Last Updated on April 15, 2021 by
The biggest sector in the world in terms of dollar value, the oil and gas sector is a global powerhouse using hundreds of thousands of workers worldwide and generating hundreds of billions of dollars globally each year. The below-listed oil and gas companies are so vital that they often contribute a significant amount towards national GDP.
List of the top Oil and Gas Companies
We have compiled below the list of the best and the top oil and gas companies in the world. All these companies belong to the top 100 oil and gas companies, top 10 oil and gas companies in the world 2021, top oil companies in the world from oil and gas companies in UAE, Qatar, Dubai UAE.
The list also contains the oil and gas companies in Singapore, Saudi Arabia, Kuwait, Canada, Abu Dhabi UAE, Oman, Bahrain, Nigeria, Malaysia, Australia, Europe, the middle east, Norway, Russia, Kazakhstan, oil and gas companies in India, Texas USA and various other parts of the world.
Below is the list of the world’s top oil and gas companies they broadly covered MENA (the Middle East and North Africa), Asia Pacific, Europe, Australia, UK, and America regions (US).
Note: This list of companies is not a ranking based on any specific criteria. This list is only for information purposes.
China Petroleum & Chemical Corporation, or Sinopec, is a Chinese oil and gas enterprise based in Beijing, China. It is listed in Hong Kong and also trades in Shanghai and New York.
The largest company on this list with annual revenue of $377 billion, Sinopec, is a state-owned Chinese oil company based in Beijing. The company significantly expanded its assets by exploring and drilling in African territories, providing China with a major foothold in the continent.
In fact, Chinese oil and gas organizations now operate in more than 20 African countries, with Sinopec regularly beating off major western oil and gas competitors to secure lucrative offshore deepwater prospecting blocks.
2. Aramco Overseas – Top Oil and Gas Companies
Saudi Aramco is Saudi Arabia’s national oil company. Operating in both upstream and downstream segments, the company has extensive operations in production, exploration, petrochemicals, refining, marketing, and international shipping.
Not only is Saudi Aramco the most profitable oil company in the world, but it is also the most profitable company in the world by a large margin. In 2018, the company generated $111.1 billion in net income – far exceeding the second most profitable company in 2018, Apple ($59 billion).
Aramco is a world leader in integrated energy and chemicals. offices in Europe support a wide range of activities from facilitating the safe and reliable delivery of energy to customers around the globe, to pushing for breakthroughs in research and innovation.
Established in 1988 and the predecessor of the Ministry of Petroleum Industry of the People’s Republic of China, the China National Petroleum Corporation is a state-owned oil and gas company with governmental administrative functions.
With the liberalization of trade in China and the resulting economic boom, CNPC first started to export oil and engage in the development of overseas oil fields in 1993.
It has come a very long way since then, with much of its operations organized under its subsidiary, PetroChina, and it is now the world’s 4th largest publically listed company and currently accounts for around two-thirds of China’s oil and gas output.
4. Royal Dutch Shell – Top Oil and Gas Companies
The super major more commonly known as Shell was founded in 1907 following the merger of the Royal Dutch Petroleum Company and the “Shell” Transport and Trading Company Ltd of the United Kingdom.
Thanks to its distinctive logo and subsidiary Shell Oil Company’s many service stations, Shell is one of the most well-known oil and gas companies in the world. The Shell name and logo is tied to the “Shell” Transport and Trading Company – its founder’s father had originally created a business selling seashells to collectors.
An Anglo-Dutch company, Royal Dutch Shell’s revenue is equivalent to 84% of the Netherlands’s GDP at the time. In 2012 Shell took the top spot as the biggest company on the FTSE, with a 140.9 billion market capitalization.
In 2017 the company took the number seven spot in Fortune 500’s Global 500 – their annual ranking of the world’s largest corporations.
BP plc is a British multinational oil and gas company headquartered in London, United Kingdom. It is one of the world’s seven oil and gas “supermajors”.
