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Shale: the Great
American Gas Revolution
page 9
China: Driving
the Oil Price
page 19
Mexican Standoff: What
Can Come of Cancun?
page 53
www.platts.com December 2010
2011
Global Energy Outlook
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insight
December 2010 insight 1
Publisher’s Note
Guest Editor’s Note
Ross McCracken
Patsy Wurster
The 2011 Global Energy Outlook issue of Platts Insight—a key resource for short-
and long-term planning—draws on the first-hand knowledge and expertise of just
a few of the 250 Platts editorial thought leaders. They will identify key issues from
2010 and uncover potential pitfalls and opportunities for 2011. For example, John
Kingston, Platts Global Director of News, tackles the #1 energy story of 2010, ex-
amining the impact of the Macondo oil rig explosion and spill, and the impact it
may have on aternative energy sources like shale gas.
The Platts Global Energy Outlook Forum—Clean Energy: Fact or Fiction?—was
held in conjunction with this publication and the 12th annual Platts Global En-
ergy Awards. John Hofmeister, former president of Shell Oil Company, author and
founder and CEO of Citizens for Affordable Energy Inc, was the keynote speaker.
The 2010 Platts Top 250 Global Energy Company Rankings
TM
are also featured in this
issue, providing a breakdown of the Top 250 by industry and region, offering commen-
tary on trends and movement within the list. And read the inside story, as our judges
go beyond evaluating financial metrics, considering customer focus, community in-
volvement, integrity and leadership before granting one of these prestigious awards.
This year’s Global Leader’s Section showcases companies and executives who are
making major advances in their local communities and across the world through
exceptional leadership and innovation.
To view our upcoming publications and other events, visit our web site at www.
events.platts.com.
Patsy Wurster
Publisher, Platts Insight
Cheap Gas for Dirty Coal
If the Macondo oil spill in the Gulf of Mexico hardened the resolve of the envi-
ronmental movement, it has not resulted in any tangible progress toward cap-and-
trade in the United States. Rather the opposite, mid-term elections in the US saw
support grow for the right wing of the Republican Party, a section not known for
its enthusiasm for regulation, environmental or otherwise.
However, the US has the capacity to reduce its carbon emissions substantially
without cap-and-trade, other forms of environmental regulation, or indeed renew-
ables. It will replace, just as Europe did, coal with gas in power generation. And it
will do so, again as Europe did, not primarily to the tune of a green agenda, but for
good commercial reasons.
Aging coal plant forms the backbone of the US generation system, but it faces
environmental opposition that can delay and obstruct new plant construction
for years, as well as increasing penalties for all of its emissions, not just carbon
dioxide. Moreover, it lacks the operational flexibility of a gas-fired power plant in
a future where flexibility will become more and more valuable.
In short, building a new coal plant in the US faces a mountain of risk. “Clean
coal” cannot come to the rescue. It’s simply too expensive. Natural gas in the US
is cheap, making projects where the economics are already challenging—Carbon
Capture and Storage, Integrated Gasification Combined Cycle and so on—look
deathly. And that goes for new nuclear too.
The result, depending on the incentives provided at federal and state level for re-
newables, is likely to be an emerging gas/wind duopoly. And if those shale gas wells
do have the rapid decline rates some analysts suggest, never fear, the US already
has a whole heap of currently redundant LNG regasification terminals on standby.
Ross McCracken
Editor, Platts Energy Economist
2 insight December 2010
Inside
Authors
1 Publisher’s Note
Patsy Wurster
1 Guest Editor’s Note
Ross McCracken
5 Creative Destruction and Sustainability
John Kingston
9 Shale: the Great American
Gas Revolution
Bill Holland
14 Gas Prices Test Oil Link
William Powell
19 China: Driving the Oil Price
Ross McCracken
26 OPEC at 50
Kate Dourian
30 Russia Grapples With Modernity
Nadia Rodova
34 Thermal Plants to Play Cameo Role
in EU Green Dream
Henry Edwardes-Evans
39 Premium for US Nuclear Newbuild
Aneesh Prabhu and Swami Venketaraman
43 Winds of Change for Renewable
Energy
David R. Jones
48 Adventures Abroad for Coal
James O’Connell
53 Mexican Standoff: What Can
Come of Cancun?
Frank Watson
57 Petrochemicals: Consolidation
and Recovery
Shahrin Ismaiyatim
62 Power Sector Revival (Platts Top 250
Global Energy Company Rankings

)
Ross McCracken
104 A Reflection and Dedication
Patsy Wurster
Kate Dourian heads Platts Middle East office in Dubai covering energy
news and developments in the Persian Gulf states, including Iran, Iraq and
other Arabic-speaking countries. Also a member of the OPEC reporting
team, she is a fluent Arabic and French speaker. She received a degree in
English literature and mass communication from the American University of
Beirut. Her job experience includes three years with the Associated Press
in Beirut (1980-83) and then Reuters in Lebanon, Egypt, Morocco, Cyprus
and London (1984-2000).
Henry Edwardes-Evans has a bachelor of arts degree from Oxford University,
where he studied English Literature. As a trainee journalist at Financial Times
Business, he worked on a number of energy-related publications before be-
ing appointed editor of EC Energy Monthly in 1996. Henry launched and edited
the FT newsletter Power in East Europe, which subsequently became Platts
Energy in East Europe. In 2000, he took over editorship of FT’s flagship energy
newsletter, Power in Europe, now Platts Power in Europe, developing power
plant trackers and managing three other highly-regarded Platts newsletter
titles – Energy in East Europe, Power UK and Power in Asia.
Kate Dourian Henry
Edwardes-Evans
Bill Holland Shahrin
Ismaiyatim
David R.Jones John Kingston
Ross McCracken James O’Connell William Powell Aneesh Prabhu Nadia Rodova Swami
Venkataraman
Frank Watson
December 2010 insight 3
Bill Holland has been covering shale for six years as an associate editor
for Platts’ Gas Daily. In addition to shale developments, Bill also covers
corporate finance, bankruptcies and mergers & acquisitions in the oil and
gas industries. A graduate of St. Joseph’s University in Philadelphia with
degrees in English and Philosophy, Holland has also done MBA studies at
Hood College in Frederick, Maryland. Prior to becoming a reporter and editor
at newspapers, television stations and online news services in Florida, he
served 15 years in the US Navy as an aviator and deck officer.
Shahrin Ismaiyatim, global editorial director of Platts Petrochemicals, joined Platts
in 2001. Starting off as a frontline reporter in the Singapore bureau, Shah covered
the Asian aromatics, polymers and olefins markets. In January 2003, he was
posted to London to head Platts’ European petrochemicals division, before assum-
ing the responsibility of leading the global team at the start of 2009. Before Platts,
Shah was a currency futures and interest rates broker, starting in 1991. He dealt
primarily in US dollar and UK Sterling pound interest rates swaps and derivatives.
David R. Jones is Platts’ global renewable energy editor, based in London. An
environmental journalist with 20 years’ experience, David edited newsletters
on US state and local government, medical waste management, oil pollution,
and solid waste before joining Platts in 2001 to cover coal and energy policy.
John Kingston, Platts’ global director of oil, manages a staff of almost 80
editors covering the world’s oil industry. He has been with Platts for 22
years, including stints as managing editor of Platts Oilgram Price Report and
editor-in-chief of Platts Oilgram News. Prior to joining Platts, John worked for
American Metal Market and for newspapers in New Jersey and Virginia. He
is a graduate of Washington & Lee University.
Ross McCracken, editor of Energy Economist, joined Platts in 1999 to run the
European and West African crude desk. He was previously an editor with an
Oxford University-based political and economic consultancy, and has taught
in Poland and China. He holds a master’s degree in European studies from
the London School of Economics and his undergraduate degree is from the
University of East Anglia.
James O’Connell, international coal managing editor, joined Platts Metals
in 2001, covering global precious metals trading. He joined the coal team
in early 2007, leading reporters in Europe and Asia producing news for the
global coal, electrical and steel industries. He previously worked for Irish
broadcaster RTE. He holds a BA in English and History and a Higher Diploma
in Applied Communications from the National University of Ireland.
William Powell is the editor of Platts International Gas Report, a fortnightly
with a strong focus on markets and politics. He has worked for Platts since
2001, where he has managed the real-time European news and markets
team, and has been writing about gas markets since the mid-1990s. Before
Platts he held senior positions at Financial Times Energy, Argus Media and
Heren Energy. He is a Russian speaker and a graduate of London University.
Aneesh Prabhu is a director in Corporate and Government Ratings at Standard
& Poor’s. He is also a credit analyst for a number of large electric companies
in the PJM interconnect and Mid-Atlantic regions. Aneesh is a Charterholder
of the CFA Institute and holds the Financial Risk Manager (FRM) certification
of the Global Association of Risk Professionals (GARP). Aneesh has an MBA
from the University of Wisconsin, Madison, and holds a BE in electronics and
communications engineering from the Indian Institute of Technology, Roorkee.
Nadia Rodova, managing editor of Platts Moscow office, joined Platts in 2004
to cover energy markets in Russia and the post-Soviet area. She previously
worked for the Australian Broadcasting Corporation and a number of economy-
focused publications in Russia. She holds a Higher Diploma in Finance from Rus-
sia’s Financial Academy and in Journalism from the Moscow State University.
Swami Venkataraman is a director in Corporate and Government Ratings
with Standard & Poor’s, and a member of the Utilities, Energy, and Project
Finance Ratings Group. He joined S&P Indian affiliate CRISIL in 1997 and has
worked since 1999 in both the New York and San Francisco S&P offices. He
is a Chartered Financial Analyst, holds a B.Tech from the Indian Institute of
Technology and an MBA from the Indian Institute of Management.
Frank Watson, managing editor of Platts Emissions Daily, is a financial jour-
nalist and editor specializing in energy markets. He has headed up the global
emissions team at Platts since May 2008, having held the position of Europe
Editor on emissions markets since August 2005. Frank developed Platts’ cov-
erage of the emerging EU Emissions Trading Scheme, UN Clean Development
Mechanism and Joint Implementation schemes, covering regulatory policy
under the EU ETS and Kyoto Protocol, producing independent over-the-
counter price assessments, market commentary and analysis.
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December 2010 insight 5
The Macondo oil spill in the Gulf
of Mexico made it very clear: the US
needs to get off foreign oil. The US
needs to start using more solar, wind,
biomass and conservation. We’re run-
ning out of oil, don’t you see, and
even if we do have it, it does nasty
things like this. In the weeks after the
tragic April 20 explosion and subse-
quent spill this was a constant refrain.
And, of course, the word sustainable
was heard many, many times.
The problem is that advocates of
swapping a petroleum-based econo-
my for one reliant on renewables are
missing the mark. While biofuels can
displace oil as a transportation fuel,
and have to a degree done so, solar
and wind power in the United States
have to compete with the growing
800-pound gorilla of natural gas, pri-
marily from shale plays. And that’s
even before shale gas technology has
made its way to other countries.
The legendary Austrian economist
Joseph Schumpeter referred to “cre-
ative destruction,” a free economy’s
irresistible force where changes in
customer demand and the supply of
market-altering goods and services
fundamentally alter the landscape
of a market. While economists, peak
oil disciples and those intractably
opposed to oil thought they were
creative destruction
Creative Destruction
and Sustainability
John Kingston, Global Director, Platts News
The Macondo oil spill in the Gulf of Mexico has prompted
calls for a new and sustainable energy future based on home
grown renewables. But all over the US, the forces of creative
destruction have already been busy forging a new energy era,
one based on natural gas.
Illustration by Nelson Sprinkle
6 insight December 2010
2011 global energy outlook - creative destruction
having their “ah-ha” moment when
Macondo blew out, this creative de-
struction was occurring in the city
of Fort Worth, in Pennsylvania, in
south Texas, and in every other area
of the US with a shale gas resource.
It was being driven by drill bits slic-
ing through shale rock, followed by a
rush of high-pressure water and oth-
er fluids, freeing massive volumes of
once unreachable natural gas.
Gas Keeps Flowing
It’s difficult to overstate the impact
that shale gas has had in the years since
George Mitchell first successfully com-
bined hydraulic fracturing and hori-
zontal drilling. And the game is only
just beginning, possibly redefining the
boundaries of what is considered “sus-
tainable.” Consider the following:

In mid-2009, T. Boone Pickens
cancelled his giant wind farm
in the Texas Panhandle. While
much news coverage at the time
cited transmission problems as a
key reason for the deferral, Pick-
ens told Newsweek in an interview,
when asked the reasons behind
his decision: “The price of natural
gas dropped. When it goes below
$7 (per Mcf), it’s hard to finance
those lines. We’re now at $4.”

Constellation Energy canceled
plans in October to build a new
nuclear plant in Maryland. One
of the reasons cited: low natural
gas prices.

There is now an unprecedented
spread between oil and gas prices
in the US. As a result, gas drilling
has taken an strange turn. The liq-
uids that come up with the gas are
priced against crude. The value of
the liquids are so robust that they
support gas prices of . . . well, no-
body has an exact number, but the
fact that some people are saying
“zero” should give an indication
of what’s going on. The normal
swings in the natural gas market,
where oversupply leads to low
prices and then production shut-
ins, allow the market to rebalance
supply and demand. But that isn’t
happening anymore, primarily be-
cause the spread between gas and
oil keeps these wells profitable,
and the gas keeps flowing.
Multiple Impacts
Except in competitions won by very
smart college students, solar cells can-
not power a car. Wind turbines on the
top of an automobile would be silly
and make it tough to get through an
underpass. Fuel for electricity genera-
tion on the one hand, and liquid fuels
for transportation on the other, have
long occupied separate universes.
The natural gas boom, which has
still to be exported outside the US, has
the potential to link markets in ways
that LNG mildly threatened to, but
never really did. If the most ebullient
and optimistic forecasts are accurate,
the impact is immense:

The US petrochemical and fertiliz-
er industries will receive an enor-
mous shot in the arm by being
able to use natural gas as a feed-
stock at prices far cheaper than
the gas prices of other countries.
This will be aided by the fact that
outside the US, gas pricing is pre-
dominantly linked to oil.

The long list of potential LNG
facilities to be built in the US is
dwindling. With gas from shale
so abundant, why spend billions
of dollars building receiving ter-
minals that already face heavy lo-
cal opposition and for which there
may simply be no market?

LNG liquefaction plants from Ni-
geria to Qatar to Trinidad face
a much smaller US market than
originally envisioned. That means
more LNG for the rest of the world.
The shrinkage of the US LNG mar-
ket is, in essence, the US exporting
. . .solar and wind power in the United States
have to compete with the growing 800-pound
gorilla of natural gas.
December 2010 insight 7
2011 global energy outlook - creative destruction
its gas surplus to other countries.

The Honda Civic GX NGV is the
only Natural Gas Vehicle current-
ly sold in the US. Will low-priced
natural gas prompt the develop-
ment of new cars and new distri-
bution systems to power them?
The possibilities are endless. Is the
future of automobile propulsion a
plug-in hybrid, charged overnight off
a grid supplied by a natural gas-fired
power plant, taking market share from
coal? Or is it a hydrogen fuel cell, with
the hydrogen provided through the
process known as reforming, fueled
by natural gas? Or is it just straight
NGVs, running compressed natural
gas straight out of any one of the US’
many shale plays?
Whatever creative destruction path
gets followed, it is clear that no matter
how beloved they may be, solar and
wind are going to have an extremely
difficult time competing against this
gas bonanza. Generation costs for one
kilowatt hour of electricity vary wide-
ly, but an estimate by research compa-
ny SolarBuzz recently put the cost of a
combined cycle gas turbine at 3-5 cts;
biomass gasification at 7-9 cts; wind at
4-7 cts; and solar photovoltaics at any-
where from 20 to 50 cts. SolarBuzz, as
the name implies, is relentlessly up-
beat about solar’s future.
Wind has become more competi-
tive, but its lower carbon footprint is
starting to run up against its rather
large visual and land-eating foot-
print. In a classic half empty/half
full debate, the US Interior depart-
ment in April approved the Cape
Wind project, a 130-turbine 420 MW
facility that will power the Cape Cod
area of Massachusetts. Good news
for wind! However, its construction
drew heavy, well-funded opposi-
tion from local residents who didn’t
want to see those turbines from their
beachfront properties. That contro-
versy went on for close to 10 years,
and opponents are still vowing to
take Cape Wind to court following
the Interior department approval. A
decade, for one project.
Shale Gas Opposition
The gas-fueled future does have its
critics. They are not so much against
the use of gas, but there is a serious
school of analysts that believes the
projections of gas as far as the eye can
see are flawed. It’s not that they don’t
believe the reserves exist. It’s because
they don’t see shale gas’ production
levels as sustainable.
One of the most outspoken and
best-known shale skeptics is Art Ber-
man, an independent geophysicist
who has written and spoken exten-
sively about his views on long-term
shale gas viability. In a speech last
year before the Association for the
Study of Peak Oil, he laid out the crux
of his argument. Companies produc-
ing shale gas are promoting two con-
current trends: that producing shale
gas can simultaneously be low risk/
high reward, and that an exploration
venture can have high capital costs
and low gas prices at the same time,
and still make money.
He describes the balance sheets
of major shale gas players as having
huge debt load. He says they engage
in activity that involves frequent
writedowns of assets, producing lots
of gas to generate quick cash, and
then selling more assets to generate
cash to drill more wells to produce
more gas to . . . and so on. Berman’s
criticism, expressed by others, is that
the current glut of natural gas, sup-
plied by shale plays, cannot be sus-
tained because depletion rates from
shale wells are so enormous. The
plays will not be providing an end-
less supply of gas 30 years from now,
according to this argument.
But for now, that surplus does exist.
Futuristic dreamers looking over that
hideous orange-like slick that cov-
ered the Gulf of Mexico after the Ma-
condo spill, and thinking they were
seeing the key to a radically-changed
energy future, might want to check
the benchmark Henry Hub natural
gas price before getting too excited.
That price—which as you read this
probably starts with a four—may be
a dream-killer. ■






December 2010 insight 9
Chattanooga
Eagle
Ford
Rio Grande
Embayment
Texas-
Louisiana-
Mississippi Salt Basin
Uinta Basin
Devonian (Ohio)
Marcellus
Utica
Appalachian
Basin
Antrim
Barnett
Bend
New
Albany
Woodford
Barnett-
Woodford
Lewis
Hilliard-
Baxter-
Mancos
Excello-
Mulky
Fayetteville
Floyd-
Neal
Gammon
Cody
Haynesville-
Bossier
Hermosa
Mancos
Pierre
Conasauga
Pearsall-
Eagle Ford
Michigan
Basin
Ft. Worth
Basin
Palo Duro
Basin
Permian
Basin
Illinois
Basin
Anadarko
Basin
Greater
Green
River
Basin
Cherokee Platform
San Juan
Basin
Williston
Basin
Black Warrior
Basin
A
rdm
ore B
asin
Paradox Basin
Raton
Basin
Maverick
Sub-Basin
Montana
Thrust
Belt
Marfa
Basin
Valley and
Ridge Province
Arkoma Basin
Forest
City Basin
Piceance
Basin
Shale Gas Plays, Lower 48 States
0 200 400 100 300
Miles
±
Stacked Plays
Shale Gas Plays Basins
Deepest / Oldest
Shallowest / Youngest
June 2008: The NYMEX natural gas
futures contract rolls off the board at
its highest closing price ever, $12.753/
MMBtu. Summer heat coupled with
the annual hurricane threat to Gulf
of Mexico production spooks a North
American market where gas demand has
outstripped gas supplies for more than a
decade. Applications for dozens of LNG
terminals crowd the US regulatory dock-
ets at the state and federal levels. The
state of Alaska renews its push to build
a $40 billion pipeline to carry gas from
the North Slope to the Lower-48 states,
alleviating a shortage in the world’s larg-
est gas-burning market. Despite stiffer
royalty taxes, drillers in the Canadian
province of Alberta punch ever more
holes in the ground to satisfy the gas
behemoth to the south willing to pay
more than $10/MMBtu for the supply.
June 2010: The NYMEX contract
rolls off the board at $4.804/MMBtu, a
62% drop in two years. The gas futures
contract will fall below $4/MMBtu as
the summer progresses without a ma-
jor storm, while the rig count falls as
US gas drillers further reduce activity
in reaction to low prices. Gas produc-
tion grows anyway, reaching an all-
time high of 26.2 Tcf for the year. The
list of canceled LNG terminals grows
almost monthly. New terminals along
the Gulf Coast file for permits to export
gas rather than import it. International
engineering giant Fluor says that with
US gas prices forecast to be low for the
natural gas
Shale: the Great American
Gas Revolution
Bill Holland, Associate Editor, Platts Gas Daily
Built on advances in drilling and information technology,
shale gas has transformed the United States from a growing
importer of LNG to a potential exporter. The country’s
recoverable gas resource estimates have ballooned, and
despite growing environmental concerns, shale gas
technology is going global.
Source: US Energy Information Administration, based on data from various published studies,
updated March 10, 2010
10 insight December 2010
2011 global energy outlook - natural gas
next ten years, nuclear power plant proj-
ects will start to be canceled, unable to
compete with gas on price. Questions re-
surface as to whether the Alaska pipeline
is economically viable, or even needed.
What Happened? In a Word, Shale
“Simply the most significant energy
innovation so far this century,” IHS
Cambridge Energy Research Associates
Chairman and author of the oil history,
The Prize, Daniel Yergin told audiences
at a conference in March. A sedimentary
rock, shale was formed 300 to 400 mil-
lion years ago as oceans withdrew from
low plains throughout the world, leav-
ing behind a mixture of sand and plant
material that under pressure and heat
became thick layers of impermeable rock
one to two miles below the earth. Indus-
try thinking for a long time was that gas
from shales was unrecoverable. The rock
was too deep and too hard. While plank-
ton and the accumulated organic matter
remaining after oceans receded millions
of years ago left the rock rich in gas, it
remained impervious to extraction.
Solving that problem required three el-
ements that would turn a US gas indus-
try away from chasing declining conven-
tional fields into a gas factory that, for
the first time in 40 years, produces more
gas than can be consumed. Two of those
techniques—horizontal drilling and hy-
draulic fracturing—came from a 20-year
quest by a stubborn Texas oilman, who,
watching oil output on his leases near
Fort Worth decline, wanted to get more
hydrocarbons out of the ground.
Horizontal drilling and hydraulic frac-
turing have drillers sinking a well ver-
tically more than a mile underground,
then, using motors, turning the drill bit
90 degrees along the horizontal plane
and drilling another mile through the
shale rock. Horizontal drilling was the
first of Mitchell’s tools. The horizontal
well bore exposed far more rock to the
well than a simple vertical shaft.
The second technique was hydraulic
fracturing, better known as “fracking”:
pumping fluids down the well under ex-
tremely high pressures to crack the rock,
creating fissures in the previously imper-
meable formation. To hold those fissures
open and allow gas to flow continuous-
ly, proppants—sand and silicas—were
added to the mix. Through 30 wells and
nearly ten years, Mitchell pumped fluids
and gases (and, some said, dollars) in
various combinations down the well to
crack the rock and hold it open: water,
nitrogen, carbon dioxide, various gels,
silica, even propane.
The third development came from
information technology. The geologi-
cal structure of the Barnett Shale was
relatively well-known from decades of
oil and gas activity in the area, but how
could producers map the extent and
thickness of shale layers in areas that
weren’t well-defined? Three-dimension-
al seismic surveys, initially developed
by ExxonMobil, use seismic data to cre-
Slant-hole well
Horizontal well
Lenticular
reservoir
Blanket
reservoir
1. Slant and horizontal drilling.
Source: US Geological Survey
December 2010 insight 11
2011 global energy outlook - natural gas
ate a three-dimensional map of tight
reservoirs such as shale. Processing and
manipulating the huge amounts of data
collected from seismic surveyors didn’t
become economical until computer pro-
cessing speeds increased exponentially
during the high-tech revolution of the
1990s. Armed with cheaper, heavy-duty
microprocessors, gas producers of all siz-
es were able to map the earth.
Developing Reserves
Independent producers such as Oklaho-
ma City-based rivals Chesapeake Energy
and Devon Energy (the latter purchased
Mitchell Energy in 2002 for $3.5 billion),
took up the tools, trained in the Barnett
and then found shales across the US. In
2008, Chesapeake announced it had as-
sembled acreage in the “next” big shale
play—the Haynesville around Shreveport,
Louisiana. Chesapeake now rivals BP as the
US’ biggest gas producer on the strength
of new hydrocarbons coming from shale
plays it operates across the country.
But the Haynesville was only the “next”
play if you were Chesapeake. Smaller inde-
pendents were already developing profit-
able shale plays across the country: South-
western Energy in Arkansas’ Fayetteville
Shale, Devon in Oklahoma’s Woodford,
Range Resources in the Marcellus Shale that
stretches from New York south through
Pennsylvania into West Virginia and Ohio,
and Petrohawk Energy in the Eagle Ford
Shale south of San Antonio, Texas.
Although it was the pioneer in the
Haynesville, Chesapeake has assembled
the leading land position in the Marcel-
lus and holds lots of acreage in all the
major shale plays. Chesapeake was also
the first to establish joint ventures with
international oil companies including BP,
Statoil and, most recently, the China Na-
tional Offshore Oil Corp. Typically, Chesa-
peake sells a minority share of its acreage
in a play and the international firm pays
most of the drilling expenses for a year or
two. In return, the internationals get their
share of the gas sales revenue and admis-
sion to Chesapeake’s “Shale Academy” in
Oklahoma City, where they learn how to
locate and exploit shale.
In every case, geologists and engineers
have had to change their estimates of the
gas that could be recovered as drillers got
more efficient and the size of the shales
became clearer from drilling. The Barnett
Shale, the “granddaddy,” is now estimated
to contain 26 Tcf of gas and has already
produced more than the 5 Tcf originally
forecast. The biggest revision to date came
at a Platts conference in Pittsburgh in
2008. The Penn State University geologist
who spent his career researching the Mar-
cellus Shale, Dr. Terry Engelder, revised
his original 15 Tcf of gas in place in the
Marcellus to nearly 500 Tcf after seeing
the first results of drilling by Chesapeake,
Atlas and Range Resources.
The end result of all this activity had
the Potential Gas Committee, a group
200
400
600
800
1000
1200
1400
1600
1800
T
c
f
2000
2002 2004 2006 2008
shale other
39% increase;
85% of that shale
19% increase;
65% of that shale
2. Technically recoverable US natural gas reserves.
Source: Potential Gas Committee, Colorado School of Mines
2011 global energy outlook - natural gas
12 insight December 2010
of geologists, academics and industry
representatives that meets every other
year at the Colorado School of Mines,
reporting in 2009 that potential gas in
the US, which for years had hovered
around 1,000 Tcf, had nearly doubled
to 1,836 Tcf.
Fracking Concerns
However, as gas drilling moves out of
the lightly populated areas of Texas and
Oklahoma, where it has operated for
years, into the more densely populated
areas of the Northeast US, the industry’s
common practices are getting a skeptical
look. Fracking requires millions of gal-
lons of water for each well, and roughly
half that water comes back to the surface,
polluted and requiring treatment.
Where the fresh water for fracking will
come from and where it will be disposed
of after it is used have become hot-button
issues as the industry moves closer to the
political and media centers of the North-
east US. Although water use and disposal
is regulated in the US by each individual
state, the federal Environmental Protec-
tion Agency was ordered by Congress
this year to investigate the effects of the
practice on drinking water.
The industry’s image has also been
hurt by the inevitable accidents that oc-
cur among the thousands of wells drilled
annually: gas migration into the water
table from poorly cased well bores, well
blowouts and chemical spill on the sur-
face. Each accident creates a headline,
and the headlines add up in the more
densely populated Marcellus Shale, now
thought to be the world’s second largest
gas field (behind Iran’s South Pars).
Going Global
Despite the difficulties, exploration for
shale gas is poised to expand worldwide
in the coming year. Already, Hallibur-
ton has spudded two shale wells 75 miles
south of Warsaw, Poland. India plans to
hold its first auction of shale leases in
three states in August, 2011. China and
India are signing agreements that will
have the US Geological Survey examine
their geologic data for signs of shale.
A US State Department global shale
conference held in Washington, DC,
in August drew representatives from 20
countries, their interest spurred by two
factors: independence from outside sup-
pliers of gas, and meeting greenhouse gas
emission goals by fueling coal and oil-
fired power sources with cleaner burn-
ing natural gas. Already, the techniques
used by George Mitchell, now 91, are be-
ing exported around the globe through
joint ventures in US shale plays between
independents and global majors such as
BP, Norway’s Statoil, France’s Total, In-
dia’s Reliance and China’s CNOOC. ■
3. Hydraulic fracturing.
Source: Chesapeake Energy
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In fact, the U.S. has more natural gas than Saudi Arabia has oil,
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let’s make sure natural gas is a big part of the resource mix.
Visit www.anga.us to learn more about
the benefits of clean, American natural gas.
14 insight December 2010
Gas markets went through the mangle
in 2010, as growing competition global-
ly pointed up the flaws in the European
system. The old assumptions of peak
scarcity managed by storage and ration-
ing through prices went by the board, as
cheap shale gas in the US and abundant
spot-market supplies of LNG hammered
incumbent pipeline importers tied to
oil indexed take-or-pay contracts.
With the US out of the market for
imports, owing to the simultaneous
fall in demand and massive ramp up of
domestic shale production, LNG sellers
had to choose between the markets of
Asia and Europe. However, competition
from buyers was mild. Prices in Asia
largely reflected the cost of freight from
the Atlantic Basin with a varying but
seldom sizeable premium on top.
As a result, the dominant players in an
over-supplied European gas market had
to embark on a massive damage limita-
tion exercise. They have achieved partial
success on volumes, but there is still a lot
of pain to come on the pricing front.
European Supply Glut
European gas importers, who have
long been unwilling or unable to
change their practices, continue to
sign up to long-term gas contracts in-
dexed to oil products with standard
take-or-pay terms. Among the latest of
these contracts is for the supply of first
gas through the yet-to-be-completed
55 Bcm a year Nord Stream pipeline,
which runs from Russia to Germany via
the Baltic Sea.
These contracts left importers hold-
ing more gas than they could expect
to sell—the result of both a recession-
induced downturn in demand and the
surge in uncontracted LNG production.
The incumbents might have been able
to cope with one of these two events
separately, but there was no chance if
they coincided.
Upstream, Qatar brought more LNG
trains on-stream, and is expected to hit
its 77 million ton per annum ceiling
this fiscal year. Peru and Yemen also
joined the ranks of exporting coun-
tries. Downstream, a string of gas ma-
jors brought on-line brand new import
capacity, particularly in the UK, which
is linked by pipeline to continental Eu-
ropean markets.
This infrastructure was tested to
the full in the coldest winter for de-
cades. The prompt UK price in Janu-
ary went below the price of spot gas
gas markets
Gas Prices Test Oil Link
William Powell, Editor, Platts International Gas Report
Too much supply and too little demand has been the natural
gas market story of 2010. The abundance of gas threw into
sharp relief the difference between spot and long-term contract
prices indexed to oil, particularly in continental Europe. The
parallels with the United Kingdom in the 1990s are striking;
incumbents dominating supply in their own markets have
been left with more gas than they can possibly sell.
December 2010 insight 15
2011 global energy outlook - gas markets
for the following summer as the engi-
neers tested out their new equipment.
There were no problems at the UK’s
National Balancing Point, despite re-
cord demand, and prices were gener-
ally stable.
That combination—too much sup-
ply, too little demand and improved
transmission between markets—drove
a wedge between oil-indexation, which
prevails on the European continent,
and spot prices, the norm in the UK.
Usually, winter demand pushes spot
prices above the oil indexation level,
resulting in flows from the continent to
the UK, while oil indexation tends to
result in higher prices in summer, at-
tracting spot gas to the continent. How-
ever, this year, oil prices remained con-
sistently more expensive than spot gas,
both winter and summer, and there is
little sign of an imminent change in
this relationship.
Too Much Gas
As a consequence, producers have
been slow to take final investment de-
cisions on future upstream projects,
and have been generally relaxed about
the duration of their maintenance
programs at existing ones, idling
plant as long as possible. With much
of Qatar’s latest LNG trains’ output go-
ing to meet spot demand, and prices
languishing, there was a marked slow-
down in Fujairah loadings in the sum-
mer months.
Among the risks on the supply side is
environmental permitting for coalbed
methane-LNG projects in Queensland,
Australia. While partners such as BG
remain optimistic, the federal govern-
ment has repeatedly pushed back an
approval decision, which is a precon-
dition for investment decisions. Some
consolidation is expected, given the
number of projects that will otherwise
be chasing the same markets—not to
mention the same small band of con-
tractors and suppliers able to carry out
the work.
Downstream, panicked gas majors
such as E.ON Ruhrgas in Germany,
GDF Suez in France and Italy’s Eni have
been doing what they can to offload
surpluses and slash the price they have
to pay for gas they cannot avoid tak-
ing. Some gas pricing has been trans-
ferred from oil to gas hub prices, but
Gazprom has stuck to its guns more
firmly than Norway’s Statoil. The latter
extracted better terms for its own sales
and marketing operations in continen-
tal Europe, in exchange for granting
buyers’ price relief.
As an indication of the extent of the
problem, E.ON Ruhrgas this autumn
held an auction for gas delivery within
10
20
30
40
50
60
70
7/09 8/09 9/09 10/09 11/09 12/09 1/10 2/10 3/10 4/10 5/10 6/10 7/10 8/10 9/10 10/10
p
/
t
h
US HH UK NBP NWE GCI
1. Gas prices for UK spot, oil-linked Europe and Henry Hub.
Source: Platts
16 insight December 2010
2011 global energy outlook - gas markets
Germany, only to dispose of less than
a quarter of the volume. Apparently ig-
noring all the signals, it set a price lev-
el based on oil prices. Shippers calcu-
lated that the spot market would have
delivered savings of about 5%. Its joint
venture in Slovakia also tried to auc-
tion off no longer needed gas, but sold
none at all. E.ON Ruhrgas has restruc-
tured, and someone else is in charge of
gas procurement.
Competition Issues
GDF Suez and Eni have more subtle
problems to tackle: both must reduce
their rights to transmission capacity
to encourage more competition and
satisfy the European Commission,
as part of deals done to avoid formal
competition charges. GDF Suez must
lose some of its pipeline and LNG im-
port rights, which might explain why
it has disposed of some of its short-
term LNG contracts—to Gazprom, to
Korea and to China.
Eni has to sell its stakes in major im-
port pipelines to Italy. The high price
of the Italian spot market, not to men-
tion its lack of liquidity, reflects in part
a lack of competition in that market.
This high price should attract LNG, but
unused berthing slots offered to the
market at the Adriatic LNG terminal
have not been sold. Regasification and
system entry costs appear to offset any
advantage that LNG sellers might gain
from the apparent arbitrage.
Deja Vu
The parallels between the most lib-
eral market in Europe—the UK—in the
1990s and the incumbents of continen-
tal European markets today are strik-
ing. In both cases, a legal or virtual mo-
nopoly had bought up gas to forestall
competition in supply in its own mar-
ket; in both cases, a wall of abundant
gas exposed the market price as traders
went to work, parceling out the sur-
plus; and in both cases the buyers are
left having to negotiate their way out of
hefty payments for unwanted gas, and
to sell gas at a loss.
In both cases, too, there was and is
no certainty that in a few years’ time,
the supply-demand picture will not
look completely different, and then the
incumbents will be scrabbling for gas
on the same terms as their competitors.
But it is reasonably certain that linking
the gas price to fuels that barely com-
pete nowadays will continue to hinder
the smooth operation of the market, by
perpetuating additional risks—oil pric-
es and currency to name but two.
This will deter new entrants, who can
see the spot price but not the whole pic-
ture. In turn, this might affect growth
1 2 3 4 5 6 7 8 9 10
Jan 2011
Feb
Q2
Q3
Q4
Winter 2011
Summer 2012
Winter 2012
Summer 2013
NBP Henry Hub
2. Gas forwards for UK NBP vs Henry Hub, October 20, in $/MMBtu.
Source: Platts
in the supply of gas, at a time when
gas for coal replacement in the power
sector is the one certain way to reduce
the EU’s carbon dioxide emissions and
cope with the intermittency of growing
wind capacity.
Asia Rising
Despite the surplus of gas, spot pric-
es for LNG in Asian markets have im-
proved. Platts’ assessments show they
have doubled, compared with last year’s
depressed levels, and they are now
higher than some of the very cheap
LNG term cargoes, such as those from
Yemen and Sakhalin in Russia.
Several Japanese utilities have had to
buy in spot LNG to cover nuclear out-
ages, raising questions about the reli-
ability of the country’s nuclear fleet.
LNG output has also been lower than
actual capacity implies, while other
factors such as hot summer weather,
offshore problems in India and a re-
turn to stronger growth in Asia’s still
fast developing economies has prompt-
ed stronger prices in Asia. Taiwan, in
particular, has added a new LNG termi-
nal, new gas-fired power plant, while
construction of its latest nuclear reac-
tor is delayed.
Asia has been seen as a key area of
future demand growth for LNG, but
India and China have for the moment
only limited capacity to take advan-
tage of its availability. Both countries
are developing indigenous sources of
gas production, including shale gas,
while China is making the most of its
geographical position to widen its sup-
ply portfolio.
Chinese companies have in the last
year signed up for future deliveries of
LNG from Australia and Papua New
Guinea, for example—the latter being
the first instance where Chinese, rather
than Japanese or Korean companies,
have signed enough off take agreements
to underpin the financing of an Asian
LNG project. However, they have also
contracted with Myanmar for pipeline
gas, to join the already-flowing pipeline
gas from Turkmenistan.
In addition, Russia and Uzbekistan are
on stand-by as new suppliers for China.
Russia is talking up the prospects of a
long-term contract, but there is, after
years of talks, still no agreement on the
price. With so many alternatives lined
up, China—which is also continuing
to develop its own gas production cen-
ters—can afford to start thinking more
about the price of its gas and worry less
about its security of supply.
The US, by contrast, remained a mar-
ginal player on the global stage. Con-
cerned with its own production from
shale, its surplus and export limitations
effectively disconnected it from the rest
of the world. Some LNG cargoes were
delivered for practical reasons, if not
commercial ones, as the US market re-
mained so much cheaper than markets
elsewhere.
Even if plans to convert import ter-
minals into liquefaction facilities do
materialize, it is hard to imagine that
the quantities of domestically-pro-
duced LNG will be enough to influence
the domestic gas price, even if sellers
are able to lock in a sizeable margin.
In fact, disconnected from oil as well
as other competing fuels, Henry Hub
price movements for prompt months
appear to reflect most closely changes
in storage volumes.
Despite the low prices, companies
are continuing to pile into acreage
there: European companies are gener-
ally negative about the prospects for
the shale gas “revolution” on their own
patch, at least in the short to medium
term, given very different conditions
in Europe from North America. How-
ever, they still see the US as offering
value for money—especially in plays
where there are natural gas liquids ac-
cumulations, which compensate for
the relatively low price that an MMBtu
of gas commands. ■
December 2010 insight 17
2011 global energy outlook - gas markets
In both cases, a legal or virtual monopoly had
bought up gas to forestall competition in supply in its
own market . . . and in both cases the buyers are left
having to negotiate their way out of hefty payments
for unwanted gas, and to sell gas at a loss.
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December 2010 insight 19
If fundamentals are the primary deter-
minant of a commodity’s price, then the
current stock situation would clearly im-
ply lower price levels for crude oil. Com-
mercial oil stockpiles in OECD countries
rose by 15.8 million barrels in August to
end the month at 2.790 billion barrels,
according to the International Energy
Agency’s October oil report. This is just a
whisker off the record level of 2.797 bil-
lion barrels seen in August 1998.
The last time stocks were this high
the price of crude was at one of its low-
est ever points, hovering around $12
per barrel. By December 10, 1998, the
physical benchmark Dated Brent had
dropped to a record low of $9.13/b, a
level as unimaginable now as $100/b
was then. Of course, one of the major
differences between now and 1998 is
the size of inventories relative to de-
mand. In 1998, world consumption of
crude oil was 74.053 million b/d, more
than 10 million b/d less than the 85.950
million b/d expected in 2010.
However, OECD oil consumption in
1998 was, in fact, larger than it is now
by some 1.5 million b/d. Moreover, the
OECD has increased its level of strate-
gic stockpiles in addition to commer-
cial stocks. According to US Energy
Information Administration data, to-
tal OECD stocks surpassed the level of
1998 in 2005, reaching 4.272 billion
barrels in April of this year, or about 94
days of forward cover, compared with
about 85.4 in 1998.
Another major difference is that Chi-
nese demand for oil is far greater now
than it was in 1998, but China too has
made great strides in increasing its
level of both commercial and strategic
stocks. At end-July, China’s commer-
cial crude inventory stood at 29.2 mil-
lion tons, or about 213 million barrels.
Strategic stocks are estimated to be in
excess of 100 million barrels, togeth-
er representing more than 60 days of
import cover. Until early 2006, com-
mercial oil reserves held by China’s
two largest oil companies, the China
National Petroleum Corporation and
Sinopec, could meet demand for only
about two weeks.
oil
China: Driving the
Oil Price
Ross McCracken, Editor, Platts Energy Economist
The supply side of the oil market has for the moment been
substantially de-risked; inventories are high and surplus
capacity is plentiful. The one support amid an indifferent
economic recovery is China, and notably a Chinese industrial
success that is based on domestic rather than external
demand—car manufacturing. This suggests that if China
sneezes, the oil market will catch more than just a cold.
20 insight December 2010
2011 global energy outlook - oil
Surplus Capacity
Stock levels, while an important in-
dicator of the state of the market, are
not a major determinant of price. High
inventories will bear down on senti-
ment, while low inventories are bullish,
but the stock level is largely a symptom
of the pre-existing supply/demand bal-
ance. If it came to the crunch, for an
industry that takes two to three years at
least to bring a major field on-stream,
one day more or less of stocks makes
little material difference.
It is the more immediate relationship
between supply and demand that influ-
ences prices. This finds representation
in the amount of surplus capacity in the
market, i.e. how much more oil could be
produced should there be demand for it,
and should the holders of that capacity
(OPEC) prove willing to produce it.
Surplus capacity in 1999, when crude
prices were still in the doldrums, was
4.98 million barrels a day. The large
drop to 3.05 million b/d in 2000 was
accompanied by a correspondingly
large rise in the price of crude, which
averaged $17.97/b in 1999 but $28.50/b
in 2000. The price rise was terminated
in 2001-2002 as surplus capacity grew
again, but the drop from 5.54 million
b/d in 2002 to 1 million b/d in 2005
saw the average crude price more than
double to $54.52 million b/d.
Surplus capacity increased in 2006
and 2007, but not enough to take the
market out of the danger zone. It was
also apparent that there was a lack of
refinery capacity capable of taking low-
er-value crude grades that were heavy
and high in sulfur. Only in 2009, when
surplus crude capacity jumped from
1.49 million b/d to 4.33 million b/d,
did the crude price react, falling from
$97.26/b to $61.67/b. 2010 appears so
far to be an exception. For the year to
October 26, the crude price averaged
$77.605/b, significantly higher than
2009, but surplus capacity has risen
further to 5.09 million b/d.
Surplus capacity is a good measure
of the supply-demand balance because
it encapsulates shocks on both sides of
the equation. The shrinking of surplus
capacity after 2002 reflects the dramatic
increase in world oil demand, most par-
ticularly Chinese demand, and the lack
of investment caused by low prices in
the period from 1998. The huge rise in
surplus capacity in 2009 reflects both
the drop in demand as a result of the af-
termath of the financial crisis and the oil
industry investment cycle responding to
the rising prices of the preceding period.
Total OECD Total non-OECD
10000
20000
30000
40000
50000
60000
70000
80000
90000
100000
‘80 ‘81 ‘82 ‘83 ‘84 ‘85 ‘86 ‘87 ‘88 ‘89 ‘90 ‘91 ‘92 ‘93 ‘94 ‘95 ‘96 ‘97 ‘98 ‘99 ‘00 ‘01 ‘02 ‘03 ‘04 ‘05 ‘06 ‘07 ‘08 ‘09 ‘10 ‘11
1. World oil consumption (million b/d).
Source: US Energy Information Administration
December 2010 insight 21
2011 global energy outlook - oil
Taking a step back from the events that
impact oil prices on a day-to-day basis,
there appears to be a strong correlation
between surplus capacity and crude
prices that largely explains the latter’s
rise and fall since 1998.
Financials and Speculation
Fundamentals, of course, are not the
only game in town. Much has been
made of the financialisation of com-
modity markets and investment in the
commodity super cycle. There is little
doubt that the nature of commodity
markets has changed over the last ten
years as new investors have flooded into
the market for a multitude of reasons.
The rise of long-only commodity in-
vestment indices, heavily weighted to-
wards energy commodities and crude oil
in particular, put pressure on the market
to find sellers to take the other side of
the contracts. More buyers than sellers,
the general uninformative explanation
given for a rising market, is, of course,
facetious, but nonetheless true.
Those who downplay the idea that
“speculation” has been behind the
long-term rise in crude prices since 1998
argue that it cannot be the weight of
new money, because in futures markets
every seller needs a buyer. However, the
argument misses the point that sellers
will be found for all the new buyers, but
only if the price rises.
The broader argument that energy
commodities have become “finan-
cialised” means that forces less imme-
diately related to supply and demand
in the oil market help determine prices.
It is the attractiveness of an investment
in energy commodities relative to other
types of investment that affects money
flows. Even if oil inventories are high
and surplus capacity plentiful, suggest-
ing a bearish oil market, if the outlook
for other investments looks worse, then
energy markets will still attract funds.
m
i
l
l
i
o
n

t
o
n
s
-2.00
-1.00
0.00
1.00
2.00
3.00
4.00
1/09 2/09 3/09 4/09 5/09 6/09 7/09 8/09 9/09 10/09 11/09 12/09 1/10 2/10 3/10 4/10 5/10 6/10 7/10
2. Chinese total crude oil stock changes.
Source: Derived from Bureau of Statistics and Customs data
m
i
l
l
i
o
n

t
o
n
s
25.50
26.00
26.50
27.00
27.50
28.00
28.50
29.00
29.50
Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10
3. China petroleum stockpile statistics (commercial stocks).
Source: Xinhua, OGP
22 insight December 2010
2011 global energy outlook - oil
There is also the question of time hori-
zons. Arguments based on fundamentals
tend to take a very short-term outlook.
Inventories are rising, surplus capacity is
high and that means that prices should
be falling—now. This treats the oil
price as a market clearing price. A level
is achieved at which all producers and
consumers net out their positions and
meet their physical requirements on a
daily basis. Surplus oil means prices fall,
shortage means they rise.
However, financial investors want to
buy and hold. They are looking at the
capacity of a price to change. If the
market is going to tighten in the future,
then they will buy now on the expecta-
tion that prices will rise. The oil price
is no longer a clearing price but an in-
vestment vehicle. It should be no sur-
prise that as investment grew in energy
commodities and the financial side of
the market expanded in relation to the
physical side that futures prices also
grew in importance.
Oil prices are currently “seeking di-
rection,” which essentially means no-
one is sure whether they are going to
go up or down. They have stayed pret-
ty much within a $70-$80 per barrel
band for the last 12 months, breaking
out towards $85/b in May and again in
October. However, as there are no real
supply concerns attention is focused on
demand. Good economic news pushes
prices up, bad news pushes them down.
This has upset the idea that commodi-
ties might represent a hedge against in-
flation or a safe haven against an ailing
economy as equities are behaving in
the same way. The inverse correlation,
if it existed, appears to have gone.
This does not have to be bad news.
It indicates that the recovery is ongo-
ing, just unspectacular. For every spate
of poor economic data there is a raft of
good data. It isn’t a double dip recession,
but nor is it a return to robust health. In
this context, oil demand in the OECD
will remain weak, with further falls in
OECD Europe and Asia cancelling out
any growth in North America. As a re-
sult, the only place that really matters is
China, whether one takes a view of the
market based on near-term fundamen-
tals or treat oil as an investment com-
modity with a longer time horizon.
Single Support
With attention focused on the de-
mand side of the market, China’s al-
ready important position in the oil
market becomes hard to overstate. The
overall contraction in world oil demand
of 1.3 million b/d in 2009 (Internation-
al Energy Agency data) masks the stark
division between the OECD and non-
OECD and between Asia and the rest of
the world bar the Middle East.
In 2009, amid the worst of the global
slowdown, Chinese oil demand grew by
700,000 b/d, according to the IEA. The
only other growth areas were the rest of
non-OECD Asia (+0.3 million b/d) and
the Middle East (+0.3 million b/d). By
contrast, even without the emergence
of the electric car, OECD oil demand is
broadly seen as having peaked.
China became the world’s largest car
market in November 2009, surpassing
the United States. It had previously ex-
ceeded Japan as the world’s largest mak-
er of automobiles. Three notable aspects
of this industry are, first, that while
there are a number of large foreign
joint-ventures in the car manufacturing
sector, auto production is predominant-
ly indigenous. Second, very few cars are
Year (million b/d) Average price of Dated Brent ($/b)
1999 4.98 17.97
2000 3.05 28.50
2001 4.07 24.44
2002 5.54 25.02
2003 1.92 28.83
2004 1.27 38.27
2005 1.00 54.52
2006 1.42 65.14
2007 2.07 72.39
2008 1.49 97.26
2009 4.33 61.67
2010 5.09 67.92*
2011 5.19
4. Surplus capacity in the oil market.
Source: US Energy Information Administration, Platts
*To September 9
December 2010 insight 23
2011 global energy outlook - oil
made for export, almost all are absorbed
by the domestic market. And, third,
there is still huge potential for growth,
owing to the current low per capita level
of car ownership and China’s pattern of
social and economic development.
When the financial crisis turned into
a global slowdown, analysts keen to re-
main optimistic argued that the BRICs,
and China in particular, had an inter-
nal growth dynamic that would allow
them to avoid recession. These dynamic
growth regions would help pull the rest
of the world back from the brink. The
argument downplayed the extent of
export-led growth in the BRICs and to a
large extent contradicted the whole no-
tion of globalization. The idea appeared
plain wrong as China’s previous double
digit GDP growth rates stalled and the
southern coastal areas of the country—
its export-orientated manufacturing cen-
ter and the locus of the country’s job cre-
ation—saw a severe slowdown in growth.
However, in retrospect, China’s fan-
tastically successful not-for-export car
industry is indeed evidence of a more
powerful internal growth engine. In
the auto sector, China is absorbing raw
materials, but instead of processing
them and exporting manufactured and
semi-manufactured goods, it is captur-
ing the whole value chain and selling
increasingly sophisticated goods inter-
nally, and in ever larger volumes.
This puts the auto sector in an impor-
tant position within the Chinese econ-
omy. If domestic demand needs to be
stimulated, it is a prime target for ben-
efits, whether direct or, as is currently
the case, in terms of incentives for new
vehicle sales. As the car industry in-
creases in importance within the econ-
omy, it runs the risk of becoming too
big to fail, just as it has in other coun-
tries. It represents an important facet of
the country’s growing structural addic-
tion to petroleum.
Expansion Fears
The tensions this creates are already
evident. In September, China’s automak-
ers rejected an official warning that un-
checked growth in the industry was lead-
ing to excess capacity and could harm
the wider economy. Chen Bin, an official
with the National Development and Re-
form Commission, China’s top economic
planner, said excess auto capacity threat-
ened sustainable economic development
and must be “resolutely” stopped.
However, industry representatives
and the China Association of Automo-
bile Manufacturers see it differently,
arguing that car makers were only try-
ing to meet demand in the world’s larg-
est auto market. Fan Zhong, a senior
5. OECD stocks position.
Source: US Energy Information Administration
Year
Total OECD stocks
(million barrels)
OECD forward cover, including
strategic stockpiles (days)
1980 3587 85.9
1981 3531 89.4
1982 3376 89.4
1983 3255 88.2
1984 3494 92.7
1985 3408 90.9
1986 3543 91.8
1987 3643 92.6
1988 3588 88.3
1989 3634 87.9
1990 3706 89.0
1991 3713 88.4
1992 3718 86.5
1993 3791 87.5
1994 3875 87.1
1995 3758 83.6
1996 3762 81.7
1997 3875 82.8
1998 4006 85.4
1999 3733 78.0
2000 3796 79.2
2001 3912 81.5
2002 3811 79.5
2003 3914 80.4
2004 3980 80.5
2005 4068 82.2
2006 4161 84.7
2007 4090 83.8
2008 4214 88.6
2009 4217 92.8
2010 4272 94.2
24 insight December 2010
2011 global energy outlook - oil
manager with Dongfeng Automobile, a
major Chinese manufacturer, said “our
problem is not having enough capac-
ity.” Most entrepreneurs at the Interna-
tional Forum on Chinese Automobile
Industry Development in Tianjin in
September expressed similar views.
The overall capacity of China’s auto
industry might seem excessive, but the
market has huge potential for restructur-
ing and growth, said Hu Xinmin, honor-
ary chairman of CAAM. China’s auto in-
dustry has been operating at 120% of its
nameplate capacity, and most manufac-
turers were operating more than 20 hours
a day, said Xu Changming, head of infor-
mation resource development at the State
Information Center. Sales were expected
to grow by more than 15% annually in
the next few years, Xu said. “There is no
need to worry about excessive output.”
However, Chen Bin warned that lo-
cal governments have been making
“blind” efforts to open new factories
and expand capacity, encouraged by
the industry’s healthy profits and ancil-
lary economic benefits. Twenty-seven
of the Chinese mainland’s 31 prov-
inces, autonomous regions and mu-
nicipalities have plants that are able to
produce finished vehicles. This appears
to be an all-too-familiar pattern of Chi-
nese investment, in which each tier of
government mobilizes resources to en-
ter a profitable sector quickly, resulting
eventually in over capacity and a large
amount of inefficient plant.
Nevertheless, there is confidence that
China’s car market can continue to
grow. Despite average incomes remain-
ing relatively low, the proportion of the
population that can afford cars is grow-
ing and China has a huge billion plus
population. Car ownership levels tend
to rise much faster than income once
middle income levels are achieved. In
addition, China’s urban population is
increasing far quicker than its overall
population. Rapid urbanization tends to
increase income growth and with it car
ownership. Suburbanization increases
the demand for transit further, either
for cars or for mass transit systems.
These long-term underlying trends
suggest that any over expansion of the
Chinese car market in the near term
might prove short-lived. But a wider
slowdown in the rate of Chinese oil
demand growth could pull from the
oil market what has become its central
support. Without Chinese growth in
oil demand and expectations that this
growth will be sustained and replicated
in other developing countries such as
India, the fall in the price of oil from
its 2008 peak would have been deeper.
China has always been concerned
about its exposure to international mar-
kets, and particularly to raw materials
on which its manufacturing and pro-
cessing industries depend. It has been
keen to gain control of resources abroad
to mitigate the security implications of
dependence on imported commodities
and the price impact of being depen-
dent on industries where the supply
side is heavily concentrated amongst a
few large players.
The de-risking of the supply side
in the oil market has for the moment
passed a modicum of price control to
China as the main center of demand
growth. Unfortunately for Beijing, Chi-
na’s demand for oil is part of a dynamic
that is not easy to control, even for a
state-dominated economy. It represents
a deepening of the country’s addiction
to oil and a strengthening of the rela-
tionship between Chinese economic
health and the oil price. ■
Economy 1980 2002 2020 1980-2002 (%) 2002-2020 (%)
PRC 2 19 65 10.8 7.1
Beijing 9 80 177 10.4 4.5
Shanghai 5 47 100 10.7 4.3
Hong Kong, China 41 59 70 1.7 1.0
Indonesia 5 16 26 5.4 2.7
Jakarta 34 143 161 6.7 0.7
Japan 203 428 522 3.4 1.1
Tokyo 159 266 271 2.4 0.1
Korea, Republic of 7 204 284 16.6 1.9
Seoul 15 205 288 12.6 1.9
Thailand – 100 158 – 2.6
Bangkok – 324 389 – 1.0
6. Passenger vehicle ownership per 1,000 population (1980, 2002 and 2020).
Source: APERC (2006)
PRC = People’s Republic of China, - = no data available
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26 insight December 2010
Given the tumultuous history of Mid-
dle Eastern politics, it’s a wonder that
Arab-dominated OPEC, the cartel born
in Baghdad a half century ago, is still
standing. It has survived, and in recent
years even flourished, but there are still
challenges ahead. The largest of which
could soon be posed by Iraq, which is
rising from the ashes of war and sanc-
tions and rebuilding its oil industry. It’s
aim is no less than to surpass Saudi Ara-
bia as the region’s biggest oil producer.
“I hope the Iraqis are not about to re-
vive the quota parity game,” said one
regional oil official when told that Iraq
had raised its estimate of proven re-
serves by 25% to 143 billion barrels af-
ter reviewing data from two of its giant
oilfields. “I thought that issue was dead
and buried,” he added. The revision is,
in fact, quite conservative given other
estimates of Iraq’s potential.
However, the response was swift. Iran,
refusing to be trumped by Iraq, an-
nounced its own crude oil reserve hike,
finding an additional 12.31 billion bar-
rels in proven reserves, and adding that
further hikes could be forthcoming. Giv-
en that the two countries fought a bitter
eight-year war from 1980-1988, a dispute
over who gets a larger market share could
shatter the thaw in relations that followed
the fall of Saddam Hussein in March 2003.
Iraq’s current expansion plans, and Iran’s
sanction-induced stagnation, suggest the
latter stands to lose its position as OPEC’s
second largest producer, whatever level of
reserves it claims.
Trouble Behind, Trouble Ahead
When Iraq invaded Kuwait in August
1990, the world lost some 5 million b/d
of crude oil—the combined production
of both OPEC countries at that time.
Saudi Arabia stepped in and partially
made up for the loss by ramping up its pro-
duction to 8 million b/d almost overnight
from 5 million b/d. Riyadh had a chance
to put to good use the spare capacity it had
invested in and it jealously guarded this
level of production for several years.
OPEC somehow survived this turmoil,
although there have been times over the
past decade when ministers have been
cloistered in their hotel suites for days
and even weeks arguing over quotas.
Presidents and kings have on occasion
had to intervene to resolve whatever cri-
sis delayed a final agreement.
Today’s OPEC is a different animal.
The organization has become more
streamlined and more proactive in re-
OPEC
OPEC at 50
Kate Dourian, Senior Correspondent
OPEC has turned 50, Saudi Arabia has celebrated 80 years
as a nation and Kuwait marked the 10th anniversary of its
liberation from Iraqi occupation. It has been a big year, but
new challenges lie ahead. Iraq’s oil expansion plans will test
OPEC’s cohesion, while the organization’s customers continue
to demand it invest in spare capacity just as they do
everything they can to reduce their own demand.
December 2010 insight 27
2011 global energy outlook - OPEC
sponse to market movements. Meetings
last a day and members have managed
to keep politics out of their deliberations
and focus instead on the group’s char-
ter, which is to secure the best value for
a commodity that provides the bulk of
OPEC members’ state revenues.
The results have not been bad. Exclud-
ing the wild gyrations of oil prices in mid-
2008, when they rose above $147/barrel
only to plummet by $100/b months later,
prices have generally held within a $70-
$80/barrel range for much of the year, a
price level Saudi Arabia’s King Abdullah
has publicly endorsed. Yet even the Sau-
dis find it hard to explain why prices are
at current levels given continued weak
demand in the OECD and ample sup-
ply, padded with a significant cushion of
spare capacity, most of it in Saudi Arabia.
Supply Crunch Forecast
The reason is that built into these prices
is the perception that at some point the
world will need more hydrocarbons. To
deliver these requires continual invest-
ment, but that process—which resulted
in the current level of spare capacity—has
stalled. Most Middle East producers have
shifted their exploration focus to gas.
Saudi Arabia is burning an estimated
800,000 b/d of crude oil to feed its power
plants as it diverts gas to a growing pet-
rochemicals sector. Iran is struggling to
expand both its crude oil and natural
gas production as sanctions bite. Kuwait
is now importing LNG from as far afield
as Australia, while Dubai was due to get
its first LNG cargo from Qatar in October.
The Middle East is increasingly hungry
for all sources of energy, not as a produc-
er, but as a consumer. Domestic supply is
gaining in importance relative to exports.
Moreover, the only significant oil ca-
pacity expansion will come from Iraq.
Iran is virtually closed to foreign invest-
ment, owing to a wave of US, EU and
UN sanctions. Having boosted its pro-
duction capacity in recent years, Saudi
Arabia is content to wait for signs of
a significant pickup in demand that
would justify further costly investment.
Kuwait remains mired in political wran-
gling that has hampered plans to boost
its own output. The UAE is proceeding
quietly with its own production capac-
ity expansion plans, but appears to be in
no rush to bring new oil on-line for now
without what its minister, Mohammed
bin Dhaen al-Hamli, often refers to as a
“road map” for future demand.
This worries people. Jochen Weise, a
member of the board of Germany’s E.ON
Ruhrgas, writing in Abu Dhabi newspa-
per The National said that if global de-
mand continued to increase by between
1-1.5 million b/d annually, OPEC would
have to increase its production to around
35 million b/d by 2020 and possibly to 38
million b/d by 2025, from 28.5 million
b/d now. This would require the group to
add 7.5 million b/d every five years “just
to stay in the same place,” as well as meet-
ing decline rates from existing fields.
Weise said that a “comfortable cush-
ion” of spare capacity beyond 2015 would
require OPEC to undertake a “contin-
ued program of significant investment
by core Middle Eastern members of the
organization.” He added, “If this is not
forthcoming, we will see tighter markets
and higher prices going forward.”
Weise warned that the drop in energy
demand in 2009 resulted in a slowdown
in investment in oil and gas. In addition,
tightened borrowing requirements post-
Output Target
Algeria 1.26 1.2
Angola 1.65 1.506
Ecuador 0.47 0.429
Iran 3.68 3.334
Kuwait 2.3 2.221
Libya 1.57 1.472
Nigeria 2.12 1.704
Qatar 0.81 0.73
Saudi Arabia 8.28 8.014
UAE 2.26 2.226
Venezuela 2.23 2.01
OPEC-11 26.63 24.845
Iraq 2.4
Total 29.03
1. OPEC output and targets, in million b/d, September 2010.
Source: Platts
OPEC has not published individual allocations under the 24.845 million b/d target total which came into effect on January 1, 2009.
The above figures are calculated by Platts.
28 insight December 2010
2011 global energy outlook - OPEC
financial crisis has also become a “ma-
jor issue” for investors, especially for up-
stream projects. “The capital restrictions
in the post credit crunch world may have
a significant impact on investments in en-
ergy projects in the next decade,” he said.
Capacity Guardians
Most of the world’s spare oil production
capacity, estimated currently at about 6
million b/d is held by Saudi Arabia. At
current production of just over 8 million
b/d and capacity of 12.5 million b/d, the
kingdom has around 4.5 million b/d of
spare capacity. But maintaining this idle
capacity is costly and state oil company
Saudi Aramco has indicated several times
that there is a limit to its largesse.
Nor does Riyadh like to hear its erst-
while leading crude oil customer, the US,
repeatedly call for less dependence on for-
eign oil, which they read as Arab oil. Sau-
di Aramco CEO Khalid al-Falih, speaking
at the World Energy Congress in Mon-
treal in September, referred to what he
called a discriminatory attitude toward
fossil fuels in the pursuit of energy secu-
rity by some consuming nations. “Per-
ceived energy security concerns seem to
be driving some nations to discriminate
against select energy sources, as we have
seen in the case of oil,” he said.
Falih has a different plan when it comes
to investment than Weise. Rather than ex-
pand current capacity, the Aramco chief
expects Saudi Arabia’s crude oil reserves of
260 billion barrels to grow by 40% “over
time” and recovery rates from its major oil
fields to climb to 70%, twice the global
average, as part of the kingdom’s efforts to
meet future energy demand.
“The short answer is that the world
will continue to rely on traditional fossil
fuels for most of its energy needs for the
coming decades,” he said. “In fact, these
energy sources—namely coal, oil and
natural gas—are expected to account for
about four out of every five units of en-
ergy that mankind will consume for the
foreseeable future.” That is why Saudi
Aramco maintains large spare capacity
“at considerable cost to us” as part of its
efforts to keep markets supplied, he said.
“It’s costly to have that kind of capacity
idle and it was costly to build it,” he said.
“But we don’t build it for the short term.
This capacity, we build it for the next de-
cades and generations. So we’re not rush-
ing to put the projects in full utilization.
We will respond to the markets when the
markets develop,” he added. “This surplus
capacity, which currently approaches four
million barrels per day, has helped assure
market stability, providing additional sup-
plies whenever unforeseen events such as
natural disasters or man-made strife and
conflicts have struck,” he said.
While renewable energy will help to
meet part of this rise in energy demand,
the pace of its growth will be slower and
the percentage of its contribution will
remain relatively small in the global en-
ergy mix, Falih said. “My argument is
not with the concept . . . but the pace
at which we can expect to meet a por-
tion of energy demand,” he argued. “It
is going to take a long time . . . during
which time we need to invest in fossil fu-
els, including clean coal to mitigate the
environmental impact of fossil fuels . . .
but we have to be realistic and allow the
transition to take place,” he added. ■
1.00
2.00
3.00
4.00
5.00
6.00
m
i
l
l
i
o
n

b
/
d
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
2. OPEC surplus crude oil production capacity.
Source: US Energy Information Administration
ISSUE DATE: February 28, 2011 (on sale: February 14, 2010)
DEADLINE: January 6, 2011
MATERIALS DUE: January 24, 2011
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30 insight December 2010
The global economic downturn was a
serious test for Russia. Of the largest 25
economies in the world, Russia saw the
deepest recession. GDP dropped 7.9%
in 2009, following growth of 5.6% in
2008. This year, Russia’s GDP is expect-
ed to rise by about 4%, with the level
sustained for the next three years. Ac-
cording to Prime Minister Vladimir Pu-
tin, the economy has “relatively rapidly
returned to growth.”
However, less optimistic members of
the government note that the country’s
dependence on oil and gas revenues has
risen, leaving the economy increasing-
ly vulnerable to developments in exter-
nal markets. If oil and gas prices were to
fall, economic growth could be as little
as 2% per annum over the next three
years, according to deputy economy
minister Andrei Klepach. A $10/barrel
change in the oil price results in a 0.5%
change in the country’s GDP, he said.
Russia’s economic recovery has been
driven primarily by rising oil prices. Its
lack of competitiveness in other sec-
tors has led analysts to suggest that the
economy outside of the energy sector
will effectively stagnate. The authorities
recognize the problem and want to mod-
ernize. “Today Russia has a new agenda,
one that incorporates sustainable devel-
opment and the modernization of key
economic sectors. I believe we stand a
good chance of seeing these plans mate-
rialize,” Putin told investors recently.
Capital Requirements
The government needs economic di-
versification because oil and gas earn-
ings are forecast to fall from 47% now
to 44% of the federal budget in com-
ing years. There are two major factors
behind the poor outlook for Russia’s
petrodollars. First, crude production is
expected to rise at a lower rate than the
country’s GDP, leading to a cut in the
sector’s share in the budget. Second,
all new oil and gas fields in Russia have
been given tax breaks and more favor-
able investment terms. This is stimu-
lating investment, and is designed to
bring on new capacity to replace the
country’s older declining oil and gas as-
Russia
Russia Grapples
With Modernity
Nadia Rodova, Managing Editor, Platts Moscow
Russia faces a catch-22 situation. It wants to diversify its
economy and reduce its dependence on the energy sector,
but cannot afford to do so without financing the transition
with revenues from oil and gas. At the same time, the oil
and gas sector itself requires heavy investments to maintain
production from ever harder to access resources. Both
targets require tax incentives.
December 2010 insight 31
2011 global energy outlook - Russia
sets, but improved terms for investors
mean less for the federal budget.
Before the financial crisis, a package of
tax incentives, worth about $4 billion a
year for the oil industry, was agreed by
the government. The main incentives
were a cut in the oil extraction tax for
green field developments and temporary
exemptions from export duty for crude
pumped in the country’s new oil prov-
ince, East Siberia. In addition, low levels
of taxation were to remain in the gas
sector. However, with the country’s Oil
Fund depleted and the government seek-
ing funds for modernization, the empha-
sis has swung back in favor of tax rises.
But the government does not want this
to stifle investment. Russia has consoli-
dated its position as the world’s biggest
oil producer. Output saw steady increas-
es in 2010, repeatedly hitting post Sovi-
et-era records. Crude output is expected
to see a 1.5% to 2% gain from 2009 to
over 10 million b/d in 2010 before stay-
ing at roughly the same level over the
next three years. Under a less optimistic
scenario, crude production from older
fields could become less economic from
2012 when the mineral extraction tax
on oil is expected to rise. This tax rise
could also delay new projects, leading to
reduced oil output in the medium term.
Russia, which has the world’s largest
natural gas reserves, also wants to main-
tain its position as the largest exporter
of gas to Europe, as well as winning
over new markets in the Asia-Pacific re-
gion. The authorities announced in Oc-
tober an ambitious plan to increase gas
production by 50% from the current
level to a huge 1 Tcm a day by 2030, at
a total cost of $412 to $492 billion. Gas
exports would reach 455-520 Bcm/year
in 2030, up from 226 Bcm/year now,
according to the recently approved na-
tional gas industry development plan.
Gas output in 2010 is expected to grow
11% to 653 Bcm, largely reversing the
12% drop the previous year.
The upstream plans, both for oil and
gas, require producers to develop new,
hard-to-access reserves to compensate
for the decline in the country’s existing
fields. The green field sites are mainly
located in remote and undeveloped re-
gions, such as East Siberia or the Yamal
Peninsula in the Arctic, and require mas-
sive investment. Oil and gas companies
are turning to the government for new
incentives to develop those capital-inten-
sive projects. This has forced the govern-
ment to consider a wide range of changes
to the tax system to balance the interests
of both the federal budget and industry.
And against this is the risk of a fall in
the oil price, to which the country re-
mains heavily exposed. As Finance Min-
ister Alexei Kudrin put it in October:
“We don’t know what the oil price will
be. We think the price is unlikely to stay
at around $75-80/barrel as the current
[price] growth is supported by invest-
ment resources rather than demand in
the commodity. We cannot rule out that
the price will drop from $80/b to $60/b
within the next three years.” Most fore-
casts in fact suggest oil prices will remain
firm over the next few years, backed by
fast growing demand from Asia-Pacific,
but in a market as volatile as the oil mar-
ket, nothing can be taken for granted.
Looking Eastward
With the locus of demand growth
having shifted firmly to Asia, Russia has
advanced significantly its efforts to add
eastern markets to its exports portfolio,
with the key focus on energy-hungry
Forecast
scenario 2009 2010 2011 2012 2013
2009-2013
% change
Crude oil (million mt) a 494.3 501 501 498 495 0.1
b 494.3 501 502 498 502 1.6
Natural gas (Bcm) a 585.2 653.3 671 679 700 19.6
b 585.2 653.3 679 691 719 22.9
1. Russian near-term oil and gas output forecasts.
Source: Ministry for Economic Development
Natural gas figures predate recent plan to expand output to 1 Tcm a year by 2030
32 insight December 2010
2011 global energy outlook - Russia
China. First, Russia launched the new
East Siberia-Pacific Ocean pipeline to
export crude via the Far Eastern port of
Kozmino to Asian markets. South Korea
has become the biggest buyer of ESPO,
accounting for 37% of the blend’s total
sales in the first nine months of 2010.
Japan, the United States, China, Thai-
land, Singapore, Taiwan and the Phil-
ippines have all bought ESPO cargoes.
ESPO crude supplies via Kozmino have
averaged about 300,000 b/d in 2010.
From January 2011, a further 300,000
b/d will be channeled to China via a new
offshoot from ESPO. The deliveries are
to be carried out under a contract signed
between Russia’s state-run Rosneft and
China’s National Petroleum Corp that
envisages 300,000 b/d supplies over
20 years. Eventually, ESPO throughput
should rise to 1 million b/d, following
an expansion scheduled for comple-
tion in late 2012 or early 2013. Capacity
could later be raised to 1.6 million b/d.
Second, state-owned oil company
Rosneft, in partnership with CNPC, has
inaugurated the construction of a joint
260,000 b/d refinery near Tianjin. The
project will help Rosneft enter China’s
retail market as it envisages mutual
construction of at least 500 filling sta-
tions in the region.
Third, the two countries appear to have
made some advances on the supply of
pipeline gas to China, as well as 15 mil-
lion mt/year of Russian coal. Gazprom
and CNPC in September signed a legally-
binding document for deliveries of 30
Bcm a year of gas to China over 30 years.
The document includes key commercial
parameters, but the toughest issue—that
of prices—has not yet been resolved. Pric-
es have been the key stumbling block in
the negotiations, which started in 2004.
Gazprom and CNPC hope to settle
the remaining issues by July 2011. If a
final contract is signed then, Gazprom
has said it will start work immediately
on the construction of the Altai pipe-
line system from West Siberia to China
and start actual supplies in 2015. Un-
der a framework agreement signed by
Gazprom and CNPC in October 2009,
Russia could supply up to 30 Bcm/yr via
the western route and up to 38 Bcm/yr
via an eastern route, from East Siberia.
Export volumes are unlikely to reach
quite these levels, however. China, like
any other country, will be reluctant to
become too reliant on any one source of
supply, while Russia will take time to de-
velop the upstream resources to fill the
pipelines to capacity. Developing such
remote resources will also require a lot of
capital. “In order to attract the massive
investments needed for the development
of new reserves, Russia needs to become
the sort of place where you know that
you get a decent return on your invest-
ment. That doesn’t really exist now,” the
chief analyst with Moscow-based Renais-
sance Capital investment bank, Ronald
Nash, said. The government needs to
change the legal framework and build
greater trust with investors, but it has a
long way to go, he added.
The government thus finds itself in
a catch-22 situation. Modernizing the
economy and attracting huge amounts
of investment capital into the oil and
gas sector requires change to the fis-
cal regime, but not necessarily com-
plimentary ones. Moreover, constant
changes to the investment environ-
ment means uncertainty, which erodes
the trust that the government needs to
build in order to attract the large sums
of capital required. ■
Forecast
scenario 2009 2010 2011 2012 2013
2009-2013
% change
Crude oil (million mt) a 247.4 247.6 249 245 241 -2.6
b 247.4 247.6 249 247 245 -1
Natural gas (Bcm) a 168.4 185.2 205.1 214.7 229.6 36.3
b 168.4 185.2 210.1 220.7 240.6 42.9
2. Russian near-term oil and gas export forecasts.
Source: Ministry for Economic Development
Natural gas figures predate recent plan to expand output to 1 Tcm a year by 2030
©2009 CREDIT SUISSE GROUP AG and/or its affiliates. All rights reserved.
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34 insight December 2010
The unprecedented decline in Europe-
an grid-delivered electricity demand in
2009 has hit thermal generation hard.
The recession-induced slump in con-
sumption is only slowly being restored,
with demand in the UK and Italy barely
matching last year’s nadir. This has put
pressure on power prices, margins and
new investment. The first signs of finan-
cial strain are beginning to show.
An example was provided by Alstom
on October 5. The French power engi-
neering firm is to cut 4,000 jobs over
the next 18 months from its thermal
power generation equipment business.
The cuts are to fall in Europe and North
America, “where the new equipment
markets for coal and gas power plants
are most affected by the economic cri-
sis,” Alstom said. The company’s servic-
ing, wind and hydro businesses were
untouched by the cuts.
The problem is that Europe is al-
ready awash with power as the last
wave of thermal plant investment
reaches maturity. Large amounts of
gas-fired capacity are coming to mar-
ket in the UK, while in Germany the
last pre-carbon capture coal plants
are reaching completion. At the same
time, there has been no let-up in the
development of subsidized, priority-
dispatch renewables.
Priority Renewables
Renewables’ growth through the
recession has created a new dynamic
in the power market. Green power
is immune to demand patterns and
profits even when over-production re-
sults in negative pricing. This dynam-
ic is already reducing thermal plants’
leading role to one of a walk-on, walk-
off cameo.
power
Thermal Plants to
Play Cameo Role in
EU Green Dream
Henry Edwardes-Evans, Editor, Power in Europe
Europe’s recession-induced slump in power demand is only
slowly being restored. Renewable energy sources, protected
by policy, have proven almost immune to the economic
signals, leaving thermal plant to take the full impact. As a
result, European utilities may be drifting away from both
coal and CCS, while thermal power plant overall is
becoming increasingly ancillary.
December 2010 insight 35
2011 global energy outlook - power
It should be no surprise, then, that
utilities are tightening their belts. In
September, Swedish utility Vatten-
fall cut its budget to focus on its core
markets of Sweden, Germany and the
Netherlands. Presenting a new strategy,
chief executive Oystein Loseth made
the rather shocking prediction that
demand for electricity in the Nordic
markets would not recover until 2020.
In continental Europe he thought de-
mand “would pick up earlier,” but was
unwilling to suggest a date.
Pressure on margins was strong and
the way forward to a sustainable sys-
tem expensive, he said. “We’ll be a
leader in this transition, but that puts
extra pressure on Vattenfall. We want
to increase profits and value, strength-
en our balance sheet and reduce CO
2

