Platts Top 250 Global Energy Company Rankings measures financial performance by examining

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1 Power Sector Revival Ross McCracken, Editor, Energy Economist Top 250 Global Energy Company Rankings reviewed. For some, 2009 was the hangover, for others it spelled readjustment and recovery. Top 250 Global Energy Rankings for might be taken as a survivors guide to the financial crisis. Energy demand slumped in the OECD, while elsewhere the growth rates of the fastest developing economies were all but cut in half. The ings, which are based on financial reports from 2009, thus provide a relative picture of which energy industry sectors proved most resilient to the cataclysmic events of the past two to three years. Illustrating the scale of the shock, physical crude benchmark Dated Brent averaged $97.26 a barrel in 2008, its highest ever annual average, only Top 250 Global Energy Company Rankings measures financial performance by examining each company s assets, revenue, profits and return on invested capital. All ed companies have assets greater than (US) $3 billion. The underlying data comes from Capital IQ, a Standard & Poor s business (like, a division of The McGraw-Hill Companies). to slump 36.5% in 2009 to $61.67/b, below the average price level seen in This took its toll. Total profits for the top ten companies, which are dominated by integrated oil and gas companies, dropped precipitously from $ billion in 2008 to $ billion in If oil prices suffered, natural gas suffered more. Globally, natural gas demand experienced what the International Energy Agency called an unprecedented drop in demand. Exchange-traded natural gas prices, particularly in the United States, plummeted in 2009 in both absolute terms and relative to oil. Profits and prices were hit by the combined success of US unconventional gas production, expanding LNG supply worldwide and diminishing demand. By contrast, gas sellers dependent primarily on oil indexation and take-orpay contracts for their long-term sales found a measure of protection that others facing gas-to-gas competition did not. The coexistence of these two ways of pricing gas created distinct pressures, impacting on selling and acquisition strategies. The 2009 financial year stood out because of the huge disparity between spot gas, which was cheap, and relatively expensive prices for oillinked long-term gas sales. 62 insight December

2 But one person s loss is another s gain. As feedstock prices fell from secondhalf 2008, the power sector, expecting some much-deserved relief, was instead caught in a pincer movement between a near total lack of liquidity in the banking sector and a precipitous drop in demand. It has taken all of 2009 for these companies to find their feet. Some did so more quickly and effectively than others. As energy feedstock prices have remained relatively low in 2009, oil and gas profits have fallen from 2008, but power sector returns have revived from often negative territory, bringing utilities in many regions of the world back up the ings. Nevertheless, the last two years have forced a strategic rethink on the part of utilities and independent power producers. The demand and price outlook remains depressed, challenging previous expansion plans, while the environment regarding carbon pricing in key jurisdictions remains as uncertain as it ever was. Top Ten Reigning supreme at the top of the ings for the sixth consecutive year is US major ExxonMobil. Despite being fifth in terms of asset value, ExxonMobil came second in terms of both revenues and profits. ings are based on a combination of assets, revenues, profits and return on capital invested for listed companies with over $2 billion in assets. While Exxon- Mobil s European gas production declined, the coming on stream of its giant LNG production facilities in Qatar have helped it retain a strong grip on European markets. Second in the running is the now troubled UK major BP, which improved its position from fourth in the ings in This reflects a strong performance in 2009 relative to its peers. BP s revenues dropped by a third, but profits by only little more than a fifth. Contrast this with Chevron and Shell, which moved down from second and third respectively to ninth and tenth. Both saw profits more than halve. 1. Fastest growing Asia companies. 3-year Rank Company Country Industry CGR % Rank 1 China Resources Power Holdings Hong Kong IPP PTT Aromatics & Refining Plc Thailand R&M Adaro Energy Tbk Indonesia C&CF Tata Power Co Ltd India EU Huadian Power Intl Corp Ltd China IPP Reliance Infrastructure Ltd India EU Datang Int l Power Generation Co China IPP PowerGrid Corp Of India India EU China Shenhua Energy Co Ltd China C&CF Huaneng Power International China IPP Reliance Industries Ltd India R&M China Coal Energy Co China C&CF PT Bumi Resources Tbk Indonesia C&CF Shenergy Co Ltd China IPP YTL Corp Berhad Malaysia DU Shenzhen Energy Group Co Ltd China IPP Gail (India) Ltd India GU Yanzhou Coal Mining Co Ltd China C&CF Indian Oil Corp Ltd India R&M China Yangtze Power Co China IPP Fastest Growing is based on a three year compound growth rate (CGR) for revenues. The compound growth rate (CGR) is based on the companies revenue numbers for the past four years (current year included). If only three years of data was available then it is a two year CGR. All ings are computed from data assessed on June 1,. Source: Capital IQ/ December insight 63

