OPEC, the Petroleum Industry, and United States Energy Policy

By Arabinda Ghosh | Go to book overview

5 U.S. Oil Industry: Changing Structure and Performance

1.

During the last twenty-five years, the U.S. petroleum industry not only grew immensely in absolute size within the whole manufacturing sector of the U.S. economy, but it also underwent significant changes in relative size within the industry itself. Many large firms vanished from the scene either by merger or by dissolution, while some grew to become billion-dollar firms within a remarkably short time. How a small firm whose ranking in asset size was insignificant in 1954, and became fourteenth in assets in 1974, with total assets of over $3 billion in that year, can be seen in the history of growth of the Occidental Petroleum Company, the wunderkind of the U.S. petroleum industry. 1

Through the continual process of entry and exit of firms, through mergers and dissolutions, the number of firms in the U.S. petroleum industry changed constantly, particularly in the production segment of the industry, while the change was relatively small in the refining segment. But, like any other dynamic industry, the underlying factors leading to growth and structural change were quite active in the U.S. petroleum industry, pushing it toward the lofty position it occupies today in the nation's economy. It is the purpose of this chapter to estimate both the absolute and relative degrees of concentration of assets, as well as the reasons behind the change in size distribution, that occurred in the industry during 1954-1979.

The principal source of data for our analysis is Moody Industrial Manuals, various issues covering 1954 to 1979. We have also supplemented the data from Standard & Poor's Corporate Records and from Moody OTC Industrial Manuals. Although we had no access to data on privately owned companies that operated in that period, most of them were small, nonintegrated, and mainly engaged in drilling and production of crude oil

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OPEC, the Petroleum Industry, and United States Energy Policy
Table of contents

Table of contents

  • Title Page iii
  • Contents vii
  • Figures ix
  • Tables xi
  • Preface xv
  • Abbreviations xvii
  • 1 - Introduction 3
  • Notes 16
  • 2 - The Emergence of Opec 17
  • Notes 35
  • 3 - The Pricing Mechanism of Opec 36
  • Notes 49
  • 4 - Opec and the Multinational Oil Companies 50
  • Notes 64
  • 5 - U.S. Oil Industry: Changing Structure and Performance 65
  • Notes 87
  • 6 - U.S. Oil Industry: Acquisition and Diversification 89
  • Notes 106
  • 7 - Petro-Dollars and Economic Change in OPEC Nations 107
  • Notes 132
  • 8 - Opec versus the Oil-Consuming World 133
  • Notes 148
  • 9 - Strategy against Opec: Henry Kissinger and the Energy Crisis 149
  • Notes 160
  • 10 - Facing the Energy Crisis: U.S. Policy under the Nixon-Ford Administration 161
  • Notes 174
  • 11 - Presidents Carter and Reagan and the National Energy Policy 176
  • Notes 187
  • 12 - The Future of Opec 188
  • Notes 197
  • Selected Bibliography 199
  • Index 203
  • About the Author 206
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