Oil majors ' first-quarter responses are in the inventory phase

On April 28, China Oil released its first quarterly report in 2009, marking the launch of a quarterly report by Chinese and foreign oil giants.　　Overall, in the context of the global financial crisis, despite the differences in the performance of the oil giants, but because no one in the international slump has led to years of decline in profits is not immune. The profit is the same. International oil prices continue to run low, making the above travel business-oriented Chinese oil and CNOOC first quarter performance is not satisfactory.　　Benefiting from the new oil price mechanism, the domestic refining business reversed years of loss. "There are people who rejoice and worry," to describe the 2008 performance of the big three oil companies as appropriate. In addition to CNOOC's solo show, China's oil and Sinopec's 2008 net profit have fallen sharply.　　In the spring of 2009, the first "quarterly Test", the three major companies handed over a copy of what kind of report card? At the end of April, the three major oil companies issued the first quarterly report of 2009.　　The same as last year, the performance is still mixed with worry, the difference is, the protagonist has changed. Sinopec, which owns the diesel refining business, has become one of the big three to benefit from international oil prices, with net profit increasing by 84.7% per cent year-on-year.　　By contrast, China's oil and CNOOC, which are dominated by upstream operations, have failed to deliver satisfactory "answers" to oil prices, which are constrained by low hovering.　　The low price of oil has affected the fall in international oil prices, allowing oil giants, including multinational energy companies and domestic oil companies, to end their "windfall myths" for years, replacing the biggest quarterly slump in history.　　China's oil and CNOOC, which focus on upstream operations, suffered a sharp decline in profits in the first quarter.　　China's oil quarterly show, subject to the fall in crude oil prices, 2009 years ago three months profit 18.9 billion yuan, down 35.3% year-on-year.　　Industry analysts pointed out that the Chinese oil business structure of the upstream, the best profit margin is 75~80 USD/barrel, and in the first quarter of 2009 oil prices significantly lower than this range, the profit was greatly affected. In the case of a sharp drop in oil prices, the company reduced crude oil production by 5.7% to 206 million barrels a year. In this respect, PetroChina said: "In the first quarter, in the exploration and production business by the adverse impact of the sharp decline in oil prices, the company actively adjusts the domestic production arrangements, in ensuring the development of Daqing, changqing key strategic areas at the same time, reducing ineffective, inefficient production, the production of crude oil to achieve a "Although the upstream of Sinopec does not occupy an advantage, there is a downward trend in the profitability of the sector," he said. The report showed that the company's exploration and development capital expenditure of 7.778 billion yuan in the first quarter, crude oil production rose 0.61%.　　As the price of crude oil has fallen sharply, the company's exploration and development plate operating earnings fell 76.1%, to 2.756 billion yuan. Citic Securities analysts believe that the international financial crisis continues to spread and deepen, the international oil price continued low operation, domestic oil and petrochemical market demand decline, oil enterprises upstream profit pressure doubled, and intoThe pressure is still high.　　In such a context, the upstream plate situation in the short term will not be too good.　　Similar to China's oil, upstream oil and gas production and sales are the main part of CNOOC's profits, the fall in oil prices led to the middle of the oil period without audit revenue fell. It is clear that the trend of international oil prices has a great impact on the performance of PetroChina and CNOOC. For this year's oil price trend, CNOOC president and Chief financial officer Yang Hua said oil prices in addition to the basic supply and demand, but also affected by many factors, but the current international oil prices have been relatively stable.　　He also believes that the stability of oil prices is good for the company.　　Natural gas is a bright spot. Although the oil revenue has fallen sharply, the gas business has become a new aspect of the performance growth of the three major oil majors. China's first-quarter gas production grew faster, producing 523.4 billion cubic feet of natural gas, up 7.9% per cent year-on-year.　　The average price of the company's natural gas in the first quarter was 3.28 dollars/thousand cubic feet, which still had an increase of 4.1% per cent.　　