3 Return on Rank Assets Revenues Profits invested capital 3-year Industry Company State or country Region $ million Rank $ million Rank $ million Rank ROIC % Rank CGR% code 1 Exxon Mobil Corp Texas Americas 233, , , IOG 2 BP Plc United Kingdom EMEA 235, , , IOG 3 Gazprom Oao Russian Federation EMEA 270, , , IOG 4 Petrobras Brazil Americas 190, , , IOG 5 Total France EMEA 156, , , IOG 6 E.ON AG Germany EMEA 187, , , EU 7 Petrochina Co Ltd China Asia/Pacific Rim 212, , , IOG 8 China Petroleum & Chemical Corp China Asia/Pacific Rim 128, , , IOG 9 Chevron Corp California Americas 164, , , IOG 10 Royal Dutch Shell Plc United Kingdom EMEA 292, , , IOG 11 LUKOIL Oil Company Russian Federation EMEA 79, , , IOG 12 RWE AG Germany EMEA 114, , , DU 13 Reliance Industries Ltd India Asia/Pacific Rim 55, , , R&M 14 Rosneft Oil Company Russian Federation EMEA 83, , , IOG 15 Endesa SA Spain EMEA 73, , , EU 16 ENI SpA Italy EMEA 144, , , IOG 17 TNK-BP Holdings Russian Federation EMEA 28, , , IOG 18 Oil & Natural Gas Corp Ltd India Asia/Pacific Rim 33, , , E&P 19 China Shenhua Energy Co Ltd China Asia/Pacific Rim 45, , , C&CF 20 Surgutneftegas Oao Russian Federation EMEA 37, , , IOG 21 Enel SpA Italy EMEA 197, , , EU 22 EDF France EMEA 297, , , EU 23 Scottish & Southern Energy United Kingdom EMEA 26, , , EU 24 ConocoPhillips Texas Americas 152, , , IOG 25 Gazprom Neft Russian Federation EMEA 29, , , IOG 26 Exelon Corp Illinois Americas 49, , , EU 27 Statoil Asa Norway EMEA 86, , , IOG 28 GDF Suez France EMEA 210, , , DU 29 CNOOC Ltd Hong Kong Asia/Pacific Rim 35, , , E&P 30 BG Group Plc United Kingdom EMEA 38, , , IOG 31 Constellation Energy Group Inc Maryland Americas 23, , , IPP 32 Iberdrola SA Spain EMEA 107, , , EU 33 Occidental Petroleum Corp California Americas 44, , , IOG 34 Ecopetrol SA Colombia Americas 28, , , IOG 35 PTT Plc Thailand Asia/Pacific Rim 34, , , IOG 36 AK Transneft Oao Russian Federation EMEA 45, , , S&T 37 CEZ AS Czech Republic EMEA 25, , , EU 38 Sasol Ltd South Africa EMEA 19, , , IOG 39 National Grid United Kingdom EMEA 63, , , DU 40 Repsol YPF SA Spain EMEA 71, , , IOG 41 Imperial Oil Ltd Canada Americas 16, , , IOG 42 Centrica Plc United Kingdom EMEA 28, , , DU 43 Vattenfall Sweden EMEA 76, , , EU 44 Public Service Enterprise Group Inc New Jersey Americas 28, , , DU 45 Origin Energy Ltd Australia Asia/Pacific Rim 18, , , IOG 46 Tatneft Oao Russian Federation EMEA 16, , , E&P 47 NextEra Energy Inc Florida Americas 48, , , EU 48 EnBW AG Germany EMEA 42, , , EU 49 Formosa Petrochemical Taiwan Asia/Pacific Rim 14, , , R&M 50 Southern Co Georgia Americas 52, , , EU Notes: C&CF = coal and combustible fuels, DNR = data not reported, DU = diversified utility, E&P = exploration and production, EU = electric utility, GU = gas utility, IOG = integrated oil and gas, IPP = independent power producer and energy trader, R&M = refining and marketing, S&T = storage and transfer. All ings are computed from data assessed on June 1,. 64 insight December

4 Return on Rank Assets Revenues Profits invested capital 3-year Industry Company State or country Region $ million Rank $ million Rank $ million Rank ROIC % Rank CGR% code 51 XTO Energy Inc Texas Americas 36, , , E&P 52 NTPC Ltd India Asia/Pacific Rim 26, , , IPP 53 Marathon Oil Corp Texas Americas 47, , , IOG 54 Tokyo Electric Power Co Inc Japan Asia/Pacific Rim 144, , , EU 55 Encana Corp Canada Americas 33, , , E&P 56 Kansai Electric Power Co Japan Asia/Pacific Rim 78, , , EU 57 EDP Portugal EMEA 49, , , EU 58 Gas Natural Sdg SA Spain EMEA 55, , , GU 59 PG&E Corp California Americas 42, , , DU 60 Enbridge Inc Canada Americas 26, , , S&T 61 Fortum OYJ Finland EMEA 24, , , EU 62 American Electric Power Co Inc Ohio Americas 48, , , EU 63 Chubu Electric Power Co Inc Japan Asia/Pacific Rim 58, , , EU 64 Dominion Resources Inc Virginia Americas 42, , , DU 65 Husky Energy Inc Canada Americas 25, , , IOG 66 Entergy Corp Louisiana Americas 37, , , EU 67 Veolia Environnement France EMEA 61, , DU 68 Enersis SA Chile Americas 24, , , EU 69 Suncor Energy Inc Canada Americas 66, , , IOG 70 Hess Corp New York Americas 29, , IOG 71 Murphy Oil Corp Arkansas Americas 12, , IOG 72 International Power Plc United Kingdom EMEA 20, , , IPP 73 Sempra Energy California Americas 28, , , DU 74 Canadian Natural Resources Canada Americas 39, , , E&P 75 FirstEnergy Corp Ohio Americas 34, , , EU 76 OMV AG Austria EMEA 26, , IOG 77 YPF Argentina Americas 10, , IOG 78 Indian Oil Corp Ltd India Asia/Pacific Rim 29, , R&M 79 Duke Energy Corp North Carolina Americas 57, , , EU 80 Kinder Morgan Energy Partners LP Texas Americas 20, , , S&T 81 Woodside Petroleum Ltd Australia Asia/Pacific Rim 16, , , E&P 82 Consolidated Edison Inc New York Americas 33, , DU 83 SK Energy Co Ltd Korea