Can Natural Gas Development Drive PetroChina Further?
Stephen Simpson, CFA
Stephen Simpson, CFA
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.
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%
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.
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. 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.
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.
Apr. 28, 2015, 12:48 PM
- "PetroChina’s (PTR -2.8%) share price has decoupled from underlying performance and fundamentals,” says Bernstein analyst Neil Beveridge after shares surged yesterday even as China’s biggest oil company reported its worst quarterly performance since 2008.
- Shares of top China refiner Sinopec (SNP -1.3%) also have rocketed upward in recent weeks, and continued to rise for a time even after the government announced it was investigating the president of SNP’s state-owned parent company as part of a major anti-corruption drive.
- Lower oil prices means companies such as PTR make less money off each barrel they pump out of the ground, and demand has waned for products like diesel as China’s industrial activity has weakened.
- Investors are betting that China’s government wants to combine the two state-run giants a new national oil champion that could aggressively compete with world's giants, even though Beveridge thinks a merger is "highly unlikely given that it reverses the trend of increased competition within the industry.”
Apr. 27, 2015, 12:49 PM
- PetroChina (PTR +3.2%) is higher even after reporting a larger than expected 82% drop in Q1 profit due to lower international crude prices and inventory writedowns at its refining division.
- PTR's Q1 net profit tumbled to 6.15B yuan ($989M), its lowest since Q3 2007, from 34.2B in the year-ago period and well below the analyst consensus average of 9.98B yuan.
- Q1 sales fell 22% to 410B yuan and the average realized crude price was halved to $48.87/bbl from a year ago; oil and gas output rose 4.9% to 381M boe.
- Earlier: PetroChina, Sinopec surge on industry merger speculation
Apr. 27, 2015, 8:15 AM
- PetroChina (NYSE:PTR) and Sinopec (SNP, SHI), China’s two largest oil explorers, jumped by their daily trading limit in Shanghai on speculation the government is considering consolidating the industry.
- PTR jumped 10% to 14.65 yuan, the highest in more than five years, and SNP also surged 10% to 8.56 yuan at the close in Shanghai; in U.S. premarket action, PTR +5%, SNP +5.7%, SHI +17.1%.
- A report also said China’s state-assets regulator may cut the number of government-owned enterprises to 40 from 112 through mergers and restructuring.
- Earlier: Chinese shares continue powerful ascent
Mar. 27, 2015, 2:56 PM
- Cnooc (CEO +4.8%) says it will shelve its shale gas project in Anhui province, in the latest sign that the U.S. shale gas revolution is unlikely to replicate itself in China.
- CEO Li Fanrong says the company had drilled near Wuhu, in southern Anhui, since late 2011, but decided the block is not suitable for development on a large scale.
- Cnooc joins PetroChina (NYSE:PTR), which has already sharply cut back on a shale project in Sichuan province it was developing with Royal Dutch Shell.
- Cnooc tried but failed to interest foreign investors in the Wuhu block, but potential partners have shied away in part because of the dense population in the area; similar concerns held back the PetroChina-Shell project in Sichuan.
- Earlier: Cnooc surprises with 6.5% profit gain despite oil price plunge
Feb. 17, 2015, 3:31 PM
- China may merge its state-owned oil companies to create giants that will be more efficient and capable of taking on big overseas rivals, WSJ reports.
- One plan reportedly would combine the country’s largest oil companies, CNPC (PTR +2%) and Sinopec (SNP +4.2%), while other options include merging Cnooc (CEO +1.8%) with Sinochem.
- The firms have expanded into each others’ turf over the years, creating overlapping operations that span everything from exploration to refining to running gas pumps.
- No timetable is set for a decision on whether or when to proceed with the mergers, WSJ says.
Dec. 4, 2014, 2:56 PM
- PetroChina (PTR +6.4%) says it is teaming up with Sinochem to tap shale gas from five blocks in the southwest of China.
- The new entity plans to spend 26B yuan ($4.2B) to tap the five shale blocks, which total 15.6K sq. km in size and are mostly located near Chongqing; production is expected to begin in 2017.
- China is believed to hold the world's largest technically recoverable shale gas reserves but development is at an early stage.
Dec. 4, 2014, 6:32 AM
- The Shanghai Composite gained 4.3% overnight, bringing its advance over the past month to 19%, the most among 93 global markets. The index is now higher by 37% year-to-date.
- The rally comes not just alongside a PBOC rate cut, but as mainland stocks opened up to global investment in early November - exchange volume nearly doubled the previous 30-day average.
- Among the movers: PetroChina (NYSE:PTR) and Sinopec (NYSE:SNP) both soared by the 10% daily limit.
- FXI +3.9% premarket
- ETFs: FXI, EWH, PGJ, YINN, GXC, FXP, ASHR, YANG, MCHI, PEK, XPP, YAO, YXI, CHXF, FCA, CN, CHIE, EWHS, FCHI, ASHS, CNXT, CHNA, KBA, FHK
Sep. 17, 2014, 11:46 AM
- Sinopec (SNP -0.4%) and PetroChina (PTR +2%), China's largest oil and gas producers, plan to increase shale gas output by 40%/year to meet the country’s production target.
- SNP plans to invest 21.5B yuan ($3.5B) in shale gas drilling and expects to produce as much as 3.5B cu. meters by 2015, while PTR is targeting output of more than 2.5B cu. meters in 2015 after investing 11.2B yuan, according to the Ministry of Land and Resources.
- China’s 2015 target depends on SNP's ability to produce shale gas at the Fuling project in the country’s southwest, but the company has halved its target of producing 60B cu. meters by the end of the decade because of geological challenges.
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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