PFC's Petroleum Risk Manager Links Above-Ground Risk with


                         Upstream Returns;
           Energy Merchants Continue to Drop Out of PFC 50 Ranking


  WASHINGTON, July 9 /PRNewswire/ -- The latest edition of the PFC 50 looks
at the relationship between petroleum sector risk and upstream returns on
capital using the new Petroleum Risk Manager.  ExxonMobil (NYSE: XOM), Shell
(NYSE: RD, SC) and TotalFinaElf (NYSE: TOT) manage risk by diversification and
consistently post competitive returns, but not all oil and gas companies can
manage risk by building globally diversified portfolios.  Looking at 27 risk
factors in major oil producing countries, PFC analyzed the portfolios of 18
oil & gas companies, showing that those in higher risk areas often generate
higher returns and vice versa.  PFC assesses the unique challenges that
different companies face in their risk management programs.  Smaller
integrated firms, independents moving internationally and especially recently
privatized national oil companies now have to pay considerably more attention
to their portfolios and "above-ground" petroleum sector risk. 
  Over $100 Billion of Equity Lost in Merchant Energy Sector, Consolidation
Expected 
  Credit problems, government investigations, and poor fundamentals continue
to plague the merchant energy sector.  In the PFC 50 ranking of the world's
largest listed energy firms, the downturn in the sector over the past year has
erased about $115 billion of equity value.  Prior to the slump, these
companies consistently ranked among the top performers in the PFC 50.  Given
the deflated valuations, consolidation among the companies is expected,
although the risk of potential liabilities and uncertainties may delay M&A for
some time. 
The extended decline in the merchant sector forced Williams (NYSE: WMB)
and Dynegy (NYSE: DYN) out of the PFC 50 ranking in the latest quarter, while
El Paso (NYSE: EP) dropped 30 spots to number 47.  A total of seven gas &
power firms have fallen off the PFC 50 rankings in the last 18 months.
Russian oil and gas companies continued to advance in the PFC 50, with
Gazprom, Lukoil and Yukos all top ten share-price performers in the second
quarter.  European and Japanese utilities also performed well, with E.ON
(NYSE: EON), Iberdrola, and Kansai and Chubu Electric Power all posting
returns above ten percent.  CNOOC (NYSE: CEO) and newly merged EnCana
(NYSE: ECA) entered the PFC 50 for the first time. 
The PFC 50 serves as a guidepost for international energy companies
competing in a changing and converging landscape.  The PFC 50 report is
updated quarterly and covers energy capital markets, M&A, strategies, and
business models.  Visit http://www.pfcenergy.com for full details.  PFC is a
leading strategic advisory firm in global energy with clients worldwide,
including major energy companies, financial institutions and governments. 