Asia/Pacific Rim 20, , n/a R&M 84 Midamerican Energy Holdings Iowa Americas 44, , , DU 85 Edison International California Americas 41, , EU 86 Inpex Corp Japan Asia/Pacific Rim 22, , , E&P 87 Public Power Corp of Greece Greece EMEA 19, , EU 88 CEMIG Brazil Americas 15, , , EU 89 Endesa Chile Americas 11, , , IPP 90 TransCanada Corp Canada Americas 41, , , S&T 91 Plains All American Pipeline LP Texas Americas 12, , S&T 92 NRG Energy Inc New Jersey Americas 23, , IPP 93 China Coal Energy Co China Asia/Pacific Rim 16, , C&CF 94 Bharat Petroleum Co Ltd India Asia/Pacific Rim 11, , R&M 95 AES Corp Virginia Americas 39, , IPP 96 Tupras Turkey EMEA 6, , R&M 97 Saudi Electricity Co Saudi Arabia EMEA 44, , EU 98 CLP Holdings Hong Kong Asia/Pacific Rim 20, , , EU 99 CEPSA Spain EMEA 12, , IOG 100 Progress Energy Inc North Carolina Americas 31, , EU Notes: C&CF = coal and combustible fuels, DNR = data not reported, DU = diversified utility, E&P = exploration and production, EU = electric utility, GU = gas utility, IOG = integrated oil and gas, IPP = independent power producer and energy trader, R&M = refining and marketing, S&T = storage and transfer. All ings are computed from data assessed on June 1,. December insight 65

5 Return on Rank Assets Revenues Profits invested capital 3-year Industry Company State or country Region $ million Rank $ million Rank $ million Rank ROIC % Rank CGR% code 101 KazMunaiGas Exploration Kazakhstan EMEA 8, , , E&P 102 Huaneng Power International China Asia/Pacific Rim 28, , IPP 103 Galp Energia SGPS SA Portugal EMEA 8, , IOG 104 Xcel Energy Inc Minnesota Americas 25, , DU 105 Mol Hungarian Oil Hungary EMEA 18, , IOG 106 Alpiq Holding AG Switzerland EMEA 17, , EU 107 Gail (India) Ltd India Asia/Pacific Rim 7, , GU 108 Tokyo Gas Co Ltd Japan Asia/Pacific Rim 20, , GU 109 Verbund Austria EMEA 12, , EU 110 Kyushu Electric Power Co Inc Japan Asia/Pacific Rim 44, , EU 111 GS Holdings Corp Korea Asia/Pacific Rim 21, , R&M 112 CPFL Energia SA Brazil Americas 9, , EU 113 RusHydro JSC Russian Federation EMEA 15, , , EU 114 CONSOL Energy Inc Pennsylvania Americas 7, , C&CF 115 Snam Rete Gas SpA Italy EMEA 23, , , GU 116 Energy Transfer Partners LP Texas Americas 11, , S&T 117 Spectra Energy Corp Texas Americas 24, , S&T 118 PKN ORLEN Poland EMEA 14, , R&M 119 Tohoku Electric Power Co Inc Japan Asia/Pacific Rim 43, , EU 120 Eletropaulo Brazil Americas 6, , EU 121 China Resources Power Holdings Hong Kong Asia/Pacific Rim 15, , IPP 122 PTT Exploration & Production Thailand Asia/Pacific Rim 9, , E&P 123 KEPCO Inc Korea Asia/Pacific Rim 77, , EU 124 Osaka Gas Co Ltd Japan Asia/Pacific Rim 16, , GU 125 AGL Energy Australia Asia/Pacific Rim 7, , DU 126 Novatek Oao Russian Federation EMEA 6, , E&P 127 Ameren Corp Missouri Americas 23, , DU 128 DTE Energy Co Michigan Americas 24, , DU 129 JX Holdings Inc Japan Asia/Pacific Rim 43, , , R&M 130 Hongkong Electric Holdings Ltd Hong Kong Asia/Pacific Rim 9, , EU 131 Valero Energy Corp Texas Americas 35, , R&M 132 United Utilities Group Plc United Kingdom EMEA 13, , DU 133 Caltex Australia Ltd Australia Asia/Pacific Rim 4, , R&M 134 Chugoku Electric Power Co Japan Asia/Pacific Rim 30, , EU 135 Enterprise GP Holdings LP Texas Americas 27, , S&T 136 Peabody Energy Corp Missouri Americas 9, , C&CF 137 Thai Oil Pcl Thailand Asia/Pacific Rim 4, , R&M 138 Williams Companies Inc Oklahoma Americas 25, , S&T 139 ONEOK Partners LP Oklahoma Americas 7, , S&T 140 PPL Corp Pennsylvania Americas 22, , EU 141 Cameco Corp Canada Americas 7, , C&CF 142 Yanzhou Coal Mining Co Ltd China Asia/Pacific Rim 9, , C&CF 143 Eletrobras Brazil Americas 73, , EU 144 Idemitsu Kosan Co Ltd Japan Asia/Pacific Rim 27, , R&M 145 Tractebel Energia SA Brazil Americas 5, , IPP 146 OMV Petrom Romania EMEA 7, , IOG 147 COPEL Brazil Americas 7, , EU 148 Ultrapar Participacoes SA Brazil Americas 6, , S&T 149 Hong Kong & China Gas Co Ltd Hong Kong Asia/Pacific Rim 8, , GU 150 Edison SpA Italy EMEA 20, , IPP Notes: C&CF = coal and combustible fuels, DNR = data not reported, DU = diversified utility, E&P = exploration and production, EU = electric utility, GU = gas utility, IOG = integrated oil and gas, IPP = independent power producer and energy trader, R&M = refining and marketing, S&T = storage and transfer. All ings are computed from data assessed on June 1,. 66 insight December

6 Return on Rank Assets Revenues Profits invested capital 3-year Industry Company State or country Region $ million Rank $ million Rank $ million Rank ROIC % Rank CGR% code 151 EOG Resources Inc Texas Americas 18, , E&P 152 Cheung Kong Infrastructure Bermuda Asia/Pacific Rim 6, EU 153 CenterPoint Energy Inc Texas Americas 19, , DU 154 Neste Oil Oyj Finland EMEA 7, , R&M 155 Nexen Inc Canada Americas 21, , E&P 156 Polish Oil And Gas Co Poland EMEA 9, , IOG 157 ONEOK Inc Oklahoma Americas 12, , GU 158 Adaro Energy Tbk Indonesia Asia/Pacific Rim 4, , C&CF 159 Tata Power Co Ltd India Asia/Pacific Rim 6, , EU 160 Korea Gas Corp Korea Asia/Pacific Rim 19, , GU 161 Mirant Corp Georgia Americas 9, , IPP 162 S-Oil Corp Korea Asia/Pacific Rim 7, , R&M 163 China Yangtze Power