Opportunity in the middle ground for the oil industry | The National

Opportunity in the middle ground for the oil industry | The National:



"The international oil industry is structured like a badly made sandwich – two thick slices of bread with not much in the middle. Supermajors and national oil companies, with valuations in the hundreds of billions of dollars, form the top; hundreds of smaller companies the bottom.



The current lack of strong, capable mid-sized companies is a historical aberration. Might it be about to change under the stress of lower oil prices?

The current lack of mid-sized multinational companies is a result of several trends over the past decade or so. The smaller majors – Mobil, Amoco, Arco and Phillips – had already merged with larger siblings around the turn of the century. In the early 2000s, flush with cash from rising prices but short of opportunities, the newly made supermajors and Asian national oil companies swallowed the last few large independents.



Lasmo, bought by Italy’s ENI in 2000, produced 200,000 barrels of oil equivalent per day (boepd); when acquired by Shell in 2002, Enterprise Oil was producing 245,000 boepd. The largest comparable company on the London market today, Tullow, extracts less than 80,000 boepd."



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