PetroChina plans biggest capital expenditure in four years

BEIJING (Reuters) - PetroChina, Asia’s largest oil and gas producer, plans to boost capital spending to 300 billion yuan ($45 billion) in 2019, up 17 percent from last year, a company filing to the Hong Kong Stock Exchange showed.

PetroChina's logo is seen at its petrol station in Beijing, China, March 21, 2016. Picture taken March 21, 2016. REUTERS/Kim Kyung-Hoon/File Photo

The surge in expenditure to a near-record level came as PetroChina pledged to ramp up oil and gas production and reserves to answer Beijing’s call for greater energy security.

The group expects crude oil output this year at 905.9 million barrels and gas output of 3,811.0 billion cubic feet, it said in its earnings statement, with the total oil and gas equivalent of 1,541.2 million barrels.

Its crude oil processing output will reach 1,170 million barrels, it said, up from 1,123 million barrels last year. But growth in crude runs slowed, reflecting competition from upcoming refineries.

PetroChina’s fourth-quarter net earnings fell 18 percent from the same period the previous year to 4.46 billion yuan, making it the worst quarterly performance since the third quarter of 2016, Reuters calculations showed.

Over the fourth quarter, global benchmark Brent crude futures lost nearly 35 percent.

The Chinese producer’s fourth-quarter revenue, meanwhile, rose to 644 billion yuan, compared to 558 billion yuan a year earlier.

Brent prices touched four-year highs in October at nearly $87 a barrel, before plunging to just below $50 toward the end of 2018. The values, though, were still much higher overall than a $56-$64 range for the last quarter of 2017.

PetroChina also plans to buy high-end chemical products and technical equipment from the United States, in addition to liquefied natural gas (LNG) imports already underway, and increase collaboration on oil and gas investment, company president Hou Qijun told reporters on Thursday.

“The two countries can further improve the trade structure, and especially with the progress in Sino-U.S. trade negotiations, we have full confidence in expanding cooperation,” Hou said.

For the whole of 2018, PetroChina’s net earnings more than doubled to 52.6 billion yuan, the best since 2014. Revenue expanded to 2.35 trillion yuan, up 17 percent from 2017.

Reporting by Meng Meng in BEIJING and Alison Lui in HONG KONG; Editing by Tom Hogue and Dale Hudson