Crude Oil in North America

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North America - Crude Oil 0205 - 0587 - 2010

Datamonitor. This profile is a licensed product and is not to be photocopied Page 1

INDUSTRY PROFILE

Crude Oil in

North America

Reference Code: 0205-0587

Publication Date: March 2011


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EXECUTIVE SUMMARY



EXECUTIVE SUMMARY

Market value

The North American crude oil market grew by 28.4% in 2010 to reach a value of $653.5 billion.

Market value forecast

In 2015, the North American crude oil market is forecast to have a value of $828.9 billion, an increase of

26.8% since 2010.

Market volume

The North American crude oil market grew by 0.8% in 2010 to reach a volume of 8.4 billion barrels.

Market volume forecast

In 2015, the North American crude oil market is forecast to have a volume of 9 billion barrels, an increase

of 7.1% since 2010.

Market segmentation

The United States accounts for 82.6% of the North American crude oil market value.

Market rivalry

Crude oil is the most actively traded commodity in the world and the market is dominated by large

conglomerates that are competing for ever dwindling resources which makes market rivalry strong.


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CONTENTS



TABLE OF CONTENTS

EXECUTIVE SUMMARY 2

MARKET OVERVIEW 7

Market definition 7

Research highlights 8

Market analysis 9

MARKET VALUE 10

MARKET VOLUME 11

MARKET SEGMENTATION 12

FIVE FORCES ANALYSIS 13

Summary 13

Buyer power 15

Supplier power 16

New entrants 17

Substitutes 18

Rivalry 19

LEADING COMPANIES 20

Chevron Corporation 20

ConocoPhillips 25

Exxon Mobil Corporation 30

Petroleos Mexicanos (PEMEX) 34

MARKET FORECASTS 38

Market value forecast 38

Market volume forecast 39

APPENDIX 40

Methodology 40

Industry associations 41

Related Datamonitor research 41

Disclaimer 42


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CONTENTS



ABOUT DATAMONITOR 43

Premium Reports 43

Summary Reports 43

Datamonitor consulting 43


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CONTENTS



LIST OF TABLES

Table 1: North America crude oil market value: $ billion, 200610 10

Table 2: North America crude oil market volume: billion barrels, 200610 11

Table 3: North America crude oil market segmentation: % share, by value, 2010 12

Table 4: Chevron Corporation: key facts 20

Table 5: Chevron Corporation: key financials ($) 22

Table 6: Chevron Corporation: key financial ratios 23

Table 7: ConocoPhillips: key facts 25

Table 8: ConocoPhillips: key financials ($) 28

Table 9: ConocoPhillips: key financial ratios 28

Table 10:

Exxon Mobil Corporation: key facts 30

Table 11: Exxon Mobil Corporation: key financials ($) 32

Table 12: Exxon Mobil Corporation: key financial ratios 32

Table 13: Petroleos Mexicanos (PEMEX): key facts 34

Table 14: Petroleos Mexicanos (PEMEX): key financials ($) 35

Table 15: Petroleos Mexicanos (PEMEX): key financials (MXN) 36

Table 16: Petroleos Mexicanos (PEMEX): key financial ratios 36

Table 17: North America crude oil market value forecast: $ billion, 201015 38

Table 18:

North America crude oil market volume forecast: billion barrels, 201015 39


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CONTENTS



LIST OF FIGURES

Figure 1: North America crude oil market value: $ billion, 200610 10

Figure 2: North America crude oil market volume: billion barrels, 200610 11

Figure 3: North America crude oil market segmentation: % share, by value, 2010 12

Figure 4: Forces driving competition in the crude oil market in North America, 2010 13

Figure 5: Drivers of buyer power in the crude oil market in North America, 2010 15

Figure 6: Drivers of supplier power in the crude oil market in North America, 2010 16

Figure 7: Factors influencing the likelihood of new entrants in the crude oil market in North

America, 2010 17

Figure 8: Factors influencing the threat of substitutes in the crude oil market in North America,

2010 18

Figure 9:

Drivers of degree of rivalry in the crude oil market in North America, 2010 19

Figure 10: Chevron Corporation: revenues & profitability 23

Figure 11: Chevron Corporation: assets & liabilities 24

Figure 12: ConocoPhillips: revenues & profitability 29

Figure 13: ConocoPhillips: assets & liabilities 29

Figure 14: Exxon Mobil Corporation: revenues & profitability 33

Figure 15: Exxon Mobil Corporation: assets & liabilities 33

Figure 16: Petroleos Mexicanos (PEMEX): revenues & profitability 37

Figure 17: Petroleos Mexicanos (PEMEX): assets & liabilities 37

Figure 18: North America crude oil market value forecast: $ billion, 201015 38

Figure 19: North America crude oil market volume forecast: billion barrels, 201015 39


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MARKET OVERVIEW



MARKET OVERVIEW

Market definition

The market volume figures within this report represent crude oil consumption. The market values arecalculated using regional spot oil prices averaged over the whole year. As oil markets are experiencing a

period of price volatility future trends are difficult to predict, therefore the forecasts given in this report are

only given as an indication of the market's possible future growth. All currency conversions used in the

production of this report have been calculated using constant annual 2010 average exchange rates.

For the purposes of this report, the Americas consists of North America and South America.

North America consists of Canada, Mexico, and the United States.

South America comprises Argentina, Brazil, Chile, Colombia, and Venezuela.


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MARKET OVERVIEW



Research highlights

The North American crude oil market had total revenue of $653.5 billion in 2010, representing a

compound annual growth rate (CAGR) of 1.6% for the period spanning 2006-2010.

Market consumption volumes decreased with a compound annual rate of change (CARC) of -2% between

2006 and 2010, to reach a total of 8.4 billion barrels in 2010.