exposure—that is going to be expen-
sive in the future.”
In tune with a downbeat set of half-
year statements from Europe’s util-
ity majors, Loseth warned of a much
weaker market outlook, with “a lot of
new production coming online” to
meet the EU’s 20%-by-2020 renew-
ables target. “The year 2008 was the
top in terms of power demand,” he
said. “We are facing two-to-three years
of really hard work, then we’ll be ready
for growth.”
In his presentation, Loseth did not
refer to the company’s hitherto flag-
ship Carbon Capture and Storage pro-
gram. But when questioned, he said,
the program would continue: “but
there will be no CCS before 2020, so
Vattenfall has to reduce CO
2
by other
means.” The company has a target of
reducing its emissions to 65 million
mt/yr from today’s 90 million mt/yr.
Further, Loseth said that phase two
of the company’s ambitious Magnum
gasification/CCS project in the Neth-
erlands would only proceed when the
technologies were viable.
CCS Doubts
This suggests that as European utili-
ties drift away from coal, they may also
be drifting away from testing CCS. This
possibility may seem premature given
the sums already invested, but the
question is worth posing. While CCS
may be needed in the fast-growing,
coal-heavy economies of Asia, Europe
is by no means an ideal test bed for
CCS as its power systems move to low-
carbon status via alternative means.
Continuation of the current trend
would in fact see prices for carbon un-
der the EU Emissions Trading Scheme
stagnate, stalling development of CCS.
This was the conclusion of a European
Commission report, EU Trends to 2030,
published in September. The report
contains a baseline scenario, indicating
what would happen if current trends in
the energy sector were to continue, and
a reference scenario, which includes
the effects of policies adopted between
April and December 2009.
The reference scenario assumes
achievement of the EU’s binding tar-
gets for 2020 on renewables and green-
house gas reductions (a 20% cut).
Along with energy efficiency measures,
the scenario would “cause a reduction
in the use of fossil fuels that allows the
ETS cap to be reached through lower
carbon prices,” the study says.
The reference scenario forecasts that
EU emissions allowance (EUA) prices
would not be much different from
current prices at around €16.50/mt
($23.08) in 2020, rising to €18.70/mt
in 2030, both at a constant 2008 euro
level—not enough to bring CCS invest-
ment forward.
Meanwhile, under the baseline sce-
nario, EUA prices are projected to
reach €25/mt in 2020 and €39/mt by
2030, which the study says would
drive CCS capacity from 5.4 GW in-
. . . as European utilities drift away from coal,
they may also be drifting away from testing
carbon capture and storage. . . . While CCS may
be needed in the fast-growing, coal-heavy
economies of Asia, Europe is by no means an
ideal test bed for CCS as its power systems move
to low-carbon status via alternative means.
36 insight December 2010
2011 global energy outlook - power
stalled in demonstration plants by
2020 to 35 GW by 2030. CCS equipped
generation would account for 8.7% of
all power capacity.
Ancillary Plant
The European Commission’s refer-
ence scenario forecasts “a major in-
crease in generation from renewables,
which continues up to 2030, and has a
crowding out effect on other technolo-
gies.” Under this projection, renewable
capacity is set to account for 64% of
all new generation additions between
2009 and 2020, with 17% for gas, 12%
for coal, 4% for nuclear and 3% for oil.
Wind alone would account for 41% of
generation under this scenario, with a
total of 136 GW installed. Even under
the baseline scenario, renewable capac-
ity would account for 26% of total gen-
eration capacity by 2020 and around a
third by 2030.
This wind boom is forcing a re-think
on compensation for thermal plants
in Spain, Germany and the UK. As the
2005 2010 2015 2020 2025 2030
Tidal, etc. 0 0 1 3 6 9
Geothermal 5 6 6 7 11 19
Biomass/waste 84 127 164 191 218 241
Solar 1 17 32 46 60 75
Wind offshore 2 14 72 146 204 276
Wind onshore 68 147 197 253 316 368
Hydro 307 323 332 339 349 355
2005 2010 2015 2020 2025 2030
Tidal, etc. 0 0 1 7 10 14
Geothermal 5 7 8 12 17 22
Biomass/waste 84 120 171 261 275 286
Solar 1 17 32 62 77 94
Wind offshore 2 14 81 177 224 287
Wind onshore 68 147 243 348 381 407
Hydro 307 323 333 341 350 358
2005 2010 2020 2030
Nuclear 30.5 28 24.5 25.9
Solids 30 26.9 24.9 22.2
Gas 21.2 23.9 22.8 18.7
RES 14.3 19.2 26 32.1
2005 2010 2020 2030
Nuclear 30.5 28 23.9 24.1
Solids 30 27.6 22.8 21.1
Gas 21.2 23.2 19.5 17.8
RES 14.3 19.0 32.6 36.1
1. EU trends to 2030.
Source: European Commission
Baseline scenario 2009: Gross Power Generation by RES (TWh)
Reference scenario: Gross Power Generation by RES (TWh)
Baseline scenario 2009: main power generation shares (%)
Reference scenario: main power generation shares (%)
December 2010 insight 37
2011 global energy outlook - power
role of the thermal plant moves away
from baseload dispatch towards the
provision of ancillary services, fuel ef-
ficiency drops while costs rise. Without
some form of capacity fee, maintain-
ing this thermal plant is uneconomic,
utilities say.
There is also a warning from opera-
tors that long-term intermittent op-
eration has environmental implica-
tions. “Spain and Denmark are good
indicators showing that, by putting a
lot of wind on the system, you don’t
necessarily cut down on fossil fuel
use,” according to one gas plant op-
erator. “Depending on the demand
profile in Denmark, they actually
burn more fossil fuels because the
thermal machines are ramping up
and down so frequently. It is a lot less
efficient than keeping a unit ticking
over at close to full output. Car driv-
ers complain of speed bumps increas-
ing emissions because of slowing
down and speeding up. It is exactly
the same for combined cycle gas tur-
bine plants.”
Wear and tear is another issue. Ev-
ery 45-minute ramp up is equivalent
to around 10 hours of operation for
a combined cycle gas unit. Main-
tenance costs will rise and lifetime
expectancy fall if, as consultancy
Poyry has forecast in its UK stud-
ies, gas-fired plants are performing a
minimum of two start-ups a day by
2020. This could knock five years off
a CCGT’s 25-year life span.
Compensation for this needs care-
ful thought. The relevance of the
day-ahead price to gas plant will fade
as its real-time and ancillary service
value increases, Spanish market ex-
perts believe. “Spain’s power demand
profile fluctuates a lot between winter
and summer,” an operator told Platts.
“In spring, demand is quite low—you
don’t need your heating and you don’t
need air conditioning. There were peri-
ods this year when wind was supplying
over 48% of Spanish demand needs.
While the day-ahead price in the rest
of Europe was around €50/MWh in
April it went down to €18/MWh in
Spain. I think that is a sign of things
to come. Instead of dispatching plant
according to predicted demand and
maintenance schedules, we’re going to
become weather predictors.” ■
15
25
35
45
55
65
T
W
h
Sep-10 Apr-10 Nov-09 Jun-09 Jan-09 Aug-08 Mar-08
France UK Germany Italy Spain
2. West European electricity demand, monthly view.
Source: Germany—BDEW, France—RTE, Italy—Terna, Spain—REE, UK—National Grid
For Germany, provisional figues of public supply. For France, gross consumption on the French mainland. For Spain, electricity demand on the Spanish
mainland. For the UK, total generation volume excluding station transfer, pumping and interconnector export demand.
As the role of thermal plant moves away
from baseload dispatch towards the provision
of ancillary services, fuel efficiency drops
while costs rise.
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December 2010 insight 39
Nuclear power plant construction in
the US has been at a standstill for the
past 14 years, owing to safety concerns
following the accidents at Three Mile
Island in 1979 and Chernobyl in 1986,
and more recently because of the favor-
able economics for carbon-based energy
production. Yet nuclear remains a key
part of the country’s energy mix. The
US produces more power via nuclear
production than any other nuclear-pro-
ducing country. About 20% of US elec-
tricity production is from nuclear.
According to the US Energy Informa-
tion Administration’s International En-
ergy Outlook 2010 Test Case, between
now and 2035, global energy consump-
tion will rise by 49%, much of which
is expected from China and India, but
some from the US and other OECD
nations. Given international concern
about climate change and a realization
that every form of power generation
has its costs and benefits, the US and
many other nations are eyeing nuclear
energy as a low carbon means of satis-
fying these energy needs.
To stimulate interest in new nuclear
construction, the US government, in
2007, instituted a loan-guarantee pro-
gram, which along with the high gas
prices and momentum towards carbon
legislation then prevalent, encouraged
a flurry of newbuild projects. However,
that enthusiasm has slowed significant-
ly since 2007 although at least some of
the projects with loan guarantees ap-
pear to be moving forward.
Uncertain Economics
The fall in natural gas prices, the
ongoing credit crunch and the lack
of momentum for carbon legislation
have all dampened the viability of
nuclear economics significantly. It is
highly likely that unregulated opera-
tions that do not receive loan guaran-
tees will defer or abandon their nucle-
ar projects.
The volatility of gas prices over the
long-term and expectations for even-
tual carbon regulation will keep nucle-
ar power as an integral part of many
utilities’ resource planning. As the first
nuclear units are not expected until
2017, depressed gas prices in the me-
dium term should not hinder nuclear
expansion. However, claims that the
potential supply of shale gas can sup-
port demand for the next 75 to 90 years
nuclear
Premium for US
Nuclear Newbuild
Aneesh Prabhu and Swaminathan Venketaraman, Standard & Poor’s
Low gas prices, little progress on carbon legislation and tighter
borrowing requirements post-financial crisis, have all
dampened the momentum behind the so-called US nuclear
renaissance. S&P’s Swaminathan Venketaraman and Aneesh
Prabhu assess the newbuild outlook from a credit perspective.
40 insight December 2010
2011 global energy outlook - nuclear
could lower natural gas prices for the
long term, as forward gas price curves
are currently indicating.
A levelized cost of energy comparison
between new nuclear and combined-
cycle gas turbine plants, currently the
only realistic base-load alternative,
across three scenarios, shows that a
utility rate-base structure requires gas
prices of $6.50 to $10/MMBtu for nu-
clear capital costs of between $5,000
per kW to $8,000 per kW to be com-
petitive ($8.20/MMBtu for $6,500/
kW). This indicates the need for subsi-
dies at current gas prices and without
carbon costs.
With a loan guarantee, a merchant
plant with $6,500 per kW in capital
costs requires gas prices at about $6/
MMBtu; carbon costs lower the break-
even level by $1/MMBtu for every $15
charged per ton of carbon. Models that
add other subsidies (production or in-
vestment tax credits) can make the
$6,500 per kW nuclear option com-
petitive at $5/MMBtu without carbon
emission costs.
US Cost Premium
New nuclear plants in the US will
cost much more to become operation-
al on a dollar per kilowatt basis than
in other countries that continued
nuclear development. Lack of recent
regulatory and nuclear construction
experience, higher contingency costs,
and a lack of economies of scale and
a smaller pool of skilled labor all con-
tribute to this expectation.
Economies of scale are more difficult
to generate owing to the smaller num-
ber of projects and the fragmentation
of construction among small, private
companies that do not necessarily share
expertise. Even in Japan, where private
companies lead the way in nuclear
plant construction, governmental law
encourages private partnership consor-
tia. In most other countries with nucle-
ar capability, the government runs the
energy program.
Time uncertainty (a result of both
the regulatory process and financing
issues) increases the risk of construc-
tion cost escalation between project
conception and groundbreaking, ow-
ing to commodity price increases,
and both are factors in the inability
of bidders to offer fixed-price engi-
neering-procurement-construction
(EPC) contracts. Steel, cement, and
copper, all necessary for nuclear plant
construction, have doubled, and, in
some cases, almost tripled their pric-
es, since 2001.
Fixed-price EPC contracts offer Ja-
pan and China a lower cost because of
contractors’ confidence in quantities,
costs, performance history and ability
to meet schedules, obtained through
the respective countries’ continued
development programs. The US’ lack
of recent experience precludes such
certainty and thus raises the costs of
construction. Even if EPC contracts
were offered in the US, labor costs
for nuclear island construction would
likely remain outside the bounds of
any EPC contract. Another key is-
sue for the EPC contract sponsor is
which costs will be fixed and which
cost overrun risks will remain, even
after financing approval and start-up
of construction.
Another hurdle for the US is that the
market price must be able to bear all of
the costs of production and construc-
tion. That is not necessarily the case in
other countries with government own-
ership. And if the US utility is regulat-
ed, regulations may require it to recap-
ture costs only after operations have
begun or require the lowest-cost type
of power to be used at any particular
time, thus leaving expensive produc-
tion capacity unused.
In addition, safety concerns will re-
main the industry’s Achilles heel and
are paramount no matter whether the
government runs the enterprise or
functions mainly as a safety regula-
tor, as is the case in the US. The type
New nuclear plants in the US will cost much
more to become operational on a dollar per
kilowatt basis than in other countries that
continued nuclear development.
December 2010 insight 41
2011 global energy outlook - nuclear
of cooling unit, the dependence and
synergy of the units working within
the reactor, and the amount of manu-
al versus automatic control are all de-
sign factors that regulators from each
country scrutinize.
Licensing entails significant risks,
even for technologies further along
the Nuclear Regulatory Commission’s
review process. Regulators can require
amendments to design even after they
issue certifications, such as with the
NRC’s new rule dealing with “consider-
ation of aircraft impacts for new nuclear
power reactors,” which can, of course,
lengthen the project completion time.
Construction Track Record
The nuclear power industry’s aggres-
sive expansion globally holds impor-
tant lessons for the US. Based on the
experiences in China, South Korea,
Japan, France, Canada and Russia, the
following factors are vital for successful
nuclear power construction:

strong government support and
partnership among technology
vendors;

a focus on development aimed at
standardizing only a few reactor
designs;

the incorporation of lessons learned
from incremental changes to locally
made reactors, coupled with contin-
ual adaptation of imported reactors
to shorten construction schedules;

the employment of large modular
construction at low-cost locations
worldwide; and

expanding the domestic supply base
for labor and equipment.
New nuclear construction experi-
ence around the world has been mixed.
Only the ABWR has a reasonable track
record of meeting cost and schedule
estimates. The AP1000 has had a good
start in China, but construction is still
in its early days, and the projects have
not reached major critical path items.
Westinghouse’s and the Shaw Group’s
ability to deliver completed units on
schedule and within budget is unclear.
The first two European Pressurized Re-
actors have run into substantial sched-
ule delays and cost overruns although
costs are still lower than proposed US
EPR projects. It will be important to the
credit quality of US sponsors to learn
from the international experience.
Ultimately, new construction of nu-
clear power in the US remains in a state
of flux, and further government sup-
port—in the guise of loan guarantees or
a price on carbon—will likely be neces-
sary to see new construction of nuclear
power plants. Safety issues and high
costs are foremost, but when it comes to
credit, the key additional concerns are
regulatory risk, construction contract
terms and government support. ■
Coal
30.5%
337,300
Oil
5.8%
63,655
Total: 1,104,487 MW
Natural gas
41.2%
454,611
Nuclear
9.6%
106,147
Hydro
7.0% 77,731
Other renewables
3.7% 41,384
Other
2.1% 23,659
1. US electricity capacity, nameplate capacity, in MW.
Source: EIA, 2008
Coal
44.6%
1,764,486
Oil
0.7% 25,792
Total: 3,953,112 GWh
Natural gas
23.3%
920,378
Nuclear
20.2%
798,745
Hydro
6.9%
272,131
Other renewables
3.6% 141,115
Other
0.8% 30,465
2. US electricity production, in GWh.
Source: EIA, 2009
Eight out of ten North American utility executives are not satisfied with President Obama’s first-year performance
on energy issues.
Findings also reveal that executives believe the industry’s greatest challenges are uncertain legislation, the environ-
ment, incorporating new technology, finance and variable consumer demand.
After surveying over 100 senior executives within the electric and natural gas industries in the U.S. and Canada, this year’s
study revealed that the most critical issues facing the energy industry include:
• Regulatory uncertainty
• Addressing environmental concerns such as building new generation and transmission for renewables
• Incorporation of technology as a priority
• Addressing financial concerns such as cost recovery, access to capital and maintaining liquidity
• Providing satisfactory service and education about cost of ‘green’ energy to end users
The study was conducted in two phases. Phase I was qualitative and consisted of in-depth telephone interviews.
Data for the quantitative Phase II was collected via online survey. To download the full study results
go to: www.us.capgemini.com/PlattsStudy
Platts/Capgemini Utilities Executive Study
>GainInsight.
13 Platts/Capgemini Utilities Executive Study
@ Copyr|g|l P|alls a¤d Capger|¤| 2009-2010 A|| R|g|ls Reserved
Number of UtiIity Customers
500,000 up to 700,000
8%
Over 1,500,000
27%
300,000 up to 500,000
23%
1,200,000 up to 1,500,000
11%
700,000 up to 900,000
10%
900,000 up to 1,200,000
9%
Less than 300,000
13%
Base: Total sample (n=105); "No Answer¨ is excluded.
Question A3: How many retail customers does your organization have?
1ê Platts/Capgemini Utilities Executive Study
@ Copyr|g|l P|alls a¤d Capger|¤| 2009-2010 A|| R|g|ls Reserved
Areas of ResponsibiIity
22
4
5
9
9
12
12
13
13
14
16
17
18
19
19
23
23
33
0 10 20 30 40 50
Other
LegaI
NucIear
AII areas of the organization
Information TechnoIogy
Operations - Transmission
RetaiI Marketing / SaIes
Corporate Communications
Procurement
Operations - Generation
Customer Service
Project Management Office (PMO) / Cost
Reduction / Integration
ReguIatory / GovernmentaI Affairs
Operations - Distribution
Operations - TechnoIogy
Finance / Treasury / Accounting
Trading / Risk Management
Corporate Strategy / PIanning / M&A
Percentage Base: Total sample (n=106)
Question S4: Please check any and all areas that apply in your current position.
(Respondent could select >1 response.)
Other mentions include:
· Billing and revenue recovery
· Business Development
· Community Relations
· Compliance
· Corporate Safety and Human Resources
· Customer Programs/Demand Response; Renewable
Energy Procurement; Purchased Power; Renewable
Ìntegration to the Grid
· Demand-Side Management
· Development
· Distributed Energy Services
· Engineering
· Engineering and Construction
· Engineering, Construction, Capital Project
Management, outage management
· Environmental (n=2)
· EPCM company
· Gas procurement
· Generation Planning, Engineering Services, New
Generation Licensing and Construction
· Governance, Ìssues Management, Community
Ìnvestment
· HR, Safety, Security, Facilities
· Ìnternal Audit
· Ìnternal Business Services, Environment, Fish &
Wildlife, and Energy Efficiency
· Ìnvolved with all areas of Operations
· Support for all areas of Operations
Download your complimentary copy of the Platts/Capgemini
Utilities Executive Study at www.us.capgemini.com/PlattsStudy
December 2010 insight 43
Heading into 2011, the renewable energy
industry is in some ways enjoying the best
of times. The wind power industry contin-
ues a rapid expansion that began less than
a decade ago. About 40 GW of new wind
capacity will be added this year, according
to the Global Wind Energy Council, bring-
ing the world’s wind energy capacity close
to 200 GW. GWEC expects global wind
power to double by 2014, reaching more
than 400 GW.
Part of this expansion is fueled by Euro-
pean offshore wind farms that, after years
of planning and construction, have begun
generating power. These include the 300
MW Thanet plant off the UK coast and the
207 MW Rødsand II project in the Danish
North Sea. “We do expect the US market
to be down this year as the low level of or-
ders we saw during the financial crisis work
their way through the system. On the other
hand, stronger growth in China will make
up for this, and the European market is very
stable,” said GWEC Secretary General Steve
Sawyer. “Overall, wind energy continues to
be a growth market, weathering the eco-
nomic crisis much better than some ana-
lysts had predicted.”
The solar industry, too, is thriving, de-
spite an increasingly competitive market.
Quarterly manufacturing capacity for
solar photovoltaics added during third-
quarter 2010 broke the gigawatt barrier
for the first time, driving PV equipment
spending to a new quarterly high, market
analysis firm Solarbuzz reported. The so-
lar PV market is caught in an odd warp:
falling equipment prices have made PV
more economically competitive, while
also shrinking technology manufactur-
ers’ profit margins.
In a further twist, the drop in equip-
ment prices has spurred policy-makers in
such countries as Germany and Spain to
slash PV feed-in tariffs—arguing that fall-
ing prices mean the industry needs less
support. This has galvanized short-term
investments by those looking to secure lu-
crative tariffs before they are cut, while po-
tentially dampening long-term PV growth.
Germany’s solar PV association expects up
to 8 GW of new capacity to be installed in
2010, up from 3.8 GW the previous year,
ahead of tariff reductions.
Other renewables technologies are also
undergoing transitions. Geothermal ex-
ploration is expanding to countries like
Ireland and the UK, thanks to technology
improvements that have made previously
marginal resources economically viable.
renewables
Winds of Change for
Renewable Energy
David R. Jones, Editor, Platts Renewable Energy Report
As the renewable energy industry continues to grow, it is
broadening its horizons beyond Europe and the United States
to new markets in Asia. At the same time, serious challenges
to renewables are emerging, from declining feed-in tariffs to
mounting trade disputes.
44 insight December 2010
2011 global energy outlook - renewables
Still, the geothermal market was “quite
weak this year” as permitting delays held
up projects, according to Lee Clements, in-
vestment manager at Impax Asset Manage-
ment. However, new plants could enter the
market in 2011, and geothermal energy this
coming year “could be a surprise,” he said.
As with geothermal, technology ad-
vances have spurred growth in biomass
markets, as biogas, which previously was
too fouled with contaminants to combine
with natural gas, can now be refined to be
fed directly into natural gas pipelines. The
first two UK projects to funnel biogas into
the gas grid began in October, joining a
host of biogas feed-in plants in Germany.
New Investors
Yet despite this relative prosperity in the
midst of tough economic times, renew-
able energy companies are being buffeted
by political and economic forces. Much of
the wind industry’s growth, for instance,
is occurring not in traditional strongholds
like Germany and the United States, but in
developing countries, particularly in Asia.
Many companies in mature wind markets,
meanwhile, have struggled in recent years
to secure financing for large-scale projects
as the global financial crisis squeezed credit
sources. In industrialized nations, the wind
industry “is definitely in the doldrums,”
Clements said. “It will definitely be a weak
year for US and European wind, impacted
by low demand for power.”
Onshore wind has endured difficult
times in Europe, according to Ernst &
Young partner Andrew Perkins, with
problems in planning approval and grid
expansion creating major obstacles to
wind power expansion in countries like
Italy and the UK. Still, many wind energy
companies are doing well, he said, and
the financing problems plaguing the in-
dustry might begin to ease in 2011. “The
debt markets have been shut the last few
years, but it’s getting a little easier,” he
said. “But the capital markets aren’t par-
ticipating, and we haven’t seen direct
debt involvement.”
Perkins noted, though, that alternative
financing sources are filling some gaps,
such as direct participation by deep-pocket
investors, such as Masdar’s decision to as-
sume a stake in the London Array offshore
wind farm, with a planned 1 GW capacity.
Pension funds also are jumping into re-
newables finance: Denmark’s PensionDan-
mark in September purchased a 30% stake
in the 165 MW Nysted offshore wind farm
off the Danish coast from DONG Energy,
following the $400 million investment in
Hudson Clean Energy a year earlier by an-
other Danish pension fund, ATP.
New Markets
Ernst & Young’s latest Renewable En-
ergy Country Attractiveness Indices, pub-
lished in August, ranked China as the
world’s most attractive target for renew-
ables investors.
The United States, previously atop Ernst
& Young’s leader board, fell to No. 2 as
doubts persisted about whether the US
2500
2000
1500
1000
500
G
W
2007 2008 2009 2010 2015 2020 2030
Reference Moderate Advanced
1. Global cumulative wind power capacity.
Source: Global Wind Energy Council
December 2010 insight 45
2011 global energy outlook - renewables
Congress would adopt a national renew-
able energy standard and as a federal re-
newables tax break was set to expire.
At the same time, former leading renew-
ables markets in Europe have slashed the
generous feed-in tariffs that made their
countries such magnets for investment.
Both Germany and Spain lost a point in
the Ernst & Young rankings because they
cut support for PV generation.
By contrast, Asia’s two renewable ener-
gy leaders, China—which four years ago
failed to rank even in the Top 10—and
India, which placed fourth in the latest
Ernst & Young index, are strengthening
their renewables support programs and
setting national targets for clean energy
production. China last year added 37 GW
of renewable power capacity—more than
any other country. The nation’s wind
power capacity has exploded as onshore
wind farm construction has grown 40-
fold over the last decade.
Much of the wind power industry’s
growth now comes from outside mature
markets in Europe and America. Around
half the growth in wind power capacity
“is now happening in emerging econo-
mies and developing countries,” GWEC’s
Sawyer said. “We are seeing very encour-
aging signs from countries in Latin Amer-
ica, including Brazil, Mexico and Chile, as
well as Northern and Sub-Saharan Africa.”
Other analyses echo Ernst & Young’s
findings on Asia’s ascendancy. “The Asia
Pacific region is an increasingly impor-
tant market for renewable energy. Over
the next decade, the manufacturing of
products and equipment for the industry
will increasingly shift to Asia,” according
to a study, Renewable energy in Asia Pacific,
published in July by law firm Norton Rose.
“Asia Pacific’s renewable energy markets
will also become an important region for
investment . . . Much of the future growth
in renewable energy will ultimately come
from Asia Pacific.”
Many Asian countries see renewable
energy “as an opportunity to create local
champions that will manufacture prod-
ucts required in a carbon-constrained
world,” it said.
The rise of Asian renewables generation,
some analysts said, does not force a zero-
sum contest with Europe. “It’s not nec-
essarily about the demise of more estab-
lished markets. It’s more complimentary,”
Ernst & Young’s Perkins said.
At the same time, new types of busi-
nesses—some of which have never been
involved in energy production—are
looking to dive into the renewables mar-
ket. For instance, the Minera Escondida
copper mine in Chile, majority owned
by BHP Billiton, is following the lead of
Chilean mining companies Codelco and
Antofagasta Minerals in searching for
geothermal resources.
Other companies are prospecting previ-
ously ignored resources for a renewables
bounty. A striking example can be found
in Guatemala, where Canadian gold explo-
ration company Radius Gold is pursuing
licenses to explore 500,000 acres in which,
over the years, it has found hot springs—
potential hydrothermal activity linked to
gold deposits as well as to geothermal pools.
Similarly, Hungarian oil company MOL
entered the geothermal sector in 2006 to
explore the dozen hot-water wells it discov-
ered while drilling for oil.
Still others are supply-chain and service
companies that are diversifying into re-
newables. The process is well underway in
the offshore energy industry, where ports
and companies providing services to the oil
and gas sector are branching out into pro-
viding vessels and other equipment to off-
shore-wind and marine-energy developers.
In the renewables supply chain, Dan-
ish wind turbine maker Vestas recently
contracted with automobile compo-
Top trends in renewable energy for 2011

Broadening industry focus beyond Europe
and United States to Asia

Slow re-entry of traditional financial
institutions into renewables markets as
alternative funding sources emerge for
large-scale projects

Non-energy companies enter renewables
markets

Growing international trade disputes
46 insight December 2010
2011 global energy outlook - renewables
nent manufacturer ZF Friedrichshaven
for wind-turbine gearboxes—a deal that
could inspire participants in America’s
beleaguered auto industry. This mirrors
diversification among silicon technology
companies, which broadened their busi-
ness horizons from making processors
for computer manufacturers in the 1980s
and 1990s to manufacturing silicon chips
for solar PV producers.
Areas to Watch
On a larger scale, the renewables indus-
try is confronting challenges unknown
just five years ago in the arena of inter-
national trade. As renewable energy has
grown into a worldwide enterprise, contro-
versies over globalization have emerged.
The United Steelworkers, a US trade union,
charged in a petition this year that many
of Beijing’s government support policies
for renewables violate international trade
rules. The USW called on the Obama ad-
ministration to file a complaint with the
World Trade Organization about China’s
green-technology practices.
Similarly, Japan has filed a WTO com-
plaint accusing the Canadian province of
Ontario of breaking international trade
pacts with its renewables law, which re-
quires developers to purchase renewable
energy equipment with 50% provincial
content. “It’s exactly the same as the car
industry was,” Perkins noted. As the re-
newables industry expands globally and
new markets like offshore wind take off,
the World Trade Organization is set to
take center stage in handling the growing
number of international disputes regard-
ing renewable energy policies.
Perkins, Clements and RBC Capital
Markets analyst Nick Hyslop agree that
Brazil, which already generates substan-
tial amounts of electricity from large
hydropower and sugar cane bagasse, is
poised to assume a major role in world
wind power markets. The government
contracted for just over 2 GW of electric-
ity from 70 Brazilian wind farms in Au-
gust as part of a renewable energy auc-
tion, and Brazil’s wind energy association
has called for further auctions dedicated
solely to wind energy, such as the govern-
ment’s wind-power auction conducted in
December 2009.
Other markets to watch, analysts said,
include Sweden, Abu Dhabi, Nepal and
the Baltic countries. Some countries with
promising renewables sectors, though,
have stalled: Turkey, for example, has
yet to enact long-promised national re-
newables legislation. All told, the renew-
able energy industry is undergoing fun-
damental changes as it grows beyond a
business centered largely in Europe and
the United States.
Countries worldwide are now setting
ambitious renewables production targets
as they struggle to shift to low-carbon
economies. “The financing requirement
is very large. There are legal requirements,
but legislation won’t get us there,” said
Hyslop. “The downturn focused countries
on immediate concerns, not long-term
goals.” He noted that national govern-
ments face growing debt while “political
pressures to stick to timetables remain . . .
It’s an interesting conundrum.” ■
Emerging markets for renewable energy

Brazil: This longtime biomass and large
hydropower generator is rapidly expanding
wind energy sector

Sweden: Biomass now largest component of
total energy mix, surpassing oil; wind energy
finally taking hold

United Arab Emirates: OPEC titan looking to
diversify into solar photovoltaics, wants to
generate 7% of its electricity from
renewables in 10 years

Nepal: Looking to export power from
large hydroelectric plants to India while
developing small hydropower to supply
isolated communities

Baltic countries: Estonia, Latvia and
Lithuania are working to meet EU 2020
renewables targets while integrating
their power markets by 2013
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to invest in the future. We thank Platts for recognizing, as finalists in the 2010 Global Energy Awards
competition, our Texas Clean Energy Express (pictured), a private transmission line that is alleviating
congestion in wind-rich Texas, and our new West County Energy Center, the most efficient fossil-fired
power plant in the industry.
www.NextEraEnergy.com
48 insight December 2010
Coal may be in retreat in the OECD, but
the development of coal-fired power gen-
eration plant in Asia remains rapid. At one
stage China was adding roughly 80 GW of
coal plant a year, equivalent to the total
power generating capacity of the United
Kingdom. This has slowed to 40-45 GW
of new coal capacity on average in recent
years. India comes some way behind, but
is still adding 10-12 GW of coal capacity
per annum. It has an ambitious target to
develop 50 GW over the next two years.
Such targets are rarely met, but substan-
tial additions to India’s 170 GW of exist-
ing coal plant are likely.
This expansion has put pressure on
both countries’ domestic resources, both
below ground and in terms of internal
transportation systems. It has already
radically altered trade flows in thermal
coal around the world. The most notable
shifts have been the diversion of thermal
coal normally destined for Atlantic mar-
kets to the Pacific. India has become an
important buyer of South African coal,
while in 2010, Colombian coal started to
move westward to Asia, rather than east-
wards to Europe, a process likely to gain
momentum with the eventual expan-
sion of the Panama canal.
China has been more successful than
India at expanding its domestic coal in-
dustry, which is by some measure the
largest in the world. As a result, it has not
become quite the net coal importer than
many had expected. India imports of ther-
mal coal, by contrast, are expected to grow
much more rapidly. Coal plants are also
being built near to power demand centers,
often in coastal areas, in both countries,
improving the economics of imported
coal over domestic, and promoting an in-
crease in coal trade if not net imports.
The growing need for imported coal
has had another effect. It is forcing In-
dian and Chinese companies abroad to
secure energy assets to underpin their
domestic expansion and increasingly in-
ternational supply chains. This is chang-
ing the face of mergers and acquisitions
in the competition for energy resources.
It is also creating a new type of interna-
tional, vertically-integrated company op-
erating in the coal, power and transport
logistics arenas. In Asia-Pacific, almost
every major power-related asset sale or
coal
Adventures Abroad
for Coal
James O’Connell, Managing Editor, Platts International Coal Report
The contrast could not be starker: in Europe and the US an
industry in retreat, in Asia a market on fire with M&A activity.
Chinese and Asian demand for thermal coal has already
produced marked changes in global trade patterns. Now, to
secure their supply chains, Indian and Chinese coal companies
are spreading their wings, creating vertically-integrated
conglomerates in the fields of coal, power and transport.
December 2010 insight 49
2011 global energy outlook - coal
development appears to have either Chi-
na or India behind it, frequently both.
Indian and Chinese companies have par-
ticularly targeted major coal exporters
Indonesia and Australia, looking for both
transportation and coal assets.
India Overseas
India’s state-owned coal industry ini-
tially tackled overseas acquisitions with-
out independent or private assistance.
Its success was hindered by an inability,
typical of large, state-owned companies,
to move swiftly once a desirable asset
was identified.
With little or nothing to show for its
efforts, the state knew a change of di-
rection was required. In January 2008,
a team of five government companies
formed a special purpose vehicle called
Coal Ventures International Ltd (CVIL)
to spearhead the hunt for both thermal
and coking coal assets.
The team comprises one of the largest
coal producers in the world, Coal India
Limited, one of India’s biggest steel man-
ufacturers, Steel Authority of India Ltd,
India’s largest power provider NTPC Ltd,
India’s top iron ore producer NMDC Ltd,
with Rashtriya Ispat Nigam Ltd (RINL),
an important domestic steel manufac-
turer, completing the venture. CVIL was
granted a modest initial war chest of $2.7
billion comprising $1.8 billion in debt
and $900 million in equity. However,
even this juggernaut has been slow to
notch up any real successes. CVIL is con-
tinuing to evaluate thermal coal mines in
Indonesia and coking coal mines in Aus-
tralia. “CVIL will buy a coal asset by 2012
and efforts are on to zero in on a thermal
coal mine in Indonesia,” a CIL official
said, confirming that it is also scouting
for mines in Australia and South Africa.
Private Indian power companies in-
volved in the country’s Ultra Mega Pow-
er Programs have been more successful.
The UMPPs require the construction of
huge new coal plants and developers
have been keen to secure international
supply chains, given the shortage and
unreliability of domestic coal deliver-
ies. Among the first to move was Tata
Power, which bought a 30% equity stake
in Bumi Resources, Indonesia’s largest
coal producer. An outlay of $1.3 billion
saw Tata gain a 30% stake in PT Kaltim
Prima Coal and PT Arutmin Indonesia,
bringing Tata members onto their re-
spective boards. The significant part of
the deal for Tata was a coal supply agree-
ment for the sale of 10.8 million mt/year
of thermal coal at index-linked prices for
12 years starting in 2009.
However, both state and private com-
panies have run into the problem of as-
set inflation as both India and Chinese
companies simultaneously sought the
same resources. Private Indian company
Jindal Steel & Power has been caught
up in a competitive bidding war with
China’s Bhushan Steel (Australia) Pty
for a stake in Bowen Energy, an Austra-
lian mining exploration company. By
May 2010, ambitions appeared to have
cooled. A senior executive at Indian inte-
grated steel maker Ispat said: “To us, get-
ting some good coal and iron ore mines
abroad was one of our top priorities. We
have followed quite an aggressive stance
but today it’s a little different. Gone is
that life-and-death involvement.”
An analyst commented: “The result is
overvaluation. Even after we got a feel-
ing that [the asset was too expensive], we
wouldn’t stop and kept going. There has
been at least one instance where two In-
dian companies were locked in a bidding
war for a coal property.” He added, “the
bottom line is clear: the resource sector
has become overheated, and it would be
better if Indian and Chinese buyers kept
away from the market for some time.”
Backing up the claims of asset infla-
tion, investors chased after Riversdale
Mining shares in September when Indi-
an state-owned iron ore producer NDMC
was reported to be an interested buyer for
10% of the Australian company, which
has a large coal export coal project in
Mozambique. Despite NDMC chairman
and managing director Rana Som dis-
owning the reports, Riversdale’s share
price rose almost 3.5% to A$9.77/share
(US$9.75) on the day and, by October 20,
stood even higher at A$10.77/share.
However, higher asset prices do noth-
ing to resolve the problem of supply se-
curity. After its slow start, India has re-
cently made the international M&A field
50 insight December 2010
2011 global energy outlook - coal
sit up and take notice with a flurry of
deals. Indian conglomerate Adani Group
swooped on assets owned by Australia’s
Linc Energy to gain access to a 7.8 bil-
lion mt coal resource in the Galilee ten-
ement in Queensland, capable of sup-
porting a 60 million mt/year coal mine.
The deal comprises an initial outlay of
US$457 million in cash plus a 20-year
inflation-linked coal production roy-
alty. Linc Energy chief executive Peter
Bond estimated the deal would generate
A$3 billion ($2.7 billion) in revenue for
Linc over the 20-year life of the royalty
which is payable at a rate of A$2/mt and
indexed for inflation.
In late August, Adani also signed an
agreement with Indonesian coal pro-
ducer PT Tambang Batubara Bukit to de-
velop a 270 kilometer railway and coal
terminal project in South Sumatra, In-
donesia. Adani will invest over $1.6 bil-
lion in the project, a senior official said.
Development is expected to start in 2011
and take about two years to complete,
according to the head of Indonesia’s
Investment Coordinating Board, Gita
Wirjawan. The railway will link Tanjung
Enim to Tanjung Api-Api, which has a
transport capacity of 30-35 million mt/
year. The coal terminal, on which con-
struction will start next year, will have
a capacity of 50 million mt/year. One of
Adani’s Indonesian partners, PT Bukit
Asam will supply 34 million mt of that
capacity. Construction is expected to
take 36 to 48 months, Wirjawan said.
Adani Power, Reliance Power and
GMR, three Indian power utilities, were
all also reported to be in the running to
buy debt-laden West Australian miner
Griffin Coal and its power station assets
in the third quarter of this year. Aus-
tralia’s Wesfarmers, which operates the
Premier thermal coal mine next to Grif-
fin Coal’s operations, was also tipped
as a potential buyer, but the company
walked away from the sale process in
early September after carrying out due
diligence on Griffin’s mines, leaving
the way open for others. Griffin Coal
produces 3.5 million mt/year of mostly
low sulfur and low ash thermal coal,
some of which has been exported to
China and India in recent years.
Confirming its liking for transport as-
sets, in mid-October, the Adani Group
confirmed its interest in leasing Austra-
lia’s Brisbane port. It said it is in talks
with the Queensland government about
taking over as the new private sector op-
erator of Brisbane port in Queensland,
Australia on a 99-year lease. Several
companies are understood to have ex-
pressed an interest in acquiring the
lease which is due to be auctioned by
competitive tender before end-2010.
Adani Group has also secured the right
to build and operate an export terminal
at Dudgeon port near Hay Point port on
Queensland’s central coast.
Chinese Adventures Abroad
In January, Yanzhou Coal’s A$3.5
billion ($3 billion) acquisition of Aus-
tralian coal producer Felix Resources
was endorsed by Australia’s resources
and energy minister Martin Ferguson.
According to the minister’s estimates,
Chinese imports of thermal and cok-
ing coal increased 115% and 385% re-
spectively in 2009, compared with im-
Export tons by destination YTD September 2010
Australia’s Port Waratah Coal Services
Export tons by destination 2007
China 8.43%
Europe 0.3%
Mexico 1.88%
Taiwan
12.09%
South Korea 15.7%
Japan 58.09%
Other Asia 3.52%
Japan 65%
Taiwan 13%
South Korea
11%
Mexico 4%
Malaysia 2%
Other 5%
1. Top export destinations for Australian coal.
Source: PWCS
2011 global energy outlook - coal
December 2010 insight 51
port levels for the 2008 calendar year,
Australian exporters capturing much
of that increase. The Chinese producer
also said in September that its venture
with the Australia-based Felix Resourc-
es should add about 15 million mt to its
projected total 2010 output of 60 mil-
lion mt. It also aims to increase its an-
nual coal output to over 75 million mt
in 2012 and 100 million mt in 2015.
Chinese coal producer Shenhua
Group has formed a comprehensive
business alliance with Japan’s Mitsui &
Co. The alliance includes an expansion
of coal trading to Japan and China, joint
development of overseas coal mines,
collaboration of coal chemical busi-
ness and development of environmen-
tal and efficient energy-use businesses,
Mitsui said. Mitsui named Mongolia as
one country where it could work with
Shenhua, but it didn’t disclose any spe-
cific mines for joint development.
An analyst with Beijing-based China
Securities Research told Platts that Mit-
sui and Shenhua may jointly bid for the
Tavan Tolgoi coal field in Mongolia, one
of the world’s largest undeveloped coal
deposits. A Shenhua Group subsidiary
also recently confirmed plans to com-
plete a 10 million mt/year coal mining
project in the Watermark area of Aus-
tralia’s New South Wales by end-2015,
according to Huang Qing, board secre-
tary of Shenhua Energy.
In addition, Beijing and Moscow have
agreed on supplies of at least 15 million
mt/year of Russian coal for China over
the next 25 years, with Beijing to pro-
vide Moscow with a $6 billion loan to
finance development of coal projects,
according to Russia’s energy ministry,
following a meeting of a bilateral sub-
commission on energy cooperation in
September. Russia’s energy ministry
said that a working group would study
ways to increase railroad transportation
capacity. The planned loan of around
$6 billion will be secured by the coal
exports and used for the development
of coal deposits in Russia and construc-
tion of transportation infrastructure as
well as imports of mining equipment
from China, according to the ministry.
Russia exported 12.09 million mt
of coal to China in 2009, up from just
760,000 mt the previous year. In first-
half 2010, Russian coal exports to China
amounted to 6 million mt, making it
the fourth largest coal exporter to Chi-
na. The agreements also provided for
the establishment of a joint venture to
develop the Ogodzhinskoye coal deposit
in the Amur region in Russia’s Far East.
Chinese companies have been more
visible in recent years in trying to secure
oil assets, particularly in Africa, where
access to resources has been closely as-
sociated with deals and loans in other
sectors. The country’s relatively small
net amount of coal imports in compari-
son with its rapidly growing dependence
on imported oil has meant a greater fo-
cus on oil asset deals. It is India’s grow-
ing import imbalance that has driven its
companies abroad. According to govern-
ment estimates, Indian demand for im-
ported coal will be 51 million mt in 2012.
Other estimates suggest the gap could be
considerably higher. For the coal export-
ers on the rim of the Pacific and Indian
Oceans, Chinese and Indian demand
centers present both a growing market
and a source of investment capital. ■
2008 2009
Europe
India
Other Asia
Other
Europe
India
Other Asia
Other
1. Continental export shifts—South Africa’s RBCT.
Source: RBCT
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December 2010 insight 53
The 2009 UN negotiations in Copen-
hagen were widely flagged as a major
opportunity to deliver a new post-Kyo-
to deal on climate change, only to see
the talks narrowly avoid total failure.
By contrast, the prospects for the 2010
Cancun meeting have been played
down by almost all concerned. Climate
change may be a far bigger threat to
the global economy than the financial
meltdown experienced in 2008-2009,
but it is still perceived as a relatively
distant one. Hobbled by the world fi-
nancial crisis, governments are instead
struggling with the difficult task of
simultaneously reducing deficits and
boosting jobs.
As a result, many observers are ques-
tioning how much money and politi-
cal will can be brought to bear on the
issue of climate change, particularly
given the unspectacular nature of the
recovery. Some climate change doubt-
ers argue that it is simply too expensive
to switch the world’s energy systems on
to a sustainable path. Scientists, green
groups, and increasingly politicians
and voters, argue that the world cannot
afford not to. And each year the world’s
carbon meter ticks on.
Sino-US Agreement Required
China and the United States hold
the keys to a deal because without the
world’s two largest emitting nations on
board any global emissions reduction
deal is unlikely to be enough to bring
the atmospheric concentration of CO
2
down to limits scientists regard as safe.
However, there has been little progress
on the seemingly intractable divisions
between these two countries.
Chinese leaders point out that global
warming has been caused primarily by
200 years of coal-driven industrializa-
tion by developed countries. On the
question of binding emissions reduc-
tions, China’s position remains: “you
first, perhaps we follow later.” This is
all very well, but by China’s own esti-
emissions
Mexican Standoff: What
Can Come of Cancun?
Frank Watson, Managing Editor, Platts Emissions
The world’s best attempt to combat climate change—the
1997 Kyoto Protocol—expires in 2012. Time is running out
to put a new treaty in place before the world slips into a
post-Kyoto global climate policy vacuum. This year’s talks at
Cancun in Mexico were never expected to deliver a new global
deal, but, at best, to provide progress in key areas that might
allow a post-Kyoto agreement in 2011.
54 insight December 2010
2011 global energy outlook - emissions
mates, it has already eclipsed the US
as the world’s number one emitter
of greenhouse gases and it continues
to build coal-fired power plants at a
rate sufficient to keep pace with GDP
growth of about 10%.
For its part, the US, fearing econom-
ic disadvantage, has always voiced the
strongest possible opposition to the
notion of committing to any binding
emissions reductions without similar
commitments from China and other
major developing nations. This posi-
tion was essentially Washington’s ra-
tionale for not ratifying Kyoto in the
first place.
So as the atmospheric concentration
of CO
2
rises year-on-year, Beijing and
Washington continue to stare each
other down, each hoping the other
blinks first. This Mexican standoff is
nothing new: the deadlock at the heart
of the global climate negotiations has
largely remained unchanged since the
UNFCCC was agreed in 1992. The dif-
ficulty lies in finding ways to break it.
Some hope shoveling large amounts
of cash in the direction of developing
countries will encourage more ambi-
tious climate commitments, and per-
haps it will, but climate adaptation
funding in the short term will do little
to curb global warming, only help to
remedy its worst effects.
Cancun Reality
A new binding global deal to cut
greenhouse gas emissions is almost
certainly not going to be agreed in
Mexico. The UN’s top climate official,
Christiana Figueres, said in Septem-
ber that a “heavy burden” rests on the
Cancun negotiations and urged world
leaders to make “the right choice” on
climate change. “Cancun has to keep
the world walking in the right direc-
tion. It has to be the next essential and
significant step on the long journey to
respond to the climate challenge,” she
said.
Figueres said promises and pledges
have been made by many nations,
but these still need to be “captured
in an international agreement, and
only governments can mandate the
full set of ways and means to launch
a new wave of global climate action.”
Figueres added that a series of weath-
er-related disasters during 2010 have
highlighted the world’s vulnerability
to extreme climate events, and that
such events “are a mild taste of what
science says will come if we do not
continuously raise our ambitions for
environmental protection as each
year passes.”
She said the world is now “acutely
aware” of the danger it is in and re-
quires governments to “take the next
significant step . . . Governments un-
der the Convention and its associated
agreements, have the power and the
responsibility to set free the forces of
human ingenuity, innovation and en-
trepreneurial action that will take us
to a new era of clean, green develop-
ment,” she said.
Other high level officials agree that
the Cancun summit won’t deliver
a new post-2012 agreement. When
asked about the prospects for progress
at a parliamentary hearing on Septem-
ber 15, UK secretary of state for energy
and climate change Chris Huhne said:
“It’s certainly going to be very difficult
to get a final deal . . . I hope that we
can demonstrate real progress in some
of the dossiers that will make up a final
deal. I hope that we’ll see progress on
forestry, and on monitoring, report-
ing and verification [of emissions]. It’s
absolutely crucial that everybody is re-
porting in a fair way,” he said.
Huhne also pointed to the impor-
tance of finance and the role it could
play in unlocking the climate stale-
mate. He said developing countries
“make a valid point that the green-
house gases in the atmosphere doing
the global warming were emitted by
Even as the atmospheric concentration of
CO
2
increases each year, China and the US
continue to stare each other down, each
hoping the other blinks first. This Mexican
standoff is nothing new . . .
December 2010 insight 55
2011 global energy outlook - emissions
developed countries. So there is a mor-
al obligation on the developed coun-
tries to reduce emissions.” He added,
“the Americans have not delivered on
clean energy legislation in Congress
and that gives major developing coun-
tries like China a reason to say ‘why
should we do more?’ So I think we
have a role to play in convincing US
Congressmen and women that this is
in their interests and that a low car-
bon economy is good for business and
not about grinding the economy to a
standstill.”
According to the US climate action
group, the Natural Resources Defense
Council, the Cancun meeting must
serve three critical functions to ensure
continued progress on international
climate protection efforts and to re-
build some of the trust lost during the
2009 Copenhagen gathering. NRDC’s
international climate policy director
Jake Schmidt said that, first, the inter-
national community needs to prove to
countries and the world public that it
can work together to address climate
change. “This is paramount, as a per-
ceived failure will make it even more
difficult to build political momentum
within the UN system and may lead
the public and countries to disen-
gage,” he said.
Second, Cancun needs to produce
an agreement on aspects of the key
implementing activities to be deliv-
ered by the international agreement,
for example clean energy technology
deployment, deforestation reductions
and improving the resilience of coun-
tries to the impacts of climate change.
“While it is unlikely that every aspect
of these issues will be resolved in Can-
cun, it is possible to make significant
progress on each of these issues . . .
The notion of ‘nothing is agreed, until
everything is agreed’ must be set aside
in favor of re-establishing confidence
by progressively building the agree-
ment component by component,” said
Schmidt. And, third, he said, Cancun
needs to produce sufficient momen-
tum for the UN negotiations in South
Africa in 2011 and the Rio 2012 Earth
Summit to finalize additional commit-
ments and implementation steps.
More concrete commitments of cli-
mate funding for developing coun-
tries by industrialized nations could
win greater cooperation in allowing
full monitoring, reporting and veri-
fication of emissions among the big
emerging economies. Mechanisms to
facilitate technology transfer to de-
veloping countries could see progress,
and financial measures to reduce de-
forestation could also move forward.
So while a binding deal is not in the
cards in Mexico, progress can still be
made on core issues that might make
the signing of a binding agreement
possible in 2011 or 2012. ■
CO
2
concentration in ppm (pre-industrial
levels at 278 ppm; current levels at 380 ppm)
Global mean temperature increase
in C above pre-industrial levels Peaking year of CO
2
350 - 400 2.0 -2.4 2000 - 2015
400 - 440 2.4 - 2.8 2000 - 2020
440 - 485 2.8 - 3.2 2010 - 2030
485 - 570 3.2 - 40 2020 - 2060
570 - 660 4.0 - 4.9 2050 - 2080
1. Overview of CO
2
concentration level, corresponding temperature increases and year that
concentrations would need to peak to maintain specific concentration levels.
Source: UNFCCC Fact Sheet: Climate Change Science
“The notion of ‘nothing is agreed, until
everything is agreed’ must be set aside in
favor of re-establishing confidence by
progressively building the agreement
component by component,”
– Jake Schmidt, US NRDC
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December 2010 insight 57
The petrochemicals industry has
struggled hard to recover from the slump
of late 2008 and early 2009, when it saw
the worst fall in demand and prices in
the last ten years, if not in its history.
Then, the Platts Global Petrochemical
Index, a proxy measuring the collec-
tive price of petrochemicals, dropped to
$491/mt on December 5, 2008, a huge
fall from the $1,679/mt recorded on July
14 of the same year.
However, the market has seen a mod-
est recovery over the course of 2009 and
2010. Heading into the fourth-quarter
this year, the PGPI had recovered over
50% of the value lost since its death de-
fying plunge and there are encouraging
signs that it will maintain these price
levels through year’s end. Despite a dif-
ficult two years that has prompted rap-
id consolidation, the petrochemicals
industry has shown resilience.
Oil Price Link
The bullish price outlook for petro-
chemicals is closely linked to that for
crude oil. Analysts in this market, were,
by fourth-quarter 2010, increasingly
arguing that oil prices could reach $85
to $95 a barrel by end-2010. In Septem-
ber, Goldman Sachs argued that strong
Chinese oil demand, slowing inventory
builds in the US and falling levels of
floating storage suggested that “world
oil market conditions are far more con-
structive than conditions in the US oil
market suggest.”
Like oil, prices in the petrochemicals
sector have remained stubbornly firm
in comparison with a relatively mod-
est recovery in the balance between
supply and demand. One reason why
is that petrochemicals were a primary
beneficiary of the concerted effort by
the governments of the major devel-
petrochemicals
Petrochemicals:
Consolidation
and Recovery
Shahrin Ismaiyatim, Global Editorial Director, Platts Petrochemicals
The petrochemicals sector, often cited as an economic
bellwether, has slowly recovered from the financial crisis.
The latter prompted necessary consolidation and caused
the delay and suspension of new projects that would have
added to overcapacity. Rather than succumb to recession,
industry observers believe the petrochemicals sector has
weathered the storm.
58 insight December 2010
2011 global energy outlook - petrochemicals
oped and developing economies in
2008 and 2009 either to offer direct
bailouts to struggling companies or
to pump money into the economy by
other means, many of which targeted
the auto sector. This was accompanied
by “quantitative easing”—a highly ac-
commodative monetary policy stance
designed to inject liquidity into the
financial system and eventually stimu-
late the real economy.
These efforts seemed to work. Con-
sumers went shopping for big ticket
consumer items like refrigerators, tele-
vision sets, washing machines and cars
(in China) or traded in their old cars for
new ones (in the US and Europe). Both
are important areas for petrochemicals
demand. By the start of second-quarter
2010, many economists were declaring
that the recession was officially over.
However, once these measures ran
their course, the global economy start-
ed to sputter. Fears of the dreaded dou-
ble dip—a second recession following
quickly on the heels of the first—resur-
faced. In July, the S&P 500 stock index
fell to its lowest level this year as inves-
tors pulled money out of the system to
park in “safe havens” like gold and oil.
The index registered 1,022 July 2, down
from the year-high of 1,217 points April
27. Equities markets took another dip
in August.
Moreover, countries like Japan,
South Korea, Taiwan and Brazil have
seen their currencies rising versus the
US dollar. This has made their exports
more expensive compared with their
competitors and hence less attractive.
However, China’s currency is tied to
the dollar at a level which many argue
900
800
700
600
500
400
11/08 1/09 3/09 5/09 7/09 9/09 11/09 1/10 3/10 5/10 7/10 9/10
1000
1100
1200
1300
1100
900
700
500
300
1300
1500
1700
$
/
m
t
$
/
m
t
PGPI (left) Global Ethylene (right) Global PE (right)
1. Petrochemical prices recover over 50% since 2008 crash.
Source: Platts
60
65
70
75
80
85
90
9/09 10/09 11/09 12/09 1/10 2/10 3/10 4/10 5/10 6/10 7/10 8/10 9/10 10/10
500
550
600
650
700
$
/
m
t
$
/
b
b
l
750
800
Dated Brent (left) Naphtha CIF NWE (right)
2. High crude pressures napththa-petchems crack.
Source: Platts
December 2010 insight 59
2011 global energy outlook - petrochemicals
undervalues it, ensuring the competi-
tiveness of Chinese exports.
“It was the Bank of Japan which effec-
tively poked the hornets’ nest with its
unilateral intervention to stem the rise
of the yen,” according to David Mor-
rison, an analyst at Global Forex Trad-
ing. On October 7, the dollar traded at
an eight-month low against the euro, at
one point the euro reached $1.4029, the
highest level since January. Against the
Yen, the dollar slumped to Yen 82.25,
the weakest level since May 1995. Mean-
while, London gold prices closed at a re-
cord high of $1346.50 per ounce, an in-
dication of the metal’s safe haven status.
This concern over a drop back into re-
cession prompted QE2—a second round
of quantitative easing. However, it is by
no means clear that QE2 will produce
the same effect as QE1. In effect, inter-
est rates are being kept low to encourage
borrowing and keep currencies weak
and exports competitive. At the same
time, liquidity is still being pumped
into the international financial system.
The problem is that it is not finding a
productive use and is being directed to-
wards commodity investments that are
seen as safe havens against the inflation
that such monetary stimulus is likely to
provoke. Commodity prices thus ap-
pear to be a beneficiary of government
policy in two ways: first, through stim-
ulating the real economy, and second,
as a means of financial investment.
High Feed Cost
Although expansionary economic
policies have helped support petro-
chemical prices, the rise in crude oil
prices has also fuelled a rise in the price
of the petrochemical feedstock naph-
tha, causing concern over production
margins. Throughout this year, the
Platts Petrochemicals Cracker Margin
index (PCM Spot) has only hit nega-
tive territory in two out of ten months.
First, in January, when it fell to minus
$111/mt, and then in March, when it
dropped to minus $42/mt.
The PCM Spot is a measure of profit-
ability for steam cracker operators using
naphtha as a feedstock. The PCM cur-
rently reflects operators of typical Eu-
ropean assets, where the critical break-
even point is between $150-200/mt. For
most of the second and third quarters,
steam cracker operators have had fairly
good margins, in particular from June
through September. This has been at-
tributed to a resurgence in underly-
ing demand for petrochemicals driven
largely by China and not merely a re-
plenishment of inventories.
“There is no question that Asia has
been the main driver of this recovery,
showing strong growth all the way
through 2009 and into 2010,” accord-
ing to Ineos group director Tom Crotty.
Chinese demand has kept Middle East-
ern petrochemical products moving
east. Crotty, who is also the president
9/09 10/09 11/09 12/09 1/10 2/10 3/10 4/10 5/10 6/10 7/10 8/10 9/10 10/10
$
/
o
z
900
950
1000
1050
1100
1150
1200
1250
1300
1350
1400
1
1.1
1.2
1.3
1.4
1.5
1.6
London Gold (left) Eur/$ (right)
3. Weak dollar pushes funds into commodity sectors.
Source: Platts
60 insight December 2010
2011 global energy outlook - petrochemicals
of the European Petrochemical Associa-
tion, said most players in Europe that
are in the base chemicals markets, and
indeed players in other regions, have
mostly brushed aside talks of the dou-
ble-dip recession. “It certainly did not
feel like that,” Crotty said, adding “we
see strong chemical demand across all
the developed economies.”
However, the recent march upwards
in both crude oil and naphtha prices
have begun to eat into petrochemical
cracking margins. In early October,
the naphtha cargo market was assessed
at $771/mt CIF Northwest Europe, the
highest level in two years.
The feedstock cost increases have be-
gun to put a squeeze on steam cracker
margins as demand for downstream
petrochemicals has begun to slide into
its seasonal year-end lull. Although
some ethylene producers have put on a
brave face hoping the entire value chain
would continue to consume products,
others were more realistic.
“Cracker margins will be squeezed
now,” one producer said, as if resigned to
lose more margin in the fourth quarter.
Platts PCM Spot in October reached its
lowest levels since May. Ethylene is the
main petrochemical product that comes
out of a steam cracker. It feeds into many
downstream products like polyethylene
and PVC, two polyolefins that serve the
packaging and construction sectors.
In effect, before the credit crunch,
many petrochemical analysts antici-
pated that the industry would go into
a down-cycle in 2011-2012, owing to
capacity additions in the Middle East.
A recovery would then be seen in 2014-
2015. The financial crisis has brought
forward this down-cycle by two years.
It caused companies to close uncompet-
itive plants and to stop or delay some
new projects in the Middle East. Indus-
try sources now anticipate that the re-
covery in the petrochemicals industry
will come in 2011-2012, reaching the
top of the cycle in 2013-2014. ■
9/09 10/09 11/09 12/09 1/10 2/10 3/10 4/10 5/10 6/10 7/10 8/10 9/10 10/10
9/09 10/09 11/09 12/09 1/10 2/10 3/10 4/10 5/10 6/10 7/10 8/10 9/10 10/10
$
/
m
t
$
/
m
t
-200
-100
0
100
200
300
400
500
Platts Petrochemical Cracker Margin Spot
500
550
600
650
700
750
800
850
900
Naphtha CIF NWE
4. Steam cracker margin tightens as naphtha value spikes.
Source: Platts
Congratulations to the 2010 Award of Excellence Winners.
Rising Star Award
Alter NRG Corp
ARMZ Uranium Holding Co.
CoaLogix
Element Markets LLC
Enviromena Power Systems
Green Gas International BV
Nodal Exchange
OPOWER
OTC Global Holdings
Pricelock, Inc.
Stream Energy
Viridity Energy
Operational Excellence
Sustainable Technology Innovation of the Year
Aquamarine Power
Calera
Cool Earth Solar
CURRENT Group, LLC
Enel Ingegneria e Innovazione SpA
Fomento de Construcciones y Contratas, S.A. (FCC)
Ice Energy
Idaho National Laboratory
MyCelx Technologies / IBN SINA
SolFocus
Virent Energy Systems, Inc.
Westport Innovations Inc.
Leading Technologies
͜͜͞
www.GlobalEnergyAwards.com
Recognizing tle Stais of
tle ulobal Eneigy Inuustiy
62 insight December 2010
For some, 2009 was the hangover,
for others it spelled readjustment and
recovery. Platts Top 250 Global Energy
Rankings for 2010 might be taken as a
survivors’ guide to the financial crisis.
Energy demand slumped in the OECD,
while elsewhere the growth rates of
the fastest developing economies were
all but cut in half. The 2010 rankings,
which are based on financial reports
from 2009, thus provide a relative pic-
ture of which energy industry sectors
proved most resilient to the cataclysmic
events of the past two to three years.
Illustrating the scale of the shock,
Platts physical crude benchmark Dated
Brent averaged $97.26 a barrel in 2008,
its highest ever annual average, only
to slump 36.5% in 2009 to $61.67/b,
below the average price level seen in
2006. This took its toll. Total profits
for the top ten companies, which are
dominated by integrated oil and gas
companies, dropped precipitously from
$214.042 billion in 2008 to $136.018
billion in 2009.
If oil prices suffered, natural gas
suffered more. Globally, natural gas
demand experienced what the In-
ternational Energy Agency called an
unprecedented drop in demand. Ex-
change-traded natural gas prices, par-
ticularly in the United States, plummet-
ed in 2009 in both absolute terms and
relative to oil. Profits and prices were
hit by the combined success of US un-
conventional gas production, expand-
ing LNG supply worldwide and dimin-
ishing demand.
By contrast, gas sellers dependent pri-
marily on oil indexation and take-or-
pay contracts for their long-term sales
found a measure of protection that oth-
ers facing gas-to-gas competition did
not. The coexistence of these two ways
of pricing gas created distinct pres-
sures, impacting on selling and acquisi-
tion strategies. The 2009 financial year
stood out because of the huge dispar-
ity between spot gas, which was cheap,
and relatively expensive prices for oil-
linked long-term gas sales.
top 250 global energy companies
Power Sector
Revival
Ross McCracken, Editor,
Platts Energy Economist
Platts Top 250 Global Energy
Company Rankings

