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Sovereign wealth funds as a vehicle for commodity rich states is an increasing phenomenon. This chapter examines two lesser known funds in unique circumstances and whether sovereign wealth funds as even the problem Focusing on Brazil, and country forming a sovereign wealth fund due to the discovery of large offshore oil deposits, and Azerbaijan a country nearing the end of its oil and gas reserves, we focus on how countries establish their fund framework and what they do after the capital surplus stops. While sovereign wealth funds are the most widely known, other companies enjoy similarly close relationships to government. While sovereign wealth funds have been criticized for political indiscretions and seeking national security secrets, many have been slow to recognize the more predatory national champion companies. Russian and Venezuelan oil and gas companies have taken aggressive movements designed to influence politics in other countries. Chinese state controlled companies have actively sought national security and high technology goods prohibited by US export regulations. Examining specific case studies of government involvement with industry, it is quite possible that the transparency of financial markets prevents greater state over reach than the more subtle and less known government owned firms.

The discovery of oil near Masjid-e-Suleiman in Iran in 1908 by a British company aroused interest in Britain and America to explore the wider region for it. Standard Oil Company of California (Socal) secured oil concessions in Saudi Arabia from King Ibn Saud in 1933. The subsequent Arabian American Oil Company (Aramco) struck oil in 1938. The importance of Saudi petroleum increased when, following Iran’s nationalization of the British-owned Anglo-Iranian Oil Company (AIOC) in 1951, Western countries boycotted Iranian oil. The political turmoil in Iran ended with the restoration of the briefly deposed Muhammad Reza Shah Pahlavi to the throne with the assistance of the US Central Intelligence Agency (CIA) in August 1953. He leased the rights to Iran’s petroleum to the consortium of four Western oil companies for twenty-five years. With that, the United States became the prime Western influence in Tehran. By then Riyadh had forged military links with Washington. Soon rivalry developed between King Saud, a spendthrift ruler, and his austere Crown Prince Faisal. It ended with Saud abdicating in favor of Faisal in 1964. Four years earlier, Saudi Arabia had become one of the five founders of the Organization of Oil Exporting Countries (OPEC).