Yesterday the stock surged further, up 73 % from when I bought it, and today it hit 89 %. All the while, Warren Buffet has been paring down his investment in PetroChina, missing this latest surge.
So, what's going on here? The Chinese stock bubble tainting PetroChina? Or what?
I was planning not to muck around with my oil stocks, just buy and hold, but if Warren "our investment horizon is forever" Buffet is selling, one really starts wondering...
Anyone got any idea what's going on here? Peak oil is not an energy crisis. It is a liquid fuel crisis.
Well, no one ever went broke taking a profit.
Me, I'd buy Statoil/Hydro.
(a) it's oversold, due to all the corporate shit recently (entire board gone);
(b) the Norwegian economy isn't dependent on producing consumer goods for a US market that is shortly going to look pretty sick;
(c) the Norwegian currency is massively oil & gas backed;
(d) their finances are ludicrously conservatively managed. "Any economic unit can emit money. The serious problem is to get it accepted" Hyman Minsky
On the other hand, in the US, new gas equals LNG. That means problems and makes gas a good investment in the US. My play there is Exelon, the biggest private nuclear utility in the world at about 20 000 MW. Peak oil is not an energy crisis. It is a liquid fuel crisis.
Classic case is the Shtokman field, where although Statoil ostensibly lost out to Total, I think that their hard won technology and experience in inhospitable places is going to be their major winning card in years to come, backed by a Norwegian tradition of actually investing in engineers and engineering excellence.
That being so, Statoil's return on the capital they actually commit (Intellectual Capital, if you will)will wipe the floor with that of their competition.
So Statoil is IMHO structurally a buy:
(a) for the gas in the short and medium term;
(b) for its IP, if you see the future - as I do - as a disintermediated future.
As far as I know Petrochina is all about ownership and exploitation - they are the ones who will be paying the Statoils to do what they cannot. ie it's another gambling chip, IMHO, in a casino market with a pretty rigged wheel. "Any economic unit can emit money. The serious problem is to get it accepted" Hyman Minsky
I think Warren It's class warfare, my class is winning, but they shouldn't be Buffet is more candid than most.
And remember, I am a supporter of the ownership society. A fair and equitable capitalism with free movement of capital where the means of production are controlled by the people, a secure and generous welfare state, and taxes as high as needed to pay for it, but not a promille higher. Peak oil is not an energy crisis. It is a liquid fuel crisis.
BEIJING -- PetroChina Co. said it has completed all procedures for its Shanghai initial public offering and will likely list in November. Its Hong Kong shares jumped 13% yesterday as news of increased oil production and hopes of major oil-deposit discoveries spurred optimism about its performance in the fourth quarter. PetroChina President Jiang Jiemin, speaking at a Communist Party Congress panel discussion, said PetroChina's mainland share listing was "only a matter of timing." PetroChina is the largest listed Chinese oil company by output. Its shares rose to 18.78 Hong Kong dollars ($2.42) in Hong Kong, boosted by rising oil prices, the imminent A-share offering and faster-than-expected output growth. A shares are yuan-denominated shares of Chinese companies listed on mainland exchanges and restricted to approved foreign investors. H shares are Hong Kong listed and issued by companies registered and based in China. The company has American depositary receipts listed in New York. H shares reached an intraday high of HK$18.94, giving PetroChina a market value of around US$430 billion, outranking General Electric Co. as the world's second most highly valued listed company, behind Exxon Mobil Corp. PetroChina's share price has risen despite investor Warren Buffett having scaled back the stake he holds through Berkshire Hathaway Inc. Mr. Jiang attributed the run-up in PetroChina's shares to the company's growth and the strength of oil prices, which have generally traded above US$80 a barrel since Sept. 12. Oil prices climbed yesterday, with crude rising $2.44 to $86.13 a barrel on the New York Mercantile Exchange. A person familiar with the situation said PetroChina will start the road show for its offering on Oct. 22. Late last month, China's securities regulator approved the sale of as many as four billion A shares, or 2.18% of the company's enlarged share capital. The company hasn't said how much it plans to raise from the IPO, but it has said it plans to spend about 37.77 billion yuan ($5.03 billion) on five projects, including crude-oil output at its Daqing and Changqing fields. The company's third-quarter oil and gas output rose 5.6% from a year earlier, bringing PetroChina toward its full-year target of 5.3% growth.
Its Hong Kong shares jumped 13% yesterday as news of increased oil production and hopes of major oil-deposit discoveries spurred optimism about its performance in the fourth quarter.
PetroChina President Jiang Jiemin, speaking at a Communist Party Congress panel discussion, said PetroChina's mainland share listing was "only a matter of timing."
PetroChina is the largest listed Chinese oil company by output.
Its shares rose to 18.78 Hong Kong dollars ($2.42) in Hong Kong, boosted by rising oil prices, the imminent A-share offering and faster-than-expected output growth. A shares are yuan-denominated shares of Chinese companies listed on mainland exchanges and restricted to approved foreign investors. H shares are Hong Kong listed and issued by companies registered and based in China. The company has American depositary receipts listed in New York.
H shares reached an intraday high of HK$18.94, giving PetroChina a market value of around US$430 billion, outranking General Electric Co. as the world's second most highly valued listed company, behind Exxon Mobil Corp.
PetroChina's share price has risen despite investor Warren Buffett having scaled back the stake he holds through Berkshire Hathaway Inc.
Mr. Jiang attributed the run-up in PetroChina's shares to the company's growth and the strength of oil prices, which have generally traded above US$80 a barrel since Sept. 12. Oil prices climbed yesterday, with crude rising $2.44 to $86.13 a barrel on the New York Mercantile Exchange.
A person familiar with the situation said PetroChina will start the road show for its offering on Oct. 22. Late last month, China's securities regulator approved the sale of as many as four billion A shares, or 2.18% of the company's enlarged share capital.
The company hasn't said how much it plans to raise from the IPO, but it has said it plans to spend about 37.77 billion yuan ($5.03 billion) on five projects, including crude-oil output at its Daqing and Changqing fields.
The company's third-quarter oil and gas output rose 5.6% from a year earlier, bringing PetroChina toward its full-year target of 5.3% growth.
The last thing is really quite extraordinary for a company of this size. As Jerome has written about earlier, the big oil companies have all been struggling with falling extraction even in this age of high oil prices.
The P/E for the integrateds are about 10, 12-13 for Exxon and 20 for PetroChina. Maybe the hopes for growing extraction make these levels reasonable.
By the way, funny that PetroChina is now the second most valuable publicly listed company in the world. A sign of the times. Peak oil is not an energy crisis. It is a liquid fuel crisis.
I bought it at $125 this spring. Peak oil is not an energy crisis. It is a liquid fuel crisis.
