A Chinese Giant Dethrones ExxonMobil

Video Transcript

Hi, this is Tony Sagami for Uncommon Wisdom Daily.

Until last year, ExxonMobil was the largest company in the world in terms of market capitalization. But then, Apple knocked it off its perch.

And now, ExxonMobil is not even the largest energy company in the world. It’s been dethroned by a Chinese giant you may not have even heard of: PetroChina.

PetroChina boosted its oil production by 3.3% last year, to more than 2.4 million barrels per day, while Exxon’s production dropped by 5%, to 2.3 million barrels per day. PetroChina has already spent $7 billion since 2010 to buy oil reserves in Iraq, Australia, Africa, Qatar and Canada. And it plans to expand even faster in the future.

Plus, PetroChina has several other advantages over ExxonMobil. It has lower labor costs and lower regulatory and environmental costs. And to top it off, it’s 86%-owned by the Chinese government, so it has the inside track on lucrative drilling permits in the country.

For investors, it’s just as cheap and easy to buy shares of PetroChina as it is to buy ExxonMobil, because it trades on the New York Stock Exchange under the symbol PTR. And by the way, it also pays a 3.2% dividend.

But PetroChina is far from the only foreign energy company giving Exxon a run for its money. China National Offshore Oil Corp., also known as CNOOC, is the second-largest energy company in China and reported record profits just three weeks ago. CNOOC focuses more on natural gas, so it also benefits from the new push by the Chinese government to reduce greenhouse gases. CNOOC is also traded on the NYSE, and pays a 2.7% dividend.

Also keep an eye on China Petroleum & Chemical Corp., or Sinopec. It’s China’s largest oil refiner, it’s traded on the NYSE and it pays a 2.5% dividend.

Finally, I want to mention Brazil’s Petrobras. It’s in the middle of a massive $225 billion investment plan that should boost its output to about 4 million barrels per day by 2015. And yes, it’s traded on the NYSE under the ticker PBR.

I’m not recommending you rush out and buy any of these energy stocks tomorrow. As always, timing is everything, so I recommend that you wait for my buy signal in Asia Stock Alert. But if you’re looking for the companies that are likely to dominate the industry in the years to come, you need to look beyond the borders of the United States.

I’m Tony Sagami for Uncommon Wisdom Daily. Thanks for watching.

Tony Sagami is the editor of Blue-Chip Option Alert, a trading service designed to help investors profit from the seemingly unstoppable Asian consumption machine. He helps his subscribers tap into this potential through a variety of easy-to-execute strategies on global companies that trade on the U.S. exchanges that also do big business in Asia.

Tony is also the editor of International ETF Trader, where he shows members how to make money from trends taking place all over the world in areas like natural resources, gold, oil, commodities, tech, consumer goods and even in individual countries themselves.