In the first quarter of this year, China's oil and gas pipeline business closely around the production and distribution balance and engineering construction orderly, pipeline safe operation, key project construction progress smoothly, oil and gas transport smooth, management and operation level further improve, natural gas sales continue to maintain a relatively fast growth. Senior Chinese oil executives have said publicly that domestic gas prices have been expected to rise, and that domestic gas prices are indeed very low compared with those abroad.　　PetroChina set a target of 2 trillion cubic feet for the production of natural gas to be sold in 2009, up 7.53% from last year. It is clear that the gas and pipeline business is becoming the profit growth point of China's oil.　　As the absolute main force of domestic natural gas production, whether the natural gas production business continues to grow, the company's future profitability of natural gas is more important. For oil companies, in the context of low oil prices, the performance of the upstream sector will be largely expected to profit from natural gas.　　Natural gas production continues to grow in the context of rising natural gas sales, destined to be an important source of profits for oil companies. Not long ago, Sinopec chairman Shulin said, the company will focus on the construction of Sichuan-gas transmission project, to do a good job in Tahe and daqing, such as crude oil, Puguang and Ordos and other natural gas fields as the focus of capacity-building.　　Among them, the Chinese petrochemical natural gas business plays--------------------June　　Analysts expect the project to be completed, will greatly improve the Chinese petrochemical gas sales, the company's overall performance growth will play a role in promoting. CNOOC's natural gas sales prices have also increased significantly. In the first quarter, oil produced by CNOOC averaged 3.89 dollars/thousand cubic feet, up 6.6% per cent year-on-year.　　But the company's net natural gas production was 563 million cubic feet, down 4% per cent year-on-year. In this respect, CNOOC President and Chief financial Officer Yang Hua explained that, although a small number of temporary supply of customers reduced, but most of the gas contract for long-term contracts, so the current production has not changed significantly。 Oil refining turn profit all along, the downstream business of the huge Sinopec days are not very comfortable.　　Especially in the past 2008, Sinopec has suffered the biggest oil refinery losses in history, with a loss of 7.5 times times as many as 2007 years. Haze past, along with the oil pricing mechanism of the spring breeze, Sinopec finally turned a dark.　　In the first quarter of last year, the oil refining sector, which also lost 20.636 billion yuan, "magically" swung to profitability in the first quarter, earning 7.328 billion yuan in operating income and refining the profit growth of more than 50%. Sinopec said that the company according to the oil market and chemical raw material demand changes, optimize the production plan, to reduce the efficiency, and strive to improve the level of profit.　　The first quarter capital expenditure of 1.574 billion yuan, mainly used in Zhanjiang dongxing refining complete, jinling 2.6 million tons/year wax gas hydrogenation treatment device construction.　　At the end of last year, the country introduced a new oil price formation mechanism, at any time in accordance with international oil prices to adjust domestic oil prices, which to a large extent, to improve the oil refinery losses, refining process profit is constantly emerging. Dai Houliang, senior vice president and chief financial officer of Sinopec, said: "In the first quarter of 2009, the company's business is to achieve profit, especially in the implementation of oil prices and tax reform, the company to give full play to its own scale advantages, cost advantages, integration advantages and management advantages, so that the refining business has become "According to the China Petroleum and Chemical Industry Association released the latest industrial economic performance report, March oil refining industry operating rate reached 89%, crude oil processing volume growth of 0.7%, reversing the 4 consecutive months of decline."　　At the end of March, oil inventories fell by 6.13% in the chain, with diesel stocks falling by 14.7%.　　These are indications that Sinopec is indeed coming out of the trough. Although PetroChina's refining business is not the main business, in the current context, the refining sector's contribution to profits can not be ignored.　　As a result of the oil refining business, the first quarter of China's operating activities generated cash flow net reached 60.978 billion yuan, an increase of 89.6%.　　PetroChina said that refining and chemical business should actively respond to the changes in the domestic market, give full play to the integration of the advantages of efficiency as the center of the organization of production and management, strengthen the production of controlled management, to achieve a safe and stable, efficient operation of scale.　　