Driven mainly by income gains from chemical operations, the overall income and profitability of two dozen major U.S. energy companies rose for the third year in a row in 1995. Consolidated net income soared 29 percent over 1994 to $25 billion, according to data collected by the Energy Information Administration (EIA) and published in the newest edition of Performance Profiles of Major Energy Producers.

The 24 companies, which are required to report financial and operating data annually via EIA's Financial Reporting System (FRS), had 1995 sales of $482 billion, produced over half of U.S. total crude oil and natural gas liquids and 45 percent of U.S. natural gas, and owned two-thirds of U.S. refining capacity. Eighty percent of the FRS companies' sales were energy-related, with the rest coming mainly from chemicals.

Among the most significant developments for FRS companies in 1995 was the sharp growth in demand for natural gas at home and abroad. FRS companies drilled record numbers of onshore gas wells and added record volumes to U.S. onshore natural gas reserves. The companies' natural gas production was the highest since 1982. Deregulation has also drawn the FRS companies more deeply into non-production activity, such as resale, trade, and storage.

A second notable development was the low profitability (in terms of rates of return on investment) of the FRS companies' domestic refining and marketing operations during 1995. A warm winter and continued heavy investment in refinery upgrades and pollution abatement resulted in the third-poorest financial performance in at least 20 years. Declining margins and rising pollution-control spending have driven the companies to cut costs (see figure, for example) and seek joint ventures in downstream operations.

Performance Profiles of Major Energy Producers 1995 discusses these and other key financial developments in detail and reviews the FRS companies' activities in coal and alternative energy. The report includes a section on foreign direct investment in U.S. energy assets.

If you have questions about the content of this report, contact Jon Rasmussen, Office of Energy Markets and End Use, Energy Information Administration, at 202-586-1449 or jrasmuss@eia.doe.gov. For general information about energy, contact the National Energy Information Center at 202-586-8800 or via internet e-mail infoctr@eia.doe.gov.

URL: http://www.eia.doe.gov/emeu/plugs/plperf95.html