Sinopec: A Bullish Signal For Long-Term Investors

Susan Weerts submits:New Pricing MechanismAt the end of 2009 speculation started that the National Development and Reform Commission (NDRC) of China was contemplating implementing a new mechanism to price refined products during the first quarter of 2010. The NDRC regulates the Chinese domestic refined product market by imposing a “price ceiling” on the wholesale price.

HONG KONG/BEIJING — Canadian retailer Alimentation Couche-Tard Inc and China’s Tencent Holdings Ltd are among suitors short-listed to buy a US$16 billion minority stake in China’s Sinopec Sales, the world’s largest fuel retail network, people familiar with the matter told Reuters.

Sinopec Group wants to sell half of its two biggest shale gas acreages in Canada to spread costs and accelerate their development, as the Chinese energy company focuses increasingly on return of investment, an executive said. A sale of an overseas asset would be a rare move for one of China’s state-owned energy companies, which have spent hundreds of billions of dollars investing in hydrocarbon resources from North America to Australia to secure China’s energy needs.

China Petroleum & Chemical Corporation (ADR) (NYSE:SNP), also known as Sinopec Limited, is reportedly planning to list part of the company in 2015.  The Chinese state-run oil producer looks to have an initial public offering (IPO) for its gas station and convenience stores unit, hoping to raise nearly $5 billion. The company has over 30,000 gas stations and over 23,000 convenience stores located all over China.

China Petroleum & Chemical Corp (Sinopec) , Asia’s largest oil refiner, will buy half of Chesapeake Energy Corp’s Mississippi Lime oil and gas properties for $1.02 billion, becoming the latest Chinese company to pick up shale assets in North America. Chesapeake shares were up 2% at $20.90 in premarket trading on Monday. The stock has risen about 23% this year. Output from shale fields in the United States and Canada has jumped over the last three years due to the advent of drilling methods such as hydraulic fracturing.

By Bret Jensen:With oil continuing to be priced in the high nineties for WTI (West Texas Intermediate crude) and even higher for Brent, major integrated oil firms seem to have good prospects at these valuations. One of my favorites that has major upside is Hess (HES).

China’s top refiner Sinopec Corp is scaling back billions of dollars in petrochemical investments in the face of growing U.S. competition in the sector and rising local opposition to oil and gas plants over environmental concerns. The slowdown marks a break from two decades of expansion led by China’s state energy majors, which have placed self-sufficiency above profitability and environmental impact to chase robust demand growth in the world’s second-largest economy.

Ray Merola submits:Despite some ugly market action, I continue to troll around for values. An interesting stock is Hess Corporation (HES) currently trading under $69 a share. Hess Corporation: One Year Chart and Volume