Breaking News!
Petrobras - the Brazilian-run oil company - has discovered a giant oil field off the Brazilian coast! (See Petrobras, below) Repsol (below) was also involved. Offshore Brazil is a seabed of opportunity right now, although the giant discoveries there will be difficult to develop.
Also, the Bakken Formation of North Dakota is red hot with exploration now with the high oil prices. The oil formation there is two miles down and horizontal drilling and fracturing is necessary once vertical drilling reaches the formation. But the rewards are great if you have the technology (and if oil prices are high enough to justify development).. There may be as much as 500 billion barrels of oil there! EOG Resources, below, presently appears to be ahead in the technology of recovering the oil. Marathon Oil and XTO (both discussed below) are examples of large oil company that are becoming active in the Bakken Shale Formation, along with many smaller oil companies.
Investments in large oil company stocks ( "major oil companies" as they are often referred to) is essential in obtaining a well- balanced oil & gas stock portfolio. Since many of the large oil and gas company stocks appear to be priced at or below fair value, when their enormous oil & gas reserves are considered, now may be a good time to buy selected major oil & gas stocks. The large oil companies discussed include: Shell, Exxon, British Petroleum, Total, Chevron, ConocoPhillips, XTO, Occidental, Repsol, Hess, Imperial, Marathon, Chesapeake, Encana, EOG, Devon, Pestrobras, Saudi Armco, .Gasprom, PetroChina, Statoil, and CNOOC.
The recent meltdown of the overall stock market took a toll on the large oil companies, also.
Royal Dutch (RDS-B). Royal Dutch owns a majority interest in Royal Dutch/Shell Group. The Royal Dutch/Shell Group companies are engaged in all the principle aspects of the oil and natural gas industry as well as in power generation, renewable energy, chemicals, and other.
Shell stock has a market cap of $133 billion, annual revenue of over $458 billion and profits of $26 billion per year.
Several years ago, Royal Dutch was charged with significantly over-stating oil reserves and paid a large fine. The admission by Shell regarding reserves cast doubt on other oil companies' reserve estimates and helped feed the Peak Oil frenzy.
Shell stock is down about 40 % over the past year. The P/E is a very low 5.
Shell's work in alternative energy - LNG, wind power, solar energy, shale oil, natural gas to liquid fuels, Alberta oil sands - is of interest. The leading Shell R&D expenditures last year were in shale rock oil (western U.S.) and, apparently, important technology has been developed by Shell.
For more information on alternative energy sources, see alternative energy sources.
Truly a large oil company, second only to Exxon/Mobil and, possibly, British Petroleum! Also, a very innovative company.
Shell stock must be considered by any investor preparing a list of large oil company stocks.
Exxon/Mobil (XOM). This large oil company is the world's most profitable company. Engaged in the exploration and production of oil and natural gas and the manufacture of petroleum products. Exxon stock (PE = 8) is down about one-fourth from one year ago.
Market cap of Exxon is $332 billion, revenue is $460 billion and profits of $45 billion (yes, that is right...$45 billion!).
I have a particular interest in LNG and, some time ago, Exxon announced it will acquire 28 LNG tankers. Talk about commitment to LNG! One country that Exxon is apparently interested in exporting LNG from is Qatar. Qatar has enormous reserves of natural gas (see Natural Gas....could the LNG prospects change with the enormous U.S. reserves found recently in shale deposits).
Exxon has very large reserves of oil and other petroleum liquids (8 billion barrels) and natural gas (32 trillion cubic feet).
Will Exxon be worth a trillion dollars a few years from now?
British Petroleum (BP). British Petroleum has four main businesses: (1) Exploration and production of oil; (2) Gas, power and renewables; (3) Refining and marketing; and (4) Petrochemicals. BP is almost as large an oil company as Exxon/Mobil with its stock worth $125 billion, annual revenues of over $361 billion and profits of about $21 billion.
British Petroleum stock is down about one-third over the past year. The P/E is 6.5.
BP is the operator of the Alaskan Prudhoe Bay field, a portion of which had to be shut down a two years ago for extensive pipeline repairs.
BP's oil & gas reserves are also very large. Oil & petroleum liquids total 5.0 billion barrels and natural gas reserves total about 41 trillion cubic feet.
BP's activities in renewable energy are of interest. One item of particular interest to me is BP's work with the Jatropha plant from which biodiesel is being produced. See alternative energy sources for more.
