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Global Natural Gas Competition 'Stiffer,' Russian Producers Leading, China Gaining

U.S.-based natural gas producers are producing less while Chinese and Russian operators are producing more, according to a ranking by Societe Generale.

The firm on Wednesday issued its eighth gas production rankings of listed companies. Analyst Thierry Bros said the global competition has gotten "stiffer on the production side" because of the prowess of Russia and China operators.

Until last year, the top three global gas producers had stayed the same, he said. Russia's OAO Gazprom was No. 1, followed by ExxonMobil Corp. and Royal Dutch Shell plc. However, the recent merger between Europe's Shell and BG Group plc will change the order of things (see Daily GPI,April 8). Shell would become the No. 2 gas producer once the merger is completed, while ExxonMobil moves to the No. 3 slot.

The gas wealth also is being spread around more. Nine companies in 2014 together produced more than 50 bcm/d, or 1.765 Tcf/d. In 2007, seven operators produced the bulk of the gas, according to Societe Generale.

London-based BP plc, the largest gas marketer in North America, lost its No. 4 position and is now ranked as the sixth largest global gas producer.  San Ramon, CA-based Chevron Corp. dropped to No. 9 from No. 6, while former No. 5, ConocoPhillips, dropped out of the ranking. The Houston-based producer is no longer an integrated operator after selling its refining operations but it is the largest independent in the United States. Today ConocoPhillips mostly is focused on oil production in the U.S. onshore.

PetroChina Co. Ltd. moved up to No. 4 in the latest ranking. OAO Novatek, Russia's largest independent gas producer, now is ranked at No. 7. Russia's OAO Rosneft also moved up to No. 8. France's Total SA also made a big move last year, to No. 5 from No. 7.

While Gazprom continued to lead the rankings, it actually produced less gas year/year, 15.68 Tcf (444 bcm) in 2014 versus 17.23 Tcf (488 bcm) in 2013 based on reduced demand from Europe and Ukraine. Sanctions against Russia, including against its oil and gas operators, were imposed following its seizure of Crimea and resulting conflict in Ukraine (see Daily GPIMarch 20, 2014). Gazprom's future looks more secure, however, after it obtained a $400 billion deal last spring to supply gas to China over three decades (see Daily GPIMay 21, 2014).

"Gazprom stays the undisputed leader with a 13% worldwide market share," Bros wrote. He said Gazprom CEO Alexei Miller indicated earlier this month that the company's production capacity "is much higher" at 617 bcm (21.79 Tcf), "allowing the group to ramp up production if demand for Russian gas picks up."

National oil companies together controlled around 43% of the global gas market in the latest ranking, while other listed companies held a 27% share. ExxonMobil and Shell each held close to 3% of the market, while BP, PetroChina, Rosneft and Total each had around 2%. Chevron had 1% of market share.

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