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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.
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%.
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)
Sep. 9, 2015, 9:17 AM
Sep. 8, 2015, 9:14 AM
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. 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. 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, 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
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, 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
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Nov. 17, 2014, 2:58 PM
- Sinopec (SNP -2.5%) pledges to spend $4.6B over three years to address safety concerns related to its oil pipelines, after authorities order it to temporarily shut down two of its pipelines following surprise inspections.
- SNP is told to shut the 179-km Linyi-Cangzhou pipeline and a 40-km pipeline from the Tanggu oil depot to Dagang in Tianjin by Nov. 20 after inspections found numerous problems including "stress corrosion and fatigue damage."
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.
Sep. 15, 2014, 10:28 AM
- Investors are underwhelmed by Sinopec's (SNP -5.5%) plan to sell a $17.5B stake in its sprawling network of gas stations to 25 local investors, after expectations for the sale were for $20B-$30B.
- The stake sale didn't turn out to be as valuable because it isn't real reform, writes Heard on the Street's Abheek Bhattacharya; the fragmented set of investors consists mostly of local Chinese funds and businesses who have little know-how in retail petroleum operations.
- No individual stake will exceed 2.8% of the retail business, making it unlikely that any of the investors will have much clout to press for meaningful changes.
- SNP's story will now return to its business fundamentals instead of reform, says Macquarie's James Hubbard; on the plus side, SNP is selling lower-sulfur fuels to combat pollution, which earn it higher margins.
Aug. 25, 2014, 2:49 PM
- Sinopec (SNP +2.6%) says 37 companies have expressed interest in investing in its spinoff of 30% of its gas station business, but a skeptical WSJ Heard on the Street column says early signs of hoped-for reforms are not encouraging.
- Instead of boosting efficiency, SNP so far looks like it is reorganizing its priorities and raising capital, Abheek Bhattacharya writes; if this is as good as it gets for SNP's reforms, China investors should brace for disappointment.
- Shares are up nicely, however, after Chairman Fu Chengyu, in discussing SNP's 8% Y/Y rise in H1 profit, said he expects shale drilling costs in China to drop to $50M/well from $80M in three to five years.
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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