Bankruptcy Mayhem in the Oil Patch [Chart]
Total debt of newly bankrupted energy companies is soaring each month
The Chart of the Week is a weekly Visual Capitalist feature on Fridays.
Most investors are aware that there is significant carnage in the oil patch. Low energy prices caught overleveraged companies off guard, and it’s forced many of these companies to seek protection from their creditors through bankruptcy.
However, the pace of new bankruptcies is accelerating fast, and now bigger companies are being affected. This week’s chart shows that the 11 new bankruptcies in April 2016 carry a substantial debt load of nearly $15 billion – most of which is unsecured.
A quick look at the data, which we pulled from Haynes and Boone, LLP, tells the tale:
|New Bankruptcies||Total Debt||Avg. Debt Per Company|
In the first two months of 2016, there were nine bankruptcies. Not one of the companies filing had debts that exceeded $200 million.
In March, there were a total of seven new bankruptcies, including Venoco Inc. Venoco is a private company that is heavily oil-weighted with assets located offshore and onshore in Southern California. Venoco’s filing listed that it had $1.28 billion in debts, 71% of which are unsecured.
Meanwhile, April was the biggest month for oil patch bankruptcies in the last two years. A total of 11 companies filed, but even more meaningful to investors is that four of the bankruptcies were public companies with debts exceeding $1 billion.
Pacific Energy, formerly Pacific Rubiales, used to be the largest operating oil company in South America. Now, however, the company is in the midst of undergoing dramatic restructuring. Common shares have been delisted and the company is also seeking to get extensions on its $5 billion of unsecured debt.
Texas-based Ultra Petroleum, which has nearly $4 billion in unsecured debt, has dropped from the NYSE to the OTC as it too seeks protection. The stock’s 52 week high was $17, but it now shares are trading for mere pennies.
Two other big companies to go to court were Energy XII and Midstates Petroleum. They each owe roughly $3 billion and $2 billion of total debt, respectively. Energy XII operates 10 of the largest oilfields on the Gulf of Mexico Shelf, while Oklahoma-based Midstates is focused on the application of modern drilling and completion techniques in oil and liquids-rich basins in the onshore U.S.
The grand total of debt for all April bankruptcy filers was an astounding $14.9 billion, most of which is unsecured. For reference, the 42 energy companies that filed for bankruptcy in all of 2015 had a combined $17.2 billion in debt.
Ranked: The Largest Oil and Gas Companies in the World
Oil still makes up the largest share of the global energy mix. Here are the largest oil and gas companies by market cap in 2021.
The Largest Oil & Gas Companies in 2021
The pandemic brought strong headwinds for the oil and gas industry, and oil majors felt the blow.
Global primary energy consumption fell by 4.5% relative to 2019 and oil demand declined by 9%. For a brief period in April 2020, the price of West Texas Intermediate (WTI) crude futures went subzero, marking the largest one-day price plunge since 1983.
Some expected the demand crash to have a lasting impact on the industry, but it’s safe to say that 2021 has proved otherwise.
Oil Resurfaces as Energy Crisis Deepens
The world is facing a shortage of energy, and peak winter is yet to hit most parts of the globe.
Pandemic-induced supply restraints from producers, in addition to rising energy demand from recovering economies, have sent nations scrambling for petroleum products. Consequently, oil prices are resurfacing to pre-pandemic levels.
As of today, prices of WTI crude futures are at their highest levels in the last five years at over $80 per barrel. Furthermore, U.S. natural gas prices hit a 7-year high of $6.5 per million British thermal units (BTU) earlier this month. Elsewhere, European benchmark natural gas futures have surged 1,300% since May 2020.
Of course, the largest oil and gas companies are riding this wave of resurgence. Using data from CompaniesMarketCap.com, the above infographic ranks the top 20 oil and gas companies by market cap as of October 7, 2021.
Big Oil: The Largest Oil and Gas Companies by Market Cap
Given that we often see their logos at gas stations, the largest oil and gas companies are generally quite well-known. Here’s how they stack up by market cap:
|Rank||Company||Market Cap* (US$, billions)||Country|
|1||Saudi Aramco||$1,979||Saudi Arabia 🇸🇦|
|15||Duke Energy||$78.08||U.S. 🇺🇸|
|17||Southern Company||$66.64||U.S. 🇺🇸|
|20||Enterprise Products||$50.37||U.S. 🇺🇸|
*As of October 7, 2021.
Saudi Aramco is one of the five companies in the trillion-dollar club as the world’s third-largest company by market cap. Its market cap is nearly equivalent to the combined valuation of the other 19 companies on the list. But what makes this figure even more astounding is the fact that the company went public less than two years ago in December 2019.
However, the oil giant’s valuation doesn’t come out of the blue. Aramco was the world’s most profitable company in 2019, raking in $88 billion in net income. Apple took this title in 2020, but high oil prices could propel Aramco back to the top in 2021.