reviewed.
Platts Top 250 Global Energy
Company Rankings™ measures
financial performance by ex-
amining each company’s as-
sets, revenue, profits and return
on invested capital. All ranked
companies have assets greater
than (US) $3 billion. The un-
derlying data comes from Capi-
tal IQ, a Standard & Poor’s busi-
ness (like Platts, a division of
The McGraw-Hill Companies).
December 2010 insight 63
top 250 global energy companies
But one person’s loss is another’s gain.
As feedstock prices fell from second-
half 2008, the power sector, expecting
some much-deserved relief, was instead
caught in a pincer movement between
a near total lack of liquidity in the
banking sector and a precipitous drop
in demand. It has taken all of 2009 for
these companies to find their feet.
Some did so more quickly and ef-
fectively than others. As energy feed-
stock prices have remained relatively
low in 2009, oil and gas profits have
fallen from 2008, but power sector re-
turns have revived from often nega-
tive territory, bringing utilities in
many regions of the world back up the
Platts rankings.
Nevertheless, the last two years have
forced a strategic rethink on the part of
utilities and independent power pro-
ducers. The demand and price outlook
remains depressed, challenging previ-
ous expansion plans, while the envi-
ronment regarding carbon pricing in
key jurisdictions remains as uncertain
as it ever was.
Top Ten
Reigning supreme at the top of the
rankings for the sixth consecutive year
is US major ExxonMobil. Despite be-
ing fifth in terms of asset value, Exx-
onMobil came second in terms of both
revenues and profits. Platts rankings
are based on a combination of assets,
revenues, profits and return on capi-
tal invested for listed companies with
over $2 billion in assets. While Exxon-
Mobil’s European gas production de-
clined, the coming on stream of its gi-
ant LNG production facilities in Qatar
have helped it retain a strong grip on
European markets.
Second in the running is the now
troubled UK major BP, which improved
its position from fourth in the rank-
ings in 2008. This reflects a strong per-
formance in 2009 relative to its peers.
BP’s revenues dropped by a third, but
profits by only little more than a fifth.
Contrast this with Chevron and Shell,
which moved down from second and
third respectively to ninth and tenth.
Both saw profits more than halve.
3-year
CGR %
Platts
Rank
Rank Company Country Industry
1 China Resources Power Holdings Hong Kong IPP 50.5 121
2 PTT Aromatics & Refining Plc Thailand R&M 44.4 165
3 Adaro Energy Tbk Indonesia C&CF 40.3 158
4 Tata Power Co Ltd India EU 39.7 159
5 Huadian Power Intl Corp Ltd China IPP 34.3 227
6 Reliance Infrastructure Ltd India EU 28.4 198
7 Datang Int’l Power Generation Co China IPP 24.5 185
8 PowerGrid Corp Of India India EU 24.2 205
9 China Shenhua Energy Co Ltd China C&CF 23.6 19
10 Huaneng Power International China IPP 21.6 102
11 Reliance Industries Ltd India R&M 21.4 13
12 China Coal Energy Co China C&CF 21.1 93
13 PT Bumi Resources Tbk Indonesia C&CF 20.2 242
14 Shenergy Co Ltd China IPP 20.2 235
15 YTL Corp Berhad Malaysia DU 19.0 237
16 Shenzhen Energy Group Co Ltd China IPP 17.9 204
17 Gail (India) Ltd India GU 17.8 107
18 Yanzhou Coal Mining Co Ltd China C&CF 17.6 142
19 Indian Oil Corp Ltd India R&M 17.0 78
20 China Yangtze Power Co China IPP 16.8 163
1. Fastest growing Asia companies.
Source: Capital IQ/Platts
Fastest Growing is based on a three year compound growth rate (CGR) for revenues. The compound growth rate (CGR) is based on the companies revenue
numbers for the past four years (current year included). If only three years of data was available then it is a two year CGR. All rankings are computed from
data assessed on June 1, 2010.
64 insight December 2010
top 250 global energy companies
Platts
Rank
2010
Assets Revenues Profits
Return on
invested capital
3-year
CGR%
Industry
code
Company State or country Region $ million Rank $ million Rank $ million Rank ROIC % Rank
1 Exxon Mobil Corp Texas Americas 233,323 5 275,564 2 19,280 2 15.7 14 -6.3 IOG
2 BP Plc United Kingdom EMEA 235,968 4 239,272 3 16,578 3 13.0 25 -3.5 IOG
3 Gazprom Oao Russian Federation EMEA 270,501 3 98,135 13 25,578 1 11.4 37 11.6 IOG
4 Petrobras Brazil Americas 190,411 9 100,880 12 16,002 4 11.8 31 4.9 IOG
5 Total France EMEA 156,913 12 157,673 6 11,875 8 11.6 33 -5.5 IOG
6 E.ON AG Germany EMEA 187,476 10 115,772 10 12,045 7 11.5 35 8.7 EU
7 Petrochina Co Ltd China Asia/Pacific Rim 212,305 6 149,213 7 15,135 5 10.4 49 13.9 IOG
8 China Petroleum & Chemical Corp China Asia/Pacific Rim 128,505 16 192,638 4 9,041 10 11.3 38 8.0 IOG
9 Chevron Corp California Americas 164,621 11 159,293 5 10,483 9 10.2 52 -6.6 IOG
10 Royal Dutch Shell Plc United Kingdom EMEA 292,181 2 278,188 1 12,518 6 7.4 85 -4.4 IOG
11 LUKOIL Oil Company Russian Federation EMEA 79,019 21 81,083 16 7,011 12 10.7 47 8.1 IOG
12 RWE AG Germany EMEA 114,765 17 65,234 21 4,892 20 11.3 39 2.7 DU
13 Reliance Industries Ltd India Asia/Pacific Rim 55,939 33 43,636 27 5,248 18 12.4 27 21.4 R&M
14 Rosneft Oil Company Russian Federation EMEA 83,232 20 39,431 28 6,514 13 10.6 48 6.4 IOG
15 Endesa SA Spain EMEA 73,935 25 34,350 33 4,822 22 8.9 64 7.6 EU
16 ENI SpA Italy EMEA 144,355 15 117,006 9 6,139 15 6.4 107 -1.1 IOG
17 TNK-BP Holdings Russian Federation EMEA 28,041 81 25,696 44 5,175 19 23.2 3 5.0 IOG
18 Oil & Natural Gas Corp Ltd India Asia/Pacific Rim 33,377 67 22,400 52 4,240 27 20.9 5 14.0 E&P
19 China Shenhua Energy Co Ltd China Asia/Pacific Rim 45,455 43 17,759 66 4,432 25 12.1 28 23.6 C&CF
20 Surgutneftegas Oao Russian Federation EMEA 37,463 58 18,918 60 4,806 23 13.4 21 10.4 IOG
21 Enel SpA Italy EMEA 197,082 8 87,404 15 7,807 11 5.5 131 18.4 EU
22 EDF France EMEA 297,131 1 93,260 14 5,490 17 5.1 141 4.0 EU
23 Scottish & Southern Energy United Kingdom EMEA 26,338 88 34,375 32 1,970 40 14.9 16 22.0 EU
24 ConocoPhillips Texas Americas 152,588 13 136,016 8 4,858 21 5.1 138 -6.7 IOG
25 Gazprom Neft Russian Federation EMEA 29,912 71 22,236 54 3,013 32 13.2 23 3.7 IOG
26 Exelon Corp Illinois Americas 49,180 38 17,318 67 2,706 35 11.2 41 3.4 EU
27 Statoil Asa Norway EMEA 86,990 19 77,642 18 3,076 31 6.2 114 3.0 IOG
28 GDF Suez France EMEA 210,553 7 112,341 11 6,294 14 4.6 154 21.7 DU
29 CNOOC Ltd Hong Kong Asia/Pacific Rim 35,465 62 15,322 83 4,316 26 15.3 15 5.6 E&P
30 BG Group Plc United Kingdom EMEA 38,185 57 16,291 74 3,458 30 12.4 26 12.7 IOG
31 Constellation Energy Group Inc Maryland Americas 23,544 104 15,599 78 4,503 24 32.3 2 -6.8 IPP
32 Iberdrola SA Spain EMEA 107,309 18 34,527 31 3,971 28 5.1 143 30.6 EU
33 Occidental Petroleum Corp California Americas 44,229 47 15,403 80 2,927 33 9.2 62 -4.5 IOG
34 Ecopetrol SA Colombia Americas 28,166 80 15,345 82 2,590 36 13.1 24 18.2 IOG
35 PTT Plc Thailand Asia/Pacific Rim 34,006 64 47,681 26 1,790 45 7.3 89 9.3 IOG
36 AK Transneft Oao Russian Federation EMEA 45,921 42 11,518 105 3,951 29 9.8 54 20.1 S&T
37 CEZ AS Czech Republic EMEA 25,511 92 10,318 113 2,807 34 15.8 13 5.9 EU
38 Sasol Ltd South Africa EMEA 19,020 124 18,098 64 1,792 44 13.7 20 18.7 IOG
39 National Grid United Kingdom EMEA 63,278 29 22,312 53 2,211 37 5.2 134 17.2 DU
40 Repsol YPF SA Spain EMEA 71,341 27 66,465 20 2,175 38 4.0 172 1.8 IOG
41 Imperial Oil Ltd Canada Americas 16,686 132 18,860 62 1,487 55 14.5 17 -4.8 IOG
42 Centrica Plc United Kingdom EMEA 28,247 78 35,033 30 1,018 82 7.2 91 10.1 DU
43 Vattenfall Sweden EMEA 76,996 24 28,331 41 1,779 47 3.9 174 12.1 EU
44 Public Service Enterprise Group Inc New Jersey Americas 28,730 75 12,406 99 1,592 52 9.6 60 0.7 DU
45 Origin Energy Ltd Australia Asia/Pacific Rim 18,601 126 7,062 146 6,095 16 47.4 1 11.0 IOG
46 Tatneft Oao Russian Federation EMEA 16,034 136 12,478 97 1,784 46 16.3 12 6.2 E&P
47 NextEra Energy Inc Florida Americas 48,458 39 15,643 77 1,615 50 5.5 132 -0.1 EU
48 EnBW AG Germany EMEA 42,618 51 21,979 56 1,080 76 5.8 120 5.6 EU
49 Formosa Petrochemical Taiwan Asia/Pacific Rim 14,019 148 19,645 59 1,214 69 11.9 30 7.9 R&M
50 Southern Co Georgia Americas 52,046 35 15,743 75 1,708 48 4.8 149 3.1 EU
Notes: C&CF = coal and combustible fuels, DNR = data not reported, DU = diversified utility, E&P = exploration and production, EU = electric utility, GU = gas utility, IOG = integrated oil and gas, IPP = independent
power producer and energy trader, R&M = refining and marketing, S&T = storage and transfer. All rankings are computed from data assessed on June 1, 2010.
December 2010 insight 65
top 250 global energy companies
Platts
Rank
2010
Assets Revenues Profits
Return on
invested capital
3-year
CGR%
Industry
code
Company State or country Region $ million Rank $ million Rank $ million Rank ROIC % Rank
51 XTO Energy Inc Texas Americas 36,255 60 9,052 123 2,019 39 7.3 88 25.5 E&P
52 NTPC Ltd India Asia/Pacific Rim 26,276 90 10,335 112 1,893 41 8.3 71 12.5 IPP
53 Marathon Oil Corp Texas Americas 47,052 41 48,546 25 1,184 71 3.9 179 -6.8 IOG
54 Tokyo Electric Power Co Inc Japan Asia/Pacific Rim 144,895 14 54,532 22 1,454 57 1.5 225 -1.7 EU
55 Encana Corp Canada Americas 33,793 66 10,951 110 1,803 43 6.6 103 -15.3 E&P
56 Kansai Electric Power Co Japan Asia/Pacific Rim 78,095 22 28,336 40 1,382 60 2.8 202 0.1 EU
57 EDP Portugal EMEA 49,451 37 17,149 69 1,439 58 4.3 160 6.2 EU
58 Gas Natural Sdg SA Spain EMEA 55,704 34 20,918 57 1,625 49 3.7 186 12.9 GU
59 PG&E Corp California Americas 42,945 50 13,399 93 1,234 68 5.6 129 2.2 DU
60 Enbridge Inc Canada Americas 26,901 85 11,742 103 1,471 56 6.7 99 5.4 S&T
61 Fortum OYJ Finland EMEA 24,370 99 7,641 141 1,845 42 9.1 63 6.6 EU
62 American Electric Power Co Inc Ohio Americas 48,348 40 13,489 92 1,365 61 4.7 153 2.2 EU
63 Chubu Electric Power Co Inc Japan Asia/Pacific Rim 58,160 31 24,335 49 1,180 72 3.1 198 0.4 EU
64 Dominion Resources Inc Virginia Americas 42,554 52 15,131 84 1,304 63 4.8 151 -2.8 DU
65 Husky Energy Inc Canada Americas 25,111 96 14,198 87 1,334 62 6.6 105 6.0 IOG
66 Entergy Corp Louisiana Americas 37,365 59 10,746 111 1,251 66 6.2 115 -0.6 EU
67 Veolia Environnement France EMEA 61,187 30 48,574 24 881 91 2.3 212 6.5 DU
68 Enersis SA Chile Americas 24,959 98 11,488 106 1,248 67 6.8 98 16.0 EU
69 Suncor Energy Inc Canada Americas 66,606 28 24,710 47 1,079 77 2.0 219 20.9 IOG
70 Hess Corp New York Americas 29,465 73 29,614 35 740 101 4.1 167 1.8 IOG
71 Murphy Oil Corp Arkansas Americas 12,756 156 18,886 61 741 100 8.5 68 9.8 IOG
72 International Power Plc United Kingdom EMEA 20,608 113 5,848 162 1,589 53 9.7 59 12.4 IPP
73 Sempra Energy California Americas 28,512 76 8,106 135 1,129 75 6.7 102 -11.7 DU
74 Canadian Natural Resources Canada Americas 39,177 56 9,473 118 1,488 54 4.3 161 -0.4 E&P
75 FirstEnergy Corp Ohio Americas 34,304 63 12,712 96 1,006 84 4.9 146 3.4 EU
76 OMV AG Austria EMEA 26,303 89 25,189 46 804 97 4.3 162 -1.9 IOG
77 YPF Argentina Americas 10,294 173 8,954 124 910 88 16.6 10 10.2 IOG
78 Indian Oil Corp Ltd India Asia/Pacific Rim 29,380 74 52,287 23 557 126 3.9 175 17.0 R&M
79 Duke Energy Corp North Carolina Americas 57,040 32 12,731 95 1,063 78 2.8 201 -5.7 EU
80 Kinder Morgan Energy Partners LP Texas Americas 20,262 116 7,003 148 1,268 65 7.6 79 -7.9 S&T
81 Woodside Petroleum Ltd Australia Asia/Pacific Rim 16,726 131 3,822 191 1,602 51 11.5 36 4.5 E&P
82 Consolidated Edison Inc New York Americas 33,873 65 13,032 94 879 92 4.3 164 2.4 DU
83 SK Energy Co Ltd Korea Asia/Pacific Rim 20,518 115 37,162 29 567 123 4.8 148 n/a R&M
84 Midamerican Energy Holdings Iowa Americas 44,684 44 11,204 108 1,157 74 3.6 190 2.8 DU
85 Edison International California Americas 41,444 54 12,361 100 907 89 4.0 173 -0.7 EU
86 Inpex Corp Japan Asia/Pacific Rim 22,098 109 9,136 122 1,165 73 6.2 112 -4.7 E&P
87 Public Power Corp of Greece Greece EMEA 19,387 121 8,478 128 975 85 7.4 83 10.7 EU
88 CEMIG Brazil Americas 15,904 137 6,463 155 1,028 81 10.8 45 6.5 EU
89 Endesa Chile Americas 11,656 166 4,553 176 1,186 70 13.2 22 21.7 IPP
90 TransCanada Corp Canada Americas 41,867 53 8,445 130 1,300 64 3.6 189 6.0 S&T
91 Plains All American Pipeline LP Texas Americas 12,358 160 18,520 63 579 121 7.0 94 -6.2 S&T
92 NRG Energy Inc New Jersey Americas 23,378 105 8,952 125 942 87 5.8 122 16.8 IPP
93 China Coal Energy Co China Asia/Pacific Rim 16,056 135 7,866 139 969 86 7.4 84 21.1 C&CF
94 Bharat Petroleum Co Ltd India Asia/Pacific Rim 11,659 165 26,518 42 350 165 8.1 72 8.0 R&M
95 AES Corp Virginia Americas 39,535 55 14,119 88 729 102 2.7 203 6.9 IPP
96 Tupras Turkey EMEA 6,498 220 13,529 91 538 130 18.9 8 0.5 R&M
97 Saudi Electricity Co Saudi Arabia EMEA 44,350 46 6,368 156 312 173 7.8 75 6.6 EU
98 CLP Holdings Hong Kong Asia/Pacific Rim 20,103 119 6,531 153 1,056 79 6.6 104 3.5 EU
99 CEPSA Spain EMEA 12,709 157 25,898 43 527 132 5.7 125 -3.8 IOG
100 Progress Energy Inc North Carolina Americas 31,236 68 9,885 115 836 96 3.8 181 1.1 EU
Notes: C&CF = coal and combustible fuels, DNR = data not reported, DU = diversified utility, E&P = exploration and production, EU = electric utility, GU = gas utility, IOG = integrated oil and gas, IPP = independent
power producer and energy trader, R&M = refining and marketing, S&T = storage and transfer. All rankings are computed from data assessed on June 1, 2010.
66 insight December 2010
top 250 global energy companies
Platts
Rank
2010
Assets Revenues Profits
Return on
invested capital
3-year
CGR%
Industry
code
Company State or country Region $ million Rank $ million Rank $ million Rank ROIC % Rank
101 KazMunaiGas Exploration Kazakhstan EMEA 8,812 190 3,258 204 1,408 59 19.2 7 5.6 E&P
102 Huaneng Power International China Asia/Pacific Rim 28,399 77 11,674 104 744 99 3.8 184 21.6 IPP
103 Galp Energia SGPS SA Portugal EMEA 8,896 189 16,882 70 488 138 8.4 70 -0.6 IOG
104 Xcel Energy Inc Minnesota Americas 25,488 93 9,644 116 686 106 4.5 156 -0.7 DU
105 Mol Hungarian Oil Hungary EMEA 18,924 125 16,721 71 618 117 4.4 158 3.7 IOG
106 Alpiq Holding AG Switzerland EMEA 17,399 130 14,086 89 630 115 5.1 140 9.5 EU
107 Gail (India) Ltd India Asia/Pacific Rim 7,739 199 5,790 163 713 104 14.2 18 17.8 GU
108 Tokyo Gas Co Ltd Japan Asia/Pacific Rim 20,202 118 15,390 81 585 120 4.1 169 0.9 GU
109 Verbund Austria EMEA 12,707 158 4,897 174 906 90 8.5 67 6.6 EU
110 Kyushu Electric Power Co Inc Japan Asia/Pacific Rim 44,489 45 15,708 76 455 144 1.5 227 0.9 EU
111 GS Holdings Corp Korea Asia/Pacific Rim 21,228 112 29,257 36 414 153 3.2 196 12.2 R&M
112 CPFL Energia SA Brazil Americas 9,294 182 5,263 170 710 105 11.2 42 2.3 EU
113 RusHydro JSC Russian Federation EMEA 15,630 139 3,793 192 1,006 83 7.3 90 77.8 EU
114 CONSOL Energy Inc Pennsylvania Americas 7,725 200 4,538 178 540 129 22.1 4 8.2 C&CF
115 Snam Rete Gas SpA Italy EMEA 23,299 106 3,428 198 1,029 80 5.6 130 11.6 GU
116 Energy Transfer Partners LP Texas Americas 11,735 164 5,417 167 792 98 7.3 87 -11.7 S&T
117 Spectra Energy Corp Texas Americas 24,079 101 4,552 177 843 95 5.0 145 0.1 S&T
118 PKN ORLEN Poland EMEA 14,803 145 23,164 50 446 145 3.9 178 8.7 R&M
119 Tohoku Electric Power Co Inc Japan Asia/Pacific Rim 43,001 49 18,083 65 281 179 1.0 231 -1.3 EU
120 Eletropaulo Brazil Americas 6,532 219 4,445 181 587 119 20.5 6 -1.2 EU
121 China Resources Power Holdings Hong Kong Asia/Pacific Rim 15,273 141 4,281 183 685 107 6.8 97 50.5 IPP
122 PTT Exploration & Production Thailand Asia/Pacific Rim 9,266 183 3,586 195 666 111 10.9 43 10.2 E&P
123 KEPCO Inc Korea Asia/Pacific Rim 77,530 23 28,798 38 -82 238 -0.1 238 7.4 EU
124 Osaka Gas Co Ltd Japan Asia/Pacific Rim 16,284 134 11,922 102 526 133 4.1 168 -2.3 GU
125 AGL Energy Australia Asia/Pacific Rim 7,603 203 5,190 171 631 114 10.3 51 11.7 DU
126 Novatek Oao Russian Federation EMEA 6,263 223 2,913 213 854 94 16.6 11 22.3 E&P
127 Ameren Corp Missouri Americas 23,790 102 7,090 144 612 118 3.8 182 1.0 DU
128 DTE Energy Co Michigan Americas 24,195 100 8,014 138 532 131 3.9 180 -3.9 DU
129 JX Holdings Inc Japan Asia/Pacific Rim 43,562 48 80,329 17 -2,735 248 -13.9 248 6.5 R&M
130 Hongkong Electric Holdings Ltd Hong Kong Asia/Pacific Rim 9,626 175 1,340 246 863 93 10.4 50 -5.1 EU
131 Valero Energy Corp Texas Americas 35,629 61 67,271 19 -352 244 -1.6 242 -9.6 R&M
132 United Utilities Group Plc United Kingdom EMEA 13,980 149 3,891 188 644 112 5.9 118 1.6 DU
133 Caltex Australia Ltd Australia Asia/Pacific Rim 4,167 246 15,578 79 276 181 9.6 61 -1.3 R&M
134 Chugoku Electric Power Co Japan Asia/Pacific Rim 30,528 69 11,289 107 337 167 1.5 226 -1.2 EU
135 Enterprise GP Holdings LP Texas Americas 27,686 83 25,511 45 204 209 0.9 233 22.2 S&T
136 Peabody Energy Corp Missouri Americas 9,955 174 6,012 159 443 146 6.8 96 4.6 C&CF
137 Thai Oil Pcl Thailand Asia/Pacific Rim 4,245 243 8,541 127 363 162 10.8 44 0.6 R&M
138 Williams Companies Inc Oklahoma Americas 25,280 94 8,255 132 438 147 2.5 206 -11.3 S&T
139 ONEOK Partners LP Oklahoma Americas 7,953 197 6,474 154 434 149 7.4 82 11.2 S&T
140 PPL Corp Pennsylvania Americas 22,165 108 7,556 142 465 140 3.5 193 3.1 EU
141 Cameco Corp Canada Americas 7,012 214 2,180 229 675 109 11.8 32 8.1 C&CF
142 Yanzhou Coal Mining Co Ltd China Asia/Pacific Rim 9,113 184 3,147 206 568 122 7.9 74 17.6 C&CF
143 Eletrobras Brazil Americas 73,726 26 13,670 90 94 234 0.2 237 8.0 EU
144 Idemitsu Kosan Co Ltd Japan Asia/Pacific Rim 27,172 84 33,834 34 65 236 0.5 235 -2.9 R&M
145 Tractebel Energia SA Brazil Americas 5,319 232 1,901 234 626 116 16.8 9 8.4 IPP
146 OMV Petrom Romania EMEA 7,826 198 4,373 182 458 143 8.4 69 -0.1 IOG
147 COPEL Brazil Americas 7,622 201 3,021 211 567 124 9.7 58 0.5 EU
148 Ultrapar Participacoes SA Brazil Americas 6,110 224 19,941 58 258 188 5.7 124 96.0 S&T
149 Hong Kong & China Gas Co Ltd Hong Kong Asia/Pacific Rim 8,490 192 1,592 241 667 110 9.9 53 -2.8 GU
150 Edison SpA Italy EMEA 20,213 117 12,466 98 337 166 2.1 217 1.3 IPP
Notes: C&CF = coal and combustible fuels, DNR = data not reported, DU = diversified utility, E&P = exploration and production, EU = electric utility, GU = gas utility, IOG = integrated oil and gas, IPP = independent
power producer and energy trader, R&M = refining and marketing, S&T = storage and transfer. All rankings are computed from data assessed on June 1, 2010.
December 2010 insight 67
top 250 global energy companies
Platts
Rank
2010
Assets Revenues Profits
Return on
invested capital
3-year
CGR%
Industry
code
Company State or country Region $ million Rank $ million Rank $ million Rank ROIC % Rank
151 EOG Resources Inc Texas Americas 18,119 127 4,238 184 547 128 4.3 163 2.8 E&P
152 Cheung Kong Infrastructure Bermuda Asia/Pacific Rim 6,650 217 282 250 718 103 11.5 34 6.2 EU
153 CenterPoint Energy Inc Texas Americas 19,773 120 8,281 131 372 161 3.2 197 -3.9 DU
154 Neste Oil Oyj Finland EMEA 7,001 215 11,964 101 311 174 5.8 121 -10.2 R&M
155 Nexen Inc Canada Americas 21,869 110 5,340 169 505 135 3.0 199 2.5 E&P
156 Polish Oil And Gas Co Poland EMEA 9,359 180 6,578 151 410 154 5.6 128 8.3 IOG
157 ONEOK Inc Oklahoma Americas 12,828 155 11,112 109 305 175 3.9 176 -2.2 GU
158 Adaro Energy Tbk Indonesia Asia/Pacific Rim 4,628 238 2,828 216 459 142 14.1 19 40.3 C&CF
159 Tata Power Co Ltd India Asia/Pacific Rim 6,866 216 3,781 193 423 150 8.8 66 39.7 EU
160 Korea Gas Corp Korea Asia/Pacific Rim 19,144 123 16,554 73 203 210 1.5 224 14.4 GU
161 Mirant Corp Georgia Americas 9,567 177 2,309 226 494 137 7.2 92 -9.4 IPP
162 S-Oil Corp Korea Asia/Pacific Rim 7,563 204 14,869 85 195 213 5.2 136 5.9 R&M
163 China Yangtze Power Co China Asia/Pacific Rim 23,694 103 1,613 240 676 108 3.5 192 16.8 IPP
164 Tenaga Nasional Bhd Malaysia Asia/Pacific Rim 21,826 111 8,460 129 270 183 1.9 220 12.2 EU
165 PTT Aromatics & Refining Plc Thailand Asia/Pacific Rim 4,764 236 6,773 149 275 182 7.7 76 44.4 R&M
166 Iberdrola Renewables SA Spain EMEA 26,453 87 2,825 217 522 134 2.5 207 42.4 IPP
167 Cosmo Oil Co Ltd Japan Asia/Pacific Rim 18,052 128 28,397 39 -117 239 -1.3 240 -5.2 R&M
168 Hellenic Petroleum SA Greece EMEA 7,079 210 9,499 117 246 193 5.6 127 -5.9 R&M
169 Anadarko Petroleum Corp Texas Americas 50,123 36 8,210 134 -135 240 -0.4 239 -6.9 E&P
170 Wisconsin Energy Corp Wisconsin Americas 12,698 159 4,128 186 377 160 5.0 144 1.1 DU
171 Questar Corp Utah Americas 8,898 188 3,038 210 393 156 6.9 95 2.3 GU
172 Moscow United Electric Power Russian Federation EMEA 7,077 211 2,816 218 353 164 9.8 56 50.0 EU
173 Light SA Brazil Americas 5,157 233 2,669 219 334 169 12.0 29 1.5 EU
174 Hindustan Petroleum Corp Ltd India Asia/Pacific Rim 10,643 171 24,347 48 162 225 2.3 211 16.2 R&M
175 Acciona SA Spain EMEA 25,219 95 9,155 121 203 211 1.1 229 1.3 EU
176 Enbridge Energy Partners LP Texas Americas 8,988 187 5,732 165 382 158 4.9 147 -4.2 S&T
177 Electric Power Development Co Japan Asia/Pacific Rim 22,211 107 6,354 157 317 172 1.7 222 0.6 IPP
178 Pepco Holdings Inc District of Columbia Americas 15,779 138 9,259 120 235 197 2.6 205 3.5 EU
179 Red Electrica Corp SA Spain EMEA 7,617 202 1,710 237 465 141 7.6 80 8.6 EU
180 Allegheny Energy Inc Pennsylvania Americas 11,589 168 3,427 199 393 157 5.2 137 3.2 EU
181 EWE AG Germany EMEA 12,840 154 8,243 133 279 180 3.2 195 -12.7 EU
182 Petrol Ofisi As Turkey EMEA 4,406 242 9,352 119 191 215 7.4 86 1.0 R&M
183 Northeast Utilities Massachusetts Americas 14,058 147 5,439 166 336 168 3.8 183 -7.6 EU
184 SCANA Corp South Carolina Americas 12,094 162 4,237 185 357 163 4.4 157 -2.4 DU
185 Datang Int’l Power Generation Co China Asia/Pacific Rim 26,652 86 7,018 147 217 205 1.0 230 24.5 IPP
186 Grupa Lotos SA Poland EMEA 4,527 239 4,883 175 301 176 7.6 78 3.8 R&M
187 Gasunie Netherlands EMEA 12,202 161 2,213 228 554 127 4.5 155 6.0 GU
188 Canadian Utilities Canada Americas 8,675 191 2,434 224 478 139 6.0 117 2.1 DU
189 Terna SpA Italy EMEA 11,447 169 1,852 235 498 136 5.3 133 1.0 EU
190 UGI Corp Pennsylvania Americas 6,043 225 5,738 164 259 186 6.7 100 3.2 GU
191 CESP Brazil Americas 8,989 186 1,463 244 421 151 6.7 101 8.7 IPP
192 BKW Energie AG Switzerland EMEA 5,643 229 3,338 202 282 178 7.9 73 14.9 EU
193 Esso SAF France EMEA 4,195 245 14,280 86 126 231 5.6 126 -6.1 R&M
194 Apache Corp Texas Americas 28,186 79 8,574 126 -284 243 -1.4 241 2.0 E&P
195 NiSource Inc Indiana Americas 19,272 122 6,649 150 231 201 2.1 216 -3.9 DU
196 Sunoco Inc Pennsylvania Americas 11,895 163 28,804 37 -370 245 -7.1 244 -7.2 R&M
197 Canadian Oil Sands Trust Canada Americas 6,640 218 2,463 223 407 155 7.0 93 2.4 E&P
198 Reliance Infrastructure Ltd India Asia/Pacific Rim 7,446 205 3,105 208 325 171 6.4 109 28.4 EU
199 Showa Shell Sekiyu KK Japan Asia/Pacific Rim 12,869 153 21,987 55 -626 246 -17.2 249 -11.5 R&M
200 Devon Energy Corp Oklahoma Americas 29,686 72 8,015 137 -2,753 249 -12.9 247 -8.8 E&P
Notes: C&CF = coal and combustible fuels, DNR = data not reported, DU = diversified utility, E&P = exploration and production, EU = electric utility, GU = gas utility, IOG = integrated oil and gas, IPP = independent
power producer and energy trader, R&M = refining and marketing, S&T = storage and transfer. All rankings are computed from data assessed on June 1, 2010.
68 insight December 2010
top 250 global energy companies
Platts
Rank
2010
Assets Revenues Profits
Return on
invested capital
3-year
CGR%
Industry
code
Company State or country Region $ million Rank $ million Rank $ million Rank ROIC % Rank
201 NSTAR Massachusetts Americas 8,145 194 3,050 209 246 192 6.3 110 -5.2 DU
202 Chesapeake Energy Corp Oklahoma Americas 29,914 70 7,702 140 -5,830 250 -23.8 250 1.7 E&P
203 Shikoku Electric Power Co Japan Asia/Pacific Rim 15,179 143 5,929 161 240 196 2.3 210 -2.0 EU
204 Shenzhen Energy Group Co Ltd China Asia/Pacific Rim 4,428 241 1,667 238 292 177 9.8 55 17.9 IPP
205 PowerGrid Corp Of India India Asia/Pacific Rim 13,706 151 1,527 243 437 148 4.1 170 24.2 EU
206 TonenGeneral Sekiyu Corp Japan Asia/Pacific Rim 9,604 176 22,957 51 -236 242 -9.3 246 -11.8 R&M
207 Enagas SA Spain EMEA 7,099 209 1,238 247 419 152 6.4 108 -21.9 GU
208 OGE Energy Corp Oklahoma Americas 7,267 207 2,870 214 258 187 6.2 111 -10.5 DU
209 CMS Energy Corp Michigan Americas 15,256 142 6,205 158 209 208 2.2 213 -3.1 DU
210 AES Gener SA Chile Americas 5,424 231 1,653 239 328 170 7.6 81 22.2 IPP
211 Santos Ltd Australia Asia/Pacific Rim 9,561 178 1,915 233 381 159 4.7 152 -7.0 E&P
212 Energen Corp Alabama Americas 3,803 247 1,436 245 256 189 10.7 46 2.4 GU
213 Eskom South Africa EMEA 25,993 91 7,067 145 -1,210 247 -7.9 245 13.7 EU
214 Calpine Corp Texas Americas 16,650 133 6,564 152 149 226 1.1 228 -0.7 IPP
215 Manila Electric Co Philippines Asia/Pacific Rim 3,723 248 3,959 187 129 229 7.7 77 -0.2 EU
216 A2A SpA Italy EMEA 14,985 144 8,101 136 112 232 0.9 232 -4.1 DU
217 Petrobras Energia SA Argentina Americas 5,899 226 3,124 207 241 195 6.1 116 0.6 IOG
218 Abu Dhabi National Energy Co United Arab Emirates EMEA 25,003 97 4,481 180 50 237 0.3 236 50.4 DU
219 DPL Inc Ohio Americas 3,642 249 1,589 242 229 202 9.8 57 4.5 EU
220 Patriot Coal Corp Missouri Americas 3,618 250 2,045 231 127 230 11.2 40 21.2 C&CF
221 Tesoro Corp Texas Americas 8,070 196 16,589 72 -140 241 -2.8 243 -2.7 R&M
222 Nicor Inc Illinois Americas 4,436 240 2,652 220 136 227 8.8 65 -3.6 GU
223 Hokuriku Electric Power Co Japan Asia/Pacific Rim 15,493 140 5,125 172 184 218 1.5 223 -1.0 EU
224 AES Elpa SA Brazil Americas 7,072 213 4,494 179 170 224 5.1 139 -1.1 EU
225 Fortis Inc Canada Americas 11,613 167 3,426 200 264 185 2.7 204 35.5 EU
226 Hokkaido Electric Power Co Japan Asia/Pacific Rim 17,635 129 5,972 160 83 235 0.7 234 -0.6 EU
227 Huadian Power Intl Corp Ltd China Asia/Pacific Rim 14,709 146 5,367 168 170 223 1.8 221 34.3 IPP
228 GD Power Development Co Ltd China Asia/Pacific Rim 13,143 152 2,847 215 233 200 3.5 191 13.7 IPP
229 AGL Resources Inc Georgia Americas 7,074 212 2,317 225 222 204 5.9 119 -4.0 GU
230 EVN Austria EMEA 8,224 193 3,857 189 250 191 3.6 188 9.6 EU
231 NuStar Energy LP Texas Americas 4,775 235 3,856 190 225 203 5.2 135 50.3 R&M
232 EGL AG Switzerland EMEA 5,876 227 3,751 194 177 221 5.7 123 -14.7 EU
233 Atmos Energy Corp Texas Americas 6,344 222 4,969 173 191 214 4.4 159 -6.9 GU
234 Atco Ltd Canada Americas 9,506 179 2,928 212 267 184 3.4 194 2.8 DU
235 Shenergy Co Ltd China Asia/Pacific Rim 4,636 237 2,254 227 234 199 6.6 106 20.2 IPP
236 Saras Raffinerie Sarde SpA Italy EMEA 4,208 244 7,352 143 102 233 4.8 150 -4.4 R&M
237 YTL Corp Berhad Malaysia Asia/Pacific Rim 13,890 150 2,613 221 245 194 2.4 209 19.0 DU
238 Qatar Electricity & Water Qatar EMEA 4,962 234 728 249 253 190 6.2 113 15.6 DU
239 Teco Energy Inc Florida Americas 7,220 208 3,311 203 214 206 4.0 171 -1.3 DU
240 CGE Chile Americas 6,440 221 3,426 201 214 207 4.2 166 24.3 EU
241 NV Energy Inc Nevada Americas 11,413 170 3,586 196 183 219 2.1 214 2.2 EU
242 PT Bumi Resources Tbk Indonesia Asia/Pacific Rim 7,411 206 3,219 205 190 216 3.9 177 20.2 C&CF
243 Colbun SA Chile Americas 5,440 230 1,159 248 234 198 5.1 142 15.4 IPP
244 Alliant Energy Corp Wisconsin Americas 9,036 185 3,433 197 129 228 2.0 218 0.7 DU
245 Japan Petroleum Exploration Co Japan Asia/Pacific Rim 5,717 228 1,954 232 195 212 4.2 165 1.9 E&P
246 Transalta Corp Canada Americas 9,322 181 2,609 222 170 222 2.1 215 -0.3 IPP
247 Southern Union Co Texas Americas 8,075 195 2,179 230 180 220 2.9 200 -2.4 S&T
248 Talisman Energy Inc Canada Americas 22,554 107 6,002 166 -666 341 -3.7 329 -6.6 E&P
249 Integrys Energy Group Inc Illinois Americas 11,847 171 7,499 147 -70 311 -1.3 314 2.8 DU
250 Toho Gas Co Ltd Japan Asia/Pacific Rim 5,560 272 4,473 190 119 262 3.1 224 -0.01 GU
Notes: C&CF = coal and combustible fuels, DNR = data not reported, DU = diversified utility, E&P = exploration and production, EU = electric utility, GU = gas utility, IOG = integrated oil and gas, IPP = independent
power producer and energy trader, R&M = refining and marketing, S&T = storage and transfer. All rankings are computed from data assessed on June 1, 2010.
December 2010 insight 69
top 250 global energy companies
However, BP will struggle to retain its
position in 2010. Since the start of the
Macondo oil spill in the Gulf of Mexico
in April, the US’s largest ever oil disas-
ter, BP has rarely left the headlines. The
company faces huge liabilities for the
damage wrought by the spill. It is ex-
pected to weather the storm and resul-
tant financial pressures, but set asides,
expenditures and asset sales of around
$20 billion will directly impact the
company’s resource base and its long-
term growth prospects, suggesting a
drop in its ranking.
Nevertheless, it is important not
to overstate the impact to a company
of BP’s size. BP’s shares have already
bounced from an apparent floor price,
beyond which investors see value in
the company. A $20 billion asset write
down would shift BP only from fourth
to fifth for that indicator. There is also
a large gap between BP at third in terms
of revenue and the China Petroleum &
Chemical Corp which is fourth for this
individual indicator.
If BP or one of the other western ma-
jors were to fall out of the top ten, who
might take its spot? India’s Reliance
Industries Ltd, which this year rose to
13th in the rankings from 25th last
year, may be a good candidate. It has
substantially increased its asset base
from $37,188 million to $55,939 mil-
lion last year and increased revenues
on the back of that by almost 50%.
Profitability, however, remains low in
relation to its asset base and revenues.
Regulated prices in the company’s do-
mestic market may hold Reliance back.
While the top ten rankings remain
the preserve of the integrated oil and
gas companies, one intruder is evident:
German electric utility E.ON AG moved
from 45th in last year’s rankings to 6th
this year, the only non-IOG company
in the top ten, although it is a sizeable
gas producer. The company’s revenues
fell only modestly, from $120.806 bil-
lion in 2008 to $115.772 billion in 2009,
but E.ON AG successfully squeezed out
$12.045 billion in profit, more than
600% above the previous year.
This also made E.ON first among elec-
tric utilities, having been seventh the
previous year. However, E.ON has seen a
see-saw ride. Reporting profits of $9,991
million in 2007 on revenues of $100,651
million, profits slumped to just $1,929
million in 2008. Last year saw a remark-
able recovery from an asset base that
had shrunk to $187,476 million from
$222,178 million in 2008. E.ON has
seen extremes—2008’s performance was
particularly poor relative to its peers, the
rebound in 2009 unusually good.
The slump in profits in 2008 was large-
ly the result of unexpected goodwill
impairments relating to acquisitions
and to losses from non-operating earn-
ings. In its 2008 annual report, E.ON
reported losses attributable to currency
differences of €7,879 million ($10,037
million) and to derivative financial in-
3-year
CGR %
Platts
Rank
Rank Company State or country Industry
1 Ultrapar Participacoes SA Brazil S&T 96.0 148
2 NuStar Energy LP Texas R&M 50.3 231
3 Fortis Inc Canada EU 35.5 225
4 XTO Energy Inc Texas E&P 25.5 51
5 CGE Chile EU 24.3 240
6 AES Gener SA Chile IPP 22.2 210
7 Enterprise GP Holdings LP Texas S&T 22.2 135
8 Endesa Chile IPP 21.7 89
9 Patriot Coal Corp Missouri C&CF 21.2 220
10 Suncor Energy Inc Canada IOG 20.9 69
2. Fastest growing Americas companies.
Source: Capital IQ/Platts
Fastest Growing is based on a 3 year compound growth rate (CGR) for revenues. The compound growth rate (CGR) is based on the companies revenue
numbers for the past four years (current year included). If only three years of data was available then it is a two year CGR. All rankings are computed from
data assessed on June 1, 2010.
70 insight December 2010
top 250 global energy companies
Top
Asia
Platts
Rank
2010
Assets Revenues Profits
Return on
invested capital
Industry
code
Company State or country $ million Rank $ million Rank $ million Rank ROIC % Rank
1 7 Petrochina Co Ltd China 212,305 6 149,213 7 15,135 5 10.4 49 IOG
2 8 China Petroleum & Chemical Corp China 128,505 16 192,638 4 9,041 10 11.3 38 IOG
3 13 Reliance Industries Ltd India 55,939 33 43,636 27 5,248 18 12.4 27 R&M
4 18 Oil & Natural Gas Corp Ltd India 33,377 67 22,400 52 4,240 27 20.9 5 E&P
5 19 China Shenhua Energy Co Ltd China 45,455 43 17,759 66 4,432 25 12.1 28 C&CF
6 29 CNOOC Ltd Hong Kong 35,465 62 15,322 83 4,316 26 15.3 15 E&P
7 35 PTT Plc Thailand 34,006 64 47,681 26 1,790 45 7.3 89 IOG
8 45 Origin Energy Ltd Australia 18,601 126 7,062 146 6,095 16 47.4 1 IOG
9 49 Formosa Petrochemical Taiwan 14,019 148 19,645 59 1,214 69 11.9 30 R&M
10 52 NTPC Ltd India 26,276 90 10,335 112 1,893 41 8.3 71 IPP
11 54 Tokyo Electric Power Co Inc Japan 144,895 14 54,532 22 1,454 57 1.5 225 EU
12 56 Kansai Electric Power Co Japan 78,095 22 28,336 40 1,382 60 2.8 202 EU
13 63 Chubu Electric Power Co Inc Japan 58,160 31 24,335 49 1,180 72 3.1 198 EU
14 78 Indian Oil Corp Ltd India 29,380 74 52,287 23 557 126 3.9 175 R&M
15 81 Woodside Petroleum Ltd Australia 16,726 131 3,822 191 1,602 51 11.5 36 E&P
16 83 SK Energy Co Ltd Korea 20,518 115 37,162 29 567 123 4.8 148 R&M
17 86 Inpex Corp Japan 22,098 109 9,136 122 1,165 73 6.2 112 E&P
18 93 China Coal Energy Co China 16,056 135 7,866 139 969 86 7.4 84 C&CF
19 94 Bharat Petroleum Co Ltd India 11,659 165 26,518 42 350 165 8.1 72 R&M
20 98 CLP Holdings Hong Kong 20,103 119 6,531 153 1,056 79 6.6 104 EU
21 102 Huaneng Power International China 28,399 77 11,674 104 744 99 3.8 184 IPP
22 107 Gail (India) Ltd India 7,739 199 5,790 163 713 104 14.2 18 GU
23 108 Tokyo Gas Co Ltd Japan 20,202 118 15,390 81 585 120 4.1 169 GU
24 110 Kyushu Electric Power Co Inc Japan 44,489 45 15,708 76 455 144 1.5 227 EU
25 111 GS Holdings Corp Korea 21,228 112 29,257 36 414 153 3.2 196 R&M
26 119 Tohoku Electric Power Co Inc Japan 43,001 49 18,083 65 281 179 1.0 231 EU
27 121 China Resources Power Holdings Hong Kong 15,273 141 4,281 183 685 107 6.8 97 IPP
28 122 PTT Exploration & Production Thailand 9,266 183 3,586 195 666 111 10.9 43 E&P
29 123 KEPCO Inc Korea 77,530 23 28,798 38 -82 238 -0.1 238 EU
30 124 Osaka Gas Co Ltd Japan 16,284 134 11,922 102 526 133 4.1 168 GU
31 125 AGL Energy Australia 7,603 203 5,190 171 631 114 10.3 51 DU
32 129 JX Holdings Inc Japan 43,562 48 80,329 17 -2,735 248 -13.9 248 R&M
33 130 Hongkong Electric Holdings Ltd Hong Kong 9,626 175 1,340 246 863 93 10.4 50 EU
34 133 Caltex Australia Ltd Australia 4,167 246 15,578 79 276 181 9.6 61 R&M
Notes: C&CF = coal and combustible fuels, DNR = data not reported, DU = diversified utility, E&P = exploration and production, EU = electric utility, GU = gas utility, IOG = integrated oil and gas, IPP = independent
power producer and energy trader, R&M = refining and marketing, S&T = storage and transfer. All rankings are computed from data assessed on June 1, 2010.
struments of €6,552 million. In 2009,
the rebound came predominantly from
energy trading activities first and sales
in its new markets segment second.
E.ON’s financial patterns look more like
a trading firm than a utility, suggesting
future volatility ahead.
Asia on the Ascendant
It is clear that Asia as a whole has
substantially improved its position in
the global energy firmament over the
course of 2009. Of the top ten Asian
companies regionally, nine improved
their global ranking; of the top 20, 15
improved their global position; while
if new entrants are included, out of the
top 50 Asian companies, as many as
40 of the top 50 gained a higher global
ranking this year to the detriment of
other regions. There are now 68 Asian
companies in the Platts top 250, com-
pared with 55 last year.
The Asian top ten remains domi-
nated by Chinese and Indian compa-
nies. PetroChina Co Ltd retains the
Asian companies in 2010 Top 250
December 2010 insight 71
top 250 global energy companies
Top
Asia
Platts
Rank
2010
Assets Revenues Profits
Return on
invested capital
Industry
code
Company State or country $ million Rank $ million Rank $ million Rank ROIC % Rank
35 134 Chugoku Electric Power Co Japan 30,528 69 11,289 107 337 167 1.5 226 EU
36 137 Thai Oil Pcl Thailand 4,245 243 8,541 127 363 162 10.8 44 R&M
37 142 Yanzhou Coal Mining Co Ltd China 9,113 184 3,147 206 568 122 7.9 74 C&CF
38 144 Idemitsu Kosan Co Ltd Japan 27,172 84 33,834 34 65 236 0.5 235 R&M
39 149 Hong Kong & China Gas Co Ltd Hong Kong 8,490 192 1,592 241 667 110 9.9 53 GU
40 152 Cheung Kong Infrastructure China 6,650 217 282 250 718 103 11.5 34 EU
41 158 Adaro Energy Tbk Indonesia 4,628 238 2,828 216 459 142 14.1 19 C&CF
42 159 Tata Power Co Ltd India 6,866 216 3,781 193 423 150 8.8 66 EU
43 160 Korea Gas Corp Korea 19,144 123 16,554 73 203 210 1.5 224 GU
44 162 S-Oil Corp Korea 7,563 204 14,869 85 195 213 5.2 136 R&M
45 163 China Yangtze Power Co China 23,694 103 1,613 240 676 108 3.5 192 IPP
46 164 Tenaga Nasional Bhd Malaysia 21,826 111 8,460 129 270 183 1.9 220 EU
47 165 PTT Aromatics & Refining Plc Thailand 4,764 236 6,773 149 275 182 7.7 76 R&M
48 167 Cosmo Oil Co Ltd Japan 18,052 128 28,397 39 -117 239 -1.3 240 R&M
49 174 Hindustan Petroleum Corp Ltd India 10,643 171 24,347 48 162 225 2.3 211 R&M
50 177 Electric Power Development Co Japan 22,211 107 6,354 157 317 172 1.7 222 IPP
51 185 Datang Int’l Power Generation Co China 26,652 86 7,018 147 217 205 1.0 230 IPP
52 198 Reliance Infrastructure Ltd India 7,446 205 3,105 208 325 171 6.4 109 EU
53 199 Showa Shell Sekiyu KK Japan 12,869 153 21,987 55 -626 246 -17.2 249 R&M
54 203 Shikoku Electric Power Co Japan 15,179 143 5,929 161 240 196 2.3 210 EU
55 204 Shenzhen Energy Group Co Ltd China 4,428 241 1,667 238 292 177 9.8 55 IPP
56 205 PowerGrid Corp Of India India 13,706 151 1,527 243 437 148 4.1 170 EU
57 206 TonenGeneral Sekiyu Corp Japan 9,604 176 22,957 51 -236 242 -9.3 246 R&M
58 211 Santos Ltd Australia 9,561 178 1,915 233 381 159 4.7 152 E&P
59 215 Manila Electric Co Philippines 3,723 248 3,959 187 129 229 7.7 77 EU
60 223 Hokuriku Electric Power Co Japan 15,493 140 5,125 172 184 218 1.5 223 EU
61 226 Hokkaido Electric Power Co Japan 17,635 129 5,972 160 83 235 0.7 234 EU
62 227 Huadian Power Intl Corp Ltd China 14,709 146 5,367 168 170 223 1.8 221 IPP
63 228 GD Power Development Co Ltd China 13,143 152 2,847 215 233 200 3.5 191 IPP
64 235 Shenergy Co Ltd China 4,636 237 2,254 227 234 199 6.6 106 IPP
65 237 YTL Corp Berhad Malaysia 13,890 150 2,613 221 245 194 2.4 209 DU
66 242 PT Bumi Resources Tbk Indonesia 7,411 206 3,219 205 190 216 3.9 177 C&CF
67 245 Japan Petroleum Exploration Co Ltd Japan 5,717 228 1,954 232 195 212 4.2 165 E&P
68 250 Toho Gas Co Ltd Japan 5,560 272 4,473 190 119 262 3.1 224 GU
Notes: C&CF = coal and combustible fuels, DNR = data not reported, DU = diversified utility, E&P = exploration and production, EU = electric utility, GU = gas utility, IOG = integrated oil and gas, IPP = independent
power producer and energy trader, R&M = refining and marketing, S&T = storage and transfer. All rankings are computed from data assessed on June 1, 2010.
top spot, while the China Petroleum &
Chemical Corp comes in second, oust-
ing CNOOC Ltd, which falls to sixth
place. India’s Reliance Industries Ltd
moved from fourth to third, while In-
dia’s Oil and Natural Gas Corp Ltd rises
from fifth to fourth. Two companies
have moved out of the Asian top ten:
the India Oil Corp Ltd, which may re-
flect late financial reporting of its 2009
results, and Japan’s Tonen General Se-
kiyu Corp which fell from ninth in the
regional Asian rankings to 57.
The latter saw a precipitous decline
in revenues and profits in 2009, which
might be taken as emblematic of the
shift taking place within the down-
stream sector. In this sector—refining
and marketing—many Asian companies
saw their global ranking rise, but their
position regionally against energy com-
panies in other sectors declined. Of the
top Asian R&M companies, only three
improved their rankings both globally
and regionally: India’s Reliance Indus-
tries, Taiwan’s Formosa Petrochemical
Asian companies in 2010 Top 250 (continued)
72 insight December 2010
and South Korea’s GS Holdings. Four
Asian R&M companies fell in both the
regional and global rankings: India Oil
Corp., South Korea’s SK Energy Co. Ltd
and S-Oil Corp, and India’s Hindustan
Petroleum Corp. Ltd. Nevertheless, Asia,
and India in particular, continues to
dominate the R&M sector with all five
of the top R&M companies hailing from
Asia, three of those from India.
The fastest rising company in Asia
this year was Australia’s Origin Energy
Ltd, which jumped from 201st last year
to 45th in the global rankings, and
from 47th to eighth regionally, ow-
ing to an extraordinary turnaround
in profitability. This was the result of
one-off factors for a company that was
the target of a hostile and unsuccess-
ful takeover attempt by BG Group in
2008. Of the A$6,941 million ($6,422
million) recorded profits in the finan-
cial year ending June 1, 2009, A$6,700
million reflected a gain resulting from
the dilution of Origin’s interest in Aus-
tralia Pacific LNG following US major
ConocoPhillips subscription for shares
to form a 50:50 joint venture.
Nevertheless, Origin’s underlying
profits were also up by 20% at $530
million and further gains have been
posted for first-half 2010. Origin’s high
place in the Asian and global Platts
rankings is exaggerated this year by
its asset sale related profits, but this is
still a company on the rise, one with
the cash, assets and partners to expand.
It may drop back in the rankings next
year, but the company has laid the ba-
sis for long-term growth that is likely to
put it on a steady improving trend.
Another strong riser was Taiwan’s For-
mosa PetroChemical, toughing it out in
a sector experiencing fierce competi-
tion. Formosa PetroChemical improved
its global ranking from 113th to 49th,
and its regional ranking from 18th to
9th. Despite revenues dropping by
about 27% in 2009, profits rose almost
threefold. Revenues have also picked up
in 2010 from the declines seen in 2008,
although in its second-quarter 2010 re-
sults, operating profits in its key refin-
ing segment were down.
A significant trend has been the rela-
tive rise in the regional rankings of
Japanese electric utilities, benefiting
from the fall in feedstock prices last
year. Tokyo Electric Power Co moved
up from 20th in the regional rankings
to eleventh, Kansai Electric Power Co
from 25th to 12th and Chubu Electric
Power Co from 27th to 13th. Power
prices in the only partially deregulated
Japanese electricity market tend to lag
fuel source prices by between three to
four months. Japan’s electric utilities
were thus hammered in 2008—Tokyo,
Kansai and Chubu all reported losses
for the year—but benefited in 2009.
New Asian Entrants
Of the new Asian entrants, five are
from China, five from southeast Asia,
one from India and one from Australia.
China’s new entrants are without excep-
tion independent power producers—
Shenzhen Energy Group Co Ltd, Hua-
dian Power International Group Ltd, GD
Power Development Co and Shenergy Co
Ltd. All have been listed on the Shanghai
Stock Exchange for some years. In India,
the new entrant was also a power com-
pany, Tata Power, the country’s largest
integrated private power company. Both
the Indian and Chinese power sectors
are on rapidly expanding paths, suggest-
ing strong growth prospects for the two
countries’ electric utilities and IPPs.
In Japan, the Nippon Oil Corp and
Nippon Mining Holdings were reorga-
nized to become JX Holdings, while the
Hokkaido Electric Power Co returned to
the Global top 250. A new Japanese en-
top 250 global energy companies
Industry Company Country Platts Rank 2010
IOG Petrochina Co Ltd China 7
R&M Reliance Industries Ltd India 13
E&P Oil & Natural Gas Corp Ltd India 18
C&CF China Shenhua Energy Co Ltd China 19
IPP NTPC Ltd India 52
EU Tokyo Electric Power Co Inc Japan 54
GU Gail (India) Ltd India 107
DU AGL Energy Australia 125
3. #1 in Asia by industry.
Source: Capital IQ/Platts
All rankings are computed from data assessed on June 1, 2010.
December 2010 insight 73
top 250 global energy companies
trant to the top 250 came in the form
of the Japan Petroleum Exploration Co,
reflecting its increased size with the
acquisition in 2009 of the oil product
sales units of a Mitsubishi Materials
subsidiary. The company has also taken
on a 30% interest in the Garraf oil field
in Iraq to be developed with Malay-
sia’s Petronas and a domestic Iraqi oil
company, which should promise future
growth in its production base.
The number of southeast Asian com-
panies in the top 250 rose from four to
nine, two being added in Thailand, one
in Indonesia and one in Malaysia, while
the Philippines gained its first company
in the top rank—the Manila Electric Co,
the country’s largest distributor of elec-
tricity. For Thailand, Thai Oil made a re-
entry, while PTT Aromatics and Refining
Plc was ranked 156th overall and 45th in
Asia, reflecting the amalgamation of the
Aromatics Public Company Ltd and Ray-
ong Refinery Public Company Ltd.
For Malaysia, Diversified Utility YTL
Corp Berhad rejoined the Platts 250 at
237, having last been included in 2007
when its ranking was 216. Indonesia
also saw an addition—the only one in
the Coal and Combustible Fuels seg-
ment—miner Adaro Energy Tbk entered
the ratings at 158th. Adaro, Indonesia’s
second largest coal miner, is also the
ninth fastest growing company in the
top 250 with a 3-year CGR of 40.3%.
This year the company signed up to a
joint-venture agreement with Austra-
lian mining major BHP Billiton to de-
velop resources estimated at 774 million
mt, suggesting further growth to come.
BRICs to the Fore
Within the global top 20, eleven
companies are from the BRICs—Brazil,
Russia, India and China—compared
with just six the year before. Moreover,
while BRICs still account for four of
the top ten, all are rising; Russia’s Gaz-
prom gained six places to come third
in the top 250 rankings, Brazil’s Petro-
bras rose five places, PetroChina was up
two places and the China Petroleum
and Chemical Corp jumped from 23rd
place last year to eighth in the global
rankings this year.
What these BRIC companies have in
common is that, despite all being listed,
they are all ultimately state-controlled
entities. They all benefit from varying
degrees of protection in what are gener-
ally large and expanding domestic mar-
kets, the Chinese economy being partic-
ularly dynamic in terms of oil demand
growth. The western majors, while
global in reach, exist in more competi-
tive environments, where oil demand
declined in 2008 and 2009 and, in Eu-
rope and Japan at least, appears to be on
a long-term downward trend.
However, the BRIC companies equally
have distinct characteristics that make
them unique. Gazprom is a gas com-
pany rather than an IOG. It can claim
in 2009 to have been the world’s most
profitable listed energy company. It is
expanding the size of its oil subsidiary
Gazprom Neft, but its oil arm is listed
and reported separately. Petrobras sits
on some of the largest oil discoveries in
recent decades and has a state willing
to strengthen its hold on its domestic
upstream. The emergent Chinese com-
panies also have strong state support,
but more importantly lie at the heart of
the world’s most dynamic economy in
terms of car ownership and transporta-
tion demand growth.
Notably, if Gazprom and Gazprom
Neft were listed as one entity, the com-
bined company would come first in
terms of both assets and profits and
move from 13th to seventh in terms of
revenues. Its ROIC would improve, but
remain below that of ExxonMobil. It
Industry Company Country 3-year CGR % Platts Rank 2010
IPP China Resources Power Holdings Hong Kong 50.5 121
R&M PTT Aromatics & Refining Plc Thailand 44.4 165
C&CF Adaro Energy Tbk Indonesia 40.3 158
EU Tata Power Co Ltd India 39.7 159
GU Gail (India) Ltd India 17.8 107
E&P Oil & Natural Gas Corp Ltd India 14.0 18
IOG Petrochina Co Ltd China 13.9 7
DU YTL Corp Berhad Malaysia 19.0 237
4. Fastest growing Asian companies by industry.
Source: Capital IQ/Platts
Fastest Growing is based on a 3 year compound growth rate (CGR) for revenues. All rankings are computed from data
assessed on June 1, 2010.
top 250 global energy companies
74 insight December 2010
might prove enough to come top of the
global rankings, although ExxonMobil
will in 2010 absorb unconventional gas
producer XTO Energy, increasing its
overall asset base and revenues. Just as
oil major ExxonMobil expands its gas
operations, gas major Gazprom is ex-
panding its oil segment.
Otherwise, Russian oil companies
did less well than their competitors.
Rosneft and TNK-BP, the latter perhaps
still suffering from the 2008 conflict
between its Russian and its UK share-
holders, slipped in the rankings, while
Lukoil and Gazprom Neft were pretty
much static. Surgutneftegaz rose, but
late reporting meant the use of 2008
data, which would be likely to flatter
any oil company, owing to higher oil
prices in that financial year. This stands
in stark contrast to the positive perfor-
mance of Russian companies in the gas,
power and transport sectors.
Speedy Growth
If oil and gas companies generally
dominate the energy sector as a whole,
their lack of presence among the top
fastest growing companies is noticeable,
although it is easier for small companies
to show increases in growth measured
in percentage terms. In Asia, eleven of
the top 20 fastest growing companies
are involved in the power sector, but
only four in oil and gas, whether up or
downstream. Five are in the coal and
combustible fuels sector, reflecting the
presence of the world’s first and third
largest coal industries in China and In-
dia respectively and the coal export in-
dustries of Australia and Indonesia.
Of the five C&CF companies in the
fastest growing Asian companies, three
are Chinese and two Indonesian. Coal
outside Asia figures little, only US com-
pany Patriot Coal Corp registering in
the Americas. Patriot is growing fast
through the development of assets in
Appalachia and the Illinois basin, but it
is involved in the controversial practice
of mountain top removal mining. This
is coming under greater environmen-
tal and regulatory scrutiny, which may
threaten its future growth prospects.
Brazil’s Storage and Transfer compa-
ny Ultrapar Participacoes SA tops the
Americas fastest growing list with a
3-year CGR of 96.0%. Texan R&M com-
pany NuStar Energy LP takes up second
place, while Canada’s oil sands-based
Suncor is the only IOG in the top ten
Americas list.
In Asia, the front runner is the Hong
Kong-based IPP China Resources Power
Holdings, with a 3-year CGR of 50.5%.
Thailand’s PTT Aromatics & Refining Plc
takes second place, and Indonesia’s Ada-
ro Energy Tbk third. There are no IOG or
E&P companies in the Asian top 20 fast-
est growing company rankings, which
are dominated by power sector firms.
In Europe and the Middle East, power
companies are again to the fore, mak-
ing up seven of the top ten fastest grow-
3-year
CGR %
Platts
Rank
Rank Company Country Industry
1 RusHydro JSC Russian Federation EU 77.8 113
2 Abu Dhabi National Energy Co United Arab Emirates DU 50.4 218
3 Moscow United Electric Power Russian Federation EU 50.0 172
4 Iberdrola Renewables SA Spain IPP 42.4 166
5 Iberdrola SA Spain EU 30.6 32
6 Novatek Oao Russian Federation E&P 22.3 126
7 Scottish & Southern Energy United Kingdom EU 22.0 23
8 GDF Suez France DU 21.7 28
9 AK Transneft Oao Russian Federation S&T 20.1 36
10 Sasol Ltd South Africa IOG 18.7 38
5. Fastest growing EMEA companies.
Source: Capital IQ/Platts
Fastest Growing is based on a 3 year compound growth rate (CGR) for revenues. The compound growth rate (CGR) is based on the companies revenue
numbers for the past four years (current year included). If only three years of data was available then it is a two year CGR. All rankings are computed from
data assessed on June 1, 2010.
top 250 global energy companies
December 2010 insight 75
ing companies. Russian companies are
particularly prominent: of the top ten,
RusHydro JSC comes first with a 3-yr
CGR of 77.8%, despite a major accident
in August 2009, which took offline the
company’s 6.4 GW Sayano-Shushen-
skaya hydro plant and resulted in the
deaths of 75 people. Despite this setback
the company managed to increase its
overall power output in 2009 by 1.7%.
Moscow United Electric Power came
in third with 50.0%, E&P and gas spe-
cialist company Novatek Oao is sixth
with 22.3% and S&T firm AK Transneft
Oao is ninth with 20.1%. This reflects
opportunities arising from the deregu-
lation of Russia’s power generating and
distribution industries and the willing-
ness of the state to allow the emergence
of independent Russian companies in
niche areas of markets still dominated
by state-controlled giants.
Spain’s Iberdrola continued its strong
growth performance. Iberdrola SA is
ranked fifth with a 3-year CGR of 30.6%,
while its separately listed Iberdrola Re-
newables SA came fourth with a 3-year
CCR of 42.4%. The Abu Dhabi National
Energy Co came second with 50.4%.
Sectoral Leaders
While scoring well in terms of fast-
est growing companies, the C&CF seg-
ment in fact declined relative to other
segments in the rankings. The average
ranking of C&CF companies registering
in the top 250 fell from 128.4 last year to
140.6 this year, a lower number denoting
a higher ranking. China Shenhua Energy
Co Ltd kept its top spot in this segment,
but US company Peabody dropped from
second to fourth and was replaced by
another Chinese company China, Coal
Energy Co, in the second slot. Canada’s
3-year
CGR %
Platts
Rank
Company
1 Ultrapar Participacoes SA 96.0 148
2 RusHydro JSC 77.8 113
3 China Resources Power Holdings 50.5 121
4 Abu Dhabi National Energy Co 50.4 218
5 NuStar Energy LP 50.3 231
6 Moscow United Electric Power 50.0 172
7 PTT Aromatics & Refining Plc 44.4 165
8 Iberdrola Renewables SA 42.4 166
9 Adaro Energy Tbk 40.3 158
10 Tata Power Co Ltd 39.7 159
11 Fortis Inc 35.5 225
12 Huadian Power Intl Corp Ltd 34.3 227
13 Iberdrola SA 30.6 32
14 Reliance Infrastructure Ltd 28.4 198
15 XTO Energy Inc 25.5 51
16 Datang Int’l Power Generation Co 24.5 185
17 CGE 24.3 240
18 PowerGrid Corp Of India 24.2 205
19 China Shenhua Energy Co Ltd 23.6 19
20 Novatek Oao 22.3 126
21 AES Gener SA 22.2 210
22 Enterprise GP Holdings LP 22.2 135
23 Scottish & Southern Energy 22.0 23
24 GDF Suez 21.7 28
25 Endesa 21.7 89
3-year
CGR %
Platts
Rank
Company
26 Huaneng Power International 21.6 102
27 Reliance Industries Ltd 21.4 13
28 Patriot Coal Corp 21.2 220
29 China Coal Energy Co 21.1 93
30 Suncor Energy Inc 20.9 69
31 PT Bumi Resources Tbk 20.2 242
32 Shenergy Co Ltd 20.2 235
33 AK Transneft Oao 20.1 36
34 YTL Corp Berhad 19.0 237
35 Sasol Ltd 18.7 38
36 Enel SpA 18.4 21
37 Ecopetrol SA 18.2 34
38 Shenzhen Energy Group Co Ltd 17.9 204
39 Gail (India) Ltd 17.8 107
40 Yanzhou Coal Mining Co Ltd 17.6 142
41 National Grid 17.2 39
42 Indian Oil Corp Ltd 17.0 78
43 China Yangtze Power Co 16.8 163
44 NRG Energy Inc 16.8 92
45 Hindustan Petroleum Corp Ltd 16.2 174
46 Enersis SA 16.0 68
47 Qatar Electricity & Water 15.6 238
48 Colbun SA 15.4 243
49 BKW Energie AG 14.9 192
50 Korea Gas Corp 14.4 160
6. Top 50 fastest growing companies.
Source: Capital IQ/Platts
Fastest Growing is based on a 3 year compound growth rate (CGR) for revenues. All rankings are computed from data assessed on June 1, 2010.
top 250 global energy companies
76 insight December 2010
Cameco rose from eighth to fifth, but
US company Arch Coal dropped out of
the top 250 and thus out of the sectoral
rankings as well. Patriot Coal Corp and
Indonesia’s Adaro Energy Tbk were both
new entrants to the sectoral leader board.
Diversified Utilities appear to have
weathered the financial crisis and ensu-
ing recession relatively well. The top ten
average ranking in this category strength-
ened from 60.6 last year to 51 this year.
Within the sector, RWE of Germany and
GDF Suez of France retained their first
and second places respectively. The UK’s
Centrica Plc was a strong riser, moving
from 145 to 42 in the global rankings, as
it returned to profitability, taking fourth
place in the top ten DUs. Veolia Environ-
ment was another new entrant, while
MidAmerican Energy Holdings of Iowa
and France’s Suez Environment dropped
out of the leader board.
Electric Utilities also did well in 2009.
The average ranking for the top ten
companies improved from 37.8 to 27.2.
This was clearly helped by the rise of
UK utility Scottish and Southern from
127 in the global rankings to 23, which
helped place it fifth in the EU segment,
and E.ON, which moved from 45th to
sixth, the only non-IOG to make it into
the top ten globally, also putting it first
in the EU segment.
IPPs, too, improved their overall posi-
tion, with the average top ten ranking
strengthening from 119.1 last year to 94.9
this year. There was considerable move-
ment within the group. Maryland-based
Constellation Energy Group Inc can be
particularly pleased with its exceptional
rise from 185th last year to 31st, putting
it in the number one slot sectorally for
IPPs. Having suffered a tough price and
liquidity environment, along with the
rest of the US power sector in 2008, Con-
stellation’s restructuring appears to have
brought quick benefits. Although rev-
enue dropped from $19,818 million in
2008 to $15,599 million in 2009, profits
turned from a loss of $1,301 million to a
gain of $4,503 million.
A notable facet of this sector was the
entry to the top ten of two Chinese com-
panies, Huaneng Power International and
Hong Kong-based China Resources Power
Holdings. Last year, there were only two
non-OECD IPPs in the top ten—Chile’s
Endesa and Brazil’s Tractebel Energia SA—
now there are four. The Chinese compa-
nies saw a strong recovery in profits in
2009 as international feedstock prices
dropped from the highs of 2008, return-
ing a profit margin to regulated domestic
power prices. Leaving the top tier were
the UK’s Drax Group, Spain’s Iberdrola
Renewables and US IPP Mirant Group.
By contrast, in all of the oil and gas
segments—IOGs, E&P, R&M and S&T—
the average ranking of the top ten com-
panies weakened. This can largely be
explained by the rise in oil and gas pric-
es in 2008 delivering windfall profits,
and then the subsequent fall in profits
in 2009 as oil and gas prices dropped.
In the S&T segment there were no
new entrants. Russia’s Transneft stayed
on top. The most notable change was
Enbridge’s elevation from fourth to sec-
ond and Williams Companies’ journey
in the opposite direction from second
to ninth. US pipeline companies look
certain to see increased costs arising
from stricter safety regulation follow-
ing Enbridge’s two oil spills in 2010 and
Pacific Gas & Electric’s fatal gas line ex-
plosion in San Bruno, California.
For Gas Utilities, Eni’s takeover of Bel-
gium’s Distrigas left a vacant spot in the
top ten that was filled by the Nether-
lands’ Gasunie. Spain’s Gas Natural re-
mained at the top, with India’s Gail (In-
dia) Ltd moving up from fifth to second.
More change was seen in the IOGs and
E&P sectors. For IOGs, Russia’s Rosneft
and Italy’s Eni were nudged out of the
top ten, while Russia’s Lukoil moved up
to come 10th in the sector. The China Pe-
troleum and Chemical Corp also moved
into the top ten group, taking seventh
place. The balance has shifted to five
companies each for BRIC versus OECD
IOGs in the top ten, but Gazprom, the
world’s biggest gas producer and export-
er, which has taken big strides out of its
European comfort zone with LNG trade
and supply in Asia and the US, now oc-
cupies third place and Brazil’s Petrobras
fourth, as opposed to eighth and sixth
last year, while BP’s second place is clear-
ly under threat. ■
December 2010 insight 77
top 250 global energy companies
Platts
rank
2010
Platts
rank
2009 Company State or country
1 1 Exxon Mobil Corp Texas
2 4 BP Plc United Kingdom
3 8 Gazprom Oao Russian Federation
4 6 Petrobras Brazil
5 5 Total France
6 45 E.ON AG Germany
7 9 Petrochina Co Ltd China
8 23 China Petroleum & Chemical Corp China
9 2 Chevron Corp California
10 3 Royal Dutch Shell Plc United Kingdom
11 12 LUKOIL Oil Company Russian Federation
12 14 RWE AG Germany
13 25 Reliance Industries Ltd India
14 7 Rosneft Oil Company Russian Federation
15 38 Endesa SA Spain
16 10 ENI SpA Italy
17 13 TNK-BP Holdings Russian Federation
18 26 Oil & Natural Gas Corp Ltd India
19 40 China Shenhua Energy Co Ltd China
20 29 Surgutneftegas Oao Russian Federation
21 19 Enel SpA Italy
22 18 EDF France
23 127 Scottish & Southern Energy United Kingdom
24 117 ConocoPhillips Texas
25 24 Gazprom Neft Russian Federation
7. Top 50: Who’s Up, Who’s Down.
Source: Capital IQ/Platts
Platts
rank
2010
Platts
rank
2009 Company State or country
26 34 Exelon Corp Illinois
27 11 Statoil Asa Norway
28 27 GDF Suez France
29 21 CNOOC Ltd Hong Kong
30 17 BG Group Plc United Kingdom
31 185 Constellation Energy Group Inc Maryland
32 36 Iberdrola SA Spain
33 15 Occidental Petroleum Corp California
34 30 Ecopetrol SA Colombia
35 46 PTT Plc Thailand
36 64 AK Transneft Oao Russian Federation
37 49 CEZ AS Czech Republic
38 43 Sasol Ltd South Africa
39 58 National Grid United Kingdom
40 22 Repsol YPF SA Spain
41 31 Imperial Oil Ltd Canada
42 145 Centrica Plc United Kingdom
43 41 Vattenfall Sweden
44 78 Public Service Enterprise Group Inc New Jersey
45 201 Origin Energy Ltd Australia
46 172 Tatneft Oao Russian Federation
47 51 Nextera Energy Inc Florida
48 47 EnBW AG Germany
49 113 Formosa Petrochemical Taiwan
50 57 Southern Co Georgia
OVERALL
Platts
rank
2010 Rank Company State or country
1 China Shenhua Energy Co Ltd China 19
2 China Coal Energy Co China 93
3 CONSOL Energy Inc Pennsylvania 114
4 Peabody Energy Corp Missouri 136
5 Cameco Corp Canada 141
6 Yanzhou Coal Mining Co Ltd China 142
7 Adaro Energy Tbk Indonesia 158
8 Patriot Coal Corp Missouri 220
9 Bumi Resources Tbk Pt Indonesia 242
8. Leaders in coal and combustible fuels.
Source: Capital IQ/Platts
REGIONAL Industry
rank
2010
State or
country
Platts
rank
2010 Region Company
Americas 3 CONSOL Energy Inc Pennsylvania 114
Asia/Pacific Rim 1 China Shenhua Energy Co Ltd China 19
REGIONAL Industry
rank
2010
State or
country
Platts
rank
2010 Region Company
Americas 5 Public Service Enterprise Group Inc New Jersey 44
Asia/Pacific Rim 14 AGL Energy Australia 125
EMEA 1 RWE AG Germany 12
OVERALL
Platts
rank
2010 Rank Company State or country
1 RWE AG Germany 12
2 GDF Suez France 28
3 National Grid United Kingdom 39
4 Centrica Plc United Kingdom 42
5 Public Service Enterprise Group Inc New Jersey 44
6 PG&E Corp California 59
7 Dominion Resources Inc Virginia 64
8 Veolia Environnement France 67
9 Sempra Energy California 73
10 Consolidated Edison Inc New York 82
9. Leaders in diversified utilities.
Source: Capital IQ/Platts
78 insight December 2010
top 250 global energy companies
REGIONAL Industry
rank
2010
State or
country
Platts
rank
2010 Region Company
Americas 6 Exelon Corp Illinois 26
Asia/Pacific Rim 13 Tokyo Electric Power Co Inc Japan 54
EMEA 1 E.ON AG Germany 6
OVERALL
Platts
rank
2010 Rank Company State or country
1 E.ON AG Germany 6
2 Endesa SA Spain 15
3 Enel SpA Italy 21
4 EDF France 22
5 Scottish & Southern Energy United Kingdom 23
6 Exelon Corp Illinois 26
7 Iberdrola SA Spain 32
8 CEZ AS Czech Republic 37
9 Vattenfall Sweden 43
10 NextEra Energy Inc Florida 47
10. Leaders in electric utilities.
Source: Capital IQ/Platts
REGIONAL Industry
rank
2010
State or
country
Platts
rank
2010 Region Company
Americas 7 ONEOK Inc Oklahoma 157
Asia/Pacific Rim 2 Gail (India) Ltd India 107
EMEA 1 Gas Natural Sdg SA Spain 58
OVERALL
Platts
rank
2010 Rank Company State or country
1 Gas Natural Sdg SA Spain 58
2 Gail (India) Ltd India 107
3 Tokyo Gas Co Ltd Japan 108
4 Snam Rete Gas SpA Italy 115
5 Osaka Gas Co Ltd Japan 124
6 Hong Kong & China Gas Co Ltd Hong Kong 149
7 ONEOK Inc Oklahoma 157
8 Korea Gas Corp Korea 160
9 Questar Corp Utah 171
10 Gasunie Netherlands 187
12. Leaders in gas utilities.
Source: Capital IQ/Platts
REGIONAL Industry
rank
2010
State or
country
Platts
rank
2010 Region Company
Americas 1 Constellation Energy Group Inc Maryland 31
Asia/Pacific Rim 2 NTPC Ltd India 52
EMEA 3 International Power Plc United Kingdom 72
OVERALL
Platts
rank
2010 Rank Company State or country
1 Constellation Energy Group Inc Maryland 31
2 NTPC Ltd India 52
3 International Power Plc United Kingdom 72
4 Endesa Chile 89
5 NRG Energy Inc New Jersey 92
6 AES Corp Virginia 95
7 Huaneng Power International China 102
8 China Resources Power Holdings Hong Kong 121
9 Tractebel Energia SA Brazil 145
10 Edison SpA Italy 150
13. Leaders in independent power producers.
Source: Capital IQ/Platts
REGIONAL Industry
rank
2010 State or country
Platts
rank
2010 Region Company
Americas 4 XTO Energy Inc Texas 51
Asia/Pacific Rim 1 Oil & Natural Gas Corp Ltd India 18
EMEA 3 Tatneft Oao Russian Federation 46
OVERALL
Platts
rank
2010 Rank Company State or country
1 Oil & Natural Gas Corp Ltd India 18
2 CNOOC Ltd Hong Kong 29
3 Tatneft Oao Russian Federation 46
4 XTO Energy Inc Texas 51
5 Encana Corp Canada 55
6 Canadian Natural Resources Canada 74
7 Woodside Petroleum Ltd Australia 81
8 Inpex Corp Japan 86
9 KazMunaiGas Exploration Kazakhstan 101
10 PTT Exploration & Production Thailand 122
11. Leaders in exploration and production.
Source: Capital IQ/Platts
December 2010 insight 79
top 250 global energy companies
REGIONAL Industry
rank
2010 State or country
Platts
rank
2010 Region Company
Americas 1 Exxon Mobil Corp Texas 1
Asia/Pacific Rim 6 Petrochina Co Ltd China 7
EMEA 2 BP Plc United Kingdom 2
OVERALL
Platts
rank
2010 Rank Company State or country
1 Exxon Mobil Corp Texas 1
2 BP Plc United Kingdom 2
3 Gazprom Oao Russian Federation 3
4 Petrobras Brazil 4
5 Total France 5
6 Petrochina Co Ltd China 7
7 China Petroleum & Chemical Corp China 8
8 Chevron Corp California 9
9 Royal Dutch Shell Plc United Kingdom 10
10 LUKOIL Oil Company Russian Federation 11
14. Leaders in integrated oil and gas.
Source: Capital IQ/Platts
REGIONAL Industry
rank
2010 State or country
Platts
rank
2010 Region Company
Americas 10 Valero Energy Corp Texas 131
Asia/Pacific Rim 1 Reliance Industries Ltd India 13
EMEA 6 Tupras Turkey 96
OVERALL
Platts
rank
2010 Rank Company State or country
1 Reliance Industries Ltd India 13
2 Formosa Petrochemical Taiwan 49
3 Indian Oil Corp Ltd India 78
4 SK Energy Co Ltd Korea 83
5 Bharat Petroleum Co Ltd India 94
6 Tupras Turkey 96
7 GS Holdings Corp Korea 11
8 PKN ORLEN Poland 118
9 JX Holdings Inc Japan 129
10 Valero Energy Corp Texas 131
15. Leaders in refining and marketing.
Source: Capital IQ/Platts
REGIONAL Industry
rank
2010 State or country
Platts
rank
2010 Region Company
Americas 2 Enbridge Inc Canada 60
EMEA 1 AK Transneft Oao Russian Federation 36
OVERALL
Platts
rank
2010 Rank Company State or country
1 AK Transneft Oao Russian Federation 36
2 Enbridge Inc Canada 60
3 Kinder Morgan Energy Partners LP Texas 80
4 TransCanada Corp Canada 90
5 Plains All American Pipeline LP Texas 91
6 Energy Transfer Partners LP Texas 116
7 Spectra Energy Corp Texas 117
8 Enterprise GP Holdings LP Texas 135
9 Williams Companies Inc Oklahoma 138
10 ONEOK Partners LP Oklahoma 139
16. Leaders in storage and transfer.
Source: Capital IQ/Platts
Where the Numbers Came From
This 9th annual survey of global energy companies by Platts
Energy Insight magazine measures companies’ financial per-
formance using four metrics: asset worth, revenues, profits,
and return on invested capital (ROIC). All companies on the
list have assets greater than US$3 billion. The underlying
data comes from the Capital IQ, a Standard & Poor’s business,
which is, like Platts, a division of The McGraw-Hill Compa-
nies. This year, in addition to recognizing the best financial
performances of the year, we also include the list of Fastest
Growing Companies in the Top 250 list based on the three
year compound growth rate (CGR) for revenues. The CGR was
calculated by using the Capital IQ data over the past four
years (current year included).
Because the survey is global, and because all countries
do not share a standard financial reporting standard, the
data used is from the full year of 2009. Since then, material
changes in a company’s financial health may have occurred,
and any evaluation should take that into account. Data for US
companies in the tables came from SEC Form 10K.
The company rankings are derived by adding each compa-
ny’s numerical ranking for asset worth, revenues, profits, and
ROIC. The overall rank of 1 is assigned to the company with
the lowest total, 2 to the next lowest and so on.
ROIC figures—widely regarded as a driver of cash flow and
value—were calculated using the following equation:
ROIC = [(Income before extraordinary items) – (Avail-
able for common stock)] ÷ (Total invested capital) x 100
“Income before extraordinary items” is net income less
preferred dividends and “Total invested capital” is the sum
of total long-term debt, preferred stock (value), minority
interest, and total common equity.
80 insight December 2010
top 250 global energy companies
ASSETS
Platts
rank
2010 Rank Company Assets, $ million
1 EDF 297,131 22
2 Royal Dutch Shell Plc 292,181 10
3 Gazprom Oao 270,501 3
4 BP Plc 235,968 2
5 Exxon Mobil Corp 233,323 1
6 Petrochina Co Ltd 212,305 7
7 GDF Suez 210,553 28
8 Enel Spa 197,082 21
9 Petrobras 190,411 4
10 E.ON AG 187,476 6
17. Leaders by financial indicator.
Source: Capital IQ/Platts
REVENUES
Platts
rank
2010 Rank Company Revenues, $ million
1 Royal Dutch Shell Plc 278,188 10
2 Exxon Mobil Corp 275,564 1
3 BP Plc 239,272 2
4 China Petroleum & Chemical Corp 192,638 8
5 Chevron Corp 159,293 9
6 Total 157,673 5
7 Petrochina Co Ltd 149,213 7
8 Conocophillips 136,016 24
9 Eni Spa 117,006 16
10 E.On Ag 115,772 6
PROFITS
Platts
rank
2010 Rank Company Profits, $ million
1 Gazprom Oao 25,578 3
2 Exxon Mobil Corp 19,280 1
3 BP Plc 16,578 2
4 Petrobras 16,002 4
5 Petrochina Co Ltd 15,135 7
6 Royal Dutch Shell Plc 12,518 10
7 E.ON AG 12,045 6
8 Total 11,875 5
9 Chevron Corp 10,483 9
10 China Petroleum & Chemical Corp 9,041 8
RETURN ON INVESTED CAPITAL
Platts
rank
2010 Rank Company ROIC, %
1 Origin Energy Ltd 47.418 45
2 Constellation Energy Group Inc 32.254 31
3 TNK-BP Holdings 23.154 17
4 CONSOL Energy Inc 22.053 115
5 Oil & Natural Gas Corp Ltd 20.937 18
6 Eletropaulo 20.536 120
7 KazMunaiGas Exploration 19.192 101
8 Tupras 18.867 96
9 Tractebel Energia SA 16.810 145
10 YPF 16.583 77
THE AMERICAS
Industry
code
Platts
rank
2010 Rank Company State or country
1 Exxon Mobil Corp Texas IOG 1
2 Petrobras Brazil IOG 4
3 Chevron Corp California IOG 9
4 ConocoPhillips Texas IOG 24
5 Exelon Corp Illinois EU 26
6 Constellation Energy Group Inc Maryland IPP 31
7 Occidental Petroleum Corp California IOG 33
8 Ecopetrol SA Colombia IOG 34
9 Imperial Oil Ltd Canada IOG 41
10 Public Service Enterprise Group Inc New Jersey DU 44
18. Leaders by region.
Source: Capital IQ/Platts
ASIA / PACIFIC RIM
Industry
code
Platts
rank
2010 Rank Company State or country
1 Petrochina Co Ltd China IOG 7
2 China Petroleum & Chemical Corp China IOG 8
3 Reliance Industries Ltd India R&M 13
4 Oil & Natural Gas Corp Ltd India E&P 18
5 China Shenhua Energy Co Ltd China C&CF 19
6 CNOOC Ltd Hong Kong E&P 29
7 PTT Plc Thailand IOG 35
8 Origin Energy Ltd Australia IOG 45
9 Formosa Petrochemical Taiwan R&M 49
10 NTPC Ltd India IPP 52
EUROPE, MIDDLE EAST, AFRICA
Industry
code
Platts
rank
2010 Rank Company State or country
1 BP Plc United Kingdom IOG 2
2 Gazprom Oao Russian Federation IOG 3
3 Total France IOG 5
4 E.ON AG Germany EU 6
5 Royal Dutch Shell Plc United Kingdom IOG 10
6 LUKOIL Oil Company Russian Federation IOG 11
7 RWE AG Germany DU 12
8 Rosneft Oil Company Russian Federation IOG 14
9 Endesa SA Spain EU 15
10 ENI SpA Italy IOG 16
Note: C&CF = coal and combustible fuels, DU = diversified utility, E&P = exploration and production,
EU = electric utility, GU = gas utility, IOG = integrated oil and gas, IPP = independent power producer
and energy trader, R&M = refining and marketing, S&T = storage and transfer
More on the Web
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December 2010 insight 83
2010 GLOBAL ENERGY LEADERS
SPECIAL ADVERTISING SECTION
Capgemini is again proud to be the
principal sponsor of the Global Energy
Awards. Each year, the Platts Global En-
ergy Awards gala ceremony is a unique
moment where the leading energy and
utilities companies come together with
important stakeholders from govern-
ment, academia and professional services to celebrate the most successful industry companies,
projects and people of the year.
The most striking industry event of 2010 has undoubtedly been the BP Macondo disaster in
the Gulf of Mexico which has dominated the headlines since April 2010. The energy industry is
facing the challenges that the rami⇒cations of the incident will present for oil and gas explora-
tion in the coming years. The growing global appetite for oil in the foreseeable future coupled
with natural declines in existing production is creating a formidable challenge for the industry
to bring on new production capacity.
During 2010, the Utilities industry has started to recover from the economic crisis. In Europe
both prices and consumption have gone up, which is not yet the case in the United States. Cap-
gemini, one of the world’s leading business consulting, systems integration and outsourcing
⇒rms for energy and utility companies, truly understands the challenges the industry faces.
Our commitment to the energy industry does not stop with the Global Energy Awards. We
participate in the progress of the energy industry through a variety of research and conference
programs, addressing the hot topics of the market:

Capgemini produces an on-going program including in-depth studies and surveys that are
recognized as valuable thought leadership by our clients, with topics such as Nuclear En-
ergy, Sustainability, Smart Metering and Smart Grid, Integrated Oil Operations and Content
Management

Our European Energy Markets Observatory, this year in its 12th edition, is an annual report
that tracks the progress in establishing an open and competitive electricity and gas market
in Europe as well as the progress on security of supply and the European Union Climate-
Energy package objectives

The annual Platts/Capgemini Utilities Executive Study provides an overview of the electric
and natural gas industry from executives throughout North America

Our industry experts present our thoughts and points of view at major conferences worldwide

We collaborate with industry-leading partners including SAP, Oracle, Intel, Cisco, HP, GE
and Ventyx

Over many years we have built with our partners an active Smart Energy Alliance (Capgem-
ini, Cisco, GE, HP, Intel and Oracle) to promote smart grids and smart meters
I wish to convey Capgemini’s sincere congratulations to all nominees and winners of the
2010 Platts Global Energy Awards for their leadership and commitment to serving their em-
ployees, customers, business partners and shareholders.
Warmest Regards,
Colette Lewiner
Global Sector Leader, Energy, Utilities and Chemicals
Capgemini
84 insight December 2010
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AES Dominicana, located and operating in the
Dominican Republic since 1997, encompasses three
electrical generating companies, AES Andres, B.V. and
Dominican Power Partners (DPP), 100% owned by
AES Corporation; and Itabo, S.A., with 50% ownership
by AES Corporation, and 49.97% by the Dominican
Government, through the Fund of Reformed State-
Owned Enterprises (FONPER).
AES Dominicana, through its AES Dominicana
Foundation, which has been operating since July
2007, has been developing projects in crucial areas of
society such as culture, sports, education, the environ-
ment and health. These projects focus specially on the
localities near the sites of the AES Dominicana energy
production plants and the communities it serves.
With an elevated sense of commitment to social
responsibility, cutting edge technology, modern port
facilities and diversi⇒ed fuel offering, AES Domini-
cana has positioned itself as the principal player in the
energy sector, with US$800 million in investments.
AES Dominicana has 815 MW installed capacity.
AES Andres energy complex, a natural gas ⇒red com-
bined cycle with 319 MW capacity, is the main power
plant satisfying the demand of the country; with an
international port, LNG re-gasi⇒cation installations,
a 160,000 M3 Lique⇒ed Natural Gas (LNG) storage
tank and a 34-KM gas pipeline that connects with AES
owned DPP, which has two natural gas open-cycle
units with 236 MW capacity.
Itabo, S.A. has two coal ⇒red units with 260MW
capacity. Itabo, like Andres, is a base plant, since they
both operate under the scheme of marginal costs. An-
dres and Itabo make up part of the most economical
units, along with hydro generators.
To consolidate its leadership, AES Dominicana is the
only group with two deep-water port infrastructures.
AES Dominicana uses the synergy between all of its
businesses to create the strength that consolidates it as
a young and ef⇒cient Dominican group committed to
national development, adding value for its clients, and
always promoting the values of AES Corporation.
As a business group, it combines a global perspec-
tive with deep local knowledge, an untiring commit-
ment to operational excellence, helping communities
grow through a safe and reliable supply of energy.
AES Dominicana Infrastructure
Dominican Power Partners (DPP, LOS MINA 1997)

First AES investment in the Dominican Republic.

Two natural gas turbines 118 MW, each in open
cycle located in Santo Domingo Este.

Base load dispatch.

100% AES ownership.
ITABO S.A., (EGE-ITABO, 1999)

Two coal-based power plants, 130 MW each.

Coal port of 580 meters in length, and capacity for
1,300 tons per hour.

Ownership: 50% AES and the remaining owned by
the Dominican Government (FONPER) and minor-
ity shareholders (former employees).
AES Andres (2000)

319 MW combined-cycle generation.

Port for receiving liqui⇒ed natural gas (LNG).

LNG storage capacity of 160,000 m3.

34 kilometer gas pipeline to DPP.

Commercial operation day, December 1, 2003.

100% AES ownership.
Truck LNG Loading Terminal

Capacity for 2 simultaneous trucks (one hour process).

Loading rate of 68 m3/h.

Possibility to expand two additional loading bays.

Capacity to dispatch 18 TBtu/year.

Located within the AES Andres complex.
Over the last two years the company has achieved
extraordinary operational and ⇒nancial results. AES
Dominicana personnel, at all levels in the company,
are the driving force behind these improvements. In
each one of the businesses, the people are motivated to
⇒nd ways to achieve results in four key areas: optimiz-
ing the assignment of capital, increasing the ef⇒ciency
of the work processes, collecting and protecting in-
come, and mitigating high-impact operational risks.
AES Dominicana
Marco De la Rosa
CEO
AES Dominicana
Statistics

Employees: 296

Investment: US$800 million

Installed Capacity: 815 MW

Fuel Matrix: Natural Gas and Coal

Energy sold in 2009: 619.9 US$MM

Market Share: 37%
December 2010 insight 85
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In El Salvador we serve 80% of the national electri-
city market through our four distribution companies.
At AES El Salvador, we are convinced that electric
energy is a critical element for economic growth in a
country and the progress of its people, as it enables
the continuity and quality of production activities for
industry and commerce.
We consider electricity the core of our company. It
is doubtlessly at the heart of great global challenges.
Electricity use grows, and at the same time electric en-
ergy brings crucial value to a society and its economic
development, in addition to having a direct impact
upon the environment.
Therefore it is essential to ensure a sustainable
electricity sector committed to implementing projects
that facilitate access to electric energy for the neediest,
to inform and educate people for the rational and safe
use of electricity, as well as to generate actions ori-
ented toward conserving the environment.
Focusing Our CSR Efforts
Our concrete actions provide sustainability to
these initiatives when we make them also part of our
entrepreneurial objectives. Thus, we focus our social
responsibility in the community on three main pillars:

AES Rural Power: Currently more than 26 thou-
sand families have bene⇒tted from rural electri⇒ca-
tion projects carried out jointly with the national
government, municipal of⇒ces and local commu-
nities, aimed at having El Salvador 100% electri⇒ed.
Thanks to the agreement signed with the Millen-
nium Challenge Corporation, from 2009 to 2012
we will be bringing electric energy to 25 thousand
households in 94 municipalities, thus contributing
to poverty reduction in the Northern zone of the
country.

AES Education: With our “Magic Energy” educa-
tional program, since 2007 we have provided educa-
tion to more than 110 thousand children and adults
throughout the country on the safe and ef⇒cient
use of electric energy and environmental protec-
tion. We have been able to do this in part thanks to
the establishment of strategic alliances with inter-
national organizations focused on children, youth
development and education, as well as with import-
ant universities and internal volunteers from AES El
Salvador companies.

