Chinese energy giant PetroChina Co. Ltd. (PTR) announced third quarter earnings of RMB 30.8 billion or RMB 0.17 per diluted share, compared to RMB 40.1 billion or RMB 0.22 per diluted share in the year-earlier quarter. The year-over-year negative comparison was primarily attributable to lower oil prices and weaker energy demand. PetroChina’s total revenue in the quarter reached RMB 267.7 billion, a decrease of 12.1% from the year-earlier period.  Upstream  The company’s upstream segment achieved steady growth in natural gas output during the nine months ended Sep 30, 2009, while oil volumes fell slightly. Crude oil output was 631.2 million barrels, down 3.7% from the same period in 2008. However, marketable natural gas output increased 11.4% year-over-year to 1,524.8 billion cubic feet (Bcf). The average realized crude oil price during the first nine months of 2009 was US$49.06 per barrel, representing a decline of 49.6% from ...

In a bid to expand its storage capacity, PetroChina (PTR) has started building an oil storage project in Kunming, the capital city of southwestern Yunnan province. The project is expected to handle 1 million tons of freight annually. It will have a storage capacity of 85,000 cubic meters in the first phase and 150,000 cubic meters after the second phase.  Apart from the storage expansion project, PetroChina has also been actively investing in the refining space. In the last month, the company started operations at the $4 billion Dushanzi refining and chemical complex in the Xinjiang province. The complex consists of a refinery and an ethylene plant with capacities of 10 million tons and 1 million tons a year, respectively. The company estimates that the project may generate approximately $8.8 billion in annual revenue.  Despite the tentative global outlook, China’s fuel demand is expected to remain ...

Earlier today, PetroChina Company Ltd. (PTR) reported results for the six months ended June 30, 2009. Net income for the period was 50.5 billion yuan ($7.4 billion), down more than 7% from 54.4 billion yuan ($7.7 billion) a year earlier. The downward revision in net income was due to lower volumes and crude prices. The average realized crude price in the first half was $42.46 per barrel, down 54.6% from $93.45 per barrel in the year-earlier period. Total production was 588 million barrels of oil equivalent, down nearly 1% from the earlier year. Crude oil production was 418 million barrels, down 4.8% year over year. Natural gas production was 1,021 billion cubic feet, up 10.6% year over year. The Exploration and Production segment generated profit from operations of 37.6 billion yuan ($5.5 billion), compared to 131.3 billion yuan ($18.6 billion) in the year-earlier period. This drastic ...

Prominent Chinese refiners Sinopec (SNP) and PetroChina Company Ltd. (PTR) are set to release solid quarterly earnings on the back of an increase in fuel prices.

China raised gasoline and diesel prices twice in June in order to track international crude prices. The increase in fuel prices gives refiners a guaranteed profit margin if crude price stays below $80 a barrel. Global demand is unlikely to push prices of crude above $80 a barrel this year, so the refiners' margins are assured.

Refiners had been witnessing a weakness in margins due to an increase in crude prices and the government's conservative role in the pricing of refined products, particularly gasoline and diesel. The government caps the prices of refined products to control inflation. These price regulations – which did not allow the company to pass on high refining costs to consumers – are one of the key reasons for

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The Government’s initiative to lower fuel prices may hurt Chinese refiners in the short term. Prices for gasoline, diesel and jet fuel will drop by 3.3%, 3.7% and 5.5%, respectively. The National Development and Reform Commission reported that the corresponding retail prices for gasoline, diesel and jet fuel will be about $954, $846 and $699 per ton.

Refiners in China had been witnessing an upswing in refining margins, led by the rise in fuel prices thrice during the year. This is the first price cut in 2009 following three consecutive increases.

The Chinese Government has played a conservative role in pricing of refined product (particularly gasoline and diesel). It is the policy of the Government to cap prices of refined products to control inflation. Price regulation – which did not allow the companies to pass on high refining costs to consumers – is one of the key reasons for

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China’s state-controlled petroleum refiner China Petroleum and Chemical Corp. – also known as Sinopec (SNP) – recently announced that it has finished construction of a pipeline in North China.

