In This Review

Oil Titans: National Oil Companies in the Middle East
Oil Titans: National Oil Companies in the Middle East
By Valerie Marcel
Brookings Institution Press, 2006, 322 pp

Oil and gas production was nationalized by many governments in OPEC (the Organization of the Petroleum Exporting Countries) in the 1970s. In the subsequent three decades, the resulting national oil companies (NOCs) matured professionally; moved downstream into refining, distribution, and sometimes petrochemical production; and became more commercial in orientation. But despite their importance in world oil production, they remain little studied. Based in part on over 100 interviews, this book attempts to correct that for five NOCs: those of Abu Dhabi, Algeria, Iran, Kuwait, and Saudi Arabia. NOCs have not hitherto been notable for their openness, but they are reevaluating their approaches to it, as well as to the two very different worlds in which they must simultaneously operate: an international business environment, still dominated by a handful of Western-based international oil companies, and a domestic political environment, often governed by fierce nationalist sentiments and heavily dependent on the revenues provided by the NOCs. The interviews for the book took place in 2004, and the analysis goes only through 2005: the oil price of $35 a barrel, which is the price used in the book, now looks quaint. Today's higher oil prices make the expansion of oil- and gas-production capacity financially easier but also postpone the long-term need for finding new sources of revenue. This is an informative analysis of these important organizations and their evolving relationships with their government owners.