The North America Oil & Gas Sectors : A Company and Industry Analysis (November 2003)
Mergent, November 2003, Pages: 36
Current Environment - Key Points
- The combined total revenue in 2002 of the top 10 oil and gas companies in the US was more than $400 billion and that of the top ten companies in Canada was nearly $35 billion
- The stock prices of most major oil companies dropped by varying amounts but up to 15% in 2002; this was in line with the overall market
The turnaround from 2002 to 2003 has been similar to date
- The growth of world oil production capacity continues to exceed the growth of demand, as it has done for the last three years
- Crude oil prices are presently strong, having averaged $25 a barrel in 2002 and around $30 a barrel so far in 2003
- This strength has predominantly been driven by exceptional events in Iraq, Nigeria and Venezuela
Forecasts are for a fall off in this price to around $20 to $25 /bbl
- Conversely US gas storage levels ended the heating season in 2003 at a very low level of just 15%
Despite efforts to refill prices can be expected to remain high
- Integrated oil company profitability for 2003 will be very high from their upstream activities due to the average price for crude oil and better chemicals results
- Pressure will be on to retain some of this profitability as prices decline in 2004
- Most IPOs planned for 2002 were withdrawn
IPOs tend to be restricted to exploration and production companies which can give high returns for the high level of risk inherent in there business
Some are rescheduled for Q4 2003/Q1 2004
Industry Profile - Key Points
- The United States of America is the world's largest energy producer, consumer, and net importer, while Canada is the fifth largest energy producer and a net exporter
- Little or no investment by the Government in the nationalised industry in Mexico over the last 20 years is finally being reversed
- Research and development is a vital part of the oil and gas industry as companies continue to expand the envelope of exploration, production and refining technology
- ExxonMobil alone spent more than $600 million on R&D in 2002
- The United States consumed an average of about 19.7 million barrels per day (Mbd) of oil in 2002 while producing 7.7 Mbd
- Uncoordinated environmental legislation from different US state governments has lead to a multitude of different fuel blends dependant upon region and season
- The EPA has now issued final rules to drastically reduce sulphur levels of on-road diesel fuel
Market Trends and Outlook - Key Points
- Merger activity in the oil business accelerated sharply during 2000 and 2001
This included activity in the very largest companies
- Although production falls quickly when oil prices drop, there is a significant lag between production increases and when prices increase
- Due to the closure of much of the US to new drilling companies are focusing more and more on Canada and elsewhere
- International oil companies will take a leading post-war role in reviving Iraq's oil industry
Short-term rehabilitation of southern Iraqi oilfields by US firms is already underway
- Exploration and production budgets for integrated oil companies dropped by an average of 5% in 2002 versus the previous year
- Economic uncertainty which was the feature of 2002/3 caused companies to pull back on expansion plans and to use cash generated to reduce debt and/or exercise share buy backs
A gradual reversal of this trend is anticipated for 2004
Current Environment - US
- Sector Overview
- Stock Performance
- Main Players
- Company Performance
- Research and Development
- Mergers and Acquisitions
- The YukosSibneft Merger and
Possible Takeover
- IPOs
Current Environment - Canada
- Main Players
- Mergers and Acquisitions
- IPOs
- Royalty Trusts
Industry Profile - US
- Overview
- Industry Size and Value
- Areas of Business Focus
- Proved Reserves
- Economic Environment
- Policy and Regulatory Environment
- Exploration and Production
- Consumption
- Marketing and Refining
Industry Profile - Canada
- Overview
- Economic Environment
- Policy and Regulatory Environment
- Exploration and Production
- Consumption
- Marketing and Refining
Industry Profile - Mexico
- Overview
- Main Players
- Economic Environment
- Policy and Regulatory Environment
- Exploration and Production
- Consumption
- Marketing and Refining
Market Trends & Outlook
- Exploration and Production Picks Up
- After the Iraq War
- Changes in Standards and Quality
Control
- Market Outlook
The Scope of this Report
Key References
Comparative Data
Sales Contacts
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