Petrochina 0857

[winston]

Not vested.

CNPC to Issue Bonds to Buy PetroChina Shares, Expand (Update1)
By Wang Ying and Winnie Zhu

Oct. 27 (Bloomberg) -- China National Petroleum Corp., the nation's top oil producer, plans to issue 20 billion yuan ($2.9 billion) worth of bonds to buy shares in listed unit PetroChina Co. and fund overseas exploration projects.

The bonds will be issued on Nov. 3, the Beijing-based state oil company said in a statement on the official Chinabond Web site today.

PetroChina's Hong Kong shares have dropped more than 70 percent in the past year. The parent company will continue to boost its holdings in the listed arm, Jiang Jiemin, PetroChina's chairman, said Oct. 21, without giving details. China National currently had an 86.32 percent stake in PetroChina as of September.

``Excluding the proceeds used to increase PetroChina shares, 70 percent of the remaining will be used to fund strategic projects such as the overseas construction and explorations,'' China National said in today's bond sale statement.

The company said last week it signed an accord with Uzbekistan's state oil company to jointly develop an oilfield in the central Asian country.

China and Iraq plan to sign a $3 billion oil agreement, the Associated Press reported in September, citing a spokesman from the Middle East nation's oil ministry. The accord will allow China National to develop the Ahdab field for 20 years, the news service had said, citing Assem Jihad.

Oil companies in China have resumed their quest for global resources after a two-year hiatus as the worst financial crisis since the Great Depression and falling commodity prices prompt a sell-off in share markets, making companies cheaper to acquire.

PetroChina may buy energy companies made vulnerable by the global credit crisis to expand output and meet rising domestic demand, Jiang said last week.

The drop in oil prices and the current bank crisis offer good opportunities for PetroChina to consolidate resources, Jiang said.

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BROKER CALL - PetroChina downgraded to 'neutral' - JP Morgan

HONG KONG (XFN-ASIA) - JP Morgan downgraded PetroChina Ltd to "neutral" from "overweight" and cut its target price on the stock to 8.0 hkd from 8.75, citing valuation concerns. The oil producer currently trades at 17 times forecast 2009 earnings per share, which is too high in light of lack of upstream production growth and uncertainty on oil products pricing policies in China, the brokerage said.

It noted that the stock had outperformed the H-share index by nearly 10 pct since late October, with recent gains driven by an oil price rally due to Middle East tensions and a dispute between Russia and Ukraine over gas supply. These factors could ease off shortly, causing weakness in oil prices and PetroChina's share prices, the brokerage said. PetroChina shares were down 0.02 hkd or 0.3 pct at 7.05 in late trade.

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20090116 Macquarie PetroChina
Upside as crude recovers

Event
We have revised our earnings forecasts to take account of actual crude prices in 2008 and changes to our oil price forecast for 2009 onwards.

Impact
Earnings forecast downgrade. As a result of the crude price changes, we have cut our forecast earnings by 16% for 2008, by 23% for 2009 as the full impact of lower crude prices works through, and by 1% for 2010. These reductions also reflect a poor refining result in 2008 but some improvement in 2009–10.

Cashflows are reduced and our forecast balance sheet shows a small net debt position at end-2009. However, our forecast gearing is only 1%.

We have cut our 2008 dividend forecast from Rmb0.34/sh to Rmb0.32/sh, our 2009 forecast from Rmb0.29/sh to Rmb0.22/sh, and our 2010 forecast from Rmb0.38/sh to Rmb0.37/sh.

Price catalyst
12-month price target: HK$10.15 based on a Sum of Parts methodology.

Catalyst: Crude price rise and improved refining profit.

Action and recommendation


PetroChina’s earnings and share price movements are highly geared to oil price changes. In 2H09 and in 2010, the positive impact of our forecast rise in crude prices is boosted further by our assumption of a maintainable improvement in the refining sector. Our valuation has been cut by HK$1.00/sh to HK$10.15/sh but still provides significant upside to the current share price and we expect this upside will materialise on the back of improved trading conditions. We maintain our Outperform recommendation.

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PetroChina to get asset injection from parent-paper

SHANGHAI, Feb 12 (Reuters) - The state parent of PetroChina (0857.HK) (601857.SS), Asia's top oil and gas producer, will inject some of the group's overseas assets into its listed unit, the China Business News said on Thursday.

The newspaper, citing unnamed sources, said the parent group may gradually inject some "non-sensitive" overseas assets into PetroChina, but did not specify the timetable or the nature and size of these assets.

The group's oil output overseas came to 62.2 million tonnes in 2008, with its natural gas output at 6.73 billion cubic metres, the report said, without providing comparative figures.

While it continues to focus on slashing its operating cost, PetroChina has no plans to cut its capital expenditure this year from its 2008 level of roughly 200 billion yuan ($29.27 billion), it added.

It scraped non-essential projects worth roughly 20.7 billion yuan last year, the report added.