AES Environment: Through our “Recycle!” pro-
gram we make available in a practical and access-
ible way to all citizens the possibility of contributing
to environmental protection by turning our cus-
tomer service of⇒ces into paper recycling centers.
We also joined efforts with Salvanatura, a recog-
nized environmental NGO in the country, to protect
the El Imposible and Los Volcanes National Parks,
channeling the results of our “Recycle!” program to
bene⇒t these unique forest reserves in El Salvador.
Actions Based on Values
Our corporate values—Put Safety First, Act with
Integrity, Honor Commitments, Strive for Excellence
and Have Fun through Work—are promoted within
the organization and expressed through our actions
toward our colleagues, clients, contractors, providers,
shareholders and with the communities whom we
serve. Through practicing our values we direct our
actions, understand the challenges that lie ahead and
orient our decision-making.
As global companies, our corporate values are a fun-
damental axis for all of our actions, and the foundation
upon which we make all of our business decisions in
the countries in which we operate around the world.
AES El Salvador
Through our distribution companies CAESS,
CLESA, EEO and DEUSEM, we serve 80% of the
national electricity market, delivering power to
over a million customers.
www.aeselsalvador.com
The AES Corporation

A Fortune 500 company, 29 years experience, 27
thousand employees, operations in 29 countries on
⇒ve continents, 14 energy distribution companies,
installed capacity to generate 40,330 MW, 120 power
plants. Generation sources: natural gas, biomass,
water, mineral coal, diesel, wind and other sources.
www.aes.com
AES El Salvador
Abraham A. Bichara Handal
CEO
AES El Salvador
86 insight December 2010
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American Municipal Power, Inc (AMP) is the
nonpro⇒t wholesale power supplier and services
provider for 128 member municipal electric systems
in six states; Ohio, Pennsylvania, Michigan, Virginia,
Kentucky and West Virginia. AMP is headquar-
tered in Columbus and its members serve more than
570,000 customers.
Marc S. Gerken, P.E., has led the organization
as President/CEO since 2000. Gerken has worked
extensively on public sector infrastructure projects,
and he is a former city manager of Napoleon, Ohio.
In that capacity he served as a member of the AMP
Board of Trustees, chairing the committee overseeing
construction of the 42 MW Belleville Hydroelectric
Plant. Nationally, he is a long-time executive commit-
tee member of the American Public Power Association
Board of Directors and is the past board chair.
The AMP Board of Trustees, comprised of munici-
pal of⇒cials from member communities, is actively
engaged in policy-making and provides strong leader-
ship to the organization.
AMP’s Mission

Develop, manage and supply diverse, competitively
priced, reliable wholesale energy to members

Provide other services to members, including ⇒nan-
cial, technical, regulatory compliance, generation, le-
gal, mutual aid coordination, training, environmen-
tal stewardship, public affairs and energy ef⇒ciency
Organizational Growth

Since 2000, membership grew from 83 communities
in three states to 128 communities in six states

System peak increased from approximately 2,100
MW to more than 3,000 MW

Energy sales increased from 5.8 million MWh to
10.7 million MWh

Energy sales revenue increased from $231 million to
$740 million
Financial Strength

Since 2000, all AMP project ⇒nancing and entity rat-
ings have been in the “A” category

AMP works to maintain these ratings through its
member credit scoring program, sound ⇒nancial
practices and relationship management

AMP’s ⇒nancial strength and strong management
have been consistently recognized by rating agencies.
Project Development

Aggressive generation asset development effort
designed to diversify power supply portfolio and
reduce market exposure underway

Proven track record, including the Belleville Hydro-
electric Plant, the AMP Wind Farm (the ⇒rst utility-
scale wind farm in Ohio) and distributed generation

Generation asset development effort underway will
add more than 1,400 MW of generation capacity

AMP’s portfolio of owned/controlled generation
will be approximately 18% renewable by 2015

Largest deployment of new run-of-the-river hydro-
electric generation in the country today

Six projects at existing dams on the Ohio River
will add more than 400 MW of renewable energy
generation

Three projects are under construction with the
remaining projects in the licensing and permitting
phases

Largest equity-owner of the 1,600 MW Prairie State
Energy Campus, a coal generation facility under
construction in Illinois incorporating state-of-the-art
emissions control technologies

Proposed 600 MW natural gas combined-cycle plant
under development in Ohio

Additional wind solar and land⇒ll gas being pur-
sued including up to 300 MW of distributed solar
Project Financing

AMP has been awarded Clean Renewable Energy
Bonds (CREBs) in each year the bonding authority
has been available, receiving a total of $172.9 mil-
lion since 2006

Includes a 2009 allocation of $143.7 million, the larg-
est allocation of CREBs to a single entity that year

Allocations validate AMP’s position of providing
a range of energy options to members and being
leaders in the deployment of renewable generation

Public power leader in the use of Build America
Bonds, to date issuing nearly $1.2 billion to fund
project construction
American Municipal
Power, Inc
Marc S. Gerken, P.E.
President and CEO
American Municipal Power, Inc
December 2010 insight 87
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ARMZ is one of the largest uranium producers in the
world. The company is wholly owned by Rosatom—
the Russian State Corporation controlling the nation’s
nuclear activities—and is the mining arm of the Russian
nuclear industry operating all of the country’s uranium
mining assets. It is currently ranked as the world’s
second largest uranium mining corporation by resource
base. In 2009, ARMZ increased uranium output by 25%
to 4624 tons at its mines in Russia and abroad.
Despite its success, ARMZ was born from signi⇒-
cant restructuring only a few years ago. In 2005, the
company was signi⇒cantly restructured and adopted
a new strategy of securing uranium mines abroad.
At the outset, the company realized that in order to
compete it needed to adopt a transparent management
system and a reporting style that conformed to best
international practices.
With growth of operations, ARMZ has also experi-
enced a meteoric rise in its pro⇒le worldwide. In 2009,
it made its biggest foreign acquisition—securing 20%
stake in publically listed Uranium One. In 2010, the
company moved further by acquiring a controlling
stake in Uranium One. These two transactions ⇒rmly
established ARMZ as the most dynamic uranium
miner in the world and have propelled the company
in numerous rankings.
ARMZ’s objective is to become the leading uranium
miner globally.
ARMZ Uranium
Holding Co
Statistics

Uranium output in 2009—4,624 tons

Uranium output growth in 2009—25%

Uranium resource base—632,000 tons by January 1, 2010

Employees—10,000

Revenue in 2009—$967 million
Panoramic view of JSC Khiagda.
88 insight December 2010
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Cairn India is one of the largest independent oil and
gas exploration and production companies in India. It is
headquartered in Gurgaon near Delhi and has material
exploration and production positions in ten blocks in In-
dia and one in Sri Lanka. Cairn produces oil and gas from
three blocks in India: Ravva in Andhra Pradesh, CB/
OS-2 in the Cambay Basin in Gujarat and RJ-ON-90/1 in
Rajasthan. In 2007, Cairn India was listed on the National
and Bombay Stock Exchanges and to date has a market
capitalization of more than USD 14 billion.
Cairn has been operating in India for 15 years and
has played an active role in developing the oil and gas
resources in the country. The Mangala ⇒eld discovered
in January 2004 near Barmer, Rajasthan, is the largest
onshore oil discovery in India in more than 20 years.
The Mangala, Bhagyam and Aishwariya ⇒elds have re-
coverable oil reserves and resources of approximately
1 billion barrels, which includes proven plus probable
(2P) gross reserves and resources of 685 million barrels
of oil equivalent (mmboe) with a further 300 mmboe or
more of enhanced oil recovery (EOR) potential.
In total, there have been 25 discoveries on the Rajast-
han block and the company is focused on exploiting the
full potential. Cairn India will account for more than
20% of India’s domestic crude oil production when the
Rajasthan ⇒elds reach the current approved plateau
production rate of 175,000 barrels of oil per day in 2011.
Cairn India has developed a strong pool of skilled
manpower over a decade of its operations in India.
The people that Cairn employs represent the founda-
tion of this multicultural organization. Over the years,
Cairn has employed some of the brightest minds in
the industry and the skills of these people are critical
to the success of the organization.
Health, safety and the environment are integral to
Cairn India’s business management and the company
is committed to working with all stakeholders to de-
liver material growth.
Working with the government of India, state govern-
ments and joint venture partners, Cairn has developed
an in-depth understanding of the regulatory environ-
ment and, more importantly, has laid the foundations
for the strong relationships that are needed to help
provide some of the energy needs of the country.
Cairn also has an extremely positive approach to
working with local communities. This has enabled
them to make substantial progress with their project
while minimizing the negative impact on local people.
Working with IFC, Cairn has set up an Enterprise
Centre that provides skills training schemes to enhance
local employment as well as medical, social and micro-
⇒nance programs. As an acknowledgement of our
commitment to society, Cairn India received the TERI
Corporate Award for Social Responsibility 2008 for the
Micro-Vendor Development Programme at Ravva.
Rahul Dhir, Managing Director & CEO
Mr. Rahul Dhir, 44, joined Cairn India in May 2006 as
the chief executive of⇒cer and was appointed the man-
aging director on August 22, 2006. He completed his
bachelor of technology degree from the Indian Institute
of Technology, Delhi. He went on to complete his M.Sc
from the University of Texas at Austin and MBA from
the Wharton Business School in Pennsylvania.
Rahul started his career as an oil and gas reservoir
engineer before moving into investment banking. He
has worked at SBC Warburg, Morgan Stanley and
Merrill Lynch. Before joining Cairn India, he was the
managing director and co-head of energy and power
investment banking at Merrill Lynch.
Rahul’s commitment has contributed to making the
company a USD 14 billion enterprise and his vision to
further explore the different hydrocarbon basins has
put Cairn India on a strong growth trajectory.
Cairn India Limited
Rahul Dhir
Managing Director and CEO
Cairn India Limited
Statistics
Project Completed

Ravva and Cambay Development

Commissioning of the Mangala Processing Terminal

Commissioning of the Mangala to Salaya crude pipe-
line—longest continuously heated and insulated pipeline
in the world
Employees — ǔ1,300
Sales — >165,000 barrels of oil equivalent per day
Crude Processing Capacity

Rajasthan—205,000 barrels of oil per day (bopd) with
scope for further expansion

Ravva—Oil, 70,000 bopd, and natural gas, 95 million
standard cubic feet per day (mmscfd)

Suvali—Oil, 10,000 bopd, and natural gas, 150 mmscfd
Certi⇒cations — ISO 14001 and OSHAS 18001
December 2010 insight 89
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In 1935, Cleco Corp began as an ice company in a
small south Louisiana town. Seventy-⇒ve years later,
the company’s regulated subsidiary, Cleco Power
(Cleco), is a focused integrated electric utility, prov-
ing through skill and determination a smaller com-
pany can produce big results for its customers and
shareholders.
Cleco serves nearly 300,000 customers throughout
Louisiana and operates four power generators with
3,800 megawatts of nameplate capacity. Cleco owns
2,539 megawatts of this capacity.
Operational Performance
Cleco recently completed the foundation of its
long-term growth strategy by putting into service the
largest unit in its generation ⇓eet, Madison 3. This
facility is a net 600-megawatt multi-fuel generator that
has the capability of using biomass fuels to produce
electricity. The unit is among the largest using circu-
lating ⇓uidized-bed technology and is currently using
petroleum coke, a waste product of the oil re⇒ning
industry, for fuel. In addition, Cleco recently acquired
one of the most ef⇒cient generating units in the state, a
combined-cycle unit named the Acadia Power Station.
This 580-megawatt unit’s low heat rate makes using
natural gas an effective way to provide cost-ef⇒cient
reliable power.
To ensure the company has adequate transmis-
sion to deliver power, Cleco is investing in the larg-
est transmission project in its history. The growth in
south Louisiana has made it dif⇒cult for power to ⇓ow
through the existing transmission system during times
of peak demand. By building new transmission infra-
structure and upgrading existing equipment, Cleco
and two other area utilities are helping to alleviate
power constraints and allowing for greater ⇓exibility
in energy supply.
Financial Performance
Adding Madison 3 and the Acadia Power Station to
its existing generation ⇓eet has more than doubled the
utility’s rate base and increased its generation capacity
by more than 85%. At the time of Madison 3’s ground-
breaking, Cleco’s net property, plant and equipment
assets were approximately $1.3 billion and this project
alone had a cost of $1 billion. Knowing that funding
the plant would be a challenge, the company started
early and signi⇒cantly completed project ⇒nancing
prior to the 2008 economic downturn.
Cleco’s growth strategy is proving to have a posi-
tive impact on stock price as the corporation’s stock
has repeatedly achieved lifetime highs during 2010.
In addition, Cleco Corporation increased its dividend
payment by 11% effective May 2010.
Cleco Corporation also has been recognized by the
Edison Electric Institute for exceptional shareholder
return. The company claimed the 2009 Index Award
in the small market capitalization category for earning
a 76.3% total shareholder return for ⇒ve years ending
September 30, 2009.
Cleco Corporation
Michael H. Madison
President and CEO
Cleco Corporation
Statistics

Employees: 1,289

Total power sales in 2009: 9.1 million kWh

Owned generation: 2,539 megawatts (regulated),
1,065 megawatts (merchant/tolled)

11,571 distribution circuit miles

1,224 transmission circuit miles

Capitalization: $1.88 billion
90 insight December 2010
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Chesapeake Energy Corporation was founded in
1989 by its CEO, Aubrey K. McClendon, and former
President and COO, Tom L. Ward. Today Chesa-
peake is the second-largest producer of natural gas,
a Top 20 producer of oil and natural gas liquids
and the most active driller of new wells in the US.
Headquartered in Oklahoma City, the company’s
operations are focused on discovering and develop-
ing unconventional natural gas and oil ⇒elds onshore
in the US. Chesapeake owns leading positions in the
Barnett, Fayetteville, Haynesville, Marcellus and
Bossier natural gas shale plays and in the Eagle Ford,
Granite Wash and various other unconventional
liquids-rich plays. The company has also verti-
cally integrated its operations and owns substantial
midstream, compression, drilling and oil⇒eld service
assets. With more than 9,700 employees and an enter-
prise value of approximately $31 billion, Chesapeake
intends to continue leading the industry in develop-
ing greater supplies of US unconventional natural
gas and liquids in the years ahead.
Operations Strategy
Through strong leadership, investment in technol-
ogy and an aggressive land acquisition program in
shale plays, Chesapeake has built the industry-lead-
ing shale position. Chesapeake is the only producer
to have #1 or #2 positions in the Haynesville, Mar-
cellus, Barnett, Fayetteville and Bossier Shale plays.
Additionally, we now own the largest inventory of
leasehold in two of the Top 3 new unconventional
liquids-rich plays—the Eagle Ford Shale and the
Niobrara Shale.
McClendon’s strategy is also focused on advanta-
geous joint venture agreements with world class
partners and executing a sophisticated commodity
hedging strategy that consistently delivers cash gains
and increases the overall natural gas and oil price
realizations for Chesapeake.
Natural Gas Advocate
Chesapeake has taken a leadership position in educat-
ing policymakers, the press and the public about natural
gas. Its key message is that natural gas is clean, afford-
able, abundant and American. With a more than 120-year
supply in the United States, natural gas is clearly the best
scalable green energy solution for the country, reducing
the nation’s dependency on foreign oil and keeping jobs
and money in the US. To help deliver these messages,
Chesapeake provided funding to form the American
Clean Skies Foundation, a Washington, D.C.-based think
tank dedicated to promoting energy conservation and the
greater use of cleaner fuels, including natural gas. The
company also is committed to its CNGNow initiative,
which promotes the use of compressed natural gas as a
transportation fuel. Chesapeake is very active in Ameri-
ca’s Natural Gas Alliance (ANGA), which includes 29 of
the nation’s largest independent natural gas producers.
Community Minded
In every community where Chesapeake operates, it is
committed to building partnerships in education, com-
munity development, social services and health. In 2010,
Chesapeake has committed over $22 million to charitable
giving. Chesapeake sets high standards in service, and
strongly encourages employees to do the same. During
the 2010 United Way campaign for central Oklahoma,
the company and its employees contributed a record $4.1
million, more than twice the level given by any donor in
central Oklahoma. Additionally, Chesapeake employees
donated more than 30,000 volunteer hours in 96 commu-
nities across all of Chesapeake’s operations.
Chesapeake Energy
Corporation
Aubrey K. McClendon
Chairman of the Board
President and CEO
Chesapeake Energy Corporation
Statistics
Net Acres (in millions): 13.8
Q3 2010 Daily Production (mmcfe/d): 3,043
Q3 2010 Proved Reserves (tcfe): 16.7
Q3 2010 Risked Unproved Resources (tcfe): 102
YTD Revenues (in millions): $7,392
YTD Adjusted Net Income (in millions): $692
Market Capitalization (in millions): $16,742
Employees: 9,700
92 insight December 2010
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CONSOL Energy, the leading diversi⇒ed coal and
gas producer in the eastern United States, is a mem-
ber of the Standard & Poor’s 500 Equity Index and the
Fortune 500. It was recently named one of the “Top
100 Most Trustworthy” companies for 2010 by Forbes.
CONSOL Energy has annual revenues approach-
ing $5 billion, operates 11 bituminous coal mining
complexes in six states, reports proven and probable
coal reserves of 4.5 billion tons and has annual coal
production of nearly 70 million tons. It is also the
region’s leading gas producer, with proved reserves
of 2.9 trillion cubic feet.
Led by Chairman, President & CEO Brett Harvey,
CONSOL Energy has established ⇒ve core corporate
values: safety, compliance, continuous improvement,
productivity and cost control. Safety is of primary
importance to CONSOL Energy, which has earned the
reputation as the nation’s safest coal and gas produc-
er, with accident incident rates far below the national
averages for the energy industry.
In addition, CONSOL Energy continues with its ef-
forts to ensure that the extraction and use of important
coal and gas resources are consistent with the protec-
tion of our natural environment. One example of these
efforts is that CONSOL Energy maintains the largest
R&D group in the industry devoted exclusively to
burning coal more cleanly.
Coal still accounts for about 70% of CONSOL En-
ergy’s earnings, and in terms of our coal operations
in the eastern United States, CONSOL leads the coal
industry in revenue, net income and the production
and reserves of high-quality bituminous coal.
While coal will continue to be an important busi-
ness unit for CONSOL, the company has taken dra-
matic steps recently to increase its natural gas busi-
ness. This past spring, CONSOL acquired the oil and
gas exploration and production business of Dominion
Resources Inc.
As a result of the $3.475 billion agreement to acquire
Dominion’s E&P business, CONSOL Energy will be the
largest, and among the fastest growing and lowest cost
producers of natural gas in the eastern United States. In
addition, it gives the company a leading position in the
strategic Marcellus Shale fairway by tripling our devel-
opment assets to approximately 750,000 acres.
During that same period, CONSOL Energy an-
nounced an agreement to make an offer to acquire all
of the shares of CNX Gas common stock that it did not
previously own. The buy-back of CNX Gas shares was
completed last summer.
Collectively, coal and gas fuel about 70% of all US
power generation, which places CONSOL Energy in a
very favorable position to seize opportunities presented
in the marketplace for both fuels. With CONSOL En-
ergy’s coal and gas reserves located mainly east of the
Mississippi River, this gives the company an advantage
as one of the major fuel suppliers to users in the north-
eastern quadrant of the United States, with its high
population density and increasing demand for energy.
According to the Energy Information Administration,
demand for coal is expected to grow by 28% and for gas
the expectation is it will grow by 38% by 2035.
Additional information about CONSOL Energy can
be found at its web site: www.consolenergy.com.
CONSOL Energy Inc
J. Brett Harvey
Chairman, President and CEO
CONSOL Energy Inc
Fast facts

Began operations in 1864.

Through its subsidiary, CNX Land Resources Inc, has
timber and environmental enhancement projects, as well
as commercial real estate development ventures and
property leasing activities for energy production.

Maintains a ⇓eet of 29 vessels and 650 barges. CONSOL’s
river operations annually transport nearly 20 million
tons of coal, including about 7 million tons produced
by CONSOL Energy, along the inland waterways of the
United States.

Its subsidiary, Fairmont Supply, is a full-line distributor
of mining and industrial supplies.
December 2010 insight 93
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Ramping Up Energy Ef⇒ciency
In October 2008, the Michigan legislature passed
PA 295, also known as the known as the “clean, re-
newable and ef⇒cient energy act.”
The new legislation was designed to promote
energy optimization. It implemented standards to
cost-effectively diversify state energy resources and
promote private investment in energy ef⇒ciency.
An Ambitious Ramp-Up
Initially, DTE Energy and other Michigan utilities
were faced with some extraordinary ramp-up chal-
lenges due to the time line embedded in the legisla-
tion. The law required a series of actions among the
commission and utilities to establish temporary rules
and ⇒le plans.
In ⇒ve months, the DTE Energy team:

Filed design plans for both Detroit Edison and
MichCon, although the two are run as one com-
bined program,

Supported its plans during contested case hearings,

Hired ⇒ve implementation contractors and one
Evaluation, Measurement & Veri⇒cation (EM&V)
contractor, and

Established a tracking and call tree infrastructure.
Core programs included ENERGY STAR
®
lighting
and appliances, HVAC, audit and weatherization, low
income, multifamily direct install, appliance recycling,
and prescriptive and non-prescriptive commercial and
industrial programs. At the same time, the team used
customer research to establish a program identity
(Your Energy Savings), strategy, logos and web site.
All this was accomplished while the energy compa-
ny was operating within one of the most challenging
economic circumstances in its history.
Extraordinary Results
The campaign launched in June 2009, and set the pace
to far surpass the energy savings goal outlined in the leg-
islation. The 2009 year-end results were extraordinary.
Nearly 45,000 business and residential customers
participated directly in the program through rebates
and services. In addition, more than 300,000 customers
purchased 2.1 million discounted compact ⇓uorescent
light bulbs through local retailers.
As a result, DTE Energy surpassed the original plan
for gas and electric savings. Detroit Edison saved 203
GWh and MichCon saved 0.250 BCF. This equates to
0.42% of electric sales and 0.14% of gas sales in savings.
Customer research supports these numbers. Pro-
gram awareness started at 41% after launch and rose
as high as 49%. In the ⇒rst half of 2010, this awareness
number has increased into the low 60s.
Customer-Focused Program
The strategic vision of the Your Energy Savings
program is to enable customers to reduce their en-
ergy bills by actively controlling, and reducing, their
energy use. Programs were designed to cover as much
of the customer base as possible, in order to build
engagement.
The ultimate goals for the program re⇓ect this cus-
tomer focus. They include:

All customers believe that DTE Energy is helping
them with their energy bills by offering relevant
programs and valuable education forums.

Employees from across the company are aware of
the programs and are energy ef⇒ciency advocates.

Programs are designed with the customer in mind,
and are executed without defects.

Our regulatory relationship is fully aligned, our
⇒lings transparent and error free and we spend our
money prudently in the eyes of the customer.

We provide only those programs that are truly
valuable to customers, and both Detroit Edison
and MichCon earn their performance incentive
every year.
Company Pro⇒le
DTE Energy (NYSE: DTE) is a Detroit-based diversi-
⇒ed energy company involved in the development and
management of energy-related businesses and services
nationwide. Its operating units include Detroit Edi-
son, an electric utility serving 2.1 million customers in
Southeastern Michigan, MichCon, a natural gas utility
serving 1.2 million customers in Michigan and other
non-utility, energy businesses focused on gas storage
and pipelines, unconventional gas production, power
and industrial projects, and energy trading.
DTE Energy
Gerard M. Anderson
CEO
DTE Energy
94 insight December 2010
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Green Gas International builds, owns and operates
plants around the world that convert methane and
waste from coal mines, land⇒lls, wet and dry biomass
into clean energy and carbon credits. The company of-
fers an integrated management solution covering the
entire value chain, including: project design, ⇒nance,
project management, operations, maintenance, carbon
credits and power sales. With operations spanning
around 50 projects in nine countries, Green Gas is
headquartered in the Netherlands and currently has
some 500 employees.
The company focuses on smaller clean energy proj-
ects requiring USD 5-30 million of initial capital in-
vestment. The size of these projects and the fragmen-
tation of the market often make it dif⇒cult to bring
the necessary technical and management resources
to bear to ensure a superior return on investments.
Partnering with ⇒nanciers, investors and resource
owners, Green Gas gives focus to what is often a
non-core business for them, using the management
and operating platform of Green Gas to create a more
predictable outcome from the execution and opera-
tion of these projects.
Green Gas, through its specialist knowledge of gas
management, enhances the principal business of its
customers, through improved safety and productiv-
ity and improved environments in and around cus-
tomers’ operations. Green Gas offers a commercially
attractive solution and brings economic bene⇒ts to
local communities.
Since its foundation in July 2005, Green Gas has
developed rapidly. It achieved a compound annual
growth (CAGR) in revenue of 354% between 2006 and
2009, with revenues of USD 80 million in 2009. Earn-
ings before interest, tax, depreciation and amortisation
(EBITDA) grew from a negative USD 3 million in 2006,
to USD 9.6 million in 2009, representing a CAGR in
EBITDA of 379% between 2006 and 2009.
In addition to achieving organic growth, Green Gas
has successfully completed a number of signi⇒cant
mergers and acquisitions. In 2006, the company ac-
quired G.A.S. Energietechnologie, Germany—a leader
in the construction and operation of combined heat
and power (CHP) plants. Concurrently, it acquired
Hofstetter Umwelttechnik of Switzerland, a prominent
combustion technology and equipment supplier. In
2007, Green Gas merged with OKD, DPB of the Czech
Republic, a coal mine methane (CMM) company with
local operations and 50 years experience in coal mine
services, CMM management and utilization.
From the outset, Green Gas has been led by Chris
Norval, Executive Chairman and CEO. It now counts
on an international team of experts drawn from a
variety of backgrounds, including: mining, power,
gas management, carbon credits and environmental
protection. In less than ⇒ve years, Green Gas has built
an industrial platform, by combining companies and
technologies to address a completely new market
evolving from the global focus on climate change. The
result is a truly integrated Green Gas solution, adding
the necessary technology and expertise in the clean
energy/climate change mitigation industry.
Green Gas International B.V.
Jachthavenweg 109h
1081 KM Amsterdam
The Netherlands
T: +31 (0)20 570 2250
F: +31 (0)20 570 2222
www.greengas.net
Green Gas International
Chris Norval
Executive Chairman and CEO
Green Gas International
December 2010 insight 95
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Kosmos Energy is a premier international indepen-
dent oil exploration and production company with
major oil discoveries offshore West Africa. Kosmos’
⇒nds include the giant Jubilee Field in Ghana’s deep
waters, which was one of the largest oil discoveries
worldwide in 2007 and the biggest ⇒nd offshore West
Africa during the last decade. The Dallas-based com-
pany, as technical operator for development of the Ju-
bilee Field and leader of the Integrated Project Team,
is developing Jubilee on an aggressive timetable with
⇒rst production expected in late 2010 only three-and-
a-half years after discovery. With seasoned leadership,
a proven track record and a solid ⇒nancial founda-
tion, Kosmos is well positioned to continue delivering
substantial value to its investors.
Focus: Africa
Kosmos was founded in 2003 when members of
the company’s senior management team, backed by
leading private equity ⇒rms Warburg Pincus and
The Blackstone Group, sought to replicate and build
on the success they had at Triton Energy where they
explored for and developed oil and gas reserves in
West Africa’s Gulf of Guinea. Kosmos chose to focus
on West Africa because it contains some of the world’s
most proli⇒c hydrocarbon systems that are largely
undeveloped, has a competitive cost structure and
has host governments that are eager to develop their
countries’ natural resources.
Financial Strength
Kosmos has raised nearly US$2.3 billion in commit-
ted capital to pursue its strategy in West Africa. War-
burg Pincus and The Blackstone Group have provided
Kosmos with substantial equity commitments, and a
consortium of international lenders has provided Kos-
mos with more than $1.2 billion in debt commitments.
Strategy for Success
Kosmos’ strategy is to pursue drill bit success by
generating exploration ideas, nurturing them to drill-
ing, and then expediting ⇒eld appraisal and devel-
opment. The company’s exploration focus, which is
deeply rooted in a fundamental, geologically based
approach, is on emerging petroleum systems where
source rocks and reservoirs have been established,
but where commercial discoveries have yet to be
made. This strategy and focus help accelerate coun-
tries’ development of their natural resources and
maximize Kosmos’ upside potential. Additionally,
Kosmos forms partnerships with established industry
players and host governments, accesses a strategic-
scale interest in each project and manages entire
ventures when possible.
The Kosmos team comprises some of the indus-
try’s best and brightest. The company’s explorers use
a winning combination of innovative thinking and
proven technology to ⇒nd oil in areas labeled unpro-
spective by others. Kosmos’ in-house technical team
includes individuals with complementary areas of
expertise that span the exploration process, including
geology, geophysics, geochemistry, reservoir engi-
neering and other associated disciplines. Integration of
these disciplines is key to creating Kosmos’ competi-
tive advantage.
Solid Corporate Citizen
Kosmos is a solid corporate citizen that is helping
countries develop their energy industries by hiring and
training local residents and building indigenous ener-
gy-related organizations to create legacies of oil and
gas expertise. The company reinvests in its operational
areas, and builds and maintains cooperative relation-
ships that empower communities and local businesses.
Kosmos is sensitive to the preservation of the environ-
ment and is dedicated to making a minimal impact on
the surroundings in its operational areas.
Kosmos Energy
Brian Maxted
COO
Kosmos Energy
Highlights

Founded in 2003 by seasoned management team with
backing by Warburg Pincus and The Blackstone Group

Established new, signi⇒cant oil province with Jubilee
discovery offshore Ghana in 2007

Made four subsequent hydrocarbon discoveries offshore
Ghana to date

Commencing Jubilee oil production in late 2010, only 3.5
years after ⇒eld discovery
96 insight December 2010
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North Delhi Power Limited (NDPL) is a joint
venture of The Tata Power Company Limited (part
of TATA Group, the largest business house in India),
and the Government of Delhi, India, with the major-
ity stake and control held by Tata Power. The com-
pany, incorporated as part of the Delhi Power Sector
Reforms process, commenced distribution of power
in North Delhi from July 2002, post unbundling and
privatization of the government-owned, vertically
integrated State Electricity Board. With a registered
consumer base of 1.2 million and peak load of around
1315 MW, the company’s operations span across an
area of 510 sq kms.
NDPL is the frontrunner in implementing power
distribution reforms in the capital city and is acknowl-
edged for its consumer friendly practices. Since priva-
tization, the Aggregate, Technical and Commercial
losses in the NDPL area have been reduced to around
14% from 53% in July 2002, an unprecedented reduc-
tion of around 74% in less than eight years.
On the power reliability front, too, there has been
signi⇒cant improvement, with additional capex of
USD 530 million being incurred since takeover against
inherited (in 2002) asset base of USD 200 million. For
supplementing availability and enhancing reliability
of supply, NDPL is also establishing a 90 MW gas
based combined-cycle power project which is expect-
ed to be commissioned in January 2011.
The company, since inception, has taken the lead in
technology adoption, it being the only utility in the
country to implement systems such as SCADA, GIS,
GSAS, DMS and OTS. OMS implementation and a
smart grid pilot are presently underway. As a mem-
ber of the Global Intelligent Utility Network coalition,
NDPL is working with 10 other international utili-
ties and IBM to accelerate development of common
standards, technology solutions and processes for
intelligent networks.
NDPL has to its credit several ⇒rsts: SCADA-con-
trolled unmanned grid stations, GSM modem-based
AMR on a mass scale with more than 60% of its rev-
enues being billed through AMR, a GSM-based street
lighting system and a SMS-based fault management
system. Through innovative integration of CRM, back-
end processes and GIS, NDPL is the ⇒rst, and prob-
ably the only, utility in the country to offer “Same/
Next Day Connections.”
NDPL is a socially responsible organization which is
committed to inclusive growth in a sustainable man-
ner. The company has a well-de⇒ned three pronged
corporate sustainability strategy based on compensa-
tory, business-oriented and philanthropy approaches
which ensure win-win for both the company and the
society. Sensitive to the issue of climate change, NDPL
aims to be energy and water neutral (for its own
consumption) by 2015. NDPL is setting up solar plants
in its area, with a capacity of around 1.1 MW having
already been commissioned.
The company has won several accolades for pio-
neering efforts in power distribution. It has been
conferred the National Award for Meritorious Perfor-
mance thrice by the government of India. It also has
the distinction of being the ⇒rst Indian power distri-
bution utility to win the prestigious Edison Award in
2008 for Innovative Use of Technology and in 2009 for
Policy Advocacy. Some of the other key recognitions
include a Utility of the Year Award for four consecu-
tive years (2007 to 2010) by Asia Power, Singapore
and the Balanced Scorecard Hall of Fame Award in
2008 by International Palladium. Mr. Sunil Wadhwa,
MD NDPL, has been conferred Asia Power’s Most
Inspirational CEO of the Year Award 2008 and Udyog
Rattan (Industry Jewel) Award 2010 by the Indian
Institute of Economic Studies.
With its achievements in Delhi, NDPL is now look-
ing to extend its expertise in power distribution to
other Indian cities, as well as globally.
For additional information, please visit
www.ndpl.com.
North Delhi Power
Limited
Sunil Wadhwa
Managing Director
North Delhi Power Limited
December 2010 insight 97
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NRG Energy Inc is a Fortune 300 company that
owns and operates one of the country’s largest and
most diverse power generation portfolios. Head-
quartered in Princeton, NJ, our power plants provide
nearly 26,000 megawatts of generation capacity—
enough to supply nearly 21 million homes—includ-
ing power from a growing portfolio of low and
no-carbon sources such as nuclear, wind and solar
power. Our two retail businesses, Reliant Energy and
Green Mountain Energy Company, serve more than
1.8 million residential, business, commercial and
industrial customers.
At NRG, we believe that climate change is one of the
most signi⇒cant challenges facing our planet and we
want to be a part of the solution. NRG has completed
or is currently pursuing a variety of clean energy
initiatives, all of which are poised to create substantial
engineering, construction and operations jobs over
the next several years. We believe these efforts will
jumpstart critical reductions in our country’s carbon
and other air emissions, and decrease our country’s
dependence on foreign oil.
As part of that commitment on the generation
side, we are a leading ⇒nalist for a government loan
guarantee to build new American nuclear power
at our South Texas Project facility. This year, we’ve
also made substantial progress in solar power. NRG
owns the largest photovoltaic solar ⇒eld in Califor-
nia at Blythe, and we are building an even larger
PV project at Avenal. In California’s Mojave Desert,
NRG is the leading investor in Ivanpah, which—
when completed—will be the world’s largest solar
thermal project.
Our clean energy portfolio also includes four wind
farms in Texas and initiatives to develop biomass and
offshore wind projects at various locations. To address
existing fossil fuel plants, NRG is building a commer-
cial-scale carbon capture demonstration project, which
will test a process to reduce carbon emissions at one of
our Texas plants. This project will be among the ⇒rst
of its kind and is expected to be online in 2014.
In addition to generating more clean power, NRG
is also working on the retail side to support electric
vehicles and reduce emissions even further. Reliant
Energy is building the ⇒rst phase of a citywide public
network of fast-charging stations—an important step
toward making the transition to electric vehicles sim-
ple, practical and affordable. Reliant also has received
a government stimulus grant to expand the rollout of
smart energy solutions to residents statewide.
Green Mountain Energy gives its customers in
select markets nationwide the choice of buying their
electricity from clean generation sources. By provid-
ing clean, domestic sources of energy in combination
with the smart grid and an electric vehicle charging
infrastructure in the garage and on the road, our ef-
forts will improve America’s energy security, drive
industrial innovation and contribute to the ⇒ght
against global climate change.
NRG’s expertise in renewable energy extends
beyond our commercial projects and dovetails into
our NRG Global Giving efforts. In September, NRG
received recognition from the Clinton Global Initia-
tive for funding a project to expand the use of clean
solar energy in Haiti. By installing low-maintenance,
zero-fuel solar panels to power street lighting, water
irrigation, ⇒sh farming and other vital needs, the proj-
ect hopes to stimulate economic development in areas
that are in the process of recovering from the January
2010 earthquake.
With investments in solar, wind, nuclear power and
electric vehicle infrastructure, NRG is working to help
America transition to a clean energy economy.
NRG Energy Inc
David Crane
President and CEO
NRG Energy Inc
The third edition of the Singapore International
Energy Week (SIEW), which took place from October
27th to November 4th, engaged some 14,000 policy
makers, industry leaders and academics on issues
centered around the Smart Energy Economy and the
corresponding actions needed to build a sustainable
future in Asia and the rest of the world.
Mr. Lawrence Wong, Chief Executive of the Energy
Market Authority, which organized the seven day
event, said, “Singapore recognizes that no single city or
country will have all the answers. To succeed, we must
work together to strengthen the region’s framework for
energy co-operation, and share our experience and ex-
pertise. From the discussions and debates at this year’s
Singapore International Energy Week, we know that
governments and businesses have found it to be a useful
focal point for fruitful conversations and partnerships.”
The highlights of the Energy Week were the Sin-
gapore Energy Lecture, delivered by Singapore’s
Prime Minister Lee Hsien Loong, and the inaugural
Singapore Energy Summit, where smart actions that
promote energy sustainability and security such as ef-
⇒cient energy use, investment in technology, explora-
tion of renewable and alternative energy sources and
the smarter use of fossil fuels were discussed.
Adding further breadth to the Week were three
major energy trade shows and a myriad of dialogues,
roundtables and networking sessions all address-
ing the pertinent energy issues of the day. Climate
change, in the lead up to multilateral discussions in
Cancun, and the role of the private sector in the new
energy future were also highlighted throughout the
Week. The former, through in-depth discussions on
general policy perspectives, as well as those speci⇒-
cally represented by China, India and the United
States; and the latter, by way of business-focused
events dealing with the oil and gas industry, power
generation, carbon trading and clean energy ⇒nancing
and solutions.
The Singapore International Energy Week aims to
continue being the premier platform for key decision
makers to shift the energy agenda from discussion to
action, as Asia looks set to grow into the world’s larg-
est consumer of energy in future years.
98 insight December 2010
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Singapore International
Energy Week
Mark your calendars! SIEW 2011 will be held from October
31 to November 4, 2011, and will encompass a compre-
hensive schedule of conferences, exhibitions, networking
sessions and business matching opportunities. Visit www.
singapore.iew.com.sg for more information.
The program line-up will include key events such as:

Singapore Energy Lecture

Singapore Energy Summit

Carbon Forum Asia

Clean Energy Expo Asia

Asia Smart Grids Conference and Expo
Come meet with key energy policy makers, industry and
thought leaders to exchange best practices, see the latest tech-
nologies and turn discussion on issues-of-the-day into action!
SIEW 2011
S-OIL Corporation is a $ 14 billion integrated re⇒ning
company and a reliable supplier of petroleum, petro-
chemical and lube products to over thirty countries
around the world. Since its establishment in 1976,
S-OIL has shown outstanding performance by realizing
operational excellence and sound ⇒nancial structure.
Renowned for a successful joint venture with
Aramco Overseas Company, a subsidiary of Saudi
Aramco, and Hanjin Group, a world-leading company
in logistics and transportation, S-OIL has been able
to ensure the stable import of crude oil as well as a
steady supply of petroleum products.
S-OIL operates three CDUs with aggregate pro-
cessing capacity of 580 MB/D and a large-scale
Bunker-C Cracking Center, which consists of various
conversion processes such as Hydrocracker, RFCC,
RHDS, etc., through which most of residual crude is
upgraded into light and/or low sulfur products. In
addition, S-OIL produces basic raw materials for the
petrochemical industry; 740 KTA of Para-Xylene, 200
KTA of Benzene, and 200 KTA of Propylene, and has
a full line-up of API Group-III to Group-I lube base
oils with daily production capacity of 30,000 barrels,
which is the 2nd largest single-re⇒nery capacity in
the world.
S-OIL has been a forerunner of implementing a di-
versi⇒ed marketing strategy, supplying about 40% of
the re⇒ned products in domestic market while export-
ing the remaining 60% to over 30 countries includ-
ing Japan, China, the US and many other countries
around the globe.
Based on its core competitiveness, in 2009, S-OIL
was proudly awarded Downstream Operations of the
Year by Platts, named as one of Global 500 by Fortune,
and obtained the highest credit ratings among Asian
re⇒ners from S&P and Moody’s.
S-OIL has continuously made investments to further
improve pro⇒tability for its long-term sustainability.
In July 2009, S-OIL completed construction of the
Alkylation unit, which produces high quality gasoline
blending stock, and is currently constructing #2 Aro-
matic Complex capable of producing 960 KTA of Para-
Xylene and 280 KTA of Benzene in order to strengthen
the company’s petrochemical business with a target of
completion by June 2011.
Furthermore, S-OIL has embarked on a new journey
in 2009 by establishing a strategy framework which
consists of three strategic directions, which are, “Fur-
ther Investment in Re⇒ning Business,” “Integration
with Petrochemical Business,” and “Renewable Energy
Business” along with strategic imperatives that col-
lectively serve to meet the expectations of our C.E.O.
(Customers, Employees, and Owners & Stakeholders).
Through successful execution of these strategic imper-
atives, S-OIL aims to achieve balanced growth in terms
of economic, social and environmental values.
Equipped with this solid strategy framework,
S-OIL will relentlessly pursue materializing a well-
diversi⇒ed business portfolio that can lead the waves
of change. In the end, such strengths will enable S-OIL
to break through an ever-changing business environ-
ment encompassing the entirety of the horizon of the
energy industry.
December 2010 insight 99
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S-OIL Corporation
S-OIL strives to satisfy the
expectations of our C.E.O.
(Customers, Employees and
Owners & Stakeholders),
aiming at achieving sustainable
pro⇒table growth.
Ahmed A. Subaey
RD and CEO
S-OIL Corporation
Statistics
Revenue : US$ 13.7 billion (2009)
Location : Seoul (Head Of⇒ce) / Ulsan (Re⇒nery)
Re⇒nery Capacity : 580,000 BPSD
Key Businesses : Oil Re⇒ning, Petrochemical Product
Manufacturing, Production of Lube
Base Oil
Employees : 2,473 persons (as of Dec 31, 2009)
Sales Volume : 193,716 thousand barrels (2009)
100 insight December 2010
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Southern Company is one of the nation’s leading
producers of electricity. It is committed to providing
solutions to national energy issues and challenges
facing the industry. During 2010, the company led
a renaissance in new nuclear generation, researched
new carbon capture processes, continued to develop
advanced coal technologies and explored renewable
energy options.
New Nuclear
Southern Company is moving forward with con-
struction of the ⇒rst new nuclear units to be built in
the United States in more than 30 years. Based on the
progress and integrity of the project in Georgia—as
well as the company’s history of strong operational
performance—the plant was awarded the nation’s ⇒rst
nuclear loan guarantees earlier this year. Target dates
for completing the units are 2016 and 2017.
Carbon Capture
The US Department of Energy’s National Carbon
Capture Center is located in Wilsonville, Alabama,
where scientists and researchers from government,
industry and universities are developing the next gen-
eration of carbon capture technologies. DOE selected
Southern Company to manage and operate the center
because of its long-term commitment to research and
development. The company is currently testing vari-
ous carbon capture and storage processes at seven
sites in the Southeast.
21st Century Coal Technologies
Southern Company is building the nation’s ⇒rst
commercial-scale plant using an advanced technol-
ogy developed in partnership with DOE and others.
The project in Mississippi uses an integrated gasi⇒ca-
tion combined-cycle process to convert coal to gas,
removing 99% of sulfur dioxide and particulates and
generating 65% less carbon dioxide emissions through
carbon capture and sequestration. Southern Company
and its partners currently are marketing this new tech-
nology internationally. The ⇒rst plant built using the
process will begin operating in China in 2012.
Renewable Energy Options
Southern Company is currently building one of
the nation’s largest biomass-fueled plants in Texas,
planning to convert an existing coal-burning plant to
biomass in Georgia, and building one of the nation’s
largest solar installations in New Mexico. The com-
pany also has numerous other studies and projects
under way using biomass, wind, geothermal, land⇒ll
gas/solid waste and solar.
About Southern Company
Southern Company is headquartered in Atlanta and
employs 26,000 people. It consistently outperforms the
S&P 500 Index and has increased its dividends for the
past nine consecutive years.
Southern Company ranks among the top utilities
in customer satisfaction and diversity. In 2010, the
company received the US Secretary of Defense’s high-
est award recognizing business support of employees
serving in the military.
With more than 42,000 megawatts of generating
capacity, Southern Company serves 4.4 million cus-
tomers in the Southeast through four electric utili-
ties—Alabama Power, Georgia Power, Gulf Power and
Mississippi Power. In addition to superior customer
service, these brands are known for high reliability and
retail electric prices below the national average. Other
Southern Company subsidiaries include a competitive
generation business, a licensed nuclear operator, and
wireless communications and ⇒ber-optic providers.
Southern Company
Tom Fanning
Chairman, President and CEO
Southern Company
2009 Statistics

Power sales: 186 billion kilowatt-hours

Operating revenues: $15.74 billion

Earnings: $1.64 billion

Assets: $52.05 billion
Staples is the world’s largest of⇒ce products compa-
ny, with 2009 sales of $24 billion and 91,000 associates,
serving in 25 countries. An early champion of environ-
mental leadership, Staples has been actively engaged
for more than a decade in a wide range of energy ef⇒-
ciency programs designed to preserve the environment.
Staples today celebrates the success of its industry-
premier energy ef⇒ciency program, taken to new
levels of excellence in the last two years through its
partnership with EPA ENERGY STAR. These fully
integrated energy programs demonstrate the com-
pany’s genuine commitment and are designed to help
businesses and customers “make it easy” to be good
stewards of the environment, a long-standing corpo-
rate commitment.
Energy ef⇒ciency is a key component of Staples Soul,
a holistic approach to achieving environmental excel-
lence, and includes the development and sourcing of
environmental products, easy access recycling ser-
vices, renewable energy and environmental education.
Through these progressive programs, Staples has estab-
lished an impressive track record of performance and
credibility while delivering a positive ⇒nancial index.
Staples understands that energy ef⇒ciency is a
fundamental business advantage and is committed
to making a difference. They recognize the synergy
among all components of their business. Their uni⇒ed
sustainable mission starts with energy ef⇒ciency at
their ENERGY STAR distribution centers that trans-
port products ef⇒ciently to their energy ef⇒cient stores.
This approach creates superior value throughout the
chain to employees, customers and stockholders.
Staples’ leading program includes initiatives such as
EPA ENERGY STAR certi⇒cations, Six Sigma proj-
ects, facility energy audits, monitoring and reporting
of metrics, lighting retro⇒ts, hybrid vehicles to raise
⇓eet ef⇒ciency, alternative energy like solar and fuel
cell, HVAC optimization, monitored control systems,
LEED Certi⇒cation, their Wake Up Kids school energy
education program, awareness programs, more than
600 ENERGY STAR products available to their cus-
tomers through a network of more than 2,000 retail fa-
cilities and ful⇒llment centers of which more than 140
have earned the prestigious ENERGY STAR award in
2010. The results are impressive:

The reduction achieved in energy consumption has
prevented the release of more than 70,000 tons of
carbon dioxide equivalent emissions, equating to
CO
2
emissions produced by the energy consump-
tion of almost 6,000 homes in one year.

Staples has 34 solar projects throughout the US,
preventing the release of 12,700 tons of CO
2
, equat-
ing to the energy consumption of 1,000 homes
since 2005. In 2010, Staples achieved an incredible
milestone of 20,000,000 kWh of energy for their
solar program.

A LEAN Six Sigma program incorporating en-
ergy waste elimination, awareness training, usage
metrics and store re-commission was rolled out in
2010. Progress toward achieving aggressive goals
is tracked by facility with monthly reports and
webinars, sharing of best practices and analysis of
site energy pro⇒les.
Staples leadership and operational excellence are
priorities to maintain a meaningful and effective long-
term sustainability strategy. Today, Staples continues
to exceed its corporate commitment to the environ-
ment while undertaking a domestic and international
business expansion. Staples is proud of numerous
awards for its high operational performance and envi-
ronmental management.
December 2010 insight 101
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Staples Inc
Ronald L. Sargent
Chairman and CEO
Staples Inc
Statistics

One of the largest corporate purchasers of green power,
ranked No. 5 among all retailers.

Operates a 385 KW fuel cell which supplies 90% of the
base building electrical requirements for a 330,000 sq. ft.
DC in California.

Staples committed to reducing their absolute carbon
emissions by 7% from 2001 to 2010. To date, they have
reduced carbon emissions by 9% from 2001 to 2008.

Staples has 34 solar installations throughout North
America and just passed 20 million kWh for total solar
production.
insight
Finalist
Rising Star of the Year
Finalist
Rising Star of the Year
Nodal Exchange is the first commodities exchange
dedicated to offering locational (nodal) futures con-
tracts and related services to participants in the orga-
nized North American electric power markets. Nodal
Exchange offers cash settled futures contracts for
power on over 1,800 hubs, zones and nodes as well
as a Henry Hub natural gas contract. Nodal Exchange’s
auction and OTC trade platforms effectively facilitate
trading. All contracts are central counterparty cleared
by LCH.Clearnet, with participants enjoying significant
capital efficiencies from Value-at-Risk margining as
well as cross-margining. Nodal Exchange provides
superior basis and credit risk management to its par-
ticipants. www.NodalExchange.com
Stream Energy is honored to be recognized as an
emerging industry leader in the global energy mar-
ketplace. As the largest network marketer of en-
ergy in the U.S., the company has been propelled
to more than $2 billion in total sales in only five
years in business. This achievement redefined the
way energy retailers consider how to market energy
to consumers. The result has been a strengthening
of the deregulated marketplace and unprecedented
growth in the direct sales segment. The company
has expanded from its Texas base into Georgia and
Pennsylvania and is on a fast track to continue the
rapid rate of expansion.
Dallas, Texas, 214-800-4400, www.streamenergy.net
Finalist
Deal of the Year
Ventyx, an ABB company, is a leading business solutions provider of software, data, and services to global energy, util-
ity, communications, and other asset-intensive organizations. Ventyx personnel solve complex technical challenges with
innovative solutions and deep industry-specific domain expertise. We offer a broad range of solutions to address our
customers’ most critical needs, including: asset management, customer care, energy analytics, energy operations, energy
trading and risk management, mobile workforce management and utility network management. Acquired by power and
automation technology group ABB in June 2010 and merged with the Network Management business unit within its Power
Systems Division, Ventyx is the industry’s sole supplier of both enterprise-wide information technology (IT) and power
automation systems. By adding ABB’s network management software offerings (SCADA, distribution management, outage
management, and market management systems and services), Ventyx for the first time closes the gap between operations
technology (OT) and IT platforms and automation systems. As a result of this unparalleled breadth of solutions, Ventyx can
be found across the globe improving our operational and financial performance with innovative applications of technology
and expertise that help clients manage critical infrastructure, meet growing energy demands and provide a smarter grid.
insight
Finalist
Infrastructure Project of the Year
Adriatic LNG, is the company that designed, built and now operates the LNG Terminal located offshore Italy, in the northern
Adriatic Sea, about 15 kilometres off the Veneto coastline. It was established in May 2005 by two global energy leaders,
Qatar Petroleum and ExxonMobil, with Edison, an Italian gas operator.
The offshore Terminal is designed around a concrete gravity base structure, which houses two cryogenic LNG tanks, and
supports facilities for mooring and unloading LNG vessels, the regasification plant and a pipeline to transport the gas
onshore. It is 375m long, 115m wide and the main deck is 18m above sea level.
This state-of-the-art facility has been created to provide the Italian gas market with major new, diversified and reli-
able sources of energy. Built with cutting edge technologies and boasting a highly innovative design, the Adriatic LNG
Terminal adds to Italy’s LNG import capacity and energy diversity. With a design regasification capacity of 8 billion
cubic meters per year (775 million cubic feet of natural gas per day), approximately 10% of the country’s natural gas
consumption, the terminal is becoming a global gateway for LNG and in this way it is contributing to improved security
of energy supply for Italy.
To l earn more about PJM, vi si t us onl i ne at www. pj m. com
Working
to Perfect
the Flow of
Energy
PJM Interconnection ensures the reliability of the
high-voltage electric power system serving 51
million people in all or parts of 13 states and the
District of Columbia. PJM coordinates and directs
the operation of the region’s transmission grid, which
includes 56,350 miles of transmission lines; administers
a competitive wholesale electricity market; and plans
regional transmission expansion improvements to
maintain grid reliability and relieve congestion.
Finalist
Deal of the Year
Zorlu Energy Group, whose foundations were laid with the
establishment of Zorlu Enerji Elektrik Üretim A.$. in 1993,
have integrated activities locally and globally, extending
from generation and sales or electric power, distribution
and sales of natural gas and project process to “turnkey”
installation and long-term maintenance and operation of
power plants. Zorlu Energy Group’s installed capacity of 738
MW electricity and 192 tons/hour steam at 5 natural gas
powered, 7 hydraulic, 1 geothermal, 1 wind and 1 diesel
plants in various regions of Turkey. Zorlu Energy Group has
cemented its presence in Europe, Asia and the Middle East
to evaluate opportunities in the field of energy and become
a regional power. The projects carried out in Russia, Paki-
stan and Israel are important steps in reaching this target.
104 insight December 2010
Over the past decade or so of the
Platts Global Energy Awards the in-
dustry has experienced many ups and
downs. This year’s winners reflect
some of the best moments of 2010.
But, certainly, we cannot forget or
ignore the tragedies that struck the
industry this year. April was a very
difficult month for energy with five
reported coal mining disasters—four
in China and one in the United States.
Then, on April 20, who can forget the
images of the oil rig explosion and fire
in the Gulf of Mexico? These disasters
remind us that energy can be a dan-
gerous business. Many energy com-
pany employees put their lives on the
line every day so we can have light in
our lives, heat in our homes and fuel
in our tanks.
This year’s Platts Global Energy
Awards are dedicated to all the men
and women who work for energy com-
panies across the globe, who take risks
every day to supply us with precious
electric power, oil, natural gas and re-
newable energy. We applaud you!
China, Europe and the Middle East
Steal the Show
The Platts Global Energy Awards,
in its 12th year, has never been more
global. With eight countries represent-
ed on stage at Cipriani Wall Street in
New York City on December 2, 2010,
and with many of the US based win-
ners taking prizes for projects outside
the US, 2010 can be called the year of
true globalization for the Awards.
In addition, 2010 marked another
key milestone in globalization for the
program. For the first time in its his-
tory a Chinese company won a Platts
Global Energy Award—and not just
one, but two, including Energy Com-
pany of the Year, the program’s most
prestigious honor. CNOOC Limited
will be forever in the archives as the
first company from China to win a
Platts Global Energy Award
It is apparent that all companies, no
matter where they are located, are look-
ing at smarter, more efficient, cleaner
and more sustainable ways of produc-
ing energy through their vision and
leadership, operational prowess, unique
programs, complex projects or lead-
ing technologies. So, to better show-
case achievements, this year the Platts
Global Energy Awards are organized in
much the same way.
As you read the following highlights
of the winning submissions, you will
also see that, indeed, innovation, lead-
ership, commitment, safety, customer
satisfaction and sense of community
know no geographical bounds. These
winning qualities come from all over
the world.
Vision and Leadership
CEO of the Year
Rafael Villaseca
Gas Natural Fenosa
Spain
CEO Rafael Villaseca led the merger
between Gas Natural and Unión Feno-
sa in September 2009 resulting in the
creation of a multinational company
in the gas and electricity sector, oper-
ating in more than 23 countries with
global energy awards
A Reflection and
Dedication
Patsy Wurster, Director, Platts Global Energy Awards and Publisher, Platts Insight
December 2010 insight 105
global energy awards
over 20 million customers. The merger
generated value for all its stakeholders
including increased profits for share-
holders, integrated services for its cus-
tomers, additional career options for
employees and social development for
communities in the countries in which
it operates.
Through Villaseca’s leadership, the
merger and integration was carried out
within the planned time-frames con-
tributing to greater operational, finan-
cial and tax efficiencies. Within the
first year after the end of the purchase
process, Villaseca rolled out the com-
pany’s integrated strategic plan for the
next four years.
The CEO of the Year category typi-
cally attracts a large number of nomi-
nations. This year was no exception.
The quality of the list made selecting
finalists, and ultimately picking one
winner, especially challenging. How-
ever, it became strikingly clear to the
judges that Rafael Villaseca’s leadership
in bringing these two large, respected
companies together amidst such eco-
nomic uncertainty was the story of
CEO achievements for the past year.
From the start, both the opportuni-
ties and risks were known, measured
and presented with full transparency.
The musical score itself may have been
good, but the conductor made all the
difference to the performance and
guaranteed its success.
Deal of the Year
NRG Energy Inc
United States of America
In May 2009, NRG completed the
$287.5 million acquisition of Reliant
Energy’s Texas retail business, which
provides electricity service to nearly 1.6
million customers. The combination
of Reliant’s retail business—the second
largest mass market electricity provider
in Texas—and NRG’s wholesale power
generation business created a strong,
more reliable player in the competi-
tive Texas electricity market. By back-
ing Reliant’s load-serving requirements
with NRG’s generation in ERCOT, they
significantly reduced transaction costs
and credit risk.
This transaction closed in a mere 60
days, which is even more noteworthy
due to the fact that NRG was confront-
ing a hostile takeover attempt with a
would-be acquirer at the time. The suc-
cessful and speedy closure of the Reliant
acquisition proved to be a critical factor
in NRG winning this battle and remain-
ing an independent company. By creat-
ing additional, substantial shareholder
value and integrating it quickly to max-
imize NRG’s earnings, NRG essentially
compelled the other company to either
increase its bid to reflect this additional
value or walk away. The resulting up-
ward bid did not sufficiently recognize
Reliant’s value and NRG shareholders
rejected the proposal in July 2009.
In the first 14 months of NRG owner-
ship, Reliant has already proven to be
a highly profitable investment, imme-
diately accretive to free cash flow and
EBITDA. Specifically, Reliant’s adjusted
EBITDA was $642 million in 2009 and
$385 million in 2010—over $1 bil-
lion total as of June 30, 2010, or $4 per
share, a phenomenal 400% return on
the investment.
The shrewd leadership and visionary
tactics of fending off an aggressive, hos-
tile takeover with one hand, while em-
ploying the other to make strategic moves
into the market impressed the Platts
Awards judges. Convincing its sharehold-
ers to stick with his vision, David Crane
led NRG Energy out of the pack, by man-
aging all of this at a remarkable pace.
Energy Company of the Year
CNOOC Limited
China
CNOOC Limited, one of the world’s
largest exploration and production
companies, made strong strategic in-
vestment plays in 2009 and 2010 push-
ing its way onto the global scene. With
reputation, ethics, innovation and lead-
ership in the forefront of judges’ minds,
CNOOC stood out, bringing home Chi-
na’s first Global Energy Award, 2010
Energy Producer of the Year.
In 2009, CNOOC deployed its op-
eration resources, and steadily ad-
vanced its intensive engineering, con-
struction and development activities.
106 insight December 2010
global energy awards
Streamlined management enabled the
company to maintain producing oil
fields at comparatively high produc-
tion time efficiencies, further con-
tributing to its production growth. In
exploration, the impressive number
of new discoveries and successful ap-
praisals strengthened the foundation
of its long-term development.
While focusing on making great ef-
forts to provide clean and reliable energy
to the community, CNOOC also treated
social responsibility as another lead-
ing priority. They not only challenged
their management team to enhance
CNOOC’s core competitiveness, achieve
sustainable development and create val-
ue for the shareholders, but also to pay
close attention to various stakeholders
by encouraging development between
the company and the community, and
between humanity and nature.
What stood out for the judges was Chi-
na’s gutsy surge into the global energy
scene this year. In the first half of 2010,
CNOOC successfully completed several
significant acquisitions. Through both
its 50% interest holdings in Bridas Cor-
poration, establishing a solid platform
for South American business develop-
ment and its aggressive move to invest
up to $2.16 billion in Chesapeake’s
Eagle Ford shale gas project in October
of 2010, CNOOC demonstrated its com-
mitment to becoming a “world class”
energy company.
Industry Leadership Award
PJM Interconnection
United States of America
PJM Interconnection has made a
unique contribution to the foundation
for competitive wholesale electricity
markets. Their organization stands out
as the largest, most innovative leader
among independent grid operators in
reliability, competitive markets and
positive results of a robust transmission
planning process.
PJM focused attention and diligent ef-
forts toward defending the integrity of
its markets—an intangible yet critical
component of any energy marketplace,
especially during this era when partici-
pants and the general public demand
greater confidence in the stability and
fundamental fairness of markets.
Three key actions by PJM have
strengthened wholesale electricity plat-
forms in the US:

Initiating credit reforms to acceler-
ate settlement processes, enhance
collateral requirements, return $1
billion in working capital back to
PJM member companies and en-
act stronger credit rules for affili-
ated firms under one corporate um-
brella. This was quickly adopted by
other transmission operators.

Pursuing the regulatory filings and
civil lawsuit in pursuit of justice
against a default by a hedge fund en-
gaging in financial arbitrage within
PJM markets. The result of this ef-
fort was an $18 million settlement
with the defaulting entity, all of
which was reimbursed to PJM mem-
ber companies who had covered the
costs of the original default.

Establishing a structure and envi-
ronment throughout the PJM com-
munity that relentlessly identifies
and shuns market manipulators,
thereby reinforcing the strength
and fairness of electricity markets.
PJM’s sustained operating perfor-
mance and commitment to ethical be-
havior among its market participants
has set a high standard for all competi-
tive energy markets and earned them
the 2010 Industry Leadership Award.
Lifetime Achievement Award
During this year’s judging meeting,
this category brought the most vigor-
ous debate. Every nomination had good
competitive merit to compete and after
long, healthy and sometimes prickly
discussion the judges agreed this should
not be a “winner take all” category;
rather, a threshold to surpass. So while
each of the finalists in 2010 could have
easily been winners for their contribu-
tions, there were two awards for Lifetime
Achievement that actually changed the
industry in some way—one for entre-
preneurial engineering and the other
for propelling policy making.
December 2010 insight 107
global energy awards
Peter Cartwright
Avalon EcoPower
United States of America
Peter Cartwright has led a distin-
guished career in the power industry
including: Princeton University’s Proj-
ect Matterhorn, a project developing
thermonuclear energy for the Atomic
Energy Commission, 19 years with
General Electric’s Nuclear Energy Divi-
sion, 21 years with Calpine as founder
and CEO, and continues activity in the
sector with Avalon EcoPower.
The sheer magnitude of the power
plant development that Mr. Cartwright
was able to accomplish during his ten-
ure at Calpine is a testament to his dedi-
cation to the industry. He effectively cre-
ated the IPP sector for developers with
scale which has endured over 25 years.
Cartwright has often been recognized
for his entrepreneurial spirit and vision.
He developed a reputation as a shrewd
deal maker and excellent risk manager.
His leadership style was to empower his
people with responsibility and author-
ity and then “get out of their way.”
As a visionary in clean energy who
was ahead of his time, Peter Cartwright
was instrumental in the development
of both geothermal energy and natural
gas fired generation. Cartwright has a
long history of clean energy accom-
plishments including nuclear power
plant development across the globe
with General Electric and being the
founder of the premier independent
power provider, Calpine Corporation.
It became clear to the judges panel
that the creator of the Independent
Power Producer market must be recog-
nized in that this system has allowed
important players, many of them fi-
nalists for a Global Energy Award this
year, to build their companies. For
this, the judges bestowed the honor of
Lifetime Achievement to Peter Cart-
wright of Avalon EcoPower, a company
he founded.
Elizabeth “Betsy” Moler
Exelon Corporation
United States of America
Elizabeth “Betsy” Moler has been
a preeminent voice on energy poli-
cy throughout her 40-year career in
Washington, D.C.
Moler was a staff member for 20
years on Capitol Hill, beginning as a
staff assistant in the office of Senator
Mike Gravel of Alaska. She went on to
serve on the staff of the Senate Ener-
gy and Natural Resources Committee
as counsel for both Chairman Henry
M. “Scoop” Jackson of Washington
and Chairman J. Bennett Johnston
of Louisiana. During her time on the
Committee, she was the principal staff
member responsible for all natural gas
issues and helped craft the Natural Gas
Policy Act of 1978.
In 1988, at the urging of all 19 mem-
bers of the committee, President Ron-
ald Reagan nominated her to serve as
a commissioner on the Federal Energy
Regulatory Commission (FERC). She
was reappointed to the commission by
Presidents George H.W. Bush and Bill
Clinton. President Clinton designated
her to serve as the commission’s chair
in 1993. Moler is the longest serving
member of FERC and the only member
appointed by three different Presidents.
President Clinton then nominated
Moler to be Deputy Secretary of the US
Department of Energy (DOE). While at
DOE, she was the principal architect of
the Clinton Administration’s Compre-
hensive Electricity Competition Act,
which was presented to the Congress in
June 1998.
In 2000, Moler joined Exelon Cor-
poration to head its Washington, D.C.
office where she served as executive
vice president of Government Affairs
and Public Policy. In this position, she
remained a vital resource to public of-
ficials concerned about energy policy,
testifying before Congress and FERC on
numerous occasions. In recent years,
Moler has worked tirelessly with many
in the utility and NGO communities
to persuade Congress to pass climate
change legislation. She retired from Ex-
elon in June 2010.
Moler, as evidenced by her dedication
to advancing the nation’s energy and
environmental policy, is well deserving
of Platts Global Energy Awards’ Life-
time Achievement.
108 insight December 2010
global energy awards
Operational Excellence
Downstream Operations of the Year
Excelerate Energy
United States of America
Excelerate Energy is the world leader
in developing innovative solutions for
both expanding and emerging LNG
markets. With over 50 successful com-
mercial operations just within the past
year, ship-to-ship transfer is now the
backbone for the year-round delivery of
LNG supply into locations such as Ku-
wait and Argentina. Since the launch of
new transfer operations in August 2009,
Kuwait has imported approximately 1.8
MMt representing about 20% of the
nation’s total natural gas consumption.
During the winter period, Argentina’s
LNG imports represented 7% of the na-
tional consumption.
Excelerate developed facility designs
to meet two distinctive natural gas
delivery challenges. For offshore deep-
water settings, Excelerate designed
the Gateway system which enabled
the first ever discharge of natural gas
through a Submerged Turret Loading
(STL™) buoy system. The Gateway
concept is demonstrated in the de-
sign of Gulf Gateway and Northeast
Gateway Deepwater Ports located in
the Gulf of Mexico and Massachusetts
Bay, respectively. Near-shore/dockside
applications utilize GasPort technol-
ogy using a variety of configurations
to further extend their flexibility. Ex-
amples include the Bahia Blanca (Ar-
gentina), Teesside (UK), and Mina Al-
Ahmadi (Kuwait) GasPorts.
The judging panel for this year’s
Awards was very pleased with Excel-
erate’s entry. They felt this type of
operation differentiates downstream,
and gives refining a new face. “With
their novel operations in LNG, they
took ostensibly large risks and went
against the norm of this industry,”
stated the judges. It was these im-
pacting facts that created strong con-
sensus among the panel. Excelerate
proved a dubious segment and many
nay-sayers flat wrong; and in doing
so, was awarded Downstream Opera-
tions of the Year.
Power Company of the Year
Xcel Energy
United States of America
Despite the economic challenges
of the past couple years, Xcel Energy
stayed true to its commitments to
the environment and to its customers
and communities, while managing to
achieve outstanding financial results.
Environmental leadership has been,
and will continue to be, an impor-
tant part of Xcel’s overall strategy. It is
building a clean energy future through
use of advanced, clean energy tech-
nologies, expanded energy efficiency
programs, and with innovative busi-
ness strategies. Wind, biomass, hydro
and solar energy represent 14% of their
energy mix. Geographic advantages
contribute to their ability to increase
renewable energy resources at a reason-
able cost to customers.
In 2009, Xcel completed a major
emissions reduction project in Min-
nesota that included converting two
coal-fired plants to natural gas fa-
cilities and completely refurbishing a
coal-fired plant.
The judges applauded Xcel’s De-
mand Response model and recog-
nized their renewable energy portfolio
as one of the best. Xcel has invested
in smart grid like no other company
by launching the first US SmartGrid-
City, a technology pilot taking place
in Boulder, Colorado, allowing Xcel
to explore smart-grid tools in a real-
world setting.
Its 92% positive customer satisfac-
tion score is an improvement of seven
percent since 2006. Electric system
reliability continues to be the biggest
contributor toward customer satisfac-
tion in all Xcel’s jurisdictions.
Under Richard Kelly’s tremendous
stewardship, Xcel’s strategy goes be-
yond the traditional mission of a
regulated utility. In embracing en-
vironmental leadership, it is taking
prudent, balanced steps to reduce
the impact of their operations on the
environment while promoting tech-
nological and public policy advance-
ments that will encourage a cleaner
electric system.
December 2010 insight 109
global energy awards
Energy Producer of the Year
CNOOC Limited
China
In 2009, offshore China, CNOOC
Limited’s independent explorations
resulted in 15 new discoveries and 11
successful appraisals. These include
many independent discoveries in the
adjacent area around Shijiutuo uplift
and Liaodong Bay in the Bohai area,
and are anticipated to become a new
base for its reserve growth.
In terms of production sharing con-
tracts (PSC) exploration, CNOOC’s
efforts resulted in two new discover-
ies and one successful appraisal. Out-
side of China, CNOOC made two dis-
coveries and one successful appraisal.
During 2009, 11 new fields were
started as a result of effective project
management, more than 20 projects
were under construction and all have
been operating smoothly. In 2009,
CNOOC’s reserve replacement ratio
(RRR) amounted to 163%, whereas
its owned-net proved reserves of ap-
proximately 2.66 billion barrels of oil
equivalent (BOE), and its average dai-
ly net production was 623,896 BOE.
Some very powerful nominations
from international companies were
submitted in this category this year.
The judges believed CNOOC stood
above the rest due to its strong push
onto the global scene—redefining it-
self as a world class player.
In 1H2010, CNOOC Limited suc-
cessfully completed several signifi-
cant acquisitions. Through its 50%
interest holdings in Bridas Corpo-
ration, CNOOC established a solid
platform for business development
in South America. Through the tech-
nical service contract for Missan oil
field in Iraq, CNOOC entered this
resource rich area along with the
super-majors. Increasing the share of
ownership in the Panyu 4-2/5-1 oil
field added to its low risk assets in
the core operation area. Showing its
strength, CNOOC invested $2.1 bil-
lion in Chesapeake’s Eagle Ford shale
gas project in October of 2010, put-
ting an exclamation point at the end
of an exceptional year. With mul-
tiple moves to acquire and strategi-
cally merge, CNOOC Limited landed
the prize.
Rising Star Award
Green Gas International, BV
Netherlands
Since its foundation in 2005, Green
Gas International has turned the idea
of developing Coal Mine Methane
(CMM) and landfill gas (LFG) projects,
which convert methane into energy,
into a profitable and successful busi-
ness. It has since 2007 constructed
some 38MWeq of projects in Czech
Republic, USA, Colombia and Ukraine.
The company achieved a CAGR in
revenue of 354% between the calen-
dar years 2006 and 2009. Green Gas
now covers CMM, LFG, biomass and
biowaste. It has methodically expand-
ed its portfolio through a mixture of
organic growth, mergers and acqui-
sitions and entering new markets.
Green Gas, which is headquartered in
the Netherlands, now operates around
50 projects in 9 countries.
All this was achieved under the lead-
ership of an experienced team that suc-
cessfully managed the integration of
new business, the expansion into new
markets and the management of com-
plex partnerships with mine, landfill
gas owners, producers of biowaste and
biomass and the carbon market.
As a result of its operations, Green
Gas brings significant environmental
and economic benefits to the commu-
nities in which it is active. This arises
through the conversion of methane
and waste into energy, which results in
the elimination of significant green-
house gas emissions. Green Gas cur-
rently reduces green house gas emis-
sions by over 3.0 million tons of CO
2

equivalent annually.
This entire category was brimming
with good nominations challeng-
ing the field. Green Gas stood out in
very significant ways. Its enormous
impact on the climate, detailed in its
nomination, and unbelievable 3-year
growth rate demonstrated very pre-
cisely just what the Rising Star Award
is all about.
110 insight December 2010
global energy awards
Outstanding Programs
Community Development Program of
the Year
OMV Pakistan
Pakistan
OMV Pakistan made a smart strategic
move in giving back to the very commu-
nities in which it continues to operate.
The community development program
of OMV Pakistan aims to support inte-
grated and sustainable initiatives con-
tributing to the well being of the com-
munities in its operational areas. Its
operational areas are predominantly ru-
ral, where the communities are deprived
of the very basic necessities of life.
Working in collaboration with the lo-
cal populace, the District Governments
and local NGOs, the development proj-
ects were brought in line with the Unit-
ed Nations Millennium Development
Goals and cover the sectors of educa-
tion, health, water, agriculture and live-
lihoods identified through baseline and
community needs assessment studies.
OMV took the first step toward ac-
quainting the local community with its
basic educational right by running 63
primary schools in the remote villages
of its operational areas.
A Mother Child Health Care Centre
for maternal health care and a Family
Medical Centre for emergency and di-
agnostic services along with outreach
health care services for remote com-
munities were established. Further-
more, OMV has been implementing
a Hepatitis B vaccination program for
local communities.
Water supply schemes are provided in
areas where water resources are scarce.
Modern farming techniques are intro-
duced by setting up fruit demonstration
farms, energy problems are resolved by
providing electricity to 13 villages com-
prising of 121 households and voca-
tional skill training is provided to local
women as is support to local artisans by
marketing their products in local, na-
tional and international markets.
These multi-faceted programs con-
tinue to provide security in OMV’s op-
erations while building up the quality
of life in Pakistan. The panel of judges
recognized that OMV’s commitment to
develop their community in such an
unstable environment was exceptional
and courageous. Overcoming all these
challenges with impressive results won
over the hearts and minds of the judges.
Energy Efficiency Program of the Year
—Energy Supplier
Baltimore Gas & Electric (BGE)
United States of America
Baltimore Gas & Electric, by its own
admission, was a late bloomer in en-
ergy efficiency. However, in 2009, they
blossomed in a big way. BGE went from
offering no energy efficiency programs
to offering ten diverse programs for all
customer segments. The programs’ ag-
gressive goals were achieved in record
time, within budget, in a high quality
manner and they are still experiencing
tremendous success.
In 2009, BGE introduced a compre-
hensive portfolio of residential and
commercial energy efficiency programs
to add to the already successful BGE
Smart Energy Savers Program
SM
set of
Demand Side Management initiatives.
Residential programs included: light-
ing discounts, appliance rebates, recy-
cling (freezers and refrigerators), HVAC
equipment and services rebates, Quick
Home Energy Check-up (a modified en-
ergy audit), an Online Energy Calcula-
tor, Home Performance with ENERGY
STAR
®
comprehensive audits, ENERGY
STAR
®
for New Homes and Limited In-
come Energy Efficiency.
For commercial and industrial cus-
tomers, BGE provided incentives and
engineering services for projects from
retrofitting existing inefficient equip-
ment, major renovation and end-of-life
equipment replacements, to new con-
struction and equipment purchases.
An integrated marketing plan helped
build awareness and motivated cus-
tomer participation. Operational ef-
ficiencies and well-designed programs
appealed to a variety of customers.
Over 15% of residential customers
participated in the first year. BGE’s
strategic promotion of these programs
received praise from key stakehold-
ers including the Maryland Energy
December 2010 insight 111
global energy awards
Administration and won recognition
from the Association of Energy Servic-
es Professionals’ national chapter and
the American Marketing Association’s
Baltimore Chapter 2010 Marketing Ex-
cellence Award.
Its impressive 18-month results swayed
the judges to honor the late-comer to the
efficiency party over some of the vet-
eran suppliers who have been leaders
in efficiency over the past decade. With
programs like these, Baltimore Gas &
Electric will likely be one of the industry
standards well into the future.
Energy Efficiency Program of the
Year—Commercial End-User
Tesco plc
United Kingdom of Great Britain
By reducing total energy consump-
tion by only a few percentages, Tesco,
one of the world’s leading retailers, has
been able to save millions. Recogniz-
ing the carbon footprint of its busi-
ness, Tesco set aggressive goals to create
a greener, more sustainable business,
including reducing its overall carbon
emissions by 50% by 2020.
Tesco’s awareness on energy consump-
tion has generated enormous savings on
its energy bills. This was made possible
through introducing and maintaining
continuous enterprise wide energy ef-
ficiencies. To achieve this, in 2009 the
company committed to:

