Gross Profit Margin and Net Income Percentages for Some Major Oil Companies

Annual reports were used to obtain sales revenue, cost of sales, and net income after taxes for 17 major international oil companies.  The data obtained are shown in the following table:

Company Name	Sales Revenues (billions of USD)	Cost of Sales (billions of USD)	Gross Profit Margin %	Net Income (billions of USD)	Net Income as a % of Sales
Rosneft	137.2	24.0	82%	8.7	6%
Pemex	123.0	58.8	52%	-13.0	-11%
Conoco Phillips	55.5	31.0	44%	6.9	12%
Petronas	99.2	65.3	34%	14.4	15%
Chevron Corporation	212.1	145.0	32%	19.2	9%
Exxon Mobil	394.1	284.1	28%	32.5	8%
Total SA	212.0	153.0	28%	4.2	2%
YPF	16.8	12.4	26%	1.0	6%
China National Offshore Oil	95.7	70.8	26%	12.4	13%
China National Petroleum Corp.	431.5	326.2	24%	19.4	4%
Royal Dutch Shell	421.0	357.3	24%	14.7	3%
Petrobras	143.7	109.5	24%	-7.5	-5%
Eni	86.1	67.7	21%	1.0	1%
Sinopec	441.8	365.0	17%	10.2	2%
Marathon Petroleum	97.8	83.8	14%	2.5	3%
BP	358.7	309.3	14%	3.8	1%
Pertamina	70.7	66.0	7%	1.5	2%
		average	30%		4%

The data indicates to me that the profits of these oil companies are not unreasonable.  Considering the business risk and required technical skills of these companies, a 30% gross profit margin percentage average for the companies does not seem to be out of line in comparison to other industrial sectors.   And, an average 4% net income after taxes as a percentage of sales for all companies is, if anything, a bit on the low side compared to other industrial sectors.

These 17 companies represent most of the largest global oil exploration and production (integrated) oil companies.  Some of the companies are state owned.

Projected Bio-Succinic Acid Markets Greatly Exceed Current Bio-Succinic Acid Production Capacity

An Internet search found commercially available bio-succinic acid production capacities.  The capacities found are shown in the following table:

company	2015 capacity in metric tons
bioamber	30,000
reverdia	10,000
myriant	13,600
succinity	10,000
total	63,600

No other companies that produce commercially-available bio-succinic acid could be found by the search.  The total capacity of these four companies (63,600 metric tons (mt)) is interesting in that the amount is substantially less than what market studies suggest will be needed in coming years.  For example, market study data found on the Internet provide estimates for bio-succinic acid demand in 2020 in the 600,000 mt to 700,000 mt range.  To meet this demand, the current capacity (63,600 mt) would have to increase in the 40% to 50% per year range.  This suggests that the four companies in the table above, and possibly other companies, will have to add significant capacity to meet the market studies' estimated needs.

Important reasons for the huge increased demand for bio-succinic acid apparently are that: first, succinic acid is used in making polybutylene succinate (PBS), a biodegradable plastic that can be used to make shopping and other bags; second, using a bio source, such as sugar, to make succinic acid (bio succinic acid) is easier than using fossil fuel sources; and, third, using a bio source versus a fossil fuel source has a significant carbon footprint reduction.

Chemical and Material Shortage Alert – January 2016

The purpose of this blog is to identify chemical and material shortages reported on the Internet.  The sources of the information reported here are primarily news releases issued on the Internet.  The issue period of the news releases is January 2016.

Section I below lists those chemicals and materials that were on the previous month’s Chemical and Material Shortage Alert list and continue to have news releases indicating they are in short supply. Click here to read the December 2015 Chemical and Material Shortage Alert list.

Section II lists the new chemicals and materials (not on the December alert).  Also provided is some explanation for the shortage and geographical information.  This blog attempts to list only actual shortage situations – those shortages that are being experienced during the period covered by the news releases.   Chemicals and materials identified in news releases as only being in danger of being in short supply status are not listed.

