Super major or the International Oil Company is the term used by financial news media the world over to describe the six largest private sector owned oil companies in the world. Exxon Mobil of USA, Royal Dutch Shell of the UK and Netherlands, British Petroleum of UK, Chevron Corporation of the US, ConocoPhillips of the US and Total SA of France are the six largest oil companies.
Super majors made its appearance as a guard against dipping prices of crude oil in the latter part of 90s. Large petroleum companies resorted to merger in the hope of resolving three issues i.e. to improve economies, to create buffer against dipping oil prices and for the investment of money to reduce the large reserves of cash. Exxon and Mobil in 1999, British Petroleum and Amoco in 1998, Total and Petrofina in 1999, Chevron and Texaco in 2001 and Conoco and Phillips Petroleum Company in 2002 were the mergers that took place during the four years from 1998 to 2002. In the year 2000 Elf Aquitaine also joined the Total and Petrofina fold. These mergers created some of the world's largest oil companies according to Forbes magazine. With their 2007 rankings all these corporates were within the top 25 companies in the world.
On financial terms, by December 1, 2006 ExxonMobil came to first place among the Supermajors with size i.e. market capitalization, liquidity (1 year), income (12 months) and profits. Supermajors together have 5% of the world's crude oil and gas under their control. Exxon Mobil the largest corporate of the super majors is the 14 th of the largest oil companies. On the opposite, 95% of the world's gas and crude oil reserves are under the control of oil companies owned by governments mainly in the Middle East. Supermajors as a group are also called 'Big Oil', a contemptuous term used to express their economic power as the world's largest controllers of crude oil resources and the part played by them in politics especially in the US.
Big oil has an important influence on the crude oil industry of the industrialized and developed world and the term is used in the consumer forums when the oil prices escalate. Also people respond by purchasing vehicles with better fuel economy but when the prices come down they forget about all this. After 2005, Big Oil was in the media every now and then as the prices of regular unleaded gasoline went above $2.00 in the US. Afterwards it went up to $3.00 in the early part of autumn. Crude oil prices reached its maximum in July to $147 per barrel and came down in the middle of summer. The hike in prices was attributed to many factors. Higher demand from the developing countries that exceeded the supply, political unrest in oil exporting countries and inclement weather in the American gulf were the main causes.
The present debate is if the petroleum industry has become opportunistic to make profits at times of political unrest and natural disasters involving bad weather. The industry's response is that the rising crude oil prices on which they have no control are causing the price hikes. They also point out that the oil industry makes less profit than other sectors such as banking and the pharmaceutical industry. Supporters of the industry defend saying that oil industry is setting itself an example for the free market trade and those who oppose say that they are earning profits at crisis situations. However an investigation by US Government has cleared the industry of any unlawful manipulation to increase prices. The profit made by Supermajors together from 2004 to 2007 is $ 494.8 billion
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