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Lesson 8 - OPEC & KEY ENERGY PLAYERS
Transcript of Lesson 8 - OPEC & KEY ENERGY PLAYERS
OPEC & TNCs
'ORGANIZATION OF PETROLEUM EXPORTING COUNTRIES'
An organization consisting of the world's major oil-exporting nations.
Founded to coordinate the petroleum policies of its members, and to provide member states with technical and economic aid.
OPEC is a cartel that aims to manage the supply of oil in an effort to set the price of oil on the world market, in order to avoid fluctuations that might affect the economies of both producing and purchasing countries.
OPEC membership is open to any country that is a substantial exporter of oil and that shares the ideals of the organization. As of 2011, OPEC had 12 member countries, including founder members
Iran, Iraq, Kuwait
OPEC's influence on the market has been widely critcised. Because its member countries hold the vast majority of crude oil reserves (about 80%) and nearly half of natural gas reserves in the world, the organization has considerable power in these markets.
OPEC - Today
Although current conflict in the Middle East, is at contnuing and escalated levels:
OPEC oil output hits highest since 2012. Large increases and recovery in Libya and Iraq despite fighting.
OPEC - OIL EMBARGO 1973
Lesson Aim: to investigate the increasing
economic power of OPEC and major energy TNCs.
Founded in September 1960 by five countries Islamic Republic of Iran, Iraq, Kuwait, Saudi Arabia and Venezuela.
These countries were later joined by Qatar (1961), Indonesia (1962), Libya (1962), the United Arab Emirates (1967), Algeria (1969), Nigeria (1971), Ecuador (1973), Gabon (1975) and Angola (2007).
From December 1992 until October 2007, Ecaudor left. Gabon 1995. Indonesia 2009.
Currently, the Organization has a total of 12 Member Countries.
Among the largest and most powerful groups in the world.
Think about what you have learnt today.
Read pages 21 - 23.
In pairs discuss and analyse who you think has the most power over the energy industry and why.
You must provide evidence for your reasoning.
State Owned Energy Giants
When considering Oil production statistics 4 key points arise:
Of the top 20 oil companies at least 8 are state owned. (they are not TNC’s) They are public rather than private sector companies.
1. They are government owned and are more active in the realms of geopolitics. (the study of the ways in which political decisions and processes affect the way space and resources are used. The relationship between geography, economics and politics)
2. The remaining companies are relatively free of direct political influence and driven more by economic considerations and shareholders.
3. Most of the top companies are involved in a range of operations of which pumping oil is only one. They are also engaged in transporting and refining oil and in petrochemical industries. Exploration for new reserves and the search for new sources are also important.
4. Their diversity and presence in many countries ensure that TNC's will continue to be key players.
Russia´s economic slide -2014-15:
Oil price lowest since 2008 in 2015 - OPEC power: