The share of U.S. natural gas production by Foreign Direct Investment (FDI) affiliate companies increased in 2000 while their share of petroleum production, refinery capacity and coal production declined. FDI-affiliated electricity acquisitions and generation capacity continued to grow despite divestitures, as did FDI affiliates' share of uranium production. These and other facts are detailed in the latest edition of Foreign Direct Investment in U.S. Energy in 2000, from the Energy Information Administration (EIA).

Foreign direct investment is defined as the ownership or control of 10 percent, or more, of a U.S. business or asset by a foreign entity.

Petroleum and Natural Gas
BP Amoco's $27-billion acquisition of ARCO had the biggest impact on the foreign-affiliated oil and natural gas industry in 2000, increasing the group's natural gas production by 12 percent in spite of a decline in production at Shell. Nevertheless, oil production by FDI affiliates fell 9 percent during the year, mostly due to the divestiture of Altura Energy by BP America and Shell Oil. BP and Shell together held 87 percent of foreign affiliate oil and natural gas production at the end of 2000.

FDI-Affiliate Share of U.S. Production, 1998-2000

Note: (s)=Less than 0.5. Source: Energy Information Administration.

Four transactions resulted in a small reduction in the refinery capacity of FDI affiliates. The number of FDI-affiliate retail outlets increased 2 percent and motor gasoline sales increased by just over 8 percent as BP gained ARCO's 1,500 outlets and Lukoil (Russia) purchased almost 1,300 Getty-branded outlets.

Electricity, Coal and Uranium
Net electricity generation capacity of FDI-affiliates increased one percentage point in 2000 to reach 3.3 percent of the U.S. total as Powergen (United Kingdom) acquired LG&E Energy for $5.4 billion. This was the second-largest FDI electricity purchase after the groundbreaking $10.9 billion ScottishPower (United Kingdom) takeover of PacifiCorp in 1999. LG&E Energy and PacifiCorp accounted for more than two-thirds of FDI-affiliate electric capacity at year end.

In 2000, Amergen purchased GPU's Oyster Creek nuclear plant for $10 million; the first foreign venture into nuclear power occured in 1999 when Amergen (United Kingdom) purchased Clinton Nuclear Power Station from Illinois Power and Three Mile Island Unit 1 from GPU Inc.

Coal production by the foreign-affiliated companies decreased 5 percent in 2000 while U.S. production declined by 2 percent, resulting in a small decline in the FDI share of U.S. coal output.

In 2000, FDI affiliates accounted for 96 percent of U.S. uranium concentrate production of 4 million pounds (a decline of 14 percent over 1999). The foreign-affiliated companies are Cameco (Canada), the world's largest producer of uranium, and BHP Billiton (Australia).

Financial Results
Capital spending by FDI-affiliated petroleum and natural gas companies increased 42 percent in 2000, mostly from upstream acquisitions. Downstream refining, marketing, and pipeline capital spending increased 23 percent over the previous year.

The financial performance of FDI affiliates in petroleum, natural gas, and coal improved in 2000. Net income more than doubled as revenues increased 73 percent, faster than operating costs. Cash flow and capital spending both grew by similar percentages, and the debt-to-equity ratio fell more than 7 percentage points.

However, a comparison group of domestic energy companies performed better by many financial measures. Net income and cash flow increased by larger percentages for the comparison group than for the FDI affiliates, and their return on equity ratio rose 12 percentage points, double the 6 percentage point gain among the FDI affiliates.

If you are having technical problems with this website, please contact the EIA Webmaster at wmaster@eia.doe.gov or call 202-586-8959. For general information about energy, contact the National Energy Information Center at 202-586-8800 or infoctr@eia.doe.gov.

Questions about the report's content should be directed to:

Neal Davis, Financial Analysis Team

neal.davis@eia.doe.gov

Phone: (202) 586-6581

URL: http://www.eia.doe.gov/emeu/plugs/plfdi00.html
File last modified: August 26, 2002