Date
21 November 2017
Wang Dongjin (center) and other top PetroChina executives speak to reporters following the company's annual results announcement Thursday. Photo: HKEJ
Wang Dongjin (center) and other top PetroChina executives speak to reporters following the company's annual results announcement Thursday. Photo: HKEJ

PetroChina FY profit falls 17.3% on weak oil prices; cuts capex

PetroChina Co. Ltd. (00857.HK) announced Thursday that its net profit fell 17.3 percent last year to 107.17 billion yuan (US$17.3 billion) following the slide in crude oil prices.

Revenue rose just 1.1 percent from the previous year to 2.28 trillion yuan, it said, noting a slowdown in energy demand amid weaker economic growth.

With the external environment remaining challenging, the Chinese oil giant plans to cut its capital expenditure to 266 billion yuan in 2015, from last year’s figure of 291.7 billion, Vice-chairman and President Wang Dongjin said.

In 2014, the proportion of investment into exploration and production businesses was lifted to nearly 76 percent from about 70 percent in 2013, Wang said.

The ratio is set to climb further.

In 2014, PetroChina’s total crude oil output was up 1.4 percent from the previous year to 945.5 million barrels.

Marketable natural gas output climbed to 2.03 trillion cubic feet, up 8.1 percent, while and oil and natural gas equivalent output increased 3.6 percent to 1.45 billion barrels, according to a regulatory filing.

Given the backdrop of low oil prices, the company will seek some asset-swaps with large international peers, Wang said, adding that unconventional oil and gas fields in Canada will be particularly in focus.

PetroChina may also proactively acquire or seek mergers of some small or medium-sized oil companies that might be suffering cash-flow problems, he said.

On the topic of unconventional oil and gas resources, Wang said the group plans to complete shale gas production facilities, which will have capacity of 2.6 billion cubic meters, in Sichuan in this year.

The targeted shale gas output for 2020 is 6 billion cubic meters, the executive said.

The development cost of a shale gas well has been falling significantly, he said, adding that the output is very likely to surpass current projections.

PetroChina recorded basic earnings of 59 fen per share last year, down from 71 fen in 2013. The company recommended a financial dividend of 9.6 fen a share.

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MY/JP/RC

EJ Insight reporter

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