Stock Market News & Stocks to Watch from StraightStocks » Sinopec

Global Stocks Retreat

Contrarian Profits — Mon, 21 Sep 2009 17:30:55 +0000

pWorld stocks retreated further from last week#8217;s 11-month high on Monday as lower energy and commodity prices and caution ahead of a Federal Reserve meeting and G20 summit prompted investors to trim risky trades./p pLeaders of the Group of 20 meet on Thursday and Friday in Pittsburgh and U.S. President Barack Obama said on Sunday he would push world leaders for a reshaping of the global economy in response to the crisis./p pWorld stocks, measured by MSCI have risen over 26 percent this year, recouping more than half of last year#8217;s losses, underpinned by repeated pledges by G20 policymakers to keep emergency support for the economy in place./p p#8220;The market might look slightly overbought near term, but the economy is definitely improving, corporate#8230;/p

CNOOC Kept on Outperform – Analyst Blog

Zacks Market Commentaries — Wed, 26 Aug 2009 15:06:00 +0000

Earlier today, CNOOC Ltd. (CEO) reported results for the six months ended June 30. Net income for the period was 12.4 billion yuan ($1.82 billion), down 55% from 27.54 billion yuan ($3.9 billion) a year earlier. The steep fall in net income was primarily due to significantly lower oil prices despite excellent production performance.

The average realized oil and gas prices for the period were $49.35 per barrel and $3.90 per thousand cubic feet, respectively.

During the first half, the company’s crude oil and natural gas production reached 87.3 million barrels and 106.3 billion cubic feet, respectively. Total net oil and gas production reached 105.8 million barrels-of-oil-equivalent (BOE), up 15.2% year over year. Net oil and gas production from overseas reached 15.0 million BOE, up 38.9% year over year.

CEO’s overseas production was boosted by successful start up of Akpo oilfield and Phase I of OML130 (both in Nigeria) as well as several other deepwater projects. Besides, Tangguh LNG project in Indonesia also came online in early July. In offshore China, the company’s independent oil and gas fields including Panyu 30-1, Bozhong 28-2 South and Qinhuangdao 33-1 have commenced production successfully. We believe that the commencement of these projects will be an important driver for its medium- and long-term growth.

The company’s low cost operating model is also a competitive advantage. The all-in cost was $19.50 per barrel, down 1.4% from last year. However, unlike its bigger competitors such as PetroChina (PTR) and Sinopec (SNP), CNOOC has no significant refining exposure and could not reap the benefits of gaining refining margins driven by fuel price hikes in China, twice in the month of June.

We believe that the commencement of major projects, attractive LNG investments, solid production outlook and satisfactory exploration results (10 new discoveries and 8 successful appraisals in the first half) act as catalysts for the company’s growth trajectory. Consequently, we maintain our Outperform rating.

Read the full analyst report on "CEO"
Read the full analyst report on "PTR"
Read the full analyst report on "SNP"
Zacks Investment Research

Big First-Half Profit for Sinopec – Analyst Blog

Zacks Market Commentaries — Mon, 24 Aug 2009 15:30:58 +0000

Sinopec (SNP) recently reported results for the six months ended June 30. Net income for the period increased significantly from the year-earlier level to RMB 33.2 billion ($4.87 billion). The positive results reflect a steady growth in oil and gas volumes and profit from the refining business.

Sinopec’s crude oil production during the period rose nearly 1.2% year over year, while natural gas volumes dropped 1.1% from the year-earlier period. The company’s refining business recorded crude oil processing volumes of 86.9 million tons (a 1.8% year over year increase) and production output of refined oil products of 54.0 million tons (a 3.5% increase from the year-ago quarter).

Marketing and Distribution segment’s sales and retail volume of refined oil products decreased 8.4% and 12.8% year over year, respectively. The company’s Chemicals segment output of ethylene and synthetic resins reached 2.97 million and 4.74 million tons, respectively, as against 3.31 million and 4.95 million tons in the year-ago period.