The Anglo-Persian Oil Company was formed in 1909, itself an offshoot of the Burmah Oil Company. It later rebranded to the Anglo-Iranian Oil Company and then finally to BP.
11 years later the company became the first to strike oil in the North Sea. Thanks to its 20,000 plus service stations, BP is one of the most recognizable oil and gas companies.
Other notable mergers and acquisitions following its privatization in 1979 / 1987 include Amoco in 1998 and ARCO and Burmah Castrol in 2000, becoming one of the largest petroleum companies in the world
The company rebranded in 2001, dropping its green shield logo in favour of the “Helios” symbol – designed to represent the event in all its forms. The company also adopted the slogan “Beyond Petroleum” – highlighting their focus on all types of energy and stressing their commitment to a lower-carbon future.
In recent times, most revenue generated by the petroleum giant is through the downstream segment. This segment includes refinery processing, oil products, and chemicals.
6. ExxonMobil – Top Oil and Gas Companies
Formed in 1999 after the merger of Exxon and Mobil, the US multinational oil and gas company is one of the largest refiners in the world. The world’s seventh-largest company by revenue, ExxonMobil holds an industry-leading inventory of resources and is one of the largest integrated refiners, marketers of petroleum products, and chemical manufacturers in the world.
A descendant of Standard Oil, established by John D. Rockefeller in 1870, ExxonMobil has evolved over the last 140 years from a regional marketer of kerosene in the U.S. to the largest publicly traded oil and gas company in the world.
Their public profile took a hit in 1989 with the Valdez oil spill when 10.8 million US gallons of crude oil were spilled over the next few days. It is considered to be one of the most devastating human-caused environmental disasters and the second-largest in US waters, after the 2010 Deepwater Horizon oil spill.
Total S.A. is a French multinational integrated oil and gas company founded in 1924 and one of the seven “Supermajor” oil companies in the world.
Founded in1924, Total’s activities cover the entire oil and gas chain. The total has a very diverse portfolio across different resource themes with a strong presence in LNG, particularly due to exposure to Australian LNG. The total has produced oil and gas for almost a century and has also branched into renewable energies and electric power.
Recently, Xavier Pfeuty, LNG Manager of Total’s Marine Fuel Global Solutions group, the oil giant is committed to promoting LNG as a viable marine fuel. The total has been pursuing major LNG contracts – and in December 2017, won its first supply contract with CMA CGM for 300,000 tonnes of LNG per year for ten years.
Demonstrating attractive growth potential, Total grew its production by 8% in 2018 and is set to increase its output by 9% in 2019.
8. Valero – Top Oil and Gas Companies
Fortune 50 company, Valero, is an international manufacturer and marketer of transportation fuels and petrochemical products based in Texas.
One of the world’s largest independent petroleum refiners, Valero’s activities is predominantly based around refining crude oil as – opposed to drilling – and selling the product through its 6,800 retail outlets.
Formerly know, as Valero Refining and Marketing company, Valero was founded in 1980. It now operates 15 petroleum refineries and 14 ethanol plants and employs over 20,000 personnel.
With a global share of gas reserves of 17%, Gazprom owns the world’s largest network of gas trunklines (171.2 thousand kilometers long), most of which are tied together into the Unified Gas Supply System (UGSS) of Russia.
Although a private company, the majority of shares of the company are owned by the Russian government. At present, Gazprom is responsible for around 14% of global gas output and 74% of Russian gas output.
Following major reforms initiated by President Vladimir Putin, the company saw a shift in management personnel and policy, and later sales by its major subsidiaries resulted in the Russian government gaining the controlling share in the company.
In recent times, Gazprom has been focusing on large scale projects to exploit gas resources in the Yamal Peninsula, Arctic Shelf, Eastern Siberia, and the Far East, Developing Russia’s Arctic shelf resources and developing a gas line to China.
