(Repeats to additional subscribers)
* Q4 net 29.55 bln yuan, vs 35.2 bln forecast
* 2012 output growth to slow to 2.8 percent
* Refining business lost $9.5 bln in 2011
* Natural gas importing business also in red
* Shares down 2 pct before results
By Alison Lui and Charlie Zhu
HONG KONG, March 29 PetroChina
reported a 26 percent drop in quarterly earnings, lagging
forecasts, due largely to hefty refining losses, and the oil
major forecast slower output growth for this year.
PetroChina said on Thursday oil and gas
output was expected to grow 2.8 percent this year from 2011 when
production rose 4.7 percent to 1.29 billion barrels of oil
"The recovery of the world economy is growing more uncertain
in 2012. International energy supply will remain tight in the
long term amidst increasingly intense competition for
energy resources ," vice chairman and president Zhou Jiping said.
The company's production growth forecast for 2012 was still
strong in comparison with some global oil majors, analysts said.
Exxon Mobil Corp said its 2012 oil and natural gas
output would drop 3 percent from last year.
PetroChina, the country's dominant oil and gas producer that
also owns refineries, posted a fourth-quarter net profit of
29.55 billion yuan ($4.69 billion), down from 40 billion yuan in
the same period in 2010, based on Reuters' calculations.
This compared with a forecast of 35.17 billion yuan,
according to Reuters calculations.
For the full year, the state-run company posted a net profit
of 132.96 billion yuan, versus 139.99 billion in 2010 as strong
upstream gains were offset by massive losses at its refining
division. This compared with a consensus forecast of 138.58
billion yuan from 31 analysts polled by Thomson Reuters I/B/E/S.
Its exploration and production division posted an operating
profit of 219.5 billion yuan for 2011, up 43 percent
year-on-year, thanks to stronger crude prices.
But its refining business lost 60 billion yuan as increases
in domestic prices for oil products failed to keep pace with
strong rises in crude prices. China's fuel price hikes
often come smaller and later than required under its pricing
formula due to inflation concerns, leaving refiners saddled with
PetroChina's refining arm posted heavier losses last year
than the 37.6 billion yuan refining loss recorded by Sinopec
Corp, even though its refining capacity is much
smaller than that of Sinopec which is the largest in Asia.
That's partly because PetroChina refined more so-called
sweet crude than Sinopec, which relies heavily on Middle East
crude that contains more sulfur and hence is cheaper, Zhou told
reporters at the company's results briefing.
PetroChina's main domestic oilfield of Daqing in northeast
China also produces oil that is indexed to Indonesia's Cinta and
Duri medium-heavy sweet crudes whose prices gained more sharply
than other crudes such as Brent, WTI and Dubai last year, said
James Hubbard, head of Asia oil and gas research at Macquarie.
"As for PetroChina's outlook this year, we may see small
growth in terms of output and refining throughput," said
Lawrence Lau, analyst at BOCI Research Ltd.
"But I think the key depends on how fast the government
reforms the price mechanism on refined oil products prices and
how fast the government introduces the reform of natural gas
prices," Lau said.
PetroChina, whose oil refining throughput rose 8.9 percent
to 984.6 million barrels in 2011, incurred a cumulative loss of
21.4 billion yuan in its natural gas importing business due to
domestic price controls.
PetroChina's overseas production was a bright spot last
year, with output up 18.2 percent on the year to 120.8 million
boes, thanks in part to a contribution from its Rumaila project
with BP in Iraq, which produced 1.19 million barrels per
PetroChina's pretax profit from overseas business amounted
to 34.7 billion yuan last year, accounting for nearly one fifth
of its total pretax profit.
PetroChina's Hong Kong-listed shares ended down 2 percent on
Thursday ahead of its results announcement. The stock lost 4.8
percent in 2011, versus a 26 percent fall in CNOOC's
shares and 9.8 percent gain in Sinopec shares in Hong Kong.
China's top offshore oil producer, CNOOC Ltd, on Wednesday
posted a 29 percent rise in 2011 net profit, matching forecasts
and hitting a record, on soaring crude oil prices and despite
flat output caused by an oil spill.
($1 = 6.3060 Chinese yuan)
(Additional reporting by Wan Xu in Beijing, and Alison Leung;
Editing by Sugita Katyal and Mark Potter)