Can Natural Gas Development Drive PetroChina Further?
Stephen Simpson, CFA
Stephen Simpson, CFA
Tue, Jul. 19, 4:43 PM
- China National Petroleum (NYSE:PTR) says it has evacuated 191 employees, leaving a staff of 77 to help keep its oil fields running in South Sudan, where fighting has flared up in the past two weeks.
- CNPC says it will try to maintain normal operation of the oil fields so long as it feels its employees are safe, and is prepared to move all its staff out of South Sudan if the situation worsens.
- The country, which boasts sub-Saharan Africa’s third-biggest crude reserves, is producing as little as 120K bbl/day because of a civil war that erupted in 2013.
Wed, Jul. 13, 4:59 PM
- China's demand for oil has helped soak up some of the world's surplus crude oil, but the country’s refiners are now flooding markets with products including diesel and gasoline, WSJ reports.
- China says its total exports of refined fuels jumped 38% Y/Y to 4.2M tons, or ~1.02M bbl/day, in June, sending its refined fuel exports up 45% overall so far this year.
- Slowing domestic demand has left China’s oil refiners with huge surpluses they are looking to sell abroad, a trend that mirrors similar increases in China’s exports of processed basic materials such as steel in recent months and has provoked complaints from governments and industries around the world.
- Another key factor is the resurgence of China’s independent crude refiners: Last year, the government allowed them to directly import crude from abroad for the first time instead of buying more expensive crude from domestic state-owned oil companies, and the subsequent ramp-up in production has provided big state-owned refiners such as Sinopec (NYSE:SNP) and China National Petroleum (NYSE:PTR) with greater competition at home, leading them to sell more abroad.
Tue, Jul. 12, 8:42 AM
- Royal Dutch Shell (RDS.A, RDS.B) and its partners say they are again delaying a final investment decision on a terminal to export liquefied natural gas from Canada’s Pacific coast to Asian markets.
- "The whole global energy industry is in turmoil,” LNG Canada CEO Andy Calitz says, adding that the drop in natural gas prices around the world, particularly in Asia, has made the project too expensive for now.
- The LNG Canada project would export up to 24M metric tons/year of LNG and cost up to US$40B to build; Shell owns a 50% stake in the project along with partners Korea Gas, Mitsubishi and PetroChina (NYSE:PTR).
- The group previously postponed the decision in February, when it said it would rule on whether to proceed with construction by the end of 2016.
Wed, Jun. 29, 1:53 PM
- China National Petroleum (PTR +2.3%) says it approved plans to restructure its oilfield services business, a day after the group disclosed that it is ready to sell some of its largest oilfield subsidiaries which have reported declining revenues in recent years.
- CNPC's upstream business has been hurt by the decline in global crude prices, putting pressure on China's biggest oil producer to cut costs and spin off money-losing businesses.
- Despite calls for Chinese state-owned enterprises to improve efficiency, many China watchers believe the country's oil sector will opt only for incremental changes rather than for a radical shake-up.
Tue, Jun. 7, 11:58 AM
- Chevron (CVX +2.2%) says its Unocal East China Sea subsidiary will ramp up production in the Luojiazhai and Gunziping gas fields, its biggest investment in China.
- CVX says it will use all three of its gas trains, with combined outlet capacity of 258M cf/day of natural gas, following the success of the first stage of the Chuandongbei project.
- CVX owns a 49% interest and China National Petroleum (NYSE:PTR) owns 51% of the $6.4B Chuandongbei project that covers more than 800 sq. km in Sichuan province and the Chongqing municipality, containing potentially recoverable natural gas resources of 3T cf.
Tue, May 31, 10:53 AM
- China National Petroleum (NYSE:PTR) may consider increasing its stake in Russian oil firm Rosneft (OTC:RNFTF) during a planned privatization program, Chairman Wang Yilin told Russian television yesterday.
