Over the past two decades, the push for ‘clean’ energy has increased. Solar panels and windmills are becoming a noticeable part of the landscape, more visible as governments look to reduce their carbon footprint and produce electricity by more environmentally friendly means. There was a push over the last two American Presidential elections for the use of clean coal. The automotive industry has introduced more models of hybrid cars and electric cars are becoming more of a real option as consumers look to go green. Nuclear plants are still being built, but people are still skeptical about using uranium as a fuel, especially considering the environmental impact of a disaster like that witnessed at Chernobyl or Fukushima. All of these different types of energy sources and production methods are largely aimed at reducing our dependency on oil.
Despite windmills and solar panels, electric cars and nuclear power, petroleum remains king in the world of energy consumption. Oil is dirty, unrenewable, inefficient for power production and has been shown to be a carcinogen. So why do we use it? First, it is a useful product. Oil is used to make everything from lubricants and plastics to fertilizers and asphalt. Second, and probably one of the biggest, oil products power and lubricate our vehicles and provide fuel to cook our food and heat our homes. It is such a part of our lives and our lifestyle that it is difficult to think of a world without it. The Energy Information Administration reported that two-thirds of US oil is consumed by cars, trucks and planes. Gasoline and diesel are plentiful for the consumer and costs have clearly not reached a level which has switched the majority of consumers away from oil use. This will please the oil companies.
The oil industry can be a dirty and dangerous one. It is also an industry which can produce massive rewards in terms of profits. Since the early 20th century the world’s need for oil has continued to grow as nations develop and consumers use more oil products each day. Through this time, companies have come and gone. Many oil companies have been bought out by larger firms or forced to break up into smaller companies because of antitrust or antimonopoly laws. That said, many companies have grown and been very successful over the past decades. Their facilities have grown, ventures have spread to other countries and profits have pushed into the tens of billions annually. The following list gives ten of the biggest oil and gas companies in terms of daily production – or millions of barrels per day (mbpd). Many of these companies have started developing ‘green’ or alternative energy sources. However, when you see how big they are, it is easy to understand why oil remains king in the world of energy.
10. Kuwait Petrol Corporation – 3.2 million barrels per day
In 1934 the Kuwait Oil Company was created by the companies we know today as BP and Chevron. Over the next 40 years, exploration and development expanded the production potential of the Kuwaiti oilfields. In 1975, the Kuwait government took over the Kuwait Oil Company and by 1980 had nationalized the oil industry under the new Kuwait Petroleum Organization (KPO). The 1990 Iraqi invasion and subsequent Gulf War did considerable damage to the KPO facilities and production only improved gradually after the liberation in February 1991. Today, the KPO continues to expand its production capabilities to remain competitive with the other companies on this list when it comes to meeting the world demand for energy. Combining crude oil and natural gas production sees the KPO take the #10 spot on the list of biggest world oil producers.
9. Chevron – 3.5 million barrels per day
The discovery of oil in California in 1879 led to the creation of the Pacific Coast Oil Company (PCOC). Over the following decades, the PCOC joined other companies and experienced reorganization and several name changes. In 1984, now known as Standard Oil of California, the company merged with Gulf Oil in what was the biggest merger of that time. The following reorganization saw the company renamed Chevron Corporation. Chevron grew even larger in 2001 with the acquisition of Texaco. In 2010, the company bought Atlas Petroleum for $4.3 billion. Active in over 180 countries, Chevron has also recently moved into the ‘clean energy’ sector and is a major player in geothermal energy production. With $220 billion in revenue in 2013 and a combined daily oil-gas output of 3.5 mbpd, Chevron is clearly one of the giants of the energy sector.
8. Petroleos Mexicanos (Pemex) – 3.6 million barrels per day
In the early 20th century, American and British oil companies were developing and refining petroleum in Mexico. The Mexican government saw the potential in such industry and moved quickly to support striking oil workers in 1938. Citing the Mexican Constitution, the government took over all foreign facilities and nationalized the oil industry. Today, through taxes, Pemex supplies the Mexican government with around one-third of its total revenue. Allegations of corruption, significant oil theft – reportedly in the hundreds of millions of dollars, and several accidents have all marred the company’s reputation in recent years. That said, Pemex continues to produce 3.6 mbpd and the Mexican government continues to support further exploration and development of its petroleum reserves.
