Big oil is a name used to describe the world's five or six largest publicly owned oil and gas companies, also known as supermajors. The supermajors are considered to be BP plc, Chevron Corporation, ExxonMobil Corporation, Royal Dutch Shell plc and Total SA.
The history of the supermajors traces back to the "Seven Sisters", the seven oil companies which formed the "Consortium for Iran" cartel and dominated the global petroleum industry from the mid-1940s to the 1970s. The Seven Sisters were:
- Anglo-Persian Oil Company (now BP);
- Gulf Oil, Standard Oil of California (Socal) and Texaco (now Chevron);
- Royal Dutch Shell; and
- Standard Oil of New Jersey (Esso) and Standard Oil Company of New York (Socony) (now ExxonMobil).
Before the oil crisis of 1973 the members of the Seven Sisters controlled around 85% of the world's oil reserves. The supermajors began to emerge in the late-1990s, in response to a severe fall in oil prices. Large petroleum companies began to merge, often in an effort to improve economies of scale, hedge against oil price volatility, and reduce large cash reserves through reinvestment. The following major mergers and acquisitions of oil and gas companies took place between 1998 and 2002:
- BP's acquisitions of Amoco in 1998 and of ARCO in 2000;
- Chevron's acquisition of Texaco in 2001
- Exxon's merger with Mobil in 1999, forming ExxonMobil;
- Total's merger with Petrofina in 1999 and with Elf Aquitaine in 2000, with the resulting company subsequently renamed Total S.A.;
This process of consolidation created some of the largest global corporations as defined by the Forbes Global 2000 ranking, and as of 2007 all were within the top 25. Between 2004 and 2007 the profits of the six supermajors totaled US$494.8 billion.
Trading under various names around the world, the supermajors are considered to be:
- BP plc (United Kingdom);
- Chevron Corporation (United States);
- ExxonMobil Corporation (United States);
- Royal Dutch Shell plc (Netherlands and United Kingdom); and
- Total SA (France).
As a group, the supermajors control around 6% of global oil and gas reserves. Conversely, 88% of global oil and gas reserves are controlled by the OPEC cartel and state-owned oil companies, primarily located in the Middle East. A trend of increasing influence of the OPEC cartel, state-owned oil companies in emerging-market economies is shown and the Financial Times has used the label "The New Seven Sisters" to refer to a group of what it argues are the most influential national oil and gas companies based in countries outside of the OECD, namely CNPC (China), Gazprom (Russia), National Iranian Oil Company (Iran), Petrobras (Brazil), PDVSA (Venezuela), Petronas (Malaysia), Saudi Aramco (Saudi Arabia).
Largest oil and gas companies
Petroleum and gas supermajors are sometimes collectively referred to as "Big oil", a term that emphasizes their economic power and perceived influence on politics, particularly in the United States. Big oil is often associated with the fossil fuels lobby.
Usually used to refer to the industry as a whole in a pejorative or derogatory manner, "Big oil" has come to encompass the enormous impact crude oil exerts over first-world industrial society.
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