Major U.S. energy manufacturing and logistics company, Phillips 66, has a diversified portfolio of activities in midstream, chemical, marketing, and refining areas of oil and gas production.
Phillips 66 has over 130 years in the sector, but its recent branding can be traced back to 2002 when Conoco and Phillips merged to become Conoco Phillips, resulting in the third-largest company in the US.
Phillips 66 emerged from ConocoPhillips’ midstream and downstream businesses to create a publicly-traded company in 2012. Now, the energy company has 14,400 employees, 13 refineries, and 64,000 miles of pipeline – displaying a bright future and impressive ability to gain mainstream traction.
11. Kuwait Petroleum Corp – Top Oil and Gas Companies
Kuwait Petroleum Corporation is Kuwait’s national oil company, headquartered in Kuwait City. The activities of Kuwait Petroleum Corporation are focused on petroleum exploration, production, petrochemicals, refining, marketing, and transportation. KPC produces about 7% of the world’s total crude oil.
LUKOIL is one of the largest publicly traded, vertically integrated oil and gas companies in the world accounting for more than 2% of the world’s oil production and around 1% of the proved hydrocarbon reserves.
Serving millions of consumers in over 100 countries around the globe through the supply of our products, power, and heat. We employ over 100,000 people who join their efforts and expertise to ensure the Company’s efficient development and secure its market leadership.
Eni S.p.A. is an Italian multinational oil and gas company headquartered in Rome. Considered one of the global super-majors, it has operations in 79 countries, and is currently the d’s 11th largest industrial company with a market capitalization of 68 billion euros, as of August 14, 2013.
Pemex is the Mexican state-owned petroleum company, created in 1938 by nationalization or expropriation of all private, foreign, and domestic oil companies at that time.
15. Chevron Corporation – Top Oil and Gas Companies
Chevron Corporation is an American multinational energy corporation. One of the successor companies of Standard Oil, it is headquartered in San Ramon, California, and active in more than 180 countries.
16. National Iranian Oil Company
The National Iranian Oil Company, a government-owned corporation under the direction of the Ministry of Petroleum of Iran, is a national oil and natural gas producer and distributor headquartered in Tehran. It was established in 1948 and reinforced under The Consortium Agreement of 1954.
Wood Group is a multinational oil and gas services company headquartered in Aberdeen, Scotland.
Wood provides performance-driven solutions throughout the asset life cycle, from concept to decommissioning across a broad range of industrial markets, including the upstream, midstream, and downstream oil & gas, power & process, environment and infrastructure, clean energy, mining, nuclear, and general industrial sectors.
Halliburton offers a broad array of oilfield services and products to upstream oil and gas customers worldwide. Founded in 1919, Halliburton is one of the world’s largest providers of products and services to the energy industry.
With over 50,000 employees, representing 140 nationalities, and operations in approximately 70 countries, the company serves the upstream oil and gas industry throughout the lifecycle of the reservoir – from locating hydrocarbons and managing geological data, to drilling and formation evaluation, well construction, completion, and production optimization.
19. SPIE Oil & Gas Services – Top Oil and Gas Companies
This site informs you of our range of services, our activities, and our expertise as a global service provider to the oil & gas industry.
CH2M HILL, also known as CH2M, is a global engineering company that provides consulting, design, construction, and operations services for corporations, and federal, state, and local governments.
Petrofac is a provider of oilfield services to the international oil and gas industry. It is registered in Jersey, with its main corporate office on Jermyn Street, London.
Qatargas is the world’s largest liquefied natural gas company. It annually produces and supplies the globe with 42 million metric tons of LNG from across its four ventures.
ORYX GTL is a synthetic fuel plant based in Ras Laffan Industrial City, Qatar, that is owned by Qatar Petroleum and Sasol. It uses gas to liquids technology for converting natural gas into liquid petroleum products. The capacity of Oryx GTL in 2007 was 34 thousand barrels per day of oil.
