Thu, Apr. 30, 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.
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, 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
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.
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."
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.
Aug. 13, 2014, 2:35 PM
- Petrobras (PBR -3.3%) says a fourth well drilled in the Jupiter area offshore Brazil indicates the existence of a subsalt oil discovery.
- The well is located ~185 miles off the coast of Rio de Janeiro, beneath 2,183 meters of water; drilling will continue until the well reaches a total depth of 5,700 m.
- PBR is operator of the block with an 80% interest, while a group owned by Portugal's Galp Energia (OTC:GLPEF) and China's Sinopec (NYSE:SNP) holds the remaining 20%.
- PBR shares have been sharply lower since news of the death of Brazilian presidential candidate Campos.
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).
Mar. 17, 2014, 9:45 AM
- Sinopec (SNP +2.8%) pops higher at the open on a report that Alibaba Group will invest in the company's consumer gasoline sales subsidiary.
- The rumor follows SNP's Feb. 19 announcement that it will seek private investment in its sales business; Alibaba is currently recruiting and training SNP "petrol card" sales associates.
- Alibaba announced on its official microblog account yesterday that it had reached a business partnership with SNP, but it did not mention an investment.
Mar. 11, 2014, 11:39 AM
- Recon Technology (RCON +6.7%) says its BHD petroleum technology division received a new oilfield access certificate authorizing it to provide horizontal fracturing equipment and services for Sinopec (SNP).
- RCON and partner Baker Hughes (BHI) have so far provided fracturing equipment utilized at one of SNP's Northeast oilfield's wells.
Feb. 26, 2014, 11:14 AM
- Sinopec (SNP +3.7%) is said to be ready to reveal additional restructuring measures next month after announcing last week it would seek private investors for as much as 30% of its oil retail unit, which includes more than 30K fuel stations.
- SNP probably will introduce its next steps for reforms during China's annual National People's Congress meetings next month in Beijing, Chairman Fu Chengyu reportedly said.
Feb. 21, 2014, 11:20 AM
- Sinopec (SNP -2.6%) had been moving higher after news earlier this week that it would seek outside investors for up to 30% of its oil retail unit, but Jefferies is out with a report downgrading shares to Hold from Buy and says the reform interpretation was wrong.
- Optimism was misplaced because SNP probably will just use the proceeds to buy assets from its parent, Jefferies says; the market interpreted the action as reform of Chinese state-owned enterprises, but the firm says it looks "more like stealth capital raising.”
- But SNP has strong economic incentive to spin off and float its retail business, J.P. Morgan points out, believing the retail gas station business could fetch much higher trading multiples because they are really consumer names.
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