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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. 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. 20, 2015, 7:57 AM
- Sinopec (NYSE:SNP) is in advanced talks on taking as much as an 80% stake in petrochemical firm Dragon Aromatics, which operates one of China's biggest chemical plants, Reuters reports.
- The talks come after Dragon suffered a second major fire in less than two years at the $3B plant in Fujian, and local authorities reportedly want SNP to participate before allowing the plant to reopen.
- Dragon was forced to shut the plant with a capacity to produce 1.6M metric tons/year of paraxylene, a chemical used to make polyester fiber and plastics, after the fire in April.
Oct. 14, 2015, 8:58 AM
- Sinopec (NYSE:SNP) wins Chinese government approval to build a 5,221-mile pipeline network to connect gas fields in northwest China to populous southern and eastern provinces, Bloomberg reports.
- The 130B yuan ($20B) project, which will have an artery and six regional links, is designed to send gas produced from SNP’s Zhundong coal-to-gas project in Xinjiang to end users in eastern and southern provinces, and will carry unconventional gas from coal-bed methane and shale gas projects in northwest China.
Oct. 9, 2015, 9:45 AM
- Malaysian state-run energy company Petronas renews its pledge to move ahead with its planned C$36B liquefied natural gas shipping export project on Canada’s Pacific coast, despite the current market volatility for oil and gas.
- Petronas holds a 62% interest in the Pacific Northwest LNG project, with several partners including China's Sinopec (NYSE:SNP).
- Analysts are skeptical of Canada’s ability to deliver LNG export projects this decade, as the global market is entering a period of oversupply and demand is slowing in Asia just as the oil slump has taken down prices for LNG.
- The Petronas export terminal is among ~20 projects under consideration in British Columbia - which include stakes by the likes of Shell (RDS.A, RDS.B), Chevron (NYSE:CVX) and Exxon (NYSE:XOM) - and none have started construction.
Oct. 8, 2015, 9:11 AM
- China has nearly tripled the size of proven reserves at its Fuling project, by far the country's largest shale gas find, according to a Sinopec (NYSE:SNP) official.
- The Jiaoshiba block of the project in southwest China reportedly has 273.8B cm of newly proven reserves, which would take total proven reserves at Fuling to 380.6B cm, giving it the potential to have an annual production capacity of 10B cm by year-end 2017.
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. 9, 2015, 9:17 AM
Sep. 8, 2015, 9:14 AM
Sep. 3, 2015, 11:49 AM
- Russia's Rosneft (OTC:RNFTF) has signed documents with China worth more than $30B to jointly develop oil and gas fields in Russia, company president Igor Sechin says.
- Under the agreement, Sinopec (NYSE:SNP) has the right to buy a 49% stake in its subsidiaries that hold the exploration licenses for the Russkoye and Yurubcheno-Tokhomskoye fields, part of an agreement on cooperation within the proposed joint development of the two oil fields.
- Rosneft also says it reached a preliminary agreement for the potential acquisition of a 30% stake in a ChemChina subsidiary.
Aug. 31, 2015, 7:12 AM
- Canadian Oil Sands (OTCQX:COSWF) says it has halted crude oil production at the Syncrude oil sands project after a fire damaged equipment at its processing facility in northern Alberta on Saturday.
- COSWF says the main coker conversion units were not damaged and Syncrude continues to operate, but it has suspended synthetic crude oil production and is currently developing a recovery plan.
- The company does not estimate the volume or value of lost production, but Syncrude’s synthetic crude output averaged 207.7K bbl/day in Q2.
- COSWF holds a 37% stake in Syncrude, and six other companies own the rest, including lead operator Exxon Mobil (NYSE:XOM) unit Imperial Oil (NYSEMKT:IMO), Suncor Energy (NYSE:SU), Sinopec (NYSE:SNP) and Cnooc (NYSE:CEO) subsidiary Nexen.
Aug. 26, 2015, 8:40 AM
- Sinopec (NYSE:SNP) says its H1 net profit fell 22% Y/Y to 25.39B yuan ($3.96B) from 32.5B yuan a year earlier, as sharply lower crude oil prices hurt upstream earnings.
- SNP's total H1 oil and gas production fell 1.8% Y/Y to 233M boe, driven lower by falling domestic crude production; H1 refinery throughput rose 2.7% to 118.9M metric tons.
- "Upstream performance remains an area of concern with declining domestic oil and gas production,” says Bernstein's Neil Beveridge, but he adds that the company should benefit from improved downstream performance due to lower feedstock prices for the rest of the year.
Aug. 12, 2015, 10:15 AM
- Syncrude is facing an environmental protection order following the deaths of 30 great blue herons at an abandoned sump pond at its Mildred Lake mine site near Fort McMurray, Alberta.
- Although bird deterrents were working elsewhere on the mine site, Syncrude says no such equipment was in operation at the sump.
- Syncrude was fined $3M in 2008 when more than 1,600 ducks died after they landed on a company tailings pond.
- Canadian Oil Sands (OTCQX:COSWF) owns 37% of Syncrude, with stakes also held by lead operator Imperial Oil (NYSEMKT:IMO), Suncor (NYSE:SU), Murphy Oil (NYSE:MUR), Sinopec (NYSE:SNP) and Cnooc (NYSE:CEO).
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. 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. 8, 2015, 10:19 AM
- Sinopec (SNP -1.1%) says it expects an 11-fold Q/Q increase in its net profit during Q2, which has halted the shares in Hong Kong trading.
- In a filing with the Shanghai stock exchange, SNP forecasts Q2 net profit attributable to equity holders would jump more than 1,000% from the 2.17B yuan (~$350M) in Q1.
- Even with the projected huge increase, Q2 net profit still would come in below the 31.43B yuan (~$5B) earned in the same quarter last year.
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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