Co China Asia/Pacific Rim 23, , IPP 164 Tenaga Nasional Bhd Malaysia Asia/Pacific Rim 21, , EU 165 PTT Aromatics & Refining Plc Thailand Asia/Pacific Rim 4, , R&M 166 Iberdrola Renewables SA Spain EMEA 26, , IPP 167 Cosmo Oil Co Ltd Japan Asia/Pacific Rim 18, , R&M 168 Hellenic Petroleum SA Greece EMEA 7, , R&M 169 Anadarko Petroleum Corp Texas Americas 50, , E&P 170 Wisconsin Energy Corp Wisconsin Americas 12, , DU 171 Questar Corp Utah Americas 8, , GU 172 Moscow United Electric Power Russian Federation EMEA 7, , EU 173 Light SA Brazil Americas 5, , EU 174 Hindustan Petroleum Corp Ltd India Asia/Pacific Rim 10, , R&M 175 Acciona SA Spain EMEA 25, , EU 176 Enbridge Energy Partners LP Texas Americas 8, , S&T 177 Electric Power Development Co Japan Asia/Pacific Rim 22, , IPP 178 Pepco Holdings Inc District of Columbia Americas 15, , EU 179 Red Electrica Corp SA Spain EMEA 7, , EU 180 Allegheny Energy Inc Pennsylvania Americas 11, , EU 181 EWE AG Germany EMEA 12, , EU 182 Petrol Ofisi As Turkey EMEA 4, , R&M 183 Northeast Utilities Massachusetts Americas 14, , EU 184 SCANA Corp South Carolina Americas 12, , DU 185 Datang Int l Power Generation Co China Asia/Pacific Rim 26, , IPP 186 Grupa Lotos SA Poland EMEA 4, , R&M 187 Gasunie Netherlands EMEA 12, , GU 188 Canadian Utilities Canada Americas 8, , DU 189 Terna SpA Italy EMEA 11, , EU 190 UGI Corp Pennsylvania Americas 6, , GU 191 CESP Brazil Americas 8, , IPP 192 BKW Energie AG Switzerland EMEA 5, , EU 193 Esso SAF France EMEA 4, , R&M 194 Apache Corp Texas Americas 28, , E&P 195 NiSource Inc Indiana Americas 19, , DU 196 Sunoco Inc Pennsylvania Americas 11, , R&M 197 Canadian Oil Sands Trust Canada Americas 6, , E&P 198 Reliance Infrastructure Ltd India Asia/Pacific Rim 7, , EU 199 Showa Shell Sekiyu KK Japan Asia/Pacific Rim 12, , R&M 200 Devon Energy Corp Oklahoma Americas 29, , , E&P Notes: C&CF = coal and combustible fuels, DNR = data not reported, DU = diversified utility, E&P = exploration and production, EU = electric utility, GU = gas utility, IOG = integrated oil and gas, IPP = independent power producer and energy trader, R&M = refining and marketing, S&T = storage and transfer. All ings are computed from data assessed on June 1,. December insight 67

7 Return on Rank Assets Revenues Profits invested capital 3-year Industry Company State or country Region $ million Rank $ million Rank $ million Rank ROIC % Rank CGR% code 201 NSTAR Massachusetts Americas 8, , DU 202 Chesapeake Energy Corp Oklahoma Americas 29, , , E&P 203 Shikoku Electric Power Co Japan Asia/Pacific Rim 15, , EU 204 Shenzhen Energy Group Co Ltd China Asia/Pacific Rim 4, , IPP 205 PowerGrid Corp Of India India Asia/Pacific Rim 13, , EU 206 TonenGeneral Sekiyu Corp Japan Asia/Pacific Rim 9, , R&M 207 Enagas SA Spain EMEA 7, , GU 208 OGE Energy Corp Oklahoma Americas 7, , DU 209 CMS Energy Corp Michigan Americas 15, , DU 210 AES Gener SA Chile Americas 5, , IPP 211 Santos Ltd Australia Asia/Pacific Rim 9, , E&P 212 Energen Corp Alabama Americas 3, , GU 213 Eskom South Africa EMEA 25, , , EU 214 Calpine Corp Texas Americas 16, , IPP 215 Manila Electric Co Philippines Asia/Pacifi c Rim 3, , EU 216 A2A SpA Italy EMEA 14, , DU 217 Petrobras Energia SA Argentina Americas 5, , IOG 218 Abu Dhabi National Energy Co United Arab Emirates EMEA 25, , DU 219 DPL Inc Ohio Americas 3, , EU 220 Patriot Coal Corp Missouri Americas 3, , C&CF 221 Tesoro Corp Texas Americas 8, , R&M 222 Nicor Inc Illinois Americas 4, , GU 223 Hokuriku Electric Power Co Japan Asia/Pacific Rim 15, , EU 224 AES Elpa SA Brazil Americas 7, , EU 225 Fortis Inc Canada Americas 11, , EU 226 Hokkaido Electric Power Co Japan Asia/Pacific Rim 17, , EU 227 Huadian Power Intl Corp Ltd China Asia/Pacific Rim 14, , IPP 228 GD Power Development Co Ltd China Asia/Pacific Rim 13, , IPP 229 AGL Resources Inc Georgia Americas 7, , GU 230 EVN Austria EMEA 8, , EU 231 NuStar Energy LP Texas Americas 4, , R&M 232 EGL AG Switzerland EMEA 5, , EU 233 Atmos Energy Corp Texas Americas 6, , GU 234 Atco Ltd Canada Americas 9, , DU 235 Shenergy Co Ltd China Asia/Pacific Rim 4, , IPP 236 Saras Raffinerie Sarde SpA Italy EMEA 4, , R&M 237 YTL Corp Berhad Malaysia Asia/Pacific Rim 13, , DU 238 Qatar Electricity & Water Qatar EMEA 4, DU 239 Teco Energy Inc Florida Americas 7, , DU 240 CGE Chile Americas 6, , EU 241 NV Energy Inc Nevada Americas 11, , EU 242 PT Bumi Resources Tbk Indonesia Asia/Pacific Rim 7, , C&CF 243 Colbun SA Chile Americas 5, , IPP 244 Alliant Energy Corp Wisconsin Americas 9, , DU 245 Japan Petroleum Exploration Co Japan Asia/Pacific Rim 5, , E&P 246 Transalta Corp Canada Americas 9, , IPP 247 Southern Union Co Texas Americas 8, , S&T 248 Talisman Energy Inc Canada Americas 22, , E&P 249 Integrys Energy Group Inc Illinois Americas 11, , DU 250 Toho Gas Co Ltd Japan Asia/Pacific Rim 5, , GU Notes: C&CF = coal and combustible fuels, DNR = data not reported, DU = diversified utility, E&P = exploration and production, EU = electric utility, GU = gas utility, IOG = integrated oil and gas, IPP = independent power producer and energy trader, R&M = refining and marketing, S&T = storage and transfer. All ings are computed from data assessed on June 1,. 68 insight December