Become a zero-carbon business by
2050

Reduce the emissions of the prod-
ucts it sells by 30% by 2020

Help customers reduce their carbon
footprint by 50% by 2020

Halve emissions from their 2006/07
baseline portfolio of buildings by
2020

Cut emissions for stores built 2007
to 2020 to half the CO
2
of 2006
stores

Reduce emissions per case delivered
by 50% by 2012
One of the key partnerships Tesco
formed to help it significantly reduce
its energy consumption was with Ener-
gyICT, an Elster Group Company, that
provides energy management, Smart
Grid and smart metering solutions. En-
ergyICT’s sophisticated energy manage-
ment platform, EIServer, incorporated
all vital functionalities that are indis-
pensable for a modern energy man-
agement system including meter data
management (MDM) and advanced
metering infrastructure (AMI) support,
which helped Tesco to data-mine the
vast quantities of energy information
and highlighted the stores’ areas of en-
ergy inefficiency.
Through its collaboration with Energy-
ICT, Tesco is well on its way to obtaining
these inspirational goals, with a direct
influence on the reduction of CO
2
emis-
sions: the total energy consumption of
all Tesco stores in the United Kingdom,
combined, has plummeted by 20%.
Tesco’s highly ambitious goals im-
pressed the judges. Not only are their
aspirations large, they are achieving big
results.
Green Energy Initiative of the Year
Alter NRG Corporation
Canada
Alter NRG Corp is a publicly traded
company pursuing alternative energy
solutions to meet the growing demand
for environmentally responsible energy
in world markets.
Through its wholly-owned subsid-
iary, Westinghouse Plasma Corpora-
tion, Alter NRG Corp is commercial-
izing the industry leading plasma
gasification technology to provide
renewable and clean energy solutions
from a variety of low value inputs
such as waste and biomass to produce
various energy outputs including elec-
trical power, syngas and liquid fuels
(e.g. ethanol and diesel). In addition,
through its other wholly-owned sub-
sidiary, CleanEnergy
TM
, Alter NRG
Corp’s objective is to capitalize on the
rapidly growing geoexchange residen-
tial and commercial heating and cool-
ing market, enabling consumers to re-
duce their carbon footprint and reduce
the cost and volatility of energy bills
using the energy from the earth.
Alter NRG is already providing clean
energy solutions worldwide by con-
112 insight December 2010
global energy awards
verting waste and variable low grade
feedstocks into useable energy like
power or ethanol. With over $100 mil-
lion spent on research and develop-
ment, 18 patents and over 30 years of
operation, Alter NRG’s/WPC’s prov-
en plasma technology can be found
around the globe, producing impres-
sive results under the most demanding
industrial applications.
The technology has been used to
develop the world’s largest hazardous
waste plasma gasification facility and
North America’s first commercial-scale
plasma gasification project to receive
regulatory approval.
Judges acknowledged that Alter
NRG took a 20-year-old technology
and implemented it in a way no oth-
er company has managed to do. With
two proven technologies, two wholly-
owned subsidiaries and a twofold ob-
jective, Alter NRG is poised to provide
solutions for the key issue of our time:
maintaining the balance between en-
ergy and the environment.
Premier Projects
Energy Construction Project of the Year
Bechtel Power Corporation /
FirstEnergy / Babcock & Wilcox /
Stantec Inc
United States of America
In 2005, FirstEnergy began a $1.8
billion project to retrofit state-of-the-
art air emission controls at the W.H.
Sammis Plant in Stratton, Ohio. The
project, completed in June of 2010,
has been called the most difficult air
emission control retrofit project in the
country because of the extremely lim-
ited space for installation of the new
equipment and systems, the complex-
ity associated with integrating the
emissions control equipment with the
seven existing boiler units and the lo-
gistical issues associated with complet-
ing the project in coordination with
on-going plant operations.
Bechtel Power Corporation served as
the engineering, design and procure-
ment contractor for the majority of
the project and general contractor for
the construction work. Babcock & Wil-
cox Power Generation Group (B&W)
designed and installed two key com-
ponents of the project—scrubbers to
remove sulfur dioxide and selective
catalytic reduction equipment to re-
move nitrogen oxides. Additional en-
gineering services were provided by
Stantec Consulting Services, as subcon-
tractor to B&W.
Bechtel’s nomination put into per-
spective the significant logistical chal-
lenges and constraints resulting from
the site location adjacent to the Ohio
River, the Cumberland Lock and Dam,
State Highway Route 7 (SR 7), the Vil-
lage of Stratton and the Norfolk South-
ern Railroad. As further evidence of the
challenges of this site location, a con-
crete deck over three football fields in
length was built in the 1980s over SR 7
for a previous retrofit of fly ash controls.
Overall, more than 18 months were
spent selecting the technology and
optimizing the system designs, and
then planning the project schedule.
The project sequence, various project
scopes, and final tie-ins were coordi-
nated and integrated with on-going
Sammis Plant operations and planned
outages. The fact that this 5-year proj-
ect was completed early, without any
forced outages of the existing boiler
units, and within the original budget
is directly related to this detailed plan-
ning and integration.
While the judges agreed that retro-fit-
ting coal fired power plants is not a new
concept, this mega project stood out as
a world class engineering, construction
and management accomplishment by
some of the most accomplished compa-
nies in the construction business.
Engineering Project of the Year
Fluor Corporation
United States of America
Beginning in 2003, Fluor successful-
ly provided feasibility, FEED, detailed
engineering, procurement support,
construction support, hook-up and
commissioning support and the sec-
ondment of personnel for the Bohai Bay
Phase II Development Project, located
in approximately 90 feet of water, 140
miles offshore in Bohai Bay, China. The
December 2010 insight 113
global energy awards
project, jointly owned by ConocoPhil-
lips China (COPC) and China National
Offshore Oil Corporation (CNOOC),
was for the development of an oil field
with a capacity of 190,000 barrels of oil
per day of production.
The Bohai Phase II Development
Project is the largest Fluor-executed
offshore project measured in services
revenue and the fourth largest proj-
ect in Total Indicated Cost. The float-
ing production, storage and offloading
unit, one of the largest in the world,
measures 320 meters long by 63 meters
wide, can process 190,000 bopd, and
can store two million barrels. The top-
sides modules alone weigh more than
30,000 metric tons. The project also in-
cludes five 40-slot wellhead platforms
and 55 kilometers of subsea pipelines.
The one-of-a-kind technology used for
crude separation via centrifuges, and
the innovative solutions in solids han-
dling and power generation/distribu-
tion also set this project apart.
In addition to generating $167 mil-
lion in approved value awareness sav-
ings for the client, Fluor created value
through world-class design and quality
support services in addressing offshore-
specific challenges such as interface
management and weight control. Their
work-sharing effort saved $50 million
in engineering costs. Efficiencies in the
repetitive design of the fixed platforms
saved an additional $65 million.
The safety record for this project was
remarkable with zero lost time inci-
dents on more than 3.4 million man-
hours expended in their Houston, Ma-
nila and Shanghai offices.
This project wowed the judging pan-
el and resulted in its only unanimous
decision in 2010. They were most im-
pressed by the sheer scope of the proj-
ect, its unique challenges, but more im-
portantly, the innovative solutions that
Fluor provided.
Infrastructure Project of the Year
Adriatic LNG
Italy
Terminale GNL Adriatico Srl, com-
monly known as Adriatic LNG
®
, is the
company that designed, built and now
operates the first-ever built offshore
LNG regasificiation terminal.
The Adriatic Terminal is the world’s
first offshore liquefied natural gas
(LNG) receiving and regasification fa-
cility. It is also the first ever facility to
incorporate LNG storage into a con-
crete Gravity Based Structure (GBS).
And, it is the first significant new gas
import facility for Italy in 6 years,
overcoming many regulatory and per-
mitting challenges in the course of its
development.
Throughout construction, and now
in the operational phase, safety and
the environment have been the first
priority for Adriatic LNG. The project
achieved an excellent safety record
which continues since its start-up. The
Terminal is highly energy efficient,
utilizing waste heat recovery from the
power generators and sea water to pro-
vide heat for the regasification process.
This facility was created to provide
the Italian domestic gas market with a
major new, safe and reliable source of
energy. Built with cutting edge tech-
nologies and boasting a highly innova-
tive design, the Adriatic LNG Terminal
adds to Italy’s LNG import capacity and
energy diversity, with a regasification
capacity of 8 billion cubic meters per
year (775 million cubic feet of natural
gas per day), approximately 10% of the
country’s natural gas consumption.
The project was recognized by this
year’s judges as one of the most strate-
gic operations in the region with the
potential to improve competitiveness
in the Italian natural gas market.
Leading Technologies
Commercial Technology of the Year
Suniva
United States of America
Solar cell manufacturers are current-
ly split into two categories: low-cost,
low-efficiency and high-cost, high-
efficiency. Suniva is bridging the gap
by offering highly efficient cells at low
cost. The company is currently manu-
facturing solar cells that turn 18.2+%
of available sunlight into energy and it
has plans to reach 20+% efficiency by
114 insight December 2010
global energy awards
the end of 2011. Highly efficient cells
are important because they increase
the amount of power produced by each
module in a solar array. This decreases
hardware and installation costs, allow-
ing customers to create more power in a
smaller space compared to less efficient
cells, which require more space, and
thus, more materials. Suniva’s technol-
ogy is bringing the solar industry closer
to parity with traditional energy gen-
eration costs.
Suniva’s technical sophistication has
allowed the company to continually
improve its efficiency. In addition to
its own research and development, the
company has exclusive rights to approx-
imately 20 years of intellectual property
from Georgia Tech’s University Center
of Excellence in Photovoltaics. Innova-
tive process changes combined with im-
proved manufacturing techniques, re-
ductions in raw material consumption
and enhanced cell efficiency are mak-
ing Suniva’s vision a reality.
The company’s commercial success
has been evident since its launch—
when Suniva announced that its first
manufacturing line was operational,
it simultaneously stated that it had se-
cured over $1B in orders. The company
is sold out into 2011, with exports to
Europe and Asia amounting to more
than 90% of its sales.
Suniva’s innovative solar cells are
helping move solar into the main-
stream, eventually without subsidies
or incentives. In other words, Suniva
is making solar “sensible” for every-
one who needs power and has access
to sunshine.
Exploding out of the blocks in 2008
as a start-up, to having over $1 billion
in 2010 orders and a “sold-out” status
through 2011, put Suniva at the top of
the category for the judges.
Sustainable Technology Innovation
of the Year
Aquamarine Power
United Kingdom of Great Britain
Aquamarine Power developed an in-
novative product called “Oyster” which
produces clean sustainable electricity
from ocean wave energy. The compa-
ny’s innovative technology combined
with a pioneering route-to-market strat-
egy is leading the way in an exciting
new renewable energy sector.
With a proven technology, signifi-
cant private and public investment, a
ground-breaking joint development
agreement with a major United King-
dom utility and exclusive develop-
ment rights to the first 200MW Oyster
wave farm, Aquamarine Power stole
the show in this Platts Global Energy
Awards’ category.
The Oyster technology is now oper-
ating in the harsh seas off the western
coast of the Orkney Islands in Scot-
land. Oyster 1 was officially switched
on at the European Marine Energy
Centre (EMEC) test facility in Novem-
ber 2009—making Oyster one of the
few wave energy technologies to go
from the drawing board to full-scale
power production.
A key factor in Oyster’s innovation
is that it has been designed to survive.
In essence, the device is simply a large
pump which provides the power source
for a conventional onshore hydro-elec-
tric power plant. All of the complex
electronics are onshore, and there are
only seven moving parts offshore.
Oyster’s location is also innovative.
By locating Oyster near the shore, the
device naturally avoids the massive
storm forces which it would be exposed
to in the open ocean. By the time a
storm reaches the Oyster, the waves
are a maximum 12 meters high. These
big waves push the Oyster towards the
seabed before it bobs back up to meet
the next wave. As the waves get bigger
it is pushed further under the water al-
lowing the excess energy in the wave
to flow over the top of the Oyster. This
inherent survivability means there is
no need for complex control systems
or for Oyster to shut down in stormy
conditions—it will continue to produce
power, whatever the weather.
Aquamarine Power is driving inno-
vation in a brand new industry which
will help secure the world’s energy fu-
ture, reduce climate change and cre-
ate sustainable economic development
through job creation. ■
© Exelon Corporation, 2010
Congratulations.
We take this occasion to salute Betsy
Moler, who served as Exelon’s Executive
Vice President of Government and
Environmental Affairs and Public Policy, on
her recognition as a finalist for the Global
Energy Lifetime Achievement Award.
From her time as counsel and senior counsel
for the United States Senate Committee on
Energy and Natural Resources under Senators
Henry M. (“Scoop”) Jackson and J. Bennett
Johnston, to her tenure as a member and chair
of the Federal Energy Regulatory Commission
(FERC) and as Deputy Secretary of the
United States Department of Energy, Betsy
has been a leader in shaping our industry.
While we salute all of tonight’s finalists, we
particularly thank Betsy for her service,
both to our nation and to our industry.
116 insight December 2010
insight
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Megawatt Daily
www.platts.com
Thursday, August 26, 2010
Day-ahead markets for delivery Aug 26 ($/MWh)
ERCOT Index Change Range Deals Volume Avg $/Mo
On-peak
ERCOT, North 39.78 -3.11 39.40-40.05 54 3,500 63.86
ERCOT, Houston 40.26 -5.52 40.00-40.50 12 825 64.95
ERCOT, West 39.25 -2.00 39.25-39.25 N.A. N.A. 63.40
ERCOT, South 40.00 -3.54 40.00-40.00 N.A. N.A. 64.12
Off-Peak
ERCOT, North 24.50 -0.20 24.50-24.50 N.A. N.A. 29.67
ERCOT, Houston 24.33 -0.45 24.00-25.00 7 300 29.65
ERCOT, West 24.25 5.00 24.25-24.25 N.A. N.A. 27.04
ERCOT, South 24.50 0.25 24.50-24.50 N.A. N.A. 29.40
Southeast Index Change Range Deals Volume Avg $/Mo
On-peak
VACAR 36.00 -2.75 36.00-36.00 N.A. N.A. 55.09
Southern, into 35.37 -2.88 35.00-36.00 11 750 55.07
Florida 42.50 -2.75 42.50-42.50 N.A. N.A. 61.34
TVA, into 35.25 -2.75 35.25-35.25 N.A. N.A. 54.59
Entergy, into 33.00 0.25 33.00-33.00 N.A. N.A. 53.76
Off-Peak
VACAR 19.50 -1.00 19.50-19.50 N.A. N.A. 26.46
Southern, into 22.75 -0.88 22.75-22.75 N.A. N.A. 28.86
Florida 28.00 -1.00 28.00-28.00 N.A. N.A. 33.93
TVA into 21 00 1 00 21 00 21 00 N A N A 27 66
After delaying a decision for several months, Ohio regulators
took less than five minutes Wednesday to approve a new electric
security plan for FirstEnergy that calls for biennial power auctions
starting in October on behalf of the company’s Ohio Edison,
Cleveland Electric Illuminating and Toledo Edison subsidiaries.
Alan Schriber, chairman of the Public Utilities Commission
, said the plan, which runs from June 1, 2011, through May 31,
2014, “confers significant benefits across a broad spectrum of
customers. In keeping with sound public policy, the plan also
promotes energy efficiency programs and renewable energy
resource development.”
But the Ohio Consumers’ Counsel, the state’s residential
utility consumer watchdog, blasted the order, accusing the PUC
PUCO OKs FirstEnergy electric security plan
(continued on page 10)
American Electric Power says new data about thermal
overloads on transmission lines in the PJM Interconnection
show even more need for the proposed Potomac Appalachian
Transmission Highline. PJM itself says the data strengthen the
Newdata prompt fresh look at PJMline options
P
ec
n
En
n b
m
ai
h
ca
g
cie
t.
su
ch
E
ss
d
e
p
Asia Pacific
Halyard natural gas to supply
Western Australian market 2
South Korean STX buys Encana Canadian
gas field 2
Japan to drill for gas hydrates 2011-2012 2
Pakistan State Oil’s flood damage costs to rise 3
3
Europe, Middle East & Africa
KazMunaiGaz plans higher crude output
Gazprom increases gas flow to Turkey on
line outage 4
Iraqi Kirkuk crude oil flow to Ceyhan halted:
source 5
ShaMaran buys stake in Kurdistan explorer 5
Iran details gasoline self-sufficiency plan 5
Contents
Volume 88 / Number 170 / Tuesday, August 31, 2010
US proposes new fuel-efficiency car ratings
Would replace decades-old system to include GHG emissions
Washington—The Obama administration pro-
posed August 30 to replace the decades-old
fuel efficiency labeling system for new cars
and trucks with one of two new approaches
that would also rank vehicles according to
their greenhouse gas emissions.
One option under the initiative, which is
being spearheaded by the Environmental Pro-
tection Agency and the Department of Trans-
portation, would assign vehicles letter grades
ranging from A+ to D. The grades would be
based on vehicles’ fuel efficiency—either in
terms of miles per gallon or miles per change,
in the case of electric vehicles—as well as
tailpipe carbon dioxide emissions that are
blamed for global climate change.
A second proposed option would omit the
letter grades and simply rank vehicles on slid-
ing scales for fuel efficiency, CO2 emissions
and other air pollutants.
Both options would phase out the conven-
tional miles-per-gallon stickers that automak-
ers have put in the windows of new cars and
trucks for decades.
“The old, petroleum-centric labels, simply
land, administrator of DOT’s National Highway
and Traffic Safety Administration, told
reporters on a conference call.
DOT and EPA will take public comments
on the two proposed labeling options for 60
would take effect in 2012.
“We think a new label is necessary for
consumers to make the right decision for the
their wallets and the environment,” said Gina
McCarthy, EPA assistant administrator for air
and radiation.
Under the letter-grade option, electric vehi-
cles would receive an A+, and high-perform-
receive a D, officials said. That approach would
balances CO2 emissions with gas mileage and
plug-in hybrids would be graded on a ratio that
assumes 33.7 kilowatt hours of electricity
Notably, neither labeling option would
(Continued on page 7)
Oilgram News
]
Indian refiners hike July crude runs 3.2%
also lump cars and trucks into a metric that
aren’t good enough anymore,” David Strick-
average annual fuel costs. Electric cars and
ance cars that use a lot of gasoline would
used for every one gallon of gasoline.
4
Iraqi Kurds slam oil ministry on RWE deal 4
days, Strickland said, adding the new system days, Strickland said, adding the new system
n the two proposed labeling options for 60 o
s T and EPA will take public comment DO
eporters on a conference call. r
d and Traffic Safety Administration, tol
land, administrator of DOT’s National Highway
would take effect in 2012.
“We think a new label is necessary for
consumers to make the right decision for the
their wallets and the environment,” said Gina
McCarthy, EPA assistant administrator for air
and radiation.
Under the letter-grade option, electric vehi-
cles would receive an A+, and high-perform-
ance cars that use a lot of gasoline would
receive a D, officials said. That approach would
also lump cars and trucks into a metric that
C t t Contents Contents
new fuel-efficiency car ratings
old system to include GHG emissions
ministration pro-
he decades-old
m for new cars
ew approaches
according to
ons.
ative, which is
vironmental Pro-
rtment of Trans-
les letter grades
ades would be
ency—either in
miles per change,
s—as well as
ions that are
ange.
n would omit the
vehicles on slid-
CO2 emissions
e out the conven-
s that automak-
of new cars and
c labels simply
aren’t good enough anymore,” David Strick-
balances CO2 emissions with gas mileage and
average annual fuel costs. Electric cars and
plug-in hybrids would be graded on a ratio that
assumes 33.7 kilowatt hours of electricity
used for every one gallon of gasoline.
Iraqi Kurds slam oil ministry on RWE deal 4
Iraqi Kirkuk crude oil flow to Ceyhan halted:
source 5
ShaMaran buys stake in Kurdistan explorer 5
Iran details gasoline self sufficiency plan 5
4 ine outage l
azprom increases gas flow to Turkey on G
Indian refiners hike July crude runs 3.2% 3
akistan State Oil’s flood damage costs to rise 3 P
2 apan to drill for gas hydrates 2011-2012 J
2 gas field
anadian outh Korean STX buys Encana C S
2 t estern Australian marke W
alyard natural gas to supply H
c sia Pacifi A
Europe, Middle East & Africa
4 azMunaiGaz plans higher crude output K
Notably, neither labeling option would
(Continued on page 7)
Gas Daily
www.platts.com
Tuesday, August 31, 2010
Daily price survey ($/MMBtu)
NATIONAL AVERAGE PRICE: 3.710
Trans. date: 8/30
Flow date(s): 8/31
Midpoint +/- Absolute Common Volume Deals
Permian Basin Area
El Paso, Permian 3.350 -0.010 3.32-3.44 3.32-3.38 334 59
Waha 3.430 +0.000 3.37-3.60 3.37-3.49 828 125
Transwestern, Permian 3.225 -0.065 3.20-3.37 3.20-3.27 41 12
East Texas-North Louisiana Area
Carthage Hub 3.630 +0.045 3.60-3.66 3.62-3.65 116 32
NGPL, Texok zone 3.615 +0.000 3.57-3.73 3.58-3.66 722 107
Tx. Eastern, ETX 3.595 +0.015 3.52-3.60 3.58-3.60 3 4
Tx. Gas, zone 1 3.725 +0.045 3.67-3.83 3.69-3.77 460 79
East-Houston-Katy
Houston Ship Channel 3.790 -0.020 3.74-3.85 3.76-3.82 336 55
Katy 3.775 -0.005 3.74-3.86 3.75-3.81 1207 165
South-Corpus Christi
Agua Dulce Hub 3.680 -0.085 3.68-3.68 3.68-3.68 7 1
NGPL, STX 3.650 -0.040 3.62-3.85 3.62-3.71 147 24
Tennessee, zone 0 3.710 +0.045 3.60-3.82 3.66-3.77 186 45
Tx. Eastern, STX 3.695 +0.050 3.66-3.80 3.66-3.73 33 10
Transco, zone 1 3.705 +0.005 3.67-3.80 3.67-3.74 106 20
Louisiana-Onshore South
ANR, La. 3.770 +0.050 3.66-3.92 3.71-3.84 385 82
Columbia Gulf, La. 3.730 +0.020 3.68-3.88 3.68-3.78 347 65
THE
MARKET
Buoyed by the return of heat in the East and hurricane activ-
ity in the Atlantic, the October NYMEX gas futures contract
finished its first day as the prompt month 10.7 cents higher
at $3.812/MMBtu, ending an eight-session prompt-month slide. Cash
prices likewise followed demand higher in many regions.
Phil Flynn, analyst at PFGBest Futures, said the October contract
seemed to be getting a “post-expiration bounce” after the September con-
tract tumbled 16.6 cents to expire Friday at a new 11-month low.
Heat, hurricanes push October NYMEX higher
(continued on page 2)
Natural gas production in the Lower-48 states in June fell 1.2%, or
810,000 Mcf/d, fromMay levels, marking the first month-to-month
decline since December, the Energy Information Administration said
Monday.
EIA said gas production fromthe federal offshore Gulf of Mexico in
June continued a four-month slide with a 4.8% or 300,000 Bcf/d decline,
which the agency attributed to Hurricane Alex and pipeline problems.
Wyoming also saw a production slump of 5.5% or 380,000 Mcf/d because
Gas output falls for first time this year: EIA
(continued on page 6)
Adriatic LNG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103
AES Dominicana . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
AES El Salvador . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
America’s Natural Gas Alliance . . . . . . . . . . . . . . . 13
American Municipal Power, Inc . . . . . . . . . . . . . . 86
ARMZ Uranium Holding Co . . . . . . . . . . . . . . . . . . . 87
Bechtel Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Cairn India Limited . . . . . . . . . . . . . . . . . . . . . . . . . . 88
Capgemini . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42, 82
Chesapeake Energy. . . . . . . . . . . . . . . . . . . . . . . 90, 91
Cleco Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
CONSOL Energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
Credit Suisse . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
DTE Energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
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Exelon . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115
Fortune . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Green Gas International . . . . . . . . . . . . . . . . . . . . . . 94
Indji Watch . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Kosmos Energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
Landis+gyr. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
North Delhi Power Ltd . . . . . . . . . . . . . . . . . . . . . . . 96
NextEra Energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Nodal Exchange. . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
NRG Energy Inc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
Oracle . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Peabody Energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
PJM Interconnection . . . . . . . . . . . . . . . . . . . . . . . 103
SAIC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . back cover
Singapore International Energy Week . . . . . . . . . 98
S-OIL Corp . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
SolArc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Southern Company . . . . . . . . . . . . . . . . . . . . . . . . . 100
Staples Inc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
Stream Energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
Ventyx . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
Xcel Energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Zorlu Energy Group . . . . . . . . . . . . . . . . . . . . . . . . . 103
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insight

Publisher’s Note
The 2011 Global Energy Outlook issue of Platts Insight—a key resource for shortand long-term planning—draws on the first-hand knowledge and expertise of just a few of the 250 Platts editorial thought leaders. They will identify key issues from 2010 and uncover potential pitfalls and opportunities for 2011. For example, John Kingston, Platts Global Director of News, tackles the #1 energy story of 2010, examining the impact of the Macondo oil rig explosion and spill, and the impact it may have on aternative energy sources like shale gas. The Platts Global Energy Outlook Forum—Clean Energy: Fact or Fiction?—was held in conjunction with this publication and the 12th annual Platts Global Energy Awards. John Hofmeister, former president of Shell Oil Company, author and founder and CEO of Citizens for Affordable Energy Inc, was the keynote speaker. The 2010 Platts Top 250 Global Energy Company RankingsTM are also featured in this issue, providing a breakdown of the Top 250 by industry and region, offering commentary on trends and movement within the list. And read the inside story, as our judges go beyond evaluating financial metrics, considering customer focus, community involvement, integrity and leadership before granting one of these prestigious awards. This year’s Global Leader’s Section showcases companies and executives who are making major advances in their local communities and across the world through exceptional leadership and innovation. To view our upcoming publications and other events, visit our web site at www. events.platts.com. Patsy Wurster Publisher, Platts Insight

Patsy Wurster

Guest Editor’s Note
Cheap Gas for Dirty Coal If the Macondo oil spill in the Gulf of Mexico hardened the resolve of the environmental movement, it has not resulted in any tangible progress toward cap-andtrade in the United States. Rather the opposite, mid-term elections in the US saw support grow for the right wing of the Republican Party, a section not known for its enthusiasm for regulation, environmental or otherwise. However, the US has the capacity to reduce its carbon emissions substantially without cap-and-trade, other forms of environmental regulation, or indeed renewables. It will replace, just as Europe did, coal with gas in power generation. And it will do so, again as Europe did, not primarily to the tune of a green agenda, but for good commercial reasons. Aging coal plant forms the backbone of the US generation system, but it faces environmental opposition that can delay and obstruct new plant construction for years, as well as increasing penalties for all of its emissions, not just carbon dioxide. Moreover, it lacks the operational flexibility of a gas-fired power plant in a future where flexibility will become more and more valuable. In short, building a new coal plant in the US faces a mountain of risk. “Clean coal” cannot come to the rescue. It’s simply too expensive. Natural gas in the US is cheap, making projects where the economics are already challenging—Carbon Capture and Storage, Integrated Gasification Combined Cycle and so on—look deathly. And that goes for new nuclear too. The result, depending on the incentives provided at federal and state level for renewables, is likely to be an emerging gas/wind duopoly. And if those shale gas wells do have the rapid decline rates some analysts suggest, never fear, the US already has a whole heap of currently redundant LNG regasification terminals on standby. Ross McCracken Editor, Platts Energy Economist
December 2010 insight 1

Ross McCracken

Inside
1 Publisher’s Note
Patsy Wurster

39 Premium for US Nuclear Newbuild
Aneesh Prabhu and Swami Venketaraman

1 Guest Editor’s Note
Ross McCracken

5 Creative Destruction and Sustainability
John Kingston

43 Winds of Change for Renewable Energy
David R. Jones

9 Shale: the Great American Gas Revolution
Bill Holland

48 Adventures Abroad for Coal
James O’Connell

14 Gas Prices Test Oil Link
William Powell

53 Mexican Standoff: What Can Come of Cancun?
Frank Watson

19 China: Driving the Oil Price
Ross McCracken

26 OPEC at 50
Kate Dourian

57 Petrochemicals: Consolidation and Recovery
Shahrin Ismaiyatim

30 Russia Grapples With Modernity
Nadia Rodova

62 Power Sector Revival (Platts Top 250 Global Energy Company Rankings™)
Ross McCracken

34 Thermal Plants to Play Cameo Role in EU Green Dream
Henry Edwardes-Evans

104 A Reflection and Dedication
Patsy Wurster

Authors

Kate Dourian

Henry Edwardes-Evans

Bill Holland

Shahrin Ismaiyatim

David R.Jones

John Kingston

Ross McCracken James O’Connell

William Powell

Aneesh Prabhu

Nadia Rodova

Swami Venkataraman

Frank Watson

Kate Dourian heads Platts Middle East office in Dubai covering energy news and developments in the Persian Gulf states, including Iran, Iraq and other Arabic-speaking countries. Also a member of the OPEC reporting team, she is a fluent Arabic and French speaker. She received a degree in English literature and mass communication from the American University of Beirut. Her job experience includes three years with the Associated Press in Beirut (1980-83) and then Reuters in Lebanon, Egypt, Morocco, Cyprus and London (1984-2000).

Henry Edwardes-Evans has a bachelor of arts degree from Oxford University, where he studied English Literature. As a trainee journalist at Financial Times Business, he worked on a number of energy-related publications before being appointed editor of EC Energy Monthly in 1996. Henry launched and edited the FT newsletter Power in East Europe, which subsequently became Platts Energy in East Europe. In 2000, he took over editorship of FT’s flagship energy newsletter, Power in Europe, now Platts Power in Europe, developing power plant trackers and managing three other highly-regarded Platts newsletter titles – Energy in East Europe, Power UK and Power in Asia.

2 insight December 2010

Bill Holland has been covering shale for six years as an associate editor for Platts’ Gas Daily. In addition to shale developments, Bill also covers corporate finance, bankruptcies and mergers & acquisitions in the oil and gas industries. A graduate of St. Joseph’s University in Philadelphia with degrees in English and Philosophy, Holland has also done MBA studies at Hood College in Frederick, Maryland. Prior to becoming a reporter and editor at newspapers, television stations and online news services in Florida, he served 15 years in the US Navy as an aviator and deck officer. Shahrin Ismaiyatim, global editorial director of Platts Petrochemicals, joined Platts in 2001. Starting off as a frontline reporter in the Singapore bureau, Shah covered the Asian aromatics, polymers and olefins markets. In January 2003, he was posted to London to head Platts’ European petrochemicals division, before assuming the responsibility of leading the global team at the start of 2009. Before Platts, Shah was a currency futures and interest rates broker, starting in 1991. He dealt primarily in US dollar and UK Sterling pound interest rates swaps and derivatives. David R. Jones is Platts’ global renewable energy editor, based in London. An environmental journalist with 20 years’ experience, David edited newsletters on US state and local government, medical waste management, oil pollution, and solid waste before joining Platts in 2001 to cover coal and energy policy. John Kingston, Platts’ global director of oil, manages a staff of almost 80 editors covering the world’s oil industry. He has been with Platts for 22 years, including stints as managing editor of Platts Oilgram Price Report and editor-in-chief of Platts Oilgram News. Prior to joining Platts, John worked for American Metal Market and for newspapers in New Jersey and Virginia. He is a graduate of Washington & Lee University. Ross McCracken, editor of Energy Economist, joined Platts in 1999 to run the European and West African crude desk. He was previously an editor with an Oxford University-based political and economic consultancy, and has taught in Poland and China. He holds a master’s degree in European studies from the London School of Economics and his undergraduate degree is from the University of East Anglia. James O’Connell, international coal managing editor, joined Platts Metals in 2001, covering global precious metals trading. He joined the coal team in early 2007, leading reporters in Europe and Asia producing news for the global coal, electrical and steel industries. He previously worked for Irish

broadcaster RTE. He holds a BA in English and History and a Higher Diploma in Applied Communications from the National University of Ireland. William Powell is the editor of Platts International Gas Report, a fortnightly with a strong focus on markets and politics. He has worked for Platts since 2001, where he has managed the real-time European news and markets team, and has been writing about gas markets since the mid-1990s. Before Platts he held senior positions at Financial Times Energy, Argus Media and Heren Energy. He is a Russian speaker and a graduate of London University. Aneesh Prabhu is a director in Corporate and Government Ratings at Standard & Poor’s. He is also a credit analyst for a number of large electric companies in the PJM interconnect and Mid-Atlantic regions. Aneesh is a Charterholder of the CFA Institute and holds the Financial Risk Manager (FRM) certification of the Global Association of Risk Professionals (GARP). Aneesh has an MBA from the University of Wisconsin, Madison, and holds a BE in electronics and communications engineering from the Indian Institute of Technology, Roorkee. Nadia Rodova, managing editor of Platts Moscow office, joined Platts in 2004 to cover energy markets in Russia and the post-Soviet area. She previously worked for the Australian Broadcasting Corporation and a number of economyfocused publications in Russia. She holds a Higher Diploma in Finance from Russia’s Financial Academy and in Journalism from the Moscow State University. Swami Venkataraman is a director in Corporate and Government Ratings with Standard & Poor’s, and a member of the Utilities, Energy, and Project Finance Ratings Group. He joined S&P Indian affiliate CRISIL in 1997 and has worked since 1999 in both the New York and San Francisco S&P offices. He is a Chartered Financial Analyst, holds a B.Tech from the Indian Institute of Technology and an MBA from the Indian Institute of Management. Frank Watson, managing editor of Platts Emissions Daily, is a financial journalist and editor specializing in energy markets. He has headed up the global emissions team at Platts since May 2008, having held the position of Europe Editor on emissions markets since August 2005. Frank developed Platts’ coverage of the emerging EU Emissions Trading Scheme, UN Clean Development Mechanism and Joint Implementation schemes, covering regulatory policy under the EU ETS and Kyoto Protocol, producing independent over-thecounter price assessments, market commentary and analysis.

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December 2010 insight 3

biomass and conservation. and even if we do have it. solar and wind power in the United States have to compete with the growing 800-pound gorilla of natural gas. Platts News The Macondo oil spill in the Gulf of Mexico has prompted calls for a new and sustainable energy future based on home grown renewables. don’t you see. While biofuels can displace oil as a transportation fuel. it does nasty things like this. one based on natural gas. and have to a degree done so.” a free economy’s irresistible force where changes in customer demand and the supply of market-altering goods and services fundamentally alter the landscape of a market. primarily from shale plays. Global Director. The legendary Austrian economist Joseph Schumpeter referred to “creative destruction. But all over the US.creative destruction Creative Destruction and Sustainability John Kingston. The US needs to start using more solar. wind. The Macondo oil spill in the Gulf of Mexico made it very clear: the US needs to get off foreign oil. While economists. And that’s even before shale gas technology has made its way to other countries. We’re running out of oil. the forces of creative destruction have already been busy forging a new energy era. many times. of course. The problem is that advocates of swapping a petroleum-based economy for one reliant on renewables are missing the mark. And. In the weeks after the tragic April 20 explosion and subsequent spill this was a constant refrain. the word sustainable was heard many. peak oil disciples and those intractably opposed to oil thought they were Illustration by Nelson Sprinkle December 2010 insight 5 .

Multiple Impacts Except in competitions won by very smart college students. The shrinkage of the US LNG market is. the impact is immense: ◆ The Gas Keeps Flowing It’s difficult to overstate the impact that shale gas has had in the years since George Mitchell first successfully combined hydraulic fracturing and horizontal drilling. primarily because the spread between gas and oil keeps these wells profitable. Pickens told Newsweek in an interview. As a result.” Constellation Energy canceled plans in October to build a new nuclear plant in Maryland. possibly redefining the boundaries of what is considered “sustainable.” Consider the following: ◆ ◆ ◆ In mid-2009. The value of the liquids are so robust that they support gas prices of . and in every other area of the US with a shale gas resource. . Wind turbines on the top of an automobile would be silly and make it tough to get through an underpass. where oversupply leads to low prices and then production shutins. T. why spend billions of dollars building receiving terminals that already face heavy local opposition and for which there may simply be no market? ◆ LNG liquefaction plants from Nigeria to Qatar to Trinidad face a much smaller US market than originally envisioned. allow the market to rebalance supply and demand. But that isn’t happening anymore. While much news coverage at the time cited transmission problems as a key reason for the deferral. And the game is only just beginning. ing through shale rock. have long occupied separate universes. but never really did. has the potential to link markets in ways that LNG mildly threatened to.solar and wind power in the United States have to compete with the growing 800-pound gorilla of natural gas. Boone Pickens cancelled his giant wind farm in the Texas Panhandle. The normal swings in the natural gas market. gas drilling has taken an strange turn. With gas from shale so abundant. It was being driven by drill bits slicfact that some people are saying “zero” should give an indication of what’s going on. in Pennsylvania. There is now an unprecedented spread between oil and gas prices in the US. the US exporting 6 insight December 2010 . We’re now at $4. and the gas keeps flowing. solar cells cannot power a car. The natural gas boom. When it goes below $7 (per Mcf). nobody has an exact number. gas pricing is predominantly linked to oil. when asked the reasons behind his decision: “The price of natural gas dropped. That means more LNG for the rest of the world. well. which has still to be exported outside the US. and liquid fuels for transportation on the other. ◆ The long list of potential LNG facilities to be built in the US is dwindling. in south Texas. This will be aided by the fact that outside the US. followed by a rush of high-pressure water and other fluids.creative destruction having their “ah-ha” moment when Macondo blew out. One of the reasons cited: low natural gas prices. If the most ebullient and optimistic forecasts are accurate. . . The liquids that come up with the gas are priced against crude. Fuel for electricity generation on the one hand. but the US petrochemical and fertilizer industries will receive an enormous shot in the arm by being able to use natural gas as a feedstock at prices far cheaper than the gas prices of other countries. in essence. it’s hard to finance those lines. this creative destruction was occurring in the city of Fort Worth. .2011 global energy outlook . freeing massive volumes of once unreachable natural gas. .

is relentlessly upbeat about solar’s future. He describes the balance sheets of major shale gas players as having huge debt load. In a classic half empty/half full debate. That controversy went on for close to 10 years. might want to check the benchmark Henry Hub natural gas price before getting too excited. its construction drew heavy. but there is a serious school of analysts that believes the projections of gas as far as the eye can see are flawed.creative destruction ◆ its gas surplus to other countries. Good news for wind! However. but its lower carbon footprint is starting to run up against its rather large visual and land-eating footprint. producing lots of gas to generate quick cash. Futuristic dreamers looking over that hideous orange-like slick that covered the Gulf of Mexico after the Macondo spill. well-funded opposition from local residents who didn’t want to see those turbines from their beachfront properties. It’s because they don’t see shale gas’ production levels as sustainable. charged overnight off a grid supplied by a natural gas-fired power plant. fueled by natural gas? Or is it just straight NGVs. taking market share from coal? Or is it a hydrogen fuel cell. and then selling more assets to generate cash to drill more wells to produce more gas to . running compressed natural gas straight out of any one of the US’ many shale plays? Whatever creative destruction path gets followed. Will low-priced natural gas prompt the development of new cars and new distribution systems to power them? Shale Gas Opposition The gas-fueled future does have its critics. . and thinking they were seeing the key to a radically-changed energy future. supplied by shale plays. A decade. and so on. Is the future of automobile propulsion a plug-in hybrid. .2011 global energy outlook . They are not so much against the use of gas. In a speech last year before the Association for the Study of Peak Oil. It’s not that they don’t believe the reserves exist. But for now. and solar photovoltaics at anywhere from 20 to 50 cts. ■ December 2010 insight 7 The possibilities are endless. it is clear that no matter how beloved they may be. as the name implies. The plays will not be providing an endless supply of gas 30 years from now. solar and wind are going to have an extremely difficult time competing against this gas bonanza. that surplus does exist. Berman’s criticism. Generation costs for one kilowatt hour of electricity vary widely. with the hydrogen provided through the process known as reforming. and opponents are still vowing to take Cape Wind to court following the Interior department approval. Wind has become more competitive. is that the current glut of natural gas. he laid out the crux of his argument. expressed by others. That price—which as you read this probably starts with a four—may be a dream-killer. He says they engage in activity that involves frequent writedowns of assets. an independent geophysicist who has written and spoken extensively about his views on long-term shale gas viability. the US Interior department in April approved the Cape Wind project. The Honda Civic GX NGV is the only Natural Gas Vehicle currently sold in the US. for one project. but an estimate by research company SolarBuzz recently put the cost of a combined cycle gas turbine at 3-5 cts. One of the most outspoken and best-known shale skeptics is Art Berman. . according to this argument. wind at 4-7 cts. and still make money. Companies producing shale gas are promoting two concurrent trends: that producing shale gas can simultaneously be low risk/ high reward. biomass gasification at 7-9 cts. a 130-turbine 420 MW facility that will power the Cape Cod area of Massachusetts. SolarBuzz. cannot be sustained because depletion rates from shale wells are so enormous. and that an exploration venture can have high capital costs and low gas prices at the same time.

.

June 2010: The NYMEX contract rolls off the board at $4. shale gas has transformed the United States from a growing importer of LNG to a potential exporter. New terminals along the Gulf Coast file for permits to export gas rather than import it. The gas futures contract will fall below $4/MMBtu as the summer progresses without a major storm. June 2008: The NYMEX natural gas futures contract rolls off the board at its highest closing price ever. Worth Basin Maverick Sub-Basin BarnettWoodford Black Warrior Conasauga Basin Valley and FloydRidge Province Texas. Summer heat coupled with the annual hurricane threat to Gulf of Mexico production spooks a North American market where gas demand has outstripped gas supplies for more than a decade. Platts Gas Daily Built on advances in drilling and information technology. International engineering giant Fluor says that with US gas prices forecast to be low for the Shale Gas Plays. The country’s recoverable gas resource estimates have ballooned. Lower 48 States Montana Thrust Belt Cody Gammon Williston Basin Greater Green River Basin Uinta Basin Mancos HilliardBaxterMancos Forest City Basin Michigan Basin Antrim Appalachian Basin Devonian (Ohio) Illinois Basin Marcellus Utica New Albany Piceance Basin Pierre Hermosa Paradox Basin Lewis San Juan Basin ExcelloMulky Cherokee Platform Anadarko ArdBasin m Palo Duro Bend ore Ba sin Basin Permian Basin Raton Basin Woodford Fayetteville Arkoma Basin Chattanooga Barnett Ft. reaching an alltime high of 26. based on data from various published studies. drillers in the Canadian province of Alberta punch ever more holes in the ground to satisfy the gas behemoth to the south willing to pay more than $10/MMBtu for the supply.2 Tcf for the year.natural gas Shale: the Great American Gas Revolution Bill Holland. 2010 December 2010 insight 9 . $12. Gas production grows anyway. Despite stiffer royalty taxes.753/ MMBtu.Neal LouisianaMississippi Salt Basin Miles 0 100 200 300 400 Marfa Basin HaynesvilleBossier PearsallEagle Ford Eagle Ford Rio Grande Embayment Shale Gas Plays Stacked Plays Shallowest / Youngest Deepest / Oldest Basins ± Source: US Energy Information Administration. and despite growing environmental concerns.804/MMBtu. alleviating a shortage in the world’s largest gas-burning market. Associate Editor. a 62% drop in two years. The state of Alaska renews its push to build a $40 billion pipeline to carry gas from the North Slope to the Lower-48 states. shale gas technology is going global. Applications for dozens of LNG terminals crowd the US regulatory dockets at the state and federal levels. The list of canceled LNG terminals grows almost monthly. while the rig count falls as US gas drillers further reduce activity in reaction to low prices. updated March 10.

leaving behind a mixture of sand and plant material that under pressure and heat became thick layers of impermeable rock one to two miles below the earth. some said. Slant and horizontal drilling. A sedimentary rock. Questions resurface as to whether the Alaska pipeline is economically viable. nitrogen. carbon dioxide.natural gas next ten years. wanted to get more hydrocarbons out of the ground. proppants—sand and silicas—were added to the mix. Horizontal drilling was the first of Mitchell’s tools.” IHS Cambridge Energy Research Associates Chairman and author of the oil history. it remained impervious to extraction. While plankton and the accumulated organic matter remaining after oceans receded millions of years ago left the rock rich in gas. turning the drill bit 90 degrees along the horizontal plane and drilling another mile through the shale rock. watching oil output on his leases near 1. unable to compete with gas on price. Two of those techniques—horizontal drilling and hydraulic fracturing—came from a 20-year quest by a stubborn Texas oilman. The horizontal well bore exposed far more rock to the well than a simple vertical shaft. The geological structure of the Barnett Shale was relatively well-known from decades of oil and gas activity in the area. but how could producers map the extent and thickness of shale layers in areas that weren’t well-defined? Three-dimensional seismic surveys. silica. Slant-hole well Horizontal well Lenticular reservoir Blanket reservoir Source: US Geological Survey 10 insight December 2010 . Through 30 wells and nearly ten years. Daniel Yergin told audiences at a conference in March. then. using motors. The rock was too deep and too hard. who. creating fissures in the previously impermeable formation. produces more gas than can be consumed. even propane. To hold those fissures open and allow gas to flow continuously.2011 global energy outlook . Solving that problem required three elements that would turn a US gas industry away from chasing declining conventional fields into a gas factory that. The Prize. dollars) in various combinations down the well to crack the rock and hold it open: water. Horizontal drilling and hydraulic fracturing have drillers sinking a well vertically more than a mile underground. shale was formed 300 to 400 million years ago as oceans withdrew from low plains throughout the world. or even needed. various gels. Industry thinking for a long time was that gas from shales was unrecoverable. The second technique was hydraulic fracturing. Mitchell pumped fluids and gases (and. initially developed by ExxonMobil. better known as “fracking”: pumping fluids down the well under extremely high pressures to crack the rock. nuclear power plant projects will start to be canceled. Fort Worth decline. The third development came from information technology. use seismic data to cre- What Happened? In a Word. for the first time in 40 years. Shale “Simply the most significant energy innovation so far this century.

Atlas and Range Resources. trained in the Barnett and then found shales across the US. where they learn how to locate and exploit shale. 2. 85% of that shale other Source: Potential Gas Committee. Dr. Terry Engelder. Statoil and. Processing and manipulating the huge amounts of data collected from seismic surveyors didn’t become economical until computer processing speeds increased exponentially during the high-tech revolution of the 1990s. Chesapeake sells a minority share of its acreage in a play and the international firm pays most of the drilling expenses for a year or two. geologists and engineers have had to change their estimates of the gas that could be recovered as drillers got more efficient and the size of the shales became clearer from drilling. a group Developing Reserves Independent producers such as Oklahoma City-based rivals Chesapeake Energy and Devon Energy (the latter purchased Mitchell Energy in 2002 for $3. In 2008. Texas. the China National Offshore Oil Corp. In every case. The end result of all this activity had the Potential Gas Committee. gas producers of all sizes were able to map the earth. the internationals get their share of the gas sales revenue and admission to Chesapeake’s “Shale Academy” in Oklahoma City. shale 2000 1800 1600 1400 Tcf 1200 1000 800 600 400 200 2002 2004 2006 2008 19% increase. Chesapeake now rivals BP as the US’ biggest gas producer on the strength of new hydrocarbons coming from shale plays it operates across the country.5 billion). Smaller independents were already developing profitable shale plays across the country: Southwestern Energy in Arkansas’ Fayetteville Shale.” is now estimated to contain 26 Tcf of gas and has already produced more than the 5 Tcf originally forecast. 65% of that shale 39% increase. Chesapeake was also the first to establish joint ventures with international oil companies including BP. Technically recoverable US natural gas reserves. took up the tools. Colorado School of Mines December 2010 insight 11 . Armed with cheaper. Chesapeake has assembled the leading land position in the Marcellus and holds lots of acreage in all the major shale plays. In return. But the Haynesville was only the “next” play if you were Chesapeake. Range Resources in the Marcellus Shale that stretches from New York south through Pennsylvania into West Virginia and Ohio. revised his original 15 Tcf of gas in place in the Marcellus to nearly 500 Tcf after seeing the first results of drilling by Chesapeake. Typically. Although it was the pioneer in the Haynesville.2011 global energy outlook . Devon in Oklahoma’s Woodford. and Petrohawk Energy in the Eagle Ford Shale south of San Antonio. The Barnett Shale. The biggest revision to date came at a Platts conference in Pittsburgh in 2008. Louisiana. most recently. the “granddaddy. Chesapeake announced it had assembled acreage in the “next” big shale play—the Haynesville around Shreveport. heavy-duty microprocessors.natural gas ate a three-dimensional map of tight reservoirs such as shale. The Penn State University geologist who spent his career researching the Marcellus Shale.

DC. China and India are signing agreements that will have the US Geological Survey examine their geologic data for signs of shale. are being exported around the globe through joint ventures in US shale plays between independents and global majors such as BP. India’s Reliance and China’s CNOOC. Going Global Despite the difficulties. Already. Halliburton has spudded two shale wells 75 miles south of Warsaw. into the more densely populated areas of the Northeast US. reporting in 2009 that potential gas in the US. as gas drilling moves out of the lightly populated areas of Texas and Oklahoma.000 Tcf. Fracking Concerns However. ■ Source: Chesapeake Energy 12 insight December 2010 . and the headlines add up in the more densely populated Marcellus Shale. Already. well blowouts and chemical spill on the surface. France’s Total. polluted and requiring treatment. Hydraulic fracturing. and meeting greenhouse gas emission goals by fueling coal and oilfired power sources with cleaner burning natural gas. the industry’s common practices are getting a skeptical look. Each accident creates a headline. 2011. the techniques used by George Mitchell. exploration for shale gas is poised to expand worldwide in the coming year. table from poorly cased well bores. Fracking requires millions of gallons of water for each well. the federal Environmental Protection Agency was ordered by Congress this year to investigate the effects of the practice on drinking water. now thought to be the world’s second largest gas field (behind Iran’s South Pars). in August drew representatives from 20 countries.natural gas of geologists.2011 global energy outlook . Although water use and disposal is regulated in the US by each individual state. which for years had hovered around 1.836 Tcf. their interest spurred by two factors: independence from outside suppliers of gas. Poland. and roughly half that water comes back to the surface. Norway’s Statoil. A US State Department global shale conference held in Washington. had nearly doubled to 1. The industry’s image has also been hurt by the inevitable accidents that occur among the thousands of wells drilled annually: gas migration into the water 3. India plans to hold its first auction of shale leases in three states in August. academics and industry representatives that meets every other year at the Colorado School of Mines. Where the fresh water for fracking will come from and where it will be disposed of after it is used have become hot-button issues as the industry moves closer to the political and media centers of the Northeast US. where it has operated for years. now 91.

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LNG sellers had to choose between the markets of Asia and Europe. The prompt UK price in January went below the price of spot gas European Supply Glut European gas importers. Peru and Yemen also joined the ranks of exporting countries. These contracts left importers holding more gas than they could expect to sell—the result of both a recessioninduced downturn in demand and the surge in uncontracted LNG production. who have long been unwilling or unable to change their practices. but there was no chance if they coincided. sign up to long-term gas contracts indexed to oil products with standard take-or-pay terms. as cheap shale gas in the US and abundant spot-market supplies of LNG hammered incumbent pipeline importers tied to oil indexed take-or-pay contracts. particularly in continental Europe. but there is still a lot of pain to come on the pricing front. competition from buyers was mild. Editor. owing to the simultaneous fall in demand and massive ramp up of domestic shale production. and is expected to hit its 77 million ton per annum ceiling this fiscal year. particularly in the UK. a string of gas majors brought on-line brand new import capacity. the dominant players in an over-supplied European gas market had to embark on a massive damage limitation exercise. They have achieved partial success on volumes. The incumbents might have been able to cope with one of these two events separately. The old assumptions of peak scarcity managed by storage and rationing through prices went by the board. This infrastructure was tested to the full in the coldest winter for decades. With the US out of the market for imports. which runs from Russia to Germany via the Baltic Sea. Gas markets went through the mangle in 2010. continue to 14 insight December 2010 . Among the latest of these contracts is for the supply of first gas through the yet-to-be-completed 55 Bcm a year Nord Stream pipeline. The abundance of gas threw into sharp relief the difference between spot and long-term contract prices indexed to oil. Upstream. Platts International Gas Report Too much supply and too little demand has been the natural gas market story of 2010. However. which is linked by pipeline to continental European markets. Downstream. Prices in Asia largely reflected the cost of freight from the Atlantic Basin with a varying but seldom sizeable premium on top. Qatar brought more LNG trains on-stream. As a result. incumbents dominating supply in their own markets have been left with more gas than they can possibly sell.gas markets Gas Prices Test Oil Link William Powell. as growing competition globally pointed up the flaws in the European system. The parallels with the United Kingdom in the 1990s are striking.

winter demand pushes spot prices above the oil indexation level. and spot prices. this year. E. the federal government has repeatedly pushed back an approval decision. too little demand and improved transmission between markets—drove a wedge between oil-indexation. Some gas pricing has been transferred from oil to gas hub prices. oil prices remained consistently more expensive than spot gas. oil-linked Europe and Henry Hub. Some consolidation is expected. there was a marked slowdown in Fujairah loadings in the summer months. and prices were generally stable.ON Ruhrgas in Germany. Among the risks on the supply side is environmental permitting for coalbed methane-LNG projects in Queensland. As an indication of the extent of the problem.2011 global energy outlook . Downstream. However. despite record demand. in exchange for granting buyers’ price relief. the norm in the UK. With much of Qatar’s latest LNG trains’ output going to meet spot demand. Australia. panicked gas majors such as E. Gas prices for UK spot. idling plant as long as possible. The latter extracted better terms for its own sales and marketing operations in continental Europe. which prevails on the European continent. Usually. which is a precondition for investment decisions. There were no problems at the UK’s National Balancing Point. US HH 70 60 50 40 p/th 30 20 10 UK NBP NWE GCI 7/09 8/09 9/09 10/09 11/09 12/09 1/10 2/10 3/10 4/10 5/10 6/10 7/10 8/10 9/10 10/10 Source: Platts December 2010 insight 15 . producers have been slow to take fi nal investment decisions on future upstream projects. While partners such as BG remain optimistic. and there is little sign of an imminent change in this relationship. and prices 1.ON Ruhrgas this autumn held an auction for gas delivery within Too Much Gas As a consequence. given the number of projects that will otherwise be chasing the same markets—not to mention the same small band of contractors and suppliers able to carry out the work. while oil indexation tends to result in higher prices in summer. but Gazprom has stuck to its guns more firmly than Norway’s Statoil. and have been generally relaxed about the duration of their maintenance programs at existing ones. attracting spot gas to the continent. That combination—too much supply. both winter and summer. GDF Suez in France and Italy’s Eni have been doing what they can to offload surpluses and slash the price they have to pay for gas they cannot avoid taking. resulting in flows from the continent to the UK.gas markets for the following summer as the engineers tested out their new equipment. languishing.

E. there was and is no certainty that in a few years’ time. which might explain why it has disposed of some of its shortterm LNG contracts—to Gazprom. reflects in part a lack of competition in that market. This will deter new entrants. a wall of abundant gas exposed the market price as traders went to work. by perpetuating additional risks—oil prices and currency to name but two. too. who can see the spot price but not the whole picture. Gas forwards for UK NBP vs Henry Hub. and in both cases the buyers are left having to negotiate their way out of hefty payments for unwanted gas. In turn.ON Ruhrgas has restructured. in both cases. but sold none at all. the supply-demand picture will not look completely different. it set a price level based on oil prices. Eni has to sell its stakes in major import pipelines to Italy. This high price should attract LNG. Regasification and 2. Shippers calculated that the spot market would have delivered savings of about 5%.2011 global energy outlook . The high price of the Italian spot market. as part of deals done to avoid formal competition charges. not to mention its lack of liquidity. only to dispose of less than a quarter of the volume.gas markets Germany. in $/MMBtu. In both cases. to Korea and to China. Apparently ignoring all the signals. and to sell gas at a loss. parceling out the surplus. October 20. But it is reasonably certain that linking the gas price to fuels that barely compete nowadays will continue to hinder the smooth operation of the market. Deja Vu The parallels between the most liberal market in Europe—the UK—in the 1990s and the incumbents of continental European markets today are striking. Its joint venture in Slovakia also tried to auction off no longer needed gas. system entry costs appear to offset any advantage that LNG sellers might gain from the apparent arbitrage. and someone else is in charge of gas procurement. and then the incumbents will be scrabbling for gas on the same terms as their competitors. but unused berthing slots offered to the market at the Adriatic LNG terminal have not been sold. this might affect growth Competition Issues GDF Suez and Eni have more subtle problems to tackle: both must reduce their rights to transmission capacity to encourage more competition and satisfy the European Commission. GDF Suez must lose some of its pipeline and LNG import rights. NBP Summer 2013 Winter 2012 Summer 2012 Winter 2011 Q4 Q3 Q2 Feb Jan 2011 1 Source: Platts 2 3 4 5 6 7 8 9 10 Henry Hub 16 insight December 2010 . In both cases. a legal or virtual monopoly had bought up gas to forestall competition in supply in its own market.

including shale gas.gas markets in the supply of gas. Asia has been seen as a key area of future demand growth for LNG. at a time when gas for coal replacement in the power sector is the one certain way to reduce the EU’s carbon dioxide emissions and cope with the intermittency of growing wind capacity. while construction of its latest nuclear reactor is delayed. given very different conditions in Europe from North America. and in both cases the buyers are left having to negotiate their way out of hefty payments for unwanted gas. they still see the US as offering value for money—especially in plays where there are natural gas liquids accumulations. have signed enough off take agreements to underpin the financing of an Asian LNG project. Platts’ assessments show they have doubled. rather than Japanese or Korean companies. while China is making the most of its geographical position to widen its supply portfolio. but India and China have for the moment only limited capacity to take advantage of its availability. Even if plans to convert import terminals into liquefaction facilities do materialize. The US. to join the already-flowing pipeline gas from Turkmenistan. Concerned with its own production from shale. such as those from Yemen and Sakhalin in Russia. but there is.2011 global energy outlook . for example—the latter being the first instance where Chinese. However. Despite the low prices. LNG output has also been lower than actual capacity implies. has added a new LNG terminal. Both countries are developing indigenous sources of gas production. companies are continuing to pile into acreage there: European companies are generally negative about the prospects for the shale gas “revolution” on their own patch. which compensate for the relatively low price that an MMBtu of gas commands. With so many alternatives lined up. In fact. Russia is talking up the prospects of a long-term contract. a legal or virtual monopoly had bought up gas to forestall competition in supply in its own market . remained a marginal player on the global stage. Henry Hub price movements for prompt months appear to reflect most closely changes in storage volumes. China—which is also continuing to develop its own gas production centers—can afford to start thinking more about the price of its gas and worry less about its security of supply. still no agreement on the price. In both cases. Some LNG cargoes were delivered for practical reasons. Several Japanese utilities have had to buy in spot LNG to cover nuclear outages. its surplus and export limitations Asia Rising Despite the surplus of gas. Russia and Uzbekistan are on stand-by as new suppliers for China. . by contrast. ■ December 2010 insight 17 . compared with last year’s depressed levels. they have also contracted with Myanmar for pipeline gas. spot prices for LNG in Asian markets have improved. in particular. raising questions about the reliability of the country’s nuclear fleet. new gas-fired power plant. as the US market remained so much cheaper than markets elsewhere. and to sell gas at a loss. while other factors such as hot summer weather. it is hard to imagine that the quantities of domestically-produced LNG will be enough to influence the domestic gas price. Chinese companies have in the last year signed up for future deliveries of LNG from Australia and Papua New Guinea. and they are now higher than some of the very cheap LNG term cargoes. after years of talks. effectively disconnected it from the rest of the world. . disconnected from oil as well as other competing fuels. if not commercial ones. even if sellers are able to lock in a sizeable margin. In addition. However. Taiwan. offshore problems in India and a return to stronger growth in Asia’s still fast developing economies has prompted stronger prices in Asia. at least in the short to medium term.

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hovering around $12 per barrel.272 billion barrels in April of this year.053 million b/d.5 million b/d. Strategic stocks are estimated to be in excess of 100 million barrels.950 million b/d expected in 2010. The last time stocks were this high the price of crude was at one of its lowest ever points. a level as unimaginable now as $100/b was then. This suggests that if China sneezes. December 2010 insight 19 . Another major difference is that Chinese demand for oil is far greater now than it was in 1998. world consumption of crude oil was 74. Of course. more than 10 million b/d less than the 85.13/b. By December 10. At end-July.797 billion barrels seen in August 1998. OECD oil consumption in 1998 was.4 in 1998. total OECD stocks surpassed the level of 1998 in 2005. Editor. 1998. Commercial oil stockpiles in OECD countries rose by 15. the physical benchmark Dated Brent had dropped to a record low of $9. in fact.oil China: Driving the Oil Price Ross McCracken.2 million tons. or about 213 million barrels. or about 94 days of forward cover. China’s commercial crude inventory stood at 29. According to US Energy Information Administration data. Platts Energy Economist The supply side of the oil market has for the moment been substantially de-risked. In 1998. and notably a Chinese industrial success that is based on domestic rather than external demand—car manufacturing. compared with about 85. Until early 2006. If fundamentals are the primary determinant of a commodity’s price. according to the International Energy Agency’s October oil report. but China too has made great strides in increasing its level of both commercial and strategic stocks. then the current stock situation would clearly imply lower price levels for crude oil. commercial oil reserves held by China’s two largest oil companies. the OECD has increased its level of strategic stockpiles in addition to commercial stocks. The one support amid an indifferent economic recovery is China.8 million barrels in August to end the month at 2. However. the China National Petroleum Corporation and Sinopec. Moreover. one of the major differences between now and 1998 is the size of inventories relative to demand. inventories are high and surplus capacity is plentiful. larger than it is now by some 1. the oil market will catch more than just a cold. This is just a whisker off the record level of 2. together representing more than 60 days of import cover. reaching 4. could meet demand for only about two weeks.790 billion barrels.

The huge rise in surplus capacity in 2009 reflects both the drop in demand as a result of the aftermath of the financial crisis and the oil industry investment cycle responding to the rising prices of the preceding period.97/b in 1999 but $28. but the stock level is largely a symptom of the pre-existing supply/demand balance.2011 global energy outlook . and should the holders of that capacity (OPEC) prove willing to produce it. but not enough to take the market out of the danger zone. It is the more immediate relationship between supply and demand that influences prices. The large drop to 3. are not a major determinant of price. most particularly Chinese demand. 2010 appears so far to be an exception. i. The shrinking of surplus capacity after 2002 reflects the dramatic increase in world oil demand. High inventories will bear down on sentiment.e. the crude price averaged $77.605/b. 1. was 4.98 million barrels a day. for an industry that takes two to three years at least to bring a major field on-stream. while an important indicator of the state of the market. when crude prices were still in the doldrums. Total OECD 100000 90000 80000 70000 60000 50000 40000 30000 20000 10000 ‘80 ‘81 ‘82 ‘83 ‘84 ‘85 ‘86 ‘87 ‘88 ‘89 ‘90 ‘91 ‘92 ‘93 ‘94 ‘95 ‘96 ‘97 ‘98 ‘99 ‘00 ‘01 ‘02 ‘03 ‘04 ‘05 ‘06 ‘07 ‘08 ‘09 ‘10 ‘11 Source: US Energy Information Administration Total non-OECD 20 insight December 2010 .54 million b/d in 2002 to 1 million b/d in 2005 saw the average crude price more than double to $54. when surplus crude capacity jumped from 1. but surplus capacity has risen further to 5. significantly higher than 2009. how much more oil could be produced should there be demand for it.49 million b/d to 4.26/b to $61.50/b in 2000. The price rise was terminated in 2001-2002 as surplus capacity grew again. This finds representation in the amount of surplus capacity in the market. Surplus capacity increased in 2006 and 2007. Surplus capacity is a good measure of the supply-demand balance because it encapsulates shocks on both sides of the equation.33 million b/d. If it came to the crunch. and the lack of investment caused by low prices in the period from 1998.67/b. For the year to October 26.05 million b/d in 2000 was accompanied by a correspondingly large rise in the price of crude. Only in 2009. World oil consumption (million b/d). which averaged $17.oil Surplus Capacity Stock levels. Surplus capacity in 1999. It was also apparent that there was a lack of refinery capacity capable of taking lower-value crude grades that were heavy and high in sulfur.09 million b/d. while low inventories are bullish. one day more or less of stocks makes little material difference. did the crude price react.52 million b/d. but the drop from 5. falling from $97.

of course. The broader argument that energy commodities have become “financialised” means that forces less immediately related to supply and demand in the oil market help determine prices.50 27. but only if the price rises.50 29.00 million tons 2. given for a rising market.oil Taking a step back from the events that impact oil prices on a day-to-day basis. are not the only game in town. the argument misses the point that sellers will be found for all the new buyers. 29. heavily weighted towards energy commodities and crude oil in particular. is. OGP December 2010 insight 21 Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10 .00 -1. then energy markets will still attract funds. Those who downplay the idea that “speculation” has been behind the long-term rise in crude prices since 1998 argue that it cannot be the weight of new money.00 3. Much has been made of the financialisation of commodity markets and investment in the commodity super cycle. put pressure on the market to find sellers to take the other side of the contracts.00 0. It is the attractiveness of an investment in energy commodities relative to other types of investment that affects money flows.50 26. there appears to be a strong correlation between surplus capacity and crude prices that largely explains the latter’s rise and fall since 1998. However. but nonetheless true. if the outlook for other investments looks worse.00 26. Financials and Speculation Fundamentals. More buyers than sellers. facetious.00 28. Chinese total crude oil stock changes.50 Source: Xinhua.00 25.00 -2. suggesting a bearish oil market. Even if oil inventories are high and surplus capacity plentiful. of course. 4.00 27.50 million tons 28. the general uninformative explanation 2. China petroleum stockpile statistics (commercial stocks).2011 global energy outlook . There is little doubt that the nature of commodity markets has changed over the last ten years as new investors have flooded into the market for a multitude of reasons. because in futures markets every seller needs a buyer.00 1. The rise of long-only commodity investment indices.00 1/09 2/09 3/09 4/09 5/09 6/09 7/09 8/09 9/09 10/09 11/09 12/09 1/10 2/10 3/10 4/10 5/10 6/10 7/10 Source: Derived from Bureau of Statistics and Customs data 3.

Inventories are rising. Arguments based on fundamentals tend to take a very short-term outlook.54 1. This has upset the idea that commodities might represent a hedge against inflation or a safe haven against an ailing economy as equities are behaving in the same way. whether one takes a view of the market based on near-term fundamentals or treat oil as an investment commodity with a longer time horizon.3 million b/d) and the Middle East (+0.3 million b/d). even without the emergence of the electric car. but nor is it a return to robust health.02 28.000 b/d.26 61.92* Source: US Energy Information Administration.98 3. China’s already important position in the oil market becomes hard to overstate. appears to have gone. Good economic news pushes prices up. that while there are a number of large foreign joint-ventures in the car manufacturing sector. In this context.27 54. with further falls in OECD Europe and Asia cancelling out any growth in North America. Single Support With attention focused on the demand side of the market.07 5. very few cars are 4. However.52 65. They have stayed pretty much within a $70-$80 per barrel band for the last 12 months.19 Average price of Dated Brent ($/b) 17. just unspectacular. This does not have to be bad news. Three notable aspects of this industry are.05 4.97 28.” which essentially means noone is sure whether they are going to go up or down. Year 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 *To September 9 (million b/d) 4. For every spate of poor economic data there is a raft of good data.2011 global energy outlook . Oil prices are currently “seeking direction. amid the worst of the global slowdown.44 25.49 4.33 5. They are looking at the capacity of a price to change. It had previously exceeded Japan as the world’s largest maker of automobiles.27 1. It isn’t a double dip recession. This treats the oil price as a market clearing price. A level is achieved at which all producers and consumers net out their positions and meet their physical requirements on a daily basis. However.39 97. The oil price is no longer a clearing price but an investment vehicle. financial investors want to buy and hold. as there are no real supply concerns attention is focused on demand. By contrast. surplus capacity is high and that means that prices should be falling—now.67 67. oil demand in the OECD will remain weak. if it existed.oil There is also the question of time horizons. shortage means they rise. according to the IEA. The inverse correlation. It indicates that the recovery is ongoing. OECD oil demand is broadly seen as having peaked. Platts 22 insight December 2010 . Surplus oil means prices fall. Second.42 2. The overall contraction in world oil demand of 1.09 5. If the market is going to tighten in the future. As a result. breaking out towards $85/b in May and again in October.14 72.50 24.07 1. Surplus capacity in the oil market.92 1. Chinese oil demand grew by 700. auto production is predominantly indigenous. In 2009. It should be no surprise that as investment grew in energy commodities and the financial side of the market expanded in relation to the physical side that futures prices also grew in importance. then they will buy now on the expectation that prices will rise. first. bad news pushes them down. surpassing the United States. The only other growth areas were the rest of non-OECD Asia (+0. China became the world’s largest car market in November 2009.3 million b/d in 2009 (International Energy Agency data) masks the stark division between the OECD and nonOECD and between Asia and the rest of the world bar the Middle East.83 38. the only place that really matters is China.00 1.

These dynamic growth regions would help pull the rest of the world back from the brink. In September. It represents an important facet of the country’s growing structural addiction to petroleum. almost all are absorbed by the domestic market.9 89.3 87. including strategic stockpiles (days) 85.8 85. This puts the auto sector in an important position within the Chinese economy. said excess auto capacity threatened sustainable economic development and must be “resolutely” stopped. and China in particular. an official with the National Development and Reform Commission.2 92.5 87.2011 global energy outlook . Fan Zhong. analysts keen to remain optimistic argued that the BRICs. The idea appeared plain wrong as China’s previous double digit GDP growth rates stalled and the southern coastal areas of the country— its export-orientated manufacturing center and the locus of the country’s job creation—saw a severe slowdown in growth.4 88.2 84. However. it is a prime target for benefits. arguing that car makers were only trying to meet demand in the world’s largest auto market.8 92. OECD stocks position.6 81. In the auto sector.4 80. China’s top economic planner. third.6 92. had an internal growth dynamic that would allow them to avoid recession.7 90. there is still huge potential for growth.2 81. And. owing to the current low per capita level of car ownership and China’s pattern of social and economic development.5 80.7 83. If domestic demand needs to be stimulated. the wider economy. a senior 5.4 86. Year 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Total OECD stocks (million barrels) 3587 3531 3376 3255 3494 3408 3543 3643 3588 3634 3706 3713 3718 3791 3875 3758 3762 3875 4006 3733 3796 3912 3811 3914 3980 4068 4161 4090 4214 4217 4272 OECD forward cover. in retrospect. The argument downplayed the extent of export-led growth in the BRICs and to a large extent contradicted the whole notion of globalization.0 88.5 79.oil made for export.2 Expansion Fears The tensions this creates are already evident. in terms of incentives for new vehicle sales. As the car industry increases in importance within the economy.5 87. When the financial crisis turned into a global slowdown.9 91. China’s fantastically successful not-for-export car industry is indeed evidence of a more powerful internal growth engine.6 88. whether direct or. it is capturing the whole value chain and selling increasingly sophisticated goods internally. just as it has in other countries.1 83. China’s automakers rejected an official warning that unchecked growth in the industry was leading to excess capacity and could harm Source: US Energy Information Administration December 2010 insight 23 .7 82.4 78. it runs the risk of becoming too big to fail.9 89. China is absorbing raw materials.5 82. and in ever larger volumes. Chen Bin. industry representatives and the China Association of Automobile Manufacturers see it differently.8 94. but instead of processing them and exporting manufactured and semi-manufactured goods. However.4 89.0 79. as is currently the case.8 88.

0 2. a major Chinese manufacturer. . China’s auto industry has been operating at 120% of its nameplate capacity.7 3.000 population (1980. Economy PRC Beijing Shanghai Hong Kong. Suburbanization increases the demand for transit further.4 10. autonomous regions and municipalities have plants that are able to produce finished vehicles.0 PRC = People’s Republic of China.7 1. the proportion of the population that can afford cars is growing and China has a huge billion plus population. in which each tier of government mobilizes resources to enter a profitable sector quickly. said Xu Changming. Unfortunately for Beijing. In addition.4 2. China’s urban population is increasing far quicker than its overall population. “There is no need to worry about excessive output.6 1. resulting 6.1 1.1 4. the fall in the price of oil from its 2008 peak would have been deeper. there is confidence that China’s car market can continue to grow. 2002 and 2020).7 0. It represents a deepening of the country’s addiction to oil and a strengthening of the relationship between Chinese economic health and the oil price. This appears to be an all-too-familiar pattern of Chinese investment.oil manager with Dongfeng Automobile.3 1. encouraged by the industry’s healthy profits and ancillary economic benefits. ■ 24 insight December 2010 . head of information resource development at the State Information Center. Rapid urbanization tends to increase income growth and with it car ownership. Passenger vehicle ownership per 1. either for cars or for mass transit systems.8 10. Despite average incomes remaining relatively low.” However. China has always been concerned about its exposure to international markets. and most manufacturers were operating more than 20 hours a day. But a wider slowdown in the rate of Chinese oil demand growth could pull from the oil market what has become its central support. Nevertheless.2011 global energy outlook . The de-risking of the supply side in the oil market has for the moment passed a modicum of price control to China as the main center of demand growth. but the market has huge potential for restructuring and growth.6 – – 2002-2020 (%) 7. honorary chairman of CAAM. Sales were expected to grow by more than 15% annually in the next few years. These long-term underlying trends suggest that any over expansion of the Chinese car market in the near term might prove short-lived. Xu said. Republic of Seoul Thailand Bangkok Source: APERC (2006) 1980 2 9 5 41 5 34 203 159 7 15 – – 2002 19 80 47 59 16 143 428 266 204 205 100 324 2020 65 177 100 70 26 161 522 271 284 288 158 389 1980-2002 (%) 10. The overall capacity of China’s auto industry might seem excessive. China’s demand for oil is part of a dynamic that is not easy to control. Without Chinese growth in oil demand and expectations that this growth will be sustained and replicated in other developing countries such as India. said “our problem is not having enough capacity.7 1. even for a state-dominated economy.4 16.5 4. and particularly to raw materials on which its manufacturing and processing industries depend.” Most entrepreneurs at the International Forum on Chinese Automobile Industry Development in Tianjin in September expressed similar views.= no data available eventually in over capacity and a large amount of inefficient plant. said Hu Xinmin.7 5.1 0. Chen Bin warned that local governments have been making “blind” efforts to open new factories and expand capacity.9 1.6 12. Twenty-seven of the Chinese mainland’s 31 provinces. It has been keen to gain control of resources abroad to mitigate the security implications of dependence on imported commodities and the price impact of being dependent on industries where the supply side is heavily concentrated amongst a few large players. China Indonesia Jakarta Japan Tokyo Korea.4 6. Car ownership levels tend to rise much faster than income once middle income levels are achieved.9 2.

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whatever level of reserves it claims. is still standing.OPEC OPEC at 50 Kate Dourian. Iraq’s current expansion plans. Trouble Behind. but there are still challenges ahead. Iraq’s oil expansion plans will test OPEC’s cohesion. Saudi Arabia has celebrated 80 years as a nation and Kuwait marked the 10th anniversary of its liberation from Iraqi occupation. which is rising from the ashes of war and sanctions and rebuilding its oil industry.31 billion barrels in proven reserves. Given that the two countries fought a bitter eight-year war from 1980-1988. refusing to be trumped by Iraq.” said one regional oil official when told that Iraq had raised its estimate of proven reserves by 25% to 143 billion barrels after reviewing data from two of its giant oilfields. and in recent years even flourished. Presidents and kings have on occasion had to intervene to resolve whatever crisis delayed a final agreement. Trouble Ahead When Iraq invaded Kuwait in August 1990. a dispute over who gets a larger market share could 26 insight December 2010 shatter the thaw in relations that followed the fall of Saddam Hussein in March 2003. It’s aim is no less than to surpass Saudi Arabia as the region’s biggest oil producer.” he added. it’s a wonder that Arab-dominated OPEC. and Iran’s sanction-induced stagnation. It has survived. “I hope the Iraqis are not about to revive the quota parity game. Iran. Riyadh had a chance to put to good use the spare capacity it had invested in and it jealously guarded this level of production for several years. Senior Correspondent OPEC has turned 50. announced its own crude oil reserve hike. “I thought that issue was dead and buried. The organization has become more streamlined and more proactive in re- . in fact. while the organization’s customers continue to demand it invest in spare capacity just as they do everything they can to reduce their own demand. Given the tumultuous history of Middle Eastern politics. The largest of which could soon be posed by Iraq. suggest the latter stands to lose its position as OPEC’s second largest producer. although there have been times over the past decade when ministers have been cloistered in their hotel suites for days and even weeks arguing over quotas. the world lost some 5 million b/d of crude oil—the combined production of both OPEC countries at that time. but new challenges lie ahead. the cartel born in Baghdad a half century ago. finding an additional 12. and adding that further hikes could be forthcoming. It has been a big year. Saudi Arabia stepped in and partially made up for the loss by ramping up its production to 8 million b/d almost overnight from 5 million b/d. However. the response was swift. Today’s OPEC is a different animal. The revision is. OPEC somehow survived this turmoil. quite conservative given other estimates of Iraq’s potential.

” Weise warned that the drop in energy demand in 2009 resulted in a slowdown in investment in oil and gas. Output Algeria Angola Ecuador Iran Kuwait Libya Nigeria Qatar Saudi Arabia UAE Venezuela OPEC-11 Iraq Total 1.845 Supply Crunch Forecast The reason is that built into these prices is the perception that at some point the world will need more hydrocarbons.506 0. Moreover.226 2. Domestic supply is gaining in importance relative to exports. owing to a wave of US.57 2. OPEC would have to increase its production to around 35 million b/d by 2020 and possibly to 38 million b/d by 2025. The Middle East is increasingly hungry for all sources of energy. a member of the board of Germany’s E.221 1.68 2. when they rose above $147/barrel only to plummet by $100/b months later. which is to secure the best value for a commodity that provides the bulk of OPEC members’ state revenues.12 0. 2009.4 29. quietly with its own production capacity expansion plans. Excluding the wild gyrations of oil prices in mid2008. EU and UN sanctions.” He added. OPEC output and targets. Having boosted its production capacity in recent years.73 8. Saudi Arabia is content to wait for signs of a significant pickup in demand that would justify further costly investment. in million b/d. Yet even the Saudis find it hard to explain why prices are at current levels given continued weak demand in the OECD and ample supply.5 million b/d every five years “just to stay in the same place.5 million b/d annually.” as well as meeting decline rates from existing fields. To deliver these requires continual investment.81 8.03 Target 1. Weise said that a “comfortable cushion” of spare capacity beyond 2015 would require OPEC to undertake a “continued program of significant investment by core Middle Eastern members of the organization.47 3. “If this is not forthcoming. Source: Platts December 2010 insight 27 . In addition.01 24. September 2010. the only significant oil capacity expansion will come from Iraq. tightened borrowing requirements post1. not as a producer.ON Ruhrgas. prices have generally held within a $70$80/barrel range for much of the year. The UAE is proceeding OPEC has not published individual allocations under the 24.23 26. Jochen Weise. a price level Saudi Arabia’s King Abdullah has publicly endorsed. padded with a significant cushion of spare capacity.28 2. Iran is virtually closed to foreign investment. This would require the group to add 7.3 1. but that process—which resulted in the current level of spare capacity—has stalled.65 0. but appears to be in no rush to bring new oil on-line for now without what its minister. most of it in Saudi Arabia. Iran is struggling to expand both its crude oil and natural gas production as sanctions bite. but as a consumer.26 2.845 million b/d target total which came into effect on January 1.5 million b/d now. Saudi Arabia is burning an estimated 800. The results have not been bad.63 2.334 2. Most Middle East producers have shifted their exploration focus to gas.2011 global energy outlook . Kuwait is now importing LNG from as far afield as Australia. writing in Abu Dhabi newspaper The National said that if global demand continued to increase by between 1-1. we will see tighter markets and higher prices going forward.2 1.OPEC sponse to market movements.704 0. Kuwait remains mired in political wrangling that has hampered plans to boost its own output. from 28. The above figures are calculated by Platts.26 1. often refers to as a “road map” for future demand.000 b/d of crude oil to feed its power plants as it diverts gas to a growing petrochemicals sector.014 2.429 3. while Dubai was due to get its first LNG cargo from Qatar in October.472 1. This worries people. Meetings last a day and members have managed to keep politics out of their deliberations and focus instead on the group’s charter. Mohammed bin Dhaen al-Hamli.

Falih said. While renewable energy will help to meet part of this rise in energy demand. twice the global average. referred to what he called a discriminatory attitude toward fossil fuels in the pursuit of energy security by some consuming nations. So we’re not rushing to put the projects in full utilization.” he said. as we have seen in the case of oil.” he added. including clean coal to mitigate the environmental impact of fossil fuels . . we build it for the next decades and generations.OPEC financial crisis has also become a “major issue” for investors. as part of the kingdom’s efforts to meet future energy demand. “This surplus capacity.5 million b/d of spare capacity. . 2. OPEC surplus crude oil production capacity.00 2.00 1999 2000 2001 2002 2003 Source: US Energy Information Administration 28 insight December 2010 2004 2005 2006 2007 2008 2009 2010 2011 . during which time we need to invest in fossil fuels. .2011 global energy outlook . but we have to be realistic and allow the transition to take place. has helped assure market stability. which currently approaches four million barrels per day.” he added. “My argument is not with the concept . “Perceived energy security concerns seem to be driving some nations to discriminate against select energy sources. . “But we don’t build it for the short term. but the pace at which we can expect to meet a portion of energy demand.” he said. .” That is why Saudi Aramco maintains large spare capacity “at considerable cost to us” as part of its efforts to keep markets supplied. estimated currently at about 6 million b/d is held by Saudi Arabia. speaking at the World Energy Congress in Montreal in September. “It’s costly to have that kind of capacity idle and it was costly to build it. ■ Capacity Guardians Most of the world’s spare oil production capacity. especially for upstream projects.00 1. Saudi Aramco CEO Khalid al-Falih. providing additional supplies whenever unforeseen events such as natural disasters or man-made strife and conflicts have struck.00 5. Nor does Riyadh like to hear its erstwhile leading crude oil customer. “In fact.” he said.” he said. the Aramco chief expects Saudi Arabia’s crude oil reserves of 260 billion barrels to grow by 40% “over time” and recovery rates from its major oil fields to climb to 70%.” he said.00 3. We will respond to the markets when the markets develop. . “The short answer is that the world will continue to rely on traditional fossil fuels for most of its energy needs for the coming decades.” he argued.5 million b/d. This capacity. “The capital restrictions in the post credit crunch world may have a significant impact on investments in energy projects in the next decade. Rather than expand current capacity. the kingdom has around 4. these energy sources—namely coal. But maintaining this idle capacity is costly and state oil company Saudi Aramco has indicated several times that there is a limit to its largesse. “It is going to take a long time . Falih has a different plan when it comes to investment than Weise.00 million b/d 4. which they read as Arab oil. 6. the pace of its growth will be slower and the percentage of its contribution will remain relatively small in the global energy mix. he said. At current production of just over 8 million b/d and capacity of 12. oil and natural gas—are expected to account for about four out of every five units of energy that mankind will consume for the foreseeable future. the US. repeatedly call for less dependence on foreign oil.

(1&( PLOOLRQ 0('. 2010) DEADLINE: January 6. A digital version of the section will be posted within CNNMoney. 352)0*5/  7230*07 6RXUFHV00505. reaching this 4.642.$1$*(  0('. 2011 Don’t miss your chance to be seen by over 4 million Fortune readers! Robin Mason Sales Representative. to a section PDF.$1++. often called the Academy Awards of the energy industry.522. The 2010 Platts Global Energy Awards and Platts Top 250 Energy Rankings ISSUE DATE: February 28. Please ask us about a range of added value options. from complimentary copies of the issue. 2011 (on sale: February 14. and custom mailings.com. KEY SPONSOR BENEFITS • • • Our writer will interview your spokesperson and excerpts will be included in the story. Our content plan will focus on the Platts Top 250 Global Energy Rankings and the Platts Global Energy Awards.com IN PARTNERSHIP WITH 0D[LPL]H\RXUVSRQVRUVKLSE\ OHYHUDJLQJ&110RQH\FRP¶V DXGLHQFHRIPRUHWKDQQLQHPLOOLRQ XQLTXHPRQWKO\XVHUV)RUDVPDOO LQFUHPHQWDOLQYHVWPHQWRXUWHDP ZLOOFUHDWHDFXVWRPUROORYHUXQLW WKDWIHDWXUHV\RXUFXVWRPWH[W HPEHGGHGZLWKLQ\RXUDGXQLW Or contact your Fortune sales representative.1942 brenden_delaney@timeinc.1 million C-level audience of Fortune Magazine. All advertisers will receive text coverage to speak to your strategies.Platts Top 250 & Global Energy Awards FORTUNE CUSTOM PUBLISHING Fortune Magazine and Platts have teamed up to publish a special ad section highlighting the 2010 Platts Global Energy Awards and Platts Top 250 Global Energy Company Rankings. Fortune Custom Publishing T 212. technologies. These two groups represent the best-in-class performers of the energy industry using two distinct measurements. to Starch Score questions. clients and investors. 2011 MATERIALS DUE: January 24.2600 robin_mason@platts. Nine million business leaders and influencers visit the site each month. • • $8'. Fortune Custom Publishing T 631. .  ++.com Brenden Delaney Project Manager.

Russia

Russia Grapples With Modernity
Nadia Rodova, Managing Editor, Platts Moscow

Russia faces a catch-22 situation. It wants to diversify its economy and reduce its dependence on the energy sector, but cannot afford to do so without financing the transition with revenues from oil and gas. At the same time, the oil and gas sector itself requires heavy investments to maintain production from ever harder to access resources. Both targets require tax incentives.
The global economic downturn was a serious test for Russia. Of the largest 25 economies in the world, Russia saw the deepest recession. GDP dropped 7.9% in 2009, following growth of 5.6% in 2008. This year, Russia’s GDP is expected to rise by about 4%, with the level sustained for the next three years. According to Prime Minister Vladimir Putin, the economy has “relatively rapidly returned to growth.” However, less optimistic members of the government note that the country’s dependence on oil and gas revenues has risen, leaving the economy increasingly vulnerable to developments in external markets. If oil and gas prices were to fall, economic growth could be as little as 2% per annum over the next three years, according to deputy economy minister Andrei Klepach. A $10/barrel change in the oil price results in a 0.5% change in the country’s GDP, he said. Russia’s economic recovery has been driven primarily by rising oil prices. Its lack of competitiveness in other sectors has led analysts to suggest that the
30 insight December 2010

economy outside of the energy sector will effectively stagnate. The authorities recognize the problem and want to modernize. “Today Russia has a new agenda, one that incorporates sustainable development and the modernization of key economic sectors. I believe we stand a good chance of seeing these plans materialize,” Putin told investors recently.

Capital Requirements
The government needs economic diversification because oil and gas earnings are forecast to fall from 47% now to 44% of the federal budget in coming years. There are two major factors behind the poor outlook for Russia’s petrodollars. First, crude production is expected to rise at a lower rate than the country’s GDP, leading to a cut in the sector’s share in the budget. Second, all new oil and gas fields in Russia have been given tax breaks and more favorable investment terms. This is stimulating investment, and is designed to bring on new capacity to replace the country’s older declining oil and gas as-

2011 global energy outlook - Russia
sets, but improved terms for investors mean less for the federal budget. Before the financial crisis, a package of tax incentives, worth about $4 billion a year for the oil industry, was agreed by the government. The main incentives were a cut in the oil extraction tax for green field developments and temporary exemptions from export duty for crude pumped in the country’s new oil province, East Siberia. In addition, low levels of taxation were to remain in the gas sector. However, with the country’s Oil Fund depleted and the government seeking funds for modernization, the emphasis has swung back in favor of tax rises. But the government does not want this to stifle investment. Russia has consolidated its position as the world’s biggest oil producer. Output saw steady increases in 2010, repeatedly hitting post Soviet-era records. Crude output is expected to see a 1.5% to 2% gain from 2009 to over 10 million b/d in 2010 before staying at roughly the same level over the next three years. Under a less optimistic scenario, crude production from older fields could become less economic from 2012 when the mineral extraction tax on oil is expected to rise. This tax rise could also delay new projects, leading to reduced oil output in the medium term. Russia, which has the world’s largest natural gas reserves, also wants to maintain its position as the largest exporter of gas to Europe, as well as winning over new markets in the Asia-Pacific region. The authorities announced in October an ambitious plan to increase gas production by 50% from the current level to a huge 1 Tcm a day by 2030, at a total cost of $412 to $492 billion. Gas exports would reach 455-520 Bcm/year in 2030, up from 226 Bcm/year now, according to the recently approved national gas industry development plan. Gas output in 2010 is expected to grow 11% to 653 Bcm, largely reversing the 12% drop the previous year. The upstream plans, both for oil and gas, require producers to develop new, hard-to-access reserves to compensate for the decline in the country’s existing fields. The green field sites are mainly located in remote and undeveloped regions, such as East Siberia or the Yamal Peninsula in the Arctic, and require massive investment. Oil and gas companies are turning to the government for new incentives to develop those capital-intensive projects. This has forced the government to consider a wide range of changes to the tax system to balance the interests of both the federal budget and industry. And against this is the risk of a fall in the oil price, to which the country remains heavily exposed. As Finance Minister Alexei Kudrin put it in October: “We don’t know what the oil price will be. We think the price is unlikely to stay at around $75-80/barrel as the current [price] growth is supported by investment resources rather than demand in the commodity. We cannot rule out that the price will drop from $80/b to $60/b within the next three years.” Most forecasts in fact suggest oil prices will remain firm over the next few years, backed by fast growing demand from Asia-Pacific, but in a market as volatile as the oil market, nothing can be taken for granted.

Looking Eastward
With the locus of demand growth having shifted firmly to Asia, Russia has advanced significantly its efforts to add eastern markets to its exports portfolio, with the key focus on energy-hungry

1. Russian near-term oil and gas output forecasts.
Forecast scenario Crude oil (million mt) a b Natural gas (Bcm) a b 2009 494.3 494.3 585.2 585.2 2010 501 501 653.3 653.3 2011 501 502 671 679 2012 498 498 679 691 2013 495 502 700 719 2009-2013 % change 0.1 1.6 19.6 22.9

Natural gas figures predate recent plan to expand output to 1 Tcm a year by 2030

Source: Ministry for Economic Development

December 2010 insight 31

2011 global energy outlook - Russia
China. First, Russia launched the new East Siberia-Pacific Ocean pipeline to export crude via the Far Eastern port of Kozmino to Asian markets. South Korea has become the biggest buyer of ESPO, accounting for 37% of the blend’s total sales in the first nine months of 2010. Japan, the United States, China, Thailand, Singapore, Taiwan and the Philippines have all bought ESPO cargoes. ESPO crude supplies via Kozmino have averaged about 300,000 b/d in 2010. From January 2011, a further 300,000 b/d will be channeled to China via a new offshoot from ESPO. The deliveries are to be carried out under a contract signed between Russia’s state-run Rosneft and China’s National Petroleum Corp that envisages 300,000 b/d supplies over 20 years. Eventually, ESPO throughput should rise to 1 million b/d, following an expansion scheduled for completion in late 2012 or early 2013. Capacity could later be raised to 1.6 million b/d. Second, state-owned oil company Rosneft, in partnership with CNPC, has inaugurated the construction of a joint 260,000 b/d refinery near Tianjin. The project will help Rosneft enter China’s retail market as it envisages mutual construction of at least 500 filling stations in the region. Third, the two countries appear to have made some advances on the supply of pipeline gas to China, as well as 15 million mt/year of Russian coal. Gazprom and CNPC in September signed a legallybinding document for deliveries of 30 Bcm a year of gas to China over 30 years. The document includes key commercial parameters, but the toughest issue—that of prices—has not yet been resolved. Prices have been the key stumbling block in the negotiations, which started in 2004. Gazprom and CNPC hope to settle the remaining issues by July 2011. If a final contract is signed then, Gazprom has said it will start work immediately on the construction of the Altai pipeline system from West Siberia to China and start actual supplies in 2015. Under a framework agreement signed by Gazprom and CNPC in October 2009, Russia could supply up to 30 Bcm/yr via the western route and up to 38 Bcm/yr via an eastern route, from East Siberia. Export volumes are unlikely to reach quite these levels, however. China, like any other country, will be reluctant to become too reliant on any one source of supply, while Russia will take time to develop the upstream resources to fill the pipelines to capacity. Developing such remote resources will also require a lot of capital. “In order to attract the massive investments needed for the development of new reserves, Russia needs to become the sort of place where you know that you get a decent return on your investment. That doesn’t really exist now,” the chief analyst with Moscow-based Renaissance Capital investment bank, Ronald Nash, said. The government needs to change the legal framework and build greater trust with investors, but it has a long way to go, he added. The government thus finds itself in a catch-22 situation. Modernizing the economy and attracting huge amounts of investment capital into the oil and gas sector requires change to the fiscal regime, but not necessarily complimentary ones. Moreover, constant changes to the investment environment means uncertainty, which erodes the trust that the government needs to build in order to attract the large sums of capital required. ■

2. Russian near-term oil and gas export forecasts.
Forecast scenario Crude oil (million mt) a b Natural gas (Bcm) a b 2009 247.4 247.4 168.4 168.4 2010 247.6 247.6 185.2 185.2 2011 249 249 205.1 210.1 2012 245 247 214.7 220.7 2013 241 245 229.6 240.6 2009-2013 % change -2.6 -1 36.3 42.9

Natural gas figures predate recent plan to expand output to 1 Tcm a year by 2030

Source: Ministry for Economic Development

32 insight December 2010

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The recession-induced slump in consumption is only slowly being restored. European utilities may be drifting away from both coal and CCS. The first signs of financial strain are beginning to show.” Alstom said. while in Germany the last pre-carbon capture coal plants are reaching completion. while thermal power plant overall is becoming increasingly ancillary. At the same time. As a result. Green power is immune to demand patterns and profits even when over-production results in negative pricing. This has put pressure on power prices. prioritydispatch renewables. Priority Renewables Renewables’ growth through the recession has created a new dynamic in the power market. 34 insight December 2010 The problem is that Europe is already awash with power as the last wave of thermal plant investment reaches maturity. Power in Europe Europe’s recession-induced slump in power demand is only slowly being restored. This dynamic is already reducing thermal plants’ leading role to one of a walk-on. walkoff cameo. Renewable energy sources. Large amounts of gas-fi red capacity are coming to market in the UK.power Thermal Plants to Play Cameo Role in EU Green Dream Henry Edwardes-Evans. wind and hydro businesses were untouched by the cuts. with demand in the UK and Italy barely matching last year’s nadir. An example was provided by Alstom on October 5. Editor. . The unprecedented decline in European grid-delivered electricity demand in 2009 has hit thermal generation hard. The company’s servicing. The French power engineering firm is to cut 4. there has been no let-up in the development of subsidized. margins and new investment.000 jobs over the next 18 months from its thermal power generation equipment business. protected by policy. have proven almost immune to the economic signals. leaving thermal plant to take the full impact. “where the new equipment markets for coal and gas power plants are most affected by the economic crisis. The cuts are to fall in Europe and North America.

