Market capitalisation of big oil companies returns to near pre-pandemic levels
After falling 41 % in 2020, (to $174 billion) the market capitalisation of ExxonMobil over the first 11 months of 2021 climbed back 45 % (to $253 billion), Bloomberg reported.

    As of 1st December 2021, in terms of capitalisation, ExxonMobil is second only to the world’s biggest oil producer. Saudi Aramco ($1.86 trillion), but comes in ahead of Shell ($165 billion) and BP ($87 billion)  – which make up the “big three” oil companies, along with ExxonMobil.

    Shell’s capitalisation in 2020 fell by 42 % (to $136 billion), while BP’s capitalisation sank 44 % (to $71 billion) and over the first 11 months of 2021, the two companies rose, respectively, by 21 % (to $165 billion) and 24 % (to $87 billion).

    What lies behind these increases? Improved financial indicators.

    Having suffered a loss of $21.7 billion in 2020, Shell in the first three quarters of 2021 recorded a net profit of $8.6 billion. For BP, the first three quarters of 2021 produced a net profit of $5.2 billion (against a loss of $20.3 billion) and ExxonMobil recorded a net profit of $14.2 billion, compared to a loss of $22.4 billion.

    And in turn, the increase in net profit was closely linked to the price rally on oil markets. In 2020, the average price of Brent in 2020 stood at $42.30, while in the first nine months of 2021, it reached $67.40. And in October and November, it climbed still further – to $83.70 and $80.80, according to World Bank figures.

    The same dynamics were observed for other commodities included in the production plans of oil and gas companies.

    As an example – liquefied natural gas. Shell boosted sales of LNG by 1.5 times from 2015-2020 (from 22.6 million tonnes to 33.2 million tonnes, not counting resale of gas from allied companies), with prices in 2020 of $8.30 per million British Thermal Units (BTUs) and the average price of LNG imported by Japan rising to $10.10 per million BTUs – over the period Jan-Nov 2021.

    A second example – products of oil and gas chemistry, an important part of ExxonMobil’s business. Over the first three quarters of 2021, the chemical segment of the sector accounted for a little more than 40 % of net income ($5.9 billion out of $14.2 billion). To illustrate, the average price of polypropylene, one of the two most important polymers, rose in the United States from $139 per tonne in 2020 to $286 per tonne at the end of the third quarter of 2021, according to Markit IHS data. A rise nearly as steep was recorded in the United States in the price of natural gas – over the same period, the price of gas at Henry Hub climbed by nearly 80 % from $6.90 to 12.40 per million BTUs.

    The main beneficiaries of this steep climb were the national oil companies, whose shares are traded in the countries where their head offices are located. Over 11 months in 2021, Petrochina’s capitalisation rose 21 % to $133 billion, while Sinopec rose by 4 % (to $73 billion) — in 2020, these two companies declined in capitalisation, respectively, by 25 % (to $109 billion) and 18 % (to $70 billion).

    The increase undergone by Saudi Aramco was less dramatic – its capitalisation from the beginning of this year rose by less than 0.1 % (to $1.865 trillion). But that is largely due to the effect of scale, given that in 2020, Saudi Aramco’s production of oil and liquid hydrocarbons (9.2 million bpd) exceeded that of Exxonmobil (1.7 million bpd), Shell (1.8 million bpd) and BP (2.1 million bpd) all put together.


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December 2021