Feb. 19, 2014, 8:18 AM
- Sinopec (SNP) says it would allow some outside ownership of its gasoline station business to outside investors, part of the Chinese government's latest efforts to reform its state-owned companies and encourage a mixed-ownership economy.
- However, SNP stopped short of fully opening up its oil marketing business to third parties by capping the amount of outside investment at 30%, highlighting the gradual pace of such reforms.
Feb. 14, 2014, 10:56 AM
- Sinopec (SNP +1.9%) has made a deep shale gas discovery with a maximum daily output of 105K cubic meters in southwestern China's Guizhou province, authorities say.
- The gas well is said to be the deepest so far in the country, and its exploration marks a technological breakthrough in China's deep shale gas drilling.
- The Dingye-2HF gas well is expected to have an average daily output of 43K cubic meters; another shale gas block in the region produced 150K cubic meters/day last year.
Feb. 7, 2014, 3:08 PM
- Sinopec (SNP +0.5%) subsidiary Addax Petroleum reportedly will spend $400M to settle a dispute with the government of Gabon, which has charged the company with violating its contract during the development of the Obangue oilfield.
- The dispute emerged in the wake of last month's contract signed by the Gabon government which granted Addax 10-year exploitation rights for three Gabonese oilfields.
Jan. 21, 2014, 2:59 PM
- Cnooc's (CEO -6.2%) loss apparently is Sinopec's (SNP +5.9%) gain, as the two Chinese integrated oil and gas companies move in opposite directions after Cnooc estimated oil production growth below its annual target for the third straight year.
- J.P. Morgan is surprised Cnooc has guided almost no organic growth in 2014, and thinks the company has set itself up for a difficult 2015, where 14%-18% Y/Y organic production growth would be needed to reach the low end of the 2011-15 6%-10% target; the firm recommends SNP or PetroChina (PTR +0.2%) instead for China oil exposure.
- SNP's prospects are considered rosier than Cnooc's: Its dividend yield is healthy at 5.21% vs. the 4.67% industry average, and its 9.17 P/E ratio indicates general investor expectations of higher returns in the short and medium term, if not beyond.
- Also, SNP discloses that Sinopec Group (SHI) increased its shareholding via the acquisition of ~173.25M class A shares on the secondary market as of Jan. 17.
Jan. 13, 2014, 11:08 AM
- Sinopec (SNP +0.2%) is the first Chinese state-owned company to be publicly reprimanded following an accident that killed dozens of people in Qingdao, and says it will accept responsibility for part of the ~$125M damages caused when crude leaking from its pipeline exploded in November, killing 62 people.
- SNP’s pipeline subsidiary is fined the “maximum allowed under regulations,” two top execs of the subsidiary cough up hefty fines, and SNP chairman Fu Chengyu and other top brass receivee administrative demerits.
Jan. 8, 2014, 8:26 AM
- Steady Chinese energy demand has been a saving grace for the oil tanker market, with much of the credit going to China's Unipec - a unit of Sinopec (SNP) - who didn’t rank among the top 20 charterers of oil tankers a decade ago but has beaten Shell (RDS.A, RDS.B) as the No. 1 charterer for the second year in a row.
- China’s move up the rankings - PetroChina (PTR) also is raising its presence among tanker charterers, joining the top 10 - reflects its growing control over elements of its oil supply chain as the center of global oil demand growth shifts toward developing Asia.
Dec. 31, 2013, 8:14 AM
- China may buy more Iranian oil next year as it negotiates a new light crude contract that could raise imports from Tehran to levels not seen since tough Western sanctions were imposed in 2012, Reuters reports.
- Sources say Chinese state-trader Zhuhai Zhenrong, which acts as an import agent for Sinopec (SNP) and was sanctioned by the U.S. in early 2012 for supplying gasoline to Iran, is in talks with the National Iranian Oil Co. for a new contract for condensate.
Dec. 16, 2013, 3:28 PM
- Mexico’s sweeping energy reform clears its final major hurdle, as San Luis Potosi becomes the 17th state legislature to give rapid-fire approval to constitutional changes that will allow foreign investment into what has been a 75-year-old state monopoly.
- An influx of Mexican oil would contribute to a glut that is expected to lower the price of Brent crude, which has averaged $108.62/bbl YTD, to as low as $88/bbl in 2017; Exxon's recent prediction that North American production would vault ahead of every OPEC member except Saudi Arabia doesn’t even take into account any changes in Mexico.