This possibility may seem premature given the sums already invested. The reference scenario assumes achievement of the EU’s binding targets for 2020 on renewables and greenhouse gas reductions (a 20% cut). Along with energy efficiency measures.” In his presentation.power It should be no surprise. Loseth did not refer to the company’s hitherto flagship Carbon Capture and Storage program. stalling development of CCS. EUA prices are projected to reach €25/mt in 2020 and €39/mt by 2030. Meanwhile. Loseth warned of a much weaker market outlook.” In tune with a downbeat set of halfyear statements from Europe’s utility majors. so Vattenfall has to reduce CO2 by other means. rising to €18. Pressure on margins was strong and the way forward to a sustainable system expensive. “The year 2008 was the top in terms of power demand. which includes the effects of policies adopted between April and December 2009.” the study says.” he said.” but was unwilling to suggest a date. The report contains a baseline scenario. . but that puts extra pressure on Vattenfall. that utilities are tightening their belts. with “a lot of new production coming online” to meet the EU’s 20% -by-2020 renewables target. as European utilities drift away from coal. In continental Europe he thought demand “would pick up earlier.2011 global energy outlook . Continuation of the current trend would in fact see prices for carbon under the EU Emissions Trading Scheme stagnate. published in September. “We are facing two-to-three years of really hard work.4 GW inDecember 2010 insight 35 CCS Doubts This suggests that as European utilities drift away from coal. While CCS may be needed in the fast-growing. We want to increase profits and value.50/mt ($23.08) in 2020. . This was the conclusion of a European Commission report. they may also be drifting away from testing carbon capture and storage. Europe is by no means an ideal test bed for CCS as its power systems move to low-carbon status via alternative means. under the baseline scenario. coal-heavy economies of Asia. Loseth said that phase two of the company’s ambitious Magnum gasification/CCS project in the Netherlands would only proceed when the technologies were viable. While CCS may be needed in the fast-growing. EU Trends to 2030. In September. then we’ll be ready for growth. question is worth posing. Swedish utility Vattenfall cut its budget to focus on its core markets of Sweden. chief executive Oystein Loseth made the rather shocking prediction that demand for electricity in the Nordic markets would not recover until 2020. Further. The reference scenario forecasts that EU emissions allowance (EUA) prices would not be much different from current prices at around €16. “We’ll be a leader in this transition. Europe is by no means an ideal test bed for CCS as its power systems move to lowcarbon status via alternative means. the program would continue: “but there will be no CCS before 2020. strengthen our balance sheet and reduce CO2 exposure—that is going to be expensive in the future. but the . he said. indicating . both at a constant 2008 euro level—not enough to bring CCS investment forward. the scenario would “cause a reduction in the use of fossil fuels that allows the ETS cap to be reached through lower carbon prices. which the study says would drive CCS capacity from 5. they may also be drifting away from testing CCS. . But when questioned. Germany and the Netherlands. coal-heavy economies of Asia. Presenting a new strategy. what would happen if current trends in the energy sector were to continue.” The company has a target of reducing its emissions to 65 million mt/yr from today’s 90 million mt/yr. . he said. then.70/mt in 2030. and a reference scenario. .

As the Ancillary Plant The European Commission’s reference scenario forecasts “a major increase in generation from renewables.8 36.5 30 21. This wind boom is forcing a re-think on compensation for thermal plants in Spain. with 17% for gas.6 2030 24. Geothermal Biomass/waste Solar Wind offshore Wind onshore Hydro 0 5 84 1 2 68 307 2010 0 6 127 17 14 147 323 2015 1 6 164 32 72 197 332 2020 3 7 191 46 146 253 339 2025 6 11 218 60 204 316 349 2030 9 19 241 75 276 368 355 Reference scenario: Gross Power Generation by RES (TWh) 2005 Tidal.5 24.2 14.7% of all power capacity.” Under this projection.power stalled in demonstration plants by 2020 to 35 GW by 2030.1 Reference scenario: main power generation shares (%) 2005 Nuclear Solids Gas RES Source: European Commission 30.2 19.8 19.1 21. etc.1 36 insight December 2010 .2 2020 24. CCS equipped generation would account for 8. etc.2 14. which continues up to 2030.9 23. and has a crowding out effect on other technologies. Even under the baseline scenario. Germany and the UK.7 32. with a total of 136 GW installed.3 2010 28 26.2011 global energy outlook .9 22. renewable capacity would account for 26% of total generation capacity by 2020 and around a third by 2030.6 23. renewable capacity is set to account for 64% of 1. Wind alone would account for 41% of generation under this scenario.5 30 21. 4% for nuclear and 3% for oil.2 18.8 26 2030 25.0 2020 23.9 22.1 17.5 32.9 22. 12% for coal. all new generation additions between 2009 and 2020.3 2010 28 27. Geothermal Biomass/waste Solar Wind offshore Wind onshore Hydro 0 5 84 1 2 68 307 2010 0 7 120 17 14 147 323 2015 1 8 171 32 81 243 333 2020 7 12 261 62 177 348 341 2025 10 17 275 77 224 381 350 2030 14 22 286 94 287 407 358 Baseline scenario 2009: main power generation shares (%) 2005 Nuclear Solids Gas RES 30. Baseline scenario 2009: Gross Power Generation by RES (TWh) 2005 Tidal. EU trends to 2030.9 19.

“Spain and Denmark are good indicators showing that.power role of the thermal plant moves away from baseload dispatch towards the provision of ancillary services. perts believe. I think that is a sign of things to come. demand is quite low—you don’t need your heating and you don’t need air conditioning. Without some form of capacity fee. While the day-ahead price in the rest of Europe was around €50/MWh in April it went down to €18/MWh in Spain. we’re going to become weather predictors. France—RTE. as consultancy Poyry has forecast in its UK studies. It is a lot less efficient than keeping a unit ticking over at close to full output. “Depending on the demand profile in Denmark. Italy—Terna. Every 45-minute ramp up is equivalent to around 10 hours of operation for a combined cycle gas unit. gas-fi red plants are performing a minimum of two start-ups a day by 2020. you don’t necessarily cut down on fossil fuel use. “Spain’s power demand profile fluctuates a lot between winter and summer.2011 global energy outlook . Instead of dispatching plant according to predicted demand and maintenance schedules. There were periods this year when wind was supplying over 48% of Spanish demand needs. maintaining this thermal plant is uneconomic. Spain—REE. by putting a lot of wind on the system. gross consumption on the French mainland. monthly view. For France. “In spring. There is also a warning from operators that long-term intermittent operation has environmental implications. utilities say. Source: Germany—BDEW. For Spain. provisional figues of public supply. Spanish market ex- As the role of thermal plant moves away from baseload dispatch towards the provision of ancillary services. Maintenance costs will rise and lifetime expectancy fall if. Car drivers complain of speed bumps increasing emissions because of slowing down and speeding up. For the UK. It is exactly the same for combined cycle gas turbine plants. electricity demand on the Spanish mainland. fuel efficiency drops while costs rise. they actually burn more fossil fuels because the thermal machines are ramping up and down so frequently. This could knock five years off a CCGT’s 25-year life span. pumping and interconnector export demand.” Wear and tear is another issue. UK—National Grid December 2010 insight 37 .” ■ 2. West European electricity demand. total generation volume excluding station transfer.” an operator told Platts. France 65 Germany UK Italy Spain 55 45 TWh 35 25 15 Mar-08 Aug-08 Jan-09 Jun-09 Nov-09 Apr-10 Sep-10 For Germany. Compensation for this needs careful thought.” according to one gas plant operator. fuel efficiency drops while costs rise. The relevance of the day-ahead price to gas plant will fade as its real-time and ancillary service value increases.

Commissioner. Department of Energy • William Magwood. or to register and SAVE $300. President.com Registration Code: PC109-NLI . and CEO.com For media inquiries. U. Mitsubishi Nuclear Energy Systems. 2011 • Marriott Bethesda North • Bethesda. please visit us online at www. U. Join over 500 attendees.7th Annual Nuclear Energy Opportunities for Growth and Investment February 16–18. contact: Ron Berg Tel: 781-430-2118 ron_berg@platts. Registration is open — so sign up today. 2011 and SAVE $300! The Platts 7th Annual Nuclear Energy conference is the leading forum for a strategic view of nuclear energy. Maryland Register by January 14. contact: Gina Herlihy Tel: 781-430-2109 gina_herlihy@platts. both in North America and internationally. featuring the major players and experienced voices in the nuclear industry. Chairman. Vice President.com or call us at 866-355-2930 (toll-free in the US) or 781-430-2100 (direct). Progress Energy • Jack Bailey. Jordan Atomic Energy Commission • And many more — Over 35 speakers during a packed. • Kamal Araj. Nuclear Generation Development. For more information and speaking opportunities. President and CEO.S. Inc. Acting Assistant Secretary for Nuclear Energy. or contact Platts to receive a brochure with the complete agenda. more information. AREVA NP Inc.nuclearenergyconference. TVA Nuclear • Jacques Besnainou. Featured speakers include: • Pete Lyons. • Kiyoshi Yamauchi. President.com For sponsorship opportunities.S. three-day program! Platts is also offering special lower rates for electric utilities. and explore the opportunities and challenges for the growth of nuclear power. For a complete agenda. Nuclear Regulatory Commission • Bill Johnson. contact: Lorne Grout Tel: 781-430-2112 lorne_grout@platts. Commissioner for International Cooperation.

nuclear

Premium for US Nuclear Newbuild
Aneesh Prabhu and Swaminathan Venketaraman, Standard & Poor’s

Low gas prices, little progress on carbon legislation and tighter borrowing requirements post-financial crisis, have all dampened the momentum behind the so-called US nuclear renaissance. S&P’s Swaminathan Venketaraman and Aneesh Prabhu assess the newbuild outlook from a credit perspective.
Nuclear power plant construction in the US has been at a standstill for the past 14 years, owing to safety concerns following the accidents at Three Mile Island in 1979 and Chernobyl in 1986, and more recently because of the favorable economics for carbon-based energy production. Yet nuclear remains a key part of the country’s energy mix. The US produces more power via nuclear production than any other nuclear-producing country. About 20% of US electricity production is from nuclear. According to the US Energy Information Administration’s International Energy Outlook 2010 Test Case, between now and 2035, global energy consumption will rise by 49%, much of which is expected from China and India, but some from the US and other OECD nations. Given international concern about climate change and a realization that every form of power generation has its costs and benefits, the US and many other nations are eyeing nuclear energy as a low carbon means of satisfying these energy needs. To stimulate interest in new nuclear construction, the US government, in 2007, instituted a loan-guarantee program, which along with the high gas prices and momentum towards carbon legislation then prevalent, encouraged a flurry of newbuild projects. However, that enthusiasm has slowed significantly since 2007 although at least some of the projects with loan guarantees appear to be moving forward.

Uncertain Economics
The fall in natural gas prices, the ongoing credit crunch and the lack of momentum for carbon legislation have all dampened the viability of nuclear economics significantly. It is highly likely that unregulated operations that do not receive loan guarantees will defer or abandon their nuclear projects. The volatility of gas prices over the long-term and expectations for eventual carbon regulation will keep nuclear power as an integral part of many utilities’ resource planning. As the first nuclear units are not expected until 2017, depressed gas prices in the medium term should not hinder nuclear expansion. However, claims that the potential supply of shale gas can support demand for the next 75 to 90 years
December 2010 insight 39

2011 global energy outlook - nuclear
could lower natural gas prices for the long term, as forward gas price curves are currently indicating. A levelized cost of energy comparison between new nuclear and combinedcycle gas turbine plants, currently the only realistic base-load alternative, across three scenarios, shows that a utility rate-base structure requires gas prices of $6.50 to $10/MMBtu for nuclear capital costs of between $5,000 per kW to $8,000 per kW to be comencourages private partnership consortia. In most other countries with nuclear capability, the government runs the energy program. Time uncertainty (a result of both the regulatory process and financing issues) increases the risk of construction cost escalation between project conception and groundbreaking, owing to commodity price increases, and both are factors in the inability of bidders to offer fixed-price engineering-procurement-constr uction (EPC) contracts. Steel, cement, and copper, all necessary for nuclear plant construction, have doubled, and, in some cases, almost tripled their prices, since 2001. Fixed-price EPC contracts offer Japan and China a lower cost because of contractors’ confidence in quantities, costs, performance history and ability to meet schedules, obtained through the respective countries’ continued development programs. The US’ lack of recent experience precludes such certainty and thus raises the costs of construction. Even if EPC contracts were offered in the US, labor costs for nuclear island construction would likely remain outside the bounds of any EPC contract. Another key issue for the EPC contract sponsor is which costs will be fi xed and which cost overrun risks will remain, even after fi nancing approval and start-up of construction. Another hurdle for the US is that the market price must be able to bear all of the costs of production and construction. That is not necessarily the case in other countries with government ownership. And if the US utility is regulated, regulations may require it to recapture costs only after operations have begun or require the lowest-cost type of power to be used at any particular time, thus leaving expensive production capacity unused. In addition, safety concerns will remain the industry’s Achilles heel and are paramount no matter whether the government runs the enterprise or functions mainly as a safety regulator, as is the case in the US. The type

New nuclear plants in the US will cost much more to become operational on a dollar per kilowatt basis than in other countries that continued nuclear development.
petitive ($8.20/MMBtu for $6,500/ kW). This indicates the need for subsidies at current gas prices and without carbon costs. With a loan guarantee, a merchant plant with $6,500 per kW in capital costs requires gas prices at about $6/ MMBtu; carbon costs lower the breakeven level by $1/MMBtu for every $15 charged per ton of carbon. Models that add other subsidies (production or investment tax credits) can make the $6,500 per kW nuclear option competitive at $5/MMBtu without carbon emission costs.

US Cost Premium
New nuclear plants in the US will cost much more to become operational on a dollar per kilowatt basis than in other countries that continued nuclear development. Lack of recent regulatory and nuclear construction experience, higher contingency costs, and a lack of economies of scale and a smaller pool of skilled labor all contribute to this expectation. Economies of scale are more difficult to generate owing to the smaller number of projects and the fragmentation of construction among small, private companies that do not necessarily share expertise. Even in Japan, where private companies lead the way in nuclear plant construction, governmental law
40 insight December 2010

2011 global energy outlook - nuclear
of cooling unit, the dependence and synergy of the units working within the reactor, and the amount of manual versus automatic control are all design factors that regulators from each country scrutinize. Licensing entails significant risks, even for technologies further along the Nuclear Regulatory Commission’s review process. Regulators can require amendments to design even after they issue certifications, such as with the NRC’s new rule dealing with “consideration of aircraft impacts for new nuclear power reactors,” which can, of course, lengthen the project completion time. actors have run into substantial schedule delays and cost overruns although costs are still lower than proposed US EPR projects. It will be important to the credit quality of US sponsors to learn from the international experience. Ultimately, new construction of nuclear power in the US remains in a state of flux, and further government support—in the guise of loan guarantees or a price on carbon—will likely be necessary to see new construction of nuclear power plants. Safety issues and high costs are foremost, but when it comes to credit, the key additional concerns are regulatory risk, construction contract terms and government support. ■

Construction Track Record
The nuclear power industry’s aggressive expansion globally holds important lessons for the US. Based on the experiences in China, South Korea, Japan, France, Canada and Russia, the following factors are vital for successful nuclear power construction:

1. US electricity capacity, nameplate capacity, in MW.
Other renewables 3.7% 41,384 Hydro 7.0% 77,731 Nuclear 9.6% 106,147 Other 2.1% 23,659

strong government support and partnership among technology vendors; ◆ a focus on development aimed at standardizing only a few reactor designs; ◆ the incorporation of lessons learned from incremental changes to locally made reactors, coupled with continual adaptation of imported reactors to shorten construction schedules; ◆ the employment of large modular construction at low-cost locations worldwide; and ◆ expanding the domestic supply base for labor and equipment. New nuclear construction experience around the world has been mixed. Only the ABWR has a reasonable track record of meeting cost and schedule estimates. The AP1000 has had a good start in China, but construction is still in its early days, and the projects have not reached major critical path items. Westinghouse’s and the Shaw Group’s ability to deliver completed units on schedule and within budget is unclear. The first two European Pressurized Re-

Coal 30.5% 337,300

Natural gas 41.2% 454,611 Source: EIA, 2008

Oil 5.8% 63,655 Total: 1,104,487 MW

2. US electricity production, in GWh.
Other renewables 3.6% 141,115 Hydro 6.9% 272,131 Nuclear 20.2% 798,745 Coal 44.6% 1,764,486 Other 0.8% 30,465

Natural gas 23.3% 920,378 Oil 0.7% 25,792 Total: 3,953,112 GWh Source: EIA, 2009

December 2010 insight 41

>GainInsight. Phase I was qualitative and consisted of in-depth telephone interviews. To download the full study results go to: www.us. Data for the quantitative Phase II was collected via online survey. Platts/Capgemini Utilities Executive Study Eight out of ten North American utility executives are not satisfied with President Obama’s first-year performance on energy issues.QWHJUDWLRQWRWKH*ULG 'HPDQG6LGH0DQDJHPHQW 'HYHORSPHQW 'LVWULEXWHG(QHUJ\6HUYLFHV (QJLQHHULQJ (QJLQHHULQJDQG&RQVWUXFWLRQ (QJLQHHULQJ&RQVWUXFWLRQ&DSLWDO3URMHFW 0DQDJHPHQWRXWDJHPDQDJHPHQW (QYLURQPHQWDO Q .S. incorporating new technology. the environment. Findings also reveal that executives believe the industry’s greatest challenges are uncertain legislation. and Canada. access to capital and maintaining liquidity Providing satisfactory service and education about cost of ‘green’ energy to end users The study was conducted in two phases.capgemini.com/PlattsStudy 1XPEHURI8WLOLW\&XVWRPHUV /HVVWKDQ  2YHU  XSWR  $UHDVRI5HVSRQVLELOLW\ &RUSRUDWH6WUDWHJ\3ODQQLQJ0 $ 7UDGLQJ5LVN0DQDJHPHQW XSWR  2WKHUPHQWLRQVLQFOXGH                       3HUFHQWDJH   ‡ ‡ ‡ ‡ ‡ ‡ %LOOLQJDQGUHYHQXHUHFRYHU\ %XVLQHVV'HYHORSPHQW &RPPXQLW\5HODWLRQV &RPSOLDQFH &RUSRUDWH6DIHW\DQG+XPDQ5HVRXUFHV &XVWRPHU3URJUDPV'HPDQG5HVSRQVH5HQHZDEOH (QHUJ\3URFXUHPHQW3XUFKDVHG3RZHU5HQHZDEOH . this year’s study revealed that the most critical issues facing the energy industry include: • • • • • Regulatory uncertainty Addressing environmental concerns such as building new generation and transmission for renewables Incorporation of technology as a priority Addressing financial concerns such as cost recovery. After surveying over 100 senior executives within the electric and natural gas industries in the U. finance and variable consumer demand.

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“We do expect the US market to be down this year as the low level of orders we saw during the financial crisis work their way through the system. Part of this expansion is fueled by European offshore wind farms that. These include the 300 MW Thanet plant off the UK coast and the 207 MW Rødsand II project in the Danish North Sea. Jones. Germany’s solar PV association expects up to 8 GW of new capacity to be installed in 2010. after years of planning and construction. In a further twist. have begun generating power.8 GW the previous year. thanks to technology improvements that have made previously marginal resources economically viable. Platts Renewable Energy Report As the renewable energy industry continues to grow. At the same time. reaching more than 400 GW. from declining feed-in tariffs to mounting trade disputes. The wind power industry continues a rapid expansion that began less than a decade ago. Heading into 2011. Quarterly manufacturing capacity for solar photovoltaics added during thirdquarter 2010 broke the gigawatt barrier for the first time. despite an increasingly competitive market. the renewable energy industry is in some ways enjoying the best of times. according to the Global Wind Energy Council. December 2010 insight 43 .” The solar industry. About 40 GW of new wind capacity will be added this year. GWEC expects global wind power to double by 2014. up from 3. Editor. wind energy continues to be a growth market. The solar PV market is caught in an odd warp: falling equipment prices have made PV more economically competitive. too. while also shrinking technology manufacturers’ profit margins. and the European market is very stable. driving PV equipment spending to a new quarterly high. “Overall.” said GWEC Secretary General Steve Sawyer. Other renewables technologies are also undergoing transitions.renewables Winds of Change for Renewable Energy David R. bringing the world’s wind energy capacity close to 200 GW. while potentially dampening long-term PV growth. serious challenges to renewables are emerging. On the other hand. it is broadening its horizons beyond Europe and the United States to new markets in Asia. ahead of tariff reductions. Geothermal exploration is expanding to countries like Ireland and the UK. the drop in equipment prices has spurred policy-makers in such countries as Germany and Spain to slash PV feed-in tariffs—arguing that falling prices mean the industry needs less support. weathering the economic crisis much better than some analysts had predicted. stronger growth in China will make up for this. This has galvanized short-term investments by those looking to secure lucrative tariffs before they are cut. is thriving. market analysis firm Solarbuzz reported.

many wind energy companies are doing well. following the $400 million investment in Hudson Clean Energy a year earlier by another Danish pension fund. particularly in Asia.” Perkins noted. joining a host of biogas feed-in plants in Germany.” he said. “The debt markets have been shut the last few years. with a planned 1 GW capacity.” Onshore wind has endured difficult times in Europe. he said. fell to No. “It will definitely be a weak year for US and European wind. meanwhile. ATP. The United States. such as direct participation by deep-pocket investors. However. New Investors Yet despite this relative prosperity in the midst of tough economic times. renewable energy companies are being buffeted by political and economic forces.renewables Still. and we haven’t seen direct debt involvement. Global cumulative wind power capacity. according to Lee Clements. such as Masdar’s decision to assume a stake in the London Array offshore wind farm. that alternative financing sources are filling some gaps. which previously was too fouled with contaminants to combine with natural gas. Reference 2500 2000 GW 1500 1000 500 Moderate Advanced 2007 2008 Source: Global Wind Energy Council 2009 2010 2015 2020 2030 44 insight December 2010 . Young partner Andrew Perkins.” he said. have struggled in recent years to secure financing for large-scale projects as the global financial crisis squeezed credit sources. the wind industry “is definitely in the doldrums.” Clements said.2011 global energy outlook . ranked China as the world’s most attractive target for renewables investors. but it’s getting a little easier. impacted by low demand for power. can now be refined to be fed directly into natural gas pipelines. previously atop Ernst & Young’s leader board. In industrialized nations. Many companies in mature wind markets. new plants could enter the market in 2011. according to Ernst & New Markets Ernst & Young’s latest Renewable Energy Country Attractiveness Indices. and geothermal energy this coming year “could be a surprise. Much of the wind industry’s growth. Pension funds also are jumping into renewables finance: Denmark’s PensionDanmark in September purchased a 30% stake in the 165 MW Nysted offshore wind farm off the Danish coast from DONG Energy. 2 as doubts persisted about whether the US 1. as biogas. is occurring not in traditional strongholds like Germany and the United States. published in August. the geothermal market was “quite weak this year” as permitting delays held up projects. for instance. and the financing problems plaguing the industry might begin to ease in 2011. The first two UK projects to funnel biogas into the gas grid began in October. “But the capital markets aren’t participating. As with geothermal. investment manager at Impax Asset Management. with problems in planning approval and grid expansion creating major obstacles to wind power expansion in countries like Italy and the UK. technology advances have spurred growth in biomass markets. though. but in developing countries. Still.

the Minera Escondida copper mine in Chile. At the same time. some analysts said. over the years.” it said.” Many Asian countries see renewable energy “as an opportunity to create local champions that will manufacture products required in a carbon-constrained world. Renewable energy in Asia Pacific. “It’s not necessarily about the demise of more established markets. In the renewables supply chain. Over the next decade.” Ernst & Young’s Perkins said.” GWEC’s Sawyer said. Much of the future growth in renewable energy will ultimately come from Asia Pacific. which placed fourth in the latest Ernst & Young index. former leading renewables markets in Europe have slashed the generous feed-in tariffs that made their countries such magnets for investment. For instance. By contrast. China last year added 37 GW of renewable power capacity—more than any other country. the manufacturing of products and equipment for the industry will increasingly shift to Asia. majority owned by BHP Billiton. Danish wind turbine maker Vestas recently contracted with automobile compo- Top trends in renewable energy for 2011 ◆ Broadening industry focus beyond Europe and United States to Asia ◆ Slow re-entry of traditional financial institutions into renewables markets as alternative funding sources emerge for large-scale projects ◆ Non-energy companies enter renewables markets ◆ Growing international trade disputes December 2010 insight 45 .” according to a study. Mexico and Chile. “We are seeing very encouraging signs from countries in Latin America.000 acres in which. does not force a zerosum contest with Europe. The nation’s wind power capacity has exploded as onshore wind farm construction has grown 40fold over the last decade.2011 global energy outlook . “Asia Pacific’s renewable energy markets will also become an important region for investment . Still others are supply-chain and service companies that are diversifying into renewables. Both Germany and Spain lost a point in the Ernst & Young rankings because they cut support for PV generation. published in July by law firm Norton Rose. is following the lead of Chilean mining companies Codelco and Antofagasta Minerals in searching for geothermal resources. including Brazil. where Canadian gold exploration company Radius Gold is pursuing licenses to explore 500. . Similarly. . as well as Northern and Sub-Saharan Africa. Around half the growth in wind power capacity “is now happening in emerging economies and developing countries. A striking example can be found in Guatemala. “The Asia Pacific region is an increasingly important market for renewable energy. The rise of Asian renewables generation. At the same time. are strengthening their renewables support programs and setting national targets for clean energy production. where ports and companies providing services to the oil and gas sector are branching out into providing vessels and other equipment to offshore-wind and marine-energy developers. Much of the wind power industry’s growth now comes from outside mature markets in Europe and America. new types of businesses—some of which have never been involved in energy production—are looking to dive into the renewables market.renewables Congress would adopt a national renewable energy standard and as a federal renewables tax break was set to expire. China—which four years ago failed to rank even in the Top 10—and India.” Other analyses echo Ernst & Young’s findings on Asia’s ascendancy. The process is well underway in the offshore energy industry. it has found hot springs— potential hydrothermal activity linked to gold deposits as well as to geothermal pools. Asia’s two renewable energy leaders. Hungarian oil company MOL entered the geothermal sector in 2006 to explore the dozen hot-water wells it discovered while drilling for oil. Other companies are prospecting previously ignored resources for a renewables bounty. It’s more complimentary.

charged in a petition this year that many of Beijing’s government support policies for renewables violate international trade rules. the renewable energy industry is undergoing fundamental changes as it grows beyond a business centered largely in Europe and the United States. not long-term goals. The USW called on the Obama ad- Emerging markets for renewable energy ◆ Brazil: This longtime biomass and large hydropower generator is rapidly expanding wind energy sector ◆ Sweden: Biomass now largest component of total energy mix. a US trade union. is poised to assume a major role in world wind power markets. analysts said. but legislation won’t get us there. This mirrors diversification among silicon technology companies. Clements and RBC Capital Markets analyst Nick Hyslop agree that Brazil. have stalled: Turkey.” ■ Areas to Watch On a larger scale. Abu Dhabi. Nepal and the Baltic countries. wind energy finally taking hold ◆ United Arab Emirates: OPEC titan looking to diversify into solar photovoltaics. Countries worldwide are now setting ambitious renewables production targets as they struggle to shift to low-carbon economies. though. .renewables nent manufacturer ZF Friedrichshaven for wind-turbine gearboxes—a deal that could inspire participants in America’s beleaguered auto industry. .” said Hyslop. Japan has filed a WTO complaint accusing the Canadian province of Ontario of breaking international trade pacts with its renewables law. ministration to file a complaint with the World Trade Organization about China’s green-technology practices. The government contracted for just over 2 GW of electricity from 70 Brazilian wind farms in August as part of a renewable energy auction. Other markets to watch. wants to generate 7% of its electricity from renewables in 10 years ◆ Nepal: Looking to export power from large hydroelectric plants to India while developing small hydropower to supply isolated communities ◆ Baltic countries: Estonia. Similarly. which already generates substantial amounts of electricity from large hydropower and sugar cane bagasse. Perkins. which requires developers to purchase renewable energy equipment with 50% provincial content. As renewable energy has grown into a worldwide enterprise. for example. has yet to enact long-promised national renewables legislation. and Brazil’s wind energy association has called for further auctions dedicated solely to wind energy.” He noted that national governments face growing debt while “political pressures to stick to timetables remain . Latvia and Lithuania are working to meet EU 2020 renewables targets while integrating their power markets by 2013 46 insight December 2010 .” Perkins noted. “The financing requirement is very large. which broadened their business horizons from making processors for computer manufacturers in the 1980s and 1990s to manufacturing silicon chips for solar PV producers. “The downturn focused countries on immediate concerns. The United Steelworkers. controversies over globalization have emerged. Some countries with promising renewables sectors. All told. the World Trade Organization is set to take center stage in handling the growing number of international disputes regarding renewable energy policies. “It’s exactly the same as the car industry was. It’s an interesting conundrum. As the renewables industry expands globally and new markets like offshore wind take off. surpassing oil. There are legal requirements. the renewables industry is confronting challenges unknown just five years ago in the arena of international trade.2011 global energy outlook . include Sweden. such as the government’s wind-power auction conducted in December 2009.

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In Asia-Pacific. power and transport. Coal plants are also being built near to power demand centers. The most notable shifts have been the diversion of thermal coal normally destined for Atlantic markets to the Pacific. but is still adding 10-12 GW of coal capacity per annum. equivalent to the total power generating capacity of the United Kingdom. The growing need for imported coal has had another effect. Such targets are rarely met. are expected to grow much more rapidly. Coal may be in retreat in the OECD. by contrast. It is also creating a new type of international. Chinese and Asian demand for thermal coal has already produced marked changes in global trade patterns. in both countries. India imports of thermal coal. vertically-integrated company operating in the coal. but substantial additions to India’s 170 GW of existing coal plant are likely. both below ground and in terms of internal transportation systems. and promoting an increase in coal trade if not net imports. often in coastal areas. This has slowed to 40-45 GW of new coal capacity on average in recent years. India has become an important buyer of South African coal. while in 2010. which is by some measure the largest in the world. At one stage China was adding roughly 80 GW of coal plant a year. Indian and Chinese coal companies are spreading their wings. India comes some way behind. It is forcing Indian and Chinese companies abroad to secure energy assets to underpin their domestic expansion and increasingly international supply chains. As a result. Now.coal Adventures Abroad for Coal James O’Connell. in Asia a market on fire with M&A activity. a process likely to gain 48 insight December 2010 momentum with the eventual expansion of the Panama canal. Platts International Coal Report The contrast could not be starker: in Europe and the US an industry in retreat. power and transport logistics arenas. This expansion has put pressure on both countries’ domestic resources. This is changing the face of mergers and acquisitions in the competition for energy resources. Managing Editor. Colombian coal started to move westward to Asia. rather than eastwards to Europe. China has been more successful than India at expanding its domestic coal industry. to secure their supply chains. improving the economics of imported coal over domestic. almost every major power-related asset sale or . but the development of coal-fired power generation plant in Asia remains rapid. It has already radically altered trade flows in thermal coal around the world. It has an ambitious target to develop 50 GW over the next two years. it has not become quite the net coal importer than many had expected. creating vertically-integrated conglomerates in the fields of coal.

investors chased after Riversdale Mining shares in September when Indian state-owned iron ore producer NDMC was reported to be an interested buyer for 10% of the Australian company. “CVIL will buy a coal asset by 2012 and efforts are on to zero in on a thermal coal mine in Indonesia. frequently both.7 billion comprising $1. Indian and Chinese companies have particularly targeted major coal exporters Indonesia and Australia. typical of large. one of India’s biggest steel manufacturers. Even after we got a feeling that [the asset was too expensive]. “the bottom line is clear: the resource sector has become overheated. by October 20. even this juggernaut has been slow to notch up any real successes.coal development appears to have either China or India behind it. A senior executive at Indian integrated steel maker Ispat said: “To us. Steel Authority of India Ltd. In January 2008. higher asset prices do nothing to resolve the problem of supply security. Its success was hindered by an inability. which bought a 30% equity stake in Bumi Resources. CVIL is continuing to evaluate thermal coal mines in Indonesia and coking coal mines in Australia. an important domestic steel manufacturer. completing the venture. Gone is that life-and-death involvement. India has recently made the international M&A field December 2010 insight 49 India Overseas India’s state-owned coal industry initially tackled overseas acquisitions without independent or private assistance. An outlay of $1. There has been at least one instance where two Indian companies were locked in a bidding war for a coal property.” He added. India’s top iron ore producer NMDC Ltd. a team of five government companies formed a special purpose vehicle called Coal Ventures International Ltd (CVIL) to spearhead the hunt for both thermal and coking coal assets.” An analyst commented: “The result is overvaluation. After its slow start. with Rashtriya Ispat Nigam Ltd (RINL). CVIL was granted a modest initial war chest of $2. and it would be better if Indian and Chinese buyers kept away from the market for some time. We have followed quite an aggressive stance but today it’s a little different. Coal India Limited.” a CIL official said. getting some good coal and iron ore mines abroad was one of our top priorities. The UMPPs require the construction of huge new coal plants and developers have been keen to secure international supply chains.75) on the day and.77/share. we wouldn’t stop and kept going. Private Indian power companies involved in the country’s Ultra Mega Power Programs have been more successful.77/share (US$9. Private Indian company Jindal Steel & Power has been caught up in a competitive bidding war with China’s Bhushan Steel (Australia) Pty for a stake in Bowen Energy. Among the first to move was Tata Power. The significant part of the deal for Tata was a coal supply agreement for the sale of 10. ambitions appeared to have cooled. to move swiftly once a desirable asset was identified.8 million mt/year of thermal coal at index-linked prices for 12 years starting in 2009. state-owned companies. Despite NDMC chairman and managing director Rana Som disowning the reports. By May 2010.2011 global energy outlook . However. bringing Tata members onto their respective boards. the state knew a change of direction was required. both state and private companies have run into the problem of asset inflation as both India and Chinese companies simultaneously sought the same resources. which has a large coal export coal project in Mozambique.” Backing up the claims of asset inflation. coal producer. an Australian mining exploration company. Indonesia’s largest .3 billion saw Tata gain a 30% stake in PT Kaltim Prima Coal and PT Arutmin Indonesia.5% to A$9. The team comprises one of the largest coal producers in the world. With little or nothing to show for its efforts.8 billion in debt and $900 million in equity. given the shortage and unreliability of domestic coal deliveries. looking for both transportation and coal assets. stood even higher at A$10. India’s largest power provider NTPC Ltd. However. Riversdale’s share price rose almost 3. confirming that it is also scouting for mines in Australia and South Africa. However.

43% Europe 0. will have a capacity of 50 million mt/year. One of Adani’s Indonesian partners. Top export destinations for Australian coal. The coal terminal.52% China 8. Adani will invest over $1. Indonesia. Adani also signed an agreement with Indonesian coal producer PT Tambang Batubara Bukit to develop a 270 kilometer railway and coal terminal project in South Sumatra. on which construction will start next year. was also tipped as a potential buyer. The railway will link Tanjung Enim to Tanjung Api-Api. leaving the way open for others. the Adani Group confirmed its interest in leasing Australia’s Brisbane port. Chinese Adventures Abroad In January. Linc Energy chief executive Peter Bond estimated the deal would generate A$3 billion ($2. The deal comprises an initial outlay of US$457 million in cash plus a 20-year inflation-linked coal production royalty. Adani Group has also secured the right to build and operate an export terminal at Dudgeon port near Hay Point port on Queensland’s central coast. Australia on a 99-year lease. Confirming its liking for transport assets. Indian conglomerate Adani Group swooped on assets owned by Australia’s Linc Energy to gain access to a 7.7 billion) in revenue for Linc over the 20-year life of the royalty which is payable at a rate of A$2/mt and indexed for inflation. compared with im- Japan 65% Japan 58. Several companies are understood to have expressed an interest in acquiring the lease which is due to be auctioned by competitive tender before end-2010. were all also reported to be in the running to buy debt-laden West Australian miner 1. It said it is in talks with the Queensland government about taking over as the new private sector operator of Brisbane port in Queensland. according to the head of Indonesia’s Investment Coordinating Board. in mid-October. but the company walked away from the sale process in early September after carrying out due diligence on Griffin’s mines. PT Bukit Asam will supply 34 million mt of that capacity. some of which has been exported to China and India in recent years. Reliance Power and GMR.09% Taiwan 13% South Korea 15. three Indian power utilities.5 billion ($3 billion) acquisition of Australian coal producer Felix Resources was endorsed by Australia’s resources and energy minister Martin Ferguson. According to the minister’s estimates.coal sit up and take notice with a flurry of deals. Gita Wirjawan. Adani Power.8 billion mt coal resource in the Galilee tenement in Queensland.09% Malaysia 2% Mexico 4% South Korea 11% Other 5% Griffin Coal and its power station assets in the third quarter of this year.3% Mexico 1. Australia’s Wesfarmers. Griffin Coal produces 3. a senior official said.6 billion in the project. Construction is expected to take 36 to 48 months.5 million mt/year of mostly low sulfur and low ash thermal coal. which has a transport capacity of 30-35 million mt/ year. Chinese imports of thermal and coking coal increased 115% and 385% respectively in 2009. Wirjawan said.88% Taiwan 12. In late August. Other Asia 3. Yanzhou Coal’s A$3.7% Export tons by destination 2007 Export tons by destination YTD September 2010 Australia’s Port Waratah Coal Services Source: PWCS 50 insight December 2010 .2011 global energy outlook . which operates the Premier thermal coal mine next to Griffin Coal’s operations. capable of supporting a 60 million mt/year coal mine. Development is expected to start in 2011 and take about two years to complete.

It also aims to increase its annual coal output to over 75 million mt in 2012 and 100 million mt in 2015. according to Huang Qing. Continental export shifts—South Africa’s RBCT. making it the fourth largest coal exporter to China. The agreements also provided for the establishment of a joint venture to develop the Ogodzhinskoye coal deposit in the Amur region in Russia’s Far East. Australian exporters capturing much of that increase. The country’s relatively small net amount of coal imports in comparison with its rapidly growing dependence on imported oil has meant a greater focus on oil asset deals.000 mt the previous year. ■ 1.09 million mt of coal to China in 2009. Other estimates suggest the gap could be considerably higher. A Shenhua Group subsidiary also recently confirmed plans to complete a 10 million mt/year coal mining project in the Watermark area of Australia’s New South Wales by end-2015. Other Other Asia Other Asia Europe India India Europe Other 2008 Source: RBCT 2009 December 2010 insight 51 . The alliance includes an expansion of coal trading to Japan and China. Chinese and Indian demand centers present both a growing market and a source of investment capital. Russian coal exports to China amounted to 6 million mt. particularly in Africa. Chinese companies have been more visible in recent years in trying to secure oil assets. Chinese coal producer Shenhua Group has formed a comprehensive business alliance with Japan’s Mitsui & Co.coal port levels for the 2008 calendar year. collaboration of coal chemical business and development of environmental and efficient energy-use businesses. one of the world’s largest undeveloped coal deposits. The Chinese producer also said in September that its venture with the Australia-based Felix Resources should add about 15 million mt to its projected total 2010 output of 60 million mt. up from just 760.2011 global energy outlook . In addition. where access to resources has been closely associated with deals and loans in other sectors. joint development of overseas coal mines. An analyst with Beijing-based China Securities Research told Platts that Mitsui and Shenhua may jointly bid for the Tavan Tolgoi coal field in Mongolia. board secretary of Shenhua Energy. The planned loan of around $6 billion will be secured by the coal exports and used for the development of coal deposits in Russia and construction of transportation infrastructure as well as imports of mining equipment from China. according to Russia’s energy ministry. according to the ministry. It is India’s growing import imbalance that has driven its companies abroad. Mitsui said. but it didn’t disclose any specific mines for joint development. For the coal exporters on the rim of the Pacific and Indian Oceans. Russia exported 12. According to government estimates. In firsthalf 2010. following a meeting of a bilateral subcommission on energy cooperation in September. Beijing and Moscow have agreed on supplies of at least 15 million mt/year of Russian coal for China over the next 25 years. Indian demand for imported coal will be 51 million mt in 2012. Mitsui named Mongolia as one country where it could work with Shenhua. with Beijing to provide Moscow with a $6 billion loan to finance development of coal projects. Russia’s energy ministry said that a working group would study ways to increase railroad transportation capacity.

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perhaps we follow later. On the question of binding emissions reductions. and increasingly politicians and voters. the prospects for the 2010 Cancun meeting have been played down by almost all concerned. Managing Editor. Chinese leaders point out that global warming has been caused primarily by 200 years of coal-driven industrialization by developed countries. but. there has been little progress on the seemingly intractable divisions between these two countries. particularly given the unspectacular nature of the recovery. As a result. at best.” This is all very well. governments are instead struggling with the difficult task of simultaneously reducing deficits and boosting jobs. only to see the talks narrowly avoid total failure. This year’s talks at Cancun in Mexico were never expected to deliver a new global deal. Hobbled by the world financial crisis. However. By contrast. And each year the world’s carbon meter ticks on. but by China’s own estiDecember 2010 insight 53 . China’s position remains: “you first. but it is still perceived as a relatively distant one. Climate change may be a far bigger threat to the global economy than the financial meltdown experienced in 2008-2009. Sino-US Agreement Required China and the United States hold the keys to a deal because without the world’s two largest emitting nations on board any global emissions reduction deal is unlikely to be enough to bring the atmospheric concentration of CO2 down to limits scientists regard as safe. green groups. Scientists. to provide progress in key areas that might allow a post-Kyoto agreement in 2011. Time is running out to put a new treaty in place before the world slips into a post-Kyoto global climate policy vacuum.emissions Mexican Standoff: What Can Come of Cancun? Frank Watson. The 2009 UN negotiations in Copenhagen were widely flagged as a major opportunity to deliver a new post-Kyoto deal on climate change. Platts Emissions The world’s best attempt to combat climate change—the 1997 Kyoto Protocol—expires in 2012. many observers are questioning how much money and political will can be brought to bear on the issue of climate change. argue that the world cannot afford not to. Some climate change doubters argue that it is simply too expensive to switch the world’s energy systems on to a sustainable path.

UK secretary of state for energy and climate change Chris Huhne said: “It’s certainly going to be very difficult to get a final deal . When asked about the prospects for progress at a parliamentary hearing on September 15.” She said the world is now “acutely aware” of the danger it is in and requires governments to “take the next significant step . Governments under the Convention and its associated agreements. He said developing countries “make a valid point that the greenhouse gases in the atmosphere doing the global warming were emitted by Even as the atmospheric concentration of CO2 increases each year. innovation and entrepreneurial action that will take us to a new era of clean. fearing economic disadvantage. and on monitoring. it has already eclipsed the US as the world’s number one emitter of greenhouse gases and it continues to build coal-fired power plants at a rate sufficient to keep pace with GDP growth of about 10%. This position was essentially Washington’s rationale for not ratifying Kyoto in the first place. . This Mexican standoff is nothing new: the deadlock at the heart of the global climate negotiations has largely remained unchanged since the UNFCCC was agreed in 1992. and only governments can mandate the full set of ways and means to launch a new wave of global climate action. but climate adaptation funding in the short term will do little to curb global warming. notion of committing to any binding emissions reductions without similar commitments from China and other major developing nations. . and that such events “are a mild taste of what science says will come if we do not continuously raise our ambitions for environmental protection as each year passes. . Figueres said promises and pledges have been made by many nations.emissions mates. green development. It’s absolutely crucial that everybody is reporting in a fair way. It has to be the next essential and significant step on the long journey to respond to the climate challenge. .” Figueres added that a series of weather-related disasters during 2010 have highlighted the world’s vulnerability to extreme climate events.” he said. each hoping the other blinks first. only help to remedy its worst effects.” she said. and perhaps it will. the US.2011 global energy outlook . Christiana Figueres. . The UN’s top climate official. but these still need to be “captured in an international agreement. China and the US continue to stare each other down. Cancun Reality A new binding global deal to cut greenhouse gas emissions is almost certainly not going to be agreed in Mexico. have the power and the responsibility to set free the forces of human ingenuity. each hoping the other blinks first. So as the atmospheric concentration of CO2 rises year-on-year. I hope that we’ll see progress on forestry. “Cancun has to keep 54 insight December 2010 . has always voiced the strongest possible opposition to the the world walking in the right direction. The difficulty lies in finding ways to break it. . This Mexican standoff is nothing new .” she said. Other high level officials agree that the Cancun summit won’t deliver a new post-2012 agreement. reporting and verification [of emissions]. I hope that we can demonstrate real progress in some of the dossiers that will make up a final deal. Beijing and Washington continue to stare each other down. Some hope shoveling large amounts of cash in the direction of developing countries will encourage more ambitious climate commitments. For its part. Huhne also pointed to the importance of finance and the role it could play in unlocking the climate stalemate. said in September that a “heavy burden” rests on the Cancun negotiations and urged world leaders to make “the right choice” on climate change.

8 . US NRDC needs to produce sufficient momentum for the UN negotiations in South Africa in 2011 and the Rio 2012 Earth Summit to finalize additional commitments and implementation steps.485 485 .2015 2000 .2020 2010 . .40 4.4. More concrete commitments of climate funding for developing countries by industrialized nations could win greater cooperation in allowing full monitoring. as a perceived failure will make it even more difficult to build political momentum within the UN system and may lead the public and countries to disengage.3.2 3.440 440 .emissions developed countries. the Cancun meeting must serve three critical functions to ensure continued progress on international climate protection efforts and to rebuild some of the trust lost during the 2009 Copenhagen gathering.570 570 . CO2 concentration in ppm (pre-industrial levels at 278 ppm. . it is possible to make significant progress on each of these issues .2 . Cancun “The notion of ‘nothing is agreed. corresponding temperature increases and year that concentrations would need to peak to maintain specific concentration levels.” He added.660 Source: UNFCCC Fact Sheet: Climate Change Science Global mean temperature increase in C above pre-industrial levels 2. he said. until everything is agreed’ must be set aside in favor of re-establishing confidence by progressively building the agreement component by component.4 .2060 2050 . So there is a moral obligation on the developed countries to reduce emissions.2011 global energy outlook . reporting and verification of emissions among the big emerging economies.2030 2020 . the international community needs to prove to countries and the world public that it can work together to address climate change. “This is paramount. NRDC’s international climate policy director Jake Schmidt said that. Overview of CO2 concentration level.2. Second.” he said.” – Jake Schmidt.400 400 .4 2. “While it is unlikely that every aspect of these issues will be resolved in Cancun. and financial measures to reduce deforestation could also move forward. So while a binding deal is not in the cards in Mexico.0 . Cancun needs to produce an agreement on aspects of the key implementing activities to be delivered by the international agreement. “the Americans have not delivered on clean energy legislation in Congress and that gives major developing countries like China a reason to say ‘why should we do more?’ So I think we have a role to play in convincing US Congressmen and women that this is in their interests and that a low carbon economy is good for business and not about grinding the economy to a standstill.0 -2. current levels at 380 ppm) 350 . deforestation reductions and improving the resilience of countries to the impacts of climate change. the Natural Resources Defense Council. first. for example clean energy technology deployment. progress can still be made on core issues that might make the signing of a binding agreement possible in 2011 or 2012.9 Peaking year of CO2 2000 . And.8 2. until everything is agreed’ must be set aside in favor of re-establishing confidence by progressively building the agreement component by component. third. ■ 1. The notion of ‘nothing is agreed.” According to the US climate action group. Mechanisms to facilitate technology transfer to developing countries could see progress.2080 December 2010 insight 55 .” said Schmidt.

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Rather than succumb to recession. Goldman Sachs argued that strong Chinese oil demand. Platts Petrochemicals The petrochemicals sector. The petrochemicals industry has struggled hard to recover from the slump of late 2008 and early 2009. if not in its history. Oil Price Link The bullish price outlook for petrochemicals is closely linked to that for crude oil.679/mt recorded on July 14 of the same year. One reason why is that petrochemicals were a primary beneficiary of the concerted effort by the governments of the major develDecember 2010 insight 57 . the PGPI had recovered over 50% of the value lost since its death defying plunge and there are encouraging signs that it will maintain these price levels through year’s end. Heading into the fourth-quarter this year. Global Editorial Director. often cited as an economic bellwether. a huge fall from the $1. However. dropped to $491/mt on December 5. a proxy measuring the collective price of petrochemicals. when it saw the worst fall in demand and prices in the last ten years. The latter prompted necessary consolidation and caused the delay and suspension of new projects that would have added to overcapacity. were. Analysts in this market.petrochemicals Petrochemicals: Consolidation and Recovery Shahrin Ismaiyatim. the Platts Global Petrochemical Index. In September. has slowly recovered from the financial crisis. increasingly arguing that oil prices could reach $85 to $95 a barrel by end-2010. Despite a difficult two years that has prompted rapid consolidation. by fourth-quarter 2010. industry observers believe the petrochemicals sector has weathered the storm. Then. 2008. prices in the petrochemicals sector have remained stubbornly firm in comparison with a relatively modest recovery in the balance between supply and demand. the market has seen a modest recovery over the course of 2009 and 2010. the petrochemicals industry has shown resilience. slowing inventory builds in the US and falling levels of floating storage suggested that “world oil market conditions are far more constructive than conditions in the US oil market suggest.” Like oil.

the S&P 500 stock index fell to its lowest level this year as investors pulled money out of the system to park in “safe havens” like gold and oil. By the start of second-quarter 2010. the global economy started to sputter. Equities markets took another dip in August. washing machines and cars (in China) or traded in their old cars for new ones (in the US and Europe). Moreover. once these measures ran their course. countries like Japan. PGPI (left) 1300 1200 1100 1000 $/mt 900 800 700 600 500 400 11/08 Source: Platts 1/09 3/09 5/09 7/09 9/09 11/09 1/10 3/10 5/10 7/10 9/10 500 300 Global Ethylene (right) Global PE (right) 1700 1500 1300 $/mt 1100 900 700 2. down from the year-high of 1. Naphtha CIF NWE (right) 90 85 80 $/bbl 75 70 65 60 9/09 10/09 11/09 12/09 Source: Platts 1/10 2/10 3/10 4/10 5/10 6/10 7/10 8/10 9/10 10/10 Dated Brent (left) 800 750 700 $/mt 650 600 550 500 58 insight December 2010 .2011 global energy outlook . Petrochemical prices recover over 50% since 2008 crash. television sets. High crude pressures napththa-petchems crack. This was accompanied by “quantitative easing”—a highly accommodative monetary policy stance designed to inject liquidity into the financial system and eventually stimulate the real economy. many economists were declaring that the recession was officially over. However. The index registered 1.petrochemicals oped and developing economies in 2008 and 2009 either to offer direct bailouts to struggling companies or to pump money into the economy by other means. This has made their exports more expensive compared with their competitors and hence less attractive. many of which targeted the auto sector. Fears of the dreaded double dip—a second recession following quickly on the heels of the first—resurfaced. Consumers went shopping for big ticket consumer items like refrigerators.022 July 2. South Korea. These efforts seemed to work. China’s currency is tied to the dollar at a level which many argue 1. Taiwan and Brazil have seen their currencies rising versus the US dollar.217 points April 27. Both are important areas for petrochemicals demand. In July. However.

2 1.” according to Ineos group director Tom Crotty.6 December 2010 insight 59 . steam cracker operators have had fairly good margins. Meanwhile. the rise in crude oil prices has also fuelled a rise in the price of the petrochemical feedstock naphtha.50 per ounce. ensuring the competitiveness of Chinese exports. However. and second.4 Eur/$ (right) 1. in particular from June through September. On October 7. the weakest level since May 1995. Throughout this year. Weak dollar pushes funds into commodity sectors. the highest level since January. interest rates are being kept low to encourage borrowing and keep currencies weak and exports competitive. through stimulating the real economy. where the critical breakeven point is between $150-200/mt. showing strong growth all the way through 2009 and into 2010. the dollar traded at an eight-month low against the euro. who is also the president 3.1 1. when it dropped to minus $42/mt.2011 global energy outlook . The problem is that it is not finding a productive use and is being directed towards commodity investments that are seen as safe havens against the inflation that such monetary stimulus is likely to provoke. Crotty. At the same time. at one point the euro reached $1. the dollar slumped to Yen 82. This has been attributed to a resurgence in underlying demand for petrochemicals driven largely by China and not merely a replenishment of inventories.” according to David Morrison. Commodity prices thus appear to be a beneficiary of government policy in two ways: first. Against the Yen. In effect. and then in March. First. The PCM currently reflects operators of typical European assets. as a means of financial investment. High Feed Cost Although expansionary economic policies have helped support petrochemical prices.5 1. London Gold (left) 1400 1350 1300 1250 1200 $/oz 1150 1100 1050 1000 950 900 9/09 10/09 11/09 12/09 Source: Platts 1 1/10 2/10 3/10 4/10 5/10 6/10 7/10 8/10 9/10 10/10 1. liquidity is still being pumped into the international financial system. The PCM Spot is a measure of profitability for steam cracker operators using naphtha as a feedstock. Chinese demand has kept Middle Eastern petrochemical products moving east.petrochemicals undervalues it. an analyst at Global Forex Trading. “There is no question that Asia has been the main driver of this recovery. when it fell to minus $111/mt. an indication of the metal’s safe haven status. causing concern over production margins. it is by no means clear that QE2 will produce the same effect as QE1.25. For most of the second and third quarters. “It was the Bank of Japan which effectively poked the hornets’ nest with its unilateral intervention to stem the rise of the yen.3 1. in January.4029. This concern over a drop back into recession prompted QE2—a second round of quantitative easing. the Platts Petrochemicals Cracker Margin index (PCM Spot) has only hit negative territory in two out of ten months. London gold prices closed at a record high of $1346.

Naphtha CIF NWE 900 850 800 750 $/mt 700 650 600 550 500 9/09 10/09 11/09 12/09 1/10 2/10 3/10 4/10 5/10 6/10 7/10 8/10 9/10 10/10 Platts Petrochemical Cracker Margin Spot 500 400 300 200 $/mt 100 0 -100 -200 9/09 10/09 Source: Platts 60 insight December 2010 11/09 12/09 1/10 2/10 3/10 4/10 5/10 6/10 7/10 8/10 9/10 10/10 . The financial crisis has brought forward this down-cycle by two years. Industry sources now anticipate that the recovery in the petrochemicals industry will come in 2011-2012. others were more realistic. In effect. as if resigned to lose more margin in the fourth quarter. adding “we see strong chemical demand across all the developed economies.” one producer said. the naphtha cargo market was assessed at $771/mt CIF Northwest Europe. A recovery would then be seen in 20142015. “It certainly did not feel like that. It caused companies to close uncompetitive plants and to stop or delay some new projects in the Middle East. Steam cracker margin tightens as naphtha value spikes. the recent march upwards in both crude oil and naphtha prices have begun to eat into petrochemical cracking margins.” Crotty said. Although some ethylene producers have put on a brave face hoping the entire value chain would continue to consume products.” However. reaching the top of the cycle in 2013-2014. many petrochemical analysts anticipated that the industry would go into a down-cycle in 2011-2012. In early October. ■ 4. the highest level in two years. before the credit crunch. “Cracker margins will be squeezed now. said most players in Europe that are in the base chemicals markets. and indeed players in other regions.petrochemicals of the European Petrochemical Association. Platts PCM Spot in October reached its lowest levels since May. Ethylene is the main petrochemical product that comes out of a steam cracker. The feedstock cost increases have begun to put a squeeze on steam cracker margins as demand for downstream petrochemicals has begun to slide into its seasonal year-end lull. owing to capacity additions in the Middle East. have mostly brushed aside talks of the double-dip recession. two polyolefins that serve the packaging and construction sectors.2011 global energy outlook . It feeds into many downstream products like polyethylene and PVC.

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The 2010 rankings. 2009 was the hangover.5% in 2009 to $61. while elsewhere the growth rates of the fastest developing economies were all but cut in half. which are dominated by integrated oil and gas companies. gas sellers dependent primarily on oil indexation and take-orpay contracts for their long-term sales found a measure of protection that others facing gas-to-gas competition did not. profits and return on invested capital. For some. Globally. natural gas demand experienced what the International Energy Agency called an unprecedented drop in demand. only Platts Top 250 Global Energy Company Rankings™ measures financial performance by examining each company’s assets. All ranked companies have assets greater than (US) $3 billion.042 billion in 2008 to $136. particularly in the United States. which are based on financial reports from 2009. dropped precipitously from $214. By contrast. thus provide a relative picture of which energy industry sectors proved most resilient to the cataclysmic events of the past two to three years. Energy demand slumped in the OECD. expanding LNG supply worldwide and diminishing demand. Platts Energy Economist Platts Top 250 Global Energy Company Rankings™ reviewed. If oil prices suffered. 62 insight December 2010 to slump 36. a division of The McGraw-Hill Companies).018 billion in 2009. Editor. a Standard & Poor’s business (like Platts. and relatively expensive prices for oillinked long-term gas sales. which was cheap.26 a barrel in 2008.67/b. Platts Top 250 Global Energy Rankings for 2010 might be taken as a survivors’ guide to the financial crisis. The underlying data comes from Capital IQ. impacting on selling and acquisition strategies. The coexistence of these two ways of pricing gas created distinct pressures. Platts physical crude benchmark Dated Brent averaged $97. natural gas suffered more. This took its toll. plummeted in 2009 in both absolute terms and relative to oil. for others it spelled readjustment and recovery. below the average price level seen in 2006.top 250 global energy companies Power Sector Revival Ross McCracken. Total profits for the top ten companies. its highest ever annual average. revenue. The 2009 financial year stood out because of the huge disparity between spot gas. Profits and prices were hit by the combined success of US unconventional gas production. Exchange-traded natural gas prices. . Illustrating the scale of the shock.

The demand and price outlook remains depressed. Fastest growing Asia companies.7 34. revenues.4 40. If only three years of data was available then it is a two year CGR. Contrast this with Chevron and Shell. The compound growth rate (CGR) is based on the companies revenue numbers for the past four years (current year included).3 39. the coming on stream of its giant LNG production facilities in Qatar have helped it retain a strong grip on European markets. Fastest Growing is based on a three year compound growth rate (CGR) for revenues. 2010. ExxonMobil came second in terms of both revenues and profits. As feedstock prices fell from secondhalf 2008. profits and return on capital invested for listed companies with over $2 billion in assets. challenging previous expansion plans.8 Platts Rank 121 165 158 159 227 198 185 205 19 102 13 93 242 235 237 204 107 142 78 163 Top Ten Reigning supreme at the top of the rankings for the sixth consecutive year is US major ExxonMobil.top 250 global energy companies But one person’s loss is another’s gain. Despite being fifth in terms of asset value.2 19. As energy feedstock prices have remained relatively low in 2009. the last two years have forced a strategic rethink on the part of utilities and independent power producers. BP’s revenues dropped by a third. 1.4 24. but power sector returns have revived from often negative territory. while the environment regarding carbon pricing in key jurisdictions remains as uncertain as it ever was. Some did so more quickly and effectively than others. Source: Capital IQ/Platts December 2010 insight 63 . the power sector.5 44.6 17. Platts rankings are based on a combination of assets.6 21. Nevertheless.5 24.2 23. Second in the running is the now troubled UK major BP. It has taken all of 2009 for these companies to find their feet.0 17.4 21. This reflects a strong performance in 2009 relative to its peers. Rank Company 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 China Resources Power Holdings PTT Aromatics & Refining Plc Adaro Energy Tbk Tata Power Co Ltd Huadian Power Intl Corp Ltd Reliance Infrastructure Ltd Datang Int’l Power Generation Co PowerGrid Corp Of India China Shenhua Energy Co Ltd Huaneng Power International Reliance Industries Ltd China Coal Energy Co PT Bumi Resources Tbk Shenergy Co Ltd YTL Corp Berhad Shenzhen Energy Group Co Ltd Gail (India) Ltd Yanzhou Coal Mining Co Ltd Indian Oil Corp Ltd China Yangtze Power Co Country Hong Kong Thailand Indonesia India China India China India China China India China Indonesia China Malaysia China India China India China Industry IPP R&M C&CF EU IPP EU IPP EU C&CF IPP R&M C&CF C&CF IPP DU IPP GU C&CF R&M IPP 3-year CGR % 50.8 17. Both saw profits more than halve. bringing utilities in many regions of the world back up the Platts rankings. which improved its position from fourth in the rankings in 2008. was instead caught in a pincer movement between a near total lack of liquidity in the banking sector and a precipitous drop in demand. While ExxonMobil’s European gas production declined.3 28. but profits by only little more than a fifth.9 17. All rankings are computed from data assessed on June 1.1 20.0 16.6 21. expecting some much-deserved relief.2 20. which moved down from second and third respectively to ninth and tenth. oil and gas profits have fallen from 2008.

759 18.4 3.403 15.260 34.312 66.935 144. DU = diversified utility.6 7.706 3.323 5 275.4 7.6 11.098 22.5 5.131 26. IPP = independent power producer and energy trader.234 43.166 34. IOG = integrated oil and gas.180 86.465 18.918 87.8 11.175 4.0 21.095 1.601 16.553 35.7 3.927 2.175 1.9 -5. All rankings are computed from data assessed on June 1.080 1.6 -4.2 6.229 28. DNR = data not reported.1 0.5 11.1 2.8 10.4 6.041 33.247 76.0 11.341 15.822 6.621 292.4 8.921 25.514 4.1 13.487 1.0 22.792 2.511 19.213 192.211 2.188 81.8 30.5 5.6 15.240 4.139 5.939 83.7 5.9 18.0 6.615 1.2 1.0 14.1 5. EU = electric utility.476 212.971 2.232 73.5 8.490 1.6 4.4 10.9 8.6 8.350 117.083 65.1 5.294 4.181 79.708 3 1 4 8 7 5 10 9 6 12 20 18 13 22 15 19 27 25 23 11 17 40 21 32 35 31 14 26 30 24 28 33 36 45 29 34 44 37 38 55 82 47 52 16 46 50 76 69 48 13. R&M = refining and marketing.top 250 global energy companies Platts Rank 2010 Company 1 Exxon Mobil Corp 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 BP Plc Gazprom Oao Petrobras Total E.590 1.478 15.006 45.9 5.0 -6.2 4.9 12.913 187.527 15.041 10.505 164.2 3.1 7.501 190.673 115.002 11.6 -1.968 270.638 159.455 37.1 5.4 11.9 6.4 4.400 17.135 100.880 157.291 15.7 5.3 IOG 235.743 3 13 12 6 10 7 4 5 1 16 21 27 28 33 9 44 52 66 60 15 14 32 8 54 67 18 11 83 74 78 31 80 82 26 105 113 64 53 20 62 30 41 99 146 97 77 56 59 75 16.318 18.483 12.345 47.544 107.4 16.6 -4.578 25.7 21.860 35.636 39.272 98.1 IOG IOG IOG IOG EU IOG IOG IOG IOG IOG DU R&M IOG EU IOG IOG E&P C&CF IOG EU EU EU IOG IOG EU IOG DU E&P IOG IPP EU IOG IOG IOG S&T EU IOG DU IOG IOG DU EU DU IOG E&P EU EU R&M EU Russian Federation EMEA China Petroleum & Chemical Corp China Russian Federation EMEA Russian Federation EMEA Russian Federation EMEA Oil & Natural Gas Corp Ltd India China Shenhua Energy Co Ltd China Surgutneftegas Oao Enel SpA EDF ConocoPhillips Gazprom Neft Exelon Corp Statoil Asa GDF Suez CNOOC Ltd BG Group Plc Iberdrola SA Ecopetrol SA PTT Plc AK Transneft Oao CEZ AS Sasol Ltd National Grid Repsol YPF SA Imperial Oil Ltd Centrica Plc Vattenfall Origin Energy Ltd Tatneft Oao NextEra Energy Inc EnBW AG Formosa Petrochemical Southern Co Italy France Texas Illinois Norway France Hong Kong United Kingdom Spain Colombia Thailand Czech Republic South Africa United Kingdom Spain Canada United Kingdom Sweden Australia Florida Germany Taiwan Georgia Russian Federation EMEA Scottish & Southern Energy United Kingdom Russian Federation EMEA Constellation Energy Group Inc Maryland Occidental Petroleum Corp California Russian Federation EMEA Public Service Enterprise Group Inc New Jersey Russian Federation EMEA Notes: C&CF = coal and combustible fuels.8 13.806 7.432 4.518 7.322 16.236 17.807 1.019 114.1 13.7 13.006 25.681 11.062 12.564 2 19.0 -6.248 6.4 32.8 25 37 31 33 35 49 38 52 85 47 39 27 48 64 107 3 5 28 21 131 141 16 138 23 41 114 154 15 26 2 143 62 24 89 54 13 20 134 172 17 91 174 60 1 12 132 120 30 149 -3.4 5.9 3.645 15.599 34.135 9.341 16.979 19.355 28.377 45.2 -0.309 44.278 71.578 16.3 10.4 10.1 12. GU = gas utility.765 55.784 1.642 112.2 7.2 9. E&P = exploration and production.ON AG Petrochina Co Ltd Chevron Corp Royal Dutch Shell Plc LUKOIL Oil Company RWE AG Reliance Industries Ltd Rosneft Oil Company Endesa SA ENI SpA TNK-BP Holdings State or country Texas United Kingdom Brazil France Germany China California United Kingdom Germany India Spain Italy Region Americas EMEA Americas EMEA EMEA Asia/Pacific Rim Asia/Pacific Rim Americas EMEA EMEA Asia/Pacific Rim EMEA EMEA Asia/Pacific Rim Asia/Pacific Rim EMEA EMEA EMEA Americas Americas EMEA EMEA Asia/Pacific Rim EMEA Americas EMEA Americas Americas Asia/Pacific Rim EMEA EMEA EMEA EMEA Americas EMEA EMEA Americas Asia/Pacific Rim Americas EMEA Asia/Pacific Rim Americas Return on Assets Revenues Profits invested capital 3-year Industry $ million Rank $ million Rank $ million Rank ROIC % Rank CGR% code 233.318 77.214 1.643 21.463 197.912 49.686 28.293 278.618 14.588 29.2 11.404 93.431 34.458 42.5 10.6 10.7 3.046 4 3 9 12 10 6 16 11 2 21 17 33 20 25 15 81 67 43 58 8 1 88 13 71 38 19 7 62 57 104 18 47 80 64 42 92 124 29 27 132 78 24 75 126 136 39 51 148 35 239.0 14.807 5. 2010.7 14 -6.892 5.990 210.411 156.8 11.772 149.7 -6.033 28.3 9.1 9.034 48.7 17.7 11.518 10.4 23.503 3.458 4.790 3.185 23.0 23.305 128.696 22.7 11. 64 insight December 2010 .045 15.996 28.280 2 15.730 18.013 2.8 15.5 7.6 47.020 63.3 5.858 3.970 4.076 6.9 9.082 297.3 20.338 152.4 18.951 2.018 1.011 4.3 12.3 5.4 11.5 18.592 6. S&T = storage and transfer.8 -4.375 136.016 22.2 13.1 14.316 3.779 1.2 20.019 52.6 12.875 12.9 4.331 12.3 12.465 38.2 4.406 7.

5 E&P 26.898 9.532 10.518 44.9 4.4 8.848 8.488 1.040 20.1 8.6 7.6 6.885 112 25 22 110 40 69 57 93 103 141 92 49 84 87 111 24 106 47 35 61 162 135 118 96 46 124 23 95 148 191 94 29 108 100 122 128 155 176 130 63 125 139 42 88 91 156 153 43 115 1.276 47.186 1.0 -0.439 1.387 15.8 7.365 61.7 10.1 4.625 1.822 13.111 37.063 1.136 8.006 804 910 557 1.471 1.382 1.149 20.574 11.518 14.4 3.845 1.8 -1.6 6.2 17.444 22.8 3.465 12.5 2.106 9.056 11.095 49.180 1.746 48.488 24.334 1.3 4.1 2. DU = diversified utility.529 6.498 44.656 41.5 -6.8 7.187 24.9 0.512 39.2 0.052 123 2.7 4.0 20.589 1.866 26.5 6.204 12.7 9.793 78.4 6.198 10.361 9.952 7.303 10.7 18.129 1.335 15.162 11.8 71 179 225 103 202 160 186 129 99 63 153 198 151 105 115 212 98 219 167 68 59 102 161 146 162 10 175 201 79 36 164 148 190 173 112 83 45 22 189 94 122 84 72 203 8 75 104 125 181 12.262 16.904 11.473 12.3 16.9 4.160 42.712 25.901 24.380 57.5 4.608 28. 2010.5 21.6 11.445 18.684 41.350 20.6 6. R&M = refining and marketing.304 1.8 -0.918 13.954 52.157 907 1.028 1.531 25.7 -7.234 1.5 16.3 3.5 6.606 29.079 740 741 1.710 29.370 48.9 1.304 26.8 2.463 4. December 2010 insight 65 .7 6.378 16.704 42.895 33.336 17.4 -11.8 12.553 8.184 1.0 -6.399 11.959 66.1 4.7 3.8 6.0 5.8 4.2 2.731 7.052 144.3 4.165 975 1.867 12.6 4.1 8.294 29.248 1.368 6.358 23.103 12.4 -2.7 3.893 1.0 6.0 4.659 39.8 9.2 12.951 28.3 6.546 54.255 60 9.520 8.131 14.7 -4.478 6.2 3.365 1.1 IPP IOG EU E&P EU EU GU DU S&T EU EU EU DU IOG EU DU EU IOG IOG IOG IPP DU E&P EU IOG IOG R&M EU S&T E&P DU R&M DU EU E&P EU EU IPP S&T S&T IPP C&CF R&M IPP R&M EU EU IOG EU Tokyo Electric Power Co Inc Japan Kansai Electric Power Co Japan American Electric Power Co Inc Ohio Chubu Electric Power Co Inc Japan Dominion Resources Inc Husky Energy Inc Entergy Corp Veolia Environnement Enersis SA Suncor Energy Inc Hess Corp Murphy Oil Corp International Power Plc Sempra Energy FirstEnergy Corp OMV AG YPF Indian Oil Corp Ltd Duke Energy Corp Woodside Petroleum Ltd Consolidated Edison Inc SK Energy Co Ltd Edison International Inpex Corp CEMIG Endesa TransCanada Corp NRG Energy Inc China Coal Energy Co Bharat Petroleum Co Ltd AES Corp Tupras Saudi Electricity Co CLP Holdings CEPSA Progress Energy Inc Virginia Canada Louisiana France Chile Canada New York Arkansas United Kingdom California Ohio Austria Argentina India North Carolina Australia New York Korea California Japan Brazil Chile Canada New Jersey China India Virginia Turkey Saudi Arabia Hong Kong Spain North Carolina Canadian Natural Resources Canada Kinder Morgan Energy Partners LP Texas Midamerican Energy Holdings Iowa Public Power Corp of Greece Greece Plains All American Pipeline LP Texas Notes: C&CF = coal and combustible fuels.3 0.602 879 567 1.8 6.742 7.9 2.554 25.9 10.348 58.6 3.614 18. All rankings are computed from data assessed on June 1.098 19.5 -3.709 31.056 527 836 41 71 57 43 60 58 49 68 56 42 61 72 63 62 66 91 67 77 101 100 53 75 54 84 97 88 126 78 65 51 92 123 74 89 73 85 81 70 64 121 87 86 165 102 130 173 79 132 96 8.1 6.9 2.8 13.8 21.945 26. S&T = storage and transfer.451 55.3 3.003 3. IPP = independent power producer and energy trader.019 39 7.6 2.8 6.0 6.6 3.2 7.7 6.535 6.7 -0. E&P = exploration and production. DNR = data not reported.top 250 global energy companies Platts Rank 2010 Company 51 XTO Energy Inc 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 100 NTPC Ltd Marathon Oil Corp Encana Corp EDP Gas Natural Sdg SA PG&E Corp Enbridge Inc Fortum OYJ State or country Texas India Texas Canada Portugal Spain California Canada Finland Region Americas Asia/Pacific Rim Americas Asia/Pacific Rim Americas Asia/Pacific Rim EMEA EMEA Americas Americas EMEA Americas Asia/Pacific Rim Americas Americas Americas EMEA Americas Americas Americas Americas EMEA Americas Americas Americas EMEA Americas Asia/Pacific Rim Americas Americas Asia/Pacific Rim Americas Asia/Pacific Rim Americas Americas Asia/Pacific Rim EMEA Americas Americas Americas Americas Americas Asia/Pacific Rim Asia/Pacific Rim Americas EMEA EMEA Asia/Pacific Rim EMEA Americas Return on Assets Revenues Profits invested capital 3-year Industry $ million Rank $ million Rank $ million Rank ROIC % Rank CGR% code 36.756 20.9 1.803 1.2 16. EU = electric utility.9 7.300 579 942 969 350 729 538 312 1.335 48.287 12.7 6.873 20.0 -5.177 34.032 37.3 88 25.251 881 1.5 9.119 13. IOG = integrated oil and gas.7 5.4 10.8 1.236 90 41 14 66 22 37 34 50 85 99 40 31 52 96 59 30 98 28 73 156 113 76 56 63 89 173 74 32 116 131 65 115 44 54 109 121 137 166 53 160 105 135 165 55 220 46 119 157 68 10.641 13.886 5.489 24.2 5.268 1.4 n/a 2.726 33.4 -1.189 8.6 2. GU = gas utility.6 5.454 1.7 -15.

3 11.167 30.6 5.686 9.2 2.086 5.373 3.532 15.955 4.113 73.1 4.001 6.6 1.5 1.263 23.202 12.629 13.228 9.5 11.3 -1.644 16.5 96.8 2.721 14.0 20.266 77.4 -2.4 9.882 9.790 15.263 3.7 3.8 8.897 15.408 59 19.1 -9.147 13.3 5.541 8.299 11.428 5. IPP = independent power producer and energy trader.110 8.630 7.6 -11.9 8.556 2.803 43.826 7.4 -1.980 4.2 11. 2010.5 3.281 3.552 23.255 6.5 7.9 -0.213 77 189 93 125 130 199 118 158 45 112 182 139 200 106 164 101 145 49 219 141 183 23 134 203 223 102 100 48 175 61 149 246 69 83 174 243 94 197 108 214 184 26 84 232 198 201 224 192 117 11.924 17.674 16.164 18.445 4.5 6.592 12. DNR = data not reported.014 80.021 19.5 16.1 0.4 4.913 7.790 24.8 7.793 4.257 5.8 8.2 4.9 -13.1 8.603 6.0 -2.5 17.891 15.3 -1.180 3. IOG = integrated oil and gas.5 4.708 29.258 204 1.622 6.273 9.2 3.0 -2.6 0.5 0.1 5.399 8.190 2.511 6.6 E&P 28.006 540 1.488 18.8 10.9 6.083 4. GU = gas utility.2 11.1 17.9 6.289 25.490 20.399 7.3 16.489 21.735 863 -352 644 276 337 204 443 363 438 434 465 675 568 94 65 626 458 567 258 667 337 99 138 106 117 115 104 120 90 144 153 105 83 129 80 98 95 145 179 119 107 111 238 133 114 94 118 131 248 93 244 112 181 167 209 146 162 147 149 140 109 122 234 236 116 143 124 188 110 166 3.271 3.2 0.329 1.1 184 70 156 158 140 18 169 67 227 196 42 90 4 130 87 145 178 231 6 97 43 238 168 51 11 182 180 248 50 242 118 61 226 233 96 44 206 82 193 32 74 237 235 9 69 58 124 53 217 21.294 15.2 7 5.280 7.578 11.3 11.0 -3.1 10.8 10.2 4.8 3.901 4.165 7.530 16.1 8.739 20.670 33.012 8. S&T = storage and transfer.6 1.726 27.834 1.6 -0.5 -5. 66 insight December 2010 .707 44.3 1.079 14.562 9.8 1.9 6.812 190 3.012 9.340 67.0 3.5 10.9 9.7 9.474 7.1 14.3 IPP IOG DU IOG EU GU GU EU EU R&M EU EU C&CF GU S&T S&T R&M EU EU IPP E&P EU GU DU E&P DU DU R&M EU R&M DU R&M EU S&T C&CF R&M S&T S&T EU C&CF C&CF EU R&M IPP IOG EU S&T GU IPP Kyushu Electric Power Co Inc Japan Russian Federation EMEA Energy Transfer Partners LP Texas Tohoku Electric Power Co Inc Japan China Resources Power Holdings Hong Kong PTT Exploration & Production Thailand KEPCO Inc Osaka Gas Co Ltd AGL Energy Novatek Oao Ameren Corp DTE Energy Co JX Holdings Inc Valero Energy Corp Caltex Australia Ltd Korea Japan Australia Missouri Michigan Japan Texas Australia Russian Federation EMEA Hongkong Electric Holdings Ltd Hong Kong United Utilities Group Plc United Kingdom Chugoku Electric Power Co Japan Enterprise GP Holdings LP Texas Peabody Energy Corp Thai Oil Pcl Williams Companies Inc ONEOK Partners LP PPL Corp Cameco Corp Eletrobras Idemitsu Kosan Co Ltd Tractebel Energia SA OMV Petrom COPEL Missouri Thailand Oklahoma Oklahoma Pennsylvania Canada Brazil Japan Brazil Romania Brazil Yanzhou Coal Mining Co Ltd China Ultrapar Participacoes SA Brazil Hong Kong & China Gas Co Ltd Hong Kong Edison SpA Italy Notes: C&CF = coal and combustible fuels.390 4.2 50.2 7.941 1. All rankings are computed from data assessed on June 1.953 22.6 -11.7 0.922 5.896 25.798 11.319 7.626 35.029 792 843 446 281 587 685 666 -82 526 631 854 612 532 -2.417 4.284 7.245 25.2 22. EU = electric utility. E&P = exploration and production.3 22. R&M = refining and marketing.top 250 global energy companies Platts Rank State or country 2010 Company 101 KazMunaiGas Exploration Kazakhstan 102 103 104 105 106 107 108 109 110 111 112 113 114 115 116 117 118 119 120 121 122 123 124 125 126 127 128 129 130 131 132 133 134 135 136 137 138 139 140 141 142 143 144 145 146 147 148 149 150 Huaneng Power International China Galp Energia SGPS SA Xcel Energy Inc Mol Hungarian Oil Alpiq Holding AG Gail (India) Ltd Tokyo Gas Co Ltd Verbund GS Holdings Corp CPFL Energia SA RusHydro JSC CONSOL Energy Inc Snam Rete Gas SpA Spectra Energy Corp PKN ORLEN Eletropaulo Portugal Minnesota Hungary Switzerland India Japan Austria Korea Brazil Pennsylvania Italy Texas Poland Brazil Region EMEA Asia/Pacific Rim EMEA Americas EMEA EMEA Asia/Pacific Rim Asia/Pacific Rim EMEA Asia/Pacific Rim Asia/Pacific Rim Americas Americas EMEA Americas Americas EMEA Asia/Pacific Rim Americas Asia/Pacific Rim Asia/Pacific Rim Asia/Pacific Rim Asia/Pacific Rim Asia/Pacific Rim Americas Americas Asia/Pacific Rim Asia/Pacific Rim Americas EMEA Asia/Pacific Rim Asia/Pacific Rim Americas Americas Asia/Pacific Rim Americas Americas Americas Americas Asia/Pacific Rim Americas Asia/Pacific Rim Americas EMEA Americas Americas Asia/Pacific Rim EMEA Return on Assets Revenues Profits invested capital 3-year Industry $ million Rank $ million Rank $ million Rank ROIC % Rank CGR% code 8.8 0.172 5.7 9.735 24.4 3.4 5.725 23.6 -0.466 104 70 116 71 89 163 81 174 76 36 170 192 178 198 167 177 50 65 181 183 195 38 102 171 213 144 138 17 246 19 188 79 107 45 159 127 132 154 142 229 206 90 34 234 182 211 58 241 98 744 488 686 618 630 713 585 906 455 414 710 1.090 8.7 5.586 28.9 1.195 43.9 10. DU = diversified utility.6 3.9 12.538 3.9 0.6 -1.528 27.4 -0.8 8.7 -1.7 22.2 7.1 8.6 7.9 2.6 8.3 77.6 0.

