Who Owns Big Oil?
Kurt Brouwer September 2nd, 2008
Here is a study on just who owns the bulk of the shares in Big Oil. The study was done by Sonecon, an economic consulting firm run by a former adviser to President Clinton.
The Distribution of Ownership of U.S. Oil and Natural Gas Companies (Sonecon, September 2007, Robert J. Shapiro and Nam D. Pham)
…These data, along with previous analyses that we conducted, further suggest that ownership of oil and natural gas company shares is broadly middle-class.
42.7 percent are owned or held by mutual funds and other asset management companies that have mutual funds. Mutual funds manage accounts for 55 million U.S. households with a median income of $68,700, and the owners of mutual funds include 16 percent of households with incomes of $25,000 or less, as well as 83 percent of households with incomes of $100,000 or more.
Earlier analysis found that an estimated 27 percent of oil and natural gas company shares are held in private and public pension funds, and these funds manage assets, directly or indirectly, on behalf of 129 million pension-fund participants whose accounts have an average value of $62,280. For example, some 28 million public pension accounts in over 2,650 public employee pension funds represent the major retirement security for current and already-retired soldiers, teachers, police and fire personnel, social workers and office workers employed at every level of government. In 2004, these funds held approximately $64 billion in shares of U.S. oil and natural gas companies..
This chart shows the percentage breakdown of ownership in oil companies of all types:
Source: Sonecon
Peruse the numbers above. I’m only focused on the first column in the chart — Oil & Gas Industry, which is the total ownership statistics of Big Oil as the media likes to call it. Based on the chart above, it’s pretty clear what group owns the biggest chunk of Big Oil — mutual funds.
But, who owns mutual funds? Mutual funds are owned by individual and institutional investors including retirement plans, endowments and charities. The following chart spells out the number of American households that own mutual fund shares.
It’s from the Investment Company Institute (ICI) and its annual work, the Investment Company Fact Book.
The ICI is the mutual fund industry’s trade association:
Source: Investment Company Institute
Just as a point of reference. There is a discrepancy in the numbers between the Sonecon study and the ICI Fact Book, which reports lower numbers for the number of households owning mutual fund shares. I suspect the difference has to do with the definition of a household and other fairly arcane statistical matters, but I would go with the ICI number.
In any case, over 50 million households — that is 88 million people — hold shares in mutual funds. Add in the holdings of Big Oil shares by public and private pension plans and you reach out to many more millions of Americans who are beneficiaries of public and private pension plans.
No doubt there are plenty of wealthy investors who own shares in oil companies directly or through mutual funds, but the point is still very clear. Mutual funds are the investment of choice for Americans and mutual funds are the biggest owners of shares in Big Oil.
So, who owns Big Oil? The answer is clear: we do.
- Business , Economy , Investing , Mutual Funds , Retirement
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