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Today, 8:25 AM
- Large energy companies will slash dividend payouts by a total of $12B this year, bringing global payouts down 9% Y/Y to $147B, according to Markit's dividend forecasting unit.
- Ten of the world's large-cap oil and gas companies are set to cut their dividend in 2016, Markit predicts, including ConocoPhillips (NYSE:COP), which already has slashed its payout for 2015 but likely will announce additional cuts by year-end.
- The other nine large-cap energy firms Markit sees cutting their dividend this year: Anadarko Petroleum (NYSE:APC), Ecopetrol (NYSE:EC), Eni (NYSE:E), Kinder Morgan (NYSE:KMI), Noble Energy (NYSE:NBL), Sinopec (NYSE:SNP), Cnooc (NYSE:CEO), PetroChina (NYSE:PTR) and Woodside Petroleum (OTCPK:WOPEF, OTCPK:WOPEY).
Thu, Feb. 11, 2:08 PM
- While oil production cuts in most of the world have been minimal so far, WSJ reports that China’s output could fall by 100K-200K bbl/day this year from a record high of ~4.3M bbl/day in 2015.
- “China’s declining crude production will help narrow the supply surplus in the global market,” says CLSA analyst Nelson Wang.
- Sinopec (NYSE:SNP) recently said its crude production fell nearly 5% last year, PetroChina (NYSE:PTR) said oil output fell by 1.5% over the first three quarters of 2015 - it has not yet released Q4 data yet - and Cnooc (NYSE:CEO) has said it expects output to decline 5% this year following years of rapid growth.
- Many of China’s oil fields are old, having been discovered in the 1980s, which makes them expensive to maintain; the marginal cost of production at some of China’s more expensive fields is now ~$40/bbl, making it unprofitable for Chinese oil companies to keep producing at recent market prices.
- A drop in Chinese oil output on its own would not be enough to rebalance global oil markets, but it is likely to increase the country's demand for oil from overseas.
Thu, Feb. 4, 12:22 PM
- Royal Dutch Shell (RDS.A, RDS.B) says it is postponing an investment decision on the proposed LNG Canada project to the end of 2016, as lower global oil prices restrict its ability to spend.
- "This is to manage affordability and get better value from the supply chain in this downturn," CEO Ben Van Beurden says on Shell's earnings conference call.
- Shell has been one of the front-runners among nearly two dozen liquefied natural gas export proposals along Canada’s Pacific coast.
- Shell, whose partners in the project include Korea Gas, Mitsubishi and PetroChina (NYSE:PTR), had talked about making a final investment decision this year but had not set a firm date.
- FirstEnergy Capital analyst says the move particularly hurts TransCanada (NYSE:TRP), which the Shell-led group had hired to build their pipeline.
Fri, Jan. 29, 5:13 AM
- PetroChina (NYSE:PTR), China's largest oil company, has warned its net profit for 2015 could be as much as 70% lower than the previous year, in the latest sign of how the sharp slide in oil prices is hitting the industry's profitability.
- PetroChina is far from alone. Royal Dutch Shell said earlier this month that it expects fourth quarter profits to slide by at least 40% because of the crude price slump.
Wed, Jan. 27, 7:15 PM
- Chevron (NYSE:CVX) says its Unocal East China Sea subsidiary began natural gas production from the first stage of the Chuandongbei project in southwest China, one of the largest onshore gas projects developed by an international oil company and a national oil company in China.
- The long-delayed $6.4B Chuandongbei project, which is operated and 49% owned by CVX with 51% held by China National Petroleum (NYSE:PTR), is estimated to contain potentially recoverable natural gas resources of 3T cf.
Thu, Jan. 21, 8:58 AM
- China National Petroleum (NYSE:PTR) says its non-domestic oil and natural gas production rose 10.5% Y/Y to 72M metric tons (~1.45M bbl/day), as OPEC’s decision to flood global markets helped China’s biggest oil company pump record volumes overseas.
- CNPC says it produced 23.64M tons of its crude last year in Iraq, or nearly 475K bbl/day, exceeding its annual target by 12% and accounting for a third of its overseas production; the company owns stakes in Iraq’s West Qurna 1, Rumaila and Halfaya oil fields.
