By Dave Brown – Exclusive to Oil and Gas Investing News
Last year, global oil production fell by 2 million barrels per day equivalent to about 2.6 percent, the largest decline since 1982. The contraction was demonstrated across OPEC nations where declines were estimated at approximately 2.5 million barrels per day; with the strongest volumetric decline realized in Saudi Arabia with a reduction of 1.1 million barrel per day. These production totals were offset by production outside OPEC where levels rose by 450,000 barrels per day, led by an increase of 460,000 barrels per day in the U.S., the largest increase in the world and the strongest domestic growth since 1970.
Within the international oil and gas industry, publicly traded companies do not share the same scale or degree of influence compared to the larger state-owned national energy giants like Saudi Aramco, National Iranian Oil Company (NIOC) and Qatar Petroleum. This characteristic can easily be demonstrated as the combined six “supermajor” international oil companies are responsible for approximately 3 percent of global production. A similar exercise finds ExxonMobil’s oil reserves account for less than 1 percent of the world’s total.
ExxonMobil (NYSE:XOM) is the largest of the publicly traded integrated oil and gas manufacturers and marketers of commodity petrochemicals, including olefins, aromatics, polyethylene and polypropylene plastics and a range of specialty products. The company also has interests in electric power generation facilities, with several divisions and hundreds of affiliates operating or marketing products in the United States and other countries of the world. The common principal business is energy, involving exploration for, and production of, crude oil and natural gas, manufacture of petroleum products and transportation and sale of crude oil, natural gas and petroleum products. Most recently the company reconciled a forward looking vision with a historical approach to news headlines, as it released an Apple Iphone GPS software application to locate gas stations and later addressed the National Commission on the BP Deepwater Oil Spill and Offshore Drilling.
PetroChina (NYSE:PTR) was established in 1999, and is currently Asia’s biggest company and mainland China’s largest oil producer. The company is the stock market listed arm of the state owned energy giant China National Petroleum and enjoys a near duopoly in the Chinese market with Sinopec. The market value of PetroChina tripled when it first appeared on the Shanghai index, thus becoming the first company in history to have a market capitalization of $1 trillion. With recent company plans for spending at least $60 billion in the next decade on overseas acquisitions, PetroChina’s aggressive strategic objective is to increase co-operation with foreign energy companies to accelerate its global expansion.
Royal Dutch Shell (NYSE:RDS.A) is a Netherlands-based company that was first launched in 1833 as a shell trading company in London, but now has operations in over 140 countries and covering almost every single aspect of the hydrocarbons industry. The company operates in three segments: Upstream, Downstream and Corporate. Last month the company reported that third quarter earnings have rebounded substantially from year-ago levels, driven by some improvement in industry conditions, and company strategy. The company indicated that it experienced new growth, with improved revenue and cash flow, underpinned by a 5 percent increase in oil and gas production, a 22 percent increase in liquefied natural gas (LNG) sales and increased downstream volumes. The company seemed optimistic on results despite continued difficult industry conditions in refining and natural gas markets.
Chevron (NYSE:CVX) is a California-based ‘supermajor’ with interests in over 180 countries and numerous joint venture projects in the Middle East. Historically, when the company was known as Standard Oil of California, a subsidiary, California-Arabian Standard Oil Company, was responsible for finding the world’s largest oilfield, the Ghawar field in Saudi Arabia. The subsidiary evolved into the Arabian American Oil Company (Aramco) and was eventually entirely owned by Saudi Arabia and was renamed Saudi Aramco. Saudi Aramco is the largest oil company of any kind in the world and has a staggering 25 percent of the world’s oil reserves.
Petrobras-Petróleo Brasil (NYSE:PBR) is a huge semi-public company that was the brainchild of the controversial Brazilian president Getúlio Vargas. The company operates in five segments: exploration and production; refining, transportation and marketing; distribution; gas and power, and international operations. Although, Petrobras has interests in most areas of the hydrocarbons industry, it is focused on leading in the development of technology for deep-water and ultra-deep water oil production.
British Petroleum (NYSE:BP) had its initial incarnation granted as a concession by the Shah of Iran in 1901 to search for oil. Seven years later the company made the first significant discovery in the Middle East. The 70 years that BP remained in Iran were full of political intrigue and included questionable allegations of communism, military coups and the eventual renationalizing assets (with no compensation being paid to the company) by Ayatollah Khomeini. With current operations in more than 80 countries, BP maintains two segmented revenue streams: Exploration and Production, and Refining and Marketing. Since the spring, the company has been embroiled in an ongoing public relations battle surrounding its liability in the Gulf of Mexico oil spill. Earlier this month BP reported that a strong operating performance across the group helped it return to profit in the third quarter of 2010 despite an additional pre-tax charge of $7.7 billion in respect of the spill.
Gazprom (PINK:OGZPY) is the largest provider of natural gas in the world with 16 percent of the world’s gas reserves as well as being involved in various projects across the globe. The European Union has historically obtained around 25 percent of its gas from the company; however, in January 2009, an ongoing disagreement with the Ukraine resulted in supply disruptions, with eighteen European countries reporting major drops in or complete cut-offs of their gas supplies. On June, 8, 2010, a Stockholm court of arbitration ruled in favour of Gazprom; however, the ongoing uncertainty of critical energy sources may potentially lead Russia’s neighbours to look for more secure gas supplies.
Total (NYSE:TOT) is considered a ‘supermajor’ with headquarters in Paris, operating in more than 130 countries and employing over 96,400 individuals. The company was founded after a partnership offer from Royal Dutch Shell was abruptly rejected by the French government after World War I. The company is engaged in all aspects of the petroleum industry, with interests in the coal mining and power generation sectors, as well as a financial interest in Sanofi-Aventis. It is also active in solar-photovoltaic power, both in Upstream and Downstream activities. TOTAL’s worldwide operations are conducted through four business segments: Upstream, Downstream, Corporate and Chemicals.
ENI (NYSE:E) is Italy’s largest industrial company with interests across the hydrocarbons industry and producing around 1.7 million barrels per day of oil equivalent. The Italian government still has a 38 percent “golden” share in the company and has come under criticism from other members of the European Union for the over zealous exercising of its power of veto. At the end of the last fiscal year, Eni reported operations in 77 countries, segmented into five revenue streams: Exploration & Production, Gas & Power, Refining & Marketing, Petrochemicals and Other units.
Sinopec-China Petroleum (NYSE:SHI) business interests cover the whole spectrum of the oil and gas industry with exposure to refined oil products, intermediate petrochemicals, synthetic resins and synthetic fibers. The company grew out of the Shanghai Petrochemical Complex which was founded in 1972. In 1993, as an experimental unit, by standardized state-owned enterprise restructuring, SPC became the first Chinese listed company with its shares listed on Shanghai Stock Exchange, the Stock Exchange of Hong Kong and New York Stock Exchange. In 2007, it opened the first drive-through petrol station and fast-food restaurant in China.