Rising Oil Prices Lift PetroChina Profits
PetroChina, the nation’s largest oil producer listed in Hong Kong, reported a 36.1 per cent rise in the first-half earnings, largely boosted by the soaring crude prices and China’s growing energy demand.
Net income climbed to 61.6 billion yuan (US$7.6 billion), from 45.3 billion yuan (US$5.6 billion) from the same period of last year, Beijing-based PetroChina said in a statement to the Hong Kong stock exchange yesterday.
Sales rose 42 per cent to 252.5 billion yuan (US$31.1 billion) for the six-month period year-on-year.
The growth in profit is backed by the skyrocketing crude oil prices as well as the Beijing-based oil company’s enhanced output both in the domestic market and overseas.
Average crude selling price increased 45 per cent to US$43.42 a barrel in the first six months of this year from the same period of last year, according to the PetroChina statement released yesterday.
From January to June, the company’s oil and gas output rose 5.3 per cent to as much as 481 million barrels of oil equivalents.
New discoveries were made in PetroChina’s major fields across the country, expected to boost its oil reserves by some 300 million tons and gas by 150 million cubic metres, according to a senior official with CNPC.
The company is also actively seeking overseas projects to enhance its oil and gas assets.
“Overseas acquisition is our major strategy,” PetroChina President Jiang Jiemin told reporters yesterday in Hong Kong. “We are following some projects,” he added, without elaborating.
PetroChina’s parent company CNPC on Monday agreed to take over Canadian-registered PetroKazakhstan for US$4.18 billion. The business is expected to be injected into a proposed 50-50 CNPC- PetroChina overseas assets joint venture, Newco.
Despite the lucrative earnings in finding and producing crude oil and gas, State-controlled PetroChina saw its refining business much squeezed by the capped refined oil prices.
China’s second-largest oil refiner after Sinopec yesterday in the statement said it lost 5.95 billion yuan (US$733.7 million) in its refining business as margins shrank. That compared with an operating profit of 8.98 billion yuan a year ago.
In order to stave off inflation and protect consumers, the Chinese Government has controlled the retailing prices of refined oil such as gasoline and diesel. The country has raised fuel prices three times this year but the increases still fall behind the crude prices.
“The increase in ex-refinery price for its refined products was far less than that of the crude oil price,” said PetroChina.