Capital expenditures during the first half of 2009 totaled RMB 38.5 billion ($5.6 billion), out of which exploration and exploitation spending stood at RMB 19.4 billion ($2.8 billion). In the Refining segment, Sinopec spent RMB 5.3 billion ($0.8 billion), mainly used in the improvement of refineries and product quality upgrading projects.

Capital expenditures in the Chemicals segment totaled RMB 11.2 billion ($1.6 billion), mainly on account of the construction of two 1 million tons per year ethylene projects in Tianjin and Zhenhai, respectively. Capital expenditures in the Marketing and Distribution segment were RMB 2.6 billion ($0.4 billion).

Management guided that Sinopec will continue to grow its domestic production of crude oil and substantially increase natural gas production. By 2011, domestic oil equivalent production is expected to amount to 55 million tons.

Sinopec’s influence in the lucrative Chinese market is expected to help sustain its growth momentum. Leveraging the company's advantage in scale and cost-efficiency, as well as its integrated business model, Sinopec turned around its profitability in the first half of 2009.

However, its significantly downstream weighted asset structure makes it less geared to E&P than found optimally. As such, the company’s ability to consistently earn returns comparable to its international peers is weak.
Read the full analyst report on "SNP"
Zacks Investment Research

Energy Blast – August 24, 2009

Robert Amsterdam — Mon, 24 Aug 2009 09:28:24 +0000

Following the hydropower disaster, Vladimir Putin has instructed Energy Minister Sergei Shmatko to submit proposals for regulating the wholesale power market to prevent high increases in prices. Anti-monopoly chief Igor Artemyev has said that oil companies should beware of a...

China’s Oil Troubles

Robert Amsterdam — Thu, 30 Jul 2009 12:10:14 +0000

Chen Weidong, a Chinese oil services executive, has published a review of Michael Economides's book about Yukos and the Russian oil industry on Energy Tribune. The excerpt below is not about Russia, but it was the most shocking part of...

Zacks Bull and Bear of the Day Highlights: ExxonMobil, SurModics, Marathon Oil Corporation, CNOOC Ltd. and Sinopec – Press Releases

Zacks Market Commentaries — Tue, 21 Jul 2009 13:30:51 +0000

For Immediate Release

Chicago, IL – July 21, 2009 – Zacks Equity Research highlights ExxonMobil (XOM) as the Bull of the Day and SurModics (SRDX ) the Bear of the Day. In addition, Zacks Equity Research provides analysis on Marathon Oil Corporation (MRO), CNOOC Ltd. (CEO) and Sinopec (SNP).

Full analysis of all these stocks is available at http://at.zacks.com/?id=2676

Here is a synopsis of all five stocks:

Bull of the Day:

We are maintaining our Buy recommendation for ExxonMobil (XOM) shares ahead of the quarterly results, reflecting its strong operational and financial position on the back of solid business portfolio and prudent investment approach.

The company's capital spending plans remain unaffected by the current commodity-price and credit market turmoil, with annual capital outlays in the $25 billion to $30 billion range over the next five years.

We are, however, keeping our estimates and target price unchanged.

Bear of the Day:

SurModics (SRDX ) provides surface modification and drug delivery technologies to medical device and pharmaceutical companies. Revenue continues to decline in fiscal 2Q09 and outlook for the whole fiscal year is bleak.

Cypher stent sales from J&J declined dramatically again during the April-June quarter and will continue to fall in the coming quarters. This is certainly not good news to SRDX since revenue from Cypher sales makes significant contribution to the company's top line. The current economic environment also has a negative impact on the company's outlook.

Both revenue and EPS will decline in fiscal 2009 and 2010. As such, we maintain our Sell rating for the company with a price target of $15.50.

Latest Posts on the Zacks Analyst Blog:

Chinese Oil Buying into Angola

On Friday, July 17, integrated oil major Marathon Oil Corporation (MRO) announced the sale of its 20% interest in a block offshore Angola for $1.3 billion. A subsidiary of Marathon has reached an agreement with Chinese oil companies CNOOC Ltd. (CEO) and Sinopec (SNP). The transaction is expected to close by year-end 2009, subject to government and regulatory approvals.

