Issues La Rose field blew out with

Issues Motivated for choosing the study
I was profoundly inspired by the Pulitzer Winner Book “The Price:The Epic Conquest for Oil, Money and Power” by Daniel Yergin which spoke about :

In the Fortune 500 ranking published in 2008, six oil organisations were included which demonstrates the role of oil in modern capitalism,politics and worldwide influence.
Oil since the beginning of time has been a commodity influencing all parts of the world and has prompted the fall and ascent of countries,governments and societies.It likewise determined the outcome of the two world wars which changed the global economic scenario as well as smaller wars such as the Cold War and the conflict in the Middle East.
Oil in this day and age holds nearly the same measure of criticalness as cash.

Origin & nature 
“Seven Sisters” was the term used for the seven multinational oil companies which commanded the global oil scenario from the mid 1940s to the mid 1970s. The business assemble comprised of Anglo Iranian Oil company, Gulf Oil, Royal Dutch Shell, Standard Oil Company of California, Standard Oil company of New Jersey, Texaco and controlled around 85% of the world’s petroleum reserves.
In 1922 December Shell – La Rose field blew out with an uncontrolled flow estimated at one hundred thousand barrels per day. Development preceded in 1921 Venezuela produced 1.4 million barrels. By 1929 it was 137 million barrels making it second after the US in production. It became the largest single earning for the Royal Dutch/Shell and it became Britain largest supplier. The uncertainties of the President Gomez’s government and for safety refinery were set in Dutch island off the coast by Shell. Even by Lago(U.S. company Pan America later purchased by Standard). Then with the fall of the Gomez regime in 1943 the Petroleum law was introduced, Prez Alfonzo wanted Venezuela to reap the profit of transportation, refining and marketing. The tax law ensured fifty-fifty division between the Oil Company and government. 1948 the democratic government was thrown into jail on the rise of coup. Prez Alfonzo was allowed to leave the country and in 1958 dictatorship toppled and he returned to take up the post of the Minister of Mines and Hydrocarbons. He wanted to create a system run by government not the oil company which was turn down by America so he seek out towards the east – Cairo (at the Arab oil conference) where he was introduced to Abdullah Tariki the head of the Directorate of Oil and Mining Affair in Saudi Arabia a supporter of Nasser (Egypt) by Wanda Joblonski oil journalist. A secret meet held in Maadi along with Kuwaiti; the Iranian Prez Alfonzo put his idea forward of forming a Oil consultative commission to defend the price structure to protect government revenues a front against the Oil companies- that later developed in to the Organization of Petroleum exporting Countries(OPEC in 1960).
OPEC trusts itself to be a force for market stabilisation and not a anti-competitive cartel as it was formed to balance the dominants of the oil market ” the Seven Sisters”. It’s primary objectives have always been to ensure market stability and safeguarding the revenue of it’s member countries. Despite OPEC being a driving force the non-OPEC countries have had a substantial share in the world market. It has not had any conflicts with the WTO related to competition acts as protected by the organisation’s sovereign immunity.


OPEC and World Crude Oil Markets from 1973 to 1994:Cartel,Oligopoly, or Competitive?, A.F. Alhajji and David Heuttner, 2000

The study investigates the existence of the world’s dominant producers of crude oil for the period of 1973 to 1994. Contrary to popular beliefs it speaks about how despite OPEC being a major player can not be called the dominant player. It analyses the Saudi Arabia model and the alternative reasons as to why OPEC’s profits unexplainably in the period 1973-1978.

Can OPEC Cartel reverse crude oil price downfall, Ibrahim Onour, 2017

This paper analyses the sensitivity of crude oil price changes to the change in OPEC’s production of crude oil as well as the non-OPEC countries. It shows how the OPEC’s production capacity no more affects the world’s price changes or have a very minimal impact. It is more impacted by the US supply expansion than the OPEC production of crude oil and it’s supply decisions

OPEC, the Seven Sisters, and oil market dominance : An evolutionary game theory and agent based modeling approach, Aaron Wood, Charles Mason, David Finnoff, 2016

The study consists of the struggle between the Seven Sisters i.e. the leading companies in the world market before the entrance of OPEC and their struggle for control over the global oil market. The cartels and their market shares over the years from 1960 to 2016 including their theoretical models. The transition in power due to the learning and growth of the market.

Analysis of Saudi Arabia’s behavior within OPEC and the world oil market, Khalid Alkhathlan, Dermot Gately, Muhammed Javid, 2014

The study analyses the oil production and export behaviour of OPEC and Saudi Arabia within the OPEC. It depends on the a lot of various conditions but it’s main aim is the stability of OPEC and through this the stability of the world oil market. It reduces it’s exports with OPEC when faced with decreasing demand and increases its exports when faced with problems in OPEC. It proves their consistency with the strategies and plans of the OPEC but also it’s own thinking being used in various other situations for it’s own best interests.

OPEC’s oil exporting strategy and macroeconomic (in)stability, Luis Aguiar-Conraria, Yi Wen, 2012

The study argued that the dependence on oil from foreign countries increases the economic instability for oil importing countries. The decisions made for prices and quantities of oil by the cartel of oil exported such as OPEC can affect the economic stability. It explains the reversal of market strategies by the OPEC from setting the quantity of production rather the price of oil leading to the decline in economic volatility especially in the importing countries.

OPEC’s oil production has been more or less consistent for the period 2010-2017 and fell in some years due to the fall in price of oil globally. The greatest decline was due to Libya over the period and increase was also due to Libya in 2012-13 and Iran and Iraq.
The highest producer has been Saudi Arabia making it the decision making influencer. 


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