The past two years have been a wild ride for investors in the world’s
biggest publicly traded oil companies. Compared with their high-water
marks in mid-2014, Big Oil shares are down about 25% and earnings have
collapsed.
The big irony: even as oil prices have halved, Big Oil is still
getting bigger. In July 2014 U.S. oil production was 8.75 million
barrels per day, according to the Energy Information Administration.
Nearly a year (and a 50% price dip) later, U.S. oil output had grown to
9.69 million bpd, its highest level in 45 years.
U.S. production has since declined by more than half a million bpd to
9.07 million bpd, but global production continues to rise. From 92.4
million bpd in 2014, global oil production is up to 94.8 million bpd.
A unique aspect of the recent surge is that most of the gains have
not come from OPEC’s national oil companies. While Saudi Arabia’s
national oil company, Saudi Aramco, remains the world’s undisputed
production leader, Western and Russian companies have added far more
production over the past few years.
The biggest contributor to new global oil production has been the
U.S., where the shale oil boom added more than 4 million bpd of new
production since 2010. In total, about two dozen countries expanded
their oil production over the past five years, including Saudi Arabia,
Canada, United Arab Emirates, Iraq, Kuwait and Russia.
On a corporate basis, many of the companies responsible for the
production increase are on our list of the World’s 25 Largest Public Oil
and Gas Companies.
Russian companies dominate the top of the list, which is based on the
most recently published production data, accounting for more production
than any other region. Russia has been a major producer of oil and gas
for decades, and when privatization took place in the 1990s a handful of
extremely large companies were created that rival many of the world’s
national oil companies.
The U.S. has seven companies in the top 25, more than any other country, led by ExxonMobil XOM -0.26%, which is the world’s third largest public oil and gas producer.
Many may not realize that China is among the world’s Top 5 oil producing countries. But PetroChina ,
which went public in 2007, produces almost as much oil as does
ExxonMobil, and is but one of the three Chinese companies in the Top 25.
European countries are well-represented on the list, as four of the
world’s six integrated “supermajors” are headquartered in Europe. The
largest of this group is BP ,
still ranked as the 5th largest oil and gas producer in the Top 25,
despite its many divestments since the Deepwater Horizon disaster.
To compile the list, I used an Excel-based tool to screen the
proprietary database of S&P Global Market Intelligence, which
includes 2,367 publicly traded companies across the energy sector, and
from stock exchanges all over the world. If there were questions or
uncertainties about the data (e.g., reported numbers were outdated) I
used corporate earnings reports and presentations.
Production numbers are presented in terms of barrels of oil
equivalent (BOE). This converts the energy content of a company’s oil,
natural gas liquids (NGLs), and natural gas all to a barrel of oil
equivalent. In the case of natural gas, for example, about 6,000 cubic
feet are the energy equivalent of one barrel of oil.
The Enterprise Value (EV) for each company is reported. If you are
unfamiliar with the EV, it’s considered a more comprehensive measure of a
company’s capital structure than market capitalization. The EV is
calculated as the market capitalization plus debt, minority interest and
preferred shares, minus total cash and cash equivalents. The biggest
difference between the market capitalization and the EV is usually
reflected in the amount of debt a company owes. Inclusion of debt
provides a more accurate estimate of the cost of acquiring the company.
Robert
Rapier has over 20 years of experience in the energy industry as an
engineer and an investor. Follow him on Twitter @rrapier.
