Top 250 Global Energy company Rankings – Europe shows strength

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LNG flows, demand growth and trade tensions lift Shell to first place in this year’s S&P Global Platts Top 250 Global Energy Company Rankings. Article by Harry Weber, with editing by Keiron Greenhalgh

Europe seized market power while the US and China battled over trade in 2018.

As the world’s two biggest economies levied punishing tariffs against each other, impacting a range of commodities from LNG to petrochemicals to oil, countries including France, Spain, Poland and Norway moved quickly in 2018 to open their doors to increasing volumes of supplies, while also working to market their own resources.

A 31.6% rise in the annual average Brent crude oil price, to $71.31/b from $54.19/b in 2017, coupled with a narrowing of the spread between prices in the two major LNG markets also boosted Europe’s energy fortunes.

Amid the competing headwinds and tailwinds, scale mattered, as Royal Dutch Shell took the No. 1 spot in the 2019 S&P Global Top 250 ranking of energy companies, up 15 notches from the year before. In dethroning Irving, Texas-based ExxonMobil, which fell one spot to No. 2, the integrated oil and natural gas company (IOG) was atop the list for the first time since 2004. The 2019 list was based on data from 2018, including assets, revenue, profits and return on invested capital.

Global primary energy consumption grew at its fastest rate in almost a decade in 2018, led by natural gas and renewables, according to BP’s annual statistical review of world energy, issued in June 2019. Oil and coal consumption, as well as electricity generation, also advanced, although by modest margins. China, the US and India together accounted for more than two thirds of the global increase in energy demand, the report showed.

Chinese retaliatory tariffs on imports of US LNG forced trade flows to shift in the final quarter of 2018, and the impact continued in 2019 as the tariffs increased. In one snapshot of the impact, in the second quarter of 2019, no US LNG cargoes were delivered to China, versus nine during the same period in 2018 before the initial tariffs were imposed, S&P Global Platts Analytics trade flow data showed.

The result? Shipments to Spain, France and Chile helped pick up the slack as the US saw a 55% increase in overall worldwide export deliveries during the three- month period that ended June 30, 2019.

The global landscape – characterized by robust competition, volatile prices, shifting market fundamentals and geopolitical uncertainty – favored the majors in the 2019 rankings, with IOGs from the US, Europe, the Middle East and Africa taking nine of the top 10 spots. They benefited from deep pockets, vast portfolios and tentacles in multiple commodities. At No. 7, down four spots from No. 3 the year before, Houston-based Phillips 66, a refining and marketing company, took the remaining spot.

Coal India, at No. 43 versus No. 57 the previous year, saw the biggest return on invested capital globally, at 60%, and state-run China Petroleum & Chemical Corp., an IOG also known as Sinopec, generated the most revenues at $418.4 billion, although it fell a spot in the 2019 rankings to No. 10 from No. 9 the year before. ConocoPhillips, an exploration and production company based in Houston, was the biggest mover on the 2019 list among companies that were also on the 2018 list, jumping 161 spots to No. 12 from No. 173 in the 2018 rankings.

For its part, London-based BP, an IOG, came in at No. 16 in the 2019 rankings, up 24 spots from No. 40 the year before.

“It feels like the oil market rollercoaster will run for some time to come,” Spencer Dale, BP’s chief economist, said when the statistical review was released. “The gyrations in supply, together with a host of macroeconomic factors, including the festering trade dispute between the US and China, were reflected in oil prices, which trended higher through much of the year, before tumbling in the final quarter.”

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