[스크랩] Chinese Oil Companies
Chinese Oil Companies: Who They Are and How to Playby Chris Matthai, Investment U Research No trumpets sounded, no media buzzed. In fact, very little fanfare was made of the announcement… at least in the United States. But that didn’t make it any less significant. In late March, China’s government-owned PetroChina (NYSE: PTR) announced that it pumped 2.4 million barrels of oil per day last year – thereby overtaking Exxon Mobil as the world’s largest oil producer. Just a decade ago, few people would have seen that coming so quickly. Sure, some will argue that Exxon is still the biggest oil company because of its larger market cap. But we’re not comparing shares outstanding and stock prices. We’re talking about crude oil pumped out of the ground. In that regard, PetroChina is the new #1. And it won’t be temporary. Here’s why… China: Still on the Fast TrackToday, looking back, it’s impossible to deny the Asian nation’s impressive growth. The bulls and the bears can argue all day – each with their valid points – about where China is ultimately headed (and how quickly), but one point is indisputable… Few people thought China would become this significant, this fast. The country has become the world’s second-largest economy, the world’s largest energy consumer, and the world’s second-largest oil consumer… all in the last few years. A recent PriceWaterhouseCoopers report even estimates, “China could be the largest economy in the world as early as 2020…” And really, they’re not the first news source to say so, nor will they be the last. Of course, just because people are speculating about, hoping for, or downright dreading the possibility, that doesn’t change things. Nobody really knows one way or the other when China will peak, no matter how many people like to claim otherwise. In fact, it’s safe to say that long-term estimates are almost never right, mainly because nobody can predict the future. With all of that said, however, there is one thing you can pretty much count on… the Chinese economy is going to keep growing. It’s simply a question of how rapidly. Regardless if China really does take the number one spot in the global economy, it’s going to be consuming a great deal of energy in the years and decades ahead. And the government is doing everything it can to make certain the country has the energy resources it needs. That means that even if investors don’t feel comfortable putting their money directly into China, they should still be well aware of China’s energy strategy. Considering recent actions by China’s state-controlled oil giants, it’s more important than ever for investors to take a close look at how China’s oil companies do business. Because, when it comes to energy, China isn’t particular about where it gets it from. But they are hell-bent on getting what they need. And in the process, they’re shaking up the energy sector like no one has seen before. Chinese Oil Companies: Out to Get What They Need… With or Without Your CooperationChina has three major energy companies that already dominate the national industry, and have been aggressively expanding outward for the last several years. Those companies are:
We mentioned PetroChina’s new status earlier, but Sinopec and CNOOC are both ranked in the top 10 largest refining companies in Asia. And considering the continent’s size, growth projections, and energy needs… those companies seem destined to stay near the top. Discover the two most profitable secrets of the world's greatest investors: We hate spam as much as you do. Check out our privacy policy and newsletter FAQ's. And the same aggressive tactics go for China National Petroleum Corporation… In February of this year, it was reported that CNPC made an offer for a piece of Woodside Petroleum Ltd.’s Browse gas project, which is set in Western Australia. While details still aren’t clear about whether that attempt will work out or not, the Chinese oil company is using the interim to make still more deals. CNPC finalized its purchase of the MacKay River oil sands project in Canada with Athabasca Oil Sands Corp., giving CNPC full ownership. Then they did a joint venture with Royal Dutch Shell plc. The partnership involves the construction of a liquid natural gas plant in Canada for developing and producing shale gas. It’s also in talks with Valero Energy to buy one of its oil refineries. And not to be outdone, China National Offshore Corporation has been just as busy this year. It has finalized its 100% acquisition of OPTI Canada, giving CNOOC a foothold in four Canadian oil sands projects. Then, in May, it signed a production-sharing contract with ROC Oil Company, a leading oil and gas company based in Australia. Together, they’ll work over a 355 square kilometer off of China’s Bohai Sea, though CNOC has the majority option with up to 51% working interest in the area. Chinese Ownership… Coming to An Oil Company Near YouCNOOC, said it expects to be one of the biggest oil companies in the world by 2030. The firm is currently the thirty-fourth-largest oil company by reserves, but based on its upcoming joint-venture deep-sea drilling projects in the South China Sea, CNOOC will likely be moving up in the rankings. Then there’s Sinopec Group, which just launched its first ever shale gas project. It expects to churn out 6.5 billion cubic meters of shale gas for domestic use by 2015. Sinopec’s oil production also continued to nudge higher in 2011. On the other hand, like Exxon, other Western oil and gas giants have been struggling. And some of them don’t seem to be winning those struggles. ConocoPhillips (NYSE: COP), for example, divested more than $20 billion in assets and investments since 2010 and expects oil production to dip 4.3% in 2012. In a similar bind,Chevron (NYSE: CVX) sees its oil production dropping 4.7% this year. And the list goes on… So what is China doing differently that’s allowing Chinese oil companies to gain the upper hand over its Western rivals? The answer is obvious… When you have the Chinese government as a partner, financing your operations and objectives becomes a lot easier. With the deep pockets of the Chinese Central Bank in your corner, you can take an aggressive approach to mergers and acquisitions. And eager to feed its growing energy appetite, China’s worldwide buying binge for oil and other energy assets is now spreading to North America. China currently consumes about 10 million barrels of oil a day – roughly half of what the United States uses. Like the United States, China imports about half the oil it needs. But unlike the United States, where oil demand is flat or declining, demand in China is expected to jump 50% by 2020. Bottom line for the Chinese; They have to get as much oil as they can from where ever they can. China’s Foreign M&A Spree… How do You Profit As Investors?According to MarketWatch, “In 2011, the total mergers and acquisition value of China’s three biggest oil companies – CNPC [a.k.a. PetroChina], China Petrochemical Corp. or Sinopec, and China National Offshore Oil Corp. or CNOOC – reached about $20 billion.” Yet just a few years ago, they accounted for a mere fraction of that number. So there’s significant growth taking place. Unfortunately, the Chinese oil companies themselves don’t make the best investment choice. The main reason is that companies like Sinopec operate for the sole purpose of fulfilling the needs of the Chinese government. Therefore, they’re notorious for spending more than they need to for exploration, development, and mergers and acquisitions. For instance, over the past three years PetroChina’s shares have moved up a measly 22%. Meanwhile, Sinopec’s shares tanked 28%. That’s not the kind of investment we like to make. Instead, we think the money will be made by:
For investors interested to take advantage of China’s increasing energy presence abroad,one of the best ways you can play this trend is through the SPDR Oil & Gas Exploration & Production ETF (NYSE: XOP). The fund uses a replication strategy that tracks the performance of the S&P Oil & Gas Exploration & Production Select Industry Index. In addition, we’re tracking specific companies likely to be attractive acquisition candidates for Chinese oil companies and other “big oil” players. We’ll bring these to your attention in futureInvestment U columns, but for now let’s play the big picture. Good Investing, Chris Matthai Investment U Research Team |