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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.
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.
Jul. 1, 2015, 4:59 PM
- Sinopec (NYSE:SNP) and Cnooc (NYSE:CEO), which entered Brazil’s giant deepwater oilfields two years ago, are now looking to increase their presence as Petrobras (NYSE:PBR) sells assets to pay down debt, Bloomberg reports.
- The Chinese companies, as well as Royal Dutch Shell (RDS.A, RDS.B) and Statoil (NYSE:STO) are said to be among companies interested in buying stakes in Brazil's pre-salt offshore exploration blocks, and are preparing for bids to be presented as soon as this month.
- PBR removed the Carcara and Jupiter pre-salt discoveries from its schedule of projects to start producing by 2020, indicating that the fields may be for sale, BofA said in a recent research report.
Jun. 16, 2015, 8:29 AM
- Sinopec (NYSE:SNP) will delay by several years a nearly $1B oil storage terminal in Indonesia, touted to be Southeast Asia's largest, due to slow demand for tank space, Reuters reports, citing industry sources.
- The 2.6M cm storage terminal in Indonesia's Batam free trade zone south of Singapore initially was expected to become operational by mid-2016, but construction has yet to begin and the facility will not be ready for at least another 3-5 years, according to the report.
- Reuters reported in 2012 that SNP and its partner would spend $850M on the project.
Jun. 11, 2015, 8:53 PM
- Petronas and its Asian partners give a conditional final investment decision to move forward with the Pacific Northwest LNG project to be built near Prince Rupert on Canada's British Columbia coast.
- The consortium says the project still needs British Columbia lawmakers to endorse a deal on royalties and taxes that the government signed, and to pass a federal environmental review.
- But Canada’s environment regulator issues another delay, saying it is pausing its review as it requests further information from the group on plans to mitigate damage to a salmon spawning habitat.
- Malaysia's Petronas holds a 62% interest in Pacific Northwest LNG, and its partners include China's Sinopec (NYSE:SNP) with 10%.
- The export terminal is among 19 under consideration in the province - which include stakes by the likes of Shell (RDS.A, RDS.B), Chevron (NYSE:CVX) and Exxon (NYSE:XOM) - to ship western Canadian gas to growing energy markets in Asia.
May 13, 2015, 10:14 AM
- The Chinese government is looking at stripping Sinopec (SNP -0.7%) and PetroChina (PTR -0.4%) of their oil and gas pipelines and spinning off the assets into independent businesses, Bloomberg reports.
- The separation of the pipeline units would be part of Pres. Xi Jinping’s reforms to allow markets a more decisive role in the economy.
- CNPC and its listed arm PTR is China’s biggest owner of pipelines, controlling ~77K km, while China Petrochemical and its listed unit SNP is next with more than 30K km; the assets could be worth as much as $300B, according to an estimate by Bernstein's Neil Beveridge.
May 6, 2015, 9:39 PM
- Plans for a multibillion-dollar IPO of a vast network of gas stations owned by China’s Sinopec (SNP, SHI) - which could have been the biggest in Asia this year - is not likely to take place until 2016 at the earliest because of the retirement of Chairman Fu Chengyu, WSJ reports.
- Fu was considered the driver behind the plan to list the business, Sinopec Marketing Co., in a Hong Kong offering that had been expected to raise $5B-$10B.
- A public offering, when it happens, could prove attractive: Sinopec Marketing’s 30K gas stations, 23K of which have convenience stores attached to them, are dotted across China's east and south and account for 60% of the country’s market for oil products for cars.
May 4, 2015, 4:23 PM
- Chinese oil industry officials and government advisers are pushing back against a proposal that could combine China’s already massive energy companies into new national champions, WSJ reports.
- The merger discussions, which are preliminary and ongoing, reportedly have been met with skepticism from economists who say China needs more competition to nurture long-term growth and rebalance the economy.
- One option being studied by China involves combining CNPC (NYSE:PTR) and Sinopec (NYSE:SNP), while others include merging Cnooc (NYSE:CEO) and Sinochem, as China's leadership views bigger and stronger state companies as key to the country’s reasserting its prominence in the world.
May 4, 2015, 8:49 AM
- Sinopec (NYSE:SNP) confirms that Chairman Fu Chengyu is retiring, to be replaced by Wang Yupu, deputy head of the Chinese Academy of Engineering.
- Also, as part of a broad executive shake-up in China's energy industry, former CNPC (NYSE:PTR) exec Wang Yilin is expected to Cnooc (NYSE:CEO) and take over as CNPC chairman, to be replaced by the company’s president, Yang Hua.
- Fu, the most recognized exec in the Chinese energy industry, became SNP chairman in 2011 after more than 30 years with Cnooc.
- Morgan Stanley writes that "investors are likely to turn more cautious on the reform outlook for Sinopec - they don’t know whether the new management team will be as aggressive as Chairman Fu in driving reform."
Apr. 30, 2015, 12:19 PM
- Sinopec (SNP -2.5%) Chairman Fu Chengyu, who has run Asia’s biggest refiner since 2011, is planning to retire, Bloomberg reports.
- The news is said to have been announced at an internal meeting today, but it has not been made public; Fu's replacement is believed to be Wang Yupu, deputy head of the Chinese Academy of Engineering.
- The move comes a day after SNP announced a surprise Q1 profit of 2.17B yuan ($350M) despite lower crude oil prices; SNP had enjoyed a 14.1B yuan profit in the year-ago quarter, but most analysts had expected another loss after posting a loss in Q4.
- SNP cut Q1 operating costs by 23% Y/Y to 473B yuan, while oil and gas output fell 1% to 117.8M boe.
- "Sinopec did a nice job in cost control... the cost advantage [should] help them if crude begins to rebound later this year,” says a Hong Kong-based analyst at Bocom International.
Apr. 29, 2015, 12:12 PM
- China Petroleum & Chemical (NYSE:SNP): Q1 EPS of RMB 0.018
- Revenue of RMB 478.24B (-25.4% Y/Y).
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, 2:24 PM
- China’s probe into alleged corruption involving senior executives at state firms has widened to ensnare the no. 2 exec at Sinopec (SNP +3.3%), who has been placed under investigation for suspected "serious law and discipline violations," according to the state's top anti-graft authority.
- The official resigned from all his positions at SNP, including vice chairman and non-executive director.
- The news that the probe into China’s state-owned energy industry is still expanding after China National Petroleum and its listed PetroChina arm lost more than a dozen senior officials to government investigations.
Apr. 27, 2015, 11:48 AM
- Sinopec (SNP, SHI) and PetroChina (NYSE:PTR) are dismissing reports that their parent companies could merge to create a state giant, saying they have never received any official information about such a restructuring.
- It is the first time Sinopec and PTR have formally downplayed Chinese and foreign media reports in recent months that the government is considering merging Sinopec's parent with China National Petroleum, which controls PTR.
- Shares are off earlier highs but still sport strong gains, particularly SHI, up nearly 15% in U.S. trading.
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
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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