PetroChina Parent May Invest $2B in Peru - Analyst Blog

An image of stock prices rising and declining in value
Credit: Shutterstock photo

Reuters reported on May 27, 2014 that China National Petroleum Corporation ("CNPC") - the parent company of Chinese energy giant, PetroChina Co. Ltd. ( PTR ) - intends to invest roughly $2.0 billion in Peru over a period of 10 years. In the recent past, CNPC purchased a natural gas block in Peru form Petroleo Brasileiro SA or Petrobras ( PBR ) - the largest integrated oil company in Brazil.

CNPC has already received permission from the regulatory bodies of Peru for investing $1.0 billion in upstream operations in the natural gas field bought from Petrobras. The mother company of PetroChina− the largest integrated oil firm in China− is also looking for opportunities to invest $4.0 billion in southern Peru for a natural gas pipeline project. The pipeline is expected to carry gas to the thermoelectric plants located at the Pacific coast of Peru from Camisea gas fields.

Latin America has caught China's attention for its natural gas resources that could fuel the Asian country's future economic growth. This led the Chinese state-owned firm CNPC to expand its presence over there. CNPC has already started operations at Colombia, Ecuador, Cuba, Brazil, Costa Rica and Venezuela.

CNPC holds a majority stake of 86.35% in PetroChina, which was established in Nov 1999. PetroChina currently retains a Zacks Rank #4 (Sell) − implying that it is expected to underperform the broader U.S. equity market over the next one to three months - for its profits might be affected as the Chinese government caps the prices of refined-products (particularly gasoline and diesel) to control inflation.

Meanwhile, one can look at better-ranked players in the energy sector like Ultra Petroleum Corp. ( UPL ) and Encana Corporation ( ECA ). Both the stocks sport a Zacks Rank #1 (Strong Buy).

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

PETROCHINA ADR (PTR): Free Stock Analysis Report

PETROBRAS-ADR C (PBR): Free Stock Analysis Report

ENCANA CORP (ECA): Free Stock Analysis Report

ULTRA PETRO CP (UPL): Free Stock Analysis Report

To read this article on click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story


Other Topics


Latest Markets Videos


    Zacks is the leading investment research firm focusing on stock research, analysis and recommendations. In 1978, our founder discovered the power of earnings estimate revisions to enable profitable investment decisions. Today, that discovery is still the heart of the Zacks Rank. A wealth of resources for individual investors is available at

    Learn More