Energy remains most prevalent business among Oklahoma public

Nearly half of the Oklahoma-based firms on The Journal Record's list of the Largest Public Companies are energy-related, as the industry - despite its ups and downs - remains a vital part of the state's economy. In fact, seven of the 10-largest public companies in Oklahoma operate an energy-related business, according to the list. The majority of the corporate headquarters are located in the Tulsa area. Of the 36 companies (two tied for No. 35), 17 are based in Tulsa and 14 in Oklahoma City. The other five are based in Bartlesville, Ada, Sand Springs, Stillwater and Broken Arrow. Phillips Petroleum, which announced plans to merge with Houston-based Conoco in November, tops the list with revenues of $24.05 billion for 2001. Earlier this month, company officials indicated Phillips' 2,400-person work force in Bartlesville will not be cut. The merger is expected to be completed by the end of 2003. ConocoPhillips will be the nation's third-largest oil and gas company in terms of production and the sixth-largest investor-owned oil company worldwide. The loss of Phillips from the state is a continuation of a process that began almost 20 years ago, according to Robert C. Dauffenbach, director of the Center for Economic and Management Research at the University of Oklahoma. "The departure of Phillips from the ranks of corporate headquarters in Oklahoma is a severe blow. It is certainly a symbolic blow in that the state has few corporate headquarters to begin with," he said. "The process of centralization of integrated oil companies to the Houston region has been going on for some time now, however. The energy industry has continued to contract in Oklahoma. Loss of research and development and corporate operations in Oklahoma has been declining secularly since the energy bust began. But, Conoco and Phillips still have sizable investments in this state and they have vowed to maintain some operations in this state. For that, we can be grateful. "Still, we must remember that these are international companies. Only a small portion of their total employment was based in Oklahoma, anyway. It is regrettable that we continue to lose high-level personnel in this sector." In the No. 2 slot is The Williams Cos. with revenues of $11.03 billion. The Tulsa-based company is involved in natural gas transmission as well as traditional and leading-edge energy services. The company has 3,341 employees in the state. Oneok ranked No. 3 with revenues of $6.8 billion. The Tulsa- based company is engaged in natural gas intrastate distribution and transmission, gas processing, gas marketing and oil and gas production. Phillips, Williams Cos. and Oneok all reported higher revenues compared with the previous year. However, the next two on the list were not so lucky. Kerr-McGee, No. 4, and OGE Energy, No. 5, reported lower revenues vs. 2000. Kerr-McGee's revenues totaled $3.64 billion while OGE's revenues were $3.18 billion. Devon Energy ranked No. 6 on the list with revenues of $3.08 billion. The number of employees of the Oklahoma City-based oil and gas exploration and production company increased to 658 in the state from 540 the previous year. The company's continued expansion has increased its total number of employees to 2,388 compared with 1,850 the previous year. Dauffenbach said he sees the energy companies continuing to head the roster of important corporate entities in this state. "Energy is a very important component of the Oklahoma economy, and it will continue, with our reserves of natural gas, to be an important industry in future years," he said. The gross production tax, a 7 percent tax placed on the value of oil and gas production, created $735 million in revenue for the state in fiscal year 2001 based on production valued at $10.5 billion, according to Dauffenbach. That 81 percent jump in revenue from $405 million in fiscal year 2000 represented about 65 percent of the total growth in state revenues for fiscal year 2001. Revenues for fiscal year 2001 totaled $6.84 billion, up from $6.33 billion. However, tax receipts are volatile on oil and gas production and lower product prices have caused problems for the state's finance department. "As of April 2002, the state had collected only $335 million in gross production taxes compared with $616 million as of April 2001," he said. "Thus, as of April, the state experienced a decline in state revenues of $281 million from this source. That was a tremendous blow to state coffers." Dauffenbach said the state's troubles in this regard may be somewhat behind us now, as energy prices have recently shown signs of life. "I don't look to continuing problems on this front so long as the U.S. economy continues to rebound from the recession," he said. Banking, manufacturing and telecommunications were the next main industries represented on the list of the largest Oklahoma-based public companies. A spinoff of Williams Cos., Williams Communications Group, ranked No. 7 on the list with revenues totaling $1.19 billion for 2001. Williams Communications filed for Chapter 11 bankruptcy protection April 22, reporting assets of $5.99 billion and debts of $7.15 billion. The bankruptcy deal splits the Tulsa-based wholesale broadband provider's remaining equity between bondholders and its former parent company. "Tulsa has acquired quite a reputation in telecommunications. This has been important to the state and it may be important once again," Dauffenbach said. "But, as we see in the news on almost a daily basis, telecommunications companies are having their problems. Tulsa, in particular, has been relatively hard-hit by these problems. For the difficulties that this industry has faced, we can hope that the bottom has now been seen. For all of the torment that this industry has faced, it is surprising that the negative consequences were not more pronounced than they appear to have been."

Copyright 2002 Dolan Media Newswires
Provided by ProQuest Information and Learning Company. All rights Reserved.