Jul. 11, 2014, 5:59 PM
- As much as ~$700B oil companies have in their capital spending pipeline may no longer be needed, as the big discoveries of shale oil in recent years have added ~66B barrels of crude oil resources, enough to meet demand growth in the coming years, according to Goldman Sachs' head of European energy research Michele della Vigna.
- New projects that require oil prices to be above $80-$85/bbl to break even ought to be delayed or canceled - which could include big investments considered in Canadian heavy oil or in deep waters off shore - della Vigna says.
- It's also potentially bad news for the oil service companies that make money helping oil companies with their big projects; the winners are likely to be companies with the best roster of low-cost investments: SNP, BRGXF, BRGYY, AFRNF, STOSF.
Jul. 10, 2014, 8:27 AM
- A Cnooc (CEO) subsidiary signs a ~$1.6B deal to build equipment for the Yamal liquefied natural gas project in the Russian Arctic.
- Russian gas producer Novatek is developing the $27B project with Total (TOT) and Sinopec (SNP); the first production unit, with annual capacity of 5.5M metric tons, is due to be launched in 2017.
Jul. 9, 2014, 6:13 PM
- Sinopec (SNP) reportedly may shelve development of its Northern Lights oil sands lease in Alberta or sell the property entirely, as Chinese companies begin to rethink future investment prospects in Canada.
- Cnooc's (CEO) interest in cutting costs in its Canada operations, numerous delays in granting a visa and work permit for Cnooc's new CEO, and unforeseen difficulties in bringing technical staff to Canada from China are said to have raised concerns at SNP and PetroChina (PTR).
- SNP owns a 50% stake in Northern Lights, while Total (TOT) holds the remaining 50%; the lease is estimated to hold ~1.08B barrels of recoverable bitumen.
Jul. 2, 2014, 8:25 AM
- Sinopec (SNP) says it is establishing a new subsidiary to house its lubricants business as part of an effort to bring private capital into the division.
- The move comes as SNP restructures its operations following last year's landmark reform blueprint from Chinese leaders that called for state-owned enterprises to bring in private investors in a bid to improve returns and efficiency.
- The lubricants business is one of the fastest growing industries in China's energy sector, driven by the rapid growth of auto purchases.
Jul. 1, 2014, 8:57 AM
- Sinopec (SNP) says it would consider both domestic and overseas investors when selling a minority stake in its retail fuel business, which made a net profit of 25.1B yuan ($4B) last year.
- SNP does not disclose a timetable for the sale, but it rules out a public offering of shares and says it would conduct the partial sale of the retail fuel business through "multiple rounds of selection and competitive negotiation."
- The retail subsidiary includes more than 30K gasoline stations and the 23K convenience stores that accompany them.
Jun. 17, 2014, 11:44 AM
- BP CEO Bob Dudley says his company's operations in Iraq were so far unaffected by violence in the country, but China National Petroleum (PTR) reportedly has started evacuating oil workers from some of its fields in Iraq.
- PTR is said to have taken precautionary measures with some staff working at the Al-Ahdab field southeast of Baghdad after an employee there was captured and released, but has not yet moved employees at the giant Rumaila oilfield in southern Iraq where BP also operates.
- Chinese compatriots Sinopec (SNP) and Cnooc (CEO), which also operate in southern Iraq, have yet to evacuate their staff.
- Royal Dutch Shell (RDS.A, RDS.B) reportedly also has not evacuated staff at its Basra and Majnoon facilities.
- Meanwhile, Iraq’s biggest oil refinery at Baiji reportedly was shut down overnight and foreign staff evacuated as militants advance.
Jun. 10, 2014, 11:58 AM
- Sinopec (SNP +1.7%) has doubled production at its Yadvaran oil project in Iran, WSJ reports, a rare success as the country struggles to revive its flagging oil output.
- Production at the project reportedly has increased to ~50K bbl/day from 25K in early April, and SNP is pushing to start a new phase to boost output to 135K bbl/day.
- The push is part of a broader attempt by China and Iran to mend fences after the April cancellation of a $2.5B oil deal with PetroChina.
May. 22, 2014, 5:31 PM
- Sinopec (SNP) reportedly is pushing to start a second phase next year in Iran's Yadavaran oilfield development, a plan Iran says it is likely to approve.
- SNP officials are said to be traveling to Tehran next month to discuss plans for ordering equipment such as pipes and whether the deal can be adapted to Iran's proposed E&P contracts for foreign companies.
- The push is part of a broader attempt by China and Iran to mend fences after the April cancellation of a $2.5B deal with PetroChina (PTR) to develop the South Azadegan oilfield following repeated delays.
- The field currently produces 25K bbl/day, but the new phase would boost output to 135K bbl/day.