Total (TOT). A large oil company with interests in oil and gas (including LNG), electricity generation, petrochemicals, oilfield services and engineering industries. Its oil and gas activities are scattered over Africa, Europe, the North Sea, the Caspian Sea, Australia, the Gulf of Mexico, and Latin America. Market cap $106 billion, revenues $213 billion, and net income = $21 billion. (Note: recent financial data on Total was not available at my sources).
Total has interests in 16,000 retail stations.
Total's oil & natural gas reserves are estimated at 10 billion barrels, equivalent.
Total has become adept at getting foreign countries to allow Total access to oil and gas reserves. Total officials say that getting access is the new challenge to international oil companies. Oil and gas-rich countries no longer allow you to come in and pillage the country of its resources. The countries now want something in return.
Chevron (CVX). This major oil company is headquartered in San Ramon, California. The oil company explores for crude oil and natural gas, refines crude oil, produces petrochemicals, and markets the products. Operates in 180 countries. Market cap $132 billion, revenues are $256 billion and earnings are $24 billion.
Chevron merged with Texaco in 2001.
In 2004 - 2006, Chevron led a group in making a very large (possibly giant) discovery (Jack prospect) in the deep Gulf of Mexico. However, it will take about 10 years to get the field in full production....an indication of the difficulty in bringing even a giant oil field into production when the oil field is located in the deep Gulf.
Chevron stock was down about one-fourth in the past year.
About three years ago, Chevron bought out Unocal after a tussle with CNOOC, the Chinese offshore company, which also wanted Unocal. (See CNOOC, below, for more information.)
Chevron is the largest supplier of geothermal energy in the U.S. but the total energy from geothermal represents only about 2 % of Chevron's total energy output - an indication of how small alternative energy output is in the U.S.
ConocoPhillips (COP). The company is located in Houston. Primary business is exploring for and producing crude oil, natural gas and natural gas liquids, worldwide. Conoco is the world's largest oil refiner. Also, manufactures and markets petrochemicals. Has an emerging businesses segment that pushes the development of new businesses beyond the company's traditional operations.
Conoco's market cap is $59 billion, annual revenues are $225 billion, and COP is temporarily operating at a loss. The stock was down about 50% over the past year.
ConocoPhillips became North America's largest natural gas producer when it purchased Burlington Industry for $38 billion. The purchase price is equivalent to a value of $3 per thousand cubic feet for Burlington's natural gas reserves. That looks like a decent price to me although not the bargain it appeared in the aftermath of Katrina when gas prices were much higher.
ConocoPhillips is making a strong effort to enter the Russian energy market.
Conoco's reserves are estimated at 9 billion barrels of oil equivalent.
Conoco and BP are teaming up to build a $30 billion pipeline to bring natural gas from the north slope to the U.S. markets.
Repsol YPF (REP). Largest Spanish oil and gas company based in Madrid. Engages in the exploration, development and production of oil and natural gas (also LNG). The company is strongly positioned in Argentina, Venezuela and other Latin American countries.
Repsol was apparently a junior partner to Petrobras in the giant offshore Brazilian oil strike just announced. (See write-up at top of page)
Repsol's market cap is $23 billion. Data on revenues and net income are not recent so are not included here.. The stock price is down one-half for the past year.
XTO Energy (XTO). The company develops and produces both oil and natural gas and has substantial reserves of both oil and gas. Its natural gas reserves are estimated at 12 trillion cubic ft and oil/natural gas liquids are estimated at almost 1 billion barrels. XTO has interest in over 10,000 oil & gas wells.
The stock was down about 50% over the past year (Before that, it had been moving up for a long time!).
The company's market cap is $19 billion, revenues are about $7.7 billion per year and the net profit is about $2.4 billion. The price to earnings ratio is 9, pretty low for a fast growing company like XTO.
XTO is headquartered in Texas and much of its operations are in the Texas - Louisiana area. The company is strong into the Barnett shale formation developments of North Texas.
XTO has the reputation of being a superbly managed firm. It is well-known for its ability to replace reserves as the oil & gas production is sold. The risk with XTO is also low because they operate largely in old U.S. oil and gas fields. XTO tends to avoid many of the energy-rich countries of the world where risk is great (as the giant major oil companies sometimes learn to their sorrow.)
XTO has jumped into the Bakken shale formation play in North Dakota by buying properties from Headington Oil for about $2 billion. XTO is already heavily involved in the red-hot Barnett Shale play and has recently moved into the massive natural gas strike in the Haynesville shale formation.
