Seven Sisters Consortium

seven sisters

 

Enrico Mattei, the head of the Italian state oil company, Eni, coined the name Seven Sisters to describe the consortium of Iran, which dominated the global petroleum industry from the mid 1940s to the 1970s.  The Seven Sisters comprised of Anglo-Persian Oil Company (now BP), Standard Oil of California (SoCal) and Texaco (now Chevron), Royal Dutch Shell and Standard Oil of New Jersey (Esso) and Standard Oil Company of New York (Socony) (now ExxonMobil).

The members of the Seven Sisters controlled around 85 percent of the world’s petroleum reserves until oil crises began in 1983. The increasing influence of the OPEC cartel and state owned oil companies in emerging market economies saw a decrease in their dominance.

During 1951, Iran nationalized the oil industry, which was controlled by the Anglo-Iranian Oil Company (now BP) and subjected to international embargoes. The US State Department at that time suggested the creation of a Consortium of major oil companiesin an effort to bring Iranian oil production back to international markets. Hence, the companies of the Seven Sisters formed the Consortium for Iran.

Meanwhile Enrico Mattei sought membership for the Italian oil company Eni but was rejected by the Seven Sisters. During 1975, the shadowy oil cartel had tried to eliminate competitors and control the world’s oil resources. With the Anglo-Saxoncompanies, controlling the Middle East oil production after World War2 and theirwell-organized skills were able to negotiate as a cartel and exert a considerable amount of power over  producers.

Over the last few decades, the dominance of the Seven Sisters and theirsuccessorcompanies have been challenged by the increasing influence of OPEC (formed in 1960), a decline of world oil and gas reserves held by OECD countries and the emergence of powerful state-owned oil companies.

According to recent research, the most powerful oil and gas companies outside of the OECD are ChinaNational Petroleum Corporation (China), Gazprom (Russia), National Iranian Oil Company (Iran), Petrobras (Brazil), PDVS (Venezuela), Petronas (Malaysia) and Saudi Aramco (Saudi Arabia). The only surviving companies of the Seven Sistersas of 2010 areBP, Chevron, ExxonMobil, andRoyal Dutch Shell, which form four of the supermajors group.

The term Third World arose during the cold warwhich defined countries that remained non aligned with eitherNATO, with the United States and Western European nations which represented the First World, or the CommunistBlock being the Soviet Union, the Peoples Republic of China, Cuba and theirallies, and this represented the Second World. The terminology provided a way of categorizing the nations of the earthinto three groups based on social, political and economic divisions. Hence, the  included many countries in Africa, Latin America and Asia. The complex history of contexts and evolving meaning, gave rise to no clear or agreed definition of the Third World and even countries in the CommunistBloc, such as Cuba was referred to as a  country.

A number of countries are formercolonies. After gaining independence were faced with the challenges of nation and institution building on their own. Due to the common background many of these nations were developing in economic terms for most of the 20th century, many still are, and the poorer countries are struggling to attain steady economic development.

It is the United States and the Soviet Union that went to great lengths to establish connections in the  Countries by offering economic and military support. Their main reason for the support was to gain strategically located alliances, such as the Soviet Union in Cuba and the United States in Vietnam. At the end of the cold war, many countries adopted the capitalist or communist economic models and continued to rely on the support from the side they had chosen.

Despite the decades of receiving aid and experiencing different development models without success, many countries are deep indebt. They remain impoverished and underdeveloped and therefore dependant on foreign aid. Yet they call for reducing this aid and utilizing different economic theories unsuccessfully. Historically they have not accomplished goals and the gap between the rich and poor is greater than ever.

In Africa, a great concern for the First World Countries is the strong investment by China. The investment gets larger and more forceful as the years go by, with the recent mention of another three trillion dollars earmarked for Africa. The new oil and gas discoveries are astonishing, and the Chinese labor forces moving into the African countries escalate monthly.

It is just a matter of time before Africa becomes a state owned continent of China. The Africans allowing the dominant China to manipulate them will once again work for foreigners and will turn into communist bloc country. The powerful yet subtle takeover by China will result in the Seven Sisters Consortium losing dominion they held onto for such a long time.

Written by Laura Oneale

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