Date
27 May 2017
PetroChina may announce the sale of key assets anytime soon. These might include stakes in pipelines and refineries. Photo: Reuters
PetroChina may announce the sale of key assets anytime soon. These might include stakes in pipelines and refineries. Photo: Reuters

PetroChina, CNPC selling stakes in pipelines, refineries

PetroChina and its state-owned parent are planning to sell assets before the year is out as China’s biggest oil and gas producers seek to shore up their balance sheets.

The assets might include stakes in pipelines and refineries, Bloomberg reports, citing people with knowledge of the situation.

PetroChina and China National Petroleum Corp. (CNPC) may announce the decision as early as this week.

CNPC is seeking to use proceeds from the sale to meet annual income growth targets set by China’s state asset regulators.

PetroChina gained 0.4 per cent to HK$5.65 (73 US cents) at the close in Hong Kong compared with a 0.4 per cent decline in the benchmark Hang Seng Index.

The stock has dropped 37 per cent in the past year compared with a 5.1 per cent fall in the benchmark.

“Many investors would prefer they cash in on some assets rather than running the assets themselves,” Laban Yu, head of Asia oil and gas equities at Jefferies Group in Hong Kong, said.

“Investors have given almost zero valuation to PetroChina’s assets such as pipelines. Any asset sales right now are good news for the company and could help its share price.”

CNPC’s press office in Beijing was not able to immediately respond to an e-mail seeking comment.

Mao Zefeng, PetroChina’s Beijing-based spokesman, said he was unable to immediately provide comment.

The slump in energy prices has pushed energy companies to shed assets and cut staff to survive the downturn.

PetroChina’s third-quarter profit fell 81 per cent to the lowest since Bloomberg started compiling the data in 2007.

China Petroleum and Chemical Corp. (Sinopec), the country’s No. 2 producer, posted a 92 per cent decline in profit.

The sale would be the first major divestment by either company since PetroChina sold a 20 billion yuan (US$3.1 billion) pipeline stake to institutional investors in 2013.

Saudi Arabian Oil Co., the world’s largest oil exporter, hired Deutsche Bank to advise on the potential acquisition of some marketing, retail and refining assets from CNPC that could be worth several billion dollars, Bloomberg reported in October.

– Contact us at [email protected]

RC/RA

EJI Weekly Newsletter

Please click here to unsubscribe