24. Voyage Global Energy
Since the inception of Voyage in 2012, their goal and vision have always been to provide global support to clients that operate within the energy sector. Whether it is power generation, oil, and gas or renewables such as wind and smart metering, they have built and developed tailor made solutions for all of our clients that have seen Voyage Energy Group become an integral partner for our extensive but diverse clients.
They have three different businesses under Voyage Energy Group, being Voyage Global Energy, JDi Energy, and Leverage Partnership. All three companies work within specific disciplines, which allows the group to offer support across all sectors within energy. Please take the journey through our website which will provide a clear understanding of how the group works and the services we offer.
The Sepam Group specializes delivery of quality Engineering, Procurement & Construction solutions for Mechanical, Electrical, Instrumentation.
26. M2E Projects S.r.l
M2E Projects has the ability and expertise to operate in Italy, Europe, Africa, Central Asia, the Middle East, Central, and South America.
From the start, M2E Projects has operated in compliance with the strictest safety standards imposed by the major players among End Users, EPC Contractors, and Vendors on the international scene.
M2E Projects operates mainly in sectors such as Oil & Gas, Power, Nuclear, Renewables, Drilling, Mining, Real Estate, and Life Science.
M2E Projects operates and works, both the Italian market and in the international arena, offering engineering services also at the offices and/or construction of our customers.
OGAS Solutions was founded in Thailand in 1999, serving the E&P sector for major operating companies in South-East Asia. Since 2006, OGAS Solutions has grown up to be a strong actor of the industry in Europe, Africa and Asia.
VecTrance provides oil/gas and mining operating companies with project support and engineering services for construction projects of oil/gas and mining.
McDermott International is an American multinational engineering, procurement, construction and installation company with operations in the Americas, Middle East, the Caspian Sea and the Pacific Rim.
WorleyParsons delivers projects, provides expertise in engineering, procurement, and construction, and offers a wide range of consulting and advisory services. It covers the full lifecycle, from creating new assets to sustaining and enhancing operating assets, in the hydrocarbons, mineral, metals, chemicals, and infrastructure sectors.
Their resources and energy are focused on responding to and meeting the needs of our customers over the long term and thereby creating value for our shareholders.
31. Airswift – Top Oil and Gas Companies
Airswift serves as a strategic partner to our clients, offering a turnkey workforce solution to capture and deliver the top talent needed to complete successful projects by aligning with the unique needs of our clients.
With over 800 employees in over 50 offices worldwide, 6,000 contractors, and a candidate database of 500,000, our geographical reach and pool of talent available is unmatched in the industry and the level of experience, exposure, and expertise that the organization has are unparalleled.
Técnicas Reunidas, S.A., or TRSA, is a Spanish-based general contractor that provides engineering procurement and construction (EPC) of industrial and power generation plants, particularly in the oil and gas sector.
33. Pan Maritime – Top Oil and Gas Companies
Pan Maritime Energy Services supports the Oil & Gas sector through project management, support engineering, and innovative product development. Specialize in building teams of technical specialists and deploying them on assignments with clients.
They have offices in St. John’s and Qatar, have the depth and experience to meet client needs from conceptual studies, FEED through to commissioning and operations.
At NRL, we pride ourselves on providing people and skills to benefit your organization. Our resourcing team are specialists in specific industry sectors, guaranteeing that we always deliver expertise at work.
INITEC Energy focuses on the construction of power generation facilities. With its 50 years of experience, he holds a reference position in the domestic market and maintains a well – deserved reputation internationally. It is at the technological forefront supported on the core values that are defined as talent, confidence, knowledge, and reliability.
INITEC Energy is integrated within the Industrial Division of the company ACS Group, one of 10 world-leading companies in the construction sector and services.
QP has concluded EPSA and DPSA with the following major international oil and gas companies: ExxonMobil, Anadarko Qatar, Maersk Oil Qatar, Talisman Energy Qatar, Wintershall Consortium, and Marubeni.
