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PetroChina's Parent to Sell Engineering Assets Worth $3.8 B
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Leading integrated oil corporation PetroChina Company Limited’s parent company, China National Petroleum Corp., recently announced the sale of engineering-related assets worth $3.8 billion to a listed unit. The divestment is aimed to generate proceeds in order to restructure its non-core business.
China National Petroleum plans to sell seven of its engineering construction businesses to Xinjiang Dushanzi Tianli High & NewTech Co. Ltd. – a unit listed on the Shanghai exchange. Xinjiang Dushanzi aims to fund the acquisition using 6.0 billion yuan ($898.10 million) generated from a private placement of shares.
China National Petroleum, the country's largest state energy group, has been focusing on restructuring its non-core departments like oilfield services, engineering and financial operations. The company intends to make these units more efficient and competitive going forward.
Under the aforementioned plans that were announced last week, the company expects to sell $11.3 billion worth of financial assets to another listed affiliate – Jinan Diesel Engine. This unit is expected to buy these assets using cash, asset swaps and a share issue.
China National Petroleumcurrently holds a stake of 86.35% in PetroChina.The latter operates through four segments – Exploration & Production, Natural Gas & Pipelines, Refining & Chemicals, and Marketing. Crude downturn and cuts in domestic natural gas supply prices to industrial customers have almost wiped out earnings and hit PetroChina hard.
Hence, PetroChina currently carries a Zacks Rank #4 (Sell), which implies that the stock will underperform the broader U.S. equity market over the next one to three months.
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PetroChina's Parent to Sell Engineering Assets Worth $3.8 B
Leading integrated oil corporation PetroChina Company Limited’s parent company, China National Petroleum Corp., recently announced the sale of engineering-related assets worth $3.8 billion to a listed unit. The divestment is aimed to generate proceeds in order to restructure its non-core business.
China National Petroleum plans to sell seven of its engineering construction businesses to Xinjiang Dushanzi Tianli High & NewTech Co. Ltd. – a unit listed on the Shanghai exchange. Xinjiang Dushanzi aims to fund the acquisition using 6.0 billion yuan ($898.10 million) generated from a private placement of shares.
China National Petroleum, the country's largest state energy group, has been focusing on restructuring its non-core departments like oilfield services, engineering and financial operations. The company intends to make these units more efficient and competitive going forward.
Under the aforementioned plans that were announced last week, the company expects to sell $11.3 billion worth of financial assets to another listed affiliate – Jinan Diesel Engine. This unit is expected to buy these assets using cash, asset swaps and a share issue.
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China National Petroleumcurrently holds a stake of 86.35% in PetroChina.The latter operates through four segments – Exploration & Production, Natural Gas & Pipelines, Refining & Chemicals, and Marketing. Crude downturn and cuts in domestic natural gas supply prices to industrial customers have almost wiped out earnings and hit PetroChina hard.
Hence, PetroChina currently carries a Zacks Rank #4 (Sell), which implies that the stock will underperform the broader U.S. equity market over the next one to three months.
Some better-ranked players from the broader energy sector include NGL Energy Partners LP (NGL - Free Report) , Matador Resources Company (MTDR - Free Report) and Enviva Partners, LP (EVA - Free Report) . All these stocks sport a Zacks Rank #1 (Strong Buy).You can see the complete list of today’s Zacks #1 Rank stocks here.
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