PetroChina Company (0857)

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PetroChina opens new link for Turkmen gas, awaits price hike

BEIJING, June 30 (Reuters) - China's top energy giant PetroChina on Thursday opened a gas pipeline linking central Asia with southern Guangzhou that will cause the company more losses unless Beijing lifts the selling price of the costly Turkmenistan fuel.

PetroChina has long lobbied the government to raise domestic selling prices for central Asian gas, which is priced at the Chinese border at nearly double the rate the firm is allowed to sell to domestic users.

With the start-up on Thursday of the 4,865-kilometre trunk line from northwest Xinjiang to the southern export hub of Guangdong, gas sales from Turkmenistan are expected to nearly quadruple this year to 17 billion cubic metres, state media said, roughly 17 percent of China's total domestic consumption last year.

Petrochina was eagerly awaiting a price hike that industry experts said could be imminent, as China's consumer price index, a main factor holding back an increase, could peak in June after hitting a 34-month high in May.

"PetroChina is extremely eager to see the price increase. It's just not sustainable for its growth as it already faces tight cash flows after massive spending on many investments," said Yan Kefeng of Cambridge Energy Research Associates (CERA).

"Without a price rise, it may become an disincentive for the firm to deliver the fuel."

PetroChina piped in a total of 3.665 million tonnes, or roughly 5.1 billion cubic metres, of Turkmen gas in the first five months, official customs data has shown , five times the year-earlier rate and surpassing the whole of last year.

The new trunk line is part of a 142 billion yuan ($21.8 billion) project that pumps the clean burning fuel from central Asia to 15 Chinese provinces and cities and is expected to reach a capacity of 30 bcm by June 2012, the company has said.

A PetroChina official told an industry seminar on Wednesday that the seasonal demand dip for natural gas in summer would also offer a window for a price hike. Demand for natural gas normally peaks in winter for heating purposes.

Turkmen gas costs nearly double domestic price levels, even after Beijing raised its benchmark well-head gas prices nationwide by 25 percent in June 2010, resulting in deep losses for PetroChina since it started pumping in the central Asian fuel in late 2009.

Chinese media reported PetroChina's chief financial officer Zhou Mingchun saying in March that the company recorded a loss of 3.7 billion yuan in marketing 4.3 bcm of imported gas last year, which indicated the firm was making a loss of nearly $130 for each thousand cubic metres of gas sales.

While Beijing may raise prices for Turkmen gas, the government may still hold back from hiking nationwide well-head, or ex-gasfield, prices for the fuel, as that will have a broader price impact, CERA's Yan said.

China in June 2010 raised gas prices by 0.23 yuan per cubic metre to roughly $4.46 per million British thermal units (mmBTU), a level largely on par with the U.S. Henry Hub NGc1 spot prices.

That price compares to $8.48 per mmBTU for imported liquefied natural gas and $8.12 per mmBTU for the Turkmen gas for May as recorded by Chinese customs. (Reporting by Chen Aizhu; Editing by Jonathan Hopfner and Michael Urquhart)
Shares closed at $9.79 today
(21-07-2012, 12:11 AM)soros Wrote: Shares closed at $9.79 today

Would be helpful if you can share some insights on the Company or provide basis for discussion rather than just posting the closing prices of these HK-listed companies (which I am sure anyone here can check themselves).

After all, this is a value investing forum and we encourage forumers to share their views on businesses and companies.

My Value Investing Blog:
The original thread was posted some 19 months ago and it has not had any response. Although PetroChina ( ) is a big China company with a market capitalisation of over HK$200B , I don't know anything of special value about this company to share in the forum.

The thread is dead and so I think is most of the HK section. I posted the closing price to try and attract someone's attention.

Over the past 3 years, the shareprice has crawled sideways between $9.30 and $11.65 and recently a local HK analyst has posted a buy at $9.70 with a target at $12.00.
Just a short comment.

Betweem PetroChina, Sinopec and CNOOC, I would rather place my chips with the last counter.

Reason being CNOOC is the only Chinese oil companies allowed to enter offshore production sharing agreements with foreign oil companies - and foreign oil companies are only allowed to explore offshore China if they sign a production sharing agreement with CNOOC.

As such, CNOOC doesn't compete with the oil majors because it has the right to take a majority share, without cost, in the projects of any Western oil company that wants to drill offshore China, so it actually benefits when foreign oil companies enter the country.

Furthermore, CNOOC has exclusive right to the Bohai oil field area, as well as the disputed Spratly Island chain. I would bet my last dime the major oil field discoveries are there in the deep water. Land exploration would be much easier and earlier to be conducted.

But one thing I would like to highlight: Oil and nat gas prices are restricted by the PRC central govt, thus they have the right to impose price ceiling on oil and nat gas.
This can add to a drag on the three respective oligopolies profit margin, regardless of whether the crude and gas prices are registering all time high in the futures mkt.

Thus even if XOM is raining profits from above, doesn't mean PTR and co. will be getting the same kind of treatment.

Biggest Stock Collapse in World History Has No End in Sight

By Kana Nishizawa  and Aibing Guo
October 30, 2017, 12:00 AM GMT+8 October 30, 2017, 10:06 AM GMT+8

It’s going to take more than the biggest stock slump in world history to convince analysts that PetroChina Co. has finally hit bottom.

Ten years after PetroChina peaked on its first day of trading in Shanghai, the state-owned energy producer has lost about $800 billion of market value -- a sum large enough to buy every listed company in Italy, or circle the Earth 31 times with $100 bills.

In current dollar terms, it’s the world’s biggest-ever wipeout of shareholder wealth. And it may only get worse. If the average analyst estimate compiled by Bloomberg proves right, PetroChina’s Shanghai shares will sink 16 percent to an all-time low in the next 12 months.

More details in
Specuvestor: Asset - Business - Structure.

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