                                   PFC 50 - 2Q 2002
      Rank     Rank       Company      Market Value  Share  HQ Country  Primary
    6/28/02  3/28/02                   6/28/02     Price              Business
                                     ($US Bill.)   Change
                                                  (2Q '02 /
                                                   1Q '02)
      1    1    EXXONMOBIL (NYSE: XOM)     277.5   -6.6%  US        Oil & Gas
    2    3    RD/SHELL (NYSE: RD, SC)    191.9    1.5%  UK/Neth   Oil & Gas
    3    2    BP (NYSE: BP)              188.7   -5.6%  UK        Oil & Gas
    4    4    TOTALFINAELF (NYSE: TOT)   115.1    5.2%  France    Oil & Gas
    5    5    CHEVRONTEXACO (NYSE: CVX)   94.5   -2.0%  US        Oil & Gas
    6    6    ENI (NYSE: E)               63.6    8.5%  Italy     Oil & Gas
    7    9    E.ON (NYSE: EON)            40.3   15.0%  Germany   Diversified
    8    7    PETROCHINA (NYSE: PTR)      38.6    5.0%  China     Oil & Gas
    9    10   ENEL (NYSE: EN)             34.7   -5.0%  Italy     Electricity
    10   8    BHP BILLITON (NYSE: BHP)    34.1   -4.5%  Australia Diversified
    11   15   TOKYO ELEC. PWR.            27.8    8.6%  Japan     Electricity
    12   13   SUEZ (NYSE: SZE)            27.2   -5.7%  France    Diversified
    13   11   SCHLUMBERGER (NYSE: SLB)    26.8  -20.9%  US        Oil Service
    14   12   DUKE ENERGY (NYSE: DUK)     25.7  -17.7%  US        Elec. & Gas
    15   25   GAZPROM                     23.1   38.0%  Russia    Gas
    16   16   PHILLIPS (NYSE: P)          22.5   -6.2%  US        Oil & Gas
    17   18   RWE                         22.2    5.3%  Germany   Diversified
    18   19   YUKOS                       20.6   10.0%  Russia    Oil & Gas
    19   14   PETROBRAS (NYSE: PBR)       19.6  -30.0%  Brazil    Oil & Gas
    20   22   STATOIL (NYSE: STO)         19.5   12.6%  Norway    Oil & Gas
    21   20   SOUTHERN (NYSE: SO)         19.3    3.4%  US        Electricity
    22   23   DOMINION (NYSE: D)          18.3    1.6%  US        Elec. & Gas
    23   21   CONOCO (NYSE: COC)          17.4   -4.7%  US        Oil & Gas
    24   24   EXELON (NYSE: EXC)          16.8   -1.3%  US        Elec. & Gas
    25   30   SURGUTNEFTEGAZ              15.5    5.0%  Russia    Oil & Gas
    26   26   ENDESA (NYSE: ELE)          15.4   -2.4%  Spain     Electricity
    27   28   BG GROUP (NYSE: BRG)        15.4    0.2%  UK        Gas
    28   33   KANSAI ELEC. PWR.           15.2   12.4%  Japan     Electricity
    29   35   SINOPEC (NYSE: SNP)         14.9    8.7%  China     Oil & Gas
    30   N/A  ENCANA (NYSE: ECA)          14.6    3.3%  Canada    Oil & Gas
    31   27   REPSOL YPF (NYSE: REP)      14.4   -6.5%  Spain     Oil & Gas
    32   36   LUKOIL                      13.8   10.9%  Russia    Oil & Gas
    33   31   TXU (NYSE: TXU)             13.7   -5.4%  US        Elec. & Gas
    34   34   CENTRICA                    13.1   -4.6%  UK        Gas
    35   42   IBERDROLA                   13.1   11.6%  Spain     Electricity
    36   29   AEP (NYSE: AEP)             12.9  -13.2%  US        Electricity
    37   43   CHUBU ELEC. PWR.            12.9   11.4%  Japan     Electricity
    38   37   NORSK HYDRO (NYSE: NHY)     12.7   -1.4%  Norway    Oil & Gas
    39   41   NATIONAL GRID (NYSE: NGG)   12.7    7.6%  UK        Electricity
    40   44   ELECTRABEL                  12.6   11.7%  Belgium   Electricity
    41   32   ANADARKO (NYSE: APC)        12.2  -12.7%  US        Oil & Gas
    42   39   KOREA ELEC. PWR.(NYSE: KEP) 11.7   -5.9%  Korea     Electricity
    43   45   PROGRESS EN. (NYSE: PGN)    11.5    3.9%  US        Elec. & Gas
    44   46   OCCIDENTAL (NYSE: OXY)      11.2    2.9%  US        Oil & Gas
    45   38   BAKER HUGHES (NYSE: BHI)    11.2  -13.0%  US        Oil Service
    46   N/A  CNOOC (NYSE: CEO)           11.0    7.7%  China     Oil & Gas
    47   17   EL PASO (NYSE: EP)          11.0  -53.2%  US        Gas
    48   49   FPL GROUP (NYSE: FPL)       10.5    0.7%  US        Electricity
    49   N/A  SCOTTISH POWER (NYSE: SPI)  10.0    5.1%  UK        Electricity
    50   50   FIRSTENERGY (NYSE: FE)       9.9   -3.5%  US        Electricity


  Notes:  Share price changes are in $US; BHP Billiton, Petrobras, RWE,
Shell, and Surgutneftegaz % changes are total market cap.  Source: Datastream. 
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SOURCE  PFC 


    -0-                             07/09/2002
    /CONTACT:  Bruce Campbell of PFC, +1-202-872-1199, or pfc50@pfcenergy.com/


/Web site:  http://www.pfcenergy.com/ 
CO:  PFC; Petroleum Finance Company
ST:  District of Columbia
IN:  FIN OIL PUB UTI
SU:  ECO
-0- Jul/09/2002 22:28 GMT
 
 
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