For those of you out there who are clearly only interested in the price of oil, maybe after reading the following article it will give pause for thought about the actual BUSINESS of producing oil. This article is disturbing news for conventional energy producers in North America for sure.

The silver lining is that GNZ has a sigificant alternative energy source in its oil shale reserves....soon to be confirmed as substantial....that could tip the balance oh so profitably in the next year or two towards we investors at GNZ.

Oil becoming the realm of despots

Claudia Cattaneo, Financial Post Published: Wednesday, December 03, 2008

Petroleum Intelligence Weekly's annual list of the world's Top 50 oil companies confirms an alarming trend: The world's petroleum riches are sliding further into the hands of state-owned oil companies, with Russian and Chinese companies making the biggest gains in the past year, while publicly traded Western oil companies are fighting for a shrinking pie.

Among the key findings released this week: For all the talk about Canada's huge oil sands reserves and their potential, only two Canadian companies, EnCana Corp. and Canadian Natural Resources Ltd., made the elite list, ranking 34th and 39th, respectively, behind even such government-owned lightweights as Colombia's Ecopetrol and Uzbekistan's Uzbekneftegas.

Two state-owned companies, Petroleos de Venezuela and China National Petroleum Corp., climbed to the No. 4 and No. 5 spots last year, pushing down BP PLC and Royal Dutch Shell PLC., according to the New York-based publication, which bases its rankings on a combination of oil companies' most meaningful operational data: oil and gas output, reserves, product sales, distillation capacity, revenues, profit, assets, employees.

Saudi Aramco, owned by the Saudi monarch, is the world's top oil company, followed by Iran's NIOC as No. 2.

Exxon Mobil Corp., much vilified in the U.S. for being too profitable, hung onto its No. 3 spot and remained the only publicly traded company among the world's top five.

Other interesting results: CNCP is the world's No. 1 company based on the number of employees: nearly 1.7 million, a state unto itself (compare that with Canadian Natural's 3,700). Exxon Mobil makes the most money, with annual revenue of $371-billion. Russia's Gazprom is the world's No. 1 gas company, with volumes of 53 billion cubic feet a day, about 17.5 times those of Canada's largest gas producer, EnCana.

Three major reasons we should care: energy security, climate change and the market.

The study highlights that the West's worry about energy security is well-founded. While oil companies get all the flak about gasoline prices, oil is the realm of despots.

Indeed, the world's six oil majors - Exxon, BP, Shell, ConocoPhillips, Chevron, Total - control a puny share of the world's oil reserves, 3.7%, down from 4.7% a decade ago; produce 14.6% of the oil, down from 16.6% a decade ago; and 14.4% of the gas, down from 18.9% a decade ago, according to PIW. Given the state of affairs, it's no wonder they are piling into Canada's oil sands.

While the oil-price slide has eased the urgency to secure new oil sources, it's also making the problem worse. Consider that the rankings are based on 2007 results, the last year for which data is available. The spending cutbacks announced by scores of publicly traded companies, particularly in Canada, in the past few months will result in production declines, accelerating their shrinkage.

If the oil collapse means a new wave of mergers and acquisitions, as many analysts predict, there will be an even smaller shareholder-owned industry, based on past experience. The last acquisition wave 10 years ago that created the super majors failed to grow their oil production and reduced their share of the world's oil market, PIW said.

The green movement is likely re-enforcing the trend. While keeping up the pressure on publicly traded companies to reduce their greenhouse gas emissions, making their operations more expensive, it's giving a free ride to state oil companies that are by far the world's largest producers of fossil fuels. The shrinkage of Western companies is also bad news for development of technologies to reduce carbon emissions. It's shareholder-owned oil companies that are the most likely to make the investment, while state-owned companies have a long history of funneling oil revenue to support state programs and under-investing in their own operations.

For the market, the trend means fewer opportunities to participate in the oil business even as oil demand increases over the long term, and a continuing transfer of wealth from consuming to producing countries. It's food for thoughts for politicians putting all their eggs in the immature, green-energy basket.