How to Invest in State-Owned Oil and Gas Companies - dummies

How to Invest in State-Owned Oil and Gas Companies

By Nick Hodge, Jeff Siegel, Christian DeHaemer, Keith Kohl

If you are interested in investing in government-owned oil and gas companies, the following is a list of oil and gas companies that are partially government-owned but that you can still trade on certain stock exchanges:

  • Petróleo Brasileiro: Petrobras, in which the Brazilian government owns a 64 percent stake, has approximately 11.4 billion barrels of oil equivalent in reserves and produces slightly more than 2.5 million barrels of oil equivalent per day.

    In 2008, Petrobras discovered what’s considered the world’s third-largest oil field. Located off the coast of Rio de Janeiro, the Tupi field holds an estimated 8 billion barrels of oil equivalent. Petrobras trades on the New York Stock Exchange under the symbol PBR.

  • China National Offshore Oil Corporation: CNOOC (NYSE: CEO) is the third-largest national oil company in China and the largest offshore drilling company in China. Among the perks of being majority-owned by the Chinese government, CNOOC receives a 51 percent stake in every offshore oil and gas project in which a foreign company is involved.

  • PetroChina Ltd.: PetroChina (NYSE: PTR) is the traded segment of state-owned China National Petroleum Corporation. This integrated oil and gas company is involved with oil and gas exploration, production, refining, marketing, and transportation of oil, natural gas, refined products, and petrochemicals.

  • Statoil ASA: With 67 percent of all shares, the government of Norway is the largest owner of Statoil (NYSE: STO). The company is the largest offshore operator in the world.

  • Gazprom: If you like natural gas, Gazprom (NYSE: OGZPY) is worth a closer look. It’s the largest natural gas company out there, with 29.8 trillion cubic meters of natural gas reserves. The Russian government owns a hair more than 50 percent of the company, just enough to keep control.

National oil companies can also cause dramatic moves in smaller exploration and production stocks from buyout announcements and joint venture agreements. In October of 2011, Statoil spent $4.4 billion acquiring Brigham Exploration for a 20 percent premium.