Section I.   None

Section II.   Shortages Reported in January not found on the Previous Month’s List

Steel:  Japan; production not keeping up with demand

Reasons for Section II shortages can be broadly categorized as: 

1.  Mining not keeping up with demand: none

2.  Production not keeping up with demand: steel

3.  Government regulations: none

4.  Sources no longer available: none

5.  Insufficient imports:  none

6.  Supply not keeping up with demand:  none

Yangtze Delta Chemcial Industry Cluster/International Companies

Three industrial zones near the city of Ningbo in Zhejiang Province, China have dozens of international and Chinese chemical companies.  This area is one of China’s highest chemical company concentration and chemical output areas.  The three industrial zones are: Ningbo Economic and Technology Development Zone (NETDZ); Ningbo Daxie Development Zone (NDDZ); and Ningbo Petrochemical Economic and Technology Zone (NPETZ).

NETDZ, a state-level economic zone, established in 1984, one of China’s first economic zones, covers about 30 square kilometers.  International companies in the zone include: Exxon Mobil; Dow; BP; DuPont; Mitsui Chemcial; Mitsubishi Chemcial; Akzo-Nobel; and others.  A free trade zone is within NETDZ.  The port of Beilum, one of the largest in China, is adjacent to NETDZ.  Click here to go to the NETDZ website.

NDDZ, also a state-level economic zone, set up in 1993, is located on Daxie Island, and smaller, interconnected islands, just off-shore from NETDZ, and connected to the mainland by a highway and railroad bridge.  NDDZ has about 26 kilometers of coast line for port activities, including about 11 kilometers considered deep water.  NDDZ is an important petrochemical center in China.   Major Chinese petroleum companies SINOPEC, CNOOC, and PetroChina have facilities located in NDDZ.   Non-Chinese companies located at NDDZ include: Mitsubishi Chemcial; Linde; and Hanwha Chemical.  Click here to go the NDDZ website.

NPETZ is the third industrial zone near Ningbo City with numerous chemical companies.  NPETZ, which became a state-level economic zone only recently in 2010, is located along the southern Hangzhou Bay coastline not far from Ningbo City and from NETDZ and NDDZ.   NPETZ covers about 56 square kilometers.  The zone was set up primarily for chemical industry companies. Supposedly the largest refinery in China, a SINOPEC facility, is located at NPETZ.  Other international companies include: LG; Total; Formosa Plastics; Laxness; Akzo-Nobel; and SK Group.  NPETZ apparently was set up for locating chemical enterprises further away from urban areas around Ningbo.  Click here to go to the NPETZ website.

Zhejiang Province, where Ningbo is located, is one of the two provinces plus Shanghai city that borders Hangzhou Bay and make up the Yangtze River Delta Economic Region.  This economic region accounts for about 20% of China’s gross domestic product and about 33% of its imports and exports.  Click here (PDF file) for a United States Government report on the Yangtze River Delta Region.

According to Province and National Bureau of Statistics of China data, the Yangtze Delta Region in 2006 accounted for:  33.5% of raw chemical material products; 24.9% of medical and pharmaceutical products; 71.4% of chemical fibers; 28.7% of rubber products; 36.5% of plastic products; and 16.7% of petroleum processing and coke products, and nuclear fuel processing produced in China.   The same sources indicate that in 2006 the Yangtze Delta Region accounted for about 30% (1,603.06 billion Yuan/5,293.51 billion Yuan) of the gross production value of China’s chemical industry.

The above data suggests that the Yangtze River Delta Region would be a high priority area for foreign international chemical companies to consider locating in.  In doing so, researching the suitability of various economic development zones such as NETDZ, NDDZ, and NPETZ, described above, is important.  Locating in an economic zone (park) that is right for one’s company can be critical to the success of the company.  A report by Mortenson provides some useful information on the economic zone system in China and on deciding on the right economic zone (park) in the Yangtze River Delta Region.  Click here (PDF file) to read this report.

Chemical and Material Shortage Alert – December 2015

The purpose of this blog is to identify chemical and material shortages reported on the Internet.  The sources of the information reported here are primarily news releases issued on the Internet.  The issue period of the news releases is December 2015.

Section I below lists those chemicals and materials that were on the previous month’s Chemical and Material Shortage Alert list and continue to have news releases indicating they are in short supply. Click here to read the November 2015 Chemical and Material Shortage Alert list.

