Log in
Forgot password ?
Become a member for free
Sign up
Sign up
Dynamic quotes 

4-Traders Homepage  >  Equities  >  Stock Exchange of Hong Kong  >  CNOOC Ltd    0883   HK0883013259

CNOOC LTD (0883)
Mes dernières consult.
Most popular
News SummaryMost relevantAll newsSector newsTweets

China's teapot plants form new club to beat rivals, but will it work?

share with twitter share with LinkedIn share with facebook
share via e-mail
09/08/2017 | 07:17am CET
FILE PHOTO: An employee rides a bike on a road near refinery plants of Chambroad Petrochemicals, in Boxing

A group of independent Chinese oil refiners is clubbing together to survive an onslaught by state-owned giants and the rise of private chemical giants, but industry analysts said the new alliance may find it hard to stick.

Less than two years after becoming some of China's newest crude oil importers, around 20 independent plants in the eastern industrial heartland of Shandong province plan to form a joint venture to coordinate their production, marketing, crude oil imports and investments.

The new alliance, to be called the Shandong Refining & Chemical Group, is to be headquartered in the provincial capital Jinan, and as envisioned will be an upgrade on a crude-buying federation set up in early 2016 by some of the same members.

The new group of "teapot" refiners aims to pool funds and resources to produce fuels and chemicals more efficiently as they battle stiff competition in an increasingly saturated market and under tightened environmental and tax scrutiny.

"We see the need to advance to the next stage as we face competition from both the national team and the provincial team. We can't afford operating like a plate of scattered sand," said Zhang Liucheng, a vice president of Shandong Dongming Petrochemical Group [SDHLYD.UL], one of the initiators of the stronger alliance.

The earlier crude-purchasing club was too loose an organization and did not have much success, Zhang said.

But while Shandong Dongming and fellow founding member Qingyuan Group are trying to build a more formal structure, including registering the new company as early as next week with a capitalisation of 50 billion yuan (5.86 billion pounds), there are few details such as a list of members and when they will start to commit funding.

Analysts said pooling the assets and coordinating the investments of 20 plants that have multiple private and local government owners will be a huge challenge.

"The new group shall have bigger political bargaining power ... but it will be hugely difficult to align all the various interests," said Harry Liu, of consultancy IHS Markit.

That was reflected in the comments of an executive of a teapot refiner that was a member of the crude buyers' club: "Each plant has its unique product lines and marketing strategies, and every new investment is a result of thorough market studies. How would you expect the new group to coordinate?"

The executive said his company was waiting to see a concrete action plan before agreeing to participate.

(For a graphic on 'China's gasoline demand growth' click http://reut.rs/2wDDfYC)


State-owned rivals Sinopec (>> China Petroleum & Chemical Corp) and PetroChina (>> PetroChina Company Limited) operate larger, more sophisticated plants, and have influence over government policies such as fuel export quotas, which are highly sought after as China's refined product output far exceeds demand.

Jiao Chong, managing director of Qingyuan Group, said the new venture could use its larger market presence to lobby the government.

The planned group would have a combined crude oil import quota of over 50 million tonnes a year, or 1 million barrels per day, an amount on par with smaller state companies like Sinochem [SASADA.UL] and China National Offshore Oil Company (CNOOC).

"We can become a stronger voice in lobbying for policies like fuel export quotas," Jiao said.

The need for the independent refiners to club together is heightened by the emergence of new rivals, such as provincial government-backed private chemical giants like Rongsheng Holding Group and Hengli Group [HLGRP.UL] that are building or planning refining complexes on China's eastern coast.

Rongsheng's first 400,000 bpd refinery is slated to start up as early as end-2018.

Hengli, a privately-owned chemicals producer, is building a similar-sized refining complex, industry officials said.

"New investments by the likes of Rongsheng have the integration skills and scale of production that teapots could barely rival, " said IHS' Liu.

Shandong Dongming is China's largest teapot refiner with a total operating capacity of 240,000 bpd.

(Reporting by Chen Aizhu; Editing by Henning Gloystein and Tom Hogue)

By Chen Aizhu

share with twitter share with LinkedIn share with facebook
share via e-mail
Latest news on CNOOC LTD
12/13 Empyrean Energy - Dempsey and Sacramento Basin Q&A Report
12/12 Broken pipeline cuts British supply during peak energy demand
12/12 CNOOC LIMITED : - New Gas Field Discovery in Bohai Expected to Provide Quality C..
12/11 CNOOC : On the Road With UNRA's Kagina
12/11 Museveni Enters Fight Over $ 20bn Oil Deals
12/10 CNOOC : Announces New Gas Discovery in Bohai Bay
12/08 ALLTRONICS : The New Gas Field Discovery in Bohai Is Expected to Provide Quality..
12/06 Empyrean Energy PLC - Dempsey Gas well update
12/05 CNOOC : Tullow Hopes to Conclude a Farm-Down to Total and CNOOC Next Year
12/04 CNOOC LIMITED : Announces Weizhou 12-2 Oil Field Phase II Project Commences Prod..
More news
News from SeekingAlpha
08:30a MADALENA ENERGY : Huge Growth Potential, Massive Undervaluation
12/10 THE NEST EGG PORTFOLIO : Total's $5B + 5% Strategy Protects The Dividend
12/06 Alberta unveils rules for oil sands, other large carbon emitters
12/01 Petrobras sees first Libra pre-salt oil shipment in early January
12/01 Shell, PetroChina sign 27-year gas supply deal, boosting Australian project
Financials ( CNY)
Sales 2017 179 B
EBIT 2017 42 817 M
Net income 2017 30 906 M
Debt 2017 105 B
Yield 2017 4,10%
P/E ratio 2017 13,46
P/E ratio 2018 11,40
EV / Sales 2017 2,93x
EV / Sales 2018 2,62x
Capitalization 420 B
Duration : Period :
CNOOC Ltd Technical Analysis Chart | 0883 | HK0883013259 | 4-Traders
Technical analysis trends CNOOC LTD
Short TermMid-TermLong Term
Income Statement Evolution
Mean consensus OUTPERFORM
Number of Analysts 23
Average target price 10,7  CNY
Spread / Average Target 14%
EPS Revisions
Guang Yu Yuan Chief Executive Officer & Director
Ke Qiang Xu President & Executive Director
Hua Yang Chairman
Wei Zhi Xie Chief Financial Officer
Guang Qi Wu Non-Executive Director
Sector and Competitors
1st jan.Capitalization (M$)
CNOOC LTD14.61%63 584