Western Oil & Gas Companies Take Market Share from Domestic State-Owned Enterprises in China: Expert Analyst James West Discusses Trends Within the Sector in this Wall Street Transcript Interview

Wall Street Transcript

67 WALL STREET, New York - July 9, 2014 - The Wall Street Transcript has just published its Oil & Gas Review 2014 Report offering a timely review of the sector to serious investors and industry executives. This special feature contains expert industry commentary through in-depth interviews with public company CEOs and Equity Analysts. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

Topics covered: Oil & Gas Review 2014

Companies include: Schlumberger Limited (SLB), Halliburton Company (HAL), Key Energy Services Inc. (KEG), Superior Energy Services Inc. (SPN), PetroChina Co. Ltd. (PTR), Sinopec Shanghai Petrochemical (SHI), CNOOC Ltd. (CEO), Baker Hughes Inc. (BHI), Weatherford International Ltd. (WFT) and many more.

In the following excerpt from the Oil & Gas Review 2014 Report, an expert analyst discusses the outlook for the sector for investors:

TWST: Over the last few years, we have seen China become much more active in the oil and gas sector, particularly in Latin America and Africa. Is their more aggressive policy in oil and gas impacting the space?

Mr. West: China is certainly a buyer of assets, and they are heavily focused on energy security, just like we are here in the United States. However, in the United States, while demand has recently rebounded from lower levels, we are not nearly in the same growth trajectory as they are in China.

China recognizes that while they have resources domestically inside of China, they need to go after resources outside of China as well. So you have CNPC, which basically controls the three major Chinese oil companies: PetroChina (PTR), Sinopec (SHI) and CNOOC (CEO). They are mostly the acquisition vehicle for those three companies, since they are acquiring assets around the world pretty consistently. And those three oil companies are then moving in and take over operatorship of those acquired assets.

Overall, right now in domestic China, at least what we're seeing is a trend for the Western oil service companies - is very positive. The Chinese are increasingly going after tight gas and the next step will obviously be to go toward shale gas and that is partly because they have abundant resources.

PetroChina has its own state-owned oil service company. They lack some of the expertise to drill and to go after shale reserves, so they are bringing in Schlumberger and Halliburton and Baker Hughes (BHI) and Weatherford (WFT) to attack these prospects, the tight gas, and eventually the shale gas, and so you have seen a nice mixture for the Western companies where they are taking market share from the domestic state-owned enterprises.

Right now about 90% of Chinese domestic E&P spending goes to the state-owned enterprises. We think that could erode over...

For more of this interview and many others visit the Wall Street Transcript - a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs, portfolio managers and research analysts. This special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

Rates

View Comments (0)