[Petroleum Intelligence Weekly Ranks World's Top 50 Oil Companies -- ] Suncor Up, ConocoPhillips Down in PIW`s New Top 50 Oil Rankings

EI/PIW press release via Reuters, Dec 8, 2011

Divestitures and acquisitions were more significant in altering the “Big Oil” leadership landscape than either organic growth or the megamergers of yesteryear, according to the results of Petroleum Intelligence Weekly’s “Top 50” global oil company rankings, released today.

ConocoPhillips’ “shrink-to-grow” strategy, which had it spinning off considerable assets in 2010, resulted in the company falling out of the Top 10 for the first time in four years, with the Houston-based giant dropping to 12 from 8 a year earlier.

Conoco’s slippage in 2010 paved the way for Russian Gazprom’s first-time entry into the elite Top 10 that year, moving up to 10 from 12 a year earlier. France’s Total marked the only other shift on the leader board, moving up to 9 from 10 a year earlier [i.e., Saudi Aramco maintained its hold on the top spot, followed by the National Iranian Oil Co. at No. 2; with ExxonMobil at No. 3 and the Petroleos de Venezuela at No. 4. China National Petroleum Corp. retained its spot as the No. 5, followed by U.K.'s BP, Royal Dutch Shell of the Netherlands/UK and Chevron. Please also see the Saudi Aramco website, the HighBeam Business article and my remarks below -- D.R.].     

This year’s rankings reaffirmed the continued importance of the so-called “supermajors” – ExxonMobil, BP, Royal Dutch Shell and Total — which held onto their Top 10 spots. But companies in developing-countries like China were racing to catch up, moving up the ranks as they grew their operations through billions of dollars in strategic acquisitions.

The PIW Top 50 rankings compare petroleum-industry majors, independents and national oil companies based operational size, rather than market cap or other financial measures, to provide a holistic view of the industry landscape. They incorporate six unique operational criteria — oil and gas reserves, oil and gas production, product sales and refinery distillation capacity — from fiscal year 2010, the latest for which complete data were available.

For the first time the Top 50 also took a hard look at M&A, correlating companies’ movement in the rankings with the announced deal value of their mergers and acquisitions in 2009, 2010 and year-to-date 2011. The analysis reaffirms M&A’s importance to companies’ operational growth strategies, showing large net buyers — particularly in China — have generally fared better than net sellers.

“Companies are increasingly rising or falling based on their ability to look beyond the integrated model to grow their operations,” said Ian Nathan, a senior research analyst at PIW parent company Energy Intelligence Group and lead author of the Top 50. “With new reserves becoming ever scarcer, companies that come up with innovative ways to create value will reap ever bigger rewards.”

Among this year’s PIW Top 50 highlights:

• The year’s biggest gainer, Canada’s Suncor, soared 10 spots, to 39 from 49, on the strength of its Petro-Canada acquisition and impressive gains in oil and gas production and product sales.
• Colombia’s Ecopetrol returned to the list, resurfacing at 48 on significant increases in oil output and gas reserves. Meanwhile, New York-based Hess fell out off the Top 50 from 47 as its growth in oil reserves was unable to compensate for a drop in gas reserves.
• China’s Sinopec and CNOOC each gained four spots, with Sinopec jumping from 26 to 22 and CNOOC from 38 to 34 as they continued executing long-established growth strategies.
• Gazprom notwithstanding, Russian companies were a mixed bag in terms of growth. Novatek advanced to 41 from 44, but Rosneft, majority owned by the Russian government, fell to 19 from 16.

