State Owned Oil Companies to Sell Off Assets to Hit Income Growth Targets

State Owned Oil Companies to Sell Off Assets to Hit Income Growth TargetsPetroChina and its State owned parent company is planning to sell their assets before the year ends this will include their stakes in pipelines and refineries in the country’s biggest oil and gas producers in hopes to sum up their balance sheets. PetroChina and China National Petroleum Corp. announced stake sakes earlier this week as CNPC is looking to use the proceeds from the sale to meet their annual income growth targets that was set by the Country’s State asset regulators.

A majority of investors prefer to cash in on some assets rather than running the assets themselves and investors have given almost zero valuation to PetroChina’s assets such as pipelines and any assets sales right now are great news for the company and will help in it share price. The slump in energy prices pushed energy companies to shed off assets and cut staff in order to survive the downturn. PetroChina’s third quarter profit fell 81 percent to the lowest ever since Bloomberg started to compile its data in 2007.

The sale will be the first major divestment by either company since PetroChina sold 20 billion yuan pipeline stake to institutional investors in 2013. The world’s biggest oil exporter Saudi Arabian Oil Co. acquired the services of Deutsche Bank AG in advising on the possible acquisition of some of the marketing, retail and refining assets from CNOC, which could be worth seven billion dollars. Income in both companies declined dramatically adding pressure to meet its growth targets.

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