Can Natural Gas Development Drive PetroChina Further?
Stephen Simpson, CFA
Stephen Simpson, CFA
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.
Wed, Mar. 23, 8:05 AM
- PetroChina (NYSE:PTR) reports its lowest net profit since 1999, falling 67% last year to 35.5B yuan ($5.5B) from 107B yuan, on sales of 1.73T yuan, down 24% Y/Y.
- PTR says its 2015 crude oil production rose 2.8% Y/Y to 971.9M barrels, with natural gas production gaining 3.4% Y/Y to 3.1T cf.
- PTR estimates its capital spending this year will fall ~5% to 192T yuan, as it expects a weak global economy and continued low oil prices.
Tue, Mar. 22, 11:47 PM
- Woodside Petroleum (OTCPK:WOPEF, OTCPK:WOPEY) and partners including Royal Dutch Shell (RDS.A, RDS.B) are shelving plans to develop the $40B Browse liquefied natural gas project off Australia's west coast.
- Woodside says it will not go ahead with the floating LNG development after completing engineering and design work, citing an “extremely challenging” market.
- The Browse project sits on an estimated resource of 15.4T cf of dry gas, plus 453M barrels of condensate, and once was considered an important growth driver for Woodside.
- BP, PetroChina (NYSE:PTR) and a venture between Mitsubishi and Mitsui also are partners in the project.
Tue, Mar. 22, 5:26 PM
- Petrobras (NYSE:PBR) and its partners at the giant Libra pre-salt field off Brazil said today they had struck the largest oil column found so far at the play.
- PBR said a 301-meter-thick oil column was found at a well in the Santos basin, with good quality oil unearthed “in reservoirs of excellent productivity."
- PBR operates Libra and owns a 40% stake, and is joined by Shell (RDS.A, RDS.B) and Total (NYSE:TOT) with 20% each, while China National Petroleum (NYSE:PTR) and Cnooc (NYSE:CEO) each hold 10%.
Mon, Mar. 21, 2:59 PM
- Venezuela's state-oil firm PDVSA has bought a 500K-barrel cargo of U.S. crude from PetroChina (NYSE:PTR) for delivery in April at its terminal in the Caribbean island of Curacao, Reuters reports.
- The purchase reportedly is separate from a large tender launched by PDVSA to buy ~8M barrels of U.S. and Nigerian crudes that was awarded last week to BP and China Oil.
- PDVSA, which needs foreign light crude to use as a diluent for its extra heavy oil and to process at its Caribbean refineries, started buying WTI in January; since then, it has received two 500K-barrel cargoes, and another of the same size on tanker Orpheas is expected to arrive in Curacao this week, according to the report.
Mon, Mar. 7, 9:59 AM
- China National Petroleum (PTR -3.2%) will cut capital spending this year by ~23% and will reduce domestic crude production, Su Jun, general manager of the company's production and operation department, tells Bloomberg.
- CNPC plans to produce 108M metric tons of crude domestically this year, a 2.9% Y/Y decline, as it needs to "cut capital spending and output to sustain profit and maintain positive cash flow," Su says.
- CNPC is reviewing output at 16 oil and gas fields in China and may further cut targets, Su says, adding that production from its Daqing oilfield will fall by 1.5M tons this year while the Liaohe oilfield also will reduce output.
Thu, Feb. 25, 9:42 AM
- Petrobras (PBR +2.1%) should fetch $5B-$6B from the sale of its Nova Transportadora do Sudeste natural gas pipeline unit in southeast Brazil, Reuters reports, citing the Valor Economico newspaper.
- Potential bidders include Canada's Brookfield Asset Management (NYSE:BAM), China National Petroleum (NYSE:PTR), and a joint venture between the Canadian Pension Plan Investment Board and Engie (OTCPK:ENGIY), according to the report.
- Bids are said to be expected by a Tuesday deadline.
Wed, Feb. 24, 8:57 AM
- China National Petroleum (NYSE:PTR), the country’s biggest oil and gas producer, may spin off its oilfield services business as part of its efforts to streamline and become more efficient, Chairman Wang Yilin told the IHS CERAWeek conference in Houston yesterday.
- However, the chairman provided no details on the timing or stake size of a potential oilfield services IPO.
- "This reform follows on from Cnooc (NYSE:CEO) and Sinopec (NYSE:SNP), who have partially spun off their oil services divisions," Bernstein analyst Neil Beveridge says, but “with the severe downturn in the industry and low valuations, the timing is not good.”
Sat, Feb. 13, 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%.
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
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