oil industry: presentation articles

What is the 'dual legacy' of John D. Rockefeller?

Being both the best run and the most hated oil company.

What core operating principle emphasizes cost management at Standard Oil?

Financial Discipline: Obsessive cost-cutting and strict cost controls.

What does vertical integration refer to in the context of Standard Oil?

Consolidating large segments of the oil industry into a single company to achieve economies of scale.

What was a key aspect of Standard Oil's technical leadership?

Applying scientific knowledge to refining, such as removing sulfur from crude oil.

What practices contributed to Standard Oil's negative reputation?

Ruthless competitive practices, including railroad rebates, industrial spying, and predatory pricing.

What led to the dissolution of Standard Oil by the U.S. Supreme Court?

Public fury over its near-monopoly and political corruption.

How did the rise of producer power affect Exxon after 1973?

Major oil-producing nations asserted control over reserves, leading to nationalization and reduced crude oil production for Exxon.

What major merger occurred in 1999 involving Exxon?

The merger with Mobil, creating ExxonMobil, the world's largest non-government oil company.

What was the significance of the 1989 Exxon Valdez oil spill?

It led to the development of the Operations Integrity Management System (OIMS), a gold standard for safety in environmental protection.

What stance did Exxon adopt in its international operations post-Exxon Valdez?

A strong anti-bribery stance.

What strategies has ExxonMobil developed to manage political risk in high-risk nations?

Demanding government guarantees, using local contractors, and partnering with institutions like the World Bank.

What continues to plague ExxonMobil's image despite its adaptations?

Its historical negative image as a symbol of 'Big Oil' and perceived arrogance.

What is the 'shadow of Rockefeller' in the context of ExxonMobil?

The historical memory of Rockefeller as a robber baron overshadowing the company's innovations.

What challenge does ExxonMobil face regarding climate change science?

Its perceived arrogant tone on climate change issues.

What does the author suggest historians should do regarding Big Oil's portrayal?

Provide a fuller, more nuanced portrait that acknowledges contributions and the ongoing need for energy production.

What is Pratt's main argument against the view of 'Big Oil'?

Pratt argues that the view of 'Big Oil' as a villainous force is outdated and does not reflect the current dynamics of the oil industry.

What historical event in the 1970s significantly impacted Exxon?

The Arab Oil Embargo, which marked a turning point in the oil industry's power dynamics.

What shift occurred in the control of oil resources during the 1970s?

The rise of OPEC and nationalizations shifted power from Western companies to sovereign governments.

How did Exxon adapt to the loss of control over oil resources?

Exxon relied on the operational principles inherited from John D. Rockefeller, emphasizing financial discipline and operational efficiency.

What does Pratt suggest about Exxon's portrayal in the current oil landscape?

Exxon is portrayed not as a 'master of the universe' but as a technically proficient contractor adapting to a new reality dominated by National Oil Companies (NOCs).

What is the 'Lag' in public perception regarding oil companies?

The public still views oil companies as all-powerful monopolies, failing to recognize the shift of power to foreign governments since the 1970s.

What is resource nationalism in the context of the oil industry?

Resource nationalism refers to the rise of state-owned National Oil Companies (NOCs) that control the majority of the world's oil resources.

What challenges do Western oil companies face due to resource nationalism?

Western companies are relegated to high-cost environments, such as the Arctic or deep ocean, due to the dominance of NOCs.

What does Pratt argue about Exxon's survival strategy?

Exxon's profitability is attributed to its focus on return on capital and engineering excellence, rather than market manipulation.

What is the 'obsolescing bargain' in relation to Exxon's operations?

The 'obsolescing bargain' refers to the situation where once Exxon builds infrastructure in a developing nation, that nation may change the rules or expel them, showing Exxon's vulnerability to geopolitical shifts.

What were the 'Seven Sisters' in the oil industry?

The 'Seven Sisters' were the major Western oil companies that dominated the market before being replaced by state-owned companies.

Who are considered the 'New Seven Sisters'?

The 'New Seven Sisters' refer to state-owned oil companies like Saudi Aramco and Venezuela's PDVSA that now dominate the industry.

How does Pratt characterize Exxon's current market position?

Exxon is now a 'price taker' rather than a 'price maker' in the oil market.

What cultural legacy does Exxon maintain from John D. Rockefeller?

Exxon maintains a relentless focus on return on capital and operational excellence.

What does Pratt suggest about the future of Western oil companies?

Western oil companies must adapt to a reality where they have less control and are often at the mercy of geopolitical forces.

What is the significance of operational excellence for Exxon?

Operational excellence is crucial for Exxon's survival in a competitive and changing oil market.

What does Pratt mean by 'technical proficiency' in relation to Exxon?

Technical proficiency refers to Exxon's ability to operate efficiently and effectively in the oil industry despite losing control over resources.

What is the impact of the rise of NOCs on Western oil companies?

The rise of NOCs has led to Western companies facing more challenges and operating in less favorable conditions.

How did the Arab Oil Embargo affect the perception of oil companies?

The Arab Oil Embargo highlighted the vulnerability of Western oil companies and shifted public perception of their power.

What does Pratt argue about the historical view of oil companies?

Pratt argues that the historical view of oil companies as monopolies is no longer accurate in the context of modern geopolitics.

What major event reshaped North America's energy landscape?

The Shale Revolution

Which country struggled and lost its position in the energy market due to the Shale Revolution?

Canada

What did the Shale Revolution provide to the U.S.?

A massive new supply of oil and gas from deep underground.

Before the Shale Revolution, what was the U.S. reliance on Canada?

The U.S. needed Canada's oil to be secure.

What change occurred in U.S. oil supply due to the Shale Boom?

The U.S. had enough of its own oil and didn't need Canada's oil as much.

What was the goal of U.S. energy policy during the Shale Revolution?

To get oil out quickly to be 'energy secure.'

What was Canada's goal in its energy policy during the same period?

To balance making money from oil and protecting the environment.

How many kilometers of new pipelines did the U.S. build during the Shale Revolution?

Nearly 80,000 km.

What hindered Canada's pipeline construction compared to the U.S.?

Fights, protests, lawsuits, and slow approval processes.

How many kilometers of new pipelines did Canada build during the same time?

Less than 2,000 km.

What was the U.S. stance on the Keystone XL pipeline during the Shale Boom?

The U.S. didn't support it anymore because they had their own supply.

What happened to major pipeline projects in Canada like Keystone XL?

They were stalled or canceled due to environmental and Indigenous rights disputes.

What economic problem did Canada face due to its inability to build pipelines?

Canadian oil could only be sold to one customer (the U.S.), leading to trapped oil.

What is the economic consequence of trapped oil for Canada?

Sellers have to offer huge discounts, costing Canada billions of dollars.

What is the future outlook for Canada in the global oil market?

Canada is becoming a discounted, secondary supplier, unable to access overseas markets.

What internal issues does Canada face that affect its energy market position?

Inability to streamline its regulatory system and solve internal disputes.

What strategic disadvantage does Canada face compared to the U.S.?

Canada is at a major economic and strategic disadvantage due to its energy policies.