UPI Energy Watch

PetroChina makes its trading debut

PetroChina became the world's largest company by market value after its trading debut on the Shanghai Stock Exchange Monday, according to news reports.

The company earns less than comparable operations, but it has become so valuable.

PetroChina made a trading debut in Shanghai Monday, as investors helped China's leading oil and gas producer surpass the value of ExxonMobil, according to Voice of America.

PetroChina shares, which have been trading on the New York and Hong Kong markets since 2000, rose two and a half times in value on their first day of trading in Shanghai -- from the opening price of $2.24 to about $5.90 at the market close.

The initial public offering of 4 billion shares raised $9 billion for the company. That made it the world's biggest IPO this year and the biggest ever in China.

The combined value of PetroChina shares in Shanghai, New York and Hong Kong now exceeds $1 trillion -- far surpassing ExxonMobil's value of roughly $500 billion.

PetroChina's massive market value bears little relation to its profitability, however. In the first half of this year the company's net income was about $10.9 billion. ExxonMobil earned $19.5 billion during the same period.

Gazprom no longer interested in Hungarian assets

Russian gas giant Gazprom is no longer considering E.ON's Hungarian assets in connection with a planned agreement on the Yuzhno-Russkoye gas field, Wolf Bernotat, chief executive of E.ON, told Kommersant daily in an interview.

As for whether Gazprom had categorically decided to pass on E.ON's Hungarian assets, Bernotat said: "I cannot say anything specific about the talks until we agree with Gazprom, but its interest has shifted to gas electric stations in the EU.”

E.ON has never hindered Gazprom's entry onto the German energy market, he said.

"We have always negotiated about that, including through asset swaps. And in the negotiating process the subject narrowed to discussion of the Hungarian assets. However, after a certain amount of time, Gazprom decided to concentrate on gas electric stations in Western Europe. Therefore we are now talking about a participating stake in E.ON's gas electric station holdings in Europe, including in Germany, and on joint construction of new stations," he said.

Asked whether E.ON would offer Gazprom a stake in its British electric station, Bernotat said Gazprom is interested in electric stations in Britain, but not in E.ON's U.K. subsidiary.

"Now is not the time to discuss the details of the negotiations in the press, since the talks are still in the active phase," he said.

Nord Stream fist supplies due in 2010

Nord Stream AG, the company that is to build the gas pipeline linking Russia to Germany across the seafloor, has optimized its construction schedule by bringing in more equipment and speeding up construction, Matthias Warnig, the managing director of Nord Stream AG, told journalists.

"An optimized schedule will enable us to complete construction six months ahead of schedule. This will give us more time for environmental checks and the required approvals. The construction of the gas pipeline will be completed in 2010 as planned," he said.

Earlier Sergei Serdyukov, technical director at Nord Stream AG, said that the Nord Stream gas pipeline project was moved back to July 2009, whereas it had been reported before that the gas pipeline construction was due to start in 2008.

The expected period of gas deliveries was moved back by two months (from Sept. 30 to Nov. 30, 2010), Serdyukov said.

The company has decided to intensify commissioning, thereby reducing their implementation period, he said.

The actual construction period may prove shorter than planned. The most recent project of similar scale -- the Ormen Lange pipeline -- was brought online two months ahead of schedule, he said.

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Closing oil prices, Nov. 7, 3 p.m. London

Brent crude oil: $94.67

West Texas Intermediate crude oil: $98.08

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