ExxonMobil Dethroned As World's Top Energy Company

Tyler Durden's picture

Authored by Nick Cunningham via OilPrice.com,

Gazprom dethroned ExxonMobil as the top energy company in the world, according to the 2017 S&P Global Platts Top 250 Global Energy Company Rankings. The rankings measure the financial performance of energy firms on four key metrics: asset worth, revenues, profits, and return on invested capital. The list only includes companies that have assets greater than $5.5 billion.

For 12 years, ExxonMobil was second to none. But that changed this year – Exxon was ejected from the top spot, and fell all the way to ninth place.

Gazprom’s surge reflects its state ownership, its captured market in Europe for its natural gas, as well as the fall of some of its peers. But the Russian gas giant’s ability to weather sanctions, regulatory threats from the EU, low oil and gas prices, and the rise of competition from new supplies of LNG is impressive.

The reshuffling was the result of some dramatic changes underway in the energy industry, according to S&P Global Platts. Typically, the companies topping the list have been integrated oil companies. But this year, utilities and pipeline companies moved up the list. That, combined with the stumble by Exxon, marks a “changing of the guard, the most profound in the Rankings history,” S&P Global Platts said in a press release.

Still, to some degree, the shakeup is not surprising. After all, oil prices have languished for a third year, weighing on the oil industry. That doesn’t necessarily affect utilities and pipeline companies. While oil producers have stumbled, revenues for regulated utilities are pretty stable, and the same is true for pipeline companies that typically ink long-term deals with relatively inflexible pricing.

"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,” 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.” 

The natural gas sector in the United States has been a particularly promising place for a lot of companies. The surge in gas production has led to a significant need for new pipeline capacity. A raft of new natural gas-fired power plants also ensures the demand for gas will be there. Pipeline companies have stepped up to meet the need. “These trends are expected to continue into the next decade as billions of dollars of new investment pour into pipeline projects in the U.S., Canada and Mexico,” S&P wrote in its report.

Some oil companies that avoided a slide were those that made more investments in pipelines. S&P singled out French oil giant Total SA, which jumped from 12th to 10th in the rankings – returning to the top 10 after a two-year absence – owing to some notable investments in U.S. natural gas.

S&P pointed out a few companies that made the largest jump up in the rankings. German utility E.ON leapt from 114th to 2nd and British utility Centrica jumped from 156th to 15th, for example, highlighting the strong performance from utilities.  

E.ON was a rather interesting case because it had been battered in the past by the radical transformation underway in Germany’s electricity industry. But last year, E.ON spun off its fossil fuel generating assets into a separate company, with the remaining entity focusing on renewables, energy networks and customer solutions. E.ON’s revenue plunged from 7th to 28th – because it is now a smaller company – but its return on invested capital surged to 35 percent, which meant the Germany utility offered the highest ROIC on the list, a long way from the 246th place it recorded in 2015.

S&P said that Exxon could rebound in the rankings in the future due to its sizable investments in the Permian basin. The oil major spend $6.6 billion on Permian acreage in January, and just announced another significant Permian acquisition last week. Higher oil production will help, but higher natural gas output will also aid the oil major’s cause. As the region’s pipeline infrastructure expands, more gas will flow to the Gulf Coast as well as Mexico. 

It is important to note the rankings encompass four financial metrics, so dominance in one category does not necessarily mean leading overall. For example, Royal Dutch Shell ranks #1 in assets at $411 billion. But Shell only ranks 8th in profits at $4.5 billion, and well outside of the top 10 in ROIC, giving the Anglo-Dutch oil major an overall ranking of just 23rd.

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uhland62's picture

Now we understand why Putin is so hated - he contributed to that success. 

zoo's picture

Maybe the US can buy all that Russian gas with bitcoin

Bunga Bunga's picture

LOL, the government sold their 144,000 BTC for $334 per BTC. They will be worth $144 billion one day.

wee-weed up's picture

The government will see to it that BTC will be worth zero $ one day.

Yen Cross's picture

  That's only cause CL was down today.  </sarc>

  FWIW, I think the U.S. equity markets are going blow-off top right now. It really looks like alot hedges are getting unwound, as opposed to short covering.

 The reason I say this is because of the F /X and bond futures movements. I think some very big players are cashing out right now.