Per the deal, CNOOC and Sinopec will form a 50-50 venture to buy the stake in the subsea Angolan oilfield located some 150 kilometers off the country's coast in a water depth of 1400 to 2200 meters. Known as ‘Block 32,’ the 5,090-square-kilometer field has already yielded 12 successful exploration wells. Pursuant to the proposed sale, the Houston-based, fifth-largest refiner and marketer of petroleum products in the U.S. would retain a 10% interest in the enterprise of the 30% it originally had.

Get the full analysis of all these stocks by going to http://at.zacks.com/?id=5507.

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Food Inflation Returns, Watching the Fed, Dollar Bulls Rampage, Bestselling “Car” and More!

Addison Wiggin — Tue, 16 Jun 2009 13:54:33 +0000

pRice rationing redux? a href="http://www.contrarianprofits.com/articles/author/chris-mayer/" class="alinks_links"Chris Mayer/a on the return of rising food prices#8230; Dan Amoss on what the Fed says versus what the Fed does#8230; Russia sings dollar#8217;s praises, dollar bulls stampede#8230; Chuck Butler looks past the rhetoric#8230; China#8217;s latest resource grab#8230; Iraqi oil#8230; America#8217;s best-selling car#8230; with an MSRP of $60#8230;/p p strongWe begin a new week pondering the question that bedevils the conscientious market observer every day./strongInflation? Deflation? Or as Agora founder a href="http://dailyreckoning.com/author/bbonner/"Bill Bonner/a is wont to suggest, both?/p p strong“Inflation – rising prices, or a drop in the purchasing power of the dollar – will soon rise to the very top of economic concerns,” writes Chris Mayer./strong “I can’t understand why there are pundits who insist we can’t have inflation while the economy is weak. There are plenty of examples#8230;/p

Petrobras Deals with China – Analyst Blog

Zacks Market Commentaries — Tue, 24 Feb 2009 20:07:48 +0000

Last week, Petrobras (PBR) announced it has signed two Memorandums of Understanding with Chinese institutions and an export oil contract with UNIPEC Asia Co. Ltd. -- a subsidiary of China Petrochemical Corporation, or SINOPEC (SNP) -- to export around 100 thousand barrels of oil per day. The Memorandum between China Development Bank Corporation, SINOPEC and Petrobras presents has the followings details :

Credit supply to Petrobras, including the option to off-set the debt with the export of oil, as per Chinese institution option and in a volume to be defined in the future;
Increase the oil export of Petrobras to China;
Partnerships between Petrobras and Chinese companies to develop projects in several oil industry segments;
Supply of service, material and equipment by Chinese companies to Petrobras; and
Promoting contacts between Chinese and Brazilian companies for the purpose of creating joint ventures.

The amount of the deal is estimated as US$10 Billion in loans for Petrobras in exchange of future oil exports. Indeed, Petrobras is in need of cash in order to continue its investment programs to develop the giant's oil field in the pre-salt basin.

That's positive news. However, due to the depressed levels of oil prices the huge reserves -- which are more than 5,000 meters below sea level, with very high exploration costs -- doesn't seem to be a great opportunity. We are keeping our Hold recommendation on Petrobras.

Read the full analyst report on "PBR"
Read the full analyst report on "SNP"
Zacks Investment Research

Cash in on the ‘New Silk Road’

Contrarian Profits — Tue, 28 Oct 2008 12:35:09 +0000

Like a boxer who has a habit of dropping his hands, America finally caught one on the chin. The U.S. economy is flat on its back, and the financial markets are leaning down into its face yelling out a 10-count. But the U.S. economy isn’t “out for the count” yet. It will struggle back to its feet. But if the economy hopes to stay on its feet, it will have to devise new tactics. The old, sloppy tactics of credit-financed consumption won’t work anymore.

The biggest change in the American economy over the last few decades has been the transition from making things to making loans. We Americans abandoned the manufacturing industries that once powered our economy and devoted ourselves to…

My Three Top Asian Energy Companies …

Larry Edelson — Thu, 04 Sep 2008 07:30:00 +0000

I'm writing this while on a short holiday in Macau, Asia's booming Las Vegas. And let me tell you (again) — judging by what I'm seeing in Macau, there are very few signs of a slowdown in ...