PetroChina posts 35% rise in net profit

PetroChina Co. reported a 35% rise in net profit in 2010 due to strong demand, despite lower refining margins. Net profit was 139.99 billion yuan (US$21.3 billion), up from 103.39 billion yuan (US$15.7 billion) in 2009. Revenue rose 44% to 1.4 trillion yuan (US$223.5 billion), due in part to higher revenues from its exploration and production segment. PetroChina, which is China’s biggest crude oil producer by output, plans to increase its oil and gas output by 5.4% in 2011 partly due to overseas expansion. In terms of profitability, PetroChina still lags behind its foreign counterparts, such as ExxonMobil Corp., Chevron Corp. or Royal Dutch Shell. This can be attributed in part to China’s domestic fuel pricing system, which does not allow the company to pass along increases in raw material costs in full to consumers. Its refining segment reported an operating profit of 7.85 billion yuan (US$1.2 billion), down from 17.31 billion yuan (US$2.6 billion), because of higher crude oil costs. (March 18,2011)