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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.
Wed, Jan. 27, 11:38 AM
- Sinopec (SNP -0.2%) says its 2015 oil and gas production slipped nearly 2% amid sharply falling domestic production from aging fields, and natural gas production rose 2.6% to 735B cf.
- SNP also says 2015 diesel output fell 5.67% to ~70M metric tons as weak industrial activity weighed on Chinese demand, and gasoline output rose 5.4% to ~54M tons as more Chinese first-time drivers took to the country’s roads.
- The latest SNP operating statistics demonstrate why China’s state-owned oil companies have been on a quest to buy resources around the world in recent years, WSJ reports.
Wed, Jan. 20, 10:42 AM
- Saudi Aramco is in advanced talks with two of China’s Sinopec (SNP -6%) and Cnooc (CEO -6.1%) about a number of energy projects, including refineries in the city of Qingdao and in the provinces of Yunnan and Sichuan, to help increase the Saudi group’s sales in Asia, Chairman Khalid al-Falih tells WSJ.
- Imports of Saudi Arabian crude by China rose just 2% in the first 11 months last year, compared with overall Chinese import growth of ~9%, while imports from Russia - China’s No. 2 supplier after Saudi Arabia - jumped nearly 30%.
- The comments follow Tuesday's visit by Chinese Pres. Xi to Riyadh against a backdrop of evolving Chinese ties with the region.
Tue, Jan. 19, 6:28 PM
- Suncor’s (NYSE:SU) expected takeover of Canadian Oil Sands (OTCQX:COSWF), which would boost its stake in the Syncrude Canada oil sands venture to 49% from its current 12%, is a "potentially positive” step that could improve output and productivity, says Brian Tuffs, head of Sinopec’s (NYSE:SNP) Canadian operations.
- SNP is the fourth-largest owner of Syncrude, with a 9% stake, and has invested C$10B in Canada, including the Syncrude stake, and Tufts says the company sees its Canadian assets as “core” to its long-term strategy.
- SU CEO Steve Williams has said the company would devote more resources to boosting Syncrude’s output.
Fri, Jan. 15, 4:09 AM
- Crude futures are heading lower after posting the first significant gains for 2016 in the previous session, as the prospect of additional Iranian supply looms over the market with Western sanctions expected to be lifted within days.
- China's Sinopec (SNP, SHI) has also purchased its first ever batch of U.S. oil for export, a landmark transaction after the ending of a four-decade ban on domestic exports.
- West Texas Intermediate is down 3.4% at $30.13 a barrel, near the 12-year low of $29.93 hit earlier this week.
- ETFs: USO, OIL, UCO, UWTI, SCO, BNO, DBO, DWTI, DTO, USL, DNO, OLO, SZO, OLEM
Mon, Jan. 11, 12:31 PM
- The first cargo of liquefied natural gas has sailed from the Australia Pacific LNG facility in Queensland, ConocoPhillips (COP -4.1%) and its partners in the project say.
- The shipment is among the first in a wave of LNG projects that are coming online even as low oil prices have dragged down the value of natural gas.
- COP says it expects the project to be self-funding after the second train comes online later in 2016.
- COP and Australia’s Origin Energy (OTC:OGFGF) each own a 37.5% stake in the project, with Sinopec (NYSE:SNP) owning the remaining 25%.
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. 21, 2015, 3:09 PM
- Anadarko Petroleum (APC +0.9%) spikes more than 3% before fading, following chatter that Sinopec (SNP -1.2%) is considering a takeover bid for the E&P company.
- Stifel analyst Michael Scialla tells Benzinga the rumor fits into the story around the China gas sector and the understood benefits of APC's inventory and Permian exposure.
- Oppenheimer's Fadel Gheit says a SNP deal for APC has a less than 50% probability, but that APC is believed to be a takeover target by other analysts.
Dec. 21, 2015, 12:34 PM
- Iraq is in talks to form an oil marketing joint venture with top Chinese refiner Sinopec (SNP -1%), WSJ reports, as it prepares for Iran's entry into the market amid the oil price slump.
- The partnership reportedly would focus on marketing Iraqi crude in China, be equally split between each company and would be based in Singapore; Iraq would supply tankers from its fleet to the partnership while SNP's Unipec trading arm would provide the financing.
- Oversupply already has led to tumbling oil prices, and a lifting of western sanctions against Iran - which could start as early as next month - could unleash another 500K bbl/day of additional oil onto the market.
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, 6:27 PM
- The A$24.7B (US$17.9B) Australia Pacific LNG project, the last of three huge natural gas export projects built on Australia's east coast, has begun production, leaving it on track to ship its first cargo of liquefied natural gas by the end of the year, venture partner Origin Energy (OTC:OGFGF) says.
- The project - which chills natural gas at a plant on Curtis Island that is piped from within seems of coal deposits, located in two basins in Queensland state - is owned by Origin and ConocoPhilips (NYSE:COP), which each hold 37.5% stakes, and Sinopec (NYSE:SNP) with a 25% interest.
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
Dec. 2, 2015, 8:16 AM
- Sinopec (NYSE:SNP) has signed on as the anchor customer at an oil terminal in the U.S. Virgin Islands to be refurbished by an affiliate of ArcLight Capital Partners and Freepoint Commodities, Bloomberg reports.
- SNP reportedly will lease ~10M barrels of the terminal’s initial 13M barrel capacity.
- The terminal is located at a shuttered refinery, formerly owned by Hess and Petroleos Venezuela that was once the largest in the world.
China Petroleum & Chemical Corp is engaged in the oil & gas and chemical operations & businesses, including exploration, development, production, refining, transportation, storage & marketing of crude oil & natural gas & production of chemicals.
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