The performance of the market is forecast to accelerate, with an anticipated CAGR of 4.9% for the five-

year period 2010-2015, which is expected to drive the market to a value of $828.9 billion by the end of

2015.


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MARKET OVERVIEW



Market analysis

Following a period of strong growth, the North American crude oil market fell into decline in 2009. The

market recovered in 2010 and is expected to grow fairly strongly through to 2015.

The North American crude oil market had total revenues of $653.5 billion in 2010, representing a

compound annual growth rate (CAGR) of 1.6% for the period spanning 2006-2010. In comparison, the

Canadian and Mexican markets grew with CAGRs of 7.7% and 7.9% respectively, over the same period,

to reach respective values of $59.5 billion and $54.2 billion in 2010.

Market consumption volumes decreased with a compound annual rate of change (CARC) of -2% between

2006 and 2010, to reach a total of 8.4 billion barrels in 2010. The market's volume is expected to rise to 9

billion barrels by the end of 2015, representing a CAGR of 1.4% for the 2010-2015 period.

The performance of the market is forecast to accelerate, with an anticipated CAGR of 4.9% for the five-

year period 2010-2015, which is expected to drive the market to a value of $828.9 billion by the end of

2015. Comparatively, the Canadian and Mexican markets will grow with CAGRs of 4.2% and 4.6%respectively, over the same period, to reach respective values of $73.2 billion and $67.9 billion in 2015.


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MARKET VALUE



MARKET VALUE

The North American crude oil market grew by 28.4% in 2010 to reach a value of $653.5 billion.

The compound annual growth rate of the market in the period 200610 was 1.6%.

Table 1: North America crude oil market value: $ billion, 200610

Year $ billion billion % Growth

2006 613.4 461.9

2007 655.0 493.2 6.8%

2008 851.9 641.5 30.1%

2009 508.9 383.2 (40.3%)

2010 653.5 492.1 28.4%

CAGR: 200610 1.6%

Source: Datamonitor D A T A M O N I T O R

Figure 1: North America crude oil market value: $ billion, 200610



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MARKET VOLUME



MARKET VOLUME

The North American crude oil market grew by 0.8% in 2010 to reach a volume of 8.4 billion barrels.

The compound annual rate of change of the market in the period 200610 was -2%.

Table 2: North America crude oil market volume: billion barrels, 200610

Year billion barrels % Growth

2006 9.1

2007 9.1 0.5%

2008 8.7 (4.9%)

2009 8.3 (4.1%)

2010 8.4 0.8%

CAGR: 200610 (2.0%)


Figure 2: North America crude oil market volume: billion barrels, 200610



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MARKET SEGMENTATION



MARKET SEGMENTATION

The United States accounts for 82.6% of the North American crude oil market value.

Canada accounts for a further 9.1% of the North American market.

Table 3: North America crude oil market segmentation: % share, by value, 2010

Category % Share

United States 82.6

Canada 9.1

Mexico 8.3

Total 100%


Figure 3: North America crude oil market segmentation: % share, by value, 2010



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FIVE FORCES ANALYSIS




The crude oil market will be analyzed taking producers and marketers of crude oil as players. The key

buyers will be taken as oil refiners and petrochemical companies, and oil exploration and production

equipment and services companies as the key suppliers.

Summary

Figure 4: Forces driving competition in the crude oil market in North America, 2010


Crude oil is the most actively traded commodity in the world and the market is dominated by large

conglomerates that are competing for ever dwindling resources which makes market rivalry strong.

The crude oil market is characterized by the presence of large, diversified international companies with

highly vertically integrated operations, incorporating oil exploration, production, refining, transportation,

forecourt fuel retailing as well as marketing. Major suppliers are oil exploration, production equipment and

services companies, including Baker Hughes, Technip, Schlumberger and Halliburton. The presence of

powerful incumbents acts as a significant barrier to entry. Fixed costs and exit barriers tend to be high

and economies of scale are highly important for successful entry to the market. Companies engaged in

the crude oil business experience a high level of rivalry as the commoditys price has a high rate of

fluctuation. In 2008, the international crude oil market experienced increased demand for specialist

equipment and services as commodity prices increased exponentially. This pushed drilling companies to

explore commodity deposits previously deemed too costly, boosting suppliers revenues. Fiscal year 2010

showed an increase in oil prices, on the back of events such as the Gulf of Mexico oil spill and a global


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increase in the rates of inflation. Substitutes to this market include alternative energy sources; however,

the majority of the worlds current energy production uses non-renewable sources, primarily oil, gas and

coal. Shifting towards alternatives may constitute high switching costs.


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Buyer power

Figure 5: Drivers of buyer power in the crude oil market in North America, 2010


The market is characterized by the presence of large, diversified international companies with highly

vertically integrated operations. Due to their integrated downstream operations, major players are not

highly dependent upon downstream consumers of crude oil, for whom buyer power is therefore reduced.

Amongst buyers there are both individual as well as institutional end users who are able to make largepurchases. Commodities such as crude oil are relatively undifferentiated products (differentiation of crude

oil is limited to sulphur component and fractional density), the price of which is set according to supply

and demand by the mercantile exchanges of New York, London and Dubai, which effectively ameliorates

buyer power on the basis of price. Brand loyalty is not likely to be a significant factor here (unless there

are loyalty programs in place), strengthening buyer power somewhat. Buyers may be likely to switch if

presented with a better offer; however, the presence of contracts can reduce this likelihood. Backward

integration is also unlikely. Overall, buyer power is moderate.