- CNPC added 98.86M tons of overseas recoverable oil and gas reserves last year, 29% above its target, in countries including Kazakhstan, Sudan and offshore Brazil.
Mon, Jan. 11, 8:05 AM
- PetroChina (NYSE:PTR) says it has started natural gas production in China’s southwestern regions of Sichuan and Chongqing in its partnership with Chevron (NYSE:CVX) after years of delays.
- PTR parent CNPC says the Luojiazhai field's initial well began operating on Dec. 30 and has an annual production capacity of 3B cm of gas.
- Luojiazhai is part of the $6.4B Chuanbeidong project, a sour gas development in the Sichuan basin that contains a high level of hydrogen sulphide.
- CVX, an experienced sour gas developer, is the operator of the project and owns a 49%, while PTR holds the remaining 51%.
Mon, Jan. 4, 6:50 PM
- Moody’s foresees capital spending reductions of at least 20%-25% in 2016 across the oil and gas E&P business, with oilfield services and drilling remaining the most stressed energy segment.
- Moody’s expects M&A activity and industry consolidation in 2016 to increase in a subdued manner given that the timing of a commodity price recovery remains uncertain; the firm notes that Devon Energy (NYSE:DVN) has targeted the sale of $2B-$3B in assets for 2016, Husky Energy (OTCPK:HUSKF) also has reported plans to sell select legacy upstream assets, and ConocoPhillips (NYSE:COP) likely will continue trying to divest select upstream assets in 2016.
- Globally, Moody's expects to see a rise in distressed exchanges and defaults in 2016, and cites Brazil's Petrobras (NYSE:PBR), Mexico's Pemex and Venezuela's PdVSA as three major international companies that are in serious trouble; the ratings agency also sees credit metrics for PetroChina (NYSE:PTR), Sinopec (NYSE:SNP) and Cnooc (NYSE:CEO) continuing to deteriorate through at least 2017, while Russia’s weak ruble will help Rosneft (OTC:RNFTF) withstand low oil prices.
- Moody’s recently projected a "lower for much longer" energy scenario, with average prices of WTI crude at $40/bbl in 2016 - $8 lower than its earlier forecast - $45/bbl in 2017 and $50 in 2018.
- ETFs: XLE, VDE, ERX, OIH, XOP, ERY, FCG, DIG, GASL, DUG, BGR, XES, IYE, IEO, IEZ, FENY, PXE, FIF, PXJ, NDP, RYE, FXN, DDG
Dec. 23, 2015, 10:18 AM
- A fund run by Macquarie is nearing an agreement to buy more than 40% of Singapore oil storage provider Universal Terminal, possibly as soon as next week, Bloomberg reports.
- The deal reportedly could value Universal Terminal, which is part-owned by PetroChina (NYSE:PTR), at ~$3B including debt.
- Macquarie would buy existing shares of Universal Terminal from Singapore oil trader Hin Leong Trading, which owns 65% of the company.
Dec. 21, 2015, 8:05 AM
- PetroChina (NYSE:PTR) says it plans to lay a temporary natural gas pipeline in Shenzhen in southern China to replace a line that reportedly exploded near the site of a deadly mudslide.
- The ruptured line is part of the massive PTR-operated west-to-east pipeline project that supplies Shenzhen with ~770M cm/year of natural gas and Hong Kong with 400M cm/year.
- At least 90 people were missing after the mudslide spewed out of an overfull dump site in Shenzhen buried 33 buildings.
Dec. 16, 2015, 8:23 AM
- Sinopec (SNP, SHI) soared as much as 10.5% in Hong Kong today after the Chinese government said it would not cut domestic refined fuel prices, in an attempt to discourage rapid growth in oil consumption that would exacerbate air pollution.
- The decision comes a week after Beijing issued its first-ever red alert for pollution and a day after Shanghai warned residents to stay indoors because of “severely polluted” air.
- Sinopec and other state refiners such as PetroChina (NYSE:PTR) are likely to be pleased as long as the crude oil they buy or extract is cheaper than the fixed price of gasoline and diesel they sell, but the potential longer-term problem for the refiners is that the government’s price fix could essentially cap growth in demand for gasoline and diesel.
