ABSTRACT
This chapter deals with the implications for the downstream of the international oil industry of the "structural changes" that have taken place, or still are taking place, upstream. The major change upstream on which most attention has been concentrated is the change in what might be called the administrative structure of the industry which was brought about by the assumption of ownership and control of upstream operations by the major oil-producing countries of the Middle East, the so-called "disintegration" of the industry. It has been widely held that extensive integration, particularly integration between crude- oil production, refining and distribution, is a necessary condition for the efficient operation of the industry and for the maintenance of reasonable stability. Nevertheless, the consumption of oil per increment of GNP continues to fall and estimates of oil reserves outside the OPEC area continue to be revised upwards.
