PetroChina saw profit decline in 2012

PetroChina Company Limited announced in its 2012 annual report that the company achieved a profit of RMB2,195 billion (US$354 billion), an increase of 9.6% over the previous year, driven by increases in the selling prices and the sales volume of major products including natural gas, gasoline and diesel.
The net profit was RMB115 million (US$18.6 million), down 13.3% year-on-year which was primarily due to the combined impact of the increase in the volume of imported natural gas, the inverse relationship between the selling price and the cost of imported natural gas, and the macro regulation and control over the prices of domestic refined products.
In 2012, PetroChina achieved the oil and natural gas equivalent output of more than 40 million tons in the Daqing Oilfield and 42 million tons in the Changqing Oilfield.
Overseas oil and gas business accelerated its pace of increasing output in the Middle East, Central Asia and South America, with the Rumaila Project in Iraq achieving an average daily output of 1.35 million barrels for the year and the Halfaya Project in Iraq successfully meeting the initial commercial output target earlier than scheduled. The group’s overseas oil and natural gas production reached 136.9 million barrels of oil and natural gas equivalent in 2012, up 13.3% year-on-year.
Capital expenditures for the exploration and production segment for 2012 amounted to RMB227 billion (US$36.7 billion), which were primarily related to the acquisition of mineral interests in Canadian oil and gas fields, oil and gas development projects such as those in Iraq, large-scale domestic oil and gas exploration projects such as those in Chongqing, Tarim, Daqing and Southwestern, and construction of key production capacities for various oil and gas fields.
Domestic exploration activities will remain focused on the “Peak Growth in Oil and Gas Reserves” program while more efforts will be devoted to key oil and gas regions and to such non-conventional oil and gas areas as coal seam gas and shale gas.
The group processed 1,012.5 million barrels of crude oil, an increase of 2.8% as compared with last year, and produced 91.016 million tons of gasoline, diesel and kerosene, up 4.4% over 2011. Moreover, construction at Sichuan was completed, construction has commenced at Guangdong, and approval was received from the state for the Yunnan project.
The refining and ethylene project at Fushun Petrochemical and the rebuilding and expansion of the ethylene plant at Daqing as well as capacity expansion of the refining project at Hohhot Petrochemical were completed and production commenced on schedule.
In 2012, supply and demand in the international oil market was relatively relaxed. Due to the impact of geopolitical turbulences and market speculation, international crude oil prices fluctuated at high levels. The annual average price of North Sea Brent crude oil reached US$ 111.67 per barrel in 2012, setting a new record high. On the other hand, the annual average West Texas Intermediate (WTI) crude oil price was US$94.15 per barrel in 2012, representing a decrease of 1.3% as compared with last year.
In 2012, the central government made eight adjustments to the price of domestic refined products with four increases and four decreases in price.
In the first half of 2012, owing to the impact of the European debt crisis and concerns about a probable second dip in the global economy, demand in the chemical products market shrank and prices fell. In the second half of the year, following a respite in the European debt crisis, market demand recovered gradually with prices of chemical products picking up slowly from the bottom. However, as the price of naphtha has risen faster over the same period, it remained difficult for the chemical products industry to come out from the recession.
Due to significant increases in natural gas imports from Central Asia and liquefied natural gas (LNG) imports, the supply of natural gas continued to increase. According to relevant information and statistics, in 2012, domestic natural gas output reached 107.7 billion cubic meters, up 6.5% as compared with last year; natural gas imports (including LNG) amounted to 42.5 billion cubic meters, an annual increase of 31.1%.
In 2013, the world economy is expected to recover, albeit at a moderate rate. Demand for energy will continue to grow. The Chinese government will continue to strengthen macro economic control and to implement active fiscal policies and prudent currency policies in order to maintain healthy economic growth and development.
PetroChina set its oil and natural gas equivalent output target of 1,387.8 million barrels for 2013.
(April 6, 2013)