Dec. 10, 2015, 10:45 AM
- PetroChina (PTR -0.2%) is discussing the sale of a stake in domestic gas pipelines worth ~300B yuan ($47B), in a move seen as a prelude to the Chinese government's plans to break PTR's near monopoly and boost spending on energy infrastructure, Reuters reports.
- Any deal, which would follow Sinopec's (SNP -1%) $17.5B sale this year of its fuel marketing business, could be a step toward Beijing's goal to establish one or more independent pipeline companies that would enable greater access for non-state suppliers.
- PTR produces two-thirds of China's natural gas and controls nearly 80% of the country's bottlenecked patchwork grid of 90K km of gas pipelines.
Dec. 9, 2015, 11:39 AM
- China likely will miss its shale gas production target for this year, Bloomberg reports, as PetroChina (PTR -0.5%) and Sinopec (SNP +0.8%) reduce production amid weakening demand growth and the collapse in energy prices.
- PTR, China’s largest oil and gas company, may produce ~1.6B cm of shale gas this year, lagging behind its stated target of 2.6B cm, and no. 2 SNP may pump ~3.5B cm of shale gas, according to the report.
- The combined production of the two companies of 5.1B cm would come in well short of China's previously announced 2015 production target of 6.5B cm.
Dec. 4, 2015, 10:24 AM
- Iran's government has agreed to extend contracts with its top two Chinese buyers, refiner Sinopec (NYSE:SNP) and trader Zhuhai Zhenrong, to sell ~505K bbl/day in 2016, and is talking to other potential buyers in China about term deliveries next year, Reuters reports.
- Iranian oil officials also have met with traders at PetroChina (NYSE:PTR) and Cnooc (NYSE:CEO), which runs a petrochemical complex with Royal Dutch Shell, according to the report.
- While it is to be expected that Iran, once OPEC's number two exporter, would seek to regain market share as sanctions are lifted, Reuters' Clyde Russell says the significance is that it shows OPEC members now view each other more as competitors than as partners in the global oil market.
- When the Saudis talk about an output cut, what they really mean is targeting the oil that flows to Asia from the Middle East and Russia, Russell writes; there is a price war in Asia between Saudi Arabia, Iraq and Russia, and the three likely will be joined by Iran in 2016.
- ETFs: USO, OIL, UCO, UWTI, SCO, BNO, DBO, DWTI, DTO, USL, DNO, OLO, SZO, OLEM
Nov. 30, 2015, 11:49 AM
- Chinese and Australian regulators are expected to give the green light to Royal Dutch Shell’s (RDS.A, RDS.B) takeover of BG Group (OTCQX:BRGXF, OTCQX:BRGYY) before Christmas, according to The Telegraph, which reports that Shell CEO Ben van Beurden recently had direct meetings with the president of China’s ministry of commerce.
- China was originally believed to be viewing the deal as an opportunity to renegotiate long-term contracts between Shell and the country’s top energy producers, but Cnooc (NYSE:CEO) and China National Petroleum (NYSE:PTR) have pledged broad support in return for continued co-operation with Shell on projects around the world.
Nov. 30, 2015, 10:27 AM
- Iran names Total (NYSE:TOT), Royal Dutch Shell (RDS.A, RDS.B) and Lukoil as global energy majors that have selected oil and natural gas deposits to develop in the country, and Eni (NYSE:E) also is looking to invest.
- Iran is pitching 70 oil and natural gas projects valued at $30B to foreign investors at a conference in Tehran as it prepares for the end of sanctions that have hampered its energy production.
- Iran, which is introducing its new 20-year energy contracts framework at the conference, could sign its first development contract in March or April, according to a top official at National Iranian Oil Co.
- Also, Iran is giving priority to China National Petroleum (NYSE:PTR) for the second phase of the development of its onshore North Azadegan oil field.
PetroChina Co Ltd is engaged in the exploration, development, production and sale of crude oil and natural gas; refining of crude oil and petroleum products, transmission of natural gas, crude oil and refined products and sale of natural gas.
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