For a complete list of the Top 50 or to subscribe, please contact us at CustomerService@energyintel.com. [Read more]

(Please see my post "[Energy Intelligence] 'Top 100' Oil Rankings Heavy on Houston Firms,"  by Barrett Goldsmith, Houston Business Journal, Dec 3, 2010. 2011 marks the 23rd consecutive year that Saudi Aramco has achieved the top spot in the PIW rankings. Pemex retained its spot as the No. 11 in PIW's new Top 50 oil rankings for 2010. Also, Petrobras retained its spot as the No. 15 in PIW's new Top 50 oil rankings for 2010. Furthermore, please see Forbes ranking of oil and gas companies by oil and gas production "Mid 2012 Ranking of the World's Biggest Oil & Gas Companies," and PFC Energy ranking of the biggest publicly-traded energy companies, based mainly on capital market performance: "PFC Energy 50 Ranking of World’s Top Energy Companies." -- D.R.)

Angolan Oil Production Has Doubled Since 2003

EIA, Today in Energy, Oct 14, 2011

 Source: U.S. Energy Information Administration, Angola Country Analysis Brief & Short-Term Energy Outlook Table 3c: OPEC Crude Oil Production.Download CSV Data [Note: Presumably, crude oil production excluding condensates since the mid-2000s -- D.R.]

Angola has emerged as Africa's second largest oil producer [after Nigeria, and please see remarks below -- D.R.]; its oil production has grown 147% since 2000. Angola is the eighth largest supplier of crude oil to the United States [please see remarks below -- D.R.] and the second largest crude supplier to China, according to data for January through July 2011. Angola is still rebuilding from a 27-year civil war that ended in 2002. Security issues remain, especially in the disputed oil-rich Cabinda exclave. Border disputes have halted some oil developments.

A member of the Organization of the Petroleum Exporting Countries (OPEC), Angola has production targets ranging from 1.52 to 1.66 million barrels per day (bbl/d); however, the country is currently increasing its oil production and capacity. In 2010, Angola produced about 1.85 million bbl/d of crude oil [excluding condensates -- D.R.] and, given very low levels of domestic consumption, exported all but 50 thousand bbl/d.

Oil is crucial to the Angolan economy, accounting for over 95% of export revenues and over 75% of government revenue. In 2010, Angola exported almost 1.8 million bbl/d of crude oil; the majority of crude oil exports went to China (45%) and the United States (23%), representing 17% and 4% of those countries' total crude oil imports, respectively.

Production in 2011 is down, averaging 1.65 million bbl/d, due to temporary technical problems. Industry analysts expect Angolan production to grow beyond 1.85 million bbl/d by the end of 2011, and perhaps reach 2.5 to 3 million bbl/d of capacity by 2016, based on planned project startups.

International oil companies, including Chevron, ExxonMobil, Total, Eni, and BP, play a major role in Angola, operating most production. The Angolan government recently held a licensing round for a pre-selected group of private companies to explore and produce in the country's pre-salt offshore areas—an area believed to be of similar geological makeup to the Brazilian pre-salt.

China is a major investor in Angola and has provided several multi-billion dollar oil-backed loans to fund infrastructure development. The China Petroleum & Chemical Corporation (Sinopec) and China National Offshore Oil Corporation (CNOOC) are among the national oil companies working in Angola. Angola is now the second largest supplier of oil to China, behind Saudi Arabia.

According to EIA's recently released Angola Country Analysis Brief, Angola had 10.9 trillion cubic feet (Tcf) of natural gas reserves in 2011, up from an estimated 2 Tcf in 2007. Natural gas production in Angola is tied directly to oil production and is often vented or flared, with limited volumes consumed domestically. An Angolan liquefied natural gas (LNG) terminal, due to commence operation in 2012, will allow Angola to export its natural gas and reduce flaring. [Full story]

(Please see Aaron and David Rachovich, "Africa's Top 8 Oil Producers, 2006-2010 -- EIA." Angola was in 2009-2010/full year the seventh largest supplier of crude oil to the United States---please see our post "U.S. Crude Oil Imports from Top 15 Countries ... -- EIA." According to Oil and Gas Journal (OGJ), Angola's proved oil reserves stood at 9.5 billion bbl as of Jan 1, 2011---please see our post "World's Top 22 Proven Oil Reserves Holders, Jan 1, 2011 -- OGJ," while BP Statistical Review of World Energy, June 2011, places Angolan proved oil reserves as high as 13.5 billion bbl---please see our post "World's Top 23 Proven Oil Reserves Holders, 2007-2010 -- BP." -- D.R.)

