Deloitte, the business advisory firm, has produced its first ranking of UK upstream independent oil companies, by tracking the leading 25 by market capitalization. The inaugural ranking reveals the dominance of two players, Tullow Oil and Edinburgh-headquartered Cairn Energy.
Of the top 5 performing companies, two are headquartered in Scotland -- Cairn Energy and Dana Petroleum; with Melrose Resources and Bowleven achieving 12 and 19th ranking, respectively.
Graham Hollis, partner within the energy, infrastructure and utilities group at Deloitte in Aberdeen, said, "The UK upstream independent sector is vital to the ongoing success of the UK based oil and gas industry. Participants in this sector play a key role in the development of reserves on not only the UK Continental Shelf (UKCS) but increasingly overseas resulting in a significant contribution to both industry and the UK economy.
"Tullow has 41 percent of the total market cap of the leading 25 upstream companies however Scottish firms are performing well with Cairn Energy showing real strength in the marketplace following the significant operational success it has had in India and the continued progress made in Greenland."
Tullow Oil and Cairn Energy
Tullow Oil's strong position is reflected in the fact that it represents 41 percent of the total market capitalisation of the 25 leading UK upstream oil companies.
There is currently clear water between Tullow and its nearest competitor Cairn Energy in terms of market capitalisation and the two together are worth 60 percent of the entire ranking.
Movements during 2009
There were significant movements in the positions of the remaining 23 companies during the year, due to strategic acquisitions, distressed asset sales and new entrants to the AIM and Main Markets. Another factor was the impact on share prices from newsflow.
Ian Sperling-Tyler, co-lead of oil & gas corporate finance at Deloitte commented, "The main legacy of the 2009 storm, with oil price volatility; uncertainty; and an indiscriminate collapse in equity values showed the need for companies to be more self sufficient and less reliant on investors funding high risk developments; often with minimal diligence and track record. Investors have nursed large losses in this sector and will be highly selective of who they back going forward."
Other report highlights:
National Oil Companies active during 2009
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