PetroChina first-half profit rises 3.6% on higher oil, gas sales

BEIJING (Reuters) - PetroChina Co, Asia’s largest oil and gas producer, said on Thursday first-half 2019 net profit rose 3.6% from a year earlier, driven by higher crude oil and natural gas sales.

FILE PHOTO: A liquified natural gas(LNG) storage tank and workers are reflected in a puddle at PetroChina's receiving terminal at Rudong port in Nantong, Jiangsu province, China September 4, 2018. Picture taken September 4, 2018. REUTERS/Stringer

For the first six months of 2019, the company earned 28.42 billion yuan ($4.01 billion), up from 27.44 billion yuan for the same period last year, PetroChina said in a filing to the Hong Kong stock exchange. Total revenue for the state-backed company was 1.12 trillion yuan, up 6.8% from the same period in 2018.

Profit for the April to June quarter was 18.17 billion yuan, the highest since the third quarter last year, according to calculations by Reuters based on the earnings filing.

That compares with 16.94 billion yuan in the same period a year earlier and 10.25 billion yuan in the first quarter of this year.

Over the first six months of 2019, PetroChina produced a total of 451.9 million barrels of crude oil, or 2.5 million barrels per day, up 3.2% from the same period in 2018.

Natural gas output increased 9.7% to 1.96 trillion cubic feet, or 55.5 billion cubic metres over the period.

It also reported a 3.1% increase in crude oil throughput at its refineries to 597.4 million barrels, or 3.3 million barrels per day.

With Beijing’s push to boost domestic energy production, PetroChina invested 12.27 billion yuan in upstream exploration in the first half of 2019, up 14% from last year.

Chinese energy companies have said they plan to raise spending on domestic drilling this year to their highest level since 2016 to safeguard the country’s energy security.

PetroChina earlier this month started to drill its first shale oil well in China’s southwestern province of Sichuan and vowed to double natural gas output in the region to 50 billion cubic metres by 2025.

“In the second half of the year, the company will vigorously implement centralised exploration in key regions...deepen the stable production of old oil fields...and focus on shale gas production,” it said in the statement.

Chai Shouping, PetroChina’s Chief Financial Officer, said in a briefing on Thursday that China will extend subsidies for unconventional gas for another three years and the company expects to receive a 4 billion yuan government grant this year.

“Looking forward, we will focus more on the Belt and Road Initiative, such as Russia, Central Asian and Middle East countries...and will increase the natural gas percentage in our overseas portfolio to optimise the asset structure,” PetroChina Executive Director and President Hou Qijun said at the briefing.

The impact of the trade dispute between China and the United States on PetroChina’s business is limited but the company’s trading volume with the United States has been affected to a certain extent, Hou said.

Reporting by Muyu Xu in BEIJING and Chen Aizhu in SINGAPORE; Additional reporting by Felix Tam and Kevin Liu in HONG KONG; Editing by Tom Hogue and Deepa Babington