African oil and gas buoys global groups

Published: May 26, 2010

Players with regional exposure outperform those without, says Ren Cap.

During the past seven years, the shares of the four largest oil and gas companies with significant African exposure – ENI, Marathon Oil Corp, Total and Hess Corp – have outperformed their peers without regional exposure.

In a research note published today by investment bank Renaissance Capital, analyst Dragan Trajkov suggests that this is the result of good industry fundamentals in Africa during this period: oil and gas production growth, which is ranked number one among six global geographical areas; crude oil reserve growth (ranked number three); and export potential (ranked number one).

“In our view, the good fundamentals make Africa a good investment opportunity in the global oil and gas industry,” writes Trajkov.