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Supplier power

Figure 6: Drivers of supplier power in the crude oil market in North America, 2010


Major suppliers to this market are oil equipment and service providers, including: Schlumberger, Baker

Hughes, Smith International and Halliburton. Such suppliers are typically large, highly diversified

companies, which affords them greater bargaining power within the sector. Baker Hughes, for example,

has a wide product portfolio catering to the worldwide oil and natural gas industry. The companymanufactures and supplies drill bits, primarily roller cone bits, and fixed-cutter polycrystalline diamond

compact (PDC) bits. It supplies them to the oil and natural gas industry worldwide. Baker Hughes also

supplies drilling and evaluation services, which include directional drilling, measurement-while-drilling

(MWD), and logging-while-drilling (LWD) services. The company provides formation evaluation and

wireline completion and production services for oil wells. There is a small number of large equipment and

services companies, which, combined with high demand from the petroleum industry, enhances their

supplier power. However, larger companies involved in the crude oil market have backward-integrated

petroleum service operations, and use third-party services companies to supplement their own activities.

This, combined with the high importance of the crude oil market to supplier revenues, reduces the

supplier power of equipment and services companies. Overall, supplier power is strong.


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New entrants

Figure 7: Factors influencing the likelihood of new entrants in the crude oil market in North

America, 2010


Analysis of the threat of new entrants into the oil market is complicated by the fact that it is possible for

companies to operate in one or more parts of the supply chain. Leading crude oil companies, namely

Chevron and Exxon Mobil, are typically large, highly vertically-integrated, multinational companies that

use their large scale production and distribution networks to reduce costs and enhance profitability. They

make large investments in technology, fleets of drilling rigs and other equipment, with further investment

into product innovation in order to keep up with the leading players and utilize their scales of economy.

The presence of such powerful incumbents is a significant barrier to entry and the need for substantial

initial investment to set up facilities such as drilling rigs also reduces the threat of new companies

establishing themselves in this market. There is also a significant regulatory environment within the

petroleum industry, which is restrictive to the entry of players. Permission to explore new fields and

extract oil and gas is generally in the gift of national governments, and obtaining it may be a lengthy

process. The strong decline in 2009 likely repelled potential new entrants in the short run; however, the

prospectus of high market growth in the forthcoming years may be attractive. Overall, the threat of new

entrants is moderate.


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Substitutes

Figure 8: Factors influencing the threat of substitutes in the crude oil market in North America,

2010


Crude oil itself comes in many varieties and qualities, depending on its specific gravity and sulphur

content, which depend on where it has been pumped from. Brent is generally accepted to be the world

benchmark, with the United States benchmark being West Texas Intermediate (WTI) whilst the Opec

basket is comprised of 15 different crudes. Petroleum has few significant substitutes when it comes to

powering vehicles or for its use in petrochemicals, although some plant-based alternatives are attracting

interest. Other substitutes in this market can be considered in terms of alternative energy sources (such

as nuclear, solar, coal, wind). Such substitutes can be seen to offer notable benefits in terms of

environmental impact and sustainability. However, shifting to renewable energy sources is costly and will

take time, which is in short supply the world must reduce its output of CO2 by 50 to 85 percent by 2050.

With oil reserves declining, the threat of alternative fuels will increase substantially over the following

decades as they become more readily available and oil products become increasingly expensive. Overall,

the threat of substitutes is weak.


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Rivalry

Figure 9: Drivers of degree of rivalry in the crude oil market in North America, 2010


Crude oil companies are typically large-scale operations, experiencing high fixed costs and exit barriers

whilst operations in alternative unassociated industries are limited. The presence of such large

incumbents intensifies rivalry. Due to the fact that crude oil operations are highly energy and labor

intensive, fixed costs are high and the market is hard to exit as leaving would require significantdivestments of assets specific to the business. Some players try to diversify the scope of their operations,

engaging not only in exploration and production, but also refining, and the marketing of oil and natural

gas. Such diversity eases competition as such players are not solely reliant on the crude oil market.

Whilst most players activities are geographically diverse and vertically integrated, most of them present

similar business models. Recent market growth fluctuations caused by the international crisis intensify

rivalry. Estimations for the next 20-30 years show a decline in the use of oil, likely caused by switching to

more environment friendly, cheaper and renewable alternative sources. These factors combine to

produce a strong level of rivalry overall.


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LEADING COMPANIES



LEADING COMPANIES

Chevron Corporation

Table 4: Chevron Corporation: key facts

Head office: 6001 Bollinger Canyon Road, San Ramon, California 94583, USA

Telephone: 1 925 842 1000

Website: www.chevron.com

Financial year-end: December

Ticker: CVX

Stock exchange: New York

Source: company website D A T A M O N I T O R

Chevron Corporation (Chevron) is a fully integrated energy company engaged in petroleum and

chemicals operations. It is also actively involved in the mining operations of coal and other minerals,

power generation, and energy services. The company has operations in more than 100 countries

including the US.

Chevron operates through four business divisions including: upstream, downstream and chemicals.

Chevron's upstream business involves the exploration and production of crude oil and natural gas. The

company's exploration and production operations also market natural gas. Chevron has production and

exploration activities in most of the world's major hydrocarbon basins. Its upstream activities in the US are

concentrated in California, the Gulf of Mexico, Louisiana, Texas, New Mexico, the Rocky Mountains, and

Alaska. In Africa, the company is engaged in exploration and production activities in Angola, Chad, the

Democratic Republic of the Congo and Nigeria. Major producing countries in Asia include Azerbaijan,

Bangladesh, Indonesia, Kazakhstan, and the Partitioned Zone located between Saudi Arabia and Kuwait.

Chevron also has upstream operations in other countries like Australia, Argentina, Brazil, Colombia,

Trinidad and Tobago, Venezuela, Canada, Greenland, Denmark, the Faroe Islands, the Netherlands,

Norway, Poland, and the UK.

