Skip to footer

Are oil super majors falling behind the competition?

Oil super majors' performance hasn't been very impressive of late, Alic writes. They might have to get smaller to get bigger if they wish to avoid being rendered irrelevant by the growing ranks of juniors, she adds. 

|
Gerald Herbert/AP/File
An oil rig is seen in the Gulf of Mexico near the Chandeleur Islands, off the southeastern tip of Louisiana. Right now, the only clear benefit of the oil super majors is their technology development capabilities, Alic writes.
  • By Jen Alic Guest blogger

The oil super majors haven’t done anything terribly impressive in the past five years—a period that has seen the juniors shine in places like Iraqi Kurdistan, and even in Texas.

This is what happened in the late 1990s to create the super majors we have today:

•    BP Plc (NYSE: BP)took over Amoco and Arco
•    Exxon (NYSE: XOM)acquired Mobil
•    Total SA acquired Fina and Elf
•    Conoco (NYSE: COP)and Phillips merged
•    Chevron (NYSE: CVX) and Texaco merged

That worked then, but it may not be working now. The performance of these giants hasn’t been that impressive of late. There have been production gains, but they haven’t been significant and since the massive wave of mergers, these companies haven’t really grown in any noticeable way. More importantly, most of the bottom line improvement has been because of gas, not oil.

Today, the most significant work is being done by the juniors in Africa, the Middle East and North America even offshore where it’s more expensive. 

Some of the more notable ambitious juniors include: (Related Article: The Petroleum Rollercoaster)

•    Canadian-based Africa Oil – operating in Somalia (Puntland) and Kenya
•    Tullow with its big finds in Kenya (and Africa Oil’s partner there)
•    Turkey’s Genel Energy – the key operator in Iraqi Kurdistan and the first explorer Somaliland
•    UK-listed Heritage Oil – pushing ambitiously into the majors’ game in Nigeria
•    Canada’s Emperor Oil – operating in Sudan and Turkey

These are the new exploration champions, and while the smaller juniors’ major goal is to be bought out by a major, the larger juniors may go it alone and they’ve been very successful so far.

In Iraqi Kurdistan, it was the juniors who got there first; the majors followed suit once they saw the potential based on junior exploration and development.

Here are the top 10 performing juniors for 2012 listed on the TSX Venture Exchange:

1.    Emperor Oil (TSXV:EM); current price: $0.41;  year-to-date gain: 561.54 percent
2.    Africa Oil (TSXV:AOI); current price: $6.75;  year-to-date gain: 323.42 percent
3.    PetroAmerica Oil (TSXV:PTA); current price: $0.35; year-to-date gain: 238.10 percent
4.    Wellstar Energy (TSXV:WSE.H); current price: $0.15; year-to-date gain: 211.11 percent
5.    Primeline Energy Holdings (TSXV:PEH); current price: $0.57; year-to-date gain: 171.43 percent
6.    Kingsland Energy (TSXV:KEC); current price: $0.54; year-to-date gain: 170.00 percent
7.    Petromin Resources (TSXV:PTR); current price: $0.10; year-to-date gain: 150.00 percent
8.    Eaglewood Energy (TSXV:EWD); current price: $0.43; year-to-date gain: 145.71 percent
9.    Bayshore Petroleum (TSXV:BSH); current price: $0.33; year-to-date: 113.33 percent
10.  Contact Exploration (TSXV:CEX); current price: $0.33; year-to-date: 113.33 percent

Right now, the only clear benefit of the super majors is their technology development capabilities.

So what is a super major to do? They are going to have to engage in a solid fitness regime, shed some pounds and tone some muscles. They might have to get smaller to get bigger if they wish to avoid being rendered irrelevant by the growing ranks of juniors with solid management teams, an eye for exploration potential and a new no-risk-is-too-scary attitude.

Original source: http://oilprice.com/Energy/Crude-Oil/Super-Majors-Need-to-Step-Up-Their-Oil-Game.html

You've read  of  free articles. Subscribe to continue.
Real news can be honest, hopeful, credible, constructive.
What is the Monitor difference? Tackling the tough headlines – with humanity. Listening to sources – with respect. Seeing the story that others are missing by reporting what so often gets overlooked: the values that connect us. That’s Monitor reporting – news that changes how you see the world.
editor@csmonitor.com
Subscribe
Mark Sappenfield
Editor

Dear Reader,

About a year ago, I happened upon this statement about the Monitor in the Harvard Business Review – under the charming heading of “do things that don’t interest you”:

“Many things that end up” being meaningful, writes social scientist Joseph Grenny, “have come from conference workshops, articles, or online videos that began as a chore and ended with an insight. My work in Kenya, for example, was heavily influenced by a Christian Science Monitor article I had forced myself to read 10 years earlier. Sometimes, we call things ‘boring’ simply because they lie outside the box we are currently in.”

If you were to come up with a punchline to a joke about the Monitor, that would probably be it. We’re seen as being global, fair, insightful, and perhaps a bit too earnest. We’re the bran muffin of journalism.

But you know what? We change lives. And I’m going to argue that we change lives precisely because we force open that too-small box that most human beings think they live in.

The Monitor is a peculiar little publication that’s hard for the world to figure out. We’re run by a church, but we’re not only for church members and we’re not about converting people. We’re known as being fair even as the world becomes as polarized as at any time since the newspaper’s founding in 1908.

We have a mission beyond circulation, we want to bridge divides. We’re about kicking down the door of thought everywhere and saying, “You are bigger and more capable than you realize. And we can prove it.”

If you’re looking for bran muffin journalism, you can subscribe to the Monitor for $15. You’ll get the Monitor Weekly magazine, the Monitor Daily email, and unlimited access to CSMonitor.com.

Subscribe to insightful journalism

QR Code to Are oil super majors falling behind the competition?
Read this article in
https://www.csmonitor.com/Environment/Energy-Voices/2013/0214/Are-oil-super-majors-falling-behind-the-competition
QR Code to Subscription page
Start your subscription today
https://www.csmonitor.com/subscribe