Securities analysts pointed out that although the new oil price formation mechanism was launched at the end of last year to resolve the refinery losses that have plagued the petroleum companies for a long time, the level of international oil prices and market demand will remain the key factor affecting the performance of the refining industry this year. On the future profit growth of Sinopec and PetroChina's refining plate, insiders pointed out that the current crude oil prices and domestic sales of oil products for Sinopec's positive. China petrochemical business focus on the downstream, break-even point is less than PetroChina, Sinopec in the domestic refining business also greatly exceed the Chinese petroleum, refining business to obtain a certain stable profit margin, on the Chinese stonebecomes more important.　　At the same time, Sinopec's oil refining cost is low, the sales terminal is huge, also conducive to the development of the city often experts agree that if oil prices remain low, refining business will constitute the main profit of oil enterprises, and its performance will become the petrochemical industry 2009 years of important sources of profits.　　In the inventory phase, Sinopec also announced a year-on-year decline in processing volumes after PetroChina announced a sharp decline in crude processing, indicating that two of China's biggest oil companies are trying to shrink their oil inventories. In the first quarter of 2009, total domestic oil consumption fell year-on-year, especially diesel oil consumption decreased significantly. Sinopec's first-quarter oil sales fell 12.4% to 26.43 million tonnes year-on-year, but the quarter-on-quarter decline slowed to 6.2%.　　The company's first quarter crude oil processing volume decreased 3.27% to 40.51 million tons, but the chain growth of 1.2%.　　For China's petrochemical sales of the sharp decline, the Galaxy securities analysts believe that, mainly because of the shrinkage of oil products terminal demand, to inventory a long time, sales plate business profits are limited. Sinopec said that the company is adapting to market changes, vigorously explore the market, improve service levels, consolidate and expand the retail market, invest 987 million yuan, in key areas of gas stations and product pipeline construction, increase gas station 56.　　In the first quarter, according to the new oil price mechanism, the state of the steam and diesel to carry out the highest prices, Sales link price difference year-on-year decline, resulting in the company's sales business profits year-on-year decline.　　In the case of shrinking market demand, the first quarter of 2009 years, China's oil processing crude oil 185 million barrels, down 14.6%, the production of petrol, diesel and kerosene 16.366 million tons, down 13.5%, the production of ethylene 663,000 tons, down 6.5%. In the first quarter, although China's oil sales also adopted a flexible and effective marketing strategy to strengthen production and marketing convergence, and strive to improve operational efficiency.　　But during the reporting period, PetroChina sold 21.25 million tonnes of petrol, diesel and kerosene, down 2.8% per cent year-on-year. In this respect, the industry pointed out that the downstream product sales market is weak, refining business, although the new product pricing mechanism after the introduction of the huge losses from last year into a substantial profit, but the sales pressure is heavy, the proportion of digestive inventory is larger.　　As a result, the company's crude processing fell sharply in the first quarter, but sales were only slightly lower. On the performance of the two major oil companies, an analyst at the Cambridge Energy Research Association said: "Demand is still quite weak, as judged by the decline in sales of oil products."　　"Although the demand has not been significantly improved, the situation is still grim, but in the country to stimulate economic growth, accelerate structural adjustment of the macro-policy guidelines, the oil companies are actively adjusting the development strategy, pay more attention to the construction of sales network."　　For future demand, the Wanguo Securities research report points out that the two-quarter improvement in oil consumption is worth looking forward to, and the seasonal increase in agricultural oil and the revival of industrial activity will help fuel consumption rebound. As early as todayAt the working Conference at the beginning of the year, Shulin, chairman of Sinopec, proposed that 2009 should continuously enhance the efficiency of refined oil operations. Oil sales to quickly adapt to market changes, in accordance with the principle of quantity insured, vigorously explore the market, to ensure that the oil market share does not fall, the terminal sales ratio does not fall, improve market share.　　