OGJ100 financial results for 2020 slumped on COVID-19

As global oil demand and commodity prices plummeted last year due to COVID-19, the latest survey shows that OGJ100 companies’ financial results slumped in 2020 compared to their 2019 levels.

Oil & Gas Journal’s look at the leading 100 oil and gas producing companies based outside the US allows for comparison of the size and results of the entities for which financial results and production and reserves data are available. For many of the national oil companies in the report, though, no such information on assets, revenues, earnings, or capital expenditures is available. Companies in OGJ100 are grouped by regions according to the location of their corporate headquarters.

All financial results included in this report are shown in US dollars. Due to exchange rate variation, financial results can be significantly affected when translated into US dollars.

Canadian firms

A sample of 17 Canadian companies included in this edition of the OGJ100 reported for a combined net loss of $21.67 billion for 2020, compared to a collective net income of $6.34 billion for the same group a year earlier. The decrease was due to lower average realized sales prices and higher depletion, depreciation, and amortization. The WTI-Western Canadian Select (WCS) differential averaged $12.57/bbl for 2020, comparable with $12.79/bbl for 2019, and $26.29/bbl for 2018.

Two companies included in the previous OGJ100 list were removed from this year’s list. Bonavista Energy Corp. was delisted from the Toronto Stock Exchange (TSX) in June 2020. Harvest Operations Corp. was removed as it became a wholly owned subsidiary of Korea National Oil Corp. in 2020.

The Canadian group’s combined assets decreased to $221.56 billion at yearend 2020 from $247.57 billion at yearend 2019. Suncor Energy Inc. held the most assets of the group, followed by Canadian Natural Resources, Imperial Oil Ltd., and Cenovus Energy. The Canadian group’s collective 2020 capital expenditures were down 40% from a year earlier.

Sixteen of the 17 companies reported losses in 2020, compared to 10 such companies in 2019. Husky Energy Inc. reported the largest 2020 net loss in the group. In January 2021, the company announced that the Cenovus transaction was completed. As a result of deal, Husky became a wholly owned subsidiary of Cenovus, and the Husky common shares and preferred shares were delisted from TSX on Jan. 5, 2021.

On the operation side, although most companies reported lower total reserves, Canadian Natural Resources Ltd. reported a 10% increase in its total proved reserves to 12.1 billion boe with reserves additions and revisions. Noticeably, Touchstone Exploration Inc. also announced a jump in natural gas reserves at yearend 2020, thanks to its Trinidad exploration properties.

European firms

The European group’s total assets at yearend 2020 were $1,972.4 billion, a decline of 13% from the 2019 level. Ranked by assets, Shell is the largest of the European companies in the OGJ100. The company’s assets decreased to $379.3 billion at yearend 2020 from $404.3 billion at yearend 2019. Shell was followed by Gazprom, BP, and Total.

The European group reported a collective 2020 net loss of $55 billion, compared to net earnings of $81 billion for 2019. Shell reported a net loss of $21.5 billion for 2020, compared to net income of $16.4 billion for 2019. BP announced a net loss of $20.7 billion for 2020.

OJSC Surgutneftegas reported a net profit of $10.27 billion for 2020, compared to earnings of $1.64 billion for 2019. The dramatic increase in the company’s net profit was due to a jump in income from exchange differences.

The European group reduced collective 2020 capital spending by nearly 22% from a year ago. Shell’s capital spending contracted by 28%, and BP cut capital outlays by 28%.

The European group’s worldwide oil and natural gas production in 2020 decreased 7% and 10% respectively year-over-year. Worldwide oil reserves of the group were down 6% from a year ago, while natural gas reserves increased 2%.

Latin America

Petroleo Brasileiro SA (Petrobras) reported a net profit of $948 million in 2020, down from a net profit of $10.36 billion posted in 2019. Its capital expenditures were down 31% during 2020. Petrobras’ projected capital expenditures for the 2021-2025 period are $55 billion (adjusted from $75 billion of last plan), of which $46 billion is allocated to the E&P segment. Moreover, 70% of the E&P allocation is allocated to presalt assets.

Petroleos Mexicanos (Pemex) reported a net loss of $23.7 billion for 2020, compared to a net loss of $14.65 billion in 2019. Pemex’s crude oil and condensates production increased marginally, mainly due to the addition of wells in new fields. Pemex’s proved oil and gas reserves also increased 1.3% and 10% respectively during 2020.

Asia

Reporting assets of $381 billion, PetroChina Co. Ltd. is the largest of the Asia Pacific companies in the OGJ100, followed by Malaysia’s Petronas.

In 2020, PetroChina’s assets, revenue, and profits all declined as compared with a year ago. The company’s worldwide proved oil reserves declined 28% during 2020. Meantime, the company’s domestic marketable natural gas production increased nearly 10% over 2020 to 4 tcf.

Petronas’s revenue dropped by 27% due to the impact of lower benchmark prices for all products on the back of lower sales volume. The company also recorded its first-ever annual loss, reflecting its huge impairment losses.

Middle East

Saudi Arabian Oil Co. (Saudi Aramco)’s total assets increased to $510 billion at yearend 2020 from $398 billion at yearend 2019. Saudi Aramco added to the Kingdom’s oil and gas reserves with the discovery of seven new fields and one new reservoir. The company made a profit of $49 billion for 2020, down from $88 billion for 2019.