Oil Reserves: Venezuelan Influence

Oil Reserves: Venezuelan Influence

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According to BP (BP), Venezuela now holds the largest proven oil reserves in the world, surpassing Saudi Arabia.

President Hugo Chavez has also vowed to double the nation’s oil-production by 2019 to 6 million barrels a day.  Venezuela nationalized all of its oil field a few years ago and in the process bought Citgo, a large distributor of oil products in the US.

US Impact

The United States imports about 6% of all its oil from Venezuela.  Among the companies who buy their crude oil from the country are BP, Chevron (CVX), and Petrobras (PZE).  BP buys most of their crude from South America.

If Chavez does indeed double Venezuela’s oil production, the supply shock would most likely affect oil markets worldwide.  It could even mean that oil and energy companies adjust to this change and begin importing more crude from South America and less from the Middle East.

Business Section: Investment Ideas

With a potential for oil markets to change following this new discovery, we put together a list of companies who may have a newfound or increased interest in Venezuelan reserves.

Take a look at these names. How do you think the markets will react to Venezuelan oil?

Use the Turbo Chart to Compare the Performance of the First Two Companies in the List to the S&P 500:

“1. BP plc (BP, Earnings, Analysts, Financials): Provides fuel for transportation, energy for heat and light, retail services, and petrochemicals products. Market cap at $123.7B, most recent closing price at $39.02.

 

“2. Chevron Corporation (CVX, Earnings, Analysts, Financials): Engages in petroleum, chemicals, mining, power generation, and energy operations worldwide. Market cap at $198.73B, most recent closing price at $100.74.

 

“3. Petrobras Argentina SA (PZE, Earnings, Analysts, Financials): Operates in the oil industry worldwide. Market cap at $777.39M, most recent closing price at $7.70.

 

 

“4. Exxon Mobil Corporation (XOM, Earnings, Analysts, Financials): Engages in the exploration and production of crude oil and natural gas, and manufacture of petroleum products, as well as transportation and sale of crude oil, natural gas, and petroleum products. Market cap at $379.99B, most recent closing price at $81.26.

 

“5. PetroChina Co. Ltd. (PTR, Earnings, Analysts, Financials): Produces and distributes oil and gas in the People's Republic of China. Market cap at $244.42B, most recent closing price at $133.55.

 

 

“6. Sunoco, Inc. (SUN, Earnings, Analysts, Financials): Through its subsidiaries, refines and markets petroleum products, and manufactures chemicals in the United States. Market cap at $4.91B, most recent closing price at $46.90.

 

 

(Written By Ryan Horch)

 

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