- The Russian government has included a reduction in its stake in Rosneft to 50% from 69.5% in its privatization plan, with a sale expected to bring ~650B rubles ($10B) to the Russian budget, which has been in deficit as the economy has slumped because of weak oil prices.
- CNPC already has a small stake in Rosneft; BP owns a 19.75% stake.
Fri, May 27, 10:54 AM
- China National Petroleum (PTR +0.1%) plans a backdoor listing of its engineering assets through a Shanghai-listed petrochemical material supplier and processor it controls, Bloomberg reports.
- Shanghai-listed Xinjiang Dushanzi is looking at buying engineering assets from CNPC units including China Petroleum Engineering & Construction Corp., according to the report.
- CNPC will be among the first of China’s sprawling government-run enterprises to undergo reforms that will transform it into a strategic holding company that no longer manages day-to-day operations of subsidiaries.
Tue, May 17, 8:18 AM
- Alberta's massive wildfire is growing again and moving rapidly, prompting the evacuation last night of 4,000 oil sands workers north of Fort McMurray.
- Suncor Energy (NYSE:SU) and Syncrude Canada evacuated workers from the affected area, and their major facilities are under a precautionary notice with the fire still 15-20 km (10-12 miles) away.
- Other sites impacted reportedly include oil sands projects operated by Marathon Oil (NYSE:MRO) and PetroChina (NYSE:PTR) unit Brion Energy.
- The renewed fire threat threatens to further delay a restart of at least 1M bbl/day in oil sands production; Canadian oil sands production averaged 2.5M bbl/day last year, much of which was imported by the U.S. for refining into petroleum products.
- Now read Alberta fire only 1 km from Enbridge oil sands terminal
Fri, May 13, 11:57 AM
- China National Petroleum (PTR -1.4%) says it will begin laying a second domestic oil pipeline next month to allow for increased Russian crude supplies to flow to the city of Daqing.
- The 585-mile pipeline runs parallel to an existing spur off of Russia’s East Siberia-Pacific Ocean crude pipeline, and is expected to be completed by October 2017; the two pipelines will have a combined annual capacity of 30M metric tons of crude.
- Chinese imports of Russian crude jumped 28% last year, placing the country as China’s largest supplier on an annual basis after Saudi Arabia.
Thu, May 12, 11:01 AM
- via Jefferies in a recent note:
- "We believe PetroChina (NYSE:PTR) is now being squeezed. CNOOC (NYSE:CEO) and Sinopec (NYSE:SHI) have been squeezed for dividends given their discretionary payout policy and low gearing. PetroChina bent over backwards to declare a year-end dividend in 2015. It
needs to find a way to declare an interim dividend for 2016. We believe PetroChina is under tremendous pressure to fund state budgets and this will be the key to unlocking shareholder value.
- "The only way, in our view, that PetroChina can declare an H1 interim dividend is to 1) sell assets or 2) change its payout policy. Both, in our view, will unlock value for shareholders by either crystalizing SOTP value or demonstrating a new raison d'être for the SOE."
- Firm has a HK$8 price target. Implied upside 50%.
- Now read Best Ways To Gain From Bottoming Chinese Stock Market In 2016 »
Thu, Apr. 28, 9:17 AM
- PetroChina (NYSE:PTR) -1.6% premarket after reporting a 13.8B yuan ($2.1B) Q1 loss - the group's first quarterly loss since the company started its Hong Kong listing in 2000 - from a 6.15B yuan profit a year ago.
- PTR’s Q1 refining and chemicals division swung to an operating profit of 11.5B yuan, but the gains were "not enough to offset weaker oil prices, which dragged exploration and production into losses,” Bloomberg's Lu Wang says. “Ample gas supply this year may encourage a gas price cut in the second half of the year, which is likely to be the biggest headwind" for PTR.
- PTR says Q1 oil and gas production rose 2.6% to 391.3M boe, with crude output adding 1.4% to 242.7M barrels and marketable natural gas production rising 4.8% to 891.4B cf.
