Exactly ten years ago, the Chinese oil company PetroChina has conducted the primary placement of shares on the stock exchange in Shanghai. The IPO was a great success. Became the first company with a market capitalization that reached $ 1 trillion. Since then, PetroChina moved down. In a decade the state-owned company lost approx. $ 800 billion. For the money, for example, you can buy any publicly traded company in Italy.
PetroChina fall in dollar prices is the largest in history. Meanwhile, Bloomberg analysts believe that it has not yet ended. Experts predict that the company’s shares over the next 12 months will drop by another 16%. The pessimistic forecast is easy to explain. Suffice it to recall the ambitious plan of XI Jinping to transform China into a world leader for electric cars that will be a severe blow to the Chinese oil industry.
«Ahead of PetroChina will face hard times,- the analyst of a major Singaporean investment Fund Asset Management One of Toshihiko Takamoto.- Why would anyone want to buy shares when they are sold at a price exceeding the income of more than 30 times?»
The main reason for this is unimportant, to put it mildly, the situation in PetroChina can be considered a failure of the Chinese government from raw model of development of the economy and attempts to take control of speculators, who turned it into the first trillion-dollar company in 2007. Of course, most of the factors that contributed to the fall of PetroChina can be considered a force majeure, i.e. beyond the company’s control. The majority of the shares of giant owned by the government of the PRC. So the fall is not so hard hit by the shareholders, as might seem, if judged by the numbers.
Prospects PetroChina economists see in the fog. Even if the state Council of the PRC (the government) will weaken the «grip» that investors will prefer high technology and consumer market, not the «old» economy sectors such as «oil». President XI stressed at the XIX Congress of the CPC, which only took place in Beijing that the country needs is economic development, which will not harm the environment. China intends to implement a major program to establish a sector of electric cars in the automobile industry, which, if you remember the previous Grand projects, is doomed to success; and promises by 2030 to dramatically reduce the emissions of greenhouse gases. This means that oil companies will no longer walk in the «Pets» of the authorities.
As for the administration of PetroChina, the company’s management, of course, hope for the best. Senior managers say that the company has already almost reached the bottom, and already thinking of returning to the surface. Rather, the main hope lay in PetroChina for natural gas. According to statistics for the third quarter, PetroChina gradually changes its strategy and transformed from oil giant into a gas. Oil production in the first 9 months of this year decreased by 5.2%, while gas grew by 4.5%. Now the share of oil in total production volume amounts to less than 60%. Oil — 224,3 million barrels, and gas in terms of oil equivalent. 152,1 million barrels. For comparison, 15 years ago, the share of oil exceeded 90%. Such structural changes allow you to record PetroChina in a small but gradually expanding club of the oil and gas giants such as Gazprom, Repsol, Royal Dutch Shell, which more depend or will depend in the near future, not from oil but from natural gas. Of course, that’s very simplistic, but still the numbers can’t go anywhere. In the case of China, evidence of this trend enough. Analysts, for example, point out that the last time growth in oil consumption in China has exceeded the growth in gas consumption is almost two years ago.
Thus in PetroChina intend to pay special attention to the production of domestic gas, because the trade of imported gas is economically inefficient. Total losses from the sale of another gas in January-September reached 17 billion yuan (2.6 billion dollars), which is only slightly less than the total revenue of the gas division of the giant over the same period, equal to 18 billion yuan.
Opportunities and resources for the transition from oil to gas from PetroChina enough. Natural gas reserves, and deposits are readily accessible and require minimal additional investment amount to approx. 1,148 trillion m3 or 7.7 billion barrels of oil equivalent. As for their own oil reserves, they have a Chinese giant and a half times less than 5.2 billion barrels. It should be borne in mind that the undeveloped reserves of natural gas increased to 2,212 trillion m3. It’s almost twice the gas reserves of Shell, equal to 1.2 trillion m3.