8 However, BP will struggle to retain its position in. Since the start of the Macondo oil spill in the Gulf of Mexico in April, the US s largest ever oil disaster, BP has rarely left the headlines. The company faces huge liabilities for the damage wrought by the spill. It is expected to weather the storm and resultant financial pressures, but set asides, expenditures and asset sales of around $20 billion will directly impact the company s resource base and its longterm growth prospects, suggesting a drop in its ing. Nevertheless, it is important not to overstate the impact to a company of BP s size. BP s shares have already bounced from an apparent floor price, beyond which investors see value in the company. A $20 billion asset write down would shift BP only from fourth to fifth for that indicator. There is also a large gap between BP at third in terms of revenue and the China Petroleum & Chemical Corp which is fourth for this individual indicator. If BP or one of the other western majors were to fall out of the top ten, who might take its spot? India s Reliance Industries Ltd, which this year rose to 13th in the ings from 25th last year, may be a good candidate. It has substantially increased its asset base from $37,188 million to $55,939 million last year and increased revenues on the back of that by almost 50%. Profitability, however, remains low in relation to its asset base and revenues. Regulated prices in the company s domestic market may hold Reliance back. While the top ten ings remain the preserve of the integrated oil and gas companies, one intruder is evident: German electric utility E.ON AG moved from 45th in last year s ings to 6th this year, the only non-iog company in the top ten, although it is a sizeable gas producer. The company s revenues fell only modestly, from $ billion in 2008 to $ billion in 2009, but E.ON AG successfully squeezed out $ billion in profit, more than 600% above the previous year. This also made E.ON first among electric utilities, having been seventh the previous year. However, E.ON has seen a see-saw ride. Reporting profits of $9,991 million in 2007 on revenues of $100,651 million, profits slumped to just $1,929 million in Last year saw a remarkable recovery from an asset base that had shrunk to $187,476 million from $222,178 million in E.ON has seen extremes 2008 s performance was particularly poor relative to its peers, the rebound in 2009 unusually good. The slump in profits in 2008 was largely the result of unexpected goodwill impairments relating to acquisitions and to losses from non-operating earnings. In its 2008 annual report, E.ON reported losses attributable to currency differences of 7,879 million ($10,037 million) and to derivative financial in- 2. Fastest growing Americas companies. 3-year Rank Company State or country Industry CGR % Rank 1 Ultrapar Participacoes SA Brazil S&T NuStar Energy LP Texas R&M Fortis Inc Canada EU XTO Energy Inc Texas E&P CGE Chile EU AES Gener SA Chile IPP Enterprise GP Holdings LP Texas S&T Endesa Chile IPP Patriot Coal Corp Missouri C&CF Suncor Energy Inc Canada IOG Fastest Growing is based on a 3 year compound growth rate (CGR) for revenues. The compound growth rate (CGR) is based on the companies revenue numbers for the past four years (current year included). If only three years of data was available then it is a two year CGR. All ings are computed from data assessed on June 1,. Source: Capital IQ/ December insight 69

9 Asian companies in Top 250 Return on Top Rank Assets Revenues Profits invested capital Industry Asia Company State or country $ million Rank $ million Rank $ million Rank ROIC % Rank code 1 7 Petrochina Co Ltd China 212, , , IOG 2 8 China Petroleum & Chemical Corp China 128, , , IOG 3 13 Reliance Industries Ltd India 55, , , R&M 4 18 Oil & Natural Gas Corp Ltd India 33, , , E&P 5 19 China Shenhua Energy Co Ltd China 45, , , C&CF 6 29 CNOOC Ltd Hong Kong 35, , , E&P 7 35 PTT Plc Thailand 34, , , IOG 8 45 Origin Energy Ltd Australia 18, , , IOG 9 49 Formosa Petrochemical Taiwan 14, , , R&M NTPC Ltd India 26, , , IPP Tokyo Electric Power Co Inc Japan 144, , , EU Kansai Electric Power Co Japan 78, , , EU Chubu Electric Power Co Inc Japan 58, , , EU Indian Oil Corp Ltd India 29, , R&M Woodside Petroleum Ltd Australia 16, , , E&P SK Energy Co Ltd Korea 20, , R&M Inpex Corp Japan 22, , , E&P China Coal Energy Co China 16, , C&CF Bharat Petroleum Co Ltd India 11, , R&M CLP Holdings Hong Kong 20, , , EU Huaneng Power International China 28, , IPP Gail (India) Ltd India 7, , GU Tokyo Gas Co Ltd Japan 20, , GU Kyushu Electric Power Co Inc Japan 44, , EU GS Holdings Corp Korea 21, , R&M Tohoku Electric Power Co Inc Japan 43, , EU China Resources Power Holdings Hong Kong 15, , IPP PTT Exploration & Production Thailand 9, , E&P KEPCO Inc Korea 77, , EU Osaka Gas Co Ltd Japan 16, , GU AGL Energy Australia 7, , DU JX Holdings Inc Japan 43, , , R&M Hongkong Electric Holdings Ltd Hong Kong 9, , EU Caltex Australia Ltd Australia 4, , R&M Notes: C&CF = coal and