Oil Players Dominate Second Year of Asia Top 250

Neil Fleming, Vice President, Platts Strategy

But fast-growers show much wider industry spread.

FOR THE SECOND YEAR IN A ROW, Petrochina roared home in 2006 as the highest-ranked energy company in Asia among the Platts Global Top 250. The oil and gas giant is the fourth most profitable energy business in the world, hard on the heels of BP, and is the sixth most successful in the world on the basis of Platts' proprietary ranking system.

That puts Petrochina ahead of long-established western businesses like Statoil, ENI, Petrobras, and Conoco-Phillips. And only the super-majorsExxonMobil, BP, Shell, Chevron and Totaloutrank it in combined performance. Petrochina returned superior profits to both Chevron and Total last year, and owes its position in no small measure to a spectacular three-year compound revenue growth rate of 31.4%, almost twice the similar figure for ExxonMobil.

Noteworthy too is Petrochina's impressive return on invested capital, which hit 21.2% in 2006, ahead of both Shell and Total, in a year in which the company successfully raised its oil and gas output by 5.2%, largely through spectacular growth in its natural gas production.

Petrochina's Oil Output Rivals Medium-sized OPEC Producers

Gas output was up 23.5% last year, to 1.38 trillion cubic feet; while oil production was up by a more modest 0.8% to 829 million barrels of crude. Petrochina's oil output, it's worth noting, at around 2.3-million barrels per day, puts it on the same footing, in scale terms, as OPEC producer countries Kuwait, Venezuela and the UAE. With its averaged realized crude price up 23.55% year-on-year, at $59.76, it is small wonder that Petrochina dominates the Asian rankings.

Indeed perhaps predictably, given continued high oil prices and record profits around the globe for oil sector players, oil companies as a whole again make up the lion's share of the Asia Top 10the first nine ranked businesses are all either integrated oil and gas businesses, major E&P players or refining/marketing players. Sinopec (the China Petroleum and Chemical Corp.) ranks second in the region, and recorded a 35% three-year compound growth rate to hold on to its global position at 15th in the world among all energy companies.

Sinopec's 2006 profits jumped 23.7% to Yuan 55.41 billion ($7.17 billion), nearly twice the profits growth the company recorded in 2005, with all sectors of its business, bar refining, in the black last yeara sharp contrast to the previous twelve months, when only the exploration and production division recorded operating profits.

Meanwhile India's ONGC came in third in Asia (23rd in world rankings), with Thailand's PTT in fourth, forging four places up the world rankings from 31st last year to 27th this.

CNOOC was Asia's fifth-placed energy business, India's Reliance was sixth, Korea's SK Corp in seventh, IOC eighth, and Japanese refiner Nippon Mining Holdings in ninth place.

Coal Giant China Shenhua Cracks the Top Ten

Edging impressively into the top ten rankings, however, is China's largest coal mining company China Shenhua Energy, with its powerful $21.3 billion asset base, and its $2.2 billion of profits, based primarily on coal output, power generation, and transportation.

A newcomer to this year's rankings, following its decision to list on the Hong Kong Stock Exchange in 2005, the company mined around 205 million tonnes of coal in 2006 and is on track, by 2010, to push coal production to 300 million tonnes/year, and installed power generation capacity to 30,000 MW.

The company moved in July this year to list itself on the Shanghai Stock Exchange, with the aim of raising further cash to invest in power generation. It has pursued a strategy of aggressive acquisition of coal-fired generators, earlier this year buying into plants owned by both Panshan Power and Suizhong Power.

Fifty-six Asian energy companies overall reached the Top 250 this year.

Most of those in the Top 15 in Asia were familiar names from the previous year. But alongside Shenhua, Korea's hugely successful fuel retailer S-Oil (which in 2006 won Platts' Global Energy Award for "Best Marketing Campaign") deserves a mention for vaulting into 14th place.

New "Fastest Growth" Rankings Show Some Surprises

Meanwhile, this year's Platts Top 250 includes a new classification"fastest growing companies", based on a three-year measure of compound growth.

Interestingly, while oil companies may dominate the overall rankings, the "fast growers" are a much more diverse bunch. And eight out of ten of the top ten in this category came from outside the overall top 15 rankings.

Hong Kong-based independent power producer China Resource Power Holdings rocketed into the first spot here, growing its revenues by 131% over the three-year period, making it the fourth fastest growing energy company in the world.

Indonesian coal business PT Bumi Resources came in as the second-fastest growing company in the region, up 65% in revenue terms over the measured three-year period. Runaway successful Japanese E&P company Inpex Holdings, the largest such business in Japan, ranked third in growth terms, boosting revenues over three years by almost 52%. Refining and marketing experts Caltex Australia were fourth, with impressive 40% growth over three years. Thailand's PTT Exploration & Production, China's Datang Power, Sinopec, PTT the parent company, China Yangtze Power, and Thailand's Irpc secured the fifth to tenth places respectively.

China and India Dominate Sector Leadership Positions

The Platts Rankings also identify energy leaders based on eight sectoral classifications: Integrated oil and gas companies, Exploration and Production, Refining and Marketing, Coal and Combustible Fuels, Electric Utilities, Independent Power Producers, Gas Utilities, and Diversified Utlities.

Here new leaders have emerged in three of the eight categories.

In the #1 in Asia by Industry chart there are 3 new industry leaders: Tokyo Electric Power Co. takes the top slot among electric utilities. The Tokyo Gas Company rockets into first place among Gas Utilities, while China Shenhua Energy take pole position in the coal sector.

PLATTS TOP 250 ENERGY RANKINGS measures financial performance by examining each company's assets, revenue, profits, and return on invested capital. All ranked companies have assets greater than (U.S.) $2 billion. The underlying data come from the Compustat® database, which is compiled and maintained by Standard & Poor's (like Platts, a division of The McGraw-Hill Companies). Energy companies are grouped according to their Global Industry Classification Standard (GICS®) code.

2. #1 Companies in Asia by Sector. Source: Platts

3. Power Plants Owned/Operated by China Shenhua Energy 2006. Source: China Shenhua Energy

4. Top 20 Fastest Growing Companies in Asia Source: Platts

5. Fastest Growing Companies in Asia by Sector. Source: Platts