Chinese oil giants face steep losses, set to cut production, dividends as Saudi Arabia stokes price war

PetroChina and China Petroleum & Chemical or Sinopec, are expected to trim their annual production by 2 to 3 per cent, similar to that seen in the last oil recession in 2014 , according to Neil Beveridge, senior analyst in Hong Kong at Sanford C. Bernstein & Co

People observe the development of the Boursa Kuwait national stock market, in Kuwait City

Beijng - China's state-backed oil giants, facing potential steep losses, are likely to slash spending on projects and pay smaller dividends to stock investors this year after oil prices plunged to the lowest level in four years, according to Sanford C. Bernstein. The West Texas Intermediate (WTI) benchmark crashed as much as 33.8 per cent on Monday to US$27.34 a barrel, the biggest drop in about 29 years, after OPEC and Russia failed to agree on a joint production curbs through the end of 2020. Saudi Arabia promptly slashed its crude prices, stoking price war concerns.
PetroChina and China Petroleum & Chemical or Sinopec, are expected to trim their annual production by 2 to 3 per cent, similar to that seen in the last oil recession in 2014 , according to Neil Beveridge, senior analyst in Hong Kong at Sanford C. Bernstein & Co. Both producers are less competitive on costs than China’s offshore major CNOOC, he said. The US brokerage on Monday slashed its 2020’s earnings per share forecast for PetroChina by 61 per cent, for Sinopec by 41 per cent and for CNOOC by half, as the stocks slid in Hong Kong. Beveridge expects all three to pay less dividends, although they will try to maintain their payout as a percentage of their earnings.
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