Wed, Feb. 18, 11:27 AM
- WSJ’s report that China’s government is considering merging some of its big oil companies has caught the attention of Asia’s energy analysts, but Jefferies analysts doubt that the leadership actually will pull the trigger, saying the merger talk is "more brainstorming and thinking outside the box rather than feasible proposals.”
- The firm notes that CNPC (NYSE:PTR) already is plenty big enough to compete with Exxon Mobil (NYSE:XOM): It is bigger than XOM on an asset basis, production at the group level exceeded XOM in 2013, and the value of CNPC's proved reserves at year-end 2013 likely exceeded XOM's by ~50%.
- Jefferies also notes that Sinopec’s (NYSE:SNP) production and value of in-ground reserves exceeds that of ConocoPhillips (NYSE:COP).
- A merger between Cnooc (NYSE:CEO) and SinoChem could make sense, as it would create a fully integrated, 1M bbl/day company spanning upstream and downstream operations.
- WSJ's Liam Denning writes that any such merger would be a step backward because smaller companies offer a better chance for growth, and supermajors such as XOM and COP mostly have struggled to increase their production.
Tue, Feb. 17, 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.
Mon, Feb. 9, 3:41 PM
- Lukoil (OTCPK:LUKOY, OTC:LUKOF) is seeking damages from Sinopec (NYSE:SNP) through arbitration proceedings in London, saying the Chinese company breached an agreement to buy 50% of a Kazakh oil producer for ~$1.2B.
- The Russian company says SNP failed to complete a deal agreed in April 2014 to buy the stake in Caspian Investment Resources, a company with various stakes in four hydrocarbon production projects in Kazakhstan.
- Lukoil's share of production through the venture was ~30K bbl/day in 2013.
Fri, Feb. 6, 10:59 AM
- China's three major national oil companies - China National Petroleum (NYSE:PTR), Sinopec (NYSE:SNP) and Cnooc (NYSE:CEO) - may be largely immune to the global energy rout, according to recent reports.
- Government fiscal incentives in the form of tax breaks for exploration businesses will provide relief for Chinese national oil companies, Wood Mackenzie notes.
- CNPC is best positioned to weather the oil price decline because of its lower E&P production cost, larger natural gas businesses and diversification into downstream businesses, according to Moody's.
- Barclays believes Cnooc is a winner since it boasts the strongest balance sheet among Chinese state-owned enterprises, but a sharp earnings decline will be unavoidable if oil remains lower for longer.
Tue, Feb. 3, 7:59 AM
- Cnooc (NYSE:CEO) says it plans to cut capital spending by 26%-35% in 2015 compared with a year earlier, as China’s biggest energy companies tighten their belts amid plunging oil prices.
- Cnooc says that despite the capex cuts, it would still meet oil production growth targets through “cost control and efficiency enhancement,” forecasting output of 475M-495M boe in 2015, up from ~432M boe last year.
- Cnooc could be facing writedowns of more than $5B related to its 2013 acquisition of Canada’s Nexen, according to J.P. Morgan.
- Larger rival China National Petroleum (NYSE:PTR) is pledging “revolutionary measures” to cut costs, and a joint venture between Sinopec (NYSE:SNP) and Canada’s Talisman Energy (NYSE:TLM) is laying off several hundred staff and contractors in the U.K.
Wed, Jan. 28, 9:48 AM
- Aregntina's YPF and China's Sinopec (NYSE:SNP) sign an MOU aimed at eventually partnering to develop oil and gas projects in the South American country.
- SNP, which is already Argentina's fourth-leading oil producer, has no experience in unconventional oil in the country, but a potential partnership could entail YPF helping develop its conventional output while the Chinese company would invest alongside YPF to raise shale oil production.
- YPF already has partnered with Chevron and Malaysia's Petronas to develop shale oil in Vaca Muerta, and has been courting international investors to boost unconventional energy output one of the world's top shale oil and gas prospects.
Mon, Jan. 12, 8:58 AM
- Sinopec (NYSE:SNP) reportedly plans to raise more than $5B from an IPO in Hong Kong this year of its 30K gas stations and 23K convenience stores scattered across China.
- The gas station and convenience store business received approval from the Chinese government last month for a sale of ~30% of the company, but the company gave no further details on the timetable of the listing.
