A Brief New Postscript to Blowout

For those interested in the Oil and Gas industry there is another book being promoted about an oil baron’s life story. It’s being heralded in book reviews here and abroad.

The name is of the man is Calouste Gulbenkian and the title of the book is Mr Five Percent: The many lives of Calouste Gulbenkian, the world’s richest man, by Jonathan Conlin (London: Profile Books Ltd., Southampton University, 2019, 416 pp)

Gulbenkian’s claims to fame are his large art collection left to the Gulbenkian Foundation in Lisbon, Portugal after his death in 1955.

He was a Turkish businessman of a wealthy Armenian living in Istanbul who made a name for himself that paralleled John D. Rockfeller and Jean Paul Getty in the early 20th century, making it into Life Magazine at the time by being called “the richest man in the world”.

Gulbenkian’s contribution to the oil industry was his dedication to creating international cartels that bypassed government controls, and championed vertical integration.

Vertical integration seems to be a practice purported to offer large advantages for the oil and gas field, but it’s a practice that has ignored costs and the inefficiencies of those companies to an extent that was harmful to the companies themselves, the economy, and financial markets.

Other names for this practice are “conglomeration”.

Today, the concern about the industry is more about fracking because of the even higher costs of this practice that can result in harmful “dis-economies”.

Others of course, defend the practice of vertical integration by pointing out some of its virtues, while on the other hand, The Motley Fool declares that today’s “Big Oil Companies are not integrated, just co-existing.”

Given that the oil and gas companies play a major role in climate change, this debate is one that should be discussed by our politicians, but unfortunately for our quality of life, isn’t in the forefront of the news today.

Yet, it looks like it soon will be given the climate crises taking place this past year!






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