This is one I will keep a close watch on!
Occidental Petroleum (OXY). This independent, international oil company explores for, develops, and markets crude oil and natural gas in the US, Latin America, and Middle East. Biggest development in the past few years is the news that Occidental is back in Libya in a big way since sanctions were lifted from that country. Not only does Libya have plenty of oil but it has the good, light, low-sulfur oil that is easy to refine. Light oil is becoming increasingly precious as Peak Oil approaches. Occidental could be sitting in the catbird seat.
Occidental's reserves include 2 billion barrels of oil and 4 trillion cubic feet of natural gas.
Market cap $46 billion, $30 billion revenue and $7 billion net income.
Hess Corporation (HES) A smaller oil company than most of the ones discussed above. Hess explores for and produces crude oil and natural gas. It also operates oil refineries. Market cap is $18 billion, revenues are about $41 billion and profits are about $2.4 billion.
Hess's stock was down 40% over the past year.
Hess is having quite a bit of success in its offshore exploration activities. It is developing its large Pony discovery in the Gulf of Mexico.
Imperial Oil (IMO). Imperial Oil engages in exploring for, production of, and sales of crude oil and natural gas and their products. Operates over 2000 Esso stations in Canada.. Products include crude bitumen from Canada's oil sand deposits. Possibly a good way to play Canada's oil sands!
A majority (70%) of the company's stock is owned by Exxon Mobil.
Market cap is $32 billion, revenue is $25 billion revenue, and net income = $3 billion. . P/E of the stock is 10.
Marathon Oil Corporation (MRO). Marathon is a large oil company engaged in both the production of oil and natural gas and in the operation of refineries (capacity about 1,000,000 barrels of crude oil per day. Marathon recently agreed to purchase Western Oil Sands for $5.5 billion and also announced that it is upgrading one or more of its refineries to handle the heavy crude obtained from the oil sands. The company is also getting involved in the hot Bakken Formation prospect in the North Dakota - Montana-Manitoba area.
Marathon is a company that offers the investor the opportunity to invest in both the refinery end of the industry and the exploration/production end of the industry.
Marathon has a market cap of $21 billion, revenue of about $72 billion per year with profits of $3.5 billion. The stock price is down about one-thirdfor the year.
Chesapeake Energy (CHK). An independent natural gas company who has just become the largest producer of natural gas in the U.S. About 90% of the company's business is in natural gas. Chesapeake is an aggressive oil & gas company who operates thousands of oil and gas wells and drills hundreds of new wells each year. They are heavily and successfully involved in the Haynesville shale formation of Louisiana and East Texas using horizontally-drilled wells.
Chesapeake's reserves are about 7 trillion cubic feet of natural gas equivalent.
Chesapeake's market cap is $13 billion and revenue is about $ 12 billion. Profit was $623 million. The P/E is 18. The company stock was down about 60% during the past year as the overall stock market crashed.
Sliding natural gas prices over the past few years have required CHK to react aggressively to keep their profits up. The natural gas production rate has been cut, drilling programs have been trimmed, and marginal properties have been sold off.
Chesapeake Energy is a well-managed company but the stock market crash has not done them well.
Encana Corp (ECA). A Canadian-based independent company with some impressive oil & gas reserves: 13 trillion cubic feet of natural gas & 1 billion barrels of oil & natural gas liquids. At a market cap of $33 billion, the value of oil & gas reserves, alone, are worth more than the present stock value of the company.
Market cap is $34 billion, annual revenues are $30 billion, and net income is about $6 billion. P/E is 6.
The Canadian companies appear to be particularly popular now because they are in a safe location (removed from Gulf of Mexico with its hurricanes) and they are located near the hottest oil properties at this time - the Canadian oil sands whose recovery operations require enormous amounts of natural gas.
In addition to providing natural gas, Encana is getting involved in mining oil sand deposits and, in at least one instance, they are working a joint venture with another oil company.
EOG Resources (EOG). The bad boy is back! Enron is back! Or, at least, the independent oil company derived from Enron has arrived. Unlike the cursing that accompanied the demise of Enron, EOG is a well- thought-of company growing in leaps and bounds. I have included them here mainly because of their expertise in handling the Bakken Formation oil of North Dakota. Apparently, they are technically ahead of the other companies working on the Bakken Formation.
EOG has a market cap of $15 billion, revenue of $6.4 billion, and net income of $2.4 billion. The trailing PE is 6.
