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, the shareholders would be in command of a country’s most valuable asset.
The oil industry is big business, and these private, state-owned oil companies are massive. Some of them rank among the largest private companies in the world.
Saudi Arabia manages its oil reserves through state-owned Saudi Aramco. According to new information in the New York Times, the company produced an average of 13.6 million barrels per day in 2018. This capacity is three times that of Exxon Mobil, which produced 3.8 million barrels. Saudi Aramco has historically been secretive concerning its financial metrics and operating structure. However, in April 2019, the company opened its books and revealing that it generated $111.1 billion in net income in 2018, making it probably the world’s most profitable company by far.
Formally known as China Petroleum and Chemical, Sinopec is a state-owned Chinese oil company based in Beijing. With annual revenue of $327 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 trade relations between the United States and China. Sinopec conducts oil and gas exploration and produces petrochemicals. The company has purchased other petroleum company shares and drills in unexplored African territories. Critics find that the company uses damaging oil exploration methods in Gabon’s Loango National Park. These methods are detrimental to the environment, have polluted water bodies, and pushed wildlife into areas where they are vulnerable to illegal hunters. According to a Reuters report in 2018, Sinopec was expected to produce 290 barrels of crude oil in 2018.
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 close to one and a half million people. The company 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. The company has played a major role in water and air pollution through leaks and the destruction of the environment caused by exploration drilling. In 2018, according to Reuters, the company produced 4.15 million barrels of crude oil per day.
The Kuwait Petroleum Corporation is Kuwait's national oil company. It has exposure to multiple stages of oil production, including 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 $32.9 billion, according to Gulf Business.
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.
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, the company was first called the Anglo Persian Oil Company (APOC) in 1908. 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, its name was changed to the British Petroleum Company, a precursor to BP. According to the Islamic Republic News Agency, NIOC produces 3.8 million barrels of crude oil per day. Iran has conducted minimal exploration in the past 30 years due to U.N. and U.S economic sanctions. However, sanctions were lifted in 2016.