7 Indian firms among top 250 global energy companies

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As many as seven Indian companies figure in the list of the world's 250 top performing energy firms, with Reliance Industries, ONGC and NTPC grabbing the top Asian ranks.


In the annual rankings of Platts Top 250 Global Energy, ONGC and Reliance Industries have made into the top 50 with rankings of 23 and 39 respectively. ONGC has also been named as the third best performing energy company in Asia.

The ranking is published every year by Platts, a division of The McGraw-Hill Companies and a global energy and metals information provider.

Global oil and gas leaders have consolidated their energy businesses with the ranking led by Texas-based Exxon Mobil Corp, followed by the UK's BP Plc and Royal Dutch Shell Plc, Platts said.

Other Indian firms on the list include Indian Oil Corp (52), NTPC (103), GAIL (135), Bharat Petroleum Corp (203) and Hindustan Petroleum Corp (233).

According to Platts, China and India have dominated the sector leadership position. While ONGC has been named as the top Asian firm in the exploration and production (E&P), Mukesh Ambani-promoted Reliance Industries has topped the refining and marketing (R&M) list and NTPC has emerged as the top player in the independent power producers (IPP) category.

Both India and China have seven companies each on the list. However, China is represented by just Petrochina in the top 50 compared with two from India.

There were eight Indian companies on the list last year. However, Neyveli Lignite Corp, ranked 227 in 2006, is not on the list this time. While GAIL India has improved its ranking from 156 last year to 135 this year, ONGC, RIL, IOC, NTPC, BPCL and HPCL have all moved down the rankings. ONGC was ranked 20th, RIL at 30th, Indian Oil at 41st, NTPC at 90th, BPCL at 110th and HPCL at 122nd position last year.

Platts said the list scores the world's top performing energy companies on a combination of assets, revenues, profits and return on invested capital. Also, all the ranked companies have assets greater than $ 2 billion and are publicly listed companies.

Best performing Asian energy business was Petrochina, placed sixth worldwide, and ahead of many long-established western energy companies. It is followed by China Petroleum & Chemical Corp (Sinopec), India's ONGC, Thailand's PTT, and CNOOC from Hong Kong in the top five.

"Under the current volatile and competitive market environment, this year's rankings are more important than ever in highlighting the truly world class performers in the energy industry," said Victoria Chu Pao, Platts President in a statement.

The best performers in Europe, Africa and the Middle East were BP, Shell, Total, Norways Statoil and Italys ENI, in that order. In the Americas, Exxon Mobil, Chevron, Brazils Petrobras, ConocoPhillips and Valero Energy topped the table.

Meanwhile, the only non-oil and gas companies to break into the top 20 positions were French super-utilities EDF Energy and Suez, ranked 14th and 20th, respectively. Also, Germanys E.ON, Gaz de France, Italys Enel, Belgiums Electrabel and the UKs BG Group are among the top 30 in the list.

ABB-Powerful Forecast

ABB Ltd., the Swiss power technology company, has raised its outlook for the next five years, forecasting strong demand for new and upgraded power infrastructure in China, India and the Middle East.

The electrical engineering company is now targeting sales growth of between 8 percent and 11 percent. Operating profit, meanwhile, should rise at an annual rate of between 11 percent and 16 percent.

Both the figures are significantly above ABB's previous sales growth and margin expectations, but in line with market forecasts. ABB had widely been expected to lift its targets amid a global infrastructure boom and investors had already priced in their forecasts.

The company predicted its Asian market will expand by more than 50 percent by 2011, twice as much as in Europe and the Americas. The market in the Middle East and Africa is expected to increase 40 percent.

"Initiatives to optimize our global footprint will continue to bring both cost and growth benefits," said Chief Executive Fred Kindle. "At the same time, we will look for value-creating external growth opportunities."

The new targets from ABB, which has been performing strongly since facing near bankruptcy in 2002 amid a global economic downturn and costly asbestos litigation in the United States, are really strong.

This also shows how much ABB has improved over the past few years. Importantly, ABB's healthy position could enable it to make major acquisitions or pursue a multibillion dollar takeover in the automation sector, where ABB already is already a global leader. ABB could raise as much as $10 billion to sponsor a takeover.

A global economic downturn could still slow the company's growth, even though a feeling of rosiness prevails at present.

(Some forward looking statements on projections, estimates, expectations & outlook are included to enable a better comprehension of the Company prospects. Actual results may, however, differ materially from those stated on account of factors such as changes in government regulations, tax regimes, economic developments within India and the countries within which the Company conducts its business, exchange rate and interest rate movements, impact of competing products and their pricing, product demand and supply constraints

Investment bankers upbeat on India

India is largely insulated from the subprime crisis and will continue to see mergers and acquisitions, said investment bankers, speaking at a banking seminar.



“Indian corporates are largely under-leveraged and we will not see any drying up in the financing of large Indian contracts. Pricing of these deals may, however, be higher than what has been in the last few years,” said Tarun Kataria, Head, Investment Banking & Markets, HSBC, speaking at a FICCI-IBA seminar.

He added that the uncertainty due to a global credit slow down could continue for a while. Deals that are stuck will get repriced and restructured.

India may benefit

India, however, stands to benefit since most acquisitions are cash transactions and there are few leveraged buy-outs.

In 2007, there were more outbound deals in India than inbound ones both in terms of number and value. “There were 121 outbound deals for $27.98 billion while there were 51 outbound deals for $27.98 billion. This includes the Tata Steel-Corus and Hindalco-Novalis deal,” said R. Sridharan, MD and CEO, SBI Capital markets

Around 57 per cent of merger and acquisition deals (in terms of value) involved Europe and 34 per cent North America.

Investment bankers believe that the liquidity position in Asia, particularly India, is comfortable.

“However, globally, there is a backlog of $300 billion worth of loans, which are waiting to be syndicated,” said Nalin Nayyar, Managing Director-India investment banking, Lehman Brothers.