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Nov. 19, 2015, 7:57 AM
- Royal Dutch Shell's (RDS.A, RDS.B) proposed tie-up with BG Group (OTCQX:BRGXF, OTCQX:BRGYY) secured clearance yesterday from one of two Australian regulators but still requires approval from China, but Reuters reports that Chinese regulators are pressing the company to sweeten long-term gas supply contracts, which could cast new doubt on the near-term benefits of the deal.
- As the Chinese regulatory approval process entered its third and final 60-day phase earlier this month, the government asked Shell to review prices in LNG contracts worth tens of billions of dollars annually with China National Petroleum (NYSE:PTR), Cnooc (NYSE:CEO) and Sinopec (NYSE:SNP), according to the report.
- Shell officials are said to fear that a revision of the terms of the contracts could create a ripple effect around the world, further eroding gas prices.
Oct. 29, 2015, 12:57 PM
- The plunge in crude oil prices wreaked havoc on Q3 profits at PetroChina (PTR -2.3%), the country’s biggest oil and gas producer, and Sinopec (SNP -1.7%), its largest oil refiner.
- PTR reported its worst quarterly profit on record, with Q3 net income plunging 81% Y/Y to 5.2B yuan ($818M), less than half of analyst estimates, as sales dropped 29% to 427B yuan.
- "It’s a pretty weak performance across all segments,” says Bernstein's Neil Beveridge. “PetroChina is struggling in the low crude environment and needs to find a way to stop the bleeding.”
- SNP's Q3 profit plunged 92% Y/Y to 1.64B yuan ($258M), also far short of expectations, as lower oil prices and production dwarfed an increase in refining revenue.
- "We thought Sinopec would have better leverage in refining to counter the crude-price drop,” says BOC International Holdings' Lawrence Lau. “Inventory losses could be a reason for the sharp profit decline, and it may help Sinopec in the fourth quarter if the crude price rebounds.”
- Earlier: Cnooc's Q3 oil output surges even as revenue falls (Oct. 28)
Oct. 21, 2015, 1:15 PM
- BP (BP +1.2%) announces some major deals with Chinese energy companies as part of Pres. Xi's visit to the U.K., including a framework agreement with China National Petroleum (PTR -1.1%) that the company expects will add several billion dollars in future trade to its business in China, WSJ reports.
- The strategic partnership covers potential shale gas opportunities in China’s Sichuan Basin and future fuel retail ventures in the country as well as other international partnerships.
- BP also agrees to supply up to 1M tons/year of liquefied natural gas to China Huadian, the country’s largest gas-fired power generator, over the next 20 years in a deal the company says is worth up to $10B.
- China's energy production is expected to increase 47%, while consumption is estimated to jump 60% by 2035, BP China President Edward Yang says.
Oct. 20, 2015, 10:40 AM
- BP (BP -0.4%) and China National Petroleum Corp. (PTR -0.4%) are set to announce plans for closer cooperation this week, which are expected to include an outline of specific areas of focus for the two companies within China as well as a broader commitment for international cooperation, Dow Jones reports.
- BP’s main focus in China for now is its investment in petrochemical projects, retail fuel stations and infrastructure to import liquefied natural gas; it has deals to supply LNG to Cnooc (CEO +0.2%) starting from 2019 and a joint venture with Sinopec (SNP +0.2%) provides fuel to the shipping industry, and it completed the expansion of a petrochemicals project in southern China.
- But Sanford C. Bernstein Research analyst Teng Ben says China is not a priority for oil companies looking for E&P opportunities because the country’s oil is relatively expensive to pump.
- Earlier: Reuters: BP, China's CNPC to unveil oil alliance (Oct. 16)
Oct. 16, 2015, 8:58 AM
- BP and China National Petroleum (NYSE:PTR) next week will unveil a strategic alliance to develop oil resources in Iraq and other places, Reuters reports.
- The deal, expected to be one of several high profile deals to be signed during a visit by Chinese Pres. Xi to London, will seek to raise cooperation between the two companies in Iraq, where they are developing the Rumaila oil field, which produced 1.34M bbl/day in 2014.
Oct. 6, 2015, 9:46 AM
- Saudi Aramco has hired Deutsche Bank to explore the potential purchase of some marketing, retail and refining assets of China National Petroleum (PTR +2.2%), Bloomberg reports.
- The deal could be worth several billion dollars, although talks are at an early stage and may fail, according to the report.
- Saudi Aramco has said it wants to make inroads into more advanced chemicals to diversify away from its oil and basic petrochemicals businesses.
Sep. 24, 2015, 8:11 AM
- China's government reportedly plans to create a new crude oil and liquefied natural gas pipeline transportation company by stripping these operations from its three largest oil firms, China National Offshore Oil (NYSE:CEO), China National Petroleum (NYSE:PTR) and Sinopec (NYSE:SNP).
- The move is said to be aimed at reducing the firms' monopoly in the oil and gas market and improving competition; for example, CNPC's PetroChina arm controls more than 80% of China's natural gas grid.
- The report from state-backed China Securities Journal says the plan has been set and is now being studied and implemented in steps.
Sep. 16, 2015, 9:21 PM
- Australia’s antitrust regulator again defers a decision on Royal Dutch Shell's (RDS.A, RDS.B) planned takeover of BG Group (OTCPK:BRGXF, OTCQX:BRGYY), this time until Nov. 12, warning the deal could raise prices and cut the supply of natural gas to consumers on the east coast of Australia.
- The Australian Competition and Consumer Commission says its preliminary view is that the deal could decrease the incentive for Shell’s Arrow Energy joint venture with PetroChina (NYSE:PTR) to supply gas domestically, which could substantially reduce competition in Queensland state or the eastern Australian gas market.