United Kingdom Natural Gas and Oil Production Continues Decade-Long Decline

EIA, Today in Energy, Sept 21, 2011

 Source: U.S. Energy Information Administration, United Kingdom Country Analysis Brief.Download CSV Data

The United Kingdom (U.K.) is the largest producer of oil and second-largest producer of natural gas in the European Union [after the Netherlands -- D.R.]. Due to steadily declining production since the early 2000s, the U.K. became a net importer of natural gas and oil in 2004 and 2005, respectively.

In 2010, the U.K. produced 1.4 million barrels per day (bbl/d) of oil and consumed 1.6 million bbl/d. [Please see remarks below -- D.R.]. While consumption remained relatively constant throughout the last decade, 2010 production declined 7% from 2009. Further declines are expected: the U.S. Energy Information Administration's Short-Term Energy Outlook predicts the U.K.'s production will fall to 1.2 million bbl/d in 2012. Despite decreasing production, the U.K. remains one of the European Union's leading petroleum exporters; in 2010, the U.K. exported 832,000 bbl/d, more than half of its total production.

Source: U.S. Energy Information Administration, United Kingdom Country Analysis Brief.Download CSV Data

In 2010, U.K. natural gas production was 2.0 trillion cubic feet, a 5% drop from 2009, and the lowest level since 1992. Natural gas consumption rose 7% in 2010. To offset its declining natural gas production in the North Sea, the U.K. is importing more liquefied natural gas (LNG). Deliveries of LNG to the U.K. were up 0.86 billion cubic feet per day, or 54%, during the first nine months of 2011 compared to the same period in 2010.

Because discoveries of new oil and natural gas reserves have not outpaced the maturation of existing oil and natural gas fields, production from both has declined. The U.K.'s increasing reliance on imported natural gas and oil has spurred the government to develop energy policies to focus on enhanced oil and gas recovery, as well as increased cooperation with Norway—U.K.'s largest oil supplier. The U.K. has also invested heavily in renewable energy; according to the U.K. Department of Energy and Climate Change, the U.K. has the largest offshore wind resource in the world.

EIA's United Kingdom Country Analysis Brief features additional analysis of these trends, along with a broad discussion of the U.K.'s energy sector. [Full story]

(Note that oil production refers to the total oil supply, including the production of crude oil, natural gas plant liquids, and other liquids, and refinery processing gain. While oil consumption refers to the total petroleum consumption, including internal consumption, refinery fuel and loss, and bunkering. UK crude oil production, including lease condensate, dropped to 1.2 million bbl/d in 2010, from about 2.7 million bbl/d in 1999. According to Oil and Gas Journal (OGJ), UK's proved oil reserves stood at 2.858 billion bbl as of Jan 1, 2011, a decrease of 7.4% when compared with the Jan 1, 2010. Also, according to OGJ, the UK had 9,040 billion cubic feet (bcf) of proven natural gas reserves as of Jan 1, 2011, a 12% decline from the previous year. -- D.R.)

