PetroChina Co., the country’s biggest oil and gas producer, posted a 4.9 percent decline in first-quarter profit as lower oil prices eroded earnings.
Net income fell to 34.2 billion yuan ($5.48 billion), or 0.19 yuan a share, in the three months ended March 31 from 36 billion yuan, or 0.20 yuan, a year ago, the Beijing-based energy explorer and refiner said today in a statement to the Shanghai Stock Exchange. The average of four analyst estimates compiled by Bloomberg was 32.03 billion yuan.
“The profit decline came mostly from the lower realized crude price,” said Laban Yu, a Hong Kong-based analyst at Jefferies Group LLC.
The realised price of crude declined 2.9 percent to $100.06 a barrel in the quarter, according to the statement. PetroChina is poised to benefit from the most aggressive reforms in more than decade as China’s President Xi Jinping seeks to increase market forces in the economy. The government raised retail natural gas prices by 15 percent last July and has signaled it will start allowing private companies to invest in areas traditionally dominated by state-owned giants.
“Higher natural gas retail prices will improve PetroChina’s margin