In part one of this multi-part blog series, we went over some of the earliest history of the modern oil industry. From some of the first oil locomotives to oil drilling equipment inventions and many other seminal events, the oil world has grown in major ways over the decades.
At Oilfield Equipment & Manufacturing, we’re proud to provide a wide array of drilling components, oil tools and other related products for those in this industry. We’re highly appreciative of the history that’s led us to this point, including some of the major technological developments that have allowed for safe oil drilling in modern times. In today’s part two, we’ll go over the shift from oil companies to oil-producing countries, plus some of the resulting impact.
From Companies to Countries
As we noted in part one, the earlier parts of the 20th century in the oil industry were dominated by major companies like Royal Dutch Shell Group, Standard Oil and British Petroleum. Around the 1950s, however, a general shift occurred in the industry: Rather than these “Big Oil” companies dominating the field, countries themselves began industrializing the oil production process and taking advantage of the profits.
This shift was found most significantly in the Middle East and South America, two massive sources of oil. Leaders of countries in these regions began taking control of gas resources and production, leading to centralized efforts within these countries but significant battles between them.
Formation of OPEC
In the year 1960, the governments of Venezuela, Saudi Arabia, Kuwait, Iraq and Iran – some of the largest oil-product nations on earth – came together to found the Organization of the Petroleum Exporting Countries, known as OPEC. OPEC was founded to help negotiate oil production laws, prices and concession rights.
By the 1970s, OPEC was in control of a huge portion of the world’s oil reserves, led by Saudi Arabia. While there are large oil reserves outside OPEC, which is based in Vienna, the organization estimates it holds roughly 80% of all oil reserves.
The United States is not part of OPEC, and has generally viewed it as a threat. Its current policy is to lower dependence on OPEC-dominated oil, though this could be changing under the current administration.
National Oil Company
As more time has gone on, the oil world has become even more politicized and divisive. In 2007, Venezuela’s Hugo Chavez abandoned collaboration with other countries, and Russia has made similar moves. This is part of what many call the National Oil Company era, where companies like Venezuela’s state-run National Oil Company control production rather than major independent companies.
In part three, we’ll go over the modern oil era and the North American gas boom. To learn more about this or any of our oil drilling components or services, speak to the staff at Oilfield Equipment & Manufacturing today.