combustible fuels, DNR = data not reported, DU = diversified utility, E&P = exploration and production, EU = electric utility, GU = gas utility, IOG = integrated oil and gas, IPP = independent power producer and energy trader, R&M = refining and marketing, S&T = storage and transfer. All ings are computed from data assessed on June 1,. struments of 6,552 million. In 2009, the rebound came predominantly from energy trading activities first and sales in its new markets segment second. E.ON s financial patterns look more like a trading firm than a utility, suggesting future volatility ahead. Asia on the Ascendant It is clear that Asia as a whole has substantially improved its position in the global energy firmament over the course of Of the top ten Asian companies regionally, nine improved their global ing; of the top 20, 15 improved their global position; while if new entrants are included, out of the top 50 Asian companies, as many as 40 of the top 50 gained a higher global ing this year to the detriment of other regions. There are now 68 Asian companies in the top 250, compared with 55 last year. The Asian top ten remains dominated by Chinese and Indian companies. PetroChina Co Ltd retains the 70 insight December

10 Asian companies in Top 250 (continued) Return on Top Rank Assets Revenues Profits invested capital Industry Asia Company State or country $ million Rank $ million Rank $ million Rank ROIC % Rank code Chugoku Electric Power Co Japan 30, , EU Thai Oil Pcl Thailand 4, , R&M Yanzhou Coal Mining Co Ltd China 9, , C&CF Idemitsu Kosan Co Ltd Japan 27, , R&M Hong Kong & China Gas Co Ltd Hong Kong 8, , GU Cheung Kong Infrastructure China 6, EU Adaro Energy Tbk Indonesia 4, , C&CF Tata Power Co Ltd India 6, , EU Korea Gas Corp Korea 19, , GU S-Oil Corp Korea 7, , R&M China Yangtze Power Co China 23, , IPP Tenaga Nasional Bhd Malaysia 21, , EU PTT Aromatics & Refining Plc Thailand 4, , R&M Cosmo Oil Co Ltd Japan 18, , R&M Hindustan Petroleum Corp Ltd India 10, , R&M Electric Power Development Co Japan 22, , IPP Datang Int l Power Generation Co China 26, , IPP Reliance Infrastructure Ltd India 7, , EU Showa Shell Sekiyu KK Japan 12, , R&M Shikoku Electric Power Co Japan 15, , EU Shenzhen Energy Group Co Ltd China 4, , IPP PowerGrid Corp Of India India 13, , EU TonenGeneral Sekiyu Corp Japan 9, , R&M Santos Ltd Australia 9, , E&P Manila Electric Co Philippines 3, , EU Hokuriku Electric Power Co Japan 15, , EU Hokkaido Electric Power Co Japan 17, , EU Huadian Power Intl Corp Ltd China 14, , IPP GD Power Development Co Ltd China 13, , IPP Shenergy Co Ltd China 4, , IPP YTL Corp Berhad Malaysia 13, , DU PT Bumi Resources Tbk Indonesia 7, , C&CF Japan Petroleum Exploration Co Ltd Japan 5, , E&P Toho Gas Co Ltd Japan 5, , GU Notes: C&CF = coal and combustible fuels, DNR = data not reported, DU = diversified utility, E&P = exploration and production, EU = electric utility, GU = gas utility, IOG = integrated oil and gas, IPP = independent power producer and energy trader, R&M = refining and marketing, S&T = storage and transfer. All ings are computed from data assessed on June 1,. top spot, while the China Petroleum & Chemical Corp comes in second, ousting CNOOC Ltd, which falls to sixth place. India s Reliance Industries Ltd moved from fourth to third, while India s Oil and Natural Gas Corp Ltd rises from fifth to fourth. Two companies have moved out of the Asian top ten: the India Oil Corp Ltd, which may reflect late financial reporting of its 2009 results, and Japan s Tonen General Sekiyu Corp which fell from ninth in the regional Asian ings to 57. The latter saw a precipitous decline in revenues and profits in 2009, which might be taken as emblematic of the shift taking place within the downstream sector. In this sector refining and marketing many Asian companies saw their global ing rise, but their position regionally against energy companies in other sectors declined. Of the top Asian R&M companies, only three improved their ings both globally and regionally: India s Reliance Industries, Taiwan s Formosa Petrochemical December insight 71

11 3. #1 in Asia by industry. Industry Company Country Rank IOG Petrochina Co Ltd China 7 R&M Reliance Industries Ltd India 13 E&P Oil & Natural Gas Corp Ltd India 18 C&CF China Shenhua Energy Co Ltd China 19 IPP NTPC Ltd India 52 EU Tokyo Electric Power Co Inc Japan 54 GU Gail (India) Ltd India 107 DU AGL Energy Australia 125 All ings are computed from data assessed on June 1,. Source: Capital IQ/ and South Korea s GS Holdings. Four Asian R&M companies fell in both the regional and global ings: India Oil Corp., South Korea s SK Energy Co. Ltd and S-Oil Corp, and India s Hindustan Petroleum Corp. Ltd. Nevertheless, Asia, and India in particular, continues to dominate the R&M sector with all five of the top R&M companies hailing from Asia, three of those from India. The fastest rising company in Asia this year was Australia s Origin Energy Ltd, which jumped from 201st last year to 45th in the global ings, and from 47th to eighth regionally, owing to an extraordinary turnaround in profitability. This was the result