Houston – Though the U.S. is still the world’s leading oil consumer, its might in the global petroleum business is dwindling.
Developing countries are locking up a bigger share of the world’s oil and gas resources to profit from high prices and fuel industrial growth.
New research by investment bank Goldman Sachs suggests four countries in particular – Brazil, Russia, India and China, or the so-called BRIC countries – are grabbing the most market share from American companies. The BRIC’s share of the industry’s market value has grown from virtually nothing 15 years ago to more than one-third today, while American companies’ stake has dwindled from more than half to less than a third.
The biggest factor, most analysts agree, is the growth of state-controlled national oil companies, including PetroChina Ltd., an arm of China National Petroleum Corp.; Russia’s OAO Gazprom, the world’s biggest natural-gas producer; and Brazil’s Petroleo Brasileiro SA, or Petrobras. And the high price of oil – crude futures finished Friday close to $73 a barrel – is playing a big role in their expansion plans.
CNPC last week acquired rights to search for oil in Canada.
India’s state-owned oil company, Oil and Natural Gas Corp., divulged plans last month to expand in Brazil. And in May the Venezuelan government took majority control of its last privately run oil projects, part of a resource nationalization strategy also being pursued by Russia.
Whether this trend is bad for America’s long-term strategic interests is debated by analysts and executives.
Daniel Yergin, author of “The Prize,” the Pulitzer Prize-winning history of the oil industry, said it’s time to acknowledge what’s been evolving for years: U.S. oil companies simply don’t have the clout they did a decade or two ago, and it’s not necessarily a bad thing.
“A lot of our energy debate harkens back to a world when we were much more self-sufficient and doesn’t take into account the reality of how integrated we are into a much larger and complex global marketplace,” Yergin said.
Exxon Mobil Corp. remains the world’s largest publicly traded oil company, and its $39.5 billion profit in 2006 was a record for U.S. companies. Yet the Irving, Texas-based company pumped just 3 percent of the world’s oil last year. National oil companies, which control almost 90 percent of global oil reserves, produced the bulk of the world’s supply.
ConocoPhillips Chairman Jim Mulva said the global petroleum hunt has become very competitive due in part to the rising influence of the BRIC countries, though he stopped short of calling them dominant. After all, America’s daily oil consumption of about 21 million barrels exceeds that of the BRIC countries, whose combined daily use last year was about 15 million barrels, according to the U.S. Energy Department.