- Although the first Mexican opportunities may go to the major independent oil companies in the U.S. and Europe, Chinese groups such as Cnooc (CEO) and Sinopec (SNP) will actively seek opportunities; Mexico's president plans to visit Beijing in 2014 and his trip may reveal whether Chinese firms are acceptable partners.
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Dec. 16, 2013, 11:28 AM
- Royal Dutch Shell’s (RDS.A, RDS.B) long-awaited sale of its $6.4B stake in Woodside Petroleum (WOPEF, WOPEY) may open the door for Asian buyers to grab a slice of Australia’s second-largest oil and gas producer, or even the whole company, Bloomberg speculates.
- Shell, which sees its 23% holding in Woodside as “increasingly non-core," may exit its stake as soon as next year; while Shell may opt to sell the stock back to Woodside and institutional investors, China’s Cnooc (CEO) and Sinopec (SNP) might pursue the stake or a full takeover.
- Government opposition to a foreign takeover may have eased since Shell was blocked in 2001, analysts say, and the company is more affordable after its multiple to cash flow has been more than cut in half since 2011.
Dec. 6, 2013, 8:39 AM
- Russian oil producer Lukoil (LUKOY, LUKOF) reportedly has been in talks with international majors about selling its stake in a consortium developing a large oil project in Venezuela.
- Lukoil has said it wanted to sell its 20% stake in the Russian Junin-6 consortium developing heavy oil in the Orinoco basin to focus on other projects; consortium leader Rosneft apparently made a low-ball offer, and Lukoil has since held talks with Cnooc (CEO), Sinopec (SNP), Statoil (STO), Chevron (CVX), Total (TOT) and various state-run firms.
- The Russian consortium owns a 40% stake in the project; Lukoil's stake in the consortium is said to be worth ~$200M.
Nov. 26, 2013, 2:28 PM
- The LNG project on Canada's Pacific coast - known as Kitimat - is one of several Sinopec (SNP -1.6%) is looking at in that region, according to a source, and management has yet to sign off on the investment. The size and value of the stake hasn't been determined, but the investment would go towards the project's costs, which Apache (APA +0.8%) last year pegged at $15B.
- "Apache is moving forward with the project, and we're looking for partners," says an Apache spokesman, declining to comment on the talks, though he does say the cost of the project is being recalculated.
Nov. 22, 2013, 7:49 AM
- An explosion in a Sinopec (SNP) oil pipeline killed at least 35 people and injured more than 160 in Qingdao in eastern China, causing a blaze that took several hours to bring under control and halting operations at the Huangdao oil terminal.
- The local government says blast occurred as workers were trying to repair leaks in the pipeline, and that oil had spilled into the port, which also caught fire.
Nov. 20, 2013, 9:49 AM
- Sinopec (SNP) is in serious talks on a site for a potential liquefied natural gas export terminal in British Columbia, according to the province's Minister of Natural Gas Development, who did not name any partner involved in the discussions or identify sites where the parties were looking.
- Asia's largest refiner would join a growing list of major global energy players, including Shell, Chevron and Petronas, all racing to build facilities to ship cheap Canadian gas to Asian markets.
- The minister also said talks with companies on B.C.'s new natural gas export tax would continue for about a month longer than expected, though he expects to have the details of the tax nailed down by year end.
Nov. 14, 2013, 3:42 PM
- Apache (APA +1.4%) says today's completion of its sale of a one-third minority stake in its operations in Egypt to China’s Sinopec (SNP) marks the completion of its $7B asset sale program, as it seeks to rebalance its portfolio toward assets with predictable growth rates and attractive rates of return.
- APA will receive $2.95B in cash and continue to operate the Egypt oil and gas exploration business.
Nov. 7, 2013, 10:57 AM
- China reportedly may open oil and gas pipeline networks to third parties, a move which would break the long-term monopoly of the three state-owned enterprises - China National Petroleum (PTR -1%), Sinopec (SNP -1.2%) and Cnooc (CEO -1.1%) - on domestic oil pipe assets.
- Given the high expense of construction of oil pipe networks, the ability of any Chinese company to construct new networks or take over operations is questionable.
Nov. 1, 2013, 7:47 AM
- Sinopec (SNP) has won initial approval from China's top economic planner for a plan to build a $10B refinery and petrochemical complex in Shanghai, Reuters reports.
- The top Asian refiner reportedly has started formal planning for the 400K bbl/day refinery and a 1M metric tons/year ethylene project in a plan to curb pollution by shifting an old plant to Shanghai's southern edge.
- The plan for the Shanghai refinery includes a new crude oil terminal with the capacity to receive a 300K ton VLCC.
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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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