ABSTRACT

This chapter analyzes the evolution of the relationship between Organization of the Petroleum Exporting Countries (OPEC) and international oil companies (IOCs) between 1960 and 2018, with a special focus on market power and the fiscal and contractual changes that have accompanied that evolution. It investigates the domestic and global factors that have triggered major changes in that relationship and in the bargaining power of the respective parties, and how these are likely to evolve in the light of growing competitive forces and challenges shaping global energy markets. The relationship between OPEC governments and companies has rarely been static. It has gone from deep asymmetry and complete openness to foreign companies’ investment pre-OPEC in the 1940s and 1950s, when the IOCs dominated oil supplies under very generous concessionary terms, to the emergence of more assertive governments and their national oil company after OPEC’s foundation.