At the end of FY2009, worldwide net oil equivalent reserves for consolidated operations and affiliated

operations were 8.3 billion barrels and three billion barrels, respectively. The company's net provedreserves of natural gas for consolidated operations and affiliated operations in FY2009 was 22,153 billion

cubic feet (Bcf) and 3,896 Bcf, respectively. Furthermore, the company's net proved reserve of liquids,

including crude oil, condensate, and natural gas liquids for consolidated operations and affiliated

operations was 4.6 billion barrels and 2.4 billion barrels respectively.


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LEADING COMPANIES



Chevron's net crude oil and natural gas production for FY2009 was 1.8 million barrels per day. The

company's worldwide net oil-equivalent production was approximately 2.7 million barrels per day in

FY2009. The company's net oil-equivalent production (including affiliates) from the US, Africa, Asia, and

other countries averaged 717,000 barrels per day, 433,000 barrels per day, 1,044,000 barrels per day,

and 484,000 barrels per day, respectively. The company's net production of natural gas and oil sands for

FY2009 was five Bcf per day and 26,000 barrels per day respectively.

Chevron's downstream operations comprise refining crude oil into finished petroleum products and

marketing crude oil and the many products derived from petroleum. It also transports crude oil, natural

gas, and petroleum products by pipeline, marine vessel, motor equipment, and rail car.

The company also holds interest in 16 fuel refineries and markets its products under the Chevron,

Texaco, and Caltex motor fuel and lubricants brands and also manufactures gasoline additive under the

brand name Techron. It sells its products through a network of approximately 22,000 retail stations,

including those of affiliated companies. In FY2009, Chevron processed approximately 1.9 million barrelsof crude oil per day and averaged approximately 3.3 million barrels per day of refined product sales

worldwide. The downstream divisions most significant areas of operations are sub-Saharan Africa,

Southeast Asia, South Korea, the UK, the US Gulf Coast extending into Latin America, and the US West

Coast.

The company supplies its products directly or through retailers and marketers to almost 9,600 branded

motor vehicle retail outlets, concentrated in the mid-Atlantic, southern, and western states of the US.

Approximately 500 of the outlets are company-owned or leased stations. Outside the US, Chevron

supplies directly or through retailers and marketers to approximately 12,400 branded service stations,

including affiliates.

The company is also engaged in other global marketing businesses. Chevron markets aviation fuel at

more than 1,000 airports. The company also markets an extensive line of lubricant and coolant products

under brand names that include Havoline, Delo, Ursa, Meropa, and Taro. The company sells its products

through a network of approximately 22,000 retail stations, including those of affiliated companies.

Chevron owns and operates an extensive network of crude-oil, refined-product, chemicals, natural-gas-

liquids (NGL), and natural-gas pipelines and other infrastructure assets in the US. The company also has

direct or indirect interests in other US and international pipelines. Chevron also has a 15% interest in the

Caspian Pipeline Consortium (CPC) affiliate. CPC operates a crude-oil export pipeline from the Tengiz

Field in Kazakhstan to the Russian Black Sea port of Novorossiysk. During FY2009, CPC transported anaverage of approximately 743,000 barrels of crude oil per day, including 597,000 barrels per day from

Kazakhstan and 146,000 barrels per day from Russia.

Chemicals operations include the manufacture and marketing of commodity petrochemicals for industrial

applications, and fuel and lubricating oil additives. Chevron operates in the chemicals segment via its


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LEADING COMPANIES



50%-owned affiliate Chevron Phillips Chemical Company (CPChem) and the wholly-owned Chevron

Oronite Company (Chevron Oronite).

CPChem has 34 manufacturing facilities in the US, Brazil, Colombia, Singapore, China, South Korea,

Saudi Arabia, Qatar, and Belgium. Chevron Oronite is a fuel and lubricating-oil additives business that

owns and operates facilities in the US, France, the Netherlands, Singapore, Japan, and Brazil, and has

equity interests in facilities in India and Mexico.

Chevrons remaining division deals with mining operations, power generation businesses, worldwide cash

management and debt financing activities, corporate administrative functions, insurance operations, real

estate activities, alternative fuels, and technology companies.

Chevron's mining operations produce and market coal and molybdenum in both the US and international

markets. The company's coal mining and marketing subsidiary, Chevron Mining (CMI), owns and

operates two surface coal mines, McKinley, in New Mexico, and Kemmerer, in Wyoming, and oneunderground coal mine, North River, in Alabama. In FY2009, the company controlled approximately 193

million tons of proven and probable coal reserves in the US, including reserves of low-sulfur coal.

Chevron's power generation business develops and operates commercial power projects. The company's

power generation business has interests in 13 power assets with a total operating capacity of more than

3,100 megawatts, primarily through joint ventures in the US and Asia. The company also owns major

geothermal operations in Indonesia and the Philippines.

Key Metrics

The company recorded revenues of $167,402 million in the fiscal year ending December 2009, adecrease of 36.8% compared to fiscal 2008. Its net income was $10,483 million in fiscal 2009, compared

to a net income of $23,931 million in the preceding year.