Although Standard Oil was split up a century ago, its legacy lives on today in the form of Big Oil. ExxonMobil and Chevron—the second and third-largest companies on the list—are direct descendants of Standard Oil. Furthermore, Shell and BP both acquired assets from Standard Oil’s original portfolio on the road to becoming global oil giants.
The geographical distribution of the largest oil and gas companies shows how global the industry is. The top 20 oil and gas companies come from 10 different countries. The U.S. hosts six of them, while four are headquartered in Russia. The other 10 are located in one of China, Brazil, Saudi Arabia, or Europe.
Big Oil, Bigger Emissions
Due to the nature of fossil fuels, the biggest oil and gas companies are also among the biggest greenhouse gas (GHG) emitters.
In fact, Saudi Aramco is the world’s largest corporate GHG emitter and accounts for over 4% of the entire world’s emissions since 1965. Chevron, Gazprom, ExxonMobil, BP, and several other oil giants join Aramco on the list of top 20 GHG emitters between 1965 and 2017.
Shifting towards a low-carbon future will undoubtedly require the world to rely less on fossil fuels. But completely shunning the oil and gas industry isn’t possible at the moment, as shown by the global energy crisis.
The Top 10 Biggest Companies in Brazil
What drives some of the world’s emerging economies? From natural resources to giant banks, here are the top 10 biggest companies in Brazil.
The Top 10 Biggest Companies in Brazil
In 2009, the at-the-time emerging economies of Brazil, Russia, India, and China held their first formal summits as members of BRIC (with South Africa joining in 2010).
Together, BRICS represents 26.7% of the world’s land surface and 41.5% of its population. By GDP ranking, they’re also some of the most powerful economies in the world.
But what drives their economies? We’re highlighting the top 10 biggest companies in each country, starting with Brazil.
What Are the Biggest Public Companies in Brazil?
Brazil isn’t just one of the largest and most diverse countries in the world, it is also an economic powerhouse.
With over 213 million people, Brazil is the sixth most populous country on Earth and the largest in Latin America. It’s also the wealthiest on the continent, with the world’s 12th-largest economy.
Once a colony focused on sugar and gold, Brazil rapidly industrialized in the 20th century. Today, it is a top 10 exporter of industrial steel, with the country’s economic strength coming chiefly from natural resources and financials.
Here are Brazil’s biggest public companies by market capitalization in October 2021:
|Top 10 Companies (October 2021)||Category||Market Cap (USD)|
|Vale||Metals and Mining||$73.03B|
|Petróleo Brasileiro||Oil and Gas||$69.84B|
|Banco Santander Brasil||Financial||$24.70B|
|Rede D’Or Sao Luiz||Hospital||$23.79B|
At the top of the ranking is Vale, a metals and mining giant that is the world’s largest producer of iron ore and nickel. Also the operator of infrastructure including hydroelectricity plants, railroads, and ports, It consistently ranks as the most valuable company in Latin America.
Vale and second-ranking company Petróleo Brasileiro, Brazil’s largest oil producer, were former state-owned corporations that became privatized in the 1990s.
Finance in Brazil’s Top 10 Biggest Companies
Other than former monopolies, the top 10 biggest companies in Brazil highlight the power of the banking sector.
Five of the 10 companies with a market cap above $20 billion are in the financial industry.
They include Itaú Unibanco, the largest bank in the Southern Hemisphere, and Banco Santander Brasil, the Brazilian subsidiary of Spanish finance corp.
Another well-known subsidiary is brewing company Ambev, which produces the majority of the country’s liquors and also bottles and distributes PepsiCo products in much of Latin America. Ambev is an important piece of Belgian drink juggernaut Anheuser-Busch InBev, which is one of the world’s largest 100 companies.
Noticeably missing from the top 10 list are companies in the agriculture sector, as Brazil is the world’s largest exporter of coffee, soybeans, beef, and ethanol. Many multinational corporations have Brazilian subsidiaries or partners for supply chain access, which has recently put a spotlight on Amazon deforestation.
What other companies or industries do you associate with Brazil?
Correction: Two companies listed had errors in their market cap calculations and have been updated. All data is as of October 11, 2021.
Technology4 weeks ago
Mapped: The Fastest (and Slowest) Internet Speeds in the World
Datastream4 weeks ago
Ranked: The Top 10 Richest People on the Planet
Personal Finance2 weeks ago
How Does Your Personality Type Affect Your Income?
Markets3 weeks ago
The World’s 100 Most Valuable Brands in 2021
Datastream3 weeks ago
Visualizing the Fastest Trains in the World
Misc3 weeks ago
A Visual Introduction to the Dwarf Planets in our Solar System
Markets7 days ago
The World’s Biggest Real Estate Bubbles in 2021
Misc4 weeks ago
Mapped: The 50-Year Evolution of Walt Disney World