MsCreant's picture

No Boris Bourse, of course.

Golden Showers's picture

Royal Dutch Shell isn't in the top 10? Whaaaat?

opport.knocks's picture

I agree, total bullshit article.

My Gazprom stock has done zip for the last two years, other than pay a 7%+ dividend. I agree that it is the most undervalued stock, which is why I bought it in spite of geopolitical risk.

Gazprom Market Cap $46B

Royal Dutch Shell Market Cap $258.42B

Exxon Market Cap $345.96B

deoldefarte's picture

Yes but..but..but:
Co. Quote. Cash. Book Value(share)
_________________________________________________________
Gazprom $ 4.17 $41.81 B. $ 32.02
Shell $ 29.92 $23.99B. $ 23.50
Exxon $ 81.29 $ 4.04B $ 42.29
Note: figures taken from Yahoo Business....so may be questionable.
So all you wall street geniuses, which company of the 3
has the best value???

AgAuSkeptic's picture

Explains all the hatred, all that US has is apple, fb, amzn, goog, nflx and other internet junk which everyone knows is not woth anything.

TeethVillage88s's picture

I'm fuckin' laughin'

WTF?

But, yeah they are not capitalized as much as Exxon or other US Corporations with US markets... But yeah, they can't raise the same kind of capital in Secondary Public Offerings... or Bonds, or total number of shares... or confidence from their holdings in combat zones or whatever.

Yen Cross's picture

  Good comment! What about *caugh*caugh , " future earnings"?

  I'm sure Zukerfuck and the NFL, has a good answer for that one?

NoDebt's picture

List is bullshit.  Couldn't tell you exactly why, but when somebody jumps from 114 to 2, it's bullshit, especially a German (?!?!?!) energy company.  

I suspect this is more of a "political" list than a "financial" one.

Where is Saudi ARAMCO?  Should that leviathan not have been in the top 3 for decades now?  Not even at this late date as they are about to go public for eleventy-kazillion bucks?

I'm too drunk to do the research and crunch the number (and definitely WAY past giving a shit) but you can wipe your ass with this list.

 

TheReplacement's picture

Exxon... how were they in the news this year?  Oh right, Tillerson left for Secretary of State.  Is this punishment?

Agreed, something doesn't quite wash.

WTFUD's picture

Gazprom & Other Russian Companies also get 1st dibs on Iran, not just the Oil & Gas but the Oil & Gas Infrastructure, not to mention Syria & Iraq (probably Qatar also who share that monster Gas-Field with Iran ) and that whole Mid-East Crescent. We shouldn't forget the Turk Stream Pipeline and the Logistics & Transit through Euro-Asia to China & Japan (Silk Road ).

Germany have jumped to 2nd on the back of Russia with the Nord-Stream Pipeline under the Baltics, coming on board also. Of course Austria, Spain & France along with Germany put up 50% of that Investment. Germany knows where its bread's buttered, its future lies, and despite the futile US sanctions on Russia, will add to its current 6000+ German companies inside that country. So for Europe it's look East, let bygones be bygones for auld lang syne an' a' that.

Pro-Tip - Exxon should tell Congress/Deep State to Fuck-Off and Invest in those dormant Russian Oil & Gas Assets on its books before Putin tells Tillerson to hand back his Order of Friendship & the Exploration Licences.

It's all about Market Share and Gazprom gonna be difficult to replace as Head Honcho for the foreseeable future. Spread the LOVE, Baby.

deoldefarte's picture

IMHO, Gazprom is a no brainer.

Before the current BS about Russia, Gazprom was over $ 25/ADR.

Now it is only $ 4.17

New pipeline almost completed to China.

New pipeline (Nordstream) almost  completed to Germany.

Almost started a new pipeline to Turkey.

With all this "global Warming" and actual cooling, Europe will have to freeze if

they do not buy Ruski gas...and it is abut $ 2/mcf cheaper than our LNG that will be delivered

to Europe.

And...and...and the book value is at $ 32.02 per ADR.(equals 2 shares).

On top of this, about 7% dividend.

What is there not to like...my biggest investment.

 

 

Hongcha's picture

Gazprom = massive reserves in many places.  ADR shares are undervalued by a factor of ten.  P/E of 1.57.