Table 5: Chevron Corporation: key financials ($)

$ million 2005 2006 2007 2008 2009

Revenues 193,641.0 204,892.0 214,091.0 264,958.0 167,402.0

Net income (loss) 14,099.0 17,138.0 18,688.0 23,931.0 10,483.0

Total assets 125,833.0 132,628.0 148,786.0 161,165.0 164,621.0

Total liabilities 63,157.0 63,693.0 71,698.0 77,663.3 72,060.0

Employees 53,440 55,882 65,000 66,716 64,132

Source: company filings D A T A M O N I T O R


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LEADING COMPANIES



Table 6: Chevron Corporation: key financial ratios

Ratio 2005 2006 2007 2008 2009

Profit margin 7.3% 8.4% 8.7% 9.0% 6.3%Revenue growth 28.4% 5.8% 4.5% 23.8% (36.8%)

Asset growth 35.0% 5.4% 12.2% 8.3% 2.1%

Liabilities growth 31.6% 0.8% 12.6% 8.3% (7.2%)

Debt/asset ratio 50.2% 48.0% 48.2% 48.2% 43.8%

Return on assets 12.9% 13.3% 13.3% 15.4% 6.4%

Revenue per employee $3,623,522 $3,666,512 $3,293,708 $3,971,431 $2,610,273

Profit per employee $263,829 $306,682 $287,508 $358,700 $163,460


Figure 10: Chevron Corporation: revenues & profitability



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LEADING COMPANIES



Figure 11: Chevron Corporation: assets & liabilities



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LEADING COMPANIES



ConocoPhillips

Table 7: ConocoPhillips: key facts

Head office: 600 North Dairy Ashford, Houston, Texas 77079 USA

Telephone: 1 281 293 1000

Website: www.conocophillips.com


Ticker: COP



ConocoPhillips is an international, integrated energy company. It operates worldwide with assets and

businesses in nearly 40 countries.

It operates through six segments: exploration and production (E&P); midstream; refining and marketing

(R&M); LUKOIL Investment; chemicals; and emerging businesses.

The E&P segment primarily explores for, produces, transports, and markets crude oil, natural gas, and

natural gas liquids on a worldwide basis. It also mines deposits of oil sands in Canada to extract bitumen

and upgrade it into synthetic crude oil. Operations to liquefy natural gas and transport the resulting

liquefied natural gas (LNG) are also included in the E&P segment. Proved reserves for ConocoPhillips at

year end 2008 were 8.08 billion barrels of oil equivalent (BOE). The company conducts its E&P

operations in the US, Norway, the UK, Canada, Nigeria, Ecuador, the offshore region of Timor-Leste in

the Timor Sea, Australia, China, Indonesia, Algeria, Libya, Vietnam, and Russia.

In FY2009, E&P's worldwide production, including its share of equity affiliates' production excluding

LUKOIL, averaged about 1,854,000 barrels-of-oil-equivalent per day (BOED). During FY2009, 755,000

BOED were produced in the US and production from its international E&P operations averaged 1,099,000

BOED.

The company conducts its midstream business through its 50% equity investment in DCP Midstream, a

joint venture with Spectra Energy (a North American natural gas infrastructure company). The midstream

business purchases raw natural gas from producers and gathers natural gas through extensive pipelinegathering systems. The gathered natural gas is then processed to extract natural gas liquids. The

remaining residual gas is marketed to electrical utilities, industrial users, and gas marketing companies.

Most of the natural gas liquids are fractionated and separated into individual components like ethane,

butane, and propane, and marketed as chemical feedstock, fuel, or blendstock. The total natural gas


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LEADING COMPANIES



liquids extracted in FY2009, including its share of DCP Midstream, was 187,000 barrels per day. DCP

Midstream markets a portion of its natural gas liquids to ConocoPhillips and Chevron Phillips Chemical

Company under a supply agreement that continues until December 2014.

As of December 31, 2009, DCP Midstream owned or operated 53 natural gas liquid extraction plants, 10

natural gas liquid fractionation plants, and its gathering and transmission systems included approximately

60,000 miles of pipeline. In FY2009, its raw natural gas throughput averaged 6.2 billion cubic feet per day,

and natural gas liquids extraction averaged 360,000 barrels per day. DCP midstream's assets are

primarily located in the following producing regions of the US: the Rocky Mountains, Midcontinent,

Permian, East Texas/North Louisiana, South Texas, Central Texas, and the Gulf Coast.

Outside of DCP midstream, the company's US natural gas liquids business included, as of year-end

2009, a 25,000 barrel per day capacity natural gas liquids fractionation plant in Gallup, New Mexico. It

also included a 22.5% equity interest in Gulf Coast Fractionators, which owns a natural gas liquids

fractionation plant in Mont Belvieu, Texas (with ConocoPhillips net share of capacity at 24,300 barrels perday). It further included a 40% interest in a fractionation plant in Conway, Kansas (with ConocoPhillips net

share of capacity at 43,200 barrels per day); and a 12.5% equity interest in a fractionation plant in Mont

Belvieu, Texas (with ConocoPhillips net share of capacity at 26,000 barrels per day).

ConocoPhillips also owns a 39% equity interest in Phoenix Park Gas Processors (Phoenix Park), a joint

venture principally with the National Gas Company of Trinidad and Tobago. Phoenix Park processes

natural gas in Trinidad and markets natural gas liquids in the Caribbean, Central America, and the US

Gulf Coast. Its facilities include a two billion cubic feet per day gas processing plant and a 70,000 barrel

per day natural gas liquid fractionator. A third gas processing train is currently under construction. A third

gas processing train was completed in July 2009, which increased total processing capacity to two billion

cubic feet per day. ConocoPhillips share of natural gas liquids extracted averaged 8,000 barrels per day

and its share of fractionated liquids averaged 17,000 barrels per day in FY2009.

The R&M segment purchases, refines, markets, and transports crude oil and petroleum products,

primarily in the US, Europe, and Asia. As of December 31, 2009, the R&M segment represented 24% of

ConocoPhillips' total assets. The segment has operations in the US, Europe, and the Asia-Pacific region.

Furthermore, R&M owned or had an interest in 12 operating refineries in the US, and marketed gasoline,

diesel, and aviation fuel through approximately 8,500 outlets in 49 states of the US. It markets its products

under the brand names of Phillips 66, Conoco, and 76 brands.

