November 2017, Vol. 244, No. 11

In The News

World News

Gazprom Tops Rankings of Global Companies, ExxonMobil Falls to 9th

The results of the 2017 S&P Global Platts Top 250 Global Energy Company Rankings show a two-pronged changing of the guard, the most profound in the 16-year history of the rankings. First, Gazprom snagged the number 1 spot, ending ExxonMobil’s 12-year reign at the top of the list (ExxonMobil holding within the top 10 at ninth place).

And, second, integrated oil and gas (IOG) companies are not the biggest movers up, even as they continue to make a strong showing as they have since the rankings were first published in 2002. Rather, utilities and pipeline companies were among the biggest gainers. In the top 10, Asia-Pacific and Europe, Middle East and Africa (EMEA) tied, both with four representations each, while the Americas has only two of the elite spots.

The annual Top 250, published by S&P Global Platts, ranks companies based on financial performance using four key metrics: asset worth, revenues, profits, and return on invested capital. All companies on the list have assets greater than $5.5 billion.

“European utilities and North American pipeline operators got a boost from sticking to what they know best and shying away from more risky enterprises and territories,” said Harry Weber, senior natural gas writer of S&P Global Platts. “Regulated utilities, in particular, have an advantage because their revenues are largely defined and consistent, and are not as susceptible to swings in oil and gas prices.”

Among this year’s biggest movers: Germany’s E.ON climbed 112 places to second place from 114th. British utility Centrica is now 15th, up from 156th. Japan’s JXTG Holdings landed just outside the top 25, at 26th, an advance of more than 100 ranks. Brazil’s Centrais Eletricas Brasileiras, known as Eletrobras, made the lead 50, at 47th, up from 193rd. And Houston-based CenterPoint Energy surged to 105 from the prior year’s rank of 220.

There were familiar names rounding out the top 10, behind Gazprom and E.ON, such as 4th-ranked South Korea’s Korea Electric Power, which debuted in the top 10 just last year; China Petroleum & Chemical at fifth place; Russia’s PJSC Lukoil at sixth; Indian Oil Corp. at seventh place, and U.S. refiner Valero Energy at number 8.

But it was India’s Reliance Industries rising to third place from last year’s 8th and France’s Total rising two slots to 10th from 12th – returning to the top 10 after a two-year absence – that showed the strength of pipelines as the other sector that was among those that surged up this time around. Both have been making investments in the U.S. that benefit from increasing supplies of natural gas and the new pipeline infrastructure that is being built to carry those resources to the Gulf Coast for regional use and for exports to overseas hubs.

Overall, thanks to the new entrants buoyed by utilities and pipelines, revenues of the Top 10 global energy companies surged more than 30% to $1.1 trillion from $830.2 billion in the 2016 rankings.

Collectively, the world’s top 10 companies posted combined profits of $63.7 billion last year, 14% lower than the $74.3 billion posted the year before. The Top 250 profit figures are adjusted for preferred dividends and exclude discontinued operations and extraordinary operations.

TOP 10 GLOBAL ENERGY COMPANY RANKINGS
2017 Rank	COMPANY NAME	2016 Rank
1	PJSC Gazprom (Russia)	3
2	E.ON SE (Germany)	114
3	Reliance Industries Ltd. (India)	8
4	Korea Electric Power Corp. (South Korea)	2
5	China Petroleum & Chemical Corp.  (China)	13
6	PJSC LUKOIL  (Russia)	6
7	Indian Oil Corp. Ltd. (India)	14
8	Valero Energy Corp. (Texas)	5
9	ExxonMobil Corp. (Texas)	1
10	TOTAL SA (France)	12

Report: LNG Production to Increase Global Carbon Emissions

China Resumes Plan for National Gas Pipeline Company

Reuters reports that China’s state economic planner has revived a plan to create a national natural gas pipeline company that would give gas producers better access to infrastructure and increase the use of the fuel. The National Development and Reform Commission (NDRC) is working with state oil companies China National Petroleum Corp., Sinopec Group and China National Offshore Oil Co. on the proposal, according three senior officials familiar with the plan.

“The NDRC is engaging a small group of company people to design a plan for creating the national pipeline company,” said one of the sources. The talks will examine what assets would be included in the company, who will be the main stakeholders and how it will be run. The plan, first raised five years ago, is part of Beijing’s proposed reforms to make the state-dominated oil and gas sector more efficient. It follows a string of smaller steps over the past two years, including cutting down transportation costs and encouraging investment in gas storage.

CNPC controls 80% of the country’s main gas pipelines, while Sinopec has the second-largest stake.

China National Offshore Oil Co. is the leading operator of LNG-receiving terminals.