Not unlike Petrobras (NYSE:PBR), PetroChina (NYSE:PTR)
finds itself continually put into losing situations by its government.
The Chinese government controls the prices at which PetroChina can sell
natural gas and refined products like diesel, but cannot control the
global cost of crude, nor the cost of producing oil, gas, and refined
products. Couple that with aging fields, rising prices, and lower
returns on capital, and PetroChina is in a difficult position.
Although that's a serious backdrop for the company, it's one in which
management has always operated, and generally operated pretty well.
Although aging fields in China are a concern, the company has been
expanding its overseas production options and the development of shale
and other unconventional resources in China could offer production
growth. All told, PetroChina looks a little too cheap today and offers
decent capital appreciation potential and a solid dividend.
Read more here:
http://www.investopedia.com/stock-analysis/070313/new-gas-prices-help-petrochina-multiple-challenges-remain-ptr-pbr-ceo-snp-choly.aspx
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