By December 31, 2009, R&M owned or had an interest in five refineries outside the US. Three refineriesare located in the UK, Ireland, and Malaysia, while two refineries are located in Germany. For the same

period, R&M had marketing operations in five European countries. The company uses the JET brand

name to market retail and wholesale products in Austria, Germany, and the UK. In addition, a joint

venture, in which ConocoPhillips has equity interest, markets products in Switzerland under the Coop


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LEADING COMPANIES



brand name. The company also markets aviation fuels, liquid petroleum gases, heating oils,

transportation fuels and marine bunkers to commercial customers.

R&M also had approximately 1,225 marketing outlets in its European operations, of which approximately

880 were company-owned and 345 were dealer-owned. Through its joint venture operations in

Switzerland, the company also has interests in 225 additional sites.

The LUKOIL Investment segment consists of ConocoPhillips' equity investment in the ordinary shares of

LUKOIL, an international, integrated oil and gas company headquartered in Russia. As of December 31,

2009, ConocoPhillips' ownership interest in LUKOIL was 20% based on authorized and issued shares,

and 20% based on estimated shares outstanding. However, in August 2010, ConocoPhillips decided to

sell its 20% stake in Russian LUKOIL.

The chemicals segment consists of ConocoPhillips' 50% equity investment in Chevron Phillips Chemical

Company (CPChem), a joint venture with the Chevron Corporation. CPChem's business is structuredaround two primary operating segments: olefins and polyolefins; and specialties, aromatics, and styrenics.

The olefins and polyolefins segment produces and markets ethylene, propylene, and other olefin

products, which are primarily consumed within CPChem for the production of polyethylene, normal alpha

olefins, polypropylene, and polyethylene pipe. The specialties, aromatics, and styrenics segment

manufactures and markets aromatic products, such as benzene, styrene, paraxylene, and cyclohexane.

The segment also manufactures and markets polystyrene, as well as styrene-butadiene copolymers; a

variety of specialty chemical products, including organosulfur chemicals, solvents, catalysts, drilling

chemicals, mining chemicals, and high-performance engineering plastics and compounds.

The emerging businesses segment represents ConocoPhillips' investment in new technologies or

businesses outside its normal scope of operations. Activities within this segment are currently focused on

power generation and innovation of new technologies, such as those related to conventional and non-

conventional hydrocarbon recovery (including heavy oil), refining, alternative energy, biofuels, and the

environment.

The segment focuses on its power business through projects including the Immingham combined heat

and power plant (CHP), a wholly-owned 730 megawatt (MW) facility in the UK. It provides steam and

electricity to the Humber Refinery and steam to a neighboring refinery, as well as merchant power into the

UK market. In addition, the segment owns a gas fired cogeneration plant in Orange, Texas, as well as a

50% operating interest in Sweeny Cogeneration, a joint venture near the Sweeny Refinery complex. Thetechnology group focuses on developing new business opportunities designed to provide future growth

prospects for ConocoPhillips. The focus areas include advanced hydrocarbon processes, energy

efficiency technologies, new petroleum based products, renewable fuels, and carbon capture and

conversion technologies.


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Key Metrics

The company recorded revenues of $152,840 million in the fiscal year ending December 2009, a

decrease of 36.5% compared to fiscal 2008. Its net income was $4,858 million in fiscal 2009, compared to

a net loss of $16,998 million in the preceding year.

Table 8: ConocoPhillips: key financials ($)

$ million 2005 2006 2007 2008 2009

Revenues 179,442.0 183,650.0 187,437.0 240,842.0 152,840.0

Net income (loss) 13,529.0 15,550.0 11,891.0 (16,998.0) 4,858.0

Total assets 106,999.0 164,781.0 177,757.0 142,865.0 152,588.0


Employees 35,600 38,400 32,600 33,800 30,000


Table 9: ConocoPhillips: key financial ratios

Ratio 2005 2006 2007 2008 2009

Profit margin 7.5% 8.5% 6.3% (7.1%) 3.2%

Revenue growth 32.8% 2.3% 2.1% 28.5% (36.5%)

Asset growth 15.2% 54.0% 7.9% (19.6%) 6.8%

Liabilities growth 8.2% 52.5% 8.2% (1.1%) 3.4%

Debt/asset ratio 49.6% 49.1% 49.3% 60.6% 58.7%

Return on assets 13.5% 11.4% 6.9% (10.6%) 3.3%


Profit per employee $380,028 $404,948 $364,755 ($502,899) $161,933



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Figure 12: ConocoPhillips: revenues & profitability


Figure 13: ConocoPhillips: assets & liabilities



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LEADING COMPANIES



Exxon Mobil Corporation

Table 10: Exxon Mobil Corporation: key facts

Head office: 5959 Las Colinas Boulevard, Irving, Texas 75039 2298 USA

Telephone: 1 972 444 1000

Fax: 1 972 444 1348

Website: www.exxonmobil.com


Ticker: XOM



The Exxon Mobil Corporation (Exxon Mobil) is an integrated oil and gas company engaged in the

exploration and production, refining, and marketing of oil and natural gas. The company is also a major

manufacturer and marketer of commodity petrochemicals, including olefins, aromatics, polyethylene, and

polypropylene plastics, and a wide variety of specialty products. It also has interests in electric power

generation facilities. The company conducts its business activities across the globe.

Exxon Mobil operates through three segments: upstream, downstream, and chemicals.

The upstream segment explores for and produces crude oil and natural gas. The company's upstream

business has operations in 36 countries and includes five global companies. These companies are

responsible for the corporation's exploration, development, production, gas and power marketing, and

upstream-research activities. The company's upstream portfolio includes operations in the US, Canada,

South America, Europe, the Asia-Pacific, Australia, the Middle East, Russia, the Caspian region, and

Africa.