- The European Commission approved the deal earlier this month but approvals from Australia and Chinese authorities remain pending.
Sep. 14, 2015, 11:58 AM
- China National Petroleum, parent of listed PetroChina (PTR -1.4%), is promises to sell several non-core businesses, including a chain of hotels and a taxi business, as state-owned companies come under pressure from the government to dispose of lucrative but often corrupt enterprises.
- China’s two-year, anti-corruption drive has targeted the perks of office of government and state-owned enterprise employees, especially at CNPC, a former power base for now-disgraced energy and security czar Zhou Yongkang.
- Also over the weekend, state oil company Cnooc (CEO -0.7%) pledged to "dismantle all entertainment equipment” and ban official receptions, dining and purchases of high-end consumer goods.
Aug. 27, 2015, 8:19 AM
- PetroChina (NYSE:PTR) says its H1 net profit fell 63% Y/Y to 25.4B yuan ($3.97B) from 68.1B yuan in H1 2014, with earnings upstream and in the marketing segment both hurt by lower oil prices.
- PTR's H1 operating profits at its E&P segment fell 68% to 32.9B yuan, as total crude oil output rose 2.6% to 477.5M barrels.
- Total H1 oil and gas production rose 2.9% to 735.9M boe, led by a 40% Y/Y increase in overseas output, but domestic crude production fell 1.8% to 402.1M barrels.
- H1 sales fell 24% Y/Y to 878B yuan, and capital spending dropped 33% to 61.7B yuan.
- PTR says low crude prices provide an opportunity for acquisitions, and that it has been "tracking some assets for a while."
Aug. 4, 2015, 7:15 PM
- The first oil from a long-duration output test in Brazil's giant Libra offshore area now is projected to flow in Q1 2017 instead of H2 2016, says Odebrecht Oil & Gas, which will operate the test platform with Teekay Offshore Partners (NYSE:TOO).
- The later startup date could be one the first signs that Petrobras (NYSE:PBR), which manages exploration in Libra, may be having trouble meeting targets in its $130B 2015-19 strategic plan.
- PBR owns a 40% stake in E&P rights to Libra, one of the largest oil discoveries of the past three decades; Total (NYSE:TOT) owns 20%, Royal Dutch Shell (RDS.A RDS.B) 20%, and 10% each for Chinese state oil companies Cnooc (NYSE:CEO) and China National Petroleum (NYSE:PTR).
Aug. 4, 2015, 8:57 AM
- PetroChina (NYSE:PTR) yesterday won dismissal of a securities fraud lawsuit by investors who accused the company of failing to disclose corruption that exposed it to government investigations and penalties.
- The U.S. District Judge in Manhattan dismissed the case, agreeing with PTR that the investors failed to make a plausible argument that the oil and gas producer’s annual reports contained statements that were false or misleading at the time they were made.
- The investors sued PTR and some of its former and current officers in 2013, after officials at the firm became entangled in China’s crackdown on corruption.
Aug. 3, 2015, 12:24 PM
- PetroChina (PTR -2.3%) has turned into a speculative bet on how much money the Chinese government is plowing into the stock market that day, resulting in a surge in volatility to the highest level among the world’s 100 biggest companies and topping 95% of the stocks in the Russell 2000 index, according to a Bloomberg analysis.
- PTR’s top weighting in the benchmark Shanghai Composite Index makes it an ideal target for funds trying to influence the broader market, the report says.
- PTR shares have shed 25% in the past three months, while Sinopec (SNP -1.5%) and Cnooc (CEO -1.2%) have lost a respective 22% and 29% during the period.
Jul. 22, 2015, 8:55 AM
- ConocoPhillips (NYSE:COP) says it has ended talks with PetroChina (NYSE:PTR) on a shale gas development in the country after a two-year study.
- COP signed an agreement with the Chinese company to evaluate shale potential in the Neijiang-Dazu field in the Sichuan basin in early 2013.
- "Given the complicated shale formations in China, only the state-owned Chinese energy firms are more likely to pursue their investment in the sector" in the current low oil price environment, says a strategy director at ICIS China.
Jul. 17, 2015, 5:54 PM
- As exploration costs fall, Morgan Stanley's emerging markets analysts see the most upside for China's Cnooc (NYSE:CEO), Argentina's YPF and India's ONGC.
- Cnooc boasts the third-largest production growth rates among emerging markets E&P players, the highest realized oil prices and lowest costs within China's top three oil companies, and better production and development know-how than PetroChina (NYSE:PTR) and Sinopec (NYSE:SNP) on offshore reserves, Stanley says.
- YPF's current valuation is attractive due to the near-term growth of the existing asset base, leaving a sizable unconventional upside as a free option, and forex pass-through in fuel prices has been working over the past five months and protecting margins, the firm says.
- Stanley suggests avoiding Gazprom (OTCPK:OGZPY), Ecopetrol (NYSE:EC) and Petrobras (NYSE:PBR), which it calls its least favorite stock as the company will continue to generate negative free cash flow through 2018 and cash flows primarily will service bondholders to the detriment of equity holders.
Jul. 7, 2015, 12:27 PM
- China's crude oil production looks set to rise this year from a record 4.2M bbl/day in 2014 as new production from Cnooc (NYSE:CEO) helps to counter reductions from its two bigger domestic rivals, PetroChina (NYSE:PTR) and Sinopec (NYSE:SNP).
- While there is no official Chinese production outlook, information from the biggest state oil companies indicates China's output will rise slightly in 2015, largely due to increased production from Cnooc.
- China raised its output in the first five months of this year by 1.8% Y/Y to 4.25M bbl/day, vs. growth of just 0.1% over the same period in 2014.
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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