1949 - Energy

Energy

Seven major oil companies control 90 percent of world petroleum reserves outside the United States and the Soviet bloc territories: Standard Oil of New Jersey, Standard Oil of California, Gulf Oil, the Texas Company, Socony-Vacuum, Royal Dutch-Shell, and Anglo-Iranian control 88 percent of crude oil production, 77 percent of refining capacity, 85 percent of cracking capacity, two-thirds of all privately owned tankers, and every important pipeline.

Jean Paul Getty obtains a concession for his Pacific Western Co. to drill for petroleum in the Neutral Zone established in 1924 between Saudi Arabia and Kuwait. Now 56, the Minneapolis-born oil magnate inherited $15 million, made his first million by age 23, and has been battling for years to gain control of the Tide Water Associated Oil Co., owned largely by Standard Oil of New Jersey. The desert in his new concession will turn out to cover one of the world's largest petroleum reserves, and the oil will make Getty the world's richest man (see 1951).

Hughes Tool Co. supplies more than 75 percent of all bits used in oil drilling anywhere in the free world. Hughes leases the drills in the United States to keep dulled bits from being re-tipped and sold at lower prices (see 1908). Mounted on three cones, the Hughes rock bit can drill into rock formations at speeds of up to 180 feet per hour, its only significant competitor is Reed Roller Bit Co., and Reed must pay Hughes a 15 percent royalty on every rock bit it supplies to drillers.