At the end of FY2009, the company had proven liquid reserves of 11,651 million barrels and 68,007 billion

cubic feet of natural gas. The company had 16,556 of crude oil and 9,760 of natural gas net production

wells at the end of FY2009. Furthermore, the company's net production of liquids, which include crude oil,

natural gas liquids, synthetic oil, and bitumen for FY2009, was 2.4 million barrels per day. The company's

production of natural gas and oil-equivalent for FY2009 was 9,273 million cubic feet and 3.9 million

barrels per day respectively. Moreover, for FY2009, Exxon Mobil's net exploration acreage totaled 72million acres in 33 countries. During the same year, the company replaced 133% of reserves produced,

including asset sales, by adding two billion oil-equivalent barrels to proved reserves while producing 1.5

billion net oil-equivalent barrels. Furthermore, Exxon's proved reserves of oil and gas during FY2009 were

23 million barrels.


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LEADING COMPANIES



The company is also engaged in power generation. Exxon Mobil has interests in about 16,000 megawatts

of power generation capacity worldwide. This includes a majority interest in the Castle Peak Power

Company that generates electricity for consumers in Hong Kong and mainland China.

The company's downstream activities include refining, supply, and fuels marketing. The company's

refining and supply business focuses on providing fuel products and feedstock. Exxon Mobil

manufactures clean fuels, lubes, and other high-valued products. The refining and supply operations

encompass a global network of manufacturing plants, transportation systems, and distribution centers that

provide a range of fuels, lubricants, and feedstock to its customers around the world. At the end of

FY2009, the company had interests in 37 refineries across 21 countries, with a distillation capacity of 6.3

million barrels per day and a lubricant base stock manufacturing capacity of 143 thousand barrels per

day. In FY2009, Exxon Mobil's refinery throughput was 5.4 million barrels per day.

The fuels marketing business operates throughout the world. The Exxon, Mobil, Esso, and On the Run

brands serve motorists at nearly 28,000 service stations and provide over one million industrial andwholesale customers with fuel products. The company supplies lube base stocks and markets finished

lubricants and specialty products.

The chemicals division manufactures and sells petrochemicals. Exxon Mobil Chemical is an integrated

manufacturer and global marketer of olefins, aromatics, fluids, synthetic rubber, polyethylene,

polypropylene, oriented polypropylene packaging films, plasticizers, synthetic lubricant base stocks,

additives for fuels and lubricants, zeolite catalysts and other petrochemical products.

Key Metrics

The company recorded revenues of $310,586 million in the fiscal year ending December 2009, adecrease of 34.9% compared to fiscal 2008. Its net income was $19,280 million in fiscal 2009, compared

to a net income of $45,220 million in the preceding year.


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Table 11: Exxon Mobil Corporation: key financials ($)

$ million 2005 2006 2007 2008 2009

Revenues 358,955.0 365,467.0 404,552.0 477,359.0 310,586.0Net income (loss) 36,130.0 39,500.0 40,610.0 45,220.0 19,280.0

Total assets 208,335.0 219,015.0 242,082.0 269,563.0 233,323.0


Employees 83,700 82,100 80,800 80,000 79,900


Table 12: Exxon Mobil Corporation: key financial ratios

Ratio 2005 2006 2007 2008 2009Profit margin 10.1% 10.8% 10.0% 9.5% 6.2%

Revenue growth 23.2% 1.8% 10.7% 18.0% (34.9%)

Asset growth 6.7% 5.1% 10.5% 11.4% (13.4%)

Liabilities growth 3.9% 8.3% 14.4% 18.0% (13.5%)

Debt/asset ratio 46.6% 48.0% 49.7% 52.7% 52.6%

Return on assets 17.9% 18.5% 17.6% 17.7% 7.7%


Profit per employee $431,661 $481,121 $502,599 $565,250 $241,302



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LEADING COMPANIES



Figure 14: Exxon Mobil Corporation: revenues & profitability


Figure 15: Exxon Mobil Corporation: assets & liabilities



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LEADING COMPANIES



Petroleos Mexicanos (PEMEX)

Table 13: Petroleos Mexicanos (PEMEX): key facts

Head office: Avenida Marina Nacional No. 329, Colonia Huasteca, Mexico City DF11311 MEX

Telephone: 52 55 1944 2500

Fax: 52 55 1944 9378

Website: www.pemex.com



Petroleos Mexicanos (PEMEX) is engaged in the exploration, production, refining, and marketing of oiland gas. PEMEX is Mexico's state-owned, nationalized petroleum company.

PEMEX primarily operates through four subsidiary entities: PEMEX Exploration and Production; PEMEX

Refining; PEMEX Gas and Basic Petrochemicals; and PEMEX Petrochemicals. These are decentralized

public entities of the Mexican government, and each is a legal entity empowered to own property and

carry on business in its own name.

The exploration and production segment operates through the company's subsidiary PEMEX Exploration

and Production (PEP). The segment focuses on exploration and production of crude oil and natural gas,

primarily in the northeastern and southeastern regions of Mexico and offshore in the Gulf of Mexico. In

FY2009, the segment's total hydrocarbon production was approximately 3,776 thousand barrels of oil

equivalent per day and its crude oil production averaged 2,601.5 thousand barrels per day. The total

production of natural gas (excluding natural gas liquids) in FY2009 averaged 7,030.7 million cubic feet per

day.

The company's refining segment conducts its operations through the subsidiary PEMEX Refining, which

converts crude oil into gasoline, jet fuel, diesel, fuel oil, asphalts, and lubricants. It also distributes and

markets most of these products and derivatives throughout Mexico. In FY2009, PEMEX Refining's

atmospheric distillation refining capacity was approximately 1,540 thousand barrels per day and the

subsidiary produced 1,343 thousand barrels per day of refined products. At the end of FY2009, there

were 8,803 retail service stations in Mexico, of which 8,754 were privately owned and operated asfranchises and 49 were owned by PEMEX Refining.