These agreements have enhanced oil and gas reserves through new discoveries and the development of existing fields. Some of the fields included in the agreements are Idd Al Shargi Dome (North & South), Al Shaheen Field, Al Khaleej Field, Al Rayyan Field, Al Karkara Structure A Field, and El Bunduq.
37. Bureau Veritas – Top Oil and Gas Companies
Established in the Middle East in early 1976’s, Bureau Veritas is serving major Oil companies, its group of companies, and major local players by providing diversified solutions and creating added value through assistance at any stage of the life of an Oil & Gas project, from Conceptual Design to Maintenance and Operation.
With more than 150 experts in all disciplines, Bureau Veritas allows the Group to supply its day-to-day services with necessary efficiency and domestic knowledge. It offers an extensive range of technical services and solutions in the fields of certification, conformity, assessment, consulting, and training.
38. Mentor IMC Group
Mentor IMC Group offers more than 25 years’ global experience as an oil & gas industry exclusive, project management resource consultancy.
[Update] Supermajordämmerung | supermajor – Vietnamnhanvan
ON THE surface, things look pretty good for the big, listed oil companies. The world wants more of what they produce than ever before. The price it sells for is high and the profits are rolling in. Exxon Mobil, with a market capitalisation of $417 billion, vies with Apple as the world’s most valuable listed company. Royal Dutch Shell is the most valuable firm on the London Stock Exchange. Chevron employs 62,000 people; Total operates in more than 130 countries. In BP’s case the big numbers are more calamitous—it may end up paying out $90 billion in fines and compensation stemming from the Deepwater Horizon disaster. But its ability to do so and stay standing is a perverse sign of the company’s underlying strength.
In the 1990s, when the oil price dipped, a round of mergers turned the “seven sisters” of the 1950s—BP, Esso, Gulf Oil, Mobil, Royal Dutch Shell, SoCal and Texaco—their descendants and some smaller fry into this new set of “supermajors”. Soon afterwards global economic expansion further increased the demand for oil that had grown for a century, and set its price soaring (see chart 1). Things looked good for the new giants. But the rapid growth of emerging markets also exacerbated a half-century-long trend for power over that oil to shift to the countries where it is found.
In the 1950s the seven sisters controlled some 85% of global reserves. Today over 90% of reserves are under the control of national oil companies (NOCs) which are owned, at least in part, by the governments sitting on the oil in question. In the past the NOCs relied on the technological expertise, project-management skills and global reach of the big international oil companies to produce, refine and sell their oil. These days more and more NOCs are able to do without the supermajors’ help.
This means the supermajors are increasingly reliant on oil which is hard to get at: either because of geology (oil buried deep underwater and far from any shore); or because of chemistry (oil mixed up in tar sands and the like); or because of politics (oil in countries politically difficult to deal with). Their size, know-how and experience serves the companies well in such plays. But they are spending more and more money to produce less and less of global oil output. That is fine as long as the world goes on wanting more and more oil. But what if it doesn’t?
For years some researchers have been claiming that the world’s production of crude oil would soon start to decline at more or less the speed it had risen, citing the drop off in production in the lower 48 states of America after its early-1970s peak as precedent. So far they have been proved wrong. Extraction technology has improved, allowing firms to exploit previously inaccessible resources. Unconventional oil seems abundant, if more expensive to extract. But some analysts are now pointing to the possibility of another peak—one not of supply, but of demand.
The forecasts of future demand used by the supermajors show oil sales rising inexorably as more cars hit the roads, more trade crosses the oceans and more aircraft take to the skies. The International Energy Agency (IEA), a rich-country club, and other independent forecasters tend to agree. Oil is mainly a transport fuel, with 60% of it used to move things (the rest goes on power, petrochemicals and other industrial uses) and the world wants more transport. BP reckons that emerging economies will push demand for oil from just under 90m barrels a day (b/d) now to 104m b/d by 2030. Exxon sees the thirst reaching 113m b/d by 2040, a growth rate of around 0.8% a year.