Dec. 10, 2014, 10:37 AM
- Sinopec (SNP -1.4%) reportedly wants to sell some long-term liquefied natural gas import deals as a slowing Chinese economy and cheaper retail gas makes LNG imports unprofitable, signalling the end of a five-year boom fueled by rising Chinese demand.
- Reuters reports that SNP is planning to offload LNG from new export plants in Australia and potentially Papua New Guinea to BP, amid growing unease over the scale of an expansion that has seen the construction of 11 LNG import terminals since 2006 with plans for 25 more.
- SNP also may sell excess volumes coming from its stake in Exxon's (NYSE:XOM) Papua New Guinea LNG, in which it invested in 2009 when LNG prices were low but Chinese demand was expected to grow for decades to come.
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
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."
Oct. 31, 2014, 7:45 AM
- Sinopec (NYSE:SNP) agrees to acquire a stake in a Saudi Arabian petrochemical company for $562M to enhance its global network and international operation of the refining segment.
- SNP will own a 37.5% interest in Yanbu Co., while its partner Saudi Aramco will hold the remaining of 62.5%.
- The deal came after SNP posted a 12% Y/Y decline in Q3 net profit on weaker oil demand; growth prospects look poor with no obvious catalysts ahead and a reduced capital spending budget, Bernstein's Neil Beveridge says.
Oct. 20, 2014, 2:18 PM
- PetroChina (PTR +0.4%) says it is on course to surpass a 2.6B cubic meter target for shale gas production in 2015 from fields in Sichuan province, adding that the estimate is conservative and newer technology may push the number much higher.
- Geographical structures in PTR’s fields in southern Sichuan are more difficult to drill through than the Fuling project, where Sinopec (NYSE:SNP) operates China’s largest shale-producing project, and gas reservoirs have been smaller
- PTR has nine shale gas exploration rights in Sichuan and Chongqing provinces; four have started or are close to commercial production.
Oct. 9, 2014, 11:18 AM
- Ecuador, OPEC’s smallest-producing member, has signed contracts with companies including Halliburton (NYSE:HAL), Schlumberger (NYSE:SLB), Sinopec (NYSE:SNP) and YPF for a combined $2.12B investment.
- A joint venture between SLB and Tecpetrol will invest at least $702M in the block 12 oil concession, state-run Petroamazonas says; HAL will invest $579M in three concession blocks, and won a contract to boost output at fields in the block 58 concession with a minimum $240M investment.
- The deals come as the government seeks to boost crude output to offset a 15% drop in the price of its Oriente crude in the last three months.
Oct. 6, 2014, 2:19 PM
- Malaysia’s Petronas makes its most specific threat yet to delay development of its proposed C$10B Pacific Northwest natural gas export terminal on Canada's Pacific coast, as CEO Shamsul Azhar Abbas says the Canadian and British Columbia governments must commit to lower taxes by the end of this month to meet its mid-December target for a final decision.
- The CEO says “current project economics appear marginal” based on the company's latest internal assessment, and that if Petronas is unable to move forward with the project this year it probably would not reconsider the Canadian Pacific coast “until the next LNG marketing window, anticipated in 10-15 years.”
- In April, Petronas sold a 15% stake in the project to Sinopec (NYSE:SNP); earlier, Japan Petroleum Exploration and Indian Oil Corp. each took 10% stakes.
- Backers of competing LNG-terminal plans in B.C. include Exxon Mobil (NYSE:XOM), Royal Dutch Shell (RDS.A, RDS.B) and China’s Cnooc (NYSE:CEO).
Sep. 30, 2014, 4:54 PM
- Saudi Aramco and partner Sinopec (NYSE:SNP) plan to start a main refinery unit for making gasoline from crude oil at a joint venture plant on the Red Sea next year, Bloomberg reports.
- The joint venture refinery reportedly will produce low-sulfur diesel for export and have the fuel available for sale next year; the lower the sulfur content in diesel, the cleaner it is as a transport fuel, and the JV’s diesel would meet European specifications.
- The plant will have crude processing capacity of 400K bbl/day; Saudi Aramco and partner Total (NYSE:TOT) built a refinery of the same size on the Persian Gulf, which has been running at full capacity since Aug. 1.
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.
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