At a virtual climate summit with 41 world leaders, President Joe Biden on Thursday unveiled an ambitious 10-year climate plan that proposes to cut U.S. greenhouse gas emissions by 50 to 52 percent d ‘by 2030. This represents a quasi-doubling the US commitment of a 26-28% reduction under the Obama administration following the 2015 Paris Agreement.
Biden, the summit organizer, intended to use the meeting to convince emerging countries to become more aggressive in their emissions reduction targets. Or maybe he was trying to name a key figure at the meeting – Chinese President Xi Jinping who announced last year that the country has set a goal become carbon neutral by 2060.
Luckily for Biden, Corporate America is already on the right track with its aggressive climate plan, with at least 400 companies led by industry titans such as Apple (NASDAQ: AAPL), Alphabet (NASDAQ: GOOG, GOOGL), Microsoft (NASDAQ: MSFT), Coca Cola (NYSE: KO), General Electric (NYSE: GE), General Motors (NYSE: GM), Edison (NYSE: EIX), Exelon (NASDAQ: EXC), General Electric (NYSE: GE), and PG&E (NYSE: PCG) having sign an open letter supporting a reduction in GHG emissions of at least 50% from 2005 levels by 2030.
While the initial proposal will only offer an outline rather than a detailed breakdown, Biden’s aggressive goal clearly set the gauntlet for the oil and gas industry, with fossil fuels being the biggest source of GHGs. Related: Oil Guards Yemen As Saudi Arabia And Iran Meet In Secret
Oil remains by far the most dominant energy source in the world, with the EIA estimating that the world has consumed 92.2 million barrels per day (b / d) of oil and other liquid fuels in 2020, despite a 9% drop due to the pandemic.
As the world’s biggest polluters, such as the United States and China, become more aggressive in their climate goals, the largest oil and gas companies that bear the greatest responsibility for GHG emissions and are likely to feel the heat the most.
Interestingly, the 5 largest oil and gas companies in the world (by revenue) are from China and Europe, with US giants ExxonMobil (NYSE: XOM), Chevron Corp. (NYSE: CVX), and Marathon oil (NYSE: MRO) comes lower at # 6, # 8 and # 9, respectively.
China and Asia are likely to expand their oil and gas dominance over their US counterparts, given a recent analysis by energy researcher Wood Mackenzie projected that Asia-Pacific oil demand could increase 25% by 2040 compared to 2019 levels.
Here’s a look at the top 5 oil and gas companies in the world.
# 1. China Petroleum & Chemical Corp. (Sinopec)
- Revenue (2020): $ 407 billion
- Net Profit (TTM): $ 5.1 billion
- Market capitalization: $ 75.8 billion
- Total return over 1 year 4.9%
China Petroleum and Chemical Corporation (NYSE: SNP), also known as Sinopec, is one of China’s three state-owned oil companies and the largest oil and gas company in Asia Pacific and globally by revenue after achieving revenue of $ 407 billion at the end of fiscal year 2019-20. It is also the second largest listed company on the US stock exchanges in terms of revenue, behind only Walmart (NYSE: WMT).
Sinopec’s activities include the exploration, refining and marketing of oil and gas, as well as the production and sale of petrochemicals. The company’s products include gasoline, diesel, kerosene, jet fuel, synthetic rubbers and resins, and chemical fertilizers.
Sinopec Profit for fiscal 2020 fell 42% year on year at 5.1 billion, the lowest since 2015 due to the global pandemic and extensive lockdowns. The company, however, expects the current year to be much better and says it plans to increase capital spending by 24% to $ 25.55 billion while increasing throughput at the refinery. 5.5% this year to 250 million metric tonnes, or ~ 5 million barrels / day.
Sinopec says China aims to become the world’s largest oil refiner by 2025 with a refining capacity of 20 million barrels / day, according to Sinopec’s Economic and Development Research Institute.
# 2. PetroChina Co.
- Revenue (2020): $ 296.3 billion
- Net Profit (TTM): $ 2.9 billion
- Market capitalization: $ 111.4 billion
- Total return over 1 year: -0.26%
PetroChina Co. (NYSE: PTR) is the second largest oil and gas company in the world, currently with assets in 30 countries around the world. PetroChina – the publicly traded arm of China’s state-owned China National Petroleum Corporation – specializes in oil and gas operations, petroleum services, petroleum engineering and construction, equipment manufacturing, financial services and the development of new energies.