At the same time, actively promote the non-oil business, fuel oil sales business, and strive to cultivate new benefits growth.　　Securities analysts believe that once the targets have been achieved, the performance of the sales sector will have a direct effect on Sinopec's 2009-year profit growth.　　Cash flow improvement cash is the king, especially the cash generated by operating activities, but also the blood of an oil company, which directly measures the root of sustainable development of an oil company.　　In the current low oil price period, in order to maintain the normal operation of the future, the leadership of the oil companies need to develop a new investment strategy for the company, including a substantial reduction in operating costs to maintain cash flow. In addition, the capital expenditure and shareholder dividend pledged in the capital market will be maintained in the fight against rising costs and cash flows.　　If there is a problem with cash flow, rising debt means that companies will also gradually become marginalized.　　Data show that PetroChina 2008 operating cash flow net amount of 176.803 billion yuan, ranked all listed companies in China, the first non-financial companies, Sinopec 2008 operating cash flow net amount of 74.883 billion yuan, ranked in all listed companies eighth, non-financial companies second.　　Industry analysis that the petrochemical companies ranked among the top two non-financial enterprises, mainly related to its monopoly in the domestic petrochemical sector, coupled with the rise in oil prices and downstream refining product prices, sales revenue increase, which is the guarantee of operating cash flow. But China's profits have declined this year, as oil prices have continued to slump. Similarly, PetroChina is not optimistic about the company's cash flow.　　The huge capital expenditure of the future upstream exploration plate will also consume a lot of cash. Although the situation remains grim, there seems to be a glimmer of light compared to the period when cash flow was most tense.　　In the first quarter, China's oil operations net cash flow was 62.894 billion yuan, an increase of 91.8%. Dai Houliang, senior vice president and chief financial officer of Sinopec, also said that thanks to the government's economic stimulus plan, the demand for domestic oil and petrochemical products increased month by month, and the profitability of the company's refining and chemical sectors was greatly enhanced.　　In the first quarter of 2009, the company was actively optimizing its debt structure, and the cash flow situation was markedly improved.　　Experts agree that the improvement in funding for the oil majors has provided a strong guarantee for this year's investment and future sustainable development.　　Growth lies in management and innovation while the low oil price has led to a fall in the profits of crude oil, in the era of lower oil prices, oil companies can reduce production flow and management costs and make profits by saving oil refining costs, improving management, and negotiating with suppliers. Chengyu, chairman and chief executive officer of CNOOC, said:"In the context of the global financial crisis and low oil prices, CNOOC will continue to maintain prudent financial policies and strive to create value for shareholders." Sinopec also said the company would strengthen its cost control efforts to achieve steady growth in crude oil production.　　Exploration, strengthen geological comprehensive research, optimize exploration deployment, increase exploration, especially geophysical input, development, strive to improve recovery and single well production, control development costs and operating costs.　　In the first quarter of 2009, the domestic demand for chemical products declined year after year, China petrochemical industry through strengthening the sense of competition and service awareness, promote with key industries and key users of the Technical Cooperation Alliance, give full play to regional advantages and centralized sales of scale advantages, flexible product marketing strategy, to expand the city often　　With the domestic and foreign chemical products demand and price improved month by year, Sinopec's chemical products operating margin gradually increased, the chemical sector to achieve operating income of 2.8 billion yuan, an increase of 80.7%. In this regard, experts believe that, in the face of many challenges, Sinopec benefited from the adoption of a number of measures to strengthen management, optimize product structure, and strive to expand the total.　　