EOG is basically a gas company instead of an oil company...despite their expertise in handling Bakken shale formation oil. Their total reserves are about 7 trillion cubic feet equivalent.
Looks like a solid company. The stock was down about 50% over the past year..
EOG is the type of independent oil company (like Devon, below) we need right now. If we are going to survive the arrival of Peak Oil, we need an ample supply of oil and gas as a bridge to alternative energy development. And alternative energy development is nowhere near ready to assume the burden of the fossil fuels.
Keep up the good work, EOG!
Canadian Natural Resources (CNQ). Another Canadian-based company with large reserves (2 billion barrels oil, 5 trillion cubic feet of natural gas). Most of their reserves are in Canada but CNQ also has operations in the North Sea and offshore West Africa.
The market cap of CNQ is $25 billion, revenues are $12 billion per year. Net income is $4.1 billion. The trailing P/E is 6.
Devon (DVN). The largest independent oil and gas company and one about whom there are constant rumors of a take-over by one or other of the major oil companies. Devon has large oil reserves, which are well-verified, and many prospects. Hence, it is a desirable merger partner. Market cap is $23 billion, revenue is $ 15 billion.
Stock price lost over half its value over the past year,
Devon recently participated with Chevron in the discovery of a giant new oil field (Jack prospect) in the deep Gulf of Mexico and is also involved in the prolific Barnett Shale Formation work going on around the country.
Question. Would a takeover of independent Devon by a major oil company be desirable to the U.S. public as Peak Oil approaches? We need someone out looking for oil and gas and Devon does a great job. If the aggressive independents like Devon are taken over, who is going to find new oil deposits?
Too many of the larger firms are cautious and are content to buy oil deposits, i.e., buy independents like Devon, rather than spend the money to find oil deposits. You can't blame them since the return for exploration has been poor in recent years. My question is, of course, strictly academic since it is still a free country and, if someone wants to sell their firm, there is nothing legal that can be done to stop them. (For more of the same, see the discussion on China's proposed buyout of Unocal, above)
The public will likely suffer if Devon sells out.
As you can see, I like Devon but I like them as an independent.
Saudi Armco. (Saudi Armco has no public stock so no stock investment is possible). Saudi Arabian Oil Company. The world's largest oil company (largest oil producer). Owned by the Saudi Arabian government. Saudi Armco has control of enormous reserves of crude oil and very large reserves of natural gas. But, some experts say the Saudi oil reserves are exaggerated and that the super-giant Saudi field, Ghawar, is peaking and that further increases in oil production are unlikely.
The Saudis deny that their oil reserves are exaggerated. They say that when they nationalized the Saudi oil industry, they had to increase the stated oil reserves to realistic levels. They claim the oil companies - when the oil companies had control - had severely underestimated the oil reserves so that the companies could control oil prices. According to the Saudis, the oil reserves of the country are enormous, possibly as high as 900 billion barrels. Other oil experts question the reserve figures.
The Saudis also deny that their oil production has peaked and say they can increase oil production when necessary.
Saudi Arabia is a large country and additional oil fields (no doubt smaller than Ghawar) will likely be found.
(Note: In the past year or so, rumors have circulated that the Saudis are deliberately over-producing oil to put economic pressure on Iran, their competitor in the Persian Gulf region. Iran is very dependent on oil revenues and over-production reduces the price that Iran obtains for each barrel of oil.)
Petrobras
Petrobras (PBR) - Official name is Petroleo Brasileiro SA. Petrobras is the Brazilian state-run oil company. The market cap of the company stock is $152 billion but changing rapidly due to recent huge oil strikes off the Brazilian coast. Revenue is $98 billion and net income is $15 billion.
Petrobras stock lost half its value over the past year.
The company has 70,000 employees.
In April 2008, Petrobras announced the discovery of a giant oil field offshore from Brazil's southeastern coast. This Carioca field discovery closely follows their earlier discovery of the 8 billion barrel Tupi field in the same area. (It should be noted that the reported size (33 billion barrels) of the Carioca field is questioned by some oil experts.....on the other hand, there are rumors that the two Carioca and Tupi oil fields may be just the first two of a multiple collection of oil fields in the same general area.)
Offshore Brazil is turning into major oil territory and Petrobras is leading the way. The company now ranks high among the oil giants.
Keep up the good work, Petrobras! We need all the conventional oil you can find! Development of alternative energy sources is moving too slowly!
