Orderly Competition: As Was
I F you ask a chemist to tell you something of the essential nature of petroleum, he is apt to begin drawing a number of diagrams in which a large number of capital Cs and Hs are joined by lines in criss-cross and latticework patterns are varied by hexagonal 'rings', and sometimes by a few Ss. If the interest that you hasten to express betrays a continuing incomprehension, he may show you the same thing done rather more elegantly with a number of white, red and black plastic balls that can be linked together by springs, or segments of which can be fitted together into variegated clusters, also joined together by these flexible steel linkages. These 'solid diagrams' of the petroleum molecule are of almost unending complexity; any given crude oil contains a mixture of many. The connexions are hard to trace through; the segmented clusters join each other and their 'parent' atoms at many points, but remain a mixture rather than a rigidly connected structure. It was a senior executive of one of the seven major international companies who first pointed out to me how closely this organic mixture resembles the interlinked structure of the privately-owned oil industry outside the United States.
Take these seven companies -- or eight with the Compagnie Française des Pétroles -- which own some 90 per cent, as we have seen, of production, refining and marketing in that industry. They control perhaps the most important segment of it, Middle East oil, almost entirely through joint producing companies in which all or some of them are associated. All the major companies, together with a band of smaller American companies, are shareholders in the consortium that manages and operates the Iranian oil industry, though actual ownership is vested in the National Iranian Oil Company. Five are shareholders in the Iraq operating companies; four in Saudi Arabia; two -- with special contracts involving three of the others -- in Kuwait. These are the most important joint operations in producing oil in the Middle East, though