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Big oil's commitment to integration

Big oil's commitment to integration

Source: EY calculations from Energy Intelligence Group, Petroleum Intelligence Weekly data.

The 11 largest international oil majors shows a gradually decreasing commitment to integration, both in terms of ”refining cover” and "product cover."

The last decade and a half has been one of consolidation and retrenchment by the major IOCs.

It's been a period characterized by the megamerger era and the creation of the industry giants, and then by selling and/or closing refineries in low-growth (typically OECD) markets and looking to establish toeholds into heavily state-controlled, high-growth markets, typically in Asia.

Drawn from data published by PIW in its annual supplement on the Top 50 Companies, the chart "Big oil's commitment to integration," plots the structure of the industry by looking at refining capacity of the major companies in relation to their upstream oil production and their downstream product sales.

Big oil's commitment to integration

Big oil's commitment to integration

In the chart, the data for the 11 largest international oil majors (ExxonMobil, Shell, BP, Chevron, ConocoPhillips, Total SA, Marathon, Hess, Eni, Repsol and Statoil) and their predecessor companies are aggregated, showing a gradually decreasing commitment to integration, both in terms of ”refining cover” and "product cover."

For eight of the 11 companies, refining capacity is greater than oil production, with only Hess, Eni and Statoil with refining capacity less than production. All but one company, Repsol, had total product sales greater than its refining capacity.

Note that Marathon, historically one of the smaller integrated majors, has "de-integrated" in 2011, splitting into separate upstream and downstream companies. One of the supermajors, ConocoPhillips, has also split in 2012.



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