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    PetroChina's 2019 Profit Drops 14% (Update)


PetroChina did not disclose its capital expenditure and output targets for 2020.

by: Shardul Sharma

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Natural Gas & LNG News, Asia/Oceania, Security of Supply, Corporate, Exploration & Production, Import/Export, Investments, Financials, News By Country, China

PetroChina's 2019 Profit Drops 14% (Update)

(Adds quotes from executive in fourth para.)

Chinese state-run PetroChina’s net income in 2019 was yuan 45.6bn ($6.4bn), down 13.9% yr/yr owing to lower oil and gas prices.

Its average realised crude oil price last year was $60.96/barrel, representing a decrease of 10.7% from $68.28/b in 2018. PetroChina recorded a revenue of yuan 2.5 trillion in 2019, up 6% yr/yr. It sold 259bn m3of natural gas, up 19.5% yr/yr, including domestic sales of natural gas of 171bn m3, up 7.4% yr/yr.

Struggling to accommodate its long-term take-or-pay deliveries as the Covid-19 virus led to major reductions in the national economy, the company has invoked force majeure clauses on central Asian pipeline gas as well as on Australian LNG, so far with unknown success.

According to Reuters, its vice-president Lin Xiao said March 26 the company's "gas import costs will trend lower with falling oil prices, but we’re not going to pin hope on that to cut losses.” He said the company would "actively engage in price renegotiations...and keep optimizing the pace in imports and adjust the import volume where contracts allow.”

In 2019, the company’s total crude oil output amounted to 909mn barrels, representing an increase of 2.1% compared with last year. The marketable natural gas output reached 3.9 trillion ft3, up 8.3% yr/yr. 

PetroChina did not disclose its capital expenditure and output targets for this year. Another Chinese state-run firm, Cnooc, which announced its 2019 results earlier this week, also did not spell out its capital expenditure plans for 2020 and said it is monitoring changes in the external environment and the movement of international oil prices.

Sinopec Oilfield Service Corp, a unit of state-run Sinopec, however, said it will hike capital expenditure in 2020 by 18.4% yr/yr as it plans to advance key projects. The company’s decision to hike spending is in contract with the trend among most companies who are opting for radical cuts in response to the decline in oil prices and Covid-19 outbreak.