- Now read China National Petroleum's 2015 profit fell 52%
Wed, Apr. 27, 7:47 AM
- PetroChina (NYSE:PTR) parent China National Petroleum says its 2015 profit fell 52% Y/Y to 82.5B yuan ($12.7B) on 26% lower revenues of ~2T yuan.
- Total oil and gas production for the year rose 1.8% Y/Y to 259.5M metric tons; domestic crude production reached 111.4M tons (~2.24M bbl/day), accounting for 52% of China’s total, while domestic natural gas output reached 96.5B cm, 73% of the country’s total.
- CNPC said last month that full-year profit at its 86%-owned PTR fell 67% Y/Y to 35.5B yuan, the lowest since 1999.
Thu, Apr. 14, 12:37 PM
- PetroChina's (PTR +0.2%) Canadian unit is on track to start operations at its MacKay River 35K bbl/day oil sands plant later this year despite crude prices being below break-even levels for the project, a senior executive tells WSJ.
- The startup would mark the first production from PTR’s nearly C$5B (US$3.9B) investment in two Alberta oil sands projects, MacKay River and another 250K bbl/day Dover project that has yet to be built.
- The Brion Energy exec says the two projects require oil prices of $60-$70/bbl to breakeven; both use injections of steam to extract deposits of crude from horizontally drilled wells, a high-cost process that requires burning natural gas to fuel the steam generators.
- In a separate interview with Financial Post, the exec struck a cautious note, saying the company will take time to learn from its first steps in the business before expanding further.
- Now read PetroChina's 2015 profit plunges by two-thirds
Thu, Mar. 31, 8:28 AM
- BP and China National Petroleum (NYSE:PTR) sign a production sharing contract for shale gas exploration, development and production in a block in the Sichuan Basin.
- BP says the contract is its first shale gas deal in China and covers an area of 1,500 sq. km; CNPC will be the operator for the project.
- The framework agreement also covers possible future fuel retailing ventures in China, exploration of oil and liquefied natural gas trading opportunities, carbon emissions trading and the sharing of knowledge around low carbon energy and management practices.
- BP -0.6% premarket.
Tue, Mar. 29, 11:59 AM
- Sinopec’s (SNP -0.3%) move to close some high-cost fields has caused it to slip to number three among China's oil and gas producers, as it also reports a 30% profit decline for 2015.
- PetroChina (PTR -3%) remains the country's top producer at 1.49M boe in 2015, but Cnooc (CEO -1.6%) overtook SNP with output of 496M, jumping nearly 15% Y/Y, while SNP produced almost 472M boe, down 1.7%.
- SNP "has the most mature exploration and production portfolio of the all three Chinese oil majors,” says Bernstein's Neil Beveridge, adding that strong reserves replacement by CEO suggests the company can stabilize production even in a low oil price environment.
Tue, Mar. 29, 7:52 AM
- Sinopec's (NYSE:SNP) 2015 net income fell more than 30% to the lowest level in more than five years, but it still topped analyst forecasts as refining revenues helped offset sliding oil prices.
- Refining helped cushion SNP from the severe profit declines felt by state-owned rivals PetroChina (NYSE:PTR) and Cnooc (NYSE:CEO), which both saw net income drop by at least 66%.
- Net income for 2015 totaled 32.4B yuan ($4.98B) from 46.5B yuan in 2014, on revenues of 2.02T yuan, down 29% Y/Y.
- SNP's oil and gas production fell 1.7% to 471.9M boe, the first decline in production in 16 years, according to Bloomberg.
PetroChina Co. Ltd. engages in the exploration, development, production and sale of crude oil and natural gas. The company also involves in the refining of crude oil and petroleum products, production and marketing of primary petrochemical products, derivative chemical products and other... More
Sector: Basic Materials
Industry: Major Integrated Oil & Gas
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