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PetroChina (PTR) Buys Oil Stakes in UAE for $1.18 Billion
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PetroChina Company Limited recently received stakes in two offshore oil concessions from the national oil company of UAE, Abu Dhabi National Oil Company ("ADNOC"), for a total consideration of $1.18 billion. The Chinese oil company signed the agreements that have a term of 40 years and are back-dated to Mar 9, 2018.
Present Scenario at the Concessions
Per the deal, PetroChina paid a fee of $600 million for a 10% stake in the Lower Zakum concession, and $575 million for 10% interest in the Umm Shaif and Nassr concession. Notably, last week, French oil major TOTAL S.A. bought 20% stake in the Umm Shaif and Nasr concession, along with a 5% interest in the Lower Zakum concession for a total participation fee of $1.45 billion.
While operator ADNOC retains the majority shares (60%) in both the concessions, other oil companies are also present in the projects. Italian energy giant Eni S.p.A. (E - Free Report) owns 10% interest in the Umm Shaif and Nasr concession, and another 5% in the Lower Zakum concession. India’s ONGC Videsh and Japan’s INPEX Corporation are also present in the Lower Zakum concession with 10% stakes each.
Crude production capacity from the Umm Shaif field combined with the Nasr field is 460,000 barrels per day. ADNOC intends to reduce Abu Dhabi’s dependency on imported gas by processing 500 million standard cubic feet of gas per day from the Umm Shaif for the rising domestic energy demand.
PetroChina's View
The deal is expected to increase production volumes of PetroChina, which is responsible for 52% of crude oil and 71% natural gas output in China — the country that holds a fast-growing demand for energy. Moreover, the agreements are in line with the company's intention to optimize its asset portfolio and increase profitability.
Additionally, the parent organization of PetroChina, China National Petroleum Corporation (“CNPC”) was awarded 8% interest in Abu Dhabi’s onshore concession. CNPC also holds 40% interest in the Al Yasat concession, partnered with ADNOC. The latest deal not only strengthens the strategic and economic relationship between China and UAE, but also recognizes China's major growth market for energy products and petrochemicals.
Price Performance
PetroChina has lost 4.5% last year against 6.8% growth of its industry.
Zacks Rank and Other Stock to Consider
PetroChina has a Zacks Rank #2 (Buy).
Investors interested in the oil and energy space can also consider Pioneer Natural Resources Company (PXD - Free Report) that sports a Zacks Rank #1 (Strong Buy). Irving, TX-based Pioneer Natural is an independent oil and gas exploration and production company. Its revenues for first-quarter 2018 are anticipated to improve 23.7% from the prior-year quarter. The company witnessed a positive average earnings surprise of 66.9% in the trailing four quarters. You can see the complete list of today’s Zacks #1 Rank stocks here.
Can Hackers Put Money INTO Your Portfolio?
Earlier this month, credit bureau Equifax announced a massive data breach affecting 2 out of every 3 Americans. The cybersecurity industry is expanding quickly in response to this and similar events. But some stocks are better investments than others.
Zacks has just released Cybersecurity! An Investor’s Guide to help Zacks.com readers make the most of the $170 billion per year investment opportunity created by hackers and other threats. It reveals 4 stocks worth looking into right away.
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PetroChina (PTR) Buys Oil Stakes in UAE for $1.18 Billion
PetroChina Company Limited recently received stakes in two offshore oil concessions from the national oil company of UAE, Abu Dhabi National Oil Company ("ADNOC"), for a total consideration of $1.18 billion. The Chinese oil company signed the agreements that have a term of 40 years and are back-dated to Mar 9, 2018.
Present Scenario at the Concessions
Per the deal, PetroChina paid a fee of $600 million for a 10% stake in the Lower Zakum concession, and $575 million for 10% interest in the Umm Shaif and Nassr concession. Notably, last week, French oil major TOTAL S.A. bought 20% stake in the Umm Shaif and Nasr concession, along with a 5% interest in the Lower Zakum concession for a total participation fee of $1.45 billion.
While operator ADNOC retains the majority shares (60%) in both the concessions, other oil companies are also present in the projects. Italian energy giant Eni S.p.A. (E - Free Report) owns 10% interest in the Umm Shaif and Nasr concession, and another 5% in the Lower Zakum concession. India’s ONGC Videsh and Japan’s INPEX Corporation are also present in the Lower Zakum concession with 10% stakes each.
Crude production capacity from the Umm Shaif field combined with the Nasr field is 460,000 barrels per day. ADNOC intends to reduce Abu Dhabi’s dependency on imported gas by processing 500 million standard cubic feet of gas per day from the Umm Shaif for the rising domestic energy demand.
PetroChina's View
The deal is expected to increase production volumes of PetroChina, which is responsible for 52% of crude oil and 71% natural gas output in China — the country that holds a fast-growing demand for energy. Moreover, the agreements are in line with the company's intention to optimize its asset portfolio and increase profitability.
Additionally, the parent organization of PetroChina, China National Petroleum Corporation (“CNPC”) was awarded 8% interest in Abu Dhabi’s onshore concession. CNPC also holds 40% interest in the Al Yasat concession, partnered with ADNOC. The latest deal not only strengthens the strategic and economic relationship between China and UAE, but also recognizes China's major growth market for energy products and petrochemicals.
Price Performance
PetroChina has lost 4.5% last year against 6.8% growth of its industry.
Zacks Rank and Other Stock to Consider
PetroChina has a Zacks Rank #2 (Buy).
Investors interested in the oil and energy space can also consider Pioneer Natural Resources Company (PXD - Free Report) that sports a Zacks Rank #1 (Strong Buy). Irving, TX-based Pioneer Natural is an independent oil and gas exploration and production company. Its revenues for first-quarter 2018 are anticipated to improve 23.7% from the prior-year quarter. The company witnessed a positive average earnings surprise of 66.9% in the trailing four quarters. You can see the complete list of today’s Zacks #1 Rank stocks here.
Can Hackers Put Money INTO Your Portfolio?
Earlier this month, credit bureau Equifax announced a massive data breach affecting 2 out of every 3 Americans. The cybersecurity industry is expanding quickly in response to this and similar events. But some stocks are better investments than others.
Zacks has just released Cybersecurity! An Investor’s Guide to help Zacks.com readers make the most of the $170 billion per year investment opportunity created by hackers and other threats. It reveals 4 stocks worth looking into right away.
Download the new report now>>