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