The crude oil pipeline connects the Hejian oil flow station in northern China's Hebei Province to the Shijiazhuang refinery in the province's capital city. It runs through a total length of 147.5 kilometers and will have a peak annual transportation capacity of 8 million tons.

The completion of the pipeline will not only ensure crude oil supply to Sinopec’s Shijiazhuang refinery but also improve the company's resource distribution in the North China area.

We view this operational achievement as a positive for Sinopec as this will help the company’s efforts in meeting the expanding demand from refineries in northern China.

However, rising costs and special levies on domestic crude oil sales – as well as downstream-centric assets – continue

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Sinopec (SNP), China's largest oil producer after PetroChina (PTR), has improved its domestic fuel sales in the second quarter after a sharp decline in the first quarter. While first quarter sales were down 12.4% year-over-year, second quarter sales were down only 4.8%.  This follows an increasing demand, which rose approximately 6% in June over the year-ago period. It is the fastest growth recorded since August last year. We expect further gains in the second half as the economy recovers and its export-oriented industry begins to flourish.  Sinopec increased its refinery production in the quarter to meet rising sales. The augmented production was partly in anticipation of hikes in retail prices of refined products, which ultimately kicked in June with a total increase of approximately 15%.   Crude throughput rose 6.7%, recovering from a 3.3% fall in the first quarter. Gasoline production increased 21% year-over-year, while ...

PetroChina OKed to Buy Osaka Refinery Stake Earlier today, PetroChina Company Ltd. (PTR), the largest integrated oil company in China, gained approval from the country’s top economic policy planner -- the National Development and Reform Commission (NDRC) -- to invest in Nippon Oil Corporation’s Osaka refinery. NDRC said on its website that the agency had given the green light to the Chinese state-controlled energy giant's oil trading subsidiary PetroChina International to acquire a stake in the 115,000-barrels-per-day (Bbl/d) refinery in western Japan. Nippon Oil and PetroChina’s parent China National Petroleum Corporation (CNPC) finalized the deal earlier in the year to convert the Japanese refiner's wholly owned Osaka refinery into a 51:49 export-oriented joint venture, mainly targeting oil demand in China. The Osaka deal – which will be PetroChina's second overseas refinery transaction – would allow the company to take charge of all crude supply ...

Sinopec–BASF JV Expansion Approved Earlier today, China ’s state-controlled petroleum refiner China Petroleum and Chemical Corporation – also known as Sinopec (SNP) – announced that the Chinese Government has approved the feasibility study report on the expansion of its joint venture with German chemical giant BASF AG. The companies will increase investment in their joint chemical site in China’s Nanjing city by 56% to $1.4 billion. The spending, which was earlier pegged at $900 million, was boosted because of higher costs, appreciating currency and adjustments to the capacity of the project. The project will use sophisticated technology to produce downstream specialty chemicals serving the construction, electronics, pharmaceutical, automotive and chemical engineering sectors. In particular, it will expand an existing steam cracker's annual capacity by 23% to 740,000 metric tons. Additionally, the joint venture will build ten new petrochemical plants and expand three existing ones. ...

Axial Vector Energy Corporation announced earlier this morning that its PETRO-AVEC LLC Joint Venture appointed Dubai-based oil executive Dr. Mazin Samman, former Managing Director of United Oil Investments/Hadramout Refineries Company in Dubai, to its international licensing negotiating team.

Dr. Mazin Samman has great expertise in bringing experts together from various continents, governments, companies and organizations to authorize, design, finance, construct and operate large scale oil projects. In Russia, Dr. Samman was responsible for Russian government negotiations/authorizations/long term relations, financing, new refinery design/construction, existing infrastructure upgrade, product procurement, crude oil sales and refining operations.

In the Americas, on behalf of Nimir Petroleum in Dallas, TX, Dr. Samman co-managed a team with the mission of securing senior financing from Morgan Stanley and Chase Manhattan Bank to complete the acquisition of HOCOL-Shell in Columbia. In his native Saudi Arabia, Dr. Samman assisted Saudi Aramco in a number of

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