China Petroleum & Chemical Corp: A Global Powerhouse
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Today, 8:58 AM
- Sinopec's (NYSE:SNP) attempt to spin off 30% of its retail gas station business has drawn interest from China Life (NYSE:LFC), the country's biggest insurance company, and gas supplier ENN Energy; they are the first investors to publicly announce their intention to invest in the SNP unit.
- SNP is seeking to raise as much as 100B yuan ($16.3B) by selling part of its stake in the Sinopec Sales unit, which opoerates more than 30K fuel stations and 23K convenience stores in China.
Yesterday, 11:38 AM
- Sinopec (SNP +0.4%) continues to move higher after yesterday's Q2 earnings beat and news of 37 bidders vying for a 30% stake in SNP's profitable retail business, but analysts are turning cautious on the stock.
- UBS removes SNP from its Key Call list (though it maintains a Buy rating), noting the stock has climbed to its highest level since Jan. 2008 even though there has been little change in the consensus earnings outlook.
- J.P. Morgan is concerned about the lack of comments on timing for the retail divestment, and it sees more risk of disappointment to existing and further corporate reforms with an increasingly fragile near-term refining outlook.
Mon, Aug. 25, 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.
Wed, Aug. 20, 10:24 AM
- Alimentation Couche-Tard (OTCPK:ANCUF) says it not pursuing a stake in China's Sinopec Sales (SNP, SHI), refuting an earlier report that it is among the companies rumored to be interested in buying a stake in the world's largest fuel retail network.
- Analysts had doubted Couche-Tard's interest, since a stake would give investors little control over Sinopec; Couche-Tard founder and CEO Alain Bouchard is a hands-on manager who makes acquisitions based on the belief that he can introduce his company's operational efficiency to the target and improve earnings. The chain has not historically made any passive investments of this kind, the paper said.
Tue, Aug. 19, 11:25 AM
- Canada's Alimentation Couche-Tard (OTCPK:ANCUF) and China's Tencent Holdings (OTCPK:TCEHY, OTCPK:TCTZF) reportedly are among suitors on the short list to buy a $16B minority stake in China's Sinopec Sales (SNP, SHI), the world's largest fuel retail network.
- Sinopec plans to sell up to 30% of Sinopec Sales by year-end 2014 as China restructures government-owned assets; while a deal would give investors little control over the company, a likely exit through an IPO planned within three years appears to have attracted a wide range of suitors.
- Sinopec Sales booked a net profit of 25.1B yuan ($4.1B) in 2013 from 30K-plus service stations and 23K-plus convenience stores.
Fri, Aug. 15, 4:54 PM
- Oil production at Iraqi Kurdistan's top producing Taq Taq field is set to rise to as much as 140K bbl/day by the end of the month despite the advance of Islamist militants, according to the general manager of the operating company.
- While several western oil companies have evacuated personnel from the area, production has remained consistent at Taq Taq, operated by a joint venture of Genel Energy (OTCPK:GEGYF) and Sinopec's (NYSE:SNP) Addax Petroleum.
- Meanwhile, Kurdistan has delivered its third major cargo of crude oil out of a Turkish port and a fourth is sailing to Croatia.
Wed, Aug. 13, 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.
Tue, Jul. 22, 7:57 AM
- Sinopec (NYSE:SNP) reports an 8% Y/Y gain in H1 oil and gas production to 237M barrels as overseas output doubled.
- Overseas crude oil production increased to 23.7M barrels, but the gain came after the refiner bought foreign assets from its state-owned parent last year.
- Domestic crude output was little changed at 154.2M barrels, while natural gas output rose 9.5% to 354.8B cu. ft.
Fri, Jul. 18, 8:16 AM
- The Chinese government verifies shale gas reserves in Sinopec's (NYSE:SNP) Fuling field in the southwest of the country, with production from 29 test wells averaging 3.2M cm/day, signaling the official launch of the commercial development of China's first large shale gas field.
- "Fuling proves to be a high quality marine shale gas reserve," according to the Ministry of Land and Resources, which verifies proven reserves of nearly 107B cm and adds that the gas contains as much as 98% methane, with low levels of carbon dioxide and no hydrogen sulphide.
- Estimates for China's reserves easily outweigh those of the U.S., but Chinese reserves are in many cases more difficult to access than shale gas in the U.S., and China lags in the expertise needed to develop them.
Sat, Jul. 12, 8:25 AM
- The problem facing Canada isn't the Keystone pipeline or Pres. Obama or environmentalists - it's the oil sands, and they've got to be cleaned up and the head-in-the-sand denials chased way or the country will be stuck with a "baby seal hunt" image, Diane Francis writes in the Financial Post.
- The columnist thinks she knows the right person to lead the clean-up: Jeff Immelt - "an American leader with stature in Washington, on Wall Street, in the oil patch and in Silicon Valley" - who said this week that GE will help companies clean up the oil sands.
- The only way to stop the environmental excuses, Immelt believes, is for the industry to collaborate and voluntarily establish lower emissions targets that would make the oil sands competitive with any other fuel source in the world - without such a promise to provide cleaner energy, "all bets are off."
- Some related companies: XOM, IMO, SU, RDS.A, RDS.B. ENB, TRP, CNQ, CVE, CVX, COP, BP, KMP, WPZ, TOT, STO, CEO, SNP, PTR, HUSKF, ATHOF, COSWF.
Fri, Jul. 11, 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.
Thu, Jul. 10, 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.
Wed, Jul. 9, 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.
Wed, Jul. 2, 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.
Tue, Jul. 1, 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.
Tue, Jun. 17, 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.
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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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