PetroChina unveiled plans for spend 239 billion yuan ($ 37 billion) in annual capital expenditure– the highest of all oil and gas companies in the world – with the aim of increasing domestic production over the next five years and improving China’s energy security.
# 3. Saudi Arabian Oil Co. (Saudi Aramco)
- Revenue (TTM): $ 286.9 billion
- Net Profit (TTM): $ 64.5 billion
- Market capitalization: $ 1.9 trillion
- Total return over 1 year: 1.4%
With a market cap of $ 1.9 trillion, Saudi Arabian Oil Co, or Saudi Aramco (TADAWUL: 2222) is the world’s most valuable oil and gas company, but only the third in terms of revenue. Aramco is unusual on this list given that its stock does not trade in the United States. However, it is a very influential and major player in the global energy scene, given that it is the main national oil company (NOC) of the OPEC king, Saudi Arabia. Related: The Ugly Truth About Renewable Energy
Aramco is the largest oil producing company with a daily production clip of 3.2 million barrels and also has the second largest proven crude oil reserves in the world of over 270 billion barrels.
Aramco has achieved a agreement to sell a 49% stake in its pipelines to an international consortium led by the Abu Dhabi sovereign wealth fund Mubadala investment and EIG Global Energy Partners for over $ 12 billion. The deal represents another attempt to monetize Saudi Arabia‘s huge oil assets as the kingdom seeks to diversify its economy.
Saudi Arabia has made aggressive investments in renewables and has announced its intention to forgo LNG development in favor of hydrogen. Saudi Aramco remains OPEC’s alternative producer and has cut oil production by 1 million barrels per day in an effort to balance the market.
# 4. Royal Dutch Shell Plc.
- Revenue (TTM): $ 180.5 billion
- Net Profit (TTM): – $ 21.7 billion
- Market capitalization: $ 144.3 billion
- Total return over 1 year: 8.4%
- Stock Exchange: New York Stock Exchange
Based in the Netherlands, Royal Dutch Shell Plc. (NYSE: RDS.A) operates as an integrated oil, gas and chemical company.
Shell remains one of Big Oil’s least optimistic companies when it comes to the long-term oil and gas outlook, Shell says we may have already passed peak oil demand and are preparing for a worst-case scenario. : demand never fully recovers.
âI think a crisis like this has the potential to capitalize the company in a different way of thinking, just like the Paris agreement did,CEO Ben van Beurden told investors.
Shell also revealed that it expects 75% of its proven oil and gas reserves to be depleted by 2030 and nearly all by 2050.
Shell is moving massively away from oil and gas production and towards green energy, including reserving billions of dollars in losses due to huge write-offs of assets.
On a more positive note, Shell was able to double its trading profits on crude and refined products in 2020, with profits for the Petroleum Products division reaching nearly $ 2.6 billion against 1.3 billion dollars the previous year. Shell managed to stay in the dark despite a 87% dive into profits thanks to juicy trading profits
# 5. BP Plc.
- Revenue (TTM): $ 180.4 billion
- Net Profit (TTM): – $ 20.3 billion
- Market capitalization: $ 82.3 billion
- Total return over 1 year: 4.3%
BP Plc. (NYSE: BP) is active in the energy industry around the world, including the production and refining of oil and gas, trading in natural gas; offers biofuels and operates onshore / offshore wind power and solar power generation facilities.
Like Shell, BP’s business arm had booming business during the oil crisis, making nearly $ 4 billion in 2020 and nearly matching the record business profit of 2019. Profits helped support the company’s annual results. company, with BP reporting a net loss of $ 5.7 billion, excluding write-downs.
BP has recently become less aggressive with its oil production and exploration, but still remains more active than Shell. A week ago, the company revealed that it had discovered oil at the Puma West prospect in the deepwater Gulf of Mexico in the United States, with preliminary data indicating good potential for a commercial volume of hydrocarbons. BP operates Puma West with a 50% interest, with Chevron (NYSE: CVX) and Talos Energy (NYSE: TALO), each holding a 25% interest.
By Alex Kimani for Oil Octobers
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