Indian companies continue to better their position at 2017 S&P Global Platts Top 250 Global Energy Company Rankings®

Reliance Industries and Indian Oil Corp in the Top 10

Image Attribute: Twilight at the Jamnagar Refinery, one of the world's largest oil-refining unit in Western India / Source: Bechtel

MUMBAI – While fourteen Indian energy companies made it to the S&P Global Platts Top 250 Global Energy Company Rankings, they were one short of the tally held last year. However, this year saw the entry of Indian Oil to the Top 10 along with Reliance Industries that was part of the top 10 club last year as well. In the 2016 rankings, India Oil Corp took the big leap from the No. 66 in 2015 to No. 14.As many as 10 energy companies significantly moved up in their rankings this year.

Reliance Industries was the top ranked Asian energy company in the global rankings and has Indian Oil Corp, Oil & Natural Gas Corp and Bharat Petroleum Corp for company in the Asian Top 10. Refiners continued to strengthen their standings in the 2017 roster, buoyed by improved margins.

Overall, thanks to the new entrants buoyed by utilities and pipelines, revenues of the Top 10 global energy companies surged more than 30% to $1.1 trillion from $830.2 billion in the 2016 rankings. Collectively, the world's top 10 companies posted combined profits of $63.7 billion last year, 14% lower than the $74.3 billion posted the year before. The Top 250 profit figures are adjusted for preferred dividends and exclude discontinued operations and extraordinary operations.  

The two dozen biggest movers up included a range of companies from EMEA(Europe, Middle East & Africa) and the Americas. The group was heavy with diversified utilities -- which provide electricity and natural gas to residential, commercial and industrial users – and pipeline companies that carry oil and gas to market. Not surprisingly, both sectors rely on each other for supply and demand.Among the biggest losers in the rankings, by sector, were South American exploration companies and Chinese power providers.

“Commodity price volatility, geopolitical shifts and industry consolidation made investors seek out safe havens in 2016 in the form of strong returns on invested capital, long-term fixed fees, regulatory stability, and access to regional and world markets,” said Harry Weber, senior natural gas writer of S&P Global Platts, the leading independent provider of information and benchmark prices for the commodities and energy markets. “That helps explain why utilities and pipelines were able to differentiate themselves from other sectors, even as some operators struggled to boost revenue and underwent major transformations that included operational and management changes.”

Since the rankings were first released in 2002, IOGs have led the list every year, and that is true again for 2017. But, ExxonMobil, which had led the rankings for 12 consecutive years, fell to No. 9 and was replaced at the top by Russia’s Public Joint Stock Company Gazprom, which benefits from being majority-owned by the Moscow government and from European countries being heavily dependent on Gazprom’s gas supplies.

The bigger story this year is not who is at No. 1, however. Germany’s E.ON shooting up 112 places to No. 2 from No. 114 for last year is something that reveals the broader trend for utilities making further inroads due to stable cash flows and strong returns on invested capital.

It was also India’s Reliance Industries rising to No. 3 from No. 8 last year and France’s Total rising to No. 10 from No. 12 last year along with Indian Oil Corp that showed the strength of pipelines as the other sector that was among those that surged up this time around.

Notable absentees in the top spots this year include US refiners Phillips 66, which fell to No. 20 from No. 4 and Marathon Petroleum, which slipped to No. 34 from No. 10, and Russian oil major PJSC Rosneft, which slid to No. 22 from No. 7. Some US refiners’ margins were battered in 2016 because of an oversupply of gasoline and diesel, while some oil majors were negatively affected by the continuation of cheap crude prices. Among the Indian companies in the Top 250 last year, Adani Power Ltd, did not make it to the list this year.

Coal’s troubles were especially acute in Asia, with China’s production falling by 7.9% or 140 million tons of oil-equivalent (mtoe), a record decline, the review found.Those headwinds translated into swings in this year’s Platts rankings for coal interests.

Coal India, for instance, slipped in the rankings to No. 45 from No. 38 last year. On a bright note, producer China Shenhua Energy rose to No. 13 from No. 25 last year as the price of coal there rose sharply following government output cuts.

Source: The Gulf Intelligence