None of this growth is expected in the rich world, where the supermajors are based. Oil demand in developed countries has been falling since the mid-2000s, the result of more efficient vehicles and of demographic trends that have seen car-ownership and car use peak, as well as of a recession. Instead, it is expected that demand will boom in the rest of the world, rather as it did in rich countries two generations ago, except on a scale that reflects the far larger populations getting mobile.
But emerging economies will never see the sort of gas guzzlers that Detroit used to churn out in the 1950s and 1960s, when governments which took much less care of the environment had little reason to constrain the use of gasoline. The world’s new cars will have ever higher fuel efficiencies as time goes on. In March China introduced stringent fuel standards of 6.9 litres per 100km (34 miles per gallon) by 2015 and 5l/100km (47 mpg) by 2020. Such measures will not on their own cancel out the effects of the number of cars growing by 7% a year, but they will cushion them. With cars getting 3-4% more efficient each year, and trucks improving at about half that rate, analysis by Citi, a bank, shows demand in 2020 3.8m b/d below what it would be without such efficiency gains (see chart 2).
So most vehicles will be burning less petrol. Some will be burning none at all. The opening up of unconventional natural-gas reserves in America has made natural gas there a quarter the price of petrol, and as a result it is replacing oil at the fuel pump (and in the petrochemical plant). Compressed or liquefied gas is finding its way into the tanks of trucks, buses and delivery vans. A fifth of America’s buses run on natural gas, as do two out of every five new garbage trucks. Caterpillar and GE, two large engineering companies, are both working on natural-gas-powered railway trains. TOTE, a shipping company, has ordered the first container ships built to run on liquefied natural gas.
Between a NOC and hard place
Filling up with natural gas is sure to spread as fracking and other new production techniques pick up beyond America; using gas to drive vehicles will in many cases be easier than liquefying it for export or putting it into pipelines. This could slice another 3.5m b/d from oil demand by 2020. Copious gas is also being used instead of oil in places where oil is still burned to generate electricity, such as the Middle East, potentially putting 3m b/d more oil onto global markets. If nuclear power takes off in the region—two plants have been started in the UAE—that will displace oil demand, too. Reduced subsidies for oil use, common in oil-producing countries but increasingly unaffordable, will also dampen demand. Citi, using the most aggressive assumptions about gas substitution, calculates that oil demand could peak at less than 92m b/d in the next few years, far below what the supermajors expect. A study last year by Ricardo, an automotive-technology firm, came to a similar conclusion.
It may be that Citi and Ricardo are overestimating the factors that will reduce the thirst for oil; peak demand may not be so close or so low. But if the IEA and the oil companies are overestimating demand it would not be for the first time. In the late 1990s the IEA thought that by 2020 the world would be getting through 112m b/d. Now it puts the figure at about 97m b/d.
If demand levels out sooner than expected and prices start to fall, the firms extracting oil at the highest cost will suffer because they are shut out of cheap oil. According to Bernstein Research, the marginal cost of producing new barrels of oil from inhospitable countries or terrains is now around $100 a barrel, roughly the same as the current price. And it is in those expensive production sites that the supermajors do more and more of their business.
Half the supermajors’ long-term capital spending now goes on costly unconventional or deep-water oilfields, largely because production-sharing arrangements and licences to drill in the NOCs’ backyards are increasingly hard to find. The big NOCs now make up six of the ten largest oil producers in the world (see table). Some of the NOCs still lack the know-how and the capital to get to their oil on their own, and thus seek out supermajors to help. But others can do everything for themselves. Saudi Aramco, Brazil’s Petrobras, Petronas of Malaysia and others think they have learned what the supermajors have to teach them. Their governments have used oil revenues to build up the big pots of cash needed to fund giant oil- and gasfields.
What is more, the supermajors are no longer the only game in town when it comes to providing the NOCs with any help they may need. Oilfield-service companies started to burgeon in the 1980s when big companies thought it wise to outsource drilling and other aspects of production. Oil was relatively easy to come by, and operating a rig was a low-margin business.
