Comparative performance assessments of the world’s leading energy companies.

Top 100 Rankings: The Transformation Is Here

But post-pandemic recovery complicates the industry’s trajectory

•The transformation is here, but it is messy. The latest Energy Intelligence Top 100: Global NOC and IOC Rankings reflect a deeply disruptive pandemic year and presage a complex transition as companies navigate short-term opportunities and long-term strategies.

•Top 100 companies, which account for 70%-80% of global oil and gas activity, are ranked annually according to performance in six operational metrics: Oil and gas reserves, oil and gas production, product sales and refinery distillation capacity. Rankings are calculated each fall from the previous year’s data to include those reporting results late in the year.

•Oil and gas activity cratered as the world locked down. Opec-plus countries and their NOCs bore the brunt of the production cuts, while supermajors shouldered the demolition of product sales. But now the industry confronts rising oil prices and the potential for chronic underinvestment spurred by 2020 retrenchment and driven by capital return to shareholders, other investment priorities, or both.

•Saudi Aramco, NIOC and CNPC retain the first, second and third spots, respectively. Unsurprisingly, North America has been the center of long-expected consolidation activity, paving the way for new players to enter the Top 100 next year.

•The absence of investment at pre-pandemic levels will also open the way for some companies—particularly, but not necessarily limited to, Opec-country NOCs—to fill the gap. This suggests that the Top 100 will continue to be a critical barometer of a potentially chaotic transition.

Top 10: Chevron’s in, PDVSA’s Out

Diverging supermajor strategies opens opportunity for additional top 10 NOCs longer term

•The top 10 companies represent around one-third of the world’s oil and gas activity, and membership has changed for the first time in several years. PDVSA dropped to No. 11, while Chevron returned to the group at No. 10 after a six-year exile. But the companies’ large size means relative stability, for now.

•Chevron’s gain was in part due to its 2020 Noble Energy takeover. It was the largest supermajor oil and gas acquisition since TotalEnergies acquired Occidental’s Africa assets.

•Still, the outlook for supermajors remains mixed, owing in part to a near-term windfall and diverging long-term strategies. Aggregate free cash flow has skyrocketed this year, but capital is heading back to shareholders and oil and gas investment is in check—with some more focused on funding energy transition strategies. Shell’s sale of its Permian assets to ConocoPhillips is only the latest manifestation of shifting focus.

•Chevron’s ascent was also helped by PDVSA’s fall. The company held the No. 2 spot for much of the 1990s and was relatively stable in the top 10 until its economic collapse catalyzed its decline several years ago.

•Among other top NOCs, we expect Saudi Aramco and NIOC to remain in the No. 1 and No. 2 spots, respectively. Both companies stand to boost operations: Saudi Aramco plans to increase oil production capacity to 13 million b/d this decade, while NIOC’s oil output could benefit from possible sanctions relief. But Adnoc and QatarEnergy are at the top 10 doorstep–clearly NOCs to watch, particularly as gas operations grow and certain supermajors shrink.

North America: Hub for Organic Growth and Consolidation

Beyond the pandemic year, opportunities abound

•North America continues to be the center of both organic growth and consolidation, led by US-focused independents—with the pandemic serving as a catalyst. But a related uptick in Canadian growth similarly reflects ongoing rationalization in the region.

•US-focused independents continue to be overrepresented in the Top 100, accounting for 22% of the companies but only 7% of combined oil and gas output. This has been a key impetus for consolidation, pandemic notwithstanding. Most of the top deals, by value, since the beginning of 2020 were in the US shale patch.

•The pandemic fostered a fight for survival among shale players, already under immense pressure for destroying value. The group has recovered, with higher oil prices and capital discipline supporting free cash flow. Instances of higher debt tended to reflect acquisitions and will likely result in further optimization.

•Diamondback Energy, Pioneer Natural Resources and Antero Resources all advanced on organic growth. Acquisitions will support advancement for some, with Chesapeake Energy and Southwestern Energy set to benefit from Haynesville purchases.

•The Canadian shale patch has generated similar activity. Tourmaline Oil was one of the biggest movers this year, jumping 10 spots to No. 59 on a string of takeovers. ARC Resources, which is new to the Top 100 this year, acquired Seven Generations Energy, strengthening Montney exposure. But Canada’s blockbuster deal was outside the shale patch, with Cenovus’ all-stock deal for Husky Energy, creating a heftier company with complementary assets.

Free Cash FlowH1’20-338-435
Market Cap (Period end)Q2’2061,75215,010
Net Debt (Period end, incl. operating lease)Q2’2024,95629,362

M&A: Growth Not Dead, Yet

Industry restructuring will have little operational impact

•US shale patch consolidation started before the pandemic. But broader questions about the industry’s future hinge on potential for structural changes to corporate structures to reflect changing direction and investor requirements, as well as strategic and opportunistic M&A. But the latter is still sensible for some.

•We noted last year that Permian consolidation has been, in many cases, a bet on the oil market at a time when it had nowhere to go but up. We also noted previously that, as the energy transition gains momentum, declining size and rank would be as important an indication of strategic direction going forward as growth had been more than a decade ago.

•That remains the case, even with some industry players entertaining the notion of splitting companies into “green” and “brown” businesses. Driving transition is a key element this time around, in addition to unlocking value, akin to recent years’ movement among European utilities.

•If Splitsville means value creation for shareholders, it will likely have little global operational impact as “brown” businesses will still need to navigate market dynamics. If limited investment and a slow unwinding of oil operations is the goal, then opportunity opens for others to fill the gap.

•Next year’s Top 100 edition will capture some of the most dramatic M&A the industry has seen in years. While we are seeing several majors embark on the long goodbye to oil and gas, the table suggests, at least for now, that the bet on oil and gas growth is a popular one.

Key M&A: Top Transactions, 2020-21
CompanyTransactionAnnounce Deal Value Est. Ranking
Date($ billion)Next Ed.
WoodsideBHP Oil/Gas AssetsAug. 20212852
ConocoPhillipsConcho ResourcesOct. 202013.329
Shell Permian AssetsSep. 20219.5
Pioneer Natural ResourcesParsley EnergyOct. 20207.6<50
DoublePoint EnergyApr. 20216.4
ChevronNoble EnergyJul. 20201310
Cabot Oil & GasCimarex EnergyMay-219.348
SantosOil SearchAug. 20218.376
Cenovus EnergyHusky EnergyOct. 20207.837
Devon EnergyWPX EnergySep. 20205.658
Southwestern EnergyIndigo II Louisiana OperatingJun. 20213<50
GEP HaynesvilleNov. 20211.85
Montage ResourcesAug. 20200.9
Contango Oil & GasIndependence EnergyJun. 20214.5n/a
ARC ResourcesSeven Generations EnergyFeb. 20213.759
Continental ResourcesPioneer Delaware AssetsNov. 20213.25<60
EQTAtlas ResourcesMay-212.9<50
Chesapeake EnergyVine EnergyAug. 20212.260
Diamondback EnergyQEP ResourcesDec. 20202.259
ChrysaorPremier OilOct. 20202.1n/a