of one-off factors for a company that was the target of a hostile and unsuccessful takeover attempt by BG Group in Of the A$6,941 million ($6,422 million) recorded profits in the financial year ending June 1, 2009, A$6,700 million reflected a gain resulting from the dilution of Origin s interest in Australia Pacific LNG following US major ConocoPhillips subscription for shares to form a 50:50 joint venture. Nevertheless, Origin s underlying profits were also up by 20% at $530 million and further gains have been posted for first-half. Origin s high place in the Asian and global ings is exaggerated this year by its asset sale related profits, but this is still a company on the rise, one with the cash, assets and partners to expand. It may drop back in the ings next year, but the company has laid the basis for long-term growth that is likely to put it on a steady improving trend. Another strong riser was Taiwan s Formosa PetroChemical, toughing it out in a sector experiencing fierce competition. Formosa PetroChemical improved its global ing from 113th to 49th, and its regional ing from 18th to 9th. Despite revenues dropping by about 27% in 2009, profits rose almost threefold. Revenues have also picked up in from the declines seen in 2008, although in its second-quarter results, operating profits in its key refining segment were down. A significant trend has been the relative rise in the regional ings of Japanese electric utilities, benefiting from the fall in feedstock prices last year. Tokyo Electric Power Co moved up from 20th in the regional ings to eleventh, Kansai Electric Power Co from 25th to 12th and Chubu Electric Power Co from 27th to 13th. Power prices in the only partially deregulated Japanese electricity market tend to lag fuel source prices by between three to four months. Japan s electric utilities were thus hammered in 2008 Tokyo, Kansai and Chubu all reported losses for the year but benefited in New Asian Entrants Of the new Asian entrants, five are from China, five from southeast Asia, one from India and one from Australia. China s new entrants are without exception independent power producers Shenzhen Energy Group Co Ltd, Huadian Power International Group Ltd, GD Power Development Co and Shenergy Co Ltd. All have been listed on the Shanghai Stock Exchange for some years. In India, the new entrant was also a power company, Tata Power, the country s largest integrated private power company. Both the Indian and Chinese power sectors are on rapidly expanding paths, suggesting strong growth prospects for the two countries electric utilities and IPPs. In Japan, the Nippon Oil Corp and Nippon Mining Holdings were reorganized to become JX Holdings, while the Hokkaido Electric Power Co returned to the Global top 250. A new Japanese en- 72 insight December

12 trant to the top 250 came in the form of the Japan Petroleum Exploration Co, reflecting its increased size with the acquisition in 2009 of the oil product sales units of a Mitsubishi Materials subsidiary. The company has also taken on a 30% interest in the Garraf oil field in Iraq to be developed with Malaysia s Petronas and a domestic Iraqi oil company, which should promise future growth in its production base. The number of southeast Asian companies in the top 250 rose from four to nine, two being added in Thailand, one in Indonesia and one in Malaysia, while the Philippines gained its first company in the top the Manila Electric Co, the country s largest distributor of electricity. For Thailand, Thai Oil made a reentry, while PTT Aromatics and Refining Plc was ed 156th overall and 45th in Asia, reflecting the amalgamation of the Aromatics Public Company Ltd and Rayong Refinery Public Company Ltd. For Malaysia, Diversified Utility YTL Corp Berhad rejoined the 250 at 237, having last been included in 2007 when its ing was 216. Indonesia also saw an addition the only one in the Coal and Combustible Fuels segment miner Adaro Energy Tbk entered the ratings at 158th. Adaro, Indonesia s second largest coal miner, is also the ninth fastest growing company in the top 250 with a 3-year CGR of 40.3%. This year the company signed up to a joint-venture agreement with Australian mining major BHP Billiton to develop resources estimated at 774 million mt, suggesting further growth to come. BRICs to the Fore Within the global top 20, eleven companies are from the BRICs Brazil, Russia, India and China compared with just six the year before. Moreover, while BRICs still account for four of the top ten, all are rising; Russia s Gazprom gained six places to come third in the top 250 ings, Brazil s Petrobras rose five places, PetroChina was up two places and the China Petroleum and Chemical Corp jumped from 23rd place last year to eighth in the global ings this year. What these BRIC companies have in common is that, despite all being listed, they are all ultimately state-controlled entities. They all benefit from varying degrees of protection in what are generally large and expanding domestic markets, the Chinese economy being particularly dynamic in terms of oil demand growth. The western majors, while