Players move out of the stock after Merrill downgraded its rating on the oil producer due to productivity concerns
PetroChina extended its losses yesterday as investors continued to lock in profits after Merrill Lynch downgraded its rating to a 'sell'.
Merrill analysts Mario Traviati and Adrian Loh on Wednesday said that PetroChina's oil reserves and production were both declining.
'PetroChina will face increasing difficulty in extracting crude from mature fields [in Daqing] where costs are expected to rise and production to fall,' they said, forecasting PetroChina's earnings would rise by 19 per cent to 30 cents a share this year but would decline 23 per cent to 23 cents next year.
The counter fell 1.14 per cent to close at $2.175 yesterday, after declining by 6.38 per cent on Wednesday in response to Merrill's downgrade. It was the most traded security yesterday, with 253.03 million shares changing hands.
In response to Merrill's downgrade, a PetroChina spokesman said: 'Daqing oil field's falling production can be more than offset by new oil discoveries and production in the western region.
Some analysts criticised the downgrade.