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DJ MARKET TALK: CLSA Cuts PetroChina 2008, 2009 Profit Estimates

1110 [Dow Jones] STOCK CALL: PetroChina (0857.HK) might need to take sizable asset impairment charges to reflect collapsed oil prices, CLSA says. Cuts 2008, 2009 profit estimates by 17%, 34%, respectively. But notes silver linings are emerging to resuscitate profit growth in 2010, with more-friendly domestic policies toward upstream natural gas and downstream refining amid lower windfall taxes, and potential revival of oil and chemical prices in 2010.

Keeps at Buy, target unchanged at HK$7.30 based on 35% discount to fair value. Stock down 0.7% at HK$5.88

[winston]

DJ MARKET TALK: Citi Cuts PetroChina EPS On Writedown, Oil Prices

0957 [Dow Jones] STOCK CALL: Citigroup cuts PetroChina (0857.HK) 2008 EPS estimate 16% to CNY0.614, 4Q08 EPS estimate to CNY0.10 vs CNY0.22; profit hit by writedown of inventories of oil, chemical products, low oil prices. Tips PetroChina's free cash-flow to reach CNY135 billion this year, but will still fall short of CNY200 billion of capex.

Also, PetroChina's EPS may fall further to CNY0.08 in 1Q09, following domestic fuel price cut in December, though doesn't expect any inventory writedown this quarter.

"For PetroChina, with a much smaller refining and marketing business, we expect earnings to recover only when oil prices do." Keeps Hold, HK$6.40 target; stock at preopen +0.9% at HK$5.79.

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PetroChina braces for profit slide as oil dips by Kathy Wang

PetroChina (0857) said it expects lower profitability this year than in 2008 after oil prices plunged from a record high and remain sluggish. Falling oil prices have affected the firm's performance, chairman Jiang Jiemin told Bloomberg.

Credit Suisse cut 2009 volume growth estimates for PetroChina's marketing sector to zero.

"We have lowered our marketing margin assumptions for PetroChina to fully factor in the cut in marketing margins, and reflect the current market reality,"CS analyst Prashant Gokhale wrote.

Barclays Capital expects crude to average US$41 (HK$319.80) per barrel for the first quarter and rise to US$50 for the second quarter; then climb to US$76 for the final quarter.

China has a lot of potential to grow in terms of GDP per capital expenditure on crude oil" said Justin Hyde, Barclays' director of commodities structuring.

Sinopec(0386) chairman Su Shulin said slowing industrial activities have squeezed fuel sales and cash flow.

Gokhale wrote: "Sinopec is trading at 0.86 times book value, close to historical lows ... If the government lets domestic prices float in line with prices in international markets into a global recovery, then Sinopec's earnings might have bottomed and turned the corner in the fourth quarter of 2008."

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From Bloomberg:-

PetroChina has climbed 4.3 percent in Shanghai this year, giving the oil company a market valuation equal to $267 billion, even though Chairman Jiang Jiemin said on March 5 he expects profit this year will be less than 2008 and analysts forecast a 21 percent decline.

Beijing-based PetroChina, which earned an average of $16.8 billion in each of the past five years, trades at 16.58 times earnings in Shanghai. In Hong Kong, PetroChina sells for 7.92 times profit.

That’s similar to the 7.96 times earnings investors pay for Exxon Mobil Corp., the only company in the world bigger by market value. The Irving, Texas-based company earned an average $37.4 billion the past five years and has a market value of $332 billion, according to data compiled by Bloomberg.

[winston]

DJ MARKET TALK: Goldman Tips PetroChina 1Q09 Earnings To Drop 47%

0947 [Dow Jones] STOCK CALL: Goldman Sachs tips PetroChina's (0857.HK) 1Q09 earnings to drop 47% on-year, mainly on weaker oil prices and chemical margins, lower downstream sales volumes. Adds, 2Q09, 3Q09 earnings drop could be even bigger.

Says believes sharp earnings decline may surprise market as company generally viewed as defensive, Bloomberg consensus tips full-year earnings down only 21% on-year.

Affirms Sell call on H-share, ADRs (PTR), A-shares (601857.SH) with target prices at HK$4.10, US$52.56, CNY5.80 respectively, based on FY08E P/BV. H-share ended yesterday up 3.5% at HK$5.95, ADRs ended up 2.7% at US$76.74; A-shares trading up 0.3% at CNY10.69

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PetroChina to supply more jet fuel to home market

BEIJING, March 17 (Reuters) - PetroChina (0857.HK)(PTR.N) (601857.SS) will supply 12.4 percent more jet fuel this year to China National Aviation Fuel Holding, the country's near-monopoly jet fuel distributor.

China National Aviation Fuel will buy 2.35 million tonnes of jet fuel from PetroChina in 2009, higher than the 2.09 million tonnes in 2008, said a report on www.caacnews.com.cn, a website run by the Civil Aviation Administration of China.

Both sides signed the supply deal on Friday.

In February, the jet fuel distributor inked a deal to buy 5.9 million tonnes of jet fuel this year from Sinopec (600028.SS) (0386.HK)(SNP.N), marking a 13.4 percent increase over last year.