World's Top 23 Proven Oil Reserves Holders, 2007-2010 -- BP

by Aaron and David Rachovich

Proved Oil Reserves*  

Rank	Country	Year-End 2010 (billion barrels)	Year-End 2010 share of total	Year-End 2010 R/P ratio**	Year-End 2009 (billion barrels)	Year-End 2008 (billion barrels)	Year-End 2007 (billion barrels)
1.	Saudi Arabia^	264.5	19.1%	72.4	264.6	264.1	264.2
2.	Venezuela^	211.2	15.3%	***	211.2	172.3	99.4
3.	Iran^	137.0	9.9%	88.4	137.0	137.6	138.2
4.	Iraq^	115.0	8.3%	***	115.0	115.0	115.0
5.	Kuwait^	101.5	7.3%	***	101.5	101.5	101.5
6.	United Arab Emirates^	97.8	7.1%	94.1	97.8	97.8	97.8
7.	Russia	77.4	5.6%	20.6	76.7	76.0	73.0
8.	Libya^	46.4	3.4%	76.7	46.4	44.3	43.7
9.	Kazakhstan	39.8	2.9%	62.1	39.8	39.8	39.8
10.	Nigeria^	37.2	2.7%	42.4	37.2	37.2	37.2
11.	Canada	32.1	2.3%	26.3	32.1	33.0	28.2
12.	United States	30.9	2.2%	11.3	30.9	28.4	30.5
13.	Qatar^	25.9	1.9%	45.2	25.9	26.8	27.3
14.	China	14.8	1.1%	9.9	14.8	14.8	15.5
15.	Brazil	14.2	1.0%	18.3	12.9	12.8	12.6
16.	Angola^	13.5	1.0%	20.0	13.5	13.5	13.5
17.	Algeria^	12.2	0.9%	18.5	12.2	12.2	12.2
18.	Mexico	11.4	0.8%	10.6	11.7	11.9	12.2
19.	India	9.0	0.7%	30.0	5.8	5.8	5.5
20.	Azerbaijan	7.0	0.5%	18.5	7.0	7.0	7.0
21.	Norway	6.7	0.5%	8.5	7.1	7.5	8.2
22.	Sudan	6.7	0.5%	37.8	6.7	6.7	6.7
23.	Ecuador^	6.2	0.4%	34.1	6.3	6.5	4.0
Total World		1383.2	100.0%	46.2	1376.6	1334.6	1253.5
of which: OPEC		1068.4	77.2%	85.3	1068.6	1028.8	954.0
Canadian Oil Sands+		143.1			143.1	143.1	150.5
Proved reserves (world) and oil sands		1526.3			1519.6	1477.7	1404.0

*Reserves include gas condensate and natural gas liquids (NGLs) as well as crude oil.

**Reserves-to-production (R/P) ratio – If the reserves remaining at the end of any year are divided by the production in that year, the result is the length of time that those remaining reserves would last if production were to continue at that rate.

***More than 100 years.

^OPEC member.

+'Remaining established reserves,' less reserves under 'active development.'

Notes: Proved reserves of oil – Generally taken to be those quantities that geological and engineering information indicates with reasonable certainty can be recovered in the future from known reservoirs under existing economic and operating conditions, according to the British Petroleum (BP). Canadian proved reserves include an official 26.5 billion barrels for oil sands 'under active development.' And Venezuelan reserves are taken from the OPEC Annual Statistical Bulletin, which noted in 2008 that the figure included 'proven reserves of the Magna Reserve Project in the Orinoco Belt, which amounted to 94,168mb,' according to the BP. In October 2010, OPEC members Iraq and Iran each hiked their reserves estimates---see my post here (D.R.). Iraq cited work by international oil companies developing 12 fields when it increased its reserves estimate to 143 billion bbl of oil from 115 billion bbl. Iran, only days later, announced that its new official oil reserve estimate had increased to 150.31 billion bbl from 137.62 billion bbl and would rise again by yearend. BP has included neither Iraq's nor Iran's updated reserves in the table – D.R. Brazil's National Petroleum Agency (ANP) said that country's offshore Libra subsalt oil discovery could hold as much as 15 billion bbl of oil, a figure that could double Brazil's oil reserves---see my post here (D.R.)

Source: BP Statistical Review of World Energy, June 2011.

(Compare BP's rankings above with OGJ rankings here. Update: According to BP Statistical Review of World Energy, June 2012, Venezuela has surpassed Saudi Arabia as the holder of the world's largest proven oil reserves---please see my post/notes/remarks -- D.R.)