The gas and basic petrochemical business segment operates through the company's subsidiary PEMEX

Gas and Basic Petrochemicals. The segment is engaged in processing wet natural gas to obtain dry

natural gas, liquefied petroleum gas (LPG), and other natural gas liquids. Additionally, the company


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LEADING COMPANIES



Table 15: Petroleos Mexicanos (PEMEX): key financials (MXN)

MXN million 2005 2006 2007 2008 2009

Revenues 1,003,831.0 1,305,510.0 1,136,035.0 1,328,950.0 1,089,921.0Net income (loss) (82,358.0) 46,953.0 (18,308.0) (112,076.4) (94,662.0)

Total assets 1,125,596.0 1,250,020.0 1,330,281.0 1,236,837.4 1,332,037.0

Total liabilities 1,096,586.0 1,208,564.0 1,280,373.0 1,209,952.0 1,398,877.0


Table 16: Petroleos Mexicanos (PEMEX): key financial ratios

Ratio 2005 2006 2007 2008 2009

Profit margin (8.2%) 3.6% (1.6%) (8.4%) (8.7%)Revenue growth 16.0% 30.1% (13.0%) 17.0% (18.0%)

Asset growth 6.5% 11.1% 6.4% (7.0%) 7.7%

Liabilities growth 7.5% 10.2% 5.9% (5.5%) 15.6%

Debt/asset ratio 97.4% 96.7% 96.2% 97.8% 105.0%

Return on assets (7.5%) 4.0% (1.4%) (8.7%) (7.4%)



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LEADING COMPANIES



Figure 16: Petroleos Mexicanos (PEMEX): revenues & profitability


Figure 17: Petroleos Mexicanos (PEMEX): assets & liabilities



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MARKET FORECASTS



MARKET FORECASTS

Market value forecast

In 2015, the North American crude oil market is forecast to have a value of $828.9 billion, an increase of26.8% since 2010.

The compound annual growth rate of the market in the period 201015 is predicted to be 4.9%.

Table 17: North America crude oil market value forecast: $ billion, 201015

Year $ billion billion % Growth

2010 653.5 492.1 28.4%

2011 689.0 518.9 5.4%

2012 726.1 546.8 5.4%

2013 761.8 573.7 4.9%

2014 795.8 599.3 4.5%

2015 828.9 624.2 4.2%

CAGR: 201015 4.9%


Figure 18: North America crude oil market value forecast: $ billion, 201015



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MARKET FORECASTS



Market volume forecast

In 2015, the North American crude oil market is forecast to have a volume of 9 billion barrels, an increase

of 7.1% since 2010.

The compound annual growth rate of the market in the period 201015 is predicted to be 1.4%.

Table 18: North America crude oil market volume forecast: billion barrels, 201015

Year billion barrels % Growth

2010 8.4 0.8%

2011 8.5 1.3%

2012 8.6 1.1%

2013 8.8 2.7%

2014 8.9 1.1%

2015 9.00.7%

CAGR: 201015 1.4%


Figure 19: North America crude oil market volume forecast: billion barrels, 201015



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APPENDIX



APPENDIX

Methodology

Datamonitor Industry Profiles draw on extensive primary and secondary research, all aggregated,analyzed, cross-checked and presented in a consistent and accessible style.

Review of in-house databases Created using 250,000+ industry interviews and consumer surveys

and supported by analysis from industry experts using highly complex modeling & forecasting tools,

Datamonitors in-house databases provide the foundation for all related industry profiles

Preparatory research We also maintain extensive in-house databases of news, analyst

commentary, company profiles and macroeconomic & demographic information, which enable our

researchers to build an accurate market overview

Definitions Market definitions are standardized to allow comparison from country to country. The

parameters of each definition are carefully reviewed at the start of the research process to ensure they

match the requirements of both the market and our clients

Extensive secondary research activities ensure we are always fully up-to-date with the latest

industry events and trends

Datamonitor aggregates and analyzes a number of secondary information sources, including:

- National/Governmental statistics

- International data (official international sources)

- National and International trade associations

- Broker and analyst reports

- Company Annual Reports

- Business information libraries and databases

Modeling & forecasting tools Datamonitor has developed powerful tools that allow quantitative

and qualitative data to be combined with related macroeconomic and demographic drivers to create

market models and forecasts, which can then be refined according to specific competitive, regulatory

and demand-related factors

Continuous quality control ensures that our processes and profiles remain focused, accurate and

up-to-date


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APPENDIX



Industry associations

Energy Information Administration

1000 Independence Avenue, SW, Washington, DC 20585, USATel.: 1 202 586 8800

Fax: 1 202 586 0727

www.eia.doe.gov

OPEC

Obere Donaustrasse 9, A-1020 Vienna, Austria

Tel.: 43 1 21112 380

Fax: 43 1 2149 827

www.opec.org

Related Datamonitor research

Industry Profile

Crude Oil in Belgium

Crude Oil in the Netherlands

Crude Oil in Canada

Crude Oil in Argentina

Crude Oil in Chile


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APPENDIX



Disclaimer

All Rights Reserved.

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permission of the publisher, Datamonitor plc.

The facts of this report are believed to be correct at the time of publication but cannot be guaranteed.

Please note that the findings, conclusions and recommendations that Datamonitor delivers will be

based on information gathered in good faith from both primary and secondary sources, whose

accuracy we are not always in a position to guarantee. As such Datamonitor can accept no liability

whatever for actions taken based on any information that may subsequently prove to be incorrect.


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Crude Oil in North America