Who says state-run oil companies can't produce? Petrobras has made a major oil strike even if they are found to have fudged the size of the reserves a bit!
Statoil (STO). Statoil is 70 % owned by Norway and is headquartered in Norway. Statoil is very active on the Norwegian continental shelf. Statoil appears to working with Russia toward opening up huge Arctic Circle natural gas fields for development. with the long-term view of exporting LNG to the U.S. Statoil is also actively involved in oil and natural gas operations in 35 countries including LNG, Canadian oil sands, African oil, etc. I am beginning to be impressed by some of the state-run companies, e.g. Statoil & Petrobras.
The market cap is $58 billion, revenue is $99 billion, and net income $7 billion. PE is 9. The stock was down about one-half over the past year.
I particularly like Statoil's long-range projection for exporting LNG from the Arctic natural gas fields.
An impressive looking company if the state ownership shouldn't bother you. It doesn't bother me at all. As a matter of fact, when I look at the Brazilian-run company, Petrobras, and their giant new oil discovery offshore Brazil, and the well-run Statoil, the better I like the state-run companies. Some of the state-run firms are running circles around our giant private oil companies.
China National Offshore Oil Company, Ltd. (CNOOC) (Stock symbol CEO) CNOOC shook up the establishment a few years ago when they made an unsolicited offer of $18.5 billion to buy Unocal Corp. (UCL). CNOOC become quite the celebrity oil company. Eventually, under pressure from the U.S. Congress, the proposed purchase was blocked.
The offer shows that China desperate to shore up its oil and gas reserves for the long haul ahead. China is now the second leader consumer of oil in the world. They are already a net importer of oil and gas and their demand for energy is growing rapidly.
The offer upset some in the US Congress as China is generally seen as a US rival. But does the US really have any choice in such matters? Through the monstrous trade imbalance between the two countries, China has been allowed to accumulate over 700 billion dollars of greenbacks. We almost gleefully allowed this to happen and now we want to say the Chinese can't spend these greenbacks buying American companies. I don't think so! Eventually, we will have to allow China to buy U.S. energy firms.
You really can't blame the Chinese for trying. They need the oil and gas as badly as the US. ( You are going to see many more such deals around the globe from the Chinese. Many world oil companies are under-priced and the Chinese know bargains when they see them.)
Forbes (on-line) has called CNOOC a "buccaneering offshore exploration company." CNOOC is not afraid to go anywhere and that includes Somalia and Iran.
CNOOC is 66% owned by the Chinese government but the board had independent members who represent foreign interests.
PetroChina (PTR). The mainland China (headquartered in Beijing) oil and gas company. Explores for crude oil and natural gas and transports and markets the products. The company purchases oil when necessary. It also refines oil.
Company reserves are 12 billions barrels of oil and 57 trillion cubic feet of natural gas. PetroChina has 21,000 kilometers of gas pipeline, 9,600 kilometers of crude oil pipelines, and 2,400 kilometers of refined product pipelines.
Data on revenues & net income was not available from my sources.
The company has an amazing 466,000 employees.
The company has inked a deal for clean Australian natural gas (LNG) to be imported into China.
Gazprom OAO (OGZPF.PK). The Russian oil and gas company. Gazprom has the monopoly on Russia's natural gas production. The company is the largest company in Russia. An idea of the huge size of the firm can be seen in the fact that 25 % of Russia's federal tax revenues are from Gazprom. Gazprom controls one-fourth of the world's natural gas reserves. It should be noted that Gazprom is gearing up to export LNG overseas.
No financial data is presented on Gasprom due the difficulty of interpreting the available data.
You will have to do your own research.
The large oil companies are loaded with oil and gas reserves and oilfield technology. Their stocks also appear to be under-priced due to the overall market crash. With peak oil rapidly approaching and with alternative energy sources not even close to being able to replace oil and natural gas, now appears to be an excellent time to buy the large oil company stocks.
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Last Updated: 05/14/09
e-mail me @ vanc13@cox.net (Author: Van Cook)
Disclaimer
This web site, titled Large Oil Company Stocks, and the information included herein, is intended to provide information only and should not be construed as investment advice. The information provided is meant to broaden your knowledge and enable you to make better investment decisions within your portfolio.
Sometimes I give an opinion on the quality of an investment. This information is based solely on my own investment goals and investment needs and might not reflect your goals and needs and might not be an appropriate investment for your portfolio.
Please consult with your financial manager/consultant/accountant before actually purchasing any of the investments discussed herein.
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