Firms which grew up then, such as Halliburton and Schlumberger, can now offer NOCs a wide range of support services. These companies are also moving beyond just providing services for a fee; they are taking on project management and shouldering some of the financial risk in projects they are involved in.
Helped by the service companies, the larger and more ambitious NOCs are not merely less dependent on supermajors than before—they are increasingly competing with them on big projects outside their home markets and in the development of new technologies. According to Bain & Company, a consultancy, the supermajors invested $4.4 billion in R&D in 2011. The oil-service companies invested $2.3 billion. But five of the biggest NOCs invested $5.3 billion. Since 2005 the R&D budgets of those five NOCs have been growing twice as fast the supermajors’. Brazil’s Petrobras is now second to none when it comes to ultradeep oil exploration. China’s Sinopec and some other NOCs are developing in-house service firms to offer to other NOCs the know-how that once came from the big international companies. The expertise that used to be particular to the supermajors and their predecessors is ever more dispersed and available.
Assuming the risk of big projects, a role in which the supermajors excelled, is another area where they face competition. Deep-pocketed NOCs, often with access to capital from their governments on much better terms than a supermajor can get it from the markets, are spending heavily to acquire undeveloped fields in emerging territories such as Africa. Chinese oil companies are particularly keen to spread their wings, partly because China, short of domestic supplies, is keen to secure crude where it can, and partly because international expansion gives Chinese oil firms, like CNOOC and Sinopec, an opportunity to operate with a good deal more freedom than they can at home.
This comes at a time when the supermajors have had less success than they would have wished in opening up fields. They did a decent job of finding new places to drill in the deep waters off Angola and Nigeria and the giant gasfields in Kazakhstan in the early 2000s. More recently smaller and nimbler independent oil firms specialising in exploration and production have started stealing a march in new territories and technologies.
Catching up with such opportunities by buying the exploration-and-production companies involved is harder for the supermajors than it used to be, because the NOCs are after them too. According to Deloitte, a consultancy, NOCs spent $113 billion on such deals in 2012, more than three times what they spent in 2011 and nearly half the total. All told, the supermajors are now responsible for only 25% of capital spending in exploration and production. Exxon has been the world’s biggest spender on exploration and production since the mid-1980s. This year, according to Barclays, a bank, PetroChina will take its place.
Shale gas is an obvious example of a novelty the supermajors did not expect. The American gas boom was driven by small companies such as Mitchell Energy (see our Schumpeter column). Bain points out that this was bad for the big companies not just because they missed an opportunity to produce more gas. They also missed an opportunity to master new technology that they could then have profited from and exported around the world.
The gasman cometh
Chinese firms have targeted smaller American shale drillers such as Chesapeake Energy for investment to get their hands on technology that can be transferred to their vast shale bed at home. Exxon, always the shrewdest oil company, cottoned on the fastest and acquired XTO, an American shale firm, for $41 billion in 2009. But coming late it paid too much for it. Gas prices in America have since languished because of the glut that shale has brought.
The supermajors also overlooked east Africa, where the independents Tullow, Anadarko and Ophir are in the driving seat. Larger independents, BG and Hess, were prominent in Brazil’s massive pré-sal (“below the salt”) offshore finds.
As well as missing some good opportunities, the supermajors seem to be pursuing some dubious ones. Shell’s misfiring attempts to explore the Arctic, now abandoned until 2014 after damage to vital equipment, look like an extreme example of lack of choice. BP’s protracted and ham-fisted attempts to discard its Russian partners, TNK-BP, in favour of another liaison in Russia with Rosneft also suggested a firm desperate for new sources of growth, however risky, rather than the steady income that TNK-BP brought. Exxon’s investments in Central Asia, and its own recent joint venture with Rosneft, are hard to square with the company’s well-honed modus operandi of aversion to risk coupled with a brutal pursuit of return on capital employed.
