By Hui Ching-hoo
China Daily
HONG KONG — Prices of the mainland's three Hong Kong listed oil-related stocks - China National Offshore Oil Corporation (CNOOC), PetroChina and Sinopec - surged significantly as a result of the newly discovered oil fields and the soaring international oil price.
International securities houses and analysts believe the overall net profit of the three oil giants could reach 240 billion yuan by the end of the year.
Ricky Tam, chairman of Hong Kong Institution of Investors, said he expected CNOOC and PetroChina's prices to rise by a further 10 to 15 percent.
"The prices of the three oil-related stocks stayed pretty flat earlier because the shares were overlooked by institutional investors. But their prices have slid to an attractively low level as compared to their projected earnings," said Tam.
CASH Asset Management Associate Director Patrick Yiu forecast that PetroChina's share price would exceed HK$11, while Sinopec's would reach HK$9.
"The international oil price is remaining at a high level, which will help boost the price of PetroChina," said Yiu.
Securities house CLSA recently adjusted the target price of CNOOC from HK$8 to HK$9, while the prices of PetroChina and Sinopec are expected to grow to HK$13 and HK$10.8 respectively.
There had been a great deal of speculation that Sinopec would devote most of its efforts to developing its natural gas business in Sichuan, at the expense of its oil exploration business. But the discovery of a new oilfield in Xinjiang is a positive sign that the company is able to maintain its status as Asia's largest oil refiner.
An oil analyst from CLSA forecast that Sinopec's crude oil reserves would increase by 50 percent next year, which would boost the value of the firm's net assets by 5 percent.
"The production capacity of the new oil field is one of highest on the mainland," said the analyst.
DBS Vickers analyst Law Wai-yip said: "Oil stocks have long lagged behind the Hang Seng Index and are set to attract investors."
By Wang yu
China Daily
Northwest China 's Xinjiang Uygur Autonomous Region will top the country's energy grid, boasting robust reserves.
"(The) oil production and petrochemical sectors have become Xinjiang's pillar industries, with output from them accounting for more than 60 percent of the region's total industrial output," chairman of the Xinjiang Uygur Autonomous Region Ismail Tiliwaldi said on Friday at the fifth session of 10th National People's Congress.
According to Tiliwaldi, estimates for 2006 place crude oil production at 24.8 million tons and natural gas production at 16.1 billion cubic meters.
Over the next three years, China's top two energy giants CNPC and Sinopec will spare no efforts to double output from Xinjiang to 44 million tons of oil equivalent, sources from the National Development and Reform Commission (NDRC) said. The plan will enable Xinjiang to match Heilongjiang Province as China's top oil-production powerhouse.
"The target is feasible, based on the robust reserves in Xinjiang and the huge investment injected into it," Zhang Zhiguo, a press official with Beijing-based Sinopec, said. CNPC and Sinopec poured a total of 68.6 billion yuan into Xinjiang for oil and gas exploration and production from 2005 to 2006, the NDRC said.
China 's top oil producer CNPC said the firm will make greater efforts to develop potential fields in Northwest China. "The bulk of our planned investment, however, will go to the oilfields in western China especially Xinjiang," Han Xuegong, a veteran consultant for CNPC, said.
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