The undisputed leader in total upstream value in the U.K. is BP Amoco, says consulting firm Wood Mackenzie. BP Amoco's mammoth portfolio is now valued at £8.86 billion, or 19% of the total for the entire U.K. Edinburgh-based WoodMac ranked the company as part of its annual look at the top players in the U.K. oil and gas arena. Exxon Mobil and Shell occupied WoodMac's second- and third-place standings, with total upstream values in the U.K. of £5.6 billion and £5.5 billion, respectively. TotalFinaElf resides in fourth place, posting a value of £3.7 billion. Of the two significant changes from the 1999 rankings, one was Kerr-McGee's rise from 17th place to 10th this year. The Oklahoma City-based firm's acquisition of Repsol's U.K. properties was responsible for the move, says WoodMac. Also, Texaco dropped out of the top 10 for the first time since the ranking began in 1989. The major now sits in 14th place, a result of its divestiture of noncore fields in the central North Sea. "The top 10 companies own some 75% of the total U.K. Continental Shelf commercial reserve base-equivalent to some 11 billion barrels of oil," says WoodMac. In total, the consulting firm estimated the U.K.'s remaining reserve base at 14.7 billion barrels of oil equivalent. Corporate consolidation has dominated the U.K. upstream sector since the announcement of the BP and Amoco merger in August 1998, comments WoodMac. "When compared to last year's analysis, the top five companies by value now hold even more of the total U.K. upstream pie." The industry's love affair with the merger may be drawing to a close, however, given the current environment. Excellent oil prices are generating robust cash flows, making companies unwilling to part with assets. Furthermore, properties that are on the block are quite pricey. To maintain growth in the longer term, companies must either return to traditional exploration and production activity in the U.K., or mount a determined effort to high-grade their portfolios via such mechanisms as property swaps, concludes the firm. -Peggy Williams
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