May. 21, 2014, 8:14 AM
- Sinopec (SNP) says it is forming a joint venture oilfield services company with Weatherford International (WFT) to form a joint venture oilfield service company; no financial details are provided.
- The joint entity seeks to combine WFT's technological and management know-how with SNP's ability to expand its upstream business, including in China's nascent shale gas sector.
- A commercial shale gas find announced earlier this year at southwest China's Fuling area has lifted hopes that China is near a breakthrough in unlocking its vast shale potential, placing SNP in a top position to develop the resource and forcing rival PetroChina (PTR) to play catch-up to meet national production targets.
May. 13, 2014, 10:58 AM
- Cnooc's (CEO) stock performance has been trailing Chinese rivals Sinopec (SNP) and PetroChina (PTR), and the company has lagged behind its own production targets, and raised spending even as rivals have cut back; now the naval conflict with Vietnam raises the question of whether Cnooc will be dragged into politicized ventures.
- Such concerns are overdone, writes Heard On The Street's Abheek Bhattacharya: Cnooc remains one of the fastest growing large energy companies in the world, with output seen growing at 15% next year; buying Canada's Nexen two years ago diversified its reserves and lifted the life span of its reserves; and the stock comes cheap relative to peers.
May. 13, 2014, 8:19 AM
- PetroChina (PTR) says it will spin off part of its transnational gas pipelines business, the latest move in China's strategy to invite outside capital into state-dominated sectors including energy.
- PTR plans to establish a separate company comprising two of its west-east pipelines, which carry natural gas more than 4K km from the central Asian border region of Xinjiang to Shanghai and Guangdong on the east coast; PTR values the assets at $4.7B-$6.3B.
- Rival Sinopec (SNP) became the standard bearer for the new policy earlier this year with its $20B plan to sell a minority stake in its gasoline stations and convenience store business.
Apr. 29, 2014, 8:58 AM
- Malaysia's Petronas says it will sell a 15% stake in the Pacific Northwest liquefied natural gas project in Canada to Sinopec (SNP).
- SNP will buy 1.8M tons/year of LNG, equivalent to about 15% of the project's total output, for at least 20 years once it begins production.
- Petronas has been selling stakes in Pacific Northwest LNG's reserves and output to raise funds for its development, which could cost as much as C$11B ($10B), but will still hold 62% in the project after the deals are completed.
Apr. 28, 2014, 11:35 AM
- Sinopec (SNP -0.4%) reports a larger than estimated 15% drop in Q1 profit, hurt by higher finance expenses due to the weaker Chinese yuan.
- SNP's sales declined 8% to 641B yuan and operating profit at its E&P business dropped 19% to 13.2B in the quarter; crude oil output rose 9% to 89.4M metric tons, while its realized oil price declined 4%, and gas output gained 9% to 177.4B cf.
- PetroChina (PTR), China’s biggest oil and gas producer, posted a 5% decline in Q1 profit last week; both companies were hurt by the weaker Chinese yuan, which has a bigger impact on SNP because the China's biggest refiner and crude oil importer buys ~70% of the crude it needs in U.S. dollars.
Apr. 25, 2014, 10:14 AM
- Canadian Oil Sands (COSWF -4.4%) announces an unplanned maintenance-related outage at Syncrude Coker 8-1, prompting it to lower its estimate for 2014 Syncrude production to 95M-105M barrels.
- National Bank downgrades shares to Underperform from Sector Perform, saying the outage could mean Q2 production will get hit especially hard since the timing could overlap with planned maintenance of another upgrader.
- Other owners of Syncrude include Imperial Oil (IMO), Suncor (SU), Murphy Oil (MUR), Sinopec (SNP) and Cnooc (CEO).
Apr. 23, 2014, 8:56 AM
- China's Ministry of Environmental Protection lifts its ban on new projects from China National Petroleum (PTR) and Sinopec (SNP) after determining they met pollution targets last year; China's two largest refining companies make up more than 75% of the country's refining capacity.
- The ministry says both companies boosted spending, fixed problems and accelerated the construction of key projects that helped reduce emissions of four major pollutants in 2013 vs. 2012.
Apr. 23, 2014, 8:35 AM
- The Yamal LNG project in Russia's Arctic reportedly has chosen Canada's Teekay LNG (TK, TGP), Japan's Mitsui and Russia's Sovkomflot to build 16 liquefied natural gas carriers worth $5B.
- The project is scheduled to start producing gas in 2016 and supply 16.5M metric tons of the tanker-shipped fuel in 2018; Russia's Novatek holds a 60% stake in the $27B, while France's Total (TOT) and China's CNPC (SNP) own 20% each.
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