The end of cold war saw the forces of globalization at play, with trade and financial openness being

the new trend in the international arena. This has increased the investment by Multinational Corporations (MNCs) around the world especially the developing world has been the major recipient of the foreign direct investment. This investment has been helpful for the countries as they are able to increase their exports and earn foreign exchange. But many economists argue that the increase in foreign investment has been harmful for some states, especially the states whose GDP is mostly dependent on resource mining and exploration. The MNCs have challenged the state sovereignty by influencing the state policies and adjusting the tax structure indirectly, also the companies are able to influence the state revenues and dictate their own terms in forming foreign policy. Back in year 1950s the oil companies especially The Seven Sisters (the big seven oil MNCs) as they were called then were the major dictators of oil prices in the world. The Seven Sisters were able to control the revenue of the oil producing countries and ten cents per barrel reduction in oil prices by the seven sisters lead to a loss of 132 million US dollars a year for the oil exporting countries. This major decision that lead to such a big loss in terms of foreign exchange especially for the Middle Eastern countries was taken in a conference room of a multinational corporation, and by no way they had consulted the states. This gave the states a major blow and as it affected them adversely and they were all geared up to do something about it. (Sampson, 1976) At that time, President of Egypt, Nasser was keen to find a solution to break this power which had challenged the state authority. 'Petroleum', is the vital nerve of civilization, without which all its means cannot possibly exist'. (Nasser, 1954) After years of talks and negotiations the major five Arab oil producing countries, in order to counter the growing influence of The Seven Sisters, formed a supranational government. OPEC charter emphasized the absolute right of all countries to have control over their natural resources in order to safeguard their national interest. (Organization of Petroleum Exporting Countries, 2012) The organization of OPEC was a major shift in balance of power that has affected the world oil prices and it was able to show in 1973 that

it was a change in the balance of power at least as dramatic as the Congress of Vienna 160 years before, and the West had now apparently come to terms with it. There was not much serious talk of refusing to accept petrodollars, or of invading the oilfields. The fact now seemed irreversible, that much of the world's wealth had suddenly shifted to an obscure corner of the world. Discussing it at the banquet, no one could think of a precedent for such a transfer of wealth. Was it the Spanish Conquistadores, bringing back gold and silver to Spain? Was it Britain in the early nineteenth century? But both these increases were less sudden and less extreme.-Bob Dorsey, Chairman of Gulf Oil, July 1974

They believe that the MNCs that have been engaged in resource mining and exploration are the ones that have inflicted the most harmful effects to the states that are already in conflict zones. The operations of Shell in Nigeria, Unocal in Burma, De Beers in Angola have been criticized much for creating such conflicts. As William Reno, has pointed out that the intra state conflicts that were occurring in 1990s were the one that were dependent revenue earned from oil sales or the mineral exports revenue. (Reno, 2000).