In the management of safety production and energy saving, to achieve a good production and operation performance. For the following second quarter, PetroChina also put forward that it will thoroughly implement the work of the deployment of the early years, closely monitor the changes in the market, timely and effective response, seize and take advantage of important strategic opportunities, change the way of development to create new advantages, grasp the historical opportunity to achieve new development, strengthen production and distribution of the balance, and strive　　continuously enhance profitability and risk-resistant ability to achieve stable and rapid development. On innovation, oil experts suggest that technology research and development can effectively reduce project costs and that future strategies are based on competitive technologies.　　Whether upstream exploration or downstream of the refining, chemical, sales business, oil companies should continue to develop a variety of innovative technologies.　　The industry agrees that only better management and technological innovation in the future will allow oil companies to look calm in the face of the 2009. The gray transcript of the first quarter, the international oil giants Qi handed gray transcripts.　　But everything is not as bad as expected, as the oil giants have tightened their cost controls and taken different measures, highlighting the bright spots in their grey transcripts.　　No one can escape the shadow of the financial crisis. The first quarter of the world's oil majors came out without any suspense, and it was one of the worst fiscal seasons that the oil giants have been doing for years. Exxon Mobil's profits fell 58% per cent to $4.6 billion. BP's profits fell 62% per cent to $2.56 billion trillion. Shell's profits fell 62% per cent to $3.3 billion trillion.　　After years of profiteering, the oil majors face a steep fall in first-quarter results. Although the international oil giants are handing in grey transcripts, the companies ' declines vary, depending on the company's cost-control capabilities and the different measures taken.　　It is "You have a good plan, I have a wall ladder." Exxon: Firm investment in the past few years, as the world's largest oil company,Exxon Mobil has been constantly creating a new record of quarterly and annual wealth for the company. But as international oil and gas prices have plummeted, Exxon's first-quarter profit fell 58% from a year earlier, to $4.6 billion trillion, creating a five-year minimum-profit record.　　The figure is also well below previous Wall Street forecasts, with Exxon Mobil's share price down 3% on the day of the first-quarter earnings announcement. Exxon Mobil says low oil prices have reduced the company's revenue by 4.4 billion dollars. Revenue from upstream exploration and development fell by 60% to $3.5 billion. At the same time, lower gas prices have reduced the revenue by 500 million dollars. Overall, however, exploration and production were flat compared with the same period last year. Revenues from refining and sales fell 8% from a year earlier, to $1.1 billion trillion.　　But compared to the fourth quarter of last year, marginal profits in the lower reaches have increased.　　Despite its poor performance, Exxon Mobil's first-quarter investment was 5% higher than a year earlier, with other oil and gas producers delaying or even cancelling some oil and gas projects, and the company's good balance sheet is the best example. In the first quarter, Exxon Mobil also spent 7.9 billion dollars to buy back its shares. Exxon Mobil says investment in 2009 will reach $29 billion trillion, up from $26.1 billion in 2008. "While the global macroeconomic picture has changed a lot, Exxon Mobil will keep a long-term investment plan."　　Exxon Mobil President Tillerson said.　　Exxon Mobil's firm investment strategy has rewarded it handsomely, and in 2009 Exxon Mobil finally took the place of Wal-Mart, the top 500 in the Fortune list, to become America's largest company. BP: Cutting costs Europe's second-largest oil company BP's first-quarter profit fell to $2.56 billion from $7.09 billion a year earlier, down 62% per cent, a figure well above analysts ' forecast of $2.2 billion trillion. It also made a profit, compared with the loss of $3.2 billion trillion in the fourth quarter of last year. Among them, upstream exploration and development of the profit is 4.3 billion U.S. dollars, lower than the fourth quarter of last year's 4.8 billion U.S. dollars, compared with the same period last year, decreased by 62%.　　Downstream refining and sales of pre-tax profit is 1.4 billion U.S. dollars, in stark contrast to the fourth quarter last year, the downstream sector losses of 8.1 billion U.S. dollars. BP's turnround has been helped by its efforts to tackle low oil prices by cutting spending. BP said it would cut costs further. "From the perspective of long-term development, we believe that BP will maintain a good growth rate this year." Collins Stewart analyst Gordon Gray said that "falling costs and increased oil and gas production in new projects will help control the decline in revenue." "The production of BP exploration is up 2% from a year earlier," he said. The increase in the production of exploration and development is mainly the production of some major oil projects in 2008. BP once very cautiously said that the actual rate of production increase depends on oil prices and OPECThe impact of the share of production cuts.　　