Facebook Twitter 新浪微博 Instagram YouTube Saturday, Aug 26, 2017
Search
Archive
English>>

Outlook bright for China's oil giants

By Zheng Xin (China Daily)    13:30, August 26, 2017

(File photo)

Analysts believe the outstanding performance of China's three major oil companies is expected to continue in the next six months, as oil prices surge and oil companies worldwide gradually recover from the sector's two-year crash.

China National Petroleum Corp, or PetroChina, the nation's largest oil producer and supplier, said on Thursday evening that its net profit in the first half more than doubled, citing rising oil prices, cost reductions and efficiency improvement.

Net profit reached 12.68 billion yuan ($1.9 billion), representing a year-on-year increase of 12.1 billion yuan, which exceeded its forecast from late July of a net profit in a range from 9 to 11 billion yuan, compared with 528 million yuan during the same period last year.

Revenue grew 32 percent year-on-year to 975.9 billion yuan, due to higher prices and increased sales volume of crude oil, natural gas and refined products.

PetroChina said it expected competition in the oil-and-gas market to intensify in the second half, with global oil prices fluctuating "at a medium-low level with greater uncertainty" and certain countries that have oil resources facing more geopolitical risks.

Wang Lu, an Asia-Pacific oil and gas analyst at Bloomberg Intelligence, said PetroChina is focusing on enhancing total shareholder return as evidenced by a special dividend on top of its 45 percent regular payout in the first half of this year.

"Revenue and profitability of PetroChina may continue to improve in the second half of this year on higher oil prices, though competition in the downstream may erode margins in the second half," she said.

The drastic profit rebound is based on last year's low base, which is also the company's worst first-half profit since it was publicly listed in 2000, she said.

Li Li, the energy research director at ICIS China, a consulting company that provides analysis of the energy market, echoed her voice, saying Petro-China benefited largely from a rebound in international oil prices during the first six months.

On the other hand, another State-owned oil giant China National Offshore Oil Corp, the country's largest offshore oil and natural gas developer, reported 16.3 billion yuan of net profit in the first half, compared with a loss of 7.7 billion yuan in the same period of last year.

CNOOC's revenue is also expected to continue rising in the second half of this year, yet improvements may be smaller as oil prices are unlikely to rise much from current levels, Wang said.

Wang said revenue and profitability of Sinopec, one of China's three oil majors together with PetroChina and CNOOC, may have improved in the first half as a modest oil-price recovery helped narrow exploration and production losses.

"Its oil-output decline should have eased in the second quarter from a sharp 9.2 percent drop in the first quarter, while the company's gas-production growth could have accelerated to realize its targeted 15 percent increase," Wang said.

(For the latest China news, Please follow People's Daily on Twitter and Facebook)(Web editor: Hu Ximeng, Bianji)

Add your comment

We Recommend

Most Read

Key Words