7. Royal Dutch Shell – 3.9 million barrels per day
One of the largest gas companies in the world, Royal Dutch Shell was created in 1907 by the merging of Royal Dutch Petroleum and the Shell Transport and Trading Company of Britain. Perhaps best known in North America for its gas stations, automotive oils and association with Formula One racing, Shell’s oil and gas interests stretch across the globe. Like other petroleum companies, Shell has begun diversifying and is now involved in the renewable energy sector, specifically wind and solar energy. It is also investing heavily in hydrogen technology. Of course, for the time being, petroleum remains Shell’s primary focus with the company taking in a 2013 revenue of over $450 billion – most of that coming from oil and gas sales.
6. BP – 4.1 million barrels per day
British Petroleum’s origins date back to 1909 with the start-up of the Anglo-Persian Oil Company. Over the years the company changed names and expanded its drilling operations from the Middle East to Alaska and the North Sea. At one time, the company was the second largest oil company in the world. After the 2010 Deepwater Horizon spill, however, the company sold off a number of assets to help pay for the $4.5 billion in penalties, fines and legal fees. Further legal costs are likely as BP continues to be involved in court action over the record spill in the Gulf of Mexico. In North America, most consumers would best know BP as the company that makes Castrol products. In all likelihood, BP will drop down on any future lists of oil production as it sold its interest in Russian oil company TNK-BP to Russian oil company Rosneft in March 2013.
5. PetroChina – 4.4 million barrels per day
This Chinese state-controlled company is likely to move up this list quickly in the coming years. PetroChina is the largest Chinese oil and gas company. Founded in 1999, this company’s annual revenue is reportedly $325 billion, although this figure will likely be much higher once recent market data is released. In worldwide development, PetroChina is involved in Africa, in Australia, where it signed a $50 billion contract for Australia natural gas, and in Canada, where it has spent over $5 billion to take on a minority stake in developing shale gas deposits. With significant shale gas deposits under Chinese soil, PetroChina is well suited to become one of the biggest players in the energy industry over the coming years.
4. ExxonMobil – 5.3 million barrels per day
This company has its origins in John D. Rockefeller’s Standard Oil Company. When Rockefeller was forced to break up his company because of antitrust laws in 1911, two of the companies created were Jersey Standard and Socony. Over the years these two companies transformed into Exxon and Mobil, respectively. In 1999 Exxon and Mobil officially merged to create the largest company in world at that time – ExxonMobil. With a 2013 revenue of $420 billion, this oil and gas company is one of the biggest. Despite having a very poor environmental record, including the infamous 1989 Exxon Valdez spill, as well as facing criticism from human rights and environmentalist groups, ExxonMobil continues to expand its operations. An annual net income of $30 billion doesn’t seem like a lot but it makes sense given the hundreds of billions the company annual invests in expanding its share of the global oil market.
3. National Iranian Oil Company – 6.4 million barrels per day
The National Iranian Oil Company holds third place among the world’s largest oil and gas producers. This company has its origins in the early 20th century when the British discovered and successfully began exploiting Iran’s oil with the Anglo-Persian Oil Company. The rise of Iranian nationalists to power in 1951 led to the creation of the National Iranian Oil Company (NIOC). An American supported coup in 1953 eventually led to Western oil companies coming back into Iran. The Islamic Revolution in 1979 led to all foreigners leaving Iran and oil production was taken over by domestic employees. The NIOC has survived all of these events and continues to be successful, in large part because it is integrated with OPEC and also because it reportedly sells its products for gold to work around western imposed sanctions.
2. Gazprom – 9.7 million barrels per day
Officially known as Open Joint Stock Company Gazprom, Gazprom is the world’s largest natural gas company. Created in 1989, a majority of the company is held by the Russian state while a small portion is privately owned. The company was able to grow significantly in the 1990s thanks to the fact that Gazprom’s chairman was appointed Prime Minister of Russia. Don’t be fooled by the ‘mere’ $150 billion annual revenue and $40 billion annual profits of this company. As a major supplier of natural gas to Europe, Gazprom – and by extension the Kremlin – have significant political and financial leverage in that part of the world. A significant amount of tensions between Russia and Ukraine center on Gazprom.
1. Saudi Aramco – 12 million+ barrels per day
Saudi Aramco is deservedly #1 on this list. This company generates over $1 billion a day in revenue, produces the most barrels per day of any company and is sitting on the largest proven reserves in the world. This company began with Standard Oil of California striking oil in Saudi Arabia in the 1930s. By 1944 the Arabian-American Oil Company (Aramco) was formed. American support for Israel in the 1970s led the Saudi Arabian government to push for a greater stake in the domestic oil industry. By the 1980s, Saudi Arabia had taken full control of the company and renamed it Saudi Aramco. The company is so large it has its own air service complete with aircraft, helicopters and two airports in the United States – the only two privately owned and operated airports allowed by the FAA.