Report: Secret oil companies control $ 3 trillion in fortunes

Secret oil companies control the vast majority of the world's oil and gas assets, but the average person has only heard of those companies that have been attacked by missiles or have been implicated in prominent corruption scandals.

The writer Anis Alec said in a report published by the American Oil Price that the state-owned oil and gas companies control at least $ 3 trillion of oil and gas assets, compared to about $ 2.5 trillion in 2017, and these companies have the equivalent of 90% of all known reserves .

National oil companies
The author mentioned that this means that the national oil companies control the same wealth that all billionaires in the United States possess, or nearly twice the assets of the global multilateral development banks.

And if we count the annual revenues alone, then the Chinese government company, Sinopec, which is specialized in exploration, production, re-refining, marketing and distribution, is the largest oil and gas company in the world in 2018.

And when this net income is taken into account, this title is attributed to Saudi Aramco, which recorded a net income in 2018 of $ 111.1 billion.

According to the annual revenue metrics at the end of 2018, four out of the world's top ten oil and gas companies were state-owned, such as Sinopec, Aramco, the China National Petroleum Corporation and Russia's Gazprom.

As for the six places from this list, Royal Dutch Shell (fourth place), BP (fifth place), Exxon (sixth place), Total (seventh), and Valero (eighth) and Philips 66 (10th place).

Despite its economic position, most of the 71 national oil companies are very secretive, and Norwegian Equinor is one of the few exceptions, while the ambiguity of the rest of the national oil companies poses a great risk to finance and governance, especially when they are burdened with huge debt.

The NOC database included in this regard no fewer than 19 national oil companies with assets in excess of $ 50 billion.

Government revenue
No less than 25 of the national oil companies account for 20% or more of government revenue, with the National Nigerian Oil Company and the Nigerian National Oil Corporation collecting about half of the public government revenue from oil and gas sales.

The writer mentioned that the database also reveals a pattern of weak public reports issued by a number of national oil companies, as only 20 out of 71 national oil companies have revealed sufficient information for the ten most important indicators in this sector.

More than half of the national oil companies fail, however, to publish the audited financial statements by independent auditors, and companies - such as the National Petroleum Corporation of the Congo - are unable to even disclose the balance sheet.

The writer added that the national oil companies may borrow to finance new investments or to maintain significant discretionary expenditures or implement specific political programs, and that the loans may be in the form of debts from other oil companies such as the Nigerian National Oil Corporation, or from banks such as the Ghana National Oil Corporation, or from Another government entity like Sonatrach that borrows from the Algerian Central Bank, or by issuing corporate bonds such as the Russian company Rosneft, in addition to oil-backed loans from other traders or national oil companies such as Kazmunai Gas in Kazakhstan.

Borrow
The writer emphasized that the borrowing of national oil companies has its benefits, and that the need to borrow can motivate oil and gas companies to develop sound corporate governance practices in an attempt to improve their credit ratings, and that the best example of this is the recent Saudi Aramco bond issuance that provided a sneak peek of their financial performance, and that Excessive debt can create great risks.

He pointed out that some of the national oil companies such as the Norwegian Equinor and the Colombian Ecopetrol have continuously achieved strong returns for public investment, and that the national oil companies have nonetheless struggled in many countries to turn into actors with commercial efficiencies, and in extreme cases have contributed significantly to widespread corruption on Large scale, not to mention the lack of accountability for the role it plays in climate change.

National oil companies may control three trillion dollars of oil, and enjoy the luxury of being opaque, and in some cases completely corrupt, but their counterparts from non-state-owned international oil companies still generally tip the scales on revenue and incomes.