Section II lists the new chemicals and materials (not on the November alert).  Also provided is some explanation for the shortage and geographical information.  This blog attempts to list only actual shortage situations – those shortages that are being experienced during the period covered by the news releases.   Chemicals and materials identified in news releases as only being in danger of being in short supply status are not listed.

Section I.   Agar:  global; sources no longer available

Section II.   Shortages Reported in December not found on the Previous Month’s List

None

Reasons for Section II shortages can be broadly categorized as: 

1.  Mining not keeping up with demand: none

2.  Production not keeping up with demand: none

3.  Government regulations: none

4.  Sources no longer available: none

5.  Insufficient imports:  none

6.  Supply not keeping up with demand:  none

Some Data Related to Sales of Chemicals Used in Water Treatment

The World Bank provides the annual water withdrawals for countries at its website.  Click here to find this data.  Using this data, I did a regression analysis of the annual water withdrawal for the 50 countries with highest withdrawals against the countries’ population, then gross domestic product (GDP), and then GDP per person.  All data (water withdrawal amounts, population, and GDP) are 2013 data and can be found at the World Bank site.

Results of the regression analysis show that water withdrawal amounts have a fairly good correlation with a country’s population (R square value = 84%).  The correlation between water withdrawal amounts and GDP is weak (R squire value = 39%).  And, no correlation was found between water withdrawal amounts and GDP per person.

These correlation results do not seem surprising to me.  I would think that the larger a country’s population, the more water would be withdrawn to meet the population’s need.  That some correlation, but a weak one, between water withdrawal amounts and GDP also does not seem surprising.  I would expect that the higher a country’s GDP, the more use (e.g. non-personal use) a country would have for water, but many factors other than GDP likely influence such use and should be taken into account.

Using the water withdrawal amounts found at the World Bank site and the market values (that I found on the Internet) for chemicals used in water treatment, I created this table:

country	total market water treatment chemical	total cubic meters water withdrawn	$ per cubic meter	GDP per person
United States	$   4,500,000,000	478,400,000,000	$  0.009	$ 54,677
global	$ 23,500,000,000	3,906,900,000,000	$  0.006	$ 20,840
China	$   3,000,000,000	554,100,000,000	$  0.005	$    7,595
India	$       485,000,000	761,000,000,000	$  0.001	$    1,596

I was only able to find water treatment chemical market values for the 3 countries in the table.  I was also able to find a global market value for chemicals used in water treatment.  All data in the table are 2013/2014 data.

The table shows the $ per cubic meter of water withdrawn for each country and also on a global basis.   I am wondering whether the $ per cubic meter results might be useful in providing a rough estimate of market values for water treatment chemicals for individual countries.  For example, more advanced countries, such as the US, might have a market value for water treatment chemicals close to $0.009 per cubic meter of water withdrawn.  The average, represented by global, might be around $0.006 per cubic meter water withdrawn, and poorer countries closer to $0.001 per cubic meter withdrawn.

An indicator of more, average, and less developed might be the GDP per person.  For the United States, China, and India these values were computed from World Bank data to be $54,677. $7,595, and $1,596 respectively.  Based on CIA World Fact Book data, the average global GDP per person is $20,840.

Chemical and Material Shortage Alert – November 2015

The purpose of this blog is to identify chemical and material shortages reported on the Internet.  The sources of the information reported here are primarily news releases issued on the Internet.  The issue period of the news releases is November 2015.

Section I below lists those chemicals and materials that were on the previous month’s Chemical and Material Shortage Alert list and continue to have news releases indicating they are in short supply. Click here to read the October 2015 Chemical and Material Shortage Alert list.

Section II lists the new chemicals and materials (not on the October alert).  Also provided is some explanation for the shortage and geographical information.  This blog attempts to list only actual shortage situations – those shortages that are being experienced during the period covered by the news releases.   Chemicals and materials identified in news releases as only being in danger of being in short supply status are not listed.

Section I.   None

Section II.   Shortages Reported in November not found on the Previous Month’s List

Agar:  global; sources no longer available

Reasons for Section II shortages can be broadly categorized as: 

1.  Mining not keeping up with demand: none

2.  Production not keeping up with demand: none

3.  Government regulations: none

4.  Sources no longer available: agar

5.  Insufficient imports:  none

6.  Supply not keeping up with demand:  none