Poor choices and increased competition may explain deteriorations in the supermajors’ reserve replacement ratios (RRRs), a measure of the amount of oil discovered compared with production. In 2012 total hydrocarbon replacement (including gas) at Shell was a slender 44%. BP’s was 85% and Total’s 93%; that means reserves at all three are shrinking. Exxon’s RRR, which has not fallen under 100% for decades, was a more comforting 115%, and Chevron’s was 112%. But of Exxon’s 1.8 billion barrels, high-cost shale oil from the Woodford and Bakken fields in America accounted for almost 750m. Around 50% of Exxon’s reserves are now in heavy, unconventional or deep-water oil, compared with 17% in the early 2000s.
The supermajors are now spending $100 billion a year between them on exploration and production. But this level of effort has not impressed investors; their share prices (with the exception of Chevron’s) have been flat for years. Nor has it yielded net new oil; their output fell by 2% between 2006 and 2011. What it has delivered is greater gas production, a likely harbinger of things to come. The supermajors are finding themselves increasingly in the gas business. For most of them gas is currently more than 40% of their production—for Shell and Exxon it is more than 50%.
Oil and gas differ in several respects, none of them very good news for the supermajors. Because it requires the construction of expensive pipelines or liquefaction plants, gas is less profitable. It also needs to be marketed, with customers secured upfront to finance the vast cost of extraction at scale. And it could be susceptible to a steep worldwide drop in prices. The era in which most gas is sold at prices indexed to that of oil is coming to an end. Fields currently under development could provide a glut of gas in the second half of the decade which might put paid to indexation altogether.
What can the supermajors do about these threats? Spending heavily on replacing reserves to keep investors happy is not working. Selling off bits of the firms that no longer make sense, such as refineries, can help; ConocoPhillips hived off its upstream exploration and production from refining in 2011. But it hardly counts as a long-term growth strategy. Reviving unique in-house technology might help.
It will be an unhappy thought to many, but BP’s travails in the wake of the Gulf of Mexico disaster may be guide to the supermajors’ future. Forced to sell assets to raise cash to pay fines, it has found that those sales are often followed by a rise in the company’s share price. This suggests that investors like the idea of smaller, fitter oil firms. Rather than push towards ever more esoteric frontiers, the supermajors might do better to slim down and turn away from the oil that they prize so highly but that the world may no longer want ever more of—and that others can exploit equally well. They will find this hard, though. “Oil supermajor” has a much better ring to it than “fairly large gas producer”.
Virtus.pro vs Team Liquid Game 1 | China Dota2 Supermajor Grand Final
Broadcasted live on Twitch Watch live at https://www.twitch.tv/pgl_dota2
นอกจากการดูบทความนี้แล้ว คุณยังสามารถดูข้อมูลที่เป็นประโยชน์อื่นๆ อีกมากมายที่เราให้ไว้ที่นี่: ดูความรู้เพิ่มเติมที่นี่
Virtus.pro vs Vici Gaming Game 1 | China Dota 2 Supermajor Group Stage Day 1
Broadcasted live on Twitch Watch live at https://www.twitch.tv/pgl_dota2
Liquid vs Virtus.pro, Super Major, game 1 [Maelstorm, LighTofHeaveN]
Мы в социальных сетях:
Наш канал в телеграмме:
Fight with the CEO of Supermechs! | Titan in arena battles?
Join the Supermechs community discord server, If you want to fight with him as well 🙂
Music in this video:
The Kiev Major | Grand Final | OG vs Virtus.pro | Game 5
Broadcasted live on Twitch Watch live at https://www.twitch.tv/dotamajor
นอกจากการดูบทความนี้แล้ว คุณยังสามารถดูข้อมูลที่เป็นประโยชน์อื่นๆ อีกมากมายที่เราให้ไว้ที่นี่: ดูบทความเพิ่มเติมในหมวดหมู่Wiki