Supermajor is a name commonly used to describe the world's five (and sometimes six) largest publicly owned oil and gas companies.[1][2][3]
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Trading under various names around the world, the supermajors are considered to be:[1][2]
ConocoPhillips Company (United States) is also sometimes described as forming part of the group.[3]
As a group, the supermajors control about 6% of global oil and gas reserves with the largest supermajor, ExxonMobil, ranked 14th. Conversely, 88% of global oil and gas reserves are controlled by state-owned oil companies, primarily located in the Middle East.[4] As of December 2006, ExxonMobil ranked first among the supermajors measured by market capitalization, cash flow, revenues and profits.[5][6]
The supermajors began to appear in the late 1990s, in response to a severe deflation in oil prices. Large petroleum companies began to merge, often in an effort to improve economies of scale, hedge against oil price volatility, and reduce large cash reserves through reinvestment.[7] Exxon and Mobil (1999), BP and Amoco (1998), Total and Petrofina (1999) and subsequently Elf Aquitaine (2000), Chevron and Texaco (2001), and Conoco Inc. and Phillips Petroleum Company (2002) all merged between 1998 and 2002. The result of this trend created some of the largest global corporations as defined by the Forbes Global 2000 ranking, and as of 2007 all are within the top 25. Between 2004 and 2007, the profits of the six supermajors totaled $494.8 billion.[8]
Petroleum supermajors are sometimes collectively referred to as "Big Oil", a term used to describe the individual and collective economic power of the largest oil and gas producers, and their perceived influence on politics, particularly in the United States. Big Oil is often associated with the Energy Lobby.
Usually used to represent the industry as a whole in a pejorative or derogatory manner, "Big Oil" has come to encompass the enormous impact crude oil exerts over first-world industrial society.[9] The term is also utilized to discuss the consumer relationship with oil production and petroleum use, as consumers in the United States and Europe tend to respond to petroleum price spikes by purchasing vehicles with greater fuel efficiency during these periods. Historically, consumer interest in fuel efficiency and the oil debate wanes significantly as pump prices stabilize.