Tue, Apr. 28, 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.”
Mon, Apr. 27, 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.
Mon, Apr. 27, 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.
Mon, Apr. 27, 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
Wed, Apr. 22, 8:58 AM
- Sinopec (NYSE:SNP) has raised $6.4B in a bond sale that ranked as Asia’s third-biggest on record, with some of the lowest borrowing costs ever for an Asian company.
- SNP was able to take advantage of low rates in Europe, borrowing at costs as low as 0.5% and 1% for its three- and seven-year bonds, totaling €1.5B ($1.6B); the timing was especially fortuitous for the company, as the benchmark 10-year German bund sank to a low of 0.07% Monday.
- The rest of the debt, sold in dollars with coupons between 2.5% and 4.1% and lengths up to 30 years, attracted more than $15B in subscriptions.
- SNP says it plans to use the proceeds to refinance existing debt and for general corporate purpose” of overseas businesses.
Fri, Apr. 10, 9:57 AM
- Australia Pacific LNG, the joint venture between ConocoPhillips (NYSE:COP), Sinopec (NYSE:SNP) and local player Origin Energy (OTC:OGFGF), expects to begin loading tankers late in Q3 for sale to market participants as it seeks to place its first six months of production into already oversupplied spot markets.
- Within that commissioning phase of the project, exports are estimated at two to three cargoes per month, with seven to 10 cargoes planned by the end of the year.
- Attempting to get ahead of the coming surge from the start-up of Chevron's 15.6M metric tons/year Gorgon LNG plant in Australia in mid-2015 followed by Santos' 7.8M tons/year Gladstone facility, Australia Pacific LNG is said to be gauging interest from various buyers, particularly from India and China.
Tue, Apr. 7, 2:52 PM
- Iranian oil officials are in Beijing this week to discuss oil sales and Chinese investments in Iran, with Iran's oil minister set to make his first trip to Beijing since joining the then new government two years ago.
- Officials from state-run National Iranian Oil Company are expected to meet with Sinopec (NYSE:SNP) trading arm Unipec and state trader Zhuhai Zhenrong; a new condensate deal with the latter is set to lift China's total crude oil contract volumes to above 600K bbl/day later this year.
- SNP, Cnooc (NYSE:CEO) and CNPC (NYSE:PTR) signed preliminary pacts with Iran before 2010 on development projects worth tens of billions of dollars, but Chinese firms slowed or scaled back activities on worries that U.S. sanctions on Iran would hurt their businesses in the U.S.
Thu, Mar. 26, 8:49 AM
- PetroChina (NYSE:PTR) says its net profit fell 17.3% last year to its lowest annual profit in five years, as falling crude oil prices squeezed earnings.
- PTR says its net income dropped to 107.2B yuan ($17.2B) from 129.6B yuan a year earlier, while revenue rose 1.1% to 2.28T yuan from 2.25T a year earlier.
- Capital spending for 2015 will be reduced by 8.8% at 266B, adding to last year's 8.4% reduction; the move follows similar cuts by Chinese state-owned rivals Sinopec (NYSE:SNP) and Cnooc (NYSE:CEO).
- Oil and gas production rose 3.6% to 1.45B boe in 2014, and realized crude oil price fell 13% to 3,939 yuan/ton.
Mon, Mar. 23, 7:58 AM
- Sinopec (NYSE:SNP) says it is cutting its 2015 capital spending 12% to 135.9B yuan ($22B) from 2014's 154.6B yuan, after reporting a Q4 net loss of 5.4B yuan vs. a 19.3B yuan profit in Q3.
- China second largest oil group warns that it expects a “significant decrease” in Q1, which will be “in the vicinity of the breakeven point" because of low prices and inventory costs.
- For FY 2014, SNP’s net income dropped to 46.5B yuan, down nearly 30% Y/Y and falling well short of analysts’ consensus estimate of 53.5B yuan; revenues slipped 2% Y/Y to 2.8T yuan.
- SNP says crude production for 2014 climbed 8.5% to 361M barrels as realized prices fell 5.8%, and expects output may drop 4% to 348M barrels in 2015; however, natural gas production may grow 24% to 886B cf.
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.
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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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