2nd UPDATE: PetroChina 1st Half Net Down 7.2% On Lower Oil Price
August 28 2009 - 9:05AM
Dow Jones News
PetroChina Co. (PTR), China's biggest listed oil firm by
capacity, said Friday its first-half net profit fell 7.2% from a
year earlier because of lower oil prices and weaker energy
demand.
The Beijing-based company said the world's oil market will
continue to face uncertainties in the second half. But underscoring
China's thirst for energy, it said upstream exploration,
particularly outside the country, will remain a top priority.
President Zhou Jiping told reporters in a press conference he is
upbeat about the prospects for the energy market in China in the
long run and said the company hopes to boost its annual natural gas
output to 130 billion cubic meters by 2015 to take advantage of
surging demand for clean energy.
"We see a huge potential in China's natural gas business," said
Zhou. "We've maintained a double digit growth rate in our natural
gas output in recent years. We hope to maintain this high growth
rate in the next few years," he said.
Zhou said he expects China's annual demand for natural gas will
reach 215 billion cubic meters by 2015 and will further increase to
239 billion cubic meters by 2020. Natural gas will account for 50%
of the company's total output by 2015, he said.
PetroChina said Friday its net profit for the six months ended
June 30 totaled CNY50.50 billion (US$7.40 billion), down from
CNY54.44 billion in the same period last year, because of a lower
contribution from its core upstream business.
Revenue fell 25% to CNY415.28 billion from CNY551.34
billion.
Operating profit in the firm's exploration and production
businesses plunged to CNY37.64 billion from CNY96.44 billion, due
to the average selling price of its crude oil more than halving to
US$42.46 a barrel in the first half from US$93.45 a year
earlier.
PetroChina's crude oil output in the first half fell 4.8% to
417.7 million barrels, while its natural gas output rose 10.6% to
1.201 trillion cubic feet.
Its refining business, however, swung to an operating profit of
CNY17.19 billion - the highest of any half since the company listed
in 2001, from an operating loss of CNY59.02 billion a year earlier,
after Beijing eased price controls.
"Recovery of the world economy from the global financial crisis
is still uncertain...the foundation for economic rebound is not
well established," PetroChina said in a statement.
The company also said will strive to achieve faster growth in
both upstream and downstream overseas projects.
Zhou also said PetroChina is interested in bidding for more
Iraqi oil fields in the second round of bidding scheduled in
December, after winning a joint bid with BP PLC (BP) for the
Rumaila field in southern Iraq during the first round in late
June.
"We will likely do that (in the second round) in a joint
venture," he said, without revealing the company's partner.
In the second round of bidding, 10 oil fields and one gas field
in Iraq will be on offer.
China's energy markets have taken a hit from the country's
economic slowdown, which has affected industrial activity, leading
to reduced fuel demand and a slowdown in construction.
PetroChina said in March it expected to cut its crude oil output
4.3% this year and its refinery production by 1.4% in response to
weakening domestic demand. But it also raised its full-year capital
expenditure plan marginally to CNY233.1 billion from CNY232.2
billion.
The government has adjusted domestic fuel prices five times
since the beginning of this year. It cut gasoline and diesel prices
by 3% in July, after raising them 8%-10% in June in response to a
rebound in crude oil prices in the second quarter.
Analysts expect China to raise domestic fuel prices this week by
4%-8% over current gasoline and diesel retail prices, in response
to crude price gains.
The company proposed a first-half dividend of CNY0.12417, down
from CNY0.131827 last year.
-By Yvonne Lee, Dow Jones Newswires; 852-2802-7002;
yvonne.lee@dowjones.com
(Aries Poon contributed in this story.)