GU = gas utility.434 1.3 6.669 24.0 1.2 2.210 4.8 3.202 8.6 4.9 7.686 217 120 215 110 180 155 238 216 123 177 204 103 111 236 87 128 210 36 159 188 211 233 171 95 187 107 138 202 168 154 242 147 162 86 239 161 191 169 225 186 229 245 79 122 163 218 205 153 72 282 8.589 12.0 2.446 12.3 5.463 3.9 -7.675 11.094 26.9 34 197 121 199 128 176 19 66 224 92 136 192 220 76 207 240 127 239 144 95 56 29 211 229 147 222 205 80 137 195 86 183 157 230 78 155 117 133 100 101 73 126 241 216 244 93 109 249 247 6.309 14.781 16.804 2.5 3.3 50.1 1.237 7.6 3.0 5.2 -12.2 3.773 2.0 -7.038 2.4 2.2 2.1 4.8 E&P 6.828 3.9 -10.463 3.144 9.6 -0.698 8.0 6.613 8.578 11.649 28.359 12.828 4.8 6.7 2.4 -11.764 26.2 5.186 19.694 21.574 6. R&M = refining and marketing.9 1.018 4.640 7.2 8.567 7.157 10.2 -3.7 14.4 5.643 25.0 5.213 2.015 250 131 101 169 151 109 216 193 73 226 85 240 129 149 217 39 117 134 186 210 218 219 48 121 165 157 120 237 199 133 119 166 185 147 175 228 224 235 164 244 202 86 126 150 37 223 208 55 137 718 372 311 505 410 305 459 423 203 494 195 676 270 275 522 -117 246 -135 377 393 353 334 162 203 382 317 235 465 393 279 191 336 357 217 301 554 478 498 259 421 282 126 -284 231 -370 407 325 -626 -2. IOG = integrated oil and gas.112 2.852 5.895 6.4 -17.987 8.3 -2.988 22.1 7.6 3.001 21.6 -1.2 -12. All rankings are computed from data assessed on June 1. E&P = exploration and production.4 3.211 15.5 6.8 12.0 2.4 42.272 11.2 40. EU = electric utility.738 1.2 7.869 29.7 14.9 1.3 39.397 9.4 -5.7 2.6 3.119 127 4.5 -8.2 5.6 7.7 1.3 1.4 -9.406 14.2 1. IPP = independent power producer and energy trader.281 11.8 EU DU R&M E&P IOG GU C&CF EU GU IPP R&M IPP EU R&M IPP R&M R&M E&P DU GU EU EU R&M EU S&T IPP EU EU EU EU R&M EU DU IPP R&M GU DU EU GU IPP EU R&M E&P DU R&M E&P EU R&M E&P Cheung Kong Infrastructure Bermuda PTT Aromatics & Refining Plc Thailand Iberdrola Renewables SA Spain Cosmo Oil Co Ltd Hellenic Petroleum SA Wisconsin Energy Corp Questar Corp Light SA Acciona SA Japan Greece Wisconsin Utah Brazil Spain Anadarko Petroleum Corp Texas Moscow United Electric Power Russian Federation EMEA Hindustan Petroleum Corp Ltd India Enbridge Energy Partners LP Texas Electric Power Development Co Japan Pepco Holdings Inc Red Electrica Corp SA Allegheny Energy Inc EWE AG Petrol Ofisi As Northeast Utilities SCANA Corp Grupa Lotos SA Gasunie Canadian Utilities Terna SpA UGI Corp CESP BKW Energie AG Esso SAF Apache Corp NiSource Inc Sunoco Inc Canadian Oil Sands Trust Showa Shell Sekiyu KK Devon Energy Corp Spain Pennsylvania Germany Turkey Massachusetts South Carolina Poland Netherlands Canada Italy Pennsylvania Brazil Switzerland France Texas Indiana Pennsylvania Canada Japan Oklahoma District of Columbia Americas Datang Int’l Power Generation Co China Reliance Infrastructure Ltd India Notes: C&CF = coal and combustible fuels.826 4.883 2.8 4.058 12.1 -7.9 -6.898 7.4 28.1 8.779 7.0 3.043 8.5 8.9 16.2 0.259 1.554 2.128 3.0 6.238 184 547 128 4.0 -3.338 14.439 4.352 5.5 1.2 3.354 9.9 -6.1 2.989 5.5 -1.3 163 2.816 2.9 14.447 6.453 18.243 9.4 5.052 7.6 5.773 7.4 24.5 3.top 250 global energy companies Platts Rank 2010 Company 151 EOG Resources Inc 152 153 154 155 156 157 158 159 160 161 162 163 164 165 166 167 168 169 170 171 172 173 174 175 176 177 178 179 180 181 182 183 184 185 186 187 188 189 190 191 192 193 194 195 196 197 198 199 200 CenterPoint Energy Inc Neste Oil Oyj Nexen Inc Polish Oil And Gas Co ONEOK Inc Adaro Energy Tbk Tata Power Co Ltd Korea Gas Corp Mirant Corp S-Oil Corp China Yangtze Power Co Tenaga Nasional Bhd State or country Texas Texas Finland Canada Poland Oklahoma Indonesia India Korea Georgia Korea China Malaysia Region Americas Asia/Pacific Rim Americas EMEA Americas EMEA Americas Asia/Pacific Rim Asia/Pacific Rim Asia/Pacific Rim Americas Asia/Pacific Rim Asia/Pacific Rim Asia/Pacific Rim Asia/Pacific Rim EMEA Asia/Pacific Rim EMEA Americas Americas Americas Americas Asia/Pacific Rim EMEA Americas Asia/Pacific Rim EMEA Americas EMEA EMEA Americas Americas Asia/Pacific Rim EMEA EMEA Americas EMEA Americas Americas EMEA EMEA Americas Americas Americas Americas Asia/Pacific Rim Asia/Pacific Rim Americas Return on Assets Revenues Profits invested capital 3-year Industry $ million Rank $ million Rank $ million Rank ROIC % Rank CGR% code 18.1 2.628 6.8 1.527 12.7 6.219 8.2 44.9 9. 2010.964 5. DNR = data not reported.650 19.643 4.617 11.4 1.825 28.499 8.155 5.123 12.9 5.079 50.652 4.105 21.427 8.460 6.340 6.280 8. December 2010 insight 67 .753 103 161 174 135 154 175 142 150 210 137 213 108 183 182 134 239 193 240 160 156 164 169 225 211 158 172 197 141 157 180 215 168 163 205 176 127 139 136 186 151 178 231 243 201 245 155 171 246 249 11.7 7.077 5.5 16.866 19. S&T = storage and transfer.710 3.869 1.347 9.5 7.3 -4. DU = diversified utility.869 9.0 7.8 12.195 28.2 -5.840 4.563 23.5 8.6 -2.732 6.

642 3.8 1.6 34.9 3.7 4.8 2.717 9.506 4.857 3.702 5.070 4.3 24.4 0.436 7.1 3.4 13.8 20.3 110 -5.2 7.210 149 129 112 241 50 229 127 -140 136 184 170 264 83 170 233 222 250 225 177 191 267 234 102 245 253 214 214 183 190 234 129 195 170 180 -666 -70 119 250 196 177 148 242 152 187 208 170 159 189 247 226 229 232 195 237 202 230 241 227 218 224 185 235 223 200 204 191 203 221 214 184 199 233 194 190 206 207 219 216 198 228 212 222 220 341 311 262 -23.589 2.7 -0.709 13.424 9.0 17.6 4.9 24.4 4.527 22.3 13.706 9.751 4.3 9. EU = electric utility.4 19.494 3.1 250 210 55 170 246 108 111 213 81 152 46 245 228 77 232 116 236 57 40 243 65 223 139 204 234 221 191 119 188 135 123 159 194 106 150 209 113 171 166 214 177 142 218 165 215 200 329 314 224 1.7 -0.344 9.481 1.3 -2.411 5.2 -7.554 11.876 6.9 -3.436 15. All rankings are computed from data assessed on June 1.0 -1.267 15.957 1.220 6.2 -2.8 8.560 70 143 241 151 176 209 207 142 231 178 247 91 133 248 144 226 97 249 250 196 240 140 213 167 129 146 152 212 193 235 227 222 179 237 244 150 234 208 221 170 206 230 185 228 181 195 107 171 272 7.0 4.256 5.6 50.985 5.1 2.2 2.426 3.650 3.775 5.072 11.3 3.8 11.899 25.0 2.238 2.803 25.367 2.159 3. E&P = exploration and production.2 2.564 3.099 7.9 -0.426 5.045 16.124 4. 68 insight December 2010 .5 -0.636 4. S&T = storage and transfer.561 3.613 17.4 6.959 8.3 9.652 5.8 -21.179 4.6 4.125 4.322 8.9 1.609 2.586 3.969 2.928 2.6 2.top 250 global energy companies Platts Rank 2010 Company 201 NSTAR 202 203 204 205 206 207 208 209 210 211 212 213 214 215 216 217 218 219 220 221 222 223 224 225 226 227 228 229 230 231 232 233 234 235 236 237 238 239 240 241 242 243 244 245 246 247 248 249 250 Chesapeake Energy Corp State or country Massachusetts Oklahoma Region Americas Americas Asia/Pacific Rim Asia/Pacific Rim Asia/Pacific Rim Asia/Pacific Rim EMEA Americas Americas Americas Asia/Pacific Rim Americas EMEA Americas Asia/Pacific Rim EMEA Americas Americas Americas Americas Americas Asia/Pacific Rim Americas Americas Asia/Pacific Rim Asia/Pacific Rim Asia/Pacific Rim Americas EMEA Americas EMEA Americas Americas Asia/Pacific Rim EMEA Asia/Pacific Rim EMEA Americas Americas Americas Asia/Pacific Rim Americas Americas Asia/Pacific Rim Americas Americas Americas Americas Asia/Pacific Rim Return on Assets Revenues Profits invested capital 3-year Industry $ million Rank $ million Rank $ million Rank ROIC % Rank CGR% code 8.2 DU 29.9 -10.01 E&P EU IPP EU R&M GU DU DU IPP E&P GU EU IPP EU DU IOG DU EU C&CF R&M GU EU EU EU EU IPP IPP GU EU R&M EU GU DU IPP R&M DU DU DU EU EU C&CF IPP DU E&P IPP S&T E&P DU GU Shikoku Electric Power Co Japan Shenzhen Energy Group Co Ltd China PowerGrid Corp Of India Enagas SA OGE Energy Corp CMS Energy Corp AES Gener SA Santos Ltd Energen Corp Eskom Calpine Corp Manila Electric Co A2A SpA Petrobras Energia SA DPL Inc Patriot Coal Corp Tesoro Corp Nicor Inc AES Elpa SA Fortis Inc India Spain Oklahoma Michigan Chile Australia Alabama South Africa Texas Philippines Italy Argentina Ohio Missouri Texas Illinois Brazil Canada TonenGeneral Sekiyu Corp Japan Abu Dhabi National Energy Co United Arab Emirates EMEA Hokuriku Electric Power Co Japan Hokkaido Electric Power Co Japan Huadian Power Intl Corp Ltd China GD Power Development Co Ltd China AGL Resources Inc EVN NuStar Energy LP EGL AG Atmos Energy Corp Atco Ltd Shenergy Co Ltd YTL Corp Berhad Teco Energy Inc CGE NV Energy Inc PT Bumi Resources Tbk Colbun SA Alliant Energy Corp Transalta Corp Southern Union Co Talisman Energy Inc Toho Gas Co Ltd Georgia Austria Texas Switzerland Texas Canada China Malaysia Florida Chile Nevada Indonesia Chile Wisconsin Canada Texas Canada Japan Saras Raffinerie Sarde SpA Italy Qatar Electricity & Water Qatar Japan Petroleum Exploration Co Japan Integrys Energy Group Inc Illinois Notes: C&CF = coal and combustible fuels.9 5.993 16.440 9.179 6.067 6.1 -9.618 8.5 21.7 1. R&M = refining and marketing.7 0.847 5.7 -1.075 22.870 6.003 3.0 4.856 3.5 -3.050 209 246 192 6.8 3.208 13.6 5.433 1.7 -7.1 22.914 15.352 2.7 0.3 6.830 240 292 437 -236 419 258 209 328 381 256 -1.413 7.440 11.1 2.1 2.8 2.254 7.8 -0.7 -6.145 194 3.1 0.7 10.5 5.224 4.219 1.2 -2.0 15.723 14.2 -4.0 9.493 7.954 2. DU = diversified utility.3 -14.5 5.317 3.4 6.473 140 161 238 243 51 247 214 158 239 233 245 145 152 187 136 207 180 242 231 72 220 172 179 200 160 168 215 225 189 190 194 173 212 227 143 221 249 203 201 196 205 248 197 232 222 230 166 147 190 -5. IOG = integrated oil and gas.890 4.205 1.6 -1.4 6.1 35.667 1.428 13.7 1.7 -4.074 8.1 7.4 3.972 5.4 -6.589 2.143 7.002 7.929 1.101 3. DNR = data not reported.311 3.9 2.7 -3.3 2.499 4.036 5.2 2.847 2.2 -11.7 -2.2 4.915 1. GU = gas utility.6 50.653 1. 2010.9 6.6 -1.8 4.2 -4.1 0.613 728 3.962 7.604 7.2 15.2 20.2 5.635 14. IPP = independent power producer and energy trader.

Regulated prices in the company’s domestic market may hold Reliance back. There is also a large gap between BP at third in terms of revenue and the China Petroleum & Chemical Corp which is fourth for this individual indicator.ON has seen a see-saw ride.9 Platts Rank 148 231 225 51 240 210 135 89 220 69 relation to its asset base and revenues. Since the start of the Macondo oil spill in the Gulf of Mexico in April. E.2 21. Profitability. but set asides.045 billion in profit. E. All rankings are computed from data assessed on June 1.5 25.772 billion in 2009.2 22.178 million in 2008. suggesting a drop in its ranking.ON AG successfully squeezed out $12. beyond which investors see value in the company. A $20 billion asset write down would shift BP only from fourth to fifth for that indicator. Last year saw a remarkable recovery from an asset base that had shrunk to $187. the rebound in 2009 unusually good. who might take its spot? India’s Reliance Industries Ltd.879 million ($10. While the top ten rankings remain the preserve of the integrated oil and gas companies. 2010. It has substantially increased its asset base from $37. This also made E. remains low in 2. The company’s revenues fell only modestly. E.991 million in 2007 on revenues of $100.7 21.0 50.5 24. The compound growth rate (CGR) is based on the companies revenue numbers for the past four years (current year included). the only non-IOG company in the top ten. having been seventh the previous year.929 million in 2008.188 million to $55.3 35. Nevertheless.ON first among electric utilities. The slump in profits in 2008 was largely the result of unexpected goodwill impairments relating to acquisitions and to losses from non-operating earnings. Rank Company 1 2 3 4 5 6 7 8 9 10 Ultrapar Participacoes SA NuStar Energy LP Fortis Inc XTO Energy Inc CGE AES Gener SA Enterprise GP Holdings LP Endesa Patriot Coal Corp Suncor Energy Inc State or country Industry Brazil Texas Canada Texas Chile Chile Texas Chile Missouri Canada S&T R&M EU E&P EU IPP S&T IPP C&CF IOG 3-year CGR % 96.806 billion in 2008 to $115. which this year rose to 13th in the rankings from 25th last year. Reporting profits of $9. may be a good candidate. however. If BP or one of the other western majors were to fall out of the top ten.ON AG moved from 45th in last year’s rankings to 6th this year. from $120. profits slumped to just $1. BP’s shares have already bounced from an apparent floor price. It is expected to weather the storm and resultant financial pressures. However. If only three years of data was available then it is a two year CGR. one intruder is evident: German electric utility E.2 20. Fastest growing Americas companies. Source: Capital IQ/Platts December 2010 insight 69 . BP has rarely left the headlines.651 million. expenditures and asset sales of around $20 billion will directly impact the company’s resource base and its longterm growth prospects.037 million) and to derivative financial in- Fastest Growing is based on a 3 year compound growth rate (CGR) for revenues. BP will struggle to retain its position in 2010. The company faces huge liabilities for the damage wrought by the spill. but E.ON has seen extremes—2008’s performance was particularly poor relative to its peers.top 250 global energy companies However.ON reported losses attributable to currency differences of €7. In its 2008 annual report.476 million from $222. the US’s largest ever oil disaster. it is important not to overstate the impact to a company of BP’s size. although it is a sizeable gas producer. more than 600% above the previous year.939 million last year and increased revenues on the back of that by almost 50%.3 22.

4 9.001 15.939 33.681 7.626 4.335 52.284 7.1 3.103 28.095 58. of the top 20.400 17.9 8.8 3. IPP = independent power producer and energy trader.316 1.4 20.399 7.167 16 33 67 43 62 64 126 148 90 14 22 31 74 131 115 109 135 165 119 77 199 118 45 112 49 141 183 23 134 203 48 175 246 192.489 21. DU = diversified utility.214 1.3 1.213 7 15.636 22.380 16.531 11.9 10.518 6.798 11.006 18.9 12.041 5.160 29.9 -0.603 43. EU = electric utility.518 22.726 20.377 45.287 3.6 38 27 5 28 15 89 1 30 71 225 202 198 175 36 148 112 84 72 104 184 18 169 227 196 231 97 43 238 168 51 248 50 61 IOG R&M E&P C&CF E&P IOG IOG R&M IPP EU EU EU R&M E&P R&M E&P C&CF R&M EU IPP GU GU EU R&M EU IPP E&P EU GU DU R&M EU R&M Notes: C&CF = coal and combustible fuels. suggesting future volatility ahead. E. All rankings are computed from data assessed on June 1. In 2009. 15 improved their global position. as many as 40 of the top 50 gained a higher global ranking this year to the detriment of other regions.530 16.454 1. PetroChina Co Ltd retains the .335 54.062 19.432 4. while if new entrants are included.562 9.266 77. compared with 55 last year.1 15. S&T = storage and transfer.822 37.382 1.735 863 276 10 18 27 25 26 45 16 69 41 57 60 72 126 51 123 73 86 165 79 99 104 120 144 153 179 107 111 238 133 114 248 93 181 11.248 4.638 43. DNR = data not reported.922 5.1 4.098 16.281 3.2 1.893 1.8 10.674 5.162 9.322 47.1 1.180 557 1. R&M = refining and marketing.505 55.273 9.9 11.305 6 149.3 7.552 million.6 3.4 49 IOG China India India China Hong Kong Thailand Australia Taiwan India Japan Japan Japan India Australia Korea Japan China India Hong Kong China India Japan Japan Korea Japan Hong Kong Thailand Korea Japan Australia Japan Hong Kong Australia 128.465 34.895 78. the rebound came predominantly from energy trading activities first and sales in its new markets segment second.165 969 350 1.top 250 global energy companies Asian companies in 2010 Top 250 Top Asia 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 Platts Rank 2010 Company 7 Petrochina Co Ltd 8 13 18 19 29 35 45 49 52 54 56 63 78 81 83 86 93 94 98 102 107 108 110 111 119 121 122 123 124 125 129 130 133 China Petroleum & Chemical Corp Reliance Industries Ltd Oil & Natural Gas Corp Ltd China Shenhua Energy Co Ltd CNOOC Ltd PTT Plc Origin Energy Ltd Formosa Petrochemical NTPC Ltd Tokyo Electric Power Co Inc Kansai Electric Power Co Chubu Electric Power Co Inc Indian Oil Corp Ltd Woodside Petroleum Ltd SK Energy Co Ltd Inpex Corp China Coal Energy Co Bharat Petroleum Co Ltd CLP Holdings Huaneng Power International Gail (India) Ltd Tokyo Gas Co Ltd Kyushu Electric Power Co Inc GS Holdings Corp Tohoku Electric Power Co Inc China Resources Power Holdings PTT Exploration & Production KEPCO Inc Osaka Gas Co Ltd AGL Energy JX Holdings Inc Hongkong Electric Holdings Ltd Caltex Australia Ltd Return on Assets Revenues Profits invested capital Industry State or country $ million Rank $ million Rank $ million Rank ROIC % Rank code China 212.0 6.336 24.ON’s financial patterns look more like a trading firm than a utility.659 20. The Asian top ten remains dominated by Chinese and Indian companies.5 3.340 15.135 5 10.095 1.790 15. Asia on the Ascendant It is clear that Asia as a whole has substantially improved its position in the global energy firmament over the course of 2009. 2010.5 4.257 18.083 4.1 10.532 28.056 11.8 6.056 744 713 585 455 414 281 685 666 -82 526 631 -2.019 26.329 1.390 15.739 20.1 6.228 43.4 11.645 10. IOG = integrated oil and gas.708 29.759 15.790 6. out of the top 50 Asian companies.601 14.866 26.455 35.3 47.240 4.190 80. E&P = exploration and production.586 28. There are now 68 Asian companies in the Platts top 250. struments of €6.136 7.276 144.2 7.4 8. Of the top ten Asian 70 insight December 2010 companies regionally.2 4.5 2. nine improved their global ranking.3 -13.578 4 27 52 66 83 26 146 59 112 22 40 49 23 191 29 122 139 42 153 104 163 81 76 36 65 183 195 38 102 171 17 246 79 9.602 567 1.8 14. GU = gas utility.202 44.3 12.

781 16.3 9.254 2.5 1.959 5. The latter saw a precipitous decline in revenues and profits in 2009.2 3.172 8.052 10.4 -17. DU = diversified utility. ousting CNOOC Ltd.9 4.2 2. GU = gas utility. R&M = refining and marketing. and Japan’s Tonen General Sekiyu Corp which fell from ninth in the regional Asian rankings to 57.987 5.473 127 206 34 241 250 216 193 73 85 240 129 149 39 48 157 147 208 55 161 238 243 51 233 187 172 160 168 215 227 221 205 232 190 363 568 65 667 718 459 423 203 195 676 270 275 -117 162 317 217 325 -626 240 292 437 -236 381 129 184 83 170 233 234 245 190 195 119 162 122 236 110 103 142 150 210 213 108 183 182 239 225 172 205 171 246 196 177 148 242 159 229 218 235 223 200 199 194 216 212 262 10.869 15.289 107 337 167 1.1 44 74 235 53 34 19 66 224 136 192 220 76 240 211 222 230 109 249 210 55 170 246 152 77 223 234 221 191 106 209 177 165 224 R&M C&CF R&M GU EU C&CF EU GU R&M IPP EU R&M R&M R&M IPP IPP EU R&M EU IPP EU R&M E&P EU EU EU IPP IPP IPP DU C&CF E&P GU Notes: C&CF = coal and combustible fuels.604 9.8 7. India’s Reliance Industries Ltd moved from fourth to third.709 13.613 3.636 13.764 18.717 5.7 7. Of the top Asian R&M companies.179 4. Taiwan’s Formosa Petrochemical December 2010 insight 71 .773 28.211 26. top spot.7 1.828 3.2 3.105 21.367 2.541 3.650 4.554 14.7 1. In this sector—refining and marketing—many Asian companies saw their global ranking rise. S&T = storage and transfer.113 27.1 -9.592 282 2.613 8.869 1.5 0.560 243 184 84 192 217 238 216 123 204 103 111 236 128 171 107 86 205 153 143 241 151 176 178 248 140 129 146 152 237 150 206 228 272 8.667 1.957 1.694 21.643 22.826 4.top 250 global energy companies Asian companies in 2010 Top 250 (continued) Top Asia 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 Platts Rank 2010 Company 134 Chugoku Electric Power Co 137 142 144 149 152 158 159 160 162 163 164 165 167 174 177 185 198 199 203 204 205 206 211 215 223 226 227 228 235 237 242 245 250 Thai Oil Pcl Yanzhou Coal Mining Co Ltd Idemitsu Kosan Co Ltd Hong Kong & China Gas Co Ltd Cheung Kong Infrastructure Adaro Energy Tbk Tata Power Co Ltd Korea Gas Corp S-Oil Corp China Yangtze Power Co Tenaga Nasional Bhd PTT Aromatics & Refining Plc Cosmo Oil Co Ltd Hindustan Petroleum Corp Ltd Electric Power Development Co Datang Int’l Power Generation Co Reliance Infrastructure Ltd Showa Shell Sekiyu KK Shikoku Electric Power Co Shenzhen Energy Group Co Ltd PowerGrid Corp Of India TonenGeneral Sekiyu Corp Santos Ltd Manila Electric Co Hokuriku Electric Power Co Hokkaido Electric Power Co Huadian Power Intl Corp Ltd GD Power Development Co Ltd Shenergy Co Ltd YTL Corp Berhad PT Bumi Resources Tbk Japan Petroleum Exploration Co Ltd Toho Gas Co Ltd Return on Assets Revenues Profits invested capital Industry State or country $ million Rank $ million Rank $ million Rank ROIC % Rank code Japan 30.5 226 EU Thailand China Japan Hong Kong China Indonesia India Korea Korea China Malaysia Thailand Japan India Japan China India Japan Japan China India Japan Australia Philippines Japan Japan China China China Malaysia Indonesia Japan Japan 4.428 13.866 19.635 14. All rankings are computed from data assessed on June 1.563 23.4 3.5 5.446 12.527 22.915 3.723 15. which might be taken as emblematic of the shift taking place within the downstream sector.0 6.490 6.929 1.245 9.347 6.493 17.706 9.411 5. EU = electric utility.954 4.8 3.018 3.6 2.9 0.3 4.847 2.144 7. 2010.147 33.834 1. IPP = independent power producer and energy trader.7 -1. IOG = integrated oil and gas.7 1.5 14. which falls to sixth place. while India’s Oil and Natural Gas Corp Ltd rises from fifth to fourth.972 5.528 69 11. which may reflect late financial reporting of its 2009 results.8 4.5 9.652 7. DNR = data not reported. only three improved their rankings both globally and regionally: India’s Reliance Industries.5 6.397 24.1 8.219 1.561 3.460 6.3 2.9 11. while the China Petroleum & Chemical Corp comes in second. Two companies have moved out of the Asian top ten: the India Oil Corp Ltd.9 7. but their position regionally against energy companies in other sectors declined.628 6.8 1. E&P = exploration and production.354 7.143 4.125 5.890 7.3 1.

Ltd. Tata Power. Another strong riser was Taiwan’s Formosa PetroChemical. the new entrant was also a power company. profits rose almost threefold. but the company has laid the basis for long-term growth that is likely to put it on a steady improving trend. while the Hokkaido Electric Power Co returned to the Global top 250. Asia. This was the result of one-off factors for a company that was the target of a hostile and unsuccessful takeover attempt by BG Group in 2008. five from southeast Asia. Nevertheless. owing to an extraordinary turnaround in profitability. Four Asian R&M companies fell in both the regional and global rankings: India Oil Corp. Of the A$6. Kansai Electric Power Co from 25th to 12th and Chubu Electric Power Co from 27th to 13th. Source: Capital IQ/Platts 72 insight December 2010 . GD Power Development Co and Shenergy Co Ltd. A significant trend has been the relative rise in the regional rankings of Japanese electric utilities. five are from China. Ltd and S-Oil Corp. Industry IOG R&M E&P C&CF IPP EU GU DU Company Petrochina Co Ltd Reliance Industries Ltd Oil & Natural Gas Corp Ltd China Shenhua Energy Co Ltd NTPC Ltd Tokyo Electric Power Co Inc Gail (India) Ltd AGL Energy Country China India India China India Japan India Australia Platts Rank 2010 7 13 18 19 52 54 107 125 All rankings are computed from data assessed on June 1. Both the Indian and Chinese power sectors are on rapidly expanding paths. Nevertheless. 2010. Japan’s electric utilities were thus hammered in 2008—Tokyo. the country’s largest integrated private power company. which jumped from 201st last year to 45th in the global rankings. one with the cash. 2009.941 million ($6. Huadian Power International Group Ltd. Kansai and Chubu all reported losses for the year—but benefited in 2009. Despite revenues dropping by about 27% in 2009. operating profits in its key refining segment were down. Origin’s underlying profits were also up by 20% at $530 million and further gains have been posted for first-half 2010. Tokyo Electric Power Co moved up from 20th in the regional rankings to eleventh. #1 in Asia by industry.422 million) recorded profits in the financial year ending June 1. assets and partners to expand. and its regional ranking from 18th to 9th. New Asian Entrants Of the new Asian entrants. A$6. suggesting strong growth prospects for the two countries’ electric utilities and IPPs. In India.top 250 global energy companies and South Korea’s GS Holdings. the Nippon Oil Corp and Nippon Mining Holdings were reorganized to become JX Holdings. and from 47th to eighth regionally. one from India and one from Australia. China’s new entrants are without exception independent power producers— Shenzhen Energy Group Co Ltd. toughing it out in a sector experiencing fierce competition. All have been listed on the Shanghai Stock Exchange for some years.. In Japan.700 million reflected a gain resulting from the dilution of Origin’s interest in Australia Pacific LNG following US major ConocoPhillips subscription for shares to form a 50:50 joint venture. A new Japanese en- 3. Revenues have also picked up in 2010 from the declines seen in 2008. South Korea’s SK Energy Co. and India in particular. but this is still a company on the rise. The fastest rising company in Asia this year was Australia’s Origin Energy Ltd. Origin’s high place in the Asian and global Platts rankings is exaggerated this year by its asset sale related profits. although in its second-quarter 2010 results. benefiting from the fall in feedstock prices last year. Power prices in the only partially deregulated Japanese electricity market tend to lag fuel source prices by between three to four months. three of those from India. It may drop back in the rankings next year. and India’s Hindustan Petroleum Corp. continues to dominate the R&M sector with all five of the top R&M companies hailing from Asia. Formosa PetroChemical improved its global ranking from 113th to 49th.

appears to be on a long-term downward trend. Its ROIC would improve. They all benefit from varying degrees of protection in what are generally large and expanding domestic markets. However. It 4. Indonesia’s second largest coal miner. Petrobras sits on some of the largest oil discoveries in recent decades and has a state willing to strengthen its hold on its domestic upstream. It is expanding the size of its oil subsidiary Gazprom Neft. is also the ninth fastest growing company in the top 250 with a 3-year CGR of 40.7 17. The emergent Chinese companies also have strong state support.8 14. All rankings are computed from data assessed on June 1. Indonesia also saw an addition—the only one in the Coal and Combustible Fuels segment—miner Adaro Energy Tbk entered the ratings at 158th. but remain below that of ExxonMobil. Source: Capital IQ/Platts December 2010 insight 73 . the country’s largest distributor of electricity. the BRIC companies equally have distinct characteristics that make them unique.0 Platts Rank 2010 121 165 158 159 107 18 7 237 BRICs to the Fore Within the global top 20. all are rising. It can claim in 2009 to have been the world’s most profitable listed energy company. Industry IPP R&M C&CF EU GU E&P IOG DU Company China Resources Power Holdings PTT Aromatics & Refining Plc Adaro Energy Tbk Tata Power Co Ltd Gail (India) Ltd Oil & Natural Gas Corp Ltd Petrochina Co Ltd YTL Corp Berhad Country Hong Kong Thailand Indonesia India India India China Malaysia 3-year CGR % 50. despite all being listed. The number of southeast Asian companies in the top 250 rose from four to nine.0 13. For Malaysia. they are all ultimately state-controlled entities. Fastest Growing is based on a 3 year compound growth rate (CGR) for revenues. Thai Oil made a reentry.top 250 global energy companies trant to the top 250 came in the form of the Japan Petroleum Exploration Co. India and China—compared with just six the year before. This year the company signed up to a joint-venture agreement with Australian mining major BHP Billiton to develop resources estimated at 774 million mt. if Gazprom and Gazprom Neft were listed as one entity. suggesting further growth to come. Russia’s Gazprom gained six places to come third in the top 250 rankings. the Chinese economy being particularly dynamic in terms of oil demand growth. but more importantly lie at the heart of the world’s most dynamic economy in terms of car ownership and transportation demand growth.9 19. while global in reach. the combined company would come first in terms of both assets and profits and move from 13th to seventh in terms of revenues. Diversified Utility YTL Corp Berhad rejoined the Platts 250 at 237. having last been included in 2007 when its ranking was 216. one in Indonesia and one in Malaysia.5 44. What these BRIC companies have in common is that. The western majors. exist in more competitive environments. reflecting its increased size with the acquisition in 2009 of the oil product sales units of a Mitsubishi Materials subsidiary.3 39. two being added in Thailand. where oil demand declined in 2008 and 2009 and. Notably. For Thailand. Fastest growing Asian companies by industry. but its oil arm is listed and reported separately. while PTT Aromatics and Refining Plc was ranked 156th overall and 45th in Asia. reflecting the amalgamation of the Aromatics Public Company Ltd and Rayong Refinery Public Company Ltd.4 40. Gazprom is a gas company rather than an IOG. which should promise future growth in its production base. The company has also taken on a 30% interest in the Garraf oil field in Iraq to be developed with Malaysia’s Petronas and a domestic Iraqi oil company. 2010. Moreover. in Europe and Japan at least. PetroChina was up two places and the China Petroleum and Chemical Corp jumped from 23rd place last year to eighth in the global rankings this year.3%. Adaro. while BRICs still account for four of the top ten. eleven companies are from the BRICs—Brazil. Russia. while the Philippines gained its first company in the top rank—the Manila Electric Co. Brazil’s Petrobras rose five places.

presence of the world’s first and third largest coal industries in China and India respectively and the coal export industries of Australia and Indonesia. although it is easier for small companies to show increases in growth measured in percentage terms. making up seven of the top ten fastest grow- Speedy Growth If oil and gas companies generally dominate the energy sector as a whole. Otherwise. If only three years of data was available then it is a two year CGR. although ExxonMobil will in 2010 absorb unconventional gas producer XTO Energy. Brazil’s Storage and Transfer company Ultrapar Participacoes SA tops the Americas fastest growing list with a 3-year CGR of 96. which may threaten its future growth prospects. Fastest growing EMEA companies.1 18.0%. and Indonesia’s Adaro Energy Tbk third.4 30. the latter perhaps still suffering from the 2008 conflict between its Russian and its UK shareholders.top 250 global energy companies might prove enough to come top of the global rankings.8 50. eleven of the top 20 fastest growing companies are involved in the power sector. while Canada’s oil sands-based Suncor is the only IOG in the top ten Americas list.6 22. the front runner is the Hong Kong-based IPP China Resources Power Holdings. three are Chinese and two Indonesian. Surgutneftegaz rose.5%. but only four in oil and gas. only US company Patriot Coal Corp registering in the Americas. Just as oil major ExxonMobil expands its gas operations. In Europe and the Middle East. owing to higher oil prices in that financial year. This stands in stark contrast to the positive performance of Russian companies in the gas. Of the five C&CF companies in the fastest growing Asian companies. Source: Capital IQ/Platts 74 insight December 2010 . increasing its overall asset base and revenues. slipped in the rankings. power and transport sectors. which would be likely to flatter any oil company. In Asia.0 42. Russian oil companies did less well than their competitors. which are dominated by power sector firms. with a 3-year CGR of 50.7 20. There are no IOG or E&P companies in the Asian top 20 fastest growing company rankings. but it is involved in the controversial practice of mountain top removal mining. but late reporting meant the use of 2008 data. The compound growth rate (CGR) is based on the companies revenue numbers for the past four years (current year included). This is coming under greater environmental and regulatory scrutiny.0 21. In Asia.3 22. their lack of presence among the top fastest growing companies is noticeable. All rankings are computed from data assessed on June 1. Rank Company 1 2 3 4 5 6 7 8 9 10 RusHydro JSC Abu Dhabi National Energy Co Iberdrola Renewables SA Iberdrola SA Novatek Oao Scottish & Southern Energy GDF Suez AK Transneft Oao Sasol Ltd Country Russian Federation United Arab Emirates Spain Spain Russian Federation United Kingdom France Russian Federation South Africa Industry EU DU EU IPP EU E&P EU DU S&T IOG 3-year CGR % 77. power companies are again to the fore. 2010. gas major Gazprom is expanding its oil segment. Rosneft and TNK-BP. while Lukoil and Gazprom Neft were pretty much static. Texan R&M company NuStar Energy LP takes up second place.4 50. whether up or downstream. reflecting the 5. Coal outside Asia figures little.7 Platts Rank 113 218 172 166 32 126 23 28 36 38 Moscow United Electric Power Russian Federation Fastest Growing is based on a 3 year compound growth rate (CGR) for revenues. Thailand’s PTT Aromatics & Refining Plc takes second place. Patriot is growing fast through the development of assets in Appalachia and the Illinois basin. Five are in the coal and combustible fuels sector.

9 20. The average ranking of C&CF companies registering in the top 250 fell from 128. Spain’s Iberdrola continued its strong growth performance. E&P and gas specialist company Novatek Oao is sixth with 22. Russian companies are particularly prominent: of the top ten.0 16.3 24.0%.7 21. Iberdrola SA is ranked fifth with a 3-year CGR of 30.8 16. Sectoral Leaders While scoring well in terms of fastest growing companies.4 25. Moscow United Electric Power came in third with 50.2 22.5 24. Company 1 2 3 4 5 6 7 8 9 Ultrapar Participacoes SA RusHydro JSC China Resources Power Holdings Abu Dhabi National Energy Co NuStar Energy LP Moscow United Electric Power PTT Aromatics & Refining Plc Iberdrola Renewables SA Adaro Energy Tbk 3-year Platts CGR % Rank 96.2 16.4 21. China Shenhua Energy Co Ltd kept its top spot in this segment.6 15.8 50. the C&CF segment in fact declined relative to other segments in the rankings. a lower number denoting a higher ranking.0 44.2 17.7 18.6 this year.3 50. Coal Energy Co.4 last year to 140.1 20.0 148 77.8 17.4%.2 17.4 50.4%.1%.3 22. but US company Peabody dropped from second to fourth and was replaced by another Chinese company China.4 18.7 35.1 19.3 30. Canada’s 6.2 23.8%.0 18.7 113 121 218 231 172 165 166 158 159 225 227 32 198 51 185 240 205 19 126 210 135 23 28 89 Company 26 Huaneng Power International 27 Reliance Industries Ltd 28 Patriot Coal Corp 29 China Coal Energy Co 30 Suncor Energy Inc 31 PT Bumi Resources Tbk 32 Shenergy Co Ltd 33 AK Transneft Oao 34 YTL Corp Berhad 35 Sasol Ltd 36 Enel SpA 37 Ecopetrol SA 38 Shenzhen Energy Group Co Ltd 39 Gail (India) Ltd 40 Yanzhou Coal Mining Co Ltd 41 National Grid 42 Indian Oil Corp Ltd 43 China Yangtze Power Co 44 NRG Energy Inc 45 Hindustan Petroleum Corp Ltd 46 Enersis SA 47 Qatar Electricity & Water 48 Colbun SA 49 BKW Energie AG 50 Korea Gas Corp 3-year Platts CGR % Rank 21.6%.5 34.4 13 220 93 69 242 235 36 237 38 21 34 204 107 142 39 78 163 92 174 68 238 243 192 160 10 Tata Power Co Ltd 11 Fortis Inc 12 Huadian Power Intl Corp Ltd 13 Iberdrola SA 14 Reliance Infrastructure Ltd 15 XTO Energy Inc 16 Datang Int’l Power Generation Co 17 CGE 18 PowerGrid Corp Of India 19 China Shenhua Energy Co Ltd 20 Novatek Oao 21 AES Gener SA 22 Enterprise GP Holdings LP 23 Scottish & Southern Energy 24 GDF Suez 25 Endesa Source: Capital IQ/Platts Fastest Growing is based on a 3 year compound growth rate (CGR) for revenues.9 17.5 24.3% and S&T firm AK Transneft Oao is ninth with 20.2 21. Top 50 fastest growing companies. December 2010 insight 75 . in the second slot. The Abu Dhabi National Energy Co came second with 50. which took offline the company’s 6. while its separately listed Iberdrola Renewables SA came fourth with a 3-year CCR of 42.7%. despite a major accident in August 2009.4 GW Sayano-Shushenskaya hydro plant and resulted in the deaths of 75 people.0 15.6 28.4 40.6 17. This reflects opportunities arising from the deregulation of Russia’s power generating and distribution industries and the willingness of the state to allow the emergence of independent Russian companies in niche areas of markets still dominated by state-controlled giants.5 50.3 39.2 20.4 14. All rankings are computed from data assessed on June 1. 2010.0 21.6 22.2 22.6 102 21. RusHydro JSC comes first with a 3-yr CGR of 77.top 250 global energy companies ing companies. Despite this setback the company managed to increase its overall power output in 2009 by 1.9 14.4 42.8 16.2 20.

599 million in 2009.818 million in 2008 to $15. while BP’s second place is clearly under threat. The top ten average ranking in this category strengthened from 60. Having suffered a tough price and liquidity environment. This can largely be explained by the rise in oil and gas prices in 2008 delivering windfall profits. In the S&T segment there were no new entrants.1 last year to 94. profits turned from a loss of $1. improved their overall position. now occupies third place and Brazil’s Petrobras fourth. taking fourth place in the top ten DUs. The most notable change was Enbridge’s elevation from fourth to second and Williams Companies’ journey in the opposite direction from second to ninth. there were only two non-OECD IPPs in the top ten—Chile’s Endesa and Brazil’s Tractebel Energia SA— now there are four. Last year. A notable facet of this sector was the entry to the top ten of two Chinese companies.2. as opposed to eighth and sixth last year. Spain’s Gas Natural remained at the top. More change was seen in the IOGs and E&P sectors. Patriot Coal Corp and Indonesia’s Adaro Energy Tbk were both new entrants to the sectoral leader board. For IOGs. This was clearly helped by the rise of UK utility Scottish and Southern from 127 in the global rankings to 23. in all of the oil and gas segments—IOGs. along with the rest of the US power sector in 2008.8 to 27. Constellation’s restructuring appears to have brought quick benefits. also putting it first in the EU segment. The UK’s Centrica Plc was a strong riser. with the average top ten ranking strengthening from 119. taking seventh place. while MidAmerican Energy Holdings of Iowa and France’s Suez Environment dropped out of the leader board. Diversified Utilities appear to have weathered the financial crisis and ensuing recession relatively well.ON. Russia’s Transneft stayed on top. E&P. There was considerable movement within the group.9 this year. but US company Arch Coal dropped out of the top 250 and thus out of the sectoral rankings as well. which has taken big strides out of its European comfort zone with LNG trade and supply in Asia and the US. with India’s Gail (India) Ltd moving up from fifth to second. and E. By contrast.6 last year to 51 this year. Electric Utilities also did well in 2009. California. Huaneng Power International and Hong Kong-based China Resources Power 76 insight December 2010 Holdings. returning a profit margin to regulated domestic power prices. which helped place it fifth in the EU segment. US pipeline companies look certain to see increased costs arising from stricter safety regulation following Enbridge’s two oil spills in 2010 and Pacific Gas & Electric’s fatal gas line explosion in San Bruno.503 million.301 million to a gain of $4. Veolia Environment was another new entrant. The Chinese companies saw a strong recovery in profits in 2009 as international feedstock prices dropped from the highs of 2008. ■ . For Gas Utilities. the only non-IOG to make it into the top ten globally. while Russia’s Lukoil moved up to come 10th in the sector. which moved from 45th to sixth. The China Petroleum and Chemical Corp also moved into the top ten group. but Gazprom. Although revenue dropped from $19. putting it in the number one slot sectorally for IPPs. as it returned to profitability. Leaving the top tier were the UK’s Drax Group. Eni’s takeover of Belgium’s Distrigas left a vacant spot in the top ten that was filled by the Netherlands’ Gasunie. IPPs. The average ranking for the top ten companies improved from 37. The balance has shifted to five companies each for BRIC versus OECD IOGs in the top ten. moving from 145 to 42 in the global rankings. Russia’s Rosneft and Italy’s Eni were nudged out of the top ten. R&M and S&T— the average ranking of the top ten companies weakened. too. Spain’s Iberdrola Renewables and US IPP Mirant Group. Maryland-based Constellation Energy Group Inc can be particularly pleased with its exceptional rise from 185th last year to 31st. Within the sector.top 250 global energy companies Cameco rose from eighth to fifth. and then the subsequent fall in profits in 2009 as oil and gas prices dropped. the world’s biggest gas producer and exporter. RWE of Germany and GDF Suez of France retained their first and second places respectively.

Top 50: Who’s Up. Leaders in diversified utilities. Leaders in coal and combustible fuels. Who’s Down. Platts Platts rank rank 2010 2009 Company 1 1 Exxon Mobil Corp 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 4 8 6 5 45 9 23 2 3 12 14 25 7 38 10 13 26 40 29 19 18 127 117 24 BP Plc Gazprom Oao Petrobras Total E. OVERALL Rank Company 1 China Shenhua Energy Co Ltd 2 3 4 5 6 7 8 China Coal Energy Co CONSOL Energy Inc Peabody Energy Corp Cameco Corp Yanzhou Coal Mining Co Ltd Adaro Energy Tbk Patriot Coal Corp State or country China China Pennsylvania Missouri Canada China Indonesia Missouri Indonesia Platts rank 2010 19 93 114 136 141 142 158 220 242 9.ON AG Petrochina Co Ltd China Petroleum & Chemical Corp Chevron Corp Royal Dutch Shell Plc LUKOIL Oil Company RWE AG Reliance Industries Ltd Rosneft Oil Company Endesa SA ENI SpA TNK-BP Holdings Oil & Natural Gas Corp Ltd China Shenhua Energy Co Ltd Surgutneftegas Oao Enel SpA EDF Scottish & Southern Energy ConocoPhillips Gazprom Neft Platts Platts rank rank 2010 2009 Company 26 34 Exelon Corp 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 11 27 21 17 185 36 15 30 46 64 49 43 58 22 31 145 41 78 201 172 51 47 113 57 Statoil Asa GDF Suez CNOOC Ltd BG Group Plc Constellation Energy Group Inc Iberdrola SA Occidental Petroleum Corp Ecopetrol SA PTT Plc AK Transneft Oao CEZ AS Sasol Ltd National Grid Repsol YPF SA Imperial Oil Ltd Centrica Plc Vattenfall Public Service Enterprise Group Inc Origin Energy Ltd Tatneft Oao Nextera Energy Inc EnBW AG Formosa Petrochemical Southern Co State or country Texas United Kingdom Russian Federation Brazil France Germany China China California United Kingdom Russian Federation Germany India Russian Federation Spain Italy Russian Federation India China Russian Federation Italy France United Kingdom Texas Russian Federation State or country Illinois Norway France Hong Kong United Kingdom Maryland Spain California Colombia Thailand Russian Federation Czech Republic South Africa United Kingdom Spain Canada United Kingdom Sweden New Jersey Australia Russian Federation Florida Germany Taiwan Georgia Source: Capital IQ/Platts 8.top 250 global energy companies 7. OVERALL Rank Company 1 RWE AG 2 3 4 5 6 7 8 9 10 GDF Suez National Grid Centrica Plc Public Service Enterprise Group Inc PG&E Corp Dominion Resources Inc Veolia Environnement Sempra Energy Consolidated Edison Inc State or country Germany France United Kingdom United Kingdom New Jersey California Virginia France California New York Platts rank 2010 12 28 39 42 44 59 64 67 73 82 9 Bumi Resources Tbk Pt REGIONAL Region Americas Asia/Pacific Rim Industry rank 2010 Company 3 CONSOL Energy Inc 1 Platts State or rank country 2010 Pennsylvania 114 19 REGIONAL Region Americas Asia/Pacific Rim EMEA Industry Platts rank State or rank 2010 Company country 2010 5 Public Service Enterprise Group Inc New Jersey 44 14 1 AGL Energy RWE AG Australia Germany 125 12 China Shenhua Energy Co Ltd China Source: Capital IQ/Platts Source: Capital IQ/Platts December 2010 insight 77 .

Leaders in exploration and production.ON AG 2 3 4 5 6 7 8 9 10 Endesa SA Enel SpA EDF Scottish & Southern Energy Exelon Corp Iberdrola SA CEZ AS Vattenfall NextEra Energy Inc State or country Germany Spain Italy France United Kingdom Illinois Spain Czech Republic Sweden Florida Platts rank 2010 6 15 21 22 23 26 32 37 43 47 11. OVERALL Rank Company 1 Gas Natural Sdg SA 2 3 4 5 6 7 8 9 10 Gail (India) Ltd Tokyo Gas Co Ltd Snam Rete Gas SpA Osaka Gas Co Ltd Hong Kong & China Gas Co Ltd ONEOK Inc Korea Gas Corp Questar Corp Gasunie State or country Spain India Japan Italy Japan Hong Kong Oklahoma Korea Utah Netherlands Platts rank 2010 58 107 108 115 124 149 157 160 171 187 13. OVERALL Rank Company 1 Constellation Energy Group Inc 2 3 4 5 6 7 8 9 10 NTPC Ltd International Power Plc Endesa NRG Energy Inc AES Corp Huaneng Power International China Resources Power Holdings Tractebel Energia SA Edison SpA State or country Maryland India United Kingdom Chile New Jersey Virginia China Hong Kong Brazil Italy Platts rank 2010 31 52 72 89 92 95 102 121 145 150 REGIONAL Region Americas Asia/Pacific Rim EMEA Industry rank 2010 Company 7 ONEOK Inc 2 1 Gail (India) Ltd Gas Natural Sdg SA State or country Oklahoma India Spain Platts rank 2010 157 107 58 REGIONAL Region Americas Asia/Pacific Rim EMEA Industry rank State or 2010 Company country 1 Constellation Energy Group Inc Maryland 2 3 NTPC Ltd International Power Plc India United Kingdom Platts rank 2010 31 52 72 Source: Capital IQ/Platts Source: Capital IQ/Platts 78 insight December 2010 . OVERALL Rank Company 1 Oil & Natural Gas Corp Ltd 2 3 4 5 6 7 8 9 10 CNOOC Ltd Tatneft Oao XTO Energy Inc Encana Corp Canadian Natural Resources Woodside Petroleum Ltd Inpex Corp KazMunaiGas Exploration PTT Exploration & Production State or country India Hong Kong Russian Federation Texas Canada Canada Australia Japan Kazakhstan Thailand Platts rank 2010 18 29 46 51 55 74 81 86 101 122 REGIONAL Region Americas Asia/Pacific Rim EMEA Industry rank 2010 Company 6 Exelon Corp 13 1 Tokyo Electric Power Co Inc E. Leaders in electric utilities. Leaders in independent power producers. OVERALL Rank Company 1 E.ON AG State or country Illinois Japan Germany Platts rank 2010 26 54 6 REGIONAL Region Americas Asia/Pacific Rim EMEA Industry rank 2010 Company 4 XTO Energy Inc 1 3 Tatneft Oao State or country Texas Russian Federation Platts rank 2010 51 18 46 Oil & Natural Gas Corp Ltd India Source: Capital IQ/Platts Source: Capital IQ/Platts 12.top 250 global energy companies 10. Leaders in gas utilities.

This year. like Platts. OVERALL Rank Company 1 Exxon Mobil Corp 2 3 4 5 6 7 8 9 10 BP Plc Gazprom Oao Petrobras Total Petrochina Co Ltd China Petroleum & Chemical Corp Chevron Corp Royal Dutch Shell Plc LUKOIL Oil Company State or country Texas United Kingdom Russian Federation Brazil France China China California United Kingdom Russian Federation Platts rank 2010 1 2 3 4 5 7 8 9 10 11 15. profits. and total common equity. ROIC figures—widely regarded as a driver of cash flow and value—were calculated using the following equation: ROIC = [(Income before extraordinary items) – (Available for common stock)] ÷ (Total invested capital) x 100 “Income before extraordinary items” is net income less preferred dividends and “Total invested capital” is the sum of total long-term debt. Leaders in refining and marketing. The company rankings are derived by adding each company’s numerical ranking for asset worth. preferred stock (value). December 2010 insight 79 . and ROIC.top 250 global energy companies 14. and because all countries do not share a standard financial reporting standard. OVERALL Rank Company 1 AK Transneft Oao 2 3 4 5 6 7 8 9 10 Enbridge Inc Kinder Morgan Energy Partners LP TransCanada Corp Plains All American Pipeline LP Energy Transfer Partners LP Spectra Energy Corp Enterprise GP Holdings LP Williams Companies Inc ONEOK Partners LP State or country Russian Federation Canada Texas Canada Texas Texas Texas Texas Oklahoma Oklahoma Platts rank 2010 36 60 80 90 91 116 117 135 138 139 REGIONAL Region Americas EMEA Industry rank 2010 Company 2 Enbridge Inc 1 AK Transneft Oao Platts rank State or country 2010 Canada 60 Russian Federation 36 Source: Capital IQ/Platts Where the Numbers Came From This 9th annual survey of global energy companies by Platts Energy Insight magazine measures companies’ financial performance using four metrics: asset worth. material changes in a company’s financial health may have occurred. profits. Leaders in storage and transfer. Since then. in addition to recognizing the best financial performances of the year. we also include the list of Fastest Growing Companies in the Top 250 list based on the three year compound growth rate (CGR) for revenues. minority interest. a Standard & Poor’s business. All companies on the list have assets greater than US$3 billion. revenues. The CGR was calculated by using the Capital IQ data over the past four years (current year included). OVERALL Rank Company 1 Reliance Industries Ltd 2 3 4 5 6 7 8 9 10 Formosa Petrochemical Indian Oil Corp Ltd SK Energy Co Ltd Bharat Petroleum Co Ltd Tupras GS Holdings Corp PKN ORLEN JX Holdings Inc Valero Energy Corp State or country India Taiwan India Korea India Turkey Korea Poland Japan Texas Platts rank 2010 13 49 78 83 94 96 11 118 129 131 REGIONAL Region Americas Asia/Pacific Rim EMEA Industry rank 2010 Company 1 Exxon Mobil Corp 6 2 Petrochina Co Ltd BP Plc Platts rank State or country 2010 Texas 1 China United Kingdom 7 2 REGIONAL Region Americas Asia/Pacific Rim EMEA Industry rank 2010 Company 10 Valero Energy Corp 1 6 Reliance Industries Ltd Tupras Platts rank State or country 2010 Texas 131 India Turkey 13 96 Source: Capital IQ/Platts Source: Capital IQ/Platts 16. Leaders in integrated oil and gas. which is. 2 to the next lowest and so on. Data for US companies in the tables came from SEC Form 10K. The underlying data comes from the Capital IQ. and any evaluation should take that into account. Because the survey is global. revenues. the data used is from the full year of 2009. The overall rank of 1 is assigned to the company with the lowest total. and return on invested capital (ROIC). a division of The McGraw-Hill Companies.

045 11. IPP = independent power producer and energy trader.254 23.006 115. Leaders by region.501 235.553 197.188 10 275.platts.ON AG Total Chevron Corp China Petroleum & Chemical Corp Profits.772 1 2 8 9 5 7 24 16 6 Platts rank 2010 3 1 2 4 7 10 6 5 9 8 Platts rank 2010 45 31 17 115 18 120 101 96 145 77 ASIA / PACIFIC RIM Rank Company 1 Petrochina Co Ltd 2 3 4 5 6 7 8 9 10 Reliance Industries Ltd Oil & Natural Gas Corp Ltd CNOOC Ltd PTT Plc Origin Energy Ltd Formosa Petrochemical NTPC Ltd State or country China India India Hong Kong Thailand Australia Taiwan India Industry code IOG IOG R&M E&P C&CF E&P IOG IOG R&M IPP Platts rank 2010 7 8 13 18 19 29 35 45 49 52 China Petroleum & Chemical Corp China China Shenhua Energy Co Ltd China PROFITS Rank Company 1 Gazprom Oao 2 3 4 5 6 7 8 9 10 Exxon Mobil Corp BP Plc Petrobras Petrochina Co Ltd Royal Dutch Shell Plc E.280 16.041 EUROPE.578 16.aspx Source: Capital IQ/Platts 80 insight December 2010 . $ million 297.323 212.968 233. AFRICA Rank Company 1 BP Plc 2 3 4 5 6 7 8 9 10 Gazprom Oao Total E.272 192. % 47.411 187. IOG = integrated oil and gas.053 20.518 12.com/Top250Home.181 270.476 Platts rank 2010 22 10 3 2 1 7 28 21 4 6 18.536 19. Leaders by financial indicator.418 32.564 239.top 250 global energy companies 17.082 190. $ million 25. S&T = storage and transfer Source: Capital IQ/Platts More on the Web Find each company’s profile and view all the data on our web site: www.578 19. ASSETS Rank Company 1 EDF 2 3 4 5 6 7 8 9 10 Royal Dutch Shell Plc Gazprom Oao BP Plc Exxon Mobil Corp Petrochina Co Ltd GDF Suez Enel Spa Petrobras E.131 292. EU = electric utility.192 18.937 20.305 210.213 136.483 9. THE AMERICAS Rank Company 1 Exxon Mobil Corp 2 3 4 5 6 7 8 9 10 Petrobras Chevron Corp ConocoPhillips Exelon Corp Occidental Petroleum Corp Ecopetrol SA Imperial Oil Ltd State or country Texas Brazil California Texas Illinois California Colombia Canada Industry code IOG IOG IOG IOG EU IPP IOG IOG IOG DU Platts rank 2010 1 4 9 24 26 31 33 34 41 44 Constellation Energy Group Inc Maryland Public Service Enterprise Group Inc New Jersey REVENUES Rank Company 1 Royal Dutch Shell Plc 2 3 4 5 6 7 8 9 10 Exxon Mobil Corp BP Plc China Petroleum & Chemical Corp Chevron Corp Total Petrochina Co Ltd Conocophillips Eni Spa E.ON AG Assets. $ million 2010 278.583 Note: C&CF = coal and combustible fuels.810 16.638 159.On Ag Platts rank Revenues.673 149. R&M = refining and marketing.875 10. MIDDLE EAST.293 157.002 15.867 16.135 12. DU = diversified utility.016 117. E&P = exploration and production. GU = gas utility.154 22.ON AG Royal Dutch Shell Plc LUKOIL Oil Company RWE AG Rosneft Oil Company Endesa SA ENI SpA State or country United Kingdom Russian Federation France Germany United Kingdom Russian Federation Germany Russian Federation Spain Italy Industry code IOG IOG IOG EU IOG IOG DU IOG EU IOG Platts rank 2010 2 3 5 6 10 11 12 14 15 16 RETURN ON INVESTED CAPITAL Rank Company 1 Origin Energy Ltd 2 3 4 5 6 7 8 9 10 Constellation Energy Group Inc TNK-BP Holdings CONSOL Energy Inc Oil & Natural Gas Corp Ltd Eletropaulo KazMunaiGas Exploration Tupras Tractebel Energia SA YPF ROIC.

com . and more .com. track hydroelectric projects in Brazil.. oth exis n a e • Existing and proposed transmis on lines.. To purchase the UDI World Electric Power Plants Database. visit www.maps. and industrial autoproducers (captive power). list new coal-fired projects in Germany. Benefits: • Turn map layers on-and-off to focus on y o features of interest nter • Click on map featu es for additional information Click ature d a nform on • Easily navigate and print over 200 hyperlinked pages n o yperlinked ages l • Instantl create snapshots to enhance pres tati s I stantly n o enhance presentations. This unique database is the largest global power plant information resource available. railroads.UDI World Electric Power Plants Database – The Original Global Reference Find cogen power plants in South India. visit www.com or call your nearest Platts office. and substations l ds b For more information please visit www.udidata. 5kV and n ter • IOU and No IOU Ut Non-IOU Utility service te o ies territor e • Coal mines. emai . North America 1-800-PLATTS8 (toll-free) +1-212-904-3070 (direct) Europe/Middle East/Africa +44-20-7176-6111 Latin America +54-11-4804-1890 Asia-Pacific +65-6530-6430 For more information about Platts UDI databases and directories. The Platts UDI World Electric Power Plants Database (WEPP) is an inventory of generating units covering plants of all sizes and technologies operated by regulated utilities. an more… e NEW! 2010 North American Electric Power System Atlas M C nten Map Content: e • Power plants 2 5M W and grea r both exi ting & planned s 5MW and greater. and ema ls. 115k and greate r ropose ission nes.platts.udidata. private power companies.

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projects and people of the year.SPECIAL ADVERTISING SECTION 2010 GLOBAL ENERGY LEADERS Capgemini is again proud to be the principal sponsor of the Global Energy Awards. this year in its 12th edition. Intel and Oracle) to promote smart grids and smart meters I wish to convey Capgemini’s sincere congratulations to all nominees and winners of the 2010 Platts Global Energy Awards for their leadership and commitment to serving their employees. Cisco. Sustainability. truly understands the challenges the industry faces. customers. systems integration and outsourcing ⇒rms for energy and utility companies. academia and professional services to celebrate the most successful industry companies. The energy industry is facing the challenges that the rami⇒cations of the incident will present for oil and gas exploration in the coming years. Integrated Oil Operations and Content Management Our European Energy Markets Observatory. Cisco. Oracle. Warmest Regards. The growing global appetite for oil in the foreseeable future coupled with natural declines in existing production is creating a formidable challenge for the industry to bring on new production capacity. Smart Metering and Smart Grid. HP. We participate in the progress of the energy industry through a variety of research and conference programs. the Utilities industry has started to recover from the economic crisis. Intel. The most striking industry event of 2010 has undoubtedly been the BP Macondo disaster in the Gulf of Mexico which has dominated the headlines since April 2010. Energy. Each year. HP. one of the world’s leading business consulting. the Platts Global Energy Awards gala ceremony is a unique moment where the leading energy and utilities companies come together with important stakeholders from government. addressing the hot topics of the market: ■ ■ ■ ■ ■ ■ Capgemini produces an on-going program including in-depth studies and surveys that are recognized as valuable thought leadership by our clients. Capgemini. business partners and shareholders. GE. Utilities and Chemicals Capgemini December 2010 insight 83 . Our commitment to the energy industry does not stop with the Global Energy Awards. with topics such as Nuclear Energy. GE and Ventyx Over many years we have built with our partners an active Smart Energy Alliance (Capgemini. is an annual report that tracks the progress in establishing an open and competitive electricity and gas market in Europe as well as the progress on security of supply and the European Union ClimateEnergy package objectives The annual Platts/Capgemini Utilities Executive Study provides an overview of the electric and natural gas industry from executives throughout North America Our industry experts present our thoughts and points of view at major conferences worldwide We collaborate with industry-leading partners including SAP. In Europe both prices and consumption have gone up. Colette Lewiner Global Sector Leader. which is not yet the case in the United States. During 2010.

and 49.. 100% owned by AES Corporation. These projects focus specially on the localities near the sites of the AES Dominicana energy production plants and the communities it serves. is a base plant. and Itabo. AES Andres energy complex. with an international port. and Dominican Power Partners (DPP). increasing the ef⇒ciency of the work processes. 1999) ■ Two coal-based power plants.300 tons per hour. each in open cycle located in Santo Domingo Este. ■ Possibility to expand two additional loading bays. a natural gas ⇒red combined cycle with 319 MW capacity. AES Andres. the people are motivated to ⇒nd ways to achieve results in four key areas: optimizing the assignment of capital. along with hydro generators. AES Dominicana personnel. ■ Capacity to dispatch 18 TBtu/year. since they both operate under the scheme of marginal costs. which has two natural gas open-cycle units with 236 MW capacity. S.V. Truck LNG Loading Terminal ■ Capacity for 2 simultaneous trucks (one hour process).000 m3. and always promoting the values of AES Corporation. which has been operating since July 2007. has two coal ⇒red units with 260MW capacity. 130 MW each.. helping communities grow through a safe and reliable supply of energy. December 1. As a business group. ■ LNG storage capacity of 160. education. ■ Ownership: 50% AES and the remaining owned by the Dominican Government (FONPER) and minority shareholders (former employees). ■ Port for receiving liqui⇒ed natural gas (LNG). Itabo. AES Dominicana has 815 MW installed capacity.A. Itabo. encompasses three electrical generating companies. AES Dominicana uses the synergy between all of its businesses to create the strength that consolidates it as a young and ef⇒cient Dominican group committed to national development.000 M3 Lique⇒ed Natural Gas (LNG) storage tank and a 34-KM gas pipeline that connects with AES owned DPP. S. and mitigating high-impact operational risks. cutting edge technology.9 US$MM Market Share: 37% . has been developing projects in crucial areas of society such as culture. ■ 100% AES ownership. ■ Two natural gas turbines 118 MW. through the Fund of Reformed StateOwned Enterprises (FONPER). ITABO S.A. sports.A. a 160. AES Dominicana is the only group with two deep-water port infrastructures.97% by the Dominican Government. at all levels in the company. LNG re-gasi⇒cation installations.SPECIAL ADVERTISING SECTION Marco De la Rosa CEO AES Dominicana AES Dominicana AES Dominicana. like Andres. ■ 100% AES ownership. GLOBAL LEADERS PROFILE Statistics ■ ■ ■ ■ ■ ■ Employees: 296 Investment: US$800 million Installed Capacity: 815 MW Fuel Matrix: Natural Gas and Coal Energy sold in 2009: 619. the environment and health. adding value for its clients. To consolidate its leadership. collecting and protecting income. ■ Coal port of 580 meters in length. LOS MINA 1997) ■ First AES investment in the Dominican Republic. Over the last two years the company has achieved extraordinary operational and ⇒nancial results. ■ Loading rate of 68 m3/h. 84 insight December 2010 AES Dominicana Infrastructure Dominican Power Partners (DPP. B. are the driving force behind these improvements. AES Andres (2000) ■ 319 MW combined-cycle generation. and capacity for 1. through its AES Dominicana Foundation. with 50% ownership by AES Corporation. With an elevated sense of commitment to social responsibility. 2003. with US$800 million in investments. AES Dominicana. Andres and Itabo make up part of the most economical units. ■ 34 kilometer gas pipeline to DPP. it combines a global perspective with deep local knowledge. modern port facilities and diversi⇒ed fuel offering. ■ Located within the AES Andres complex. an untiring commitment to operational excellence. is the main power plant satisfying the demand of the country. ■ Commercial operation day. ■ Base load dispatch. (EGE-ITABO. In each one of the businesses. located and operating in the Dominican Republic since 1997. AES Dominicana has positioned itself as the principal player in the energy sector.

At AES El Salvador.aes. biomass. Thus. municipal of⇒ces and local communities. 120 power plants. providers. Through practicing our values we direct our actions. delivering power to over a million customers. We also joined efforts with Salvanatura. youth development and education. AES Education: With our “Magic Energy” educational program. in addition to having a direct impact upon the environment. diesel. We have been able to do this in part thanks to AES El Salvador Through our distribution companies CAESS. 29 years experience. www. wind and other sources. GLOBAL LEADERS PROFILE Actions Based on Values Our corporate values—Put Safety First. from 2009 to 2012 we will be bringing electric energy to 25 thousand households in 94 municipalities. we are convinced that electric energy is a critical element for economic growth in a country and the progress of its people.com The AES Corporation ■ A Fortune 500 company. Generation sources: natural gas. to inform and educate people for the rational and safe use of electricity. Therefore it is essential to ensure a sustainable electricity sector committed to implementing projects that facilitate access to electric energy for the neediest. as it enables the continuity and quality of production activities for industry and commerce. aimed at having El Salvador 100% electri⇒ed. Thanks to the agreement signed with the Millennium Challenge Corporation. ■ the establishment of strategic alliances with international organizations focused on children. shareholders and with the communities whom we serve. understand the challenges that lie ahead and orient our decision-making. to protect the El Imposible and Los Volcanes National Parks. we focus our social responsibility in the community on three main pillars: ■ ■ AES Rural Power: Currently more than 26 thousand families have bene⇒tted from rural electri⇒cation projects carried out jointly with the national government. CLESA.SPECIAL ADVERTISING SECTION Abraham A. Bichara Handal CEO AES El Salvador AES El Salvador In El Salvador we serve 80% of the national electricity market through our four distribution companies.330 MW. Honor Commitments. since 2007 we have provided education to more than 110 thousand children and adults throughout the country on the safe and ef⇒cient use of electric energy and environmental protection. 27 thousand employees. AES Environment: Through our “Recycle!” program we make available in a practical and accessible way to all citizens the possibility of contributing to environmental protection by turning our customer service of⇒ces into paper recycling centers. Electricity use grows. operations in 29 countries on ⇒ve continents. installed capacity to generate 40. clients. As global companies. Strive for Excellence and Have Fun through Work—are promoted within the organization and expressed through our actions toward our colleagues. we serve 80% of the national electricity market. as well as to generate actions oriented toward conserving the environment. water. Focusing Our CSR Efforts Our concrete actions provide sustainability to these initiatives when we make them also part of our entrepreneurial objectives. channeling the results of our “Recycle!” program to bene⇒t these unique forest reserves in El Salvador. and at the same time electric energy brings crucial value to a society and its economic development. thus contributing to poverty reduction in the Northern zone of the country. 14 energy distribution companies. www.aeselsalvador. EEO and DEUSEM. as well as with important universities and internal volunteers from AES El Salvador companies. and the foundation upon which we make all of our business decisions in the countries in which we operate around the world. mineral coal.com December 2010 insight 85 . contractors. It is doubtlessly at the heart of great global challenges. We consider electricity the core of our company. Act with Integrity. a recognized environmental NGO in the country. our corporate values are a fundamental axis for all of our actions.

The AMP Board of Trustees. Michigan. all AMP project ⇒nancing and entity ratings have been in the “A” category ■ ■ Organizational Growth ■ ■ ■ ■ Project Financing ■ Financial Strength ■ ■ 86 insight December 2010 . Aggressive generation asset development effort designed to diversify power supply portfolio and reduce market exposure underway Proven track record. President and CEO American Municipal Power. the largest allocation of CREBs to a single entity that year ◆ Allocations validate AMP’s position of providing a range of energy options to members and being leaders in the deployment of renewable generation Public power leader in the use of Build America Bonds. Ohio..E. Nationally. public affairs and energy ef⇒ciency Since 2000.600 MW Prairie State Energy Campus. he is a long-time executive committee member of the American Public Power Association Board of Directors and is the past board chair. reliable wholesale energy to members Provide other services to members. Gerken. In that capacity he served as a member of the AMP Board of Trustees. sound ⇒nancial practices and relationship management AMP’s ⇒nancial strength and strong management have been consistently recognized by rating agencies. comprised of municipal of⇒cials from member communities. environmental stewardship. competitively priced. Inc (AMP) is the nonpro⇒t wholesale power supplier and services provider for 128 member municipal electric systems in six states. ■ ■ AMP works to maintain these ratings through its member credit scoring program. P. and he is a former city manager of Napoleon. Inc American Municipal Power.E. a coal generation facility under construction in Illinois incorporating state-of-the-art emissions control technologies Proposed 600 MW natural gas combined-cycle plant under development in Ohio Additional wind solar and land⇒ll gas being pursued including up to 300 MW of distributed solar AMP has been awarded Clean Renewable Energy Bonds (CREBs) in each year the bonding authority has been available. Virginia. including ⇒nancial.100 MW to more than 3. manage and supply diverse. Pennsylvania. has led the organization as President/CEO since 2000.400 MW of generation capacity AMP’s portfolio of owned/controlled generation will be approximately 18% renewable by 2015 Largest deployment of new run-of-the-river hydroelectric generation in the country today ◆ Six projects at existing dams on the Ohio River will add more than 400 MW of renewable energy generation ◆ Three projects are under construction with the remaining projects in the licensing and permitting phases Largest equity-owner of the 1. training.7 million. receiving a total of $172. mutual aid coordination. Marc S. to date issuing nearly $1. the AMP Wind Farm (the ⇒rst utilityscale wind farm in Ohio) and distributed generation Generation asset development effort underway will add more than 1.8 million MWh to 10.7 million MWh Energy sales revenue increased from $231 million to $740 million Since 2000.000 customers. generation. legal. Ohio.SPECIAL ADVERTISING SECTION Marc S.2 billion to fund project construction Project Development ■ GLOBAL LEADERS PROFILE ■ ■ ■ ■ ■ AMP’s Mission ■ ■ Develop. chairing the committee overseeing construction of the 42 MW Belleville Hydroelectric Plant. regulatory compliance. Gerken has worked extensively on public sector infrastructure projects. Gerken.000 MW Energy sales increased from 5. including the Belleville Hydroelectric Plant. Inc American Municipal Power. Kentucky and West Virginia. membership grew from 83 communities in three states to 128 communities in six states System peak increased from approximately 2. P. technical. AMP is headquartered in Columbus and its members serve more than 570. is actively engaged in policy-making and provides strong leadership to the organization.9 million since 2006 ◆ Includes a 2009 allocation of $143.

the company moved further by acquiring a controlling stake in Uranium One. the company realized that in order to compete it needed to adopt a transparent management system and a reporting style that conformed to best international practices. In 2005. GLOBAL LEADERS PROFILE Statistics ■ Uranium output in 2009—4.000 tons by January 1.624 tons Uranium output growth in 2009—25% Uranium resource base—632. ARMZ’s objective is to become the leading uranium miner globally.000 Revenue in 2009—$967 million Panoramic view of JSC Khiagda. In 2009. ARMZ increased uranium output by 25% to 4624 tons at its mines in Russia and abroad. ARMZ has also experienced a meteoric rise in its pro⇒le worldwide. These two transactions ⇒rmly established ARMZ as the most dynamic uranium miner in the world and have propelled the company in numerous rankings. In 2010. it made its biggest foreign acquisition—securing 20% stake in publically listed Uranium One. ■ ■ ■ ■ mining assets.SPECIAL ADVERTISING SECTION ARMZ Uranium Holding Co ARMZ is one of the largest uranium producers in the world. ARMZ was born from signi⇒cant restructuring only a few years ago. In 2009. the company was signi⇒cantly restructured and adopted a new strategy of securing uranium mines abroad. It is currently ranked as the world’s second largest uranium mining corporation by resource base. With growth of operations. 2010 Employees—10. At the outset. The company is wholly owned by Rosatom— the Russian State Corporation controlling the nation’s nuclear activities—and is the mining arm of the Russian nuclear industry operating all of the country’s uranium Despite its success. December 2010 insight 87 .

which includes proven plus probable (2P) gross reserves and resources of 685 million barrels of oil equivalent (mmboe) with a further 300 mmboe or more of enhanced oil recovery (EOR) potential. Working with IFC.300 Sales — >165. safety and the environment are integral to Cairn India’s business management and the company is committed to working with all stakeholders to deliver material growth.000 barrels of oil per day (bopd) with scope for further expansion Ravva—Oil. and natural gas. 95 million standard cubic feet per day (mmscfd) Suvali—Oil. 70. Cairn has developed an in-depth understanding of the regulatory environment and. It is headquartered in Gurgaon near Delhi and has material exploration and production positions in ten blocks in India and one in Sri Lanka. Rahul Dhir. As an acknowledgement of our commitment to society. 44. Rahul Dhir.SPECIAL ADVERTISING SECTION Rahul Dhir Managing Director and CEO Cairn India Limited Cairn India Limited Cairn India is one of the largest independent oil and gas exploration and production companies in India. Health. there have been 25 discoveries on the Rajasthan block and the company is focused on exploiting the full potential. The Mangala. Cairn has been operating in India for 15 years and has played an active role in developing the oil and gas resources in the country. 2006. is the largest onshore oil discovery in India in more than 20 years. He completed his bachelor of technology degree from the Indian Institute of Technology. more importantly. Delhi. state governments and joint venture partners. social and micro⇒nance programs.Sc from the University of Texas at Austin and MBA from the Wharton Business School in Pennsylvania. Working with the government of India. Cairn India has developed a strong pool of skilled manpower over a decade of its operations in India. The Mangala ⇒eld discovered in January 2004 near Barmer. In total.000 barrels of oil equivalent per day Crude Processing Capacity ■ ■ ■ Rajasthan—205. has laid the foundations for the strong relationships that are needed to help provide some of the energy needs of the country. Before joining Cairn India. Cairn has employed some of the brightest minds in the industry and the skills of these people are critical to the success of the organization.000 bopd. In 2007. He went on to complete his M. he was the managing director and co-head of energy and power investment banking at Merrill Lynch. Cairn India received the TERI Corporate Award for Social Responsibility 2008 for the Micro-Vendor Development Programme at Ravva. Rajasthan. Morgan Stanley and Merrill Lynch.000 barrels of oil per day in 2011. Cairn India will account for more than 20% of India’s domestic crude oil production when the Rajasthan ⇒elds reach the current approved plateau production rate of 175. CB/ OS-2 in the Cambay Basin in Gujarat and RJ-ON-90/1 in Rajasthan. Managing Director & CEO Mr. Cairn also has an extremely positive approach to 88 insight December 2010 GLOBAL LEADERS PROFILE working with local communities. Statistics Project Completed ■ ■ ■ Ravva and Cambay Development Commissioning of the Mangala Processing Terminal Commissioning of the Mangala to Salaya crude pipeline—longest continuously heated and insulated pipeline in the world Employees — ǔ1. Cairn produces oil and gas from three blocks in India: Ravva in Andhra Pradesh. 150 mmscfd Certi⇒cations — ISO 14001 and OSHAS 18001 . This has enabled them to make substantial progress with their project while minimizing the negative impact on local people. 10. joined Cairn India in May 2006 as the chief executive of⇒cer and was appointed the managing director on August 22. Rahul started his career as an oil and gas reservoir engineer before moving into investment banking. Cairn has set up an Enterprise Centre that provides skills training schemes to enhance local employment as well as medical. and natural gas. Bhagyam and Aishwariya ⇒elds have recoverable oil reserves and resources of approximately 1 billion barrels. Rahul’s commitment has contributed to making the company a USD 14 billion enterprise and his vision to further explore the different hydrocarbon basins has put Cairn India on a strong growth trajectory. Cairn India was listed on the National and Bombay Stock Exchanges and to date has a market capitalization of more than USD 14 billion. He has worked at SBC Warburg. Over the years. The people that Cairn employs represent the foundation of this multicultural organization.000 bopd.

