European majors have more appetite for operations in volatile markets than American giants in a risk gap that has widened since 2000, according to a new analysis.
Italy’s Eni holds the highest proportion of production in risky countries thanks to its large position in Africa, according to London-based analysts Evaluate Energy.
Evaluate Energy chief executive Richard Krijgsman said that the Italian oil major’s risk appetite “has increased in the last decade as the company expanded production in Libya, Algeria, Angola, the Congo, Nigeria and Kazakhstan while its relatively 'low risk' European production declined”.
Total holds the second highest risk country profile among the majors thanks to its similar drive into African markets amid declining European output, the analyst said.
BP also increased its country risk exposure since 2000, albeit from much lower levels, as its European and North American production declined and activities increased in countries like Azerbaijan and Trinidad and Tobago.
“In fact, the company's risk profile is probably even higher if its stake in Rosneft is taken into account,” Krijgsman added.
By contrast Brazil’s Petrobras risk profile has fallen in the last decade as the financial markets take an increasingly positive view of the overall risk attached to doing business in Brazil.
US majors like ExxonMobil, Devon Energy, ConocoPhillips and Anadarko have much lower risk profiles thanks to their domestic-focused operations.
ExxonMobil sources 86% of its oil and gas production from what the rating agencies consider the 'lower risk' OECD countries, Evaluate Energy said.
Apache is an exception as its risk profile increased significantly compared to 2000 due to the ramp up in Egyptian output over the period.
The analysis was based on a consensus of country risk ratings by Fitch, S&P, Moody's, Institutional Investor and the OECD for 2000 and 2013.