Chart of the major energy companies dubbed "Big Oil" sorted by latest published revenue
The term supermajor illustrates the six largest, non state-owned energy companies, as seen in popular financial mediums around the world. Trading under various names around the world, they are considered to be:
The supermajors began to appear in the late 1990s, in response to a severe deflation 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. Exxon and Mobil (1999), BP and Amoco (1998), Total and Petrofina (1999) and subsequently Elf Aquitaine (2000), Chevron and Texaco (2001), and Conoco Inc. and Phillips Petroleum Company (2002) all merged between 1998 and 2002. The result of this trend created some of the largest global corporations as defined by the Forbes Global 2000 ranking, and as of 2007 all within the top 25.
As of December 1, 2006, ExxonMobil ranks first among the supermajors in size (market capitalization), cash flow (12 months), revenue (12 months), and profits.
As a group, the supermajors control about 5% of global oil and gas reserves with largest supermajor, ExxonMobil, ranked 14th. Conversely, 95% of global oil and gas reserved are controlled by state-owned oil companies, primarily located in the middle east.
Supermajors are sometimes collectively referred to as Big Oil, a pejorative term used to describe the individual and collective economic power of the largest oil and gasoline manufacturers, and their perceived influence on politics, particularly in the United States. Big Oil is often associated with the Energy Lobby.
Usually used to represent 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. The term is also utilized to discuss the consumer relationship with oil production and petroleum use, as consumers in the United States and Europe tend to respond to petroleum price spikes by purchasing vehicles with greater fuel efficiency during these periods. Historically, consumer interest in fuel efficiency and the oil debate wanes significantly as pump prices stabilize.
Since 2005, the term Big Oil has been used regularly in the media as the United States pump price for a gallon of regular unleaded gasoline passed $2.00 U.S., then $3.00 U.S. in early autumn. The critical increase in fuel cost has been attributed to the effects of Hurricane Katrina and Hurricane Rita, in addition to the increasing costs of crude oil on world markets resulting from the uncertain status of supply, political instability in the Niger River Delta, and the ongoing Iraq War. The phase-out of MTBE for ethanol is another factor during 2006-some parts of the U.S. were selling regular unleaded for $3.27/gallon-especially in West Coast states. Eventually the national average of the U.S. reached over $4.00/a gallon in June 2008 and has continued to rise since then.
A current issue is whether the petroleum industry has engaged in profiteering during a time of catastrophic weather events and political unrest. The oil industry has responded by outlining their extensive costs, market uncertainties, and public education efforts with regard to industry background, supply and demand, and how the system of commodity futures affects pricing. Industry supporters and many fiscal conservatives have supported the industry as an example of free market economics. Industry detractors have focused on specific profit reports and attempted to outline allegations that the oil industry has utilized unrest to achieve unjust enrichment. Nevertheless an investigation by the US Federal Trade Commission has found no illegal market manipulation to raise the price of gasoline in the US.
- ^ "ConocoPhillips: The Making Of An Oil Major", Business Week, December 12, 2005. Retrieved on 2006-09-29.
- ^ "Slick Deal?", NewsHour with Jim Lehrer, 1998-12-01. Retrieved on 2007-08-20.
- ^ Reuters, December 2, 2006.
- ^ Forbes Global 2000, 2006.
- ^ Will We Rid Ourselves of This Pollution?. Retrieved on 2008-04-22.
- ^ FTC: 2006 Investigation of Gasoline Price Manipulation