UPDATE 1-Chinese refiners slip on higher crude; CNOOC gains
(Adds analysts' comments, updates share prices)
By Parvathy Ullatil
HONG KONG, Aug 28 (Reuters) - Shares in Chinese oil refiners Sinopec Corp (0386.HK) and PetroChina (0857.HK) slid on Thursday as investors fretted about climbing oil prices, lower rebates on crude import taxes and shrinking subsidies in coming quarters.
Top Asian refiner Sinopec (600028.SS) slipped 5.3 percent after oil prices rose for a fourth straight day to top $119 per barrel, on fears that Tropical Storm Gustav may turn into a major hurricane before it hits the Gulf of Mexico.
PetroChina shares opened 0.8 percent higher with analysts having predicted a better second-half outlook, but they quickly reversed and had given up 3.3 percent by the close.
The firm on Wednesday reported a disappointing 38 percent drop in quarterly earnings after refining losses and windfall taxes dented gains from soaring crude oil prices. [ID:nHKG15523]
But CNOOC Ltd (0883.HK), an offshore oil production specialist with virtually no refining operations, gained 2.9 percent after beating first-half earnings forecasts.
"There seems to be a shift in investors' psychology towards oil prices. People expect oil prices to keep rising in the short term as the hurricane season wears on," said Andrew Chan, analyst with Daiwa Institute of Research.
Sinopec's chief financial officer, Dai Houliang, said Beijing will continue to offer tax rebates on imported products in the third quarter, but a rebate on imported crude oil would be lower in the third quarter than the second.
Government subsidies and rebates are essential for Chinese refiners that have been grappling with the widening gap between rising international crude oil prices, which hit a peak above $147 per barrel last month, and state-capped fuel prices in China.
Sinopec's refining loss came to 46 billion yuan in the first half, versus a 5.7 billion yuan refining profit a year ago.
Some analysts also disliked an acquisition that PetroChina was making to get into urban gas distribution.
PetroChina announced on Wednesday it was indirectly buying a 51.89 percent stake in CNPC (Hong Kong) (0135.HK) for HK$7.59 billion ($973 million).
Shares in CNPC (Hong Kong) have fallen 37 percent since the begining of the year. PetroChina has given up 28 percent while Sinopec has plunged 36 percent. CNOOC outperformed all with a 10 percent year-to-date fall.
"Petrochina's post-results presentation on Wednesday was not very impressive. The company seems to be struggling to revamp itself and does not seem to have chosen the direction they want to take," said an analyst with a major European bank.
"If acquisitions are the way ahead, then the question is why are they starting off with a company which has such poor asset quality." (Editing by Michael Urquhart)
