Investors in Exxon Mobil Corp., Royal Dutch Shell and BP are losing money, even though oil prices are hitting records, as they cede control of production to state-owned energy companies.
Exxon, the world's biggest company by market value, saw its stock fall 7.6% this year after Venezuela forced the Irving, Texas-based producer out of the Orinoco Belt, South America's largest oil territory. Shell lost 4.6% in London trading as Russia seized control of the $22-billion Sakhalin-2 venture. BP dropped 8.1% this year, after the Russian government said it intended to take over the Kovykta gas deposit in Siberia, which is owned by BP's Russian venture, TNK-BP.
Oil company shares are suffering even as crude rallied 46% and natural gas appreciated 76% in New York on rising demand from emerging economies. OPEC members from Saudi Arabia to Venezuela will earn more than $1 trillion this year from oil exports, the U.S. Energy Department estimates.
"The oil companies are competing with each other and with national oil companies as well for access" to reserves, said Ivor Pether, who helps oversee about $17 billion at Royal London Asset Management. "It's a lot tougher for BP and Shell to win development rights" because state-owned companies have access to cash and better technology, he said.
The struggle for new fields contributed to record oil prices by restraining supplies from nations outside the Organization of the Petroleum Exporting Countries at a time of increasing demand. After a decade of expansion, production declined last year at Exxon and Shell, the world's two largest independent oil companies, and BP, Europe's second-largest oil company.
Exxon Chairman Rex Tillerson, Saudi Arabian Oil Minister Ali Ibrahim Naimi and his Qatari counterpart Abdullah bin Hamad Attiyah are among almost 600 speakers who will discuss reserves, prices and strategy during this week's World Petroleum Congress in Madrid.
Russia, Nigeria and Venezuela are putting domestic companies ahead of international rivals when granting access to reserves. State-controlled oil companies hold about 80% of the world's total estimated 1.2 trillion barrels of proven oil reserves, according to BP.
Exxon lost 425 million barrels of proven reserves when Venezuela gained control of four heavy crude oil ventures operated by foreign companies, including Exxon's Cerro Negro project.
Gazprom is trying to buy TNK-BP's 63% stake in the Kovykta natural gas field, large enough to supply Asia for five years.
Crude oil prices have doubled in the last year, reaching a record last week, partly on concern that production will fail to keep pace with surging demand in countries such as China and India.