Joe A's picture

It was Putin of course. And in fact, it was him. He managed to get on top of the whole energy situation that involves Syria, the various pipelines, the sanctions, etc. I am not his fan but he is winning this geopolitical energy game. Perhaps he can share the wealth that comes with it with his sheeple instead of with the corrupt oligarchs in Russia. You know, build a thriving middle class to develop society further. But if he would do that perhaps his days would be numbered.

Free Man's picture

IOW, you voted for Hillary. LOL

Russia has a large, thriving middle class, dumsky.

 

Joe A's picture

I am European so I could not have voted for Clinton. I wouldn't have if I could. Would not have voted for Trump either.

That being said, the middle class of Russia cannot be compared to that in other parts of Europe or in America. It is sizeably smaller. It is growing but also the wealth cap in Russia is growing. The middle class everywhere btw. is disappearing or ever more in debt.

Here a link to a wage comparison:

https://tradingeconomics.com/russia/wages

Average Russian wages in August 2017 is 47555 Rubbles max. That is around 820 Dollar. And that is max. Compare that with wages in other countries. With prices for consumer goods in Russia almost at the same level as in Western Europe, that is not what you consider middle class. Of course, there are people that earn more than the average. These perhaps could be considered middle class. But it are that masses with low salaries that drive the average down. So the middle class is small compared to them. Moscow is one of the most expensive cities in the world to live in, rents are very high. What do you think the average Russian can afford after all the high rent and high prices for consumer goods?

Expat's picture

"large, thriving"  LOL

Lore's picture

@ Joe A.: That comes across as stunningly ignorant.  Have you ever even set foot in Russia? 

Joe A's picture

I have, have you?

Maestro Maestro's picture

***It's only because Russia is owned and controlled by the Rothschilds, and not the other misleading lies told here and elsewhere.***

The Russians are forbidden to issue their own currency the Ruble without permission from the City of London (aka the Rothschilds) and the Russians can only buy US Treasuries with the dollars they get for their oil, not gold. There are more dollar assets than Rubles in Russia:

http://anonhq.com/checkmate-central-bank-russia/

http://www.pravdareport.com/russia/economics/30-12-2014/129431-usa_russi...

The gold price would have skyrocketed if the Russians and the Chinese were buying gold hand over fist as alleged. Why do you think that Western bankers would give gold away at or below cost to their purported enemies?

Unless they were not enemies in reality, and just partners playing good cop, bad cop for the purposes of fooling and manipulating their unsuspecting respective populations?

http://batr.org/forbidden/091217.html

http://www.mygen.com/users/ufo/Mao_was_a_Yale_Man_2.html

Why do the Russians never ask the Americans to leave Syria where the Americans are illegal invaders under international law? Why did the Russians never prevent the Americans and Israelis from attacking Russian soldiers and their allies the Syrians? Why did the Russians never fought back or retaliate even after the Israelis and the Americans bombed and killed Russian generals and Syrian soldiers by the hundreds? Why is Putin selling S-300s and S-400s to NATO (to both NATO-member Greece and Turkey) and transferring technology which hinders Russian national security?

Think and accept the facts.

Trump=Putin=Clinton=Merkel

Free Man's picture

Somewhat OT, but so what?

facts:

US oil companies make about five cents off a single gallon of gasoline.

US Big Government taxes on a single gallon of gasoline is around seventy-one cents for most states & rising, the tax is now $1.00 for CA.

IOW, greedy government makes fourteen to twenty times what oil companies make and it is the oil companies who make & deliver the vital product to the marketplace.

 
It’s Big Government, not Big Oil.

 

Quantify's picture

Well they ARE the biggest county in the world. 

BritBob's picture

Sad not to see BP up there but they took a huge hit paying for the Gulf of Mexico Catastrophe.

Expat's picture

This list is very misleading and fails to explain why Exxon is so low.  It probably return on assets that dropped Exxon.  But to make a list like this and try to pretend that Kepco and Valero are somewhere in the same league as Exxon is just a joke.

More bullshit and fake news from ZH.  What's the matter?  Annoyed that the Vegas shooter is white? gotta come up with anti-American stories?

me or you's picture

Hahaha! Sanctions are working pretty good... /sarc.

GreatUncle's picture

When you apply sanctions you must not need what you are blocking.