The race for the world's remaining oil reserves could get very nasty. Recently, Nigerian militants announced their determination to oppose the efforts of a major Chinese energy group to secure six billion barrels of crude reserves, comparing the potential new investors to "locusts". The Movement for the Emancipation of the Niger Delta told journalists that the record of Chinese companies in other African nations suggested "an entry into the oil industry in Nigeria will be a disaster for the oil-bearing communities".

Whatever the facts, the end of the first decade of the twenty-first century is likely to be seen by future historians as the beginning of the final chapter of a unique, unrepeatable period in human development. Even oil companies now see the Age of Oil in irreversible decline – even if that decline spans decades. International oil companies (IOCs) increasingly accept that they must transform themselves completely – or expire – by mid-century.


Superficially, the so-called "super majors" appear to be in good health. Fortune's Global 500 list places the "big six" – Shell, ExxonMobil, BP, Chevron, Total, and ConocoPhillips – among the seven largest corporations in the world, as measured by 2008 revenues. In third place, Wal-Mart stands alone as the only top seven company not dedicated to finding, extracting, processing, distributing and selling the liquid transportation fuels that drive the global economy, although few business models are as dependent on the ready availability of relatively cheap oil.

Worryingly for such companies, 2008 may prove to have been the high water mark for the global oil industry, with geological, geopolitical and climate-related pressures now creating new market dynamics. The oil question is now, more than ever, a transport question. Cheap and reliable supplies of transportation fuel are the very lifeblood of our globalised economy. So it matters profoundly that we are entering an era in which oil supplies will be neither cheap nor reliable.

For the likes of Shell, BP, and ExxonMobil, whose rates of liquid hydrocarbon production peaked in 2002, 2005, and 2006 respectively, the current economic paradigm requires them to replace reserves. Investors primarily value IOCs on this basis, as well as their ability to execute projects on time within budget. A key problem for the IOCs is that petroleum-rich countries feel increasingly confident in the ability of their own national oil companies to steward their domestic resources. So generous concessions once offered to IOCs in return for technical and managerial expertise are now deemed unnecessary.