Many countries form large, state-owned companies to maintain control over their precious oil assets and manage their oil sectors. By keeping these companies private, countries maintain some authority over the production, sales, and expansion of valuable oil reserves. If made public, shareholders would own the company and could take command of a country’s most valuable asset.

The oil industry is big business, and these private, state-owned oil companies are massive. Some rank among the largest companies in the world.

Saudi Aramco

Saudi Arabia manages its oil reserves through state-owned Saudi Aramco. It is estimated that Saudi Aramco has the second-largest proven oil reserves, at more than 270 billion barrels, and is the second-largest oil producer in the world. The company has historically been secretive concerning its financial metrics and operating structure.

However, in April 2019, the company opened its books and revealed that it generated $111.1 billion in net income in 2018 on a staggering $355.9 billion in revenues, making it the world’s most profitable company by far. Aramco officials have also stated that the company is worth as much as $2 trillion and that Aramco could begin an initial public offering of 5% of the company in 2020 or 2021. If so, the offering would be massive at roughly $100 billion.

Key Takeaways

  • Many large oil companies are owned by their governments, allowing these governments to maintain control of an important commodity.
  • Saudi Aramco is the largest state-owned oil company and company officials estimate it is worth $2 trillion.
  • Kuwait Petroleum, China National Petroleum, and Venezuela’s PDVSA are also examples of state-owned oil companies.
  • Sinopec, formerly known as China Petroleum and Chemical, is not exclusively controlled by the government and today has shares listed for trading in Hong Kong, Shanghai, and the New York Stock Exchange.

Sinopec

Formally known as China Petroleum and Chemical, Sinopec was founded in the year 2000 in Beijing, China. The company conducts oil and gas exploration and produces petrochemicals. With annual revenues of $314 billion in 2018, it is the second-largest oil company in the world, according to Fortune.

In 2017, the company bought some businesses from Chevron in Africa for $900 million. In 2019, Sinopec faced volatile relations between the United States and China amid an ongoing trade war.

Sinopec purchased other petroleum companies over the years and conducts drilling in unexplored African territories. According to a 2018 Reuters report, the company was expected to produce nearly 300 million barrels of crude oil for the year. Sinopec is not entirely state-owned, as shares trade publicly on multiple exchanges including the New York Stock Exchange, Hong Kong Stock Exchange, and in Shanghai.

China National Petroleum Company

China National Petroleum Company is a state-owned organization established in 1988 with headquarters in Beijing. The company is the third-largest oil company in the world and has revenues of $326 billion, according to Fortune. The company employs 1.6 million people.

China National Petroleum refines oil, produces natural gas and petrochemicals, and conducts oil field exploration. The company is active in both Asia and Africa and has shares in other oil companies worldwide. It produced 4.14 million barrels of crude oil per day in 2018, according to Reuters.

Kuwait Petroleum

The Kuwait Petroleum Corporation is Kuwait's national oil company. It is active in multiple stages of oil production: exploration, exploitation, refining, marketing, and transportation. The company also produces petrochemicals.

The Kuwait Petroleum Corporation was formed by integrating a few domestic oil companies and putting them under the control of the Kuwaiti government. According to the U.S. Department of Commerce, the company's oil production in 2018 was estimated to be around 3 million barrels per day. In 2017, the company had revenues of $33 billion, according to Gulf Business.

PDVSA

PDVSA is a Venezuelan state-owned oil firm. The company produced 1.5 million barrels per day in 2018 and reported revenues of close to $21 billion, according to Reuters. Production has been plummeting as the country has been coping with military rule and sanctions imposed by the United States.

In early 2019, the United States imposed sanctions on PDVSA designed to cripple the Maduro government and empower opposition leader Juan Guaidó by blocking Venezuelan crude exports to the United States. Venezuela is estimated to have the fifth-largest oil reserves in the world.

National Iranian Oil Company (NIOC)

The National Iranian Oil Company (NIOC) was established in 1948 and is owned by the government of Iran. The company is a member of OPEC. Headquartered in Tehran, Iran, NIOC was first called the Anglo Persian Oil Company (APOC) in 1908 and APOC was the first company to extract petroleum from the Middle East.

The company was renamed the Anglo Iranian Oil Company in 1935 and, in 1954, the name was changed to the British Petroleum Company, a precursor to BP. However, after the 1979 Islamic Revolution, a new regime took power and that led to the withdrawal of foreign workers from Iran's oil industry. Iranians took full control of the company. According to the Islamic Republic News Agency, NIOC produces approximately 3.8 million barrels of crude oil per day.