Waning influence of U.S. oil companies seen as threat by some, natural evolution by others

Developing countries are locking up a bigger share of the world's oil and gas resources to profit from high prices and fuel industrial growth. Some experts view the shift as an emerging threat to the U.S. economy, while others see benefits for consumers, saying an expanding list of suppliers diminishes the impact of any single disruption.

Still others see the shift simply as a reflection of globalization, whereby emerging economies lean on rising financial strength and technological know-how to become tougher competitors.

New research by investment bank Goldman Sachs suggests four countries in particular — Brazil, Russia, India and China, or the so-called BRIC countries — are grabbing the most market share from American companies. The BRIC's share of the industry's market value has grown from virtually nothing 15 years ago to more than one third today, while American companies' stake has dwindled from more than half to less than a third.

The biggest factor, most analysts agree, is the growth of state-controlled national oil companies, including PetroChina Ltd., an arm of China National Petroleum Corp.; Russia's OAO Gazprom, the world's biggest natural gas producer; and Brazil's Petroleo Brasileiro SA, or Petrobras. And the high price of oil — crude futures finished Friday close to $73 a barrel — is playing a big role in their expansion plans.

CNPC last week acquired rights to search for oil in Canada. India's state-owned oil company, Oil and Natural Gas Corp. divulged plans last month to expand in Brazil. And in May the Venezuelan government took majority control of its last privately run oil projects, part of a resource nationalization strategy also being pursued by Russia.

Whether this trend is bad for America's long-term strategic interests is debated by analysts and executives.

Daniel Yergin, author of "The Prize," the Pulitzer Prize-winning history of the oil industry, said it's time to acknowledge what's been evolving for years: U.S. oil companies simply don't have the clout they did a decade or two ago, and it's not necessarily a bad thing.

"A lot of our energy debate harkens back to a world when we were much more self sufficient and doesn't take into account the reality of how integrated we are into a much larger and complex global marketplace," Yergin said.

Exxon Mobil Corp. remains the world's largest publicly traded oil company, and its $39.5 billion (€29.05 billion) profit in 2006 was a record for U.S. companies. Yet the Irving, Texas-based company pumped just 3 percent of the world's oil last year. National oil companies, which control almost 90 percent of global oil reserves, produced the bulk of the world's supply.

ConocoPhillips Chairman Jim Mulva said the global petroleum hunt has become very competitive due in part to the rising influence of the BRIC countries, though he stopped short of calling them dominant. After all, America's daily oil consumption of about 21 million barrels dwarfs that of the BRIC countries, whose combined daily use last year was about 15 million barrels, according to the U.S. Energy Department.

Still, Mulva credited China and India with creating energy policies focused on keeping their economies expanding — something he believes the U.S. sorely lacks.

"When energy prices increase, we tend to place blame and not address the real issue: that is, how are we going to develop a long-term energy plan that stresses conservation, additional resources, technology and diversification versus the unrealistic expectation of independence," said Mulva, whose company operates in more than 40 countries and posted a record annual profit of $15.5 billion (€11.4 billion) last year.

Jerry Taylor, an energy analyst at the Cato Institute, a free-market oriented think tank, said the trend documented in the Goldman Sachs report doesn't necessarily make the United States more vulnerable. Governments have rarely used the so-called "oil weapon" by cutting off supplies to other markets, he said. If they did they'd risk hurting themselves, due to lost revenue, more than they'd hurt the United States, he added.

Goldman Sachs cites several reasons for America's declining role, such as the growth of production outside of North America and Europe and consolidation, including BP PLC's acquisitions of U.S. companies Amoco and Arco.