Thanks to low oil prices, BP dropped its 2009 investment from $22 billion trillion last October to less than $20 billion trillion. "The challenge for oil and gas companies is how to reduce production costs," he said. For although the oil price has fallen to 2004 years, the cost of industrial production is already twice times that of 2004. Morgan Stanley analyst Tony Shephard said, "BP has been trying to reduce costs as it enters the descent phase." "BP has been working to improve productivity since Hayward took over as BP chief executive in 2007.　　In 2008, the company cut 3,000 employees and cut costs by 1 billion dollars in the first quarter. BP slashed its 2009 spending target for the second time this year, when it released its first-quarter earnings. By the second quarter of this year, 5,000 more jobs will be cut.　　Shephard predicts that BP's total investment cost this year will be no more than 2 billion dollars. Shell: In the hope that next year as Europe's largest oil company, Shell Oil and gas production fell by 3.6%, the first quarter of the average production of 3.4 million barrels. Profits fell 62% from a year earlier to $3.3 billion trillion. Net income fell to $3.49 billion or $0.57 per share from $9.08 billion trillion or $1.46 a share over the same period last year.　　If it does not include inventory surpluses and previous projects, Shell's first-quarter revenue exceeded estimates from industry analysts. Shell said the price of oil sold in the first quarter fell from $90.72 a barrel to $42.16 a barrel last year. Revenues in Shell oil production fell by 67% per cent to $17 billion trillion.　　Revenue from refining has dropped to $1.4 billion from $2.37 billion a year earlier, thanks to falling oil production and falling prices. Like the sharp decline in profits from refining and chemicals, the oil sands have become one of the worst-developed sectors of shell.　　The oil sands sector has lost $249 million trillion in revenue from the same period last year to $42 million trillion, making it a decision to abandon its oil sands project in Canada.　　The reduction in oil production by OPEC and the attack on Nigeria's petroleum equipment have reduced the shell by 3.5%, the equivalent of 3.32 million barrels a day. Despite measures such as cutting production and shrinking operations, shell cash flow is still not effective enough to meet the cost of engineering operations and shareholder dividends, so its debt levels are rising. Debt levels rose three times times from a year earlier, to 6.6%.　　But it does not meet the company's capital needs, so it is highly likely to cut dividends. Foussay, who will take over as Shell's chief executive, said: "As oil prices fall, the situation in the first quarter of this year worsened." This has also brought great pressure to business development in the second quarter, and the oil industry has entered a very difficult period, and we need to understand the current situation.　　But analysts said Shell's performance was better than expected. Shell's profits come mainly from downstream oil and gasSales market development. Oil futures are now higher than oil prices, and the employment rate of storage tanks is relatively low, which creates good opportunities for oil trade. "It's really surprising that downstream trade has increased Shell's first-quarter earnings," says Jason Kenney, ING oil analyst.　　"In fact, the downstream sales sector has become the only profitable area for Exxon, BP and Chevron." When Shell announced its first-quarter results, it predicted that crude oil prices would be unlikely to rebound in the next 12 months to 18 months, so the situation is grim this year. But Foussay said: "The company has no plans to reduce investment." Shell is still pushing for oil and gas production, and Shell's investment plan for 2009 is $31 billion trillion. Foussay says Shell is already developing an oil field about 1 million barrels a day.　　Next year, Shell's oil and gas production will enter a period of growth. Although the major oil companies ' earnings are "down", the earnings are better than previously expected. As Barclays Capital analysts predicted: "Several European oil companies have seen the biggest quarterly decline in earnings in history, but in absolute terms, the international oil giants are still making a lot of money and there will be no loss." "More than expected, after the major oil companies issued quarterly bulletin, the international oil prices began to climb slightly, oil prices were pulled back to more than 50 dollars per barrel position."