global in reach, exist in more competitive environments, where oil demand declined in 2008 and 2009 and, in Europe and Japan at least, appears to be on a long-term downward trend. However, the BRIC companies equally have distinct characteristics that make them unique. Gazprom is a gas company rather than an IOG. It can claim in 2009 to have been the world s most profitable listed energy company. It is expanding the size of its oil subsidiary Gazprom Neft, but its oil arm is listed and reported separately. Petrobras sits on some of the largest oil discoveries in recent decades and has a state willing to strengthen its hold on its domestic upstream. The emergent Chinese companies also have strong state support, but more importantly lie at the heart of the world s most dynamic economy in terms of car ownership and transportation demand growth. Notably, if Gazprom and Gazprom Neft were listed as one entity, the combined company would come first in terms of both assets and profits and move from 13th to seventh in terms of revenues. Its ROIC would improve, but remain below that of ExxonMobil. It 4. Fastest growing Asian companies by industry. Industry Company Country 3-year CGR % Rank IPP China Resources Power Holdings Hong Kong R&M PTT Aromatics & Refining Plc Thailand C&CF Adaro Energy Tbk Indonesia EU Tata Power Co Ltd India GU Gail (India) Ltd India E&P Oil & Natural Gas Corp Ltd India IOG Petrochina Co Ltd China DU YTL Corp Berhad Malaysia Fastest Growing is based on a 3 year compound growth rate (CGR) for revenues. All ings are computed from data assessed on June 1,. Source: Capital IQ/ December insight 73

13 might prove enough to come top of the global ings, although ExxonMobil will in absorb unconventional gas producer XTO Energy, increasing its overall asset base and revenues. Just as oil major ExxonMobil expands its gas operations, gas major Gazprom is expanding its oil segment. Otherwise, Russian oil companies did less well than their competitors. Rosneft and TNK-BP, the latter perhaps still suffering from the 2008 conflict between its Russian and its UK shareholders, slipped in the ings, while Lukoil and Gazprom Neft were pretty much static. Surgutneftegaz rose, but late reporting meant the use of 2008 data, which would be likely to flatter any oil company, owing to higher oil prices in that financial year. This stands in stark contrast to the positive performance of Russian companies in the gas, power and transport sectors. Speedy Growth If oil and gas companies generally dominate the energy sector as a whole, their lack of presence among the top fastest growing companies is noticeable, although it is easier for small companies to show increases in growth measured in percentage terms. In Asia, eleven of the top 20 fastest growing companies are involved in the power sector, but only four in oil and gas, whether up or downstream. Five are in the coal and combustible fuels sector, reflecting the presence of the world s first and third largest coal industries in China and India respectively and the coal export industries of Australia and Indonesia. Of the five C&CF companies in the fastest growing Asian companies, three are Chinese and two Indonesian. Coal outside Asia figures little, only US company Patriot Coal Corp registering in the Americas. Patriot is growing fast through the development of assets in Appalachia and the Illinois basin, but it is involved in the controversial practice of mountain top removal mining. This is coming under greater environmental and regulatory scrutiny, which may threaten its future growth prospects. Brazil s Storage and Transfer company Ultrapar Participacoes SA tops the Americas fastest growing list with a 3-year CGR of 96.0%. Texan R&M company NuStar Energy LP takes up second place, while Canada s oil sands-based Suncor is the only IOG in the top ten Americas list. In Asia, the front runner is the Hong Kong-based IPP China Resources Power Holdings, with a 3-year CGR of 50.5%. Thailand s PTT Aromatics & Refining Plc takes second place, and Indonesia s Adaro Energy Tbk third. There are no IOG or E&P companies in the Asian top 20 fastest growing company ings, which are dominated by power sector firms. In Europe and the Middle East, power companies are again to the fore, making up seven of the top ten fastest grow- 5. Fastest growing EMEA companies. 3-year Rank Company Country Industry CGR % Rank 1 RusHydro JSC Russian Federation EU Abu Dhabi National Energy Co United Arab Emirates DU Moscow United Electric Power Russian Federation EU Iberdrola Renewables SA Spain IPP Iberdrola SA Spain EU Novatek Oao Russian Federation E&P Scottish & Southern Energy United Kingdom EU GDF Suez France DU AK Transneft Oao Russian Federation S&T Sasol Ltd South Africa IOG Fastest Growing is based on a 3 year compound growth rate (CGR) for revenues. The compound growth rate (CGR) is based on the companies revenue numbers for the past four years (current year included). If only three years of data was available then it is a two year CGR. All ings are computed from data assessed on June 1,. Source: Capital IQ/ 74 insight December