Printer Friendly

The Oil Titans: The Human Chemicals.

In the merged company, Exxon will hold a 70% share and Mobil will have 30%.

How the conservative head of Exxon, Lee Raymond, will fare with the hands-on head of Mobil, Lucio Noto, remains to be seen. But Noto explained to journalists, in the New York press briefing on Dec. 1, that what mattered most to him was the interest of Mobil's shareholders.

Although Exxon and Mobil were part of Standard Oil Trust of New Jersey, the Rockefeller empire which was broken into 33 companies by a US Supreme Court order in 1911, the two majors have since developed different cultures. As the 'Financial Times' noted on Nov. 28: "Exxon is known as closed society. It does not employ people in mid-career from outside its ranks, or employ external consultants. It is going to have to break with at least one of these traditions if the merger is to proceed smoothly, but for how long is anyone's guess". Mobil has been less conservative in its employment system and far more aggressive in its international ambitions.

Raymond, a chemical engineer from South Dakota, is more of a bureaucrat than a patriarch and is a few years younger than Noto. At 60, Noto is a Brooklyn-born son of a Sicilian union organiser in the Big Apple's garment industry.

However, both Raymond and Noto are practical oilmen. Raymond is expected to be generous in letting Noto really enjoy having more time to play golf, continue his abstract art collection and have classy cars, with the younger boss steering Exxon Mobil Corp. towards a new course in the global petroleum business. Noto would follow the example of Amoco Chairman Larry Fuller - the older boss of the smaller company heading off into retirement sometime in the near future.

Starting on the new course for Raymond will, among other things, feature lobbying for what should amount to a dilution of the anti-trust spirit in the US and EU. Here, the background is interesting: Standard Oil of New Jersey was the first trust in the US, an empire John D. Rockefeller Sr. had built up before the turn of the 20th century. The company had already accounted for more than 80% of the US petroleum products market in the 1890s.

Standard Oil was the first anti-trust target soon after Theodore Roosevelt became president of the US in 1901. After a long battle, the Supreme Court found Standard Oil guilty of restraining trade. The empire was forcibly dismembered on May 15, 1911, two years after Roosevelt's term ended. It was broken into 33 companies.

In 1928, more than 50% of oil sales in the world outside North America were controlled by Jersey Standard (Exxon), Shell and Anglo-Persian (BP). The market was getting more and more difficult and the three majors had to take concerted action. But Jersey could not have an oil cartel in the US, because the anti-trust spirit there was quite strong. Secret conferences were held by the three to obtain closer co-operation between them.

When agreement was close, Sir Henri Deterding of Shell invited Teagle of Jersey and Cadman of Anglo-Persian to Achnacarry House in the Scottish Highlands. The result was an agreement for an international oil cartel to operate in all countries except the US and USSR. Within a few months, most of the other US majors had joined in. In one book, by G. Roberts, Shell's Deterding was described as the most powerful man in the world.

The cartel, or "union of the seven sisters", lasted until OPEC assumed control over oil pricing in the 1970s. By then, the cartel and other private oil companies had 74% of the world's petroleum business. Later, some of the seven sisters and other big ones branched into non-petroleum sectors. In the mid- 1980s, as OPEC lost control over oil pricing, the majors began to get out of the non-petroleum markets and, gradually in the subsequent years, went back to the core business. The Exxon-Mobil fusion now is the biggest industrial merger in history, the second being the BP-Amoco merger agreed last August.
COPYRIGHT 1998 Input Solutions
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1998, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

Article Details
Printer friendly Cite/link Email Feedback
Publication:APS Review Gas Market Trends
Geographic Code:1USA
Date:Dec 7, 1998
Previous Article:Nigeria Has A Masterplan For Gas; Flaring Is No Longer Allowed.
Next Article:Oil Titans: New Spirit.

Related Articles
Raindrops on Titan.
Oil Titans: New Spirit.
Industry Restructuring Accelerates - Exxon Mobil, BP Amoco, Total Fina, Etc.
The Oil Titans and Global Assets.
Life on Mars: past, present and future.
Dodgen lecture--2003; life on Mars: past, present, and future.
PolyOne sells stake in Techmer PM to TPM Holdings. (Acquisitions, Expansions).
Moon secrets. (Earth/Space News).
FDM rapid prototypes use polyphenylsulfone.
One bizarre trip: a spacecraft will soon plunge into Titan, one of the strangest moons in the solar system. What will it find?

Terms of use | Privacy policy | Copyright © 2021 Farlex, Inc. | Feedback | For webmasters |