000 customers throughout Louisiana and operates four power generators with 3. Seventy-⇒ve years later. The growth in south Louisiana has made it dif⇒cult for power to ⇓ow through the existing transmission system during times of peak demand.SPECIAL ADVERTISING SECTION Michael H. This facility is a net 600-megawatt multi-fuel generator that has the capability of using biomass fuels to produce electricity.88 billion December 2010 insight 89 .539 megawatts (regulated). To ensure the company has adequate transmission to deliver power. The company claimed the 2009 Index Award in the small market capitalization category for earning a 76. The unit is among the largest using circulating ⇓uidized-bed technology and is currently using petroleum coke.289 Total power sales in 2009: 9. In addition. Cleco Corporation increased its dividend payment by 11% effective May 2010. 2009. for fuel. Madison 3. the company started early and signi⇒cantly completed project ⇒nancing prior to the 2008 economic downturn.571 distribution circuit miles 1. Cleco Power (Cleco).065 megawatts (merchant/tolled) 11. By building new transmission infrastructure and upgrading existing equipment. plant and equipment assets were approximately $1.224 transmission circuit miles Capitalization: $1. a combined-cycle unit named the Acadia Power Station. Cleco is investing in the largest transmission project in its history. In addition. Cleco owns 2. and two other area utilities are helping to alleviate power constraints and allowing for greater ⇓exibility in energy supply. Cleco’s net property. the company’s regulated subsidiary.3 billion and this project alone had a cost of $1 billion. Madison President and CEO Cleco Corporation Cleco Corporation In 1935.1 million kWh Owned generation: 2. is a focused integrated electric utility. Financial Performance Adding Madison 3 and the Acadia Power Station to its existing generation ⇓eet has more than doubled the utility’s rate base and increased its generation capacity by more than 85%. Knowing that funding the plant would be a challenge. proving through skill and determination a smaller company can produce big results for its customers and shareholders. 1.800 megawatts of nameplate capacity. At the time of Madison 3’s groundbreaking. Cleco Corp began as an ice company in a small south Louisiana town. Cleco recently acquired one of the most ef⇒cient generating units in the state. a waste product of the oil re⇒ning industry. Cleco serves nearly 300.539 megawatts of this capacity. This 580-megawatt unit’s low heat rate makes using natural gas an effective way to provide cost-ef⇒cient reliable power. Cleco’s growth strategy is proving to have a positive impact on stock price as the corporation’s stock has repeatedly achieved lifetime highs during 2010. Cleco Corporation also has been recognized by the Edison Electric Institute for exceptional shareholder return. Cleco Statistics ■ ■ ■ ■ ■ ■ Employees: 1.3% total shareholder return for ⇒ve years ending September 30. GLOBAL LEADERS PROFILE Operational Performance Cleco recently completed the foundation of its long-term growth strategy by putting into service the largest unit in its generation ⇓eet.

Chesapeake has committed over $22 million to charitable giving. affordable. it is committed to building partnerships in education. which includes 29 of the nation’s largest independent natural gas producers. Marcellus. Today Chesapeake is the second-largest producer of natural gas. D. During the 2010 United Way campaign for central Oklahoma. investment in technology and an aggressive land acquisition program in shale plays. To help deliver these messages. and strongly encourages employees to do the same. Ward. Fayetteville. Additionally. a Top 20 producer of oil and natural gas liquids and the most active driller of new wells in the US.SPECIAL ADVERTISING SECTION Aubrey K. With a more than 120-year supply in the United States.700 employees and an enterprise value of approximately $31 billion. the company’s operations are focused on discovering and developing unconventional natural gas and oil ⇒elds onshore in the US.-based think tank dedicated to promoting energy conservation and the greater use of cleaner fuels.043 16. Haynesville. Additionally. including natural gas. Chesapeake is very active in America’s Natural Gas Alliance (ANGA). Statistics Net Acres (in millions): Q3 2010 Daily Production (mmcfe/d): Q3 2010 Proved Reserves (tcfe): Q3 2010 Risked Unproved Resources (tcfe): YTD Revenues (in millions): YTD Adjusted Net Income (in millions): Market Capitalization (in millions): Employees: 13. we now own the largest inventory of leasehold in two of the Top 3 new unconventional liquids-rich plays—the Eagle Ford Shale and the Niobrara Shale. Its key message is that natural gas is clean. abundant and American. reducing the nation’s dependency on foreign oil and keeping jobs and money in the US. social services and health. McClendon. Granite Wash and various other unconventional liquids-rich plays. Chesapeake owns leading positions in the Barnett. more than twice the level given by any donor in central Oklahoma. a Washington. Chesapeake intends to continue leading the industry in developing greater supplies of US unconventional natural gas and liquids in the years ahead. Headquartered in Oklahoma City. Chesapeake has built the industry-leading shale position. community development.392 $692 $16. drilling and oil⇒eld service assets. Chesapeake provided funding to form the American Clean Skies Foundation. GLOBAL LEADERS PROFILE Community Minded In every community where Chesapeake operates. The company also is committed to its CNGNow initiative.8 3. McClendon’s strategy is also focused on advantageous joint venture agreements with world class partners and executing a sophisticated commodity hedging strategy that consistently delivers cash gains and increases the overall natural gas and oil price realizations for Chesapeake. Fayetteville and Bossier Shale plays.1 million.C. The company has also vertically integrated its operations and owns substantial midstream. Operations Strategy Through strong leadership. compression.742 9. Marcellus and Bossier natural gas shale plays and in the Eagle Ford. Natural Gas Advocate Chesapeake has taken a leadership position in educating policymakers.700 90 insight December 2010 .000 volunteer hours in 96 communities across all of Chesapeake’s operations. Chesapeake is the only producer to have #1 or #2 positions in the Haynesville. Barnett. Tom L. Chesapeake sets high standards in service.7 102 $7. McClendon Chairman of the Board President and CEO Chesapeake Energy Corporation Chesapeake Energy Corporation Chesapeake Energy Corporation was founded in 1989 by its CEO. Aubrey K. which promotes the use of compressed natural gas as a transportation fuel. With more than 9. In 2010. natural gas is clearly the best scalable green energy solution for the country. the company and its employees contributed a record $4. and former President and COO. Chesapeake employees donated more than 30. the press and the public about natural gas.

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and among the fastest growing and lowest cost producers of natural gas in the eastern United States. operates 11 bituminous coal mining complexes in six states. net income and the production and reserves of high-quality bituminous coal. CNX Land Resources Inc. This past spring. Coal still accounts for about 70% of CONSOL Energy’s earnings. According to the Energy Information Administration. the company has taken dramatic steps recently to increase its natural gas business. with its high population density and increasing demand for energy. Fast facts ■ ■ Began operations in 1864. as well as commercial real estate development ventures and property leasing activities for energy production. Through its subsidiary. CONSOL’s river operations annually transport nearly 20 million tons of coal. The buy-back of CNX Gas shares was completed last summer.475 billion agreement to acquire Dominion’s E&P business. and in terms of our coal operations in the eastern United States. with proved reserves of 2. Safety is of primary importance to CONSOL Energy. Collectively.consolenergy. President & CEO Brett Harvey. demand for coal is expected to grow by 28% and for gas the expectation is it will grow by 38% by 2035. Fairmont Supply. In addition. is a full-line distributor of mining and industrial supplies. this gives the company an advantage as one of the major fuel suppliers to users in the northeastern quadrant of the United States. With CONSOL Energy’s coal and gas reserves located mainly east of the Mississippi River. Additional information about CONSOL Energy can be found at its web site: www. coal and gas fuel about 70% of all US power generation. During that same period. has timber and environmental enhancement projects. productivity and cost control.000 acres. ■ ■ 92 insight December 2010 .SPECIAL ADVERTISING SECTION J. GLOBAL LEADERS PROFILE As a result of the $3. In addition. CONSOL Energy announced an agreement to make an offer to acquire all of the shares of CNX Gas common stock that it did not previously own. it gives the company a leading position in the strategic Marcellus Shale fairway by tripling our development assets to approximately 750. including about 7 million tons produced by CONSOL Energy. continuous improvement. While coal will continue to be an important business unit for CONSOL. It was recently named one of the “Top 100 Most Trustworthy” companies for 2010 by Forbes. Led by Chairman. compliance. It is also the region’s leading gas producer. Brett Harvey Chairman. reports proven and probable coal reserves of 4. which places CONSOL Energy in a very favorable position to seize opportunities presented in the marketplace for both fuels. One example of these efforts is that CONSOL Energy maintains the largest R&D group in the industry devoted exclusively to burning coal more cleanly. along the inland waterways of the United States. CONSOL Energy continues with its efforts to ensure that the extraction and use of important coal and gas resources are consistent with the protection of our natural environment. CONSOL Energy will be the largest. President and CEO CONSOL Energy Inc CONSOL Energy Inc CONSOL Energy.9 trillion cubic feet. CONSOL Energy has established ⇒ve core corporate values: safety. the leading diversi⇒ed coal and gas producer in the eastern United States.5 billion tons and has annual coal production of nearly 70 million tons. with accident incident rates far below the national averages for the energy industry. is a member of the Standard & Poor’s 500 Equity Index and the Fortune 500. which has earned the reputation as the nation’s safest coal and gas producer. CONSOL leads the coal industry in revenue. Its subsidiary. CONSOL Energy has annual revenues approaching $5 billion. Maintains a ⇓eet of 29 vessels and 650 barges. CONSOL acquired the oil and gas exploration and production business of Dominion Resources Inc.com.

Core programs included ENERGY STAR® lighting and appliances. Anderson CEO DTE Energy DTE Energy Ramping Up Energy Ef⇒ciency In October 2008. ■ Hired ⇒ve implementation contractors and one Evaluation.SPECIAL ADVERTISING SECTION Gerard M. Its operating units include Detroit Edison. HVAC. our ⇒lings transparent and error free and we spend our money prudently in the eyes of the customer. At the same time. unconventional gas production. MichCon. ■ Programs are designed with the customer in mind. the DTE Energy team: ■ Filed design plans for both Detroit Edison and MichCon. ■ Supported its plans during contested case hearings. logos and web site. An Ambitious Ramp-Up Initially. The ultimate goals for the program re⇓ect this customer focus. DTE Energy and other Michigan utilities were faced with some extraordinary ramp-up challenges due to the time line embedded in the legislation. In ⇒ve months.250 BCF. appliance recycling. It implemented standards to cost-effectively diversify state energy resources and promote private investment in energy ef⇒ciency. Company Pro⇒le DTE Energy (NYSE: DTE) is a Detroit-based diversi⇒ed energy company involved in the development and management of energy-related businesses and services nationwide.2 million customers in Michigan and other non-utility. Measurement & Veri⇒cation (EM&V) contractor. and set the pace to far surpass the energy savings goal outlined in the legislation. All this was accomplished while the energy company was operating within one of the most challenging economic circumstances in its history. As a result. multifamily direct install. an electric utility serving 2. Customer research supports these numbers. also known as the known as the “clean. The 2009 year-end results were extraordinary. energy businesses focused on gas storage and pipelines. ■ Our regulatory relationship is fully aligned. Programs were designed to cover as much of the customer base as possible. this awareness number has increased into the low 60s. low income. power and industrial projects. In the ⇒rst half of 2010. This equates to 0.000 business and residential customers participated directly in the program through rebates and services. and energy trading. purchased 2. and reducing. and are executed without defects. although the two are run as one combined program. DTE Energy surpassed the original plan for gas and electric savings. the Michigan legislature passed PA 295. more than 300. their energy use. ■ We provide only those programs that are truly valuable to customers. Nearly 45.” The new legislation was designed to promote energy optimization. The law required a series of actions among the commission and utilities to establish temporary rules and ⇒le plans. In addition. a natural gas utility serving 1. Program awareness started at 41% after launch and rose as high as 49%.1 million discounted compact ⇓uorescent light bulbs through local retailers. They include: ■ All customers believe that DTE Energy is helping them with their energy bills by offering relevant programs and valuable education forums. strategy. in order to build engagement.1 million customers in Southeastern Michigan. Extraordinary Results The campaign launched in June 2009. and ■ Established a tracking and call tree infrastructure. the team used customer research to establish a program identity (Your Energy Savings). Detroit Edison saved 203 GWh and MichCon saved 0.42% of electric sales and 0. ■ Employees from across the company are aware of the programs and are energy ef⇒ciency advocates. GLOBAL LEADERS PROFILE Customer-Focused Program The strategic vision of the Your Energy Savings program is to enable customers to reduce their energy bills by actively controlling. and prescriptive and non-prescriptive commercial and industrial programs. renewable and ef⇒cient energy act. and both Detroit Edison and MichCon earn their performance incentive every year. audit and weatherization.14% of gas sales in savings.000 customers December 2010 insight 93 .

Green Gas gives focus to what is often a non-core business for them. the company acquired G.net 94 insight December 2010 . Green Gas merged with OKD. In 2007. Green Gas has built an industrial platform. CMM management and utilization. Concurrently. In 2006. The company offers an integrated management solution covering the entire value chain. gas management. a coal mine methane (CMM) company with local operations and 50 years experience in coal mine services.greengas. Green Gas has developed rapidly. Executive Chairman and CEO. enhances the principal business of its customers. power. With operations spanning around 50 projects in nine countries. Green Gas. The size of these projects and the fragmentation of the market often make it dif⇒cult to bring the necessary technical and management resources to bear to ensure a superior return on investments. to USD 9. The result is a truly integrated Green Gas solution. Jachthavenweg 109h 1081 KM Amsterdam The Netherlands T: +31 (0)20 570 2250 F: +31 (0)20 570 2222 www. It achieved a compound annual growth (CAGR) in revenue of 354% between 2006 and 2009. a prominent combustion technology and equipment supplier. Green Gas has been led by Chris Norval. Germany—a leader in the construction and operation of combined heat and power (CHP) plants.SPECIAL ADVERTISING SECTION Chris Norval Executive Chairman and CEO Green Gas International Green Gas International Green Gas International builds. In addition to achieving organic growth.S. land⇒lls. wet and dry biomass into clean energy and carbon credits. through improved safety and productivity and improved environments in and around customers’ operations. Since its foundation in July 2005. representing a CAGR in EBITDA of 379% between 2006 and 2009. project management. Green Gas has successfully completed a number of signi⇒cant mergers and acquisitions. DPB of the Czech Republic. ⇒nance. by combining companies and technologies to address a completely new market evolving from the global focus on climate change. maintenance. Earn- GLOBAL LEADERS PROFILE ings before interest. Partnering with ⇒nanciers. using the management and operating platform of Green Gas to create a more predictable outcome from the execution and operation of these projects. operations. investors and resource owners. including: project design. tax. Green Gas is headquartered in the Netherlands and currently has some 500 employees. The company focuses on smaller clean energy projects requiring USD 5-30 million of initial capital investment.V. carbon credits and environmental protection. From the outset. through its specialist knowledge of gas management. carbon credits and power sales.A. owns and operates plants around the world that convert methane and waste from coal mines. It now counts on an international team of experts drawn from a variety of backgrounds. Energietechnologie. with revenues of USD 80 million in 2009. depreciation and amortisation (EBITDA) grew from a negative USD 3 million in 2006. Green Gas offers a commercially attractive solution and brings economic bene⇒ts to local communities.6 million in 2009. Green Gas International B. adding the necessary technology and expertise in the clean energy/climate change mitigation industry. including: mining. In less than ⇒ve years. it acquired Hofstetter Umwelttechnik of Switzerland.

and a consortium of international lenders has provided Kosmos with more than $1. geologically based approach. has a competitive cost structure and has host governments that are eager to develop their countries’ natural resources. The Dallas-based company.3 billion in committed capital to pursue its strategy in West Africa. is developing Jubilee on an aggressive timetable with ⇒rst production expected in late 2010 only three-anda-half years after discovery. signi⇒cant oil province with Jubilee discovery offshore Ghana in 2007 Made four subsequent hydrocarbon discoveries offshore Ghana to date Commencing Jubilee oil production in late 2010.5 years after ⇒eld discovery Strategy for Success Kosmos’ strategy is to pursue drill bit success by generating exploration ideas. only 3. but where commercial discoveries have yet to be made. Integration of these disciplines is key to creating Kosmos’ competitive advantage. as technical operator for development of the Jubilee Field and leader of the Integrated Project Team. Kosmos is well positioned to continue delivering substantial value to its investors. With seasoned leadership. Focus: Africa Kosmos was founded in 2003 when members of the company’s senior management team. This strategy and focus help accelerate countries’ development of their natural resources and maximize Kosmos’ upside potential. Warburg Pincus and The Blackstone Group have provided Kosmos with substantial equity commitments. Kosmos is sensitive to the preservation of the environment and is dedicated to making a minimal impact on the surroundings in its operational areas. and builds and maintains cooperative relationships that empower communities and local businesses. which was one of the largest oil discoveries worldwide in 2007 and the biggest ⇒nd offshore West Africa during the last decade. Kosmos’ in-house technical team includes individuals with complementary areas of expertise that span the exploration process. Kosmos forms partnerships with established industry players and host governments. backed by leading private equity ⇒rms Warburg Pincus and The Blackstone Group. Additionally. is on emerging petroleum systems where source rocks and reservoirs have been established. GLOBAL LEADERS PROFILE Solid Corporate Citizen Kosmos is a solid corporate citizen that is helping countries develop their energy industries by hiring and training local residents and building indigenous energy-related organizations to create legacies of oil and gas expertise. Kosmos’ ⇒nds include the giant Jubilee Field in Ghana’s deep waters. sought to replicate and build on the success they had at Triton Energy where they explored for and developed oil and gas reserves in West Africa’s Gulf of Guinea. The company reinvests in its operational areas. including geology. accesses a strategicscale interest in each project and manages entire ventures when possible. which is December 2010 insight 95 . The company’s explorers use a winning combination of innovative thinking and proven technology to ⇒nd oil in areas labeled unprospective by others. reservoir engineering and other associated disciplines.SPECIAL ADVERTISING SECTION Brian Maxted COO Kosmos Energy Kosmos Energy Kosmos Energy is a premier international independent oil exploration and production company with major oil discoveries offshore West Africa. deeply rooted in a fundamental. Financial Strength Kosmos has raised nearly US$2. geochemistry. Kosmos chose to focus on West Africa because it contains some of the world’s most proli⇒c hydrocarbon systems that are largely undeveloped. a proven track record and a solid ⇒nancial foundation.2 billion in debt commitments. geophysics. and then expediting ⇒eld appraisal and development. Highlights ■ ■ ■ ■ Founded in 2003 by seasoned management team with backing by Warburg Pincus and The Blackstone Group Established new. nurturing them to drilling. The Kosmos team comprises some of the industry’s best and brightest. The company’s exploration focus.

with the majority stake and control held by Tata Power. GIS. a GSM-based street lighting system and a SMS-based fault management system. backend processes and GIS. It also has the distinction of being the ⇒rst Indian power distribution utility to win the prestigious Edison Award in 2008 for Innovative Use of Technology and in 2009 for Policy Advocacy. and probably the only. NDPL is now looking to extend its expertise in power distribution to other Indian cities. As a member of the Global Intelligent Utility Network coalition.” NDPL is a socially responsible organization which is committed to inclusive growth in a sustainable manner. With its achievements in Delhi. The company has a well-de⇒ned three pronged corporate sustainability strategy based on compensatory. GLOBAL LEADERS PROFILE 96 insight December 2010 . DMS and OTS. business-oriented and philanthropy approaches which ensure win-win for both the company and the society. technology solutions and processes for intelligent networks. with additional capex of USD 530 million being incurred since takeover against inherited (in 2002) asset base of USD 200 million. NDPL is also establishing a 90 MW gas based combined-cycle power project which is expected to be commissioned in January 2011. India. For supplementing availability and enhancing reliability of supply. commenced distribution of power in North Delhi from July 2002. Sensitive to the issue of climate change.com. Since privatization. Through innovative integration of CRM. GSAS. vertically integrated State Electricity Board. Some of the other key recognitions include a Utility of the Year Award for four consecutive years (2007 to 2010) by Asia Power. NDPL is setting up solar plants in its area. an unprecedented reduction of around 74% in less than eight years. OMS implementation and a smart grid pilot are presently underway. The company has won several accolades for pioneering efforts in power distribution. It has been conferred the National Award for Meritorious Performance thrice by the government of India. too. NDPL is the ⇒rst. has taken the lead in technology adoption. With a registered consumer base of 1. the company’s operations span across an area of 510 sq kms. has been conferred Asia Power’s Most Inspirational CEO of the Year Award 2008 and Udyog Rattan (Industry Jewel) Award 2010 by the Indian Institute of Economic Studies. On the power reliability front. post unbundling and privatization of the government-owned. since inception. GSM modem-based AMR on a mass scale with more than 60% of its revenues being billed through AMR. The company.1 MW having already been commissioned. incorporated as part of the Delhi Power Sector Reforms process. Sunil Wadhwa. as well as globally. NDPL has to its credit several ⇒rsts: SCADA-controlled unmanned grid stations. it being the only utility in the country to implement systems such as SCADA.2 million and peak load of around 1315 MW. Singapore and the Balanced Scorecard Hall of Fame Award in 2008 by International Palladium. there has been signi⇒cant improvement. and the Government of Delhi. NDPL is the frontrunner in implementing power distribution reforms in the capital city and is acknowledged for its consumer friendly practices.ndpl. the largest business house in India). with a capacity of around 1. For additional information. The company. Technical and Commercial losses in the NDPL area have been reduced to around 14% from 53% in July 2002. the Aggregate. MD NDPL.SPECIAL ADVERTISING SECTION Sunil Wadhwa Managing Director North Delhi Power Limited North Delhi Power Limited North Delhi Power Limited (NDPL) is a joint venture of The Tata Power Company Limited (part of TATA Group. please visit www. NDPL aims to be energy and water neutral (for its own consumption) by 2015. utility in the country to offer “Same/ Next Day Connections. Mr. NDPL is working with 10 other international utilities and IBM to accelerate development of common standards.

Green Mountain Energy gives its customers in select markets nationwide the choice of buying their electricity from clean generation sources. the project hopes to stimulate economic development in areas that are in the process of recovering from the January 2010 earthquake. serve more than 1. Our two retail businesses. construction and operations jobs over the next several years. As part of that commitment on the generation side. our efforts will improve America’s energy security. nuclear power and electric vehicle infrastructure. By providing clean. drive industrial innovation and contribute to the ⇒ght against global climate change. NJ. all of which are poised to create substantial engineering. GLOBAL LEADERS PROFILE December 2010 insight 97 . With investments in solar. commercial and industrial customers.SPECIAL ADVERTISING SECTION David Crane President and CEO NRG Energy Inc NRG Energy Inc NRG Energy Inc is a Fortune 300 company that owns and operates one of the country’s largest and most diverse power generation portfolios. NRG is the leading investor in Ivanpah. Our clean energy portfolio also includes four wind farms in Texas and initiatives to develop biomass and offshore wind projects at various locations.8 million residential. To address existing fossil fuel plants. we are a leading ⇒nalist for a government loan guarantee to build new American nuclear power at our South Texas Project facility.000 megawatts of generation capacity— enough to supply nearly 21 million homes—including power from a growing portfolio of low and no-carbon sources such as nuclear. which— when completed—will be the world’s largest solar thermal project. NRG is also working on the retail side to support electric vehicles and reduce emissions even further. Reliant Energy is building the ⇒rst phase of a citywide public network of fast-charging stations—an important step toward making the transition to electric vehicles simple. NRG’s expertise in renewable energy extends beyond our commercial projects and dovetails into our NRG Global Giving efforts. we believe that climate change is one of the most signi⇒cant challenges facing our planet and we want to be a part of the solution. Headquartered in Princeton. NRG has completed or is currently pursuing a variety of clean energy initiatives. wind. At NRG. wind and solar power. domestic sources of energy in combination with the smart grid and an electric vehicle charging infrastructure in the garage and on the road. water irrigation. which will test a process to reduce carbon emissions at one of our Texas plants. ⇒sh farming and other vital needs. This year. We believe these efforts will jumpstart critical reductions in our country’s carbon and other air emissions. In California’s Mojave Desert. NRG owns the largest photovoltaic solar ⇒eld in California at Blythe. zero-fuel solar panels to power street lighting. In addition to generating more clean power. we’ve also made substantial progress in solar power. NRG is building a commercial-scale carbon capture demonstration project. business. Reliant Energy and Green Mountain Energy Company. Reliant also has received a government stimulus grant to expand the rollout of smart energy solutions to residents statewide. NRG is working to help America transition to a clean energy economy. practical and affordable. In September. and we are building an even larger PV project at Avenal. NRG received recognition from the Clinton Global Initiative for funding a project to expand the use of clean solar energy in Haiti. and decrease our country’s dependence on foreign oil. our power plants provide nearly 26. This project will be among the ⇒rst of its kind and is expected to be online in 2014. By installing low-maintenance.

Mr. Lawrence Wong. and will encompass a comprehensive schedule of conferences. industry leaders and academics on issues centered around the Smart Energy Economy and the corresponding actions needed to build a sustainable future in Asia and the rest of the world.” ■ ■ Come meet with key energy policy makers.SPECIAL ADVERTISING SECTION Singapore International Energy Week The third edition of the Singapore International Energy Week (SIEW). Chief Executive of the Energy Market Authority. exhibitions. Adding further breadth to the Week were three major energy trade shows and a myriad of dialogues. which organized the seven day event. and the role of the private sector in the new energy future were also highlighted throughout the Week. To succeed. Mark your calendars! SIEW 2011 will be held from October 31 to November 4. carbon trading and clean energy ⇒nancing and solutions. networking sessions and business matching opportunities. India and the United States. industry and thought leaders to exchange best practices. 2011. Climate change. and the latter. Visit www.sg for more information. engaged some 14.000 policy makers. The former. delivered by Singapore’s Prime Minister Lee Hsien Loong.com. exploration of renewable and alternative energy sources and the smarter use of fossil fuels were discussed. investment in technology. where smart actions that promote energy sustainability and security such as ef⇒cient energy use. through in-depth discussions on general policy perspectives. which took place from October 27th to November 4th. and the inaugural Singapore Energy Summit. roundtables and networking sessions all addressing the pertinent energy issues of the day.iew. From the discussions and debates at this year’s Singapore International Energy Week. as Asia looks set to grow into the world’s largest consumer of energy in future years. in the lead up to multilateral discussions in Cancun. see the latest technologies and turn discussion on issues-of-the-day into action! 98 insight December 2010 . power generation. singapore. we know that governments and businesses have found it to be a useful focal point for fruitful conversations and partnerships. and share our experience and expertise. The Singapore International Energy Week aims to continue being the premier platform for key decision makers to shift the energy agenda from discussion to action. by way of business-focused events dealing with the oil and gas industry. we must work together to strengthen the region’s framework for GLOBAL LEADERS PROFILE SIEW 2011 The highlights of the Energy Week were the Singapore Energy Lecture. as well as those speci⇒cally represented by China. The program line-up will include key events such as: ■ ■ ■ Singapore Energy Lecture Singapore Energy Summit Carbon Forum Asia Clean Energy Expo Asia Asia Smart Grids Conference and Expo energy co-operation. “Singapore recognizes that no single city or country will have all the answers. said.

S-OIL has been a forerunner of implementing a diversi⇒ed marketing strategy. (Customers. Renowned for a successful joint venture with Aramco Overseas Company.” “Integration with Petrochemical Business. (Customers. S-OIL has shown outstanding performance by realizing operational excellence and sound ⇒nancial structure. In July 2009. aiming at achieving sustainable pro⇒table growth. S-OIL has embarked on a new journey in 2009 by establishing a strategy framework which consists of three strategic directions. “Further Investment in Re⇒ning Business. Equipped with this solid strategy framework. and obtained the highest credit ratings among Asian re⇒ners from S&P and Moody’s. which consists of various conversion processes such as Hydrocracker. 200 KTA of Benzene. Employees and Owners & Stakeholders). RFCC. Employees. S-OIL aims to achieve balanced growth in terms of economic. and 200 KTA of Propylene. a subsidiary of Saudi Aramco. and Hanjin Group. which are.000 barrels.7 billion (2009) : Seoul (Head Of⇒ce) / Ulsan (Re⇒nery) : Oil Re⇒ning. the US and many other countries around the globe. S-OIL has continuously made investments to further improve pro⇒tability for its long-term sustainability. S-OIL was proudly awarded Downstream Operations of the Year by Platts. and has a full line-up of API Group-III to Group-I lube base oils with daily production capacity of 30.SPECIAL ADVERTISING SECTION Ahmed A. In addition. Furthermore. China.” and “Renewable Energy Business” along with strategic imperatives that collectively serve to meet the expectations of our C. 740 KTA of Para-Xylene.E. Through successful execution of these strategic imperatives. and is currently constructing #2 Aromatic Complex capable of producing 960 KTA of ParaXylene and 280 KTA of Benzene in order to strengthen the company’s petrochemical business with a target of completion by June 2011. which produces high quality gasoline blending stock.E.. in 2009. a world-leading company in logistics and transportation. S-OIL produces basic raw materials for the petrochemical industry.000 BPSD Employees Sales Volume December 2010 insight 99 . Production of Lube Base Oil : 2.O. Since its establishment in 1976. S-OIL strives to satisfy the expectations of our C. GLOBAL LEADERS PROFILE Statistics Revenue Location Key Businesses : US$ 13.473 persons (as of Dec 31. etc. Subaey RD and CEO S-OIL Corporation S-OIL Corporation S-OIL Corporation is a $ 14 billion integrated re⇒ning company and a reliable supplier of petroleum. petrochemical and lube products to over thirty countries around the world. S-OIL operates three CDUs with aggregate processing capacity of 580 MB/D and a large-scale Bunker-C Cracking Center.716 thousand barrels (2009) Re⇒nery Capacity : 580. RHDS. through which most of residual crude is upgraded into light and/or low sulfur products. and Owners & Stakeholders). social and environmental values.O. Petrochemical Product Manufacturing. Based on its core competitiveness. which is the 2nd largest single-re⇒nery capacity in the world. S-OIL completed construction of the Alkylation unit. In the end. 2009) : 193. such strengths will enable S-OIL to break through an ever-changing business environment encompassing the entirety of the horizon of the energy industry. supplying about 40% of the re⇒ned products in domestic market while exporting the remaining 60% to over 30 countries including Japan. named as one of Global 500 by Fortune. S-OIL will relentlessly pursue materializing a welldiversi⇒ed business portfolio that can lead the waves of change. S-OIL has been able to ensure the stable import of crude oil as well as a steady supply of petroleum products.

President and CEO Southern Company Southern Company Southern Company is one of the nation’s leading producers of electricity. DOE selected Southern Company to manage and operate the center because of its long-term commitment to research and development. planning to convert an existing coal-burning plant to biomass in Georgia. Gulf Power and Mississippi Power. wind. geothermal. the company led a renaissance in new nuclear generation. these brands are known for high reliability and retail electric prices below the national average. Target dates for completing the units are 2016 and 2017. During 2010.000 people. In 2010. and building one of the nation’s largest solar installations in New Mexico. It consistently outperforms the S&P 500 Index and has increased its dividends for the past nine consecutive years.74 billion Earnings: $1. Southern Company 2009 Statistics ■ ■ ■ ■ Power sales: 186 billion kilowatt-hours Operating revenues: $15.000 megawatts of generating capacity.64 billion Assets: $52. and its partners currently are marketing this new technology internationally. where scientists and researchers from government. The ⇒rst plant built using the process will begin operating in China in 2012. GLOBAL LEADERS PROFILE New Nuclear Southern Company is moving forward with construction of the ⇒rst new nuclear units to be built in the United States in more than 30 years. continued to develop advanced coal technologies and explored renewable energy options. The project in Mississippi uses an integrated gasi⇒cation combined-cycle process to convert coal to gas.4 million customers in the Southeast through four electric utilities—Alabama Power. removing 99% of sulfur dioxide and particulates and generating 65% less carbon dioxide emissions through carbon capture and sequestration. Other Southern Company subsidiaries include a competitive generation business. the company received the US Secretary of Defense’s highest award recognizing business support of employees serving in the military. Based on the progress and integrity of the project in Georgia—as well as the company’s history of strong operational performance—the plant was awarded the nation’s ⇒rst nuclear loan guarantees earlier this year. The company also has numerous other studies and projects under way using biomass. land⇒ll gas/solid waste and solar. The company is currently testing various carbon capture and storage processes at seven sites in the Southeast. Renewable Energy Options Southern Company is currently building one of the nation’s largest biomass-fueled plants in Texas.SPECIAL ADVERTISING SECTION Tom Fanning Chairman. With more than 42. Southern Company serves 4. Alabama. and wireless communications and ⇒ber-optic providers. industry and universities are developing the next generation of carbon capture technologies.05 billion 100 insight December 2010 . Carbon Capture The US Department of Energy’s National Carbon Capture Center is located in Wilsonville. Southern Company ranks among the top utilities in customer satisfaction and diversity. About Southern Company Southern Company is headquartered in Atlanta and employs 26. 21st Century Coal Technologies Southern Company is building the nation’s ⇒rst commercial-scale plant using an advanced technology developed in partnership with DOE and others. researched new carbon capture processes. Georgia Power. a licensed nuclear operator. In addition to superior customer service. It is committed to providing solutions to national energy issues and challenges facing the industry.

Progress toward achieving aggressive goals is tracked by facility with monthly reports and webinars.000 homes since 2005. monitored control systems. Sargent Chairman and CEO Staples Inc Staples Inc Staples is the world’s largest of⇒ce products company.000 sq. HVAC optimization.000 kWh of energy for their solar program. ranked No. preventing the release of 12. LEED Certi⇒cation. Staples has 34 solar projects throughout the US. Today. equating to the energy consumption of 1. To date. taken to new levels of excellence in the last two years through its partnership with EPA ENERGY STAR. An early champion of environmental leadership. Staples continues to exceed its corporate commitment to the environment while undertaking a domestic and international business expansion. A LEAN Six Sigma program incorporating energy waste elimination. GLOBAL LEADERS PROFILE Staples leadership and operational excellence are priorities to maintain a meaningful and effective longterm sustainability strategy. Energy ef⇒ciency is a key component of Staples Soul. Staples achieved an incredible milestone of 20. Staples understands that energy ef⇒ciency is a fundamental business advantage and is committed to making a difference. Staples today celebrates the success of its industrypremier energy ef⇒ciency program. The results are impressive: ■ ■ ■ The reduction achieved in energy consumption has prevented the release of more than 70.000 retail fa- cilities and ful⇒llment centers of which more than 140 have earned the prestigious ENERGY STAR award in 2010. ■ ■ December 2010 insight 101 . Six Sigma projects. 5 among all retailers. awareness programs. lighting retro⇒ts. Staples has been actively engaged for more than a decade in a wide range of energy ef⇒ciency programs designed to preserve the environment. Staples has 34 solar installations throughout North America and just passed 20 million kWh for total solar production. facility energy audits. Staples is proud of numerous awards for its high operational performance and environmental management. hybrid vehicles to raise ⇓eet ef⇒ciency. These fully integrated energy programs demonstrate the company’s genuine commitment and are designed to help businesses and customers “make it easy” to be good stewards of the environment. Operates a 385 KW fuel cell which supplies 90% of the base building electrical requirements for a 330. usage metrics and store re-commission was rolled out in 2010. a holistic approach to achieving environmental excellence. Staples has established an impressive track record of performance and credibility while delivering a positive ⇒nancial index. awareness training. with 2009 sales of $24 billion and 91. they have reduced carbon emissions by 9% from 2001 to 2008. Staples committed to reducing their absolute carbon emissions by 7% from 2001 to 2010.700 tons of CO2. and includes the development and sourcing of environmental products. Through these progressive programs. DC in California.SPECIAL ADVERTISING SECTION Ronald L. their Wake Up Kids school energy education program. sharing of best practices and analysis of site energy pro⇒les. alternative energy like solar and fuel cell. serving in 25 countries. easy access recycling services. renewable energy and environmental education. This approach creates superior value throughout the chain to employees.000 associates. In 2010.000. more than 600 ENERGY STAR products available to their customers through a network of more than 2. equating to CO2 emissions produced by the energy consumption of almost 6.000 homes in one year.000 tons of carbon dioxide equivalent emissions. They recognize the synergy among all components of their business. monitoring and reporting of metrics. ft. Staples’ leading program includes initiatives such as EPA ENERGY STAR certi⇒cations. a long-standing corporate commitment. Their uni⇒ed sustainable mission starts with energy ef⇒ciency at their ENERGY STAR distribution centers that transport products ef⇒ciently to their energy ef⇒cient stores. Statistics ■ ■ One of the largest corporate purchasers of green power. customers and stockholders.

an ABB company.insight Finalist Rising Star of the Year Nodal Exchange is the first commodities exchange dedicated to offering locational (nodal) futures contracts and related services to participants in the organized North American electric power markets. energy analytics. mobile workforce management and utility network management. As the largest network marketer of energy in the U. www. outage management. Nodal Exchange offers cash settled futures contracts for power on over 1. Ventyx personnel solve complex technical challenges with innovative solutions and deep industry-specific domain expertise. The company has expanded from its Texas base into Georgia and Pennsylvania and is on a fast track to continue the rapid rate of expansion.NodalExchange. energy operations. Ventyx for the first time closes the gap between operations technology (OT) and IT platforms and automation systems. Nodal Exchange’s auction and OTC trade platforms effectively facilitate trading. and market management systems and services). Dallas. and services to global energy. We offer a broad range of solutions to address our customers’ most critical needs. The result has been a strengthening of the deregulated marketplace and unprecedented growth in the direct sales segment. 214-800-4400. This achievement redefined the way energy retailers consider how to market energy to consumers. with participants enjoying significant capital efficiencies from Value-at-Risk margining as well as cross-margining. www. and other asset-intensive organizations. utility.. Acquired by power and automation technology group ABB in June 2010 and merged with the Network Management business unit within its Power Systems Division. data.Clearnet. meet growing energy demands and provide a smarter grid. communications. All contracts are central counterparty cleared by LCH. energy trading and risk management.net Finalist Deal of the Year Ventyx. . Texas. zones and nodes as well as a Henry Hub natural gas contract. including: asset management.800 hubs. is a leading business solutions provider of software.streamenergy. the company has been propelled to more than $2 billion in total sales in only five years in business. customer care. Ventyx is the industry’s sole supplier of both enterprise-wide information technology (IT) and power automation systems. distribution management.S. As a result of this unparalleled breadth of solutions. Nodal Exchange provides superior basis and credit risk management to its participants. Ventyx can be found across the globe improving our operational and financial performance with innovative applications of technology and expertise that help clients manage critical infrastructure.com Finalist Rising Star of the Year Stream Energy is honored to be recognized as an emerging industry leader in the global energy marketplace. By adding ABB’s network management software offerings (SCADA.

. and supports facilities for mooring and unloading LNG vessels. built and now operates the LNG Terminal located offshore Italy. which includes 56. The projects carried out in Russia. approximately 10% of the country’s natural gas consumption. administers a competitive wholesale electricity market. The offshore Terminal is designed around a concrete gravity base structure. PJM coordinates and directs the operation of the region’s transmission grid. have integrated activities locally and globally. 7 hydraulic. It was established in May 2005 by two global energy leaders. Asia and the Middle East to evaluate opportunities in the field of energy and become a regional power.350 miles of transmission lines.insight Finalist Deal of the Year Zorlu Energy Group. distribution and sales of natural gas and project process to “turnkey” installation and long-term maintenance and operation of power plants. Working to Perfect the Flow of Energy PJM Interconnection ensures the reliability of the high-voltage electric power system serving 51 million people in all or parts of 13 states and the District of Columbia. is the company that designed. in the northern Adriatic Sea. With a design regasification capacity of 8 billion cubic meters per year (775 million cubic feet of natural gas per day). the Adriatic LNG Terminal adds to Italy’s LNG import capacity and energy diversity. Pakistan and Israel are important steps in reaching this target. This state-of-the-art facility has been created to provide the Italian gas market with major new.ù. an Italian gas operator. the terminal is becoming a global gateway for LNG and in this way it is contributing to improved security of energy supply for Italy. Zorlu Energy Group’s installed capacity of 738 MW electricity and 192 tons/hour steam at 5 natural gas powered. in 1993. which houses two cryogenic LNG tanks. 1 geothermal. whose foundations were laid with the establishment of Zorlu Enerji Elektrik Üretim A. the regasification plant and a pipeline to transport the gas onshore. Zorlu Energy Group has cemented its presence in Europe.com Finalist Infrastructure Project of the Year Adriatic LNG. and plans regional transmission expansion improvements to maintain grid reliability and relieve congestion. Built with cutting edge technologies and boasting a highly innovative design. 115m wide and the main deck is 18m above sea level. diversified and reliable sources of energy. To learn more about PJM. Qatar Petroleum and ExxonMobil. visit us online at www. with Edison. extending from generation and sales or electric power. about 15 kilometres off the Veneto coastline. It is 375m long.pjm. 1 wind and 1 diesel plants in various regions of Turkey.

operational prowess. CNOOC Limited will be forever in the archives as the fi rst company from China to win a Platts Global Energy Award It is apparent that all companies. These winning qualities come from all over the world. are looking at smarter. on April 20. who take risks every day to supply us with precious electric power. certainly. oil. For the fi rst time in its history a Chinese company won a Platts Global Energy Award—and not just one. operating in more than 23 countries with . we cannot forget or ignore the tragedies that struck the industry this year. commitment. in its 12th year. but two. China.global energy awards A Reflection and Dedication Patsy Wurster. In addition. safety. the program’s most prestigious honor. heat in our homes and fuel in our tanks. This year’s Platts Global Energy Awards are dedicated to all the men and women who work for energy companies across the globe. But. As you read the following highlights of the winning submissions. 2010. Europe and the Middle East Steal the Show The Platts Global Energy Awards. has never been more global. to better showcase achievements. who can forget the images of the oil rig explosion and fi re in the Gulf of Mexico? These disasters remind us that energy can be a dangerous business. unique programs. innovation. complex projects or leading technologies. this year the Platts Global Energy Awards are organized in much the same way. This year’s winners reflect some of the best moments of 2010. no matter where they are located. you will also see that. We applaud you! program. Director. So. Platts Insight Over the past decade or so of the Platts Global Energy Awards the industry has experienced many ups and downs. customer satisfaction and sense of community know no geographical bounds. including Energy Company of the Year. more efficient. April was a very difficult month for energy with five reported coal mining disasters—four in China and one in the United States. and with many of the US based winners taking prizes for projects outside the US. With eight countries represented on stage at Cipriani Wall Street in New York City on December 2. Then. 2010 can be called the year of true globalization for the Awards. cleaner and more sustainable ways of producing energy through their vision and leadership. indeed. Many energy company employees put their lives on the line every day so we can have light in our lives. Platts Global Energy Awards and Publisher. leadership. natural gas and renewable energy. 2010 marked another key milestone in globalization for the 104 insight December 2010 Vision and Leadership CEO of the Year Rafael Villaseca Gas Natural Fenosa Spain CEO Rafael Villaseca led the merger between Gas Natural and Unión Fenosa in September 2009 resulting in the creation of a multinational company in the gas and electricity sector.

6 million customers. immediately accretive to free cash flow and EBITDA. However. respected companies together amidst such economic uncertainty was the story of CEO achievements for the past year. innovation and leadership in the forefront of judges’ minds. a phenomenal 400% return on the investment. With reputation. Villaseca rolled out the company’s integrated strategic plan for the next four years. Deal of the Year NRG Energy Inc United States of America Energy Company of the Year CNOOC Limited In May 2009. The musical score itself may have been good. they significantly reduced transaction costs and credit risk. David Crane led NRG Energy out of the pack. Specifically.global energy awards over 20 million customers. The quality of the list made selecting finalists. The successful and speedy closure of the Reliant acquisition proved to be a critical factor in NRG winning this battle and remaining an independent company. while employing the other to make strategic moves into the market impressed the Platts Awards judges. hostile takeover with one hand. The resulting upward bid did not sufficiently recognize Reliant’s value and NRG shareholders rejected the proposal in July 2009. Convincing its shareholders to stick with his vision. From the start. by managing all of this at a remarkable pace. which is even more noteworthy due to the fact that NRG was confronting a hostile takeover attempt with a would-be acquirer at the time. . The merger generated value for all its stakeholders including increased profits for shareholders. both the opportunities and risks were known. bringing home China’s first Global Energy Award. CNOOC stood out. This transaction closed in a mere 60 days. and steadily advanced its intensive engineering. construction and development activities. especially challenging. By backing Reliant’s load-serving requirements with NRG’s generation in ERCOT. Reliant’s adjusted EBITDA was $642 million in 2009 and $385 million in 2010—over $1 billion total as of June 30. and ultimately picking one winner. which provides electricity service to nearly 1. In 2009. it became strikingly clear to the judges that Rafael Villaseca’s leadership in bringing these two large. NRG completed the China CNOOC Limited. ethics. The CEO of the Year category typically attracts a large number of nominations. or $4 per share. one of the world’s largest exploration and production companies. CNOOC deployed its operation resources. the merger and integration was carried out within the planned time-frames contributing to greater operational. additional career options for employees and social development for communities in the countries in which it operates. more reliable player in the competitive Texas electricity market.5 million acquisition of Reliant Energy’s Texas retail business. measured and presented with full transparency. The shrewd leadership and visionary tactics of fending off an aggressive. Reliant has already proven to be a highly profitable investment. financial and tax efficiencies. substantial shareholder value and integrating it quickly to maximize NRG’s earnings. integrated services for its customers. Within the first year after the end of the purchase process. NRG essentially compelled the other company to either increase its bid to reflect this additional value or walk away. 2010 Energy Producer of the Year. This year was no exception. By creating additional. made strong strategic investment plays in 2009 and 2010 pushing its way onto the global scene. The combination of Reliant’s retail business—the second largest mass market electricity provider in Texas—and NRG’s wholesale power generation business created a strong. Through Villaseca’s leadership. but the conductor made all the difference to the performance and guaranteed its success. December 2010 insight 105 $287. 2010. In the first 14 months of NRG ownership.

This was quickly adopted by other transmission operators. PJM’s sustained operating performance and commitment to ethical behavior among its market participants has set a high standard for all competitive energy markets and earned them the 2010 Industry Leadership Award. a threshold to surpass. PJM focused attention and diligent efforts toward defending the integrity of its markets—an intangible yet critical component of any energy marketplace. CNOOC demonstrated its commitment to becoming a “world class” energy company. further contributing to its production growth. this category brought the most vigorous debate. competitive markets and positive results of a robust transmission planning process. but also to pay close attention to various stakeholders by encouraging development between the company and the community. most innovative leader among independent grid operators in reliability. CNOOC also treated social responsibility as another leading priority. all of which was reimbursed to PJM member companies who had covered the costs of the original default. return $1 billion in working capital back to PJM member companies and enact stronger credit rules for affiliated firms under one corporate umbrella.16 billion in Chesapeake’s Eagle Ford shale gas project in October of 2010. While focusing on making great efforts to provide clean and reliable energy to the community. Three key actions by PJM have strengthened wholesale electricity platforms in the US: ◆ Initiating credit reforms to accelerate settlement processes. CNOOC successfully completed several significant acquisitions. greater confidence in the stability and fundamental fairness of markets. Industry Leadership Award PJM Interconnection United States of America PJM Interconnection has made a unique contribution to the foundation for competitive wholesale electricity markets. the impressive number of new discoveries and successful appraisals strengthened the foundation of its long-term development. The result of this effort was an $18 million settlement with the defaulting entity. What stood out for the judges was China’s gutsy surge into the global energy scene this year. especially during this era when participants and the general public demand 106 insight December 2010 Lifetime Achievement Award During this year’s judging meeting. and between humanity and nature. achieve sustainable development and create value for the shareholders. enhance collateral requirements.global energy awards Streamlined management enabled the company to maintain producing oil fields at comparatively high production time efficiencies. Their organization stands out as the largest. . In the first half of 2010. ◆ Establishing a structure and environment throughout the PJM community that relentlessly identifies and shuns market manipulators. They not only challenged their management team to enhance CNOOC’s core competitiveness. rather. ◆ Pursuing the regulatory filings and civil lawsuit in pursuit of justice against a default by a hedge fund engaging in financial arbitrage within PJM markets. Every nomination had good competitive merit to compete and after long. So while each of the finalists in 2010 could have easily been winners for their contributions. healthy and sometimes prickly discussion the judges agreed this should not be a “winner take all” category. thereby reinforcing the strength and fairness of electricity markets. there were two awards for Lifetime Achievement that actually changed the industry in some way—one for entrepreneurial engineering and the other for propelling policy making. establishing a solid platform for South American business development and its aggressive move to invest up to $2. Through both its 50% interest holdings in Bridas Corporation. In exploration.

Moler is the longest serving member of FERC and the only member appointed by three different Presidents. President Clinton then nominated Moler to be Deputy Secretary of the US Department of Energy (DOE). For this. December 2010 insight 107 Elizabeth “Betsy” Moler Exelon Corporation United States of America Elizabeth “Betsy” Moler has been a preeminent voice on energy poli- . She retired from Exelon in June 2010. “Scoop” Jackson of Washington and Chairman J. Bush and Bill Clinton. at the urging of all 19 members of the committee. and continues activity in the sector with Avalon EcoPower. D. office where she served as executive vice president of Government Affairs and Public Policy. a project developing thermonuclear energy for the Atomic Energy Commission. Peter Cartwright was instrumental in the development of both geothermal energy and natural gas fi red generation. she remained a vital resource to public officials concerned about energy policy. President Clinton designated her to serve as the commission’s chair in 1993. a company he founded. which was presented to the Congress in June 1998. Cartwright was able to accomplish during his tenure at Calpine is a testament to his dedication to the industry. While at DOE. is well deserving of Platts Global Energy Awards’ Lifetime Achievement. In recent years. Moler joined Exelon Corporation to head its Washington. beginning as a staff assistant in the office of Senator Mike Gravel of Alaska. Cartwright has a long history of clean energy accomplishments including nuclear power plant development across the globe with General Electric and being the founder of the premier independent power provider. In 2000. It became clear to the judges panel that the creator of the Independent Power Producer market must be recognized in that this system has allowed important players.” As a visionary in clean energy who was ahead of his time. She went on to serve on the staff of the Senate Energy and Natural Resources Committee as counsel for both Chairman Henry M. In this position. as evidenced by her dedication to advancing the nation’s energy and environmental policy. the judges bestowed the honor of Lifetime Achievement to Peter Cartwright of Avalon EcoPower. Moler. many of them finalists for a Global Energy Award this year. His leadership style was to empower his people with responsibility and authority and then “get out of their way. testifying before Congress and FERC on numerous occasions.W. Calpine Corporation. to build their companies. She was reappointed to the commission by Presidents George H. Moler was a staff member for 20 years on Capitol Hill.C.global energy awards Peter Cartwright Avalon EcoPower United States of America Peter Cartwright has led a distinguished career in the power industry including: Princeton University’s Project Matterhorn. He effectively created the IPP sector for developers with scale which has endured over 25 years. During her time on the Committee. she was the principal architect of the Clinton Administration’s Comprehensive Electricity Competition Act. Bennett Johnston of Louisiana. The sheer magnitude of the power plant development that Mr. cy throughout her 40-year career in Washington. Cartwright has often been recognized for his entrepreneurial spirit and vision. D. He developed a reputation as a shrewd deal maker and excellent risk manager.C. President Ronald Reagan nominated her to serve as a commissioner on the Federal Energy Regulatory Commission (FERC). In 1988. she was the principal staff member responsible for all natural gas issues and helped craft the Natural Gas Policy Act of 1978. Moler has worked tirelessly with many in the utility and NGO communities to persuade Congress to pass climate change legislation. 19 years with General Electric’s Nuclear Energy Division. 21 years with Calpine as founder and CEO.

it is taking prudent. For offshore deepwater settings. Examples include the Bahia Blanca (Argentina). and gives refining a new face. and Mina AlAhmadi (Kuwait) GasPorts. Wind. Excelerate developed facility designs to meet two distinctive natural gas delivery challenges. and with innovative business strategies. expanded energy efficiency programs. clean energy technologies. Argentina’s LNG imports represented 7% of the national consumption. ship-to-ship transfer is now the backbone for the year-round delivery of LNG supply into locations such as Kuwait and Argentina. they took ostensibly large risks and went against the norm of this industry. Excelerate proved a dubious segment and many nay-sayers flat wrong. was awarded Downstream Operations of the Year. Xcel completed a major emissions reduction project in Minnesota that included converting two coal-fired plants to natural gas facilities and completely refurbishing a coal-fired plant. Xcel has invested in smart grid like no other company by launching the fi rst US SmartGridCity. a technology pilot taking place in Boulder. Colorado. It is building a clean energy future through use of advanced. Kuwait has imported approximately 1.global energy awards Operational Excellence Downstream Operations of the Year Excelerate Energy United States of America Excelerate Energy is the world leader in developing innovative solutions for both expanding and emerging LNG markets. Since the launch of new transfer operations in August 2009. Environmental leadership has been. while managing to achieve outstanding financial results. Near-shore/dockside applications utilize GasPort technology using a variety of configurations to further extend their flexibility. The judges applauded Xcel’s Demand Response model and recognized their renewable energy portfolio as one of the best. an important part of Xcel’s overall strategy. In embracing environmental leadership. During the winter period.” stated the judges. and will continue to be. . It was these impacting facts that created strong consensus among the panel. Excelerate designed the Gateway system which enabled the fi rst ever discharge of natural gas through a Submerged Turret Loading (STL™) buoy system. Geographic advantages contribute to their ability to increase renewable energy resources at a reasonable cost to customers. They felt this type of operation differentiates downstream. “With their novel operations in LNG. In 2009. Teesside (UK). allowing Xcel to explore smart-grid tools in a realworld setting.8 MMt representing about 20% of the nation’s total natural gas consumption. With over 50 successful commercial operations just within the past year. The judging panel for this year’s Awards was very pleased with Excelerate’s entry. The Gateway concept is demonstrated in the design of Gulf Gateway and Northeast Gateway Deepwater Ports located in the Gulf of Mexico and Massachusetts Bay. 108 insight December 2010 Power Company of the Year Xcel Energy United States of America Despite the economic challenges of the past couple years. biomass. respectively. Xcel Energy stayed true to its commitments to the environment and to its customers and communities. balanced steps to reduce the impact of their operations on the environment while promoting technological and public policy advancements that will encourage a cleaner electric system. Its 92% positive customer satisfaction score is an improvement of seven percent since 2006. Electric system reliability continues to be the biggest contributor toward customer satisfaction in all Xcel’s jurisdictions. hydro and solar energy represent 14% of their energy mix. Xcel’s strategy goes beyond the traditional mission of a regulated utility. and in doing so. Under Richard Kelly’s tremendous stewardship.

CNOOC established a solid platform for business development in South America. which convert methane into energy. into a profitable and successful business. All this was achieved under the leadership of an experienced team that successfully managed the integration of new business. Increasing the share of ownership in the Panyu 4-2/5-1 oil field added to its low risk assets in the core operation area. Its enormous impact on the climate. and are anticipated to become a new base for its reserve growth. Green Gas now covers CMM. and unbelievable 3-year growth rate demonstrated very precisely just what the Rising Star Award is all about. CNOOC Limited’s independent explorations resulted in 15 new discoveries and 11 successful appraisals. The judges believed CNOOC stood above the rest due to its strong push onto the global scene—redefining itself as a world class player.global energy awards Energy Producer of the Year CNOOC Limited China In 2009. BV Netherlands Since its foundation in 2005. which results in the elimination of significant greenhouse gas emissions. Green Gas International has turned the idea of developing Coal Mine Methane (CMM) and landfill gas (LFG) projects. It has since 2007 constructed some 38MWeq of projects in Czech Republic. This arises through the conversion of methane and waste into energy. and its average daily net production was 623. In 2009.1 billion in Chesapeake’s Eagle Ford shale gas project in October of 2010. landfill gas owners. offshore China. more than 20 projects were under construction and all have been operating smoothly. mergers and acquisitions and entering new markets. the expansion into new markets and the management of complex partnerships with mine. which is headquartered in the Netherlands. CNOOC Limited landed the prize. This entire category was brimming with good nominations challenging the field. Green Gas. Rising Star Award Green Gas International. CNOOC Limited successfully completed several significant acquisitions. Showing its strength. The company achieved a CAGR in revenue of 354% between the calendar years 2006 and 2009. now operates around 50 projects in 9 countries. 11 new fields were started as a result of effective project management. Outside of China. With multiple moves to acquire and strategically merge. Green Gas stood out in very significant ways. Green Gas brings significant environmental and economic benefits to the communities in which it is active. putting an exclamation point at the end of an exceptional year. CNOOC made two discoveries and one successful appraisal. CNOOC’s reserve replacement ratio (RRR) amounted to 163%. In terms of production sharing contracts (PSC) exploration. These include many independent discoveries in the adjacent area around Shijiutuo uplift and Liaodong Bay in the Bohai area. producers of biowaste and biomass and the carbon market. December 2010 insight 109 . Through the technical service contract for Missan oil field in Iraq. During 2009. biomass and biowaste. Some very powerful nominations from international companies were submitted in this category this year. CNOOC entered this resource rich area along with the super-majors.896 BOE. As a result of its operations.66 billion barrels of oil equivalent (BOE). whereas its owned-net proved reserves of approximately 2. LFG. It has methodically expanded its portfolio through a mixture of organic growth. Colombia and Ukraine. detailed in its nomination. CNOOC invested $2. Green Gas currently reduces green house gas emissions by over 3. USA. In 1H2010.0 million tons of CO2 equivalent annually. CNOOC’s efforts resulted in two new discoveries and one successful appraisal. Through its 50% interest holdings in Bridas Corporation.

BGE went from offering no energy efficiency programs to offering ten diverse programs for all customer segments. BGE’s strategic promotion of these programs received praise from key stakeholders including the Maryland Energy . to new construction and equipment purchases. in a high quality manner and they are still experiencing tremendous success. Residential programs included: lighting discounts. was a late bloomer in energy efficiency. However. national and international markets. recycling (freezers and refrigerators). water. An integrated marketing plan helped build awareness and motivated customer participation. the District Governments and local NGOs. In 2009. Operational efficiencies and well-designed programs appealed to a variety of customers. These multi-faceted programs continue to provide security in OMV’s operations while building up the quality of life in Pakistan. The panel of judges 110 insight December 2010 recognized that OMV’s commitment to develop their community in such an unstable environment was exceptional and courageous. health. A Mother Child Health Care Centre for maternal health care and a Family Medical Centre for emergency and diagnostic services along with outreach health care services for remote communities were established. Over 15% of residential customers participated in the first year. Home Performance with ENERGY STAR® comprehensive audits. Energy Efficiency Program of the Year —Energy Supplier Baltimore Gas & Electric (BGE) United States of America Baltimore Gas & Electric. agriculture and livelihoods identified through baseline and community needs assessment studies. Working in collaboration with the local populace. ENERGY STAR® for New Homes and Limited Income Energy Efficiency. by its own admission.global energy awards Outstanding Programs Community Development Program of the Year OMV Pakistan Pakistan OMV Pakistan made a smart strategic move in giving back to the very communities in which it continues to operate. Water supply schemes are provided in areas where water resources are scarce. the development projects were brought in line with the United Nations Millennium Development Goals and cover the sectors of education. Overcoming all these challenges with impressive results won over the hearts and minds of the judges. major renovation and end-of-life equipment replacements. The community development program of OMV Pakistan aims to support integrated and sustainable initiatives contributing to the well being of the communities in its operational areas. The programs’ aggressive goals were achieved in record time. they blossomed in a big way. Modern farming techniques are introduced by setting up fruit demonstration farms. in 2009. OMV took the first step toward acquainting the local community with its basic educational right by running 63 primary schools in the remote villages of its operational areas. Furthermore. OMV has been implementing a Hepatitis B vaccination program for local communities. BGE provided incentives and engineering services for projects from retrofitting existing inefficient equipment. an Online Energy Calculator. within budget. BGE introduced a comprehensive portfolio of residential and commercial energy efficiency programs to add to the already successful BGE Smart Energy Savers ProgramSM set of Demand Side Management initiatives. Its operational areas are predominantly rural. energy problems are resolved by providing electricity to 13 villages comprising of 121 households and vocational skill training is provided to local women as is support to local artisans by marketing their products in local. For commercial and industrial customers. Quick Home Energy Check-up (a modified energy audit). where the communities are deprived of the very basic necessities of life. appliance rebates. HVAC equipment and services rebates.

In addition. one of the world’s leading retailers. they are achieving big results. more sustainable business. syngas and liquid fuels (e. Not only are their aspirations large. Smart Grid and smart metering solutions. incorporated all vital functionalities that are indispensable for a modern energy management system including meter data management (MDM) and advanced metering infrastructure (AMI) support. Tesco’s highly ambitious goals impressed the judges. including reducing its overall carbon emissions by 50% by 2020. With programs like these. provides energy management. CleanEnergyTM. has been able to save millions. combined.g. Recognizing the carbon footprint of its business. EnergyICT’s sophisticated energy management platform. an Elster Group Company. in 2009 the company committed to: ◆ Green Energy Initiative of the Year Alter NRG Corporation Canada Alter NRG Corp is a publicly traded company pursuing alternative energy solutions to meet the growing demand for environmentally responsible energy in world markets. that . Alter NRG is already providing clean energy solutions worldwide by conDecember 2010 insight 111 Become a zero-carbon business by 2050 ◆ Reduce the emissions of the products it sells by 30% by 2020 ◆ Help customers reduce their carbon footprint by 50% by 2020 ◆ Halve emissions from their 2006/07 baseline portfolio of buildings by 2020 ◆ Cut emissions for stores built 2007 to 2020 to half the CO2 of 2006 stores ◆ Reduce emissions per case delivered by 50% by 2012 One of the key partnerships Tesco formed to help it significantly reduce its energy consumption was with EnergyICT. with a direct influence on the reduction of CO2 emissions: the total energy consumption of all Tesco stores in the United Kingdom. Tesco set aggressive goals to create a greener. Through its wholly-owned subsidiary. Baltimore Gas & Electric will likely be one of the industry standards well into the future. has plummeted by 20%. Energy Efficiency Program of the Year—Commercial End-User Tesco plc United Kingdom of Great Britain By reducing total energy consumption by only a few percentages. Tesco’s awareness on energy consumption has generated enormous savings on its energy bills. This was made possible through introducing and maintaining continuous enterprise wide energy efficiencies. which helped Tesco to data-mine the vast quantities of energy information and highlighted the stores’ areas of energy inefficiency. Its impressive 18-month results swayed the judges to honor the late-comer to the efficiency party over some of the veteran suppliers who have been leaders in efficiency over the past decade. Alter NRG Corp is commercializing the industry leading plasma gasification technology to provide renewable and clean energy solutions from a variety of low value inputs such as waste and biomass to produce various energy outputs including electrical power. enabling consumers to reduce their carbon footprint and reduce the cost and volatility of energy bills using the energy from the earth. EIServer. To achieve this. ethanol and diesel). Alter NRG Corp’s objective is to capitalize on the rapidly growing geoexchange residential and commercial heating and cooling market. Tesco. Through its collaboration with EnergyICT. through its other wholly-owned subsidiary. Westinghouse Plasma Corporation.global energy awards Administration and won recognition from the Association of Energy Services Professionals’ national chapter and the American Marketing Association’s Baltimore Chapter 2010 Marketing Excellence Award. Tesco is well on its way to obtaining these inspirational goals.

With two proven technologies.global energy awards verting waste and variable low grade feedstocks into useable energy like power or ethanol. Fluor successfully provided feasibility. The fact that this 5-year project was completed early. China. Alter NRG’s/WPC’s proven plasma technology can be found around the globe. cox Power Generation Group (B&W) designed and installed two key components of the project—scrubbers to remove sulfur dioxide and selective catalytic reduction equipment to remove nitrogen oxides. without any forced outages of the existing boiler units. Bechtel Power Corporation served as the engineering. the Cumberland Lock and Dam. FirstEnergy began a $1.H. With over $100 million spent on research and development. construction and management accomplishment by some of the most accomplished companies in the construction business. producing impressive results under the most demanding industrial applications. Sammis Plant in Stratton. located in approximately 90 feet of water. The technology has been used to develop the world’s largest hazardous waste plasma gasification facility and North America’s first commercial-scale plasma gasification project to receive regulatory approval.8 billion project to retrofit state-of-theart air emission controls at the W. the complexity associated with integrating the emissions control equipment with the seven existing boiler units and the logistical issues associated with completing the project in coordination with on-going plant operations. 140 miles offshore in Bohai Bay. The . Judges acknowledged that Alter NRG took a 20-year-old technology and implemented it in a way no other company has managed to do. has been called the most difficult air emission control retrofit project in the country because of the extremely limited space for installation of the new equipment and systems. State Highway Route 7 (SR 7). design and procurement contractor for the majority of the project and general contractor for the construction work. Bechtel’s nomination put into perspective the significant logistical challenges and constraints resulting from the site location adjacent to the Ohio River. and final tie-ins were coordinated and integrated with on-going Sammis Plant operations and planned outages. and within the original budget is directly related to this detailed planning and integration. and then planning the project schedule. As further evidence of the challenges of this site location. Premier Projects Energy Construction Project of the Year Bechtel Power Corporation / FirstEnergy / Babcock & Wilcox / Stantec Inc United States of America In 2005. While the judges agreed that retro-fitting coal fired power plants is not a new concept. Additional engineering services were provided by Stantec Consulting Services. procurement support. more than 18 months were spent selecting the technology and optimizing the system designs. 18 patents and over 30 years of operation. detailed engineering. hook-up and commissioning support and the secondment of personnel for the Bohai Bay Phase II Development Project. The project sequence. as subcontractor to B&W. completed in June of 2010. construction support. a concrete deck over three football fields in length was built in the 1980s over SR 7 for a previous retrofit of fly ash controls. FEED. The project. this mega project stood out as a world class engineering. various project scopes. two whollyowned subsidiaries and a twofold objective. Overall. Ohio. the Village of Stratton and the Norfolk Southern Railroad. Babcock & Wil112 insight December 2010 Engineering Project of the Year Fluor Corporation United States of America Beginning in 2003. Alter NRG is poised to provide solutions for the key issue of our time: maintaining the balance between energy and the environment.

Leading Technologies Commercial Technology of the Year Suniva United States of America Solar cell manufacturers are currently split into two categories: low-cost. its unique challenges.2+% of available sunlight into energy and it has plans to reach 20+% efficiency by December 2010 insight 113 Infrastructure Project of the Year Adriatic LNG Italy Terminale GNL Adriatico Srl. They were most impressed by the sheer scope of the project. one of the largest in the world.global energy awards project. and now in the operational phase. built and now .000 barrels of oil per day of production. it is the fi rst significant new gas import facility for Italy in 6 years. Manila and Shanghai offices. Built with cutting edge technologies and boasting a highly innovative design. The safety record for this project was remarkable with zero lost time incidents on more than 3. This facility was created to provide the Italian domestic gas market with a major new. and the innovative solutions in solids handling and power generation/distribution also set this project apart. is the company that designed. and can store two million barrels. the Adriatic LNG Terminal adds to Italy’s LNG import capacity and energy diversity. The Terminal is highly energy efficient. overcoming many regulatory and permitting challenges in the course of its development. with a regasification capacity of 8 billion cubic meters per year (775 million cubic feet of natural gas per day). Fluor created value through world-class design and quality support services in addressing offshorespecific challenges such as interface management and weight control.000 bopd. approximately 10% of the country’s natural gas consumption. The topsides modules alone weigh more than 30. The company is currently manufacturing solar cells that turn 18. The floating production. storage and offloading unit. It is also the fi rst ever facility to incorporate LNG storage into a concrete Gravity Based Structure (GBS). In addition to generating $167 million in approved value awareness savings for the client. Efficiencies in the repetitive design of the fixed platforms saved an additional $65 million. low-efficiency and high-cost. The project also includes five 40-slot wellhead platforms and 55 kilometers of subsea pipelines. can process 190. Throughout construction. The project was recognized by this year’s judges as one of the most strategic operations in the region with the potential to improve competitiveness in the Italian natural gas market. commonly known as Adriatic LNG®. The project achieved an excellent safety record which continues since its start-up. safety and the environment have been the first priority for Adriatic LNG. The Adriatic Terminal is the world’s fi rst offshore liquefied natural gas (LNG) receiving and regasification facility. utilizing waste heat recovery from the power generators and sea water to provide heat for the regasification process.000 metric tons. operates the first-ever built offshore LNG regasificiation terminal. Suniva is bridging the gap by offering highly efficient cells at low cost. The Bohai Phase II Development Project is the largest Fluor-executed offshore project measured in services revenue and the fourth largest project in Total Indicated Cost. And. This project wowed the judging panel and resulted in its only unanimous decision in 2010. The one-of-a-kind technology used for crude separation via centrifuges. highefficiency.4 million manhours expended in their Houston. Their work-sharing effort saved $50 million in engineering costs. safe and reliable source of energy. the innovative solutions that Fluor provided. jointly owned by ConocoPhillips China (COPC) and China National Offshore Oil Corporation (CNOOC). but more importantly. was for the development of an oil field with a capacity of 190. measures 320 meters long by 63 meters wide.

it simultaneously stated that it had secured over $1B in orders. Innovative process changes combined with improved manufacturing techniques. With a proven technology. Oyster 1 was officially switched on at the European Marine Energy Centre (EMEC) test facility in November 2009—making Oyster one of the few wave energy technologies to go from the drawing board to full-scale power production. The compa114 insight December 2010 . In essence. eventually without subsidies or incentives. reductions in raw material consumption and enhanced cell efficiency are making Suniva’s vision a reality. Oyster’s location is also innovative. to having over $1 billion in 2010 orders and a “sold-out” status through 2011. Suniva’s technical sophistication has allowed the company to continually improve its efficiency. Suniva’s technology is bringing the solar industry closer to parity with traditional energy generation costs. the waves are a maximum 12 meters high. whatever the weather. Suniva’s innovative solar cells are helping move solar into the mainstream. the company has exclusive rights to approximately 20 years of intellectual property from Georgia Tech’s University Center of Excellence in Photovoltaics. Exploding out of the blocks in 2008 as a start-up. Aquamarine Power stole the show in this Platts Global Energy Awards’ category. In addition to its own research and development. Highly efficient cells are important because they increase the amount of power produced by each module in a solar array. Aquamarine Power is driving innovation in a brand new industry which will help secure the world’s energy future. By locating Oyster near the shore. This decreases hardware and installation costs. allowing customers to create more power in a smaller space compared to less efficient cells. and there are only seven moving parts offshore. ny’s innovative technology combined with a pioneering route-to-market strategy is leading the way in an exciting new renewable energy sector. This inherent survivability means there is no need for complex control systems or for Oyster to shut down in stormy conditions—it will continue to produce power. Suniva is making solar “sensible” for everyone who needs power and has access to sunshine. The company is sold out into 2011. The Oyster technology is now operating in the harsh seas off the western coast of the Orkney Islands in Scotland. ■ Sustainable Technology Innovation of the Year Aquamarine Power United Kingdom of Great Britain Aquamarine Power developed an innovative product called “Oyster” which produces clean sustainable electricity from ocean wave energy. more materials.global energy awards the end of 2011. All of the complex electronics are onshore. reduce climate change and create sustainable economic development through job creation. The company’s commercial success has been evident since its launch— when Suniva announced that its first manufacturing line was operational. significant private and public investment. a ground-breaking joint development agreement with a major United Kingdom utility and exclusive development rights to the first 200MW Oyster wave farm. As the waves get bigger it is pushed further under the water allowing the excess energy in the wave to flow over the top of the Oyster. the device naturally avoids the massive storm forces which it would be exposed to in the open ocean. which require more space. A key factor in Oyster’s innovation is that it has been designed to survive. By the time a storm reaches the Oyster. put Suniva at the top of the category for the judges. These big waves push the Oyster towards the seabed before it bobs back up to meet the next wave. and thus. the device is simply a large pump which provides the power source for a conventional onshore hydro-electric power plant. In other words. with exports to Europe and Asia amounting to more than 90% of its sales.

(“Scoop”) Jackson and J. We take this occasion to salute Betsy Moler. Betsy has been a leader in shaping our industry.Congratulations. © Exelon Corporation. From her time as counsel and senior counsel for the United States Senate Committee on Energy and Natural Resources under Senators Henry M. we particularly thank Betsy for her service. both to our nation and to our industry. While we salute all of tonight’s finalists. 2010 . to her tenure as a member and chair of the Federal Energy Regulatory Commission (FERC) and as Deputy Secretary of the United States Department of Energy. who served as Exelon’s Executive Vice President of Government and Environmental Affairs and Public Policy. Bennett Johnston. on her recognition as a finalist for the Global Energy Lifetime Achievement Award.

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STX Transco. . .32-3. . . 47 Nodal Exchange. . . .A. . . . . . 90. . chairman of the Public Utilities Commission h . . .25-24. . . .25 -2. . .040 +0. . . . In keeping with sound public policy. . . . . . . . . . . . . .68-3.93 Transmission Highline. .com Gas Daily Tuesday. . . . . . . . . West ERCOT. . .25 5. . . PUCO OKs FirstEnergy electric security plan E After delaying a decision for several months. . . . . . . . .A.04 29. . . . . . . . . .6 cents to expire Friday aton new 11-month low. / Number 170 / Tuesday. .50-42. .75 N. . . . . . . . Gas.50-19.46 vironmental Southern. . Permian -0.Pakistan State Oil’s flood damage costs to rise 3 28. . . .A. .66-3.005 +0.500 825 N. 40. . . . . . North ERCOT.630 +0.71-3. . . . Florida 28. .A.68-3. electric vehiions tailpipe carbon dioxide emissions that are cles would receive an A+. . . . . . .2%. .050 +0. .66 3. . . 102 Ventyx . . . . . . . r reporters a conference 35. . . . . EPA assistant administrator for air terms of miles per gallon or miles per change. . . . . . adding the new system Japan 2 VACAR 19. . . .68-3. . . . . Houston ERCOT. . 4 Southern Company . .7 kilowatt hours of electricity 5 3. . . . . . and radiation. . . . . . . . .95 63. . 56 North Delhi Power Ltd . . . . . . . . . .5% or 380. .66-3.A. . . . .58-3. m Cleveland Electric Illuminating and Toledo Edison subsidiaries. . . . . . . . . . . .00-40. . . .000 +0. . South Index Change Range Deals Volume Avg $/Mo 39. intoDOT and 33. . . .com ] Megawatt Daily Thursday. .25 -2. . . . . . . . . . . . . . . . . . . . 89 CONSOL Energy . . .66-3. . . 97 Oracle . . . . .67-3. . zone 0 Tx. . . . . . . .350 source Waha 3. . . . . . . . . . . . . . .25-39. . . .A. 52 PJM Interconnection . . the October NYMEX gas futures contract gas flow to Turkey on ity in D. . . . . . . .25 VolumeN.73 3. . . .65 3. . . zone 1 East-Houston-Katy Houston Ship Channel Katy South-Corpus Christi Agua Dulce Hub NGPL. . . the Energy Information Administration said Monday. . .37-3. . .085 -0. . . . . . . . . . .26 -5. 42.045 (continued on page 2) www. . . .010 s tional miles-per-gallon stickers that automak.50 0.” t. .27 3. . . . . . . . . . . . . . . o on Off-Peak n the two proposed labeling options for 60 overloads on transmission lines inOne optionInterconnection which is the PJM under the initiative. . . . . . .A. . ca 2014. . . . . said the plan. . 103 Reach Key Decision Makers Worldwide Platts Readers Circle The Globe Advertise in Platts Newsletters • Thousands of energy professionals around the globe rely on Platts for timely news.065 trucks for decades. . . .00 anymore.25 N. . . . . East Texas-North (Continued a page 7) c labels “The old. .77 3. . . 87 Bechtel Power .00 N. officials said. . . . . . .730 +0.50-24.045 +0. accusing the PUC ch Would replace decades-old system old www. . . . .25 N. . . 13 American Municipal Power. . .7 cents higher Flow date(s): 8/31 ing scales for fuel efficiency. inside front cover Exelon . . . . . . the state’s residential su utility consumer watchdog. marking the first month-to-month decline since December. . . . . .A. . . . . . . . . . . . . 91 Cleco Corp. 18 Kosmos Energy . . neither labeling option would tract tumbled 16. . .60 3. .005 -0. . 93 Elster .00 N. . . . . . . . .78 -3. . . . .67-3. . . . 102 NRG Energy Inc . . .78 Volume Deals 334 828 41 116 722 3 460 336 1207 7 147 186 33 106 385 347 59 125 12 32 107 4 79 55 165 1 24 45 10 20 82 65 Heat. . . . .33 -0.67 300 N. 100 Staples Inc . . . .60 3.770 3. .37 -2. STX Tennessee. PJM itself says the data strengthen the e les portation. . . . . . . . .A. days. . . . t US proposes new fuel-efficiency car Range Deals VolumeContents ratings C Avgt$/Mo Southeast Index Change to include GHG emissions On-peak 24. . . . told N. . . . .615 3. .54 Oilgram News 39. .74-3. .86 Pakistan rtment tection Agency and the Department of Trans“We think a new-1.015 +0. . . . 103 SAIC . . . .50 -1. . 101 Stream Energy . . . . .A.680 3. blasted the order. Notably. 63. .20-3. . That approach would MARKET Gazprom Gazprom increases Trans.32-3. .09 he posed August 30 to replace the decades-old land. . West ERCOT.80 3. .83 3. . . . . . . . . The grades would be their wallets and the environment. . . . . hurricanes push October NYMEX higher Gas output falls for first time this year: EIA Natural gas production in the Lower-48 states in June fell 1. . . . . . back cover Singapore International Energy Week . .71 3. . . . . . .platts.49 3. . . 55. . . 82 Chesapeake Energy.695 3.020 -0. . Texok zone Tx.812/MMBtu. .020 Call today for more information at +720-548-5479 or download our media kit at www.A. . . . .775 3. . . 102 Xcel Energy . .52 39. .2% 27 66 ades ranging from A+ to D.platts. . . . .76 South Canadian that would also rank vehicles according to Entergy. . . .00 is necessary for label 28. . .50 12 39. . . . .000 Mcf/d because (continued on page 6) NGPL. .81 3. . Electric cars and Permian Basin prices e Both options would phase out the conven-likewise followed would be graded on a ratio that plug-in hybrids demand higher in many regions. . . . . .50-24. . . . . . . . . . . . . . . . . . . . . . . . . .44 3. .60-3. . . . . . through May 31. . . Houston ERCOT. . La. . . .A. 88 Capgemini . . . August 31. August 26. . . . . .8% or 300. the plan also g promotes energy efficiency programs and renewable energy cie resource development. . . .595 3. 86 ARMZ Uranium Holding Co . .85 3.710 KazMunaiGaz KazMunaiGaz plans NATIONAL output 4 ange. . 24. . . . . N. .00 N.25 N. . . . date: 8/30 letter grades and simply rank vehicles on slidalso lump cars and trucks into apromptthat line 4 line outage finished its first day as the metric month 10. .62-3. .” David StrickN.73 3.62-3. . . . .A. . 42. .34 told market 2 Western TVA.000 Mcf/d. . . . . .050 +0. 94 Indji Watch . . . . . . . . . 2011. Ohio regulators ec took less than five minutes Wednesday to approve a new electric n En security plan for FirstEnergy that calls for biennial power auctions nb starting in October on behalf of the company’s Ohio Edison. . . . . . . .A. Permian -0. . Eastern. . . from May levels. . . their greenhouse gas emissions. .00 7 24. . . . 2010 88 29.75 36. petroleum-centric labels. .92 3. . . . . . .00-40. . . ETX Tx. . . ending an eight-session prompt-month Iraqi Kurds slam oil ministry on RWE deal slide. . show even more need for the proposed Potomacby the Environmental Prod 22. .40 64. blamed for global climate change. . . . . . . . . . . . . 29. . . . But the Ohio Consumers’ Counsel. . .Japan to drill for gas hydrates 2011-2012 26. . . .57-3.A. . . . . . .58-3. . . . . . ShaMaran buys stake in Kurdistan explorer 5 3. . . . . . . . .75 call. .20 24. . . Eastern. . .platts. . . . . .00 19. . . . . 99 SolArc .A. . which runs from June 1. .80 3. . 103 AES Dominicana . .60 3. . . . . THE ance cars that use a lot of gasoline would n A second proposed option would omit the receive a the Atlantic. . . . . . . . . . . . . . . 96 NextEra Energy . . . . . . . . . . . . zone 1 Louisiana-Onshore South ANR. . . .50 N. N.68 3. . . analyst at PFGBest Futures. . . . .A. • Deliver your message to the right person at the right time in the right place. . . . .00-36. . . . . .50 -2.52-3. . 25 Cairn India Limited . . . .60-3. .25 public comments comments DOT EPA will take 33. . .67-3. . . . . . . . ss ative.37 3.A. . .00 24. simply Iran details gasoline self-sufficiency plan self sufficiency Louisiana Area 5 Carthage Hub 3. .88 Common 3. . . . Inc . .710 3. . . . . Iraqi Kirkuk crude oil flow to Ceyhan Area halted: El Paso.25-35.66 3. . . . . . . . August 31. .84 3. .000 ers have put in the windows of new cars and toused for every“post-expiration bounce” after the September conseemed be getting a one gallon of gasoline.40 New data prompt fresh look at PJM line options p Asia Pacific Asia Pacific (continued on page 10) Washington—The Obama administration proministration VACAR aren’t good enough -2. .00-36. . . . . . . . . . . .50 N. . . . . . . . Strickland said. . .11 40. Middle East price survey ($/MMBtu) s—as in the case of electric vehicles—as well as Under the letter-grade option. . . . . . . . . 18 Zorlu Energy Group .66-3. . . . .insight Advertiser Index Adriatic LNG . . . . . .38 3.68-3. .50 N. which the agency attributed to Hurricane Alex and pipeline problems.725 3. . . . 98 S-OIL Corp . . .650 3. . South Off-Peak ERCOT. . . . . . . . . . . . . . inside back cover Entergy Corp . . . North ERCOT. . . 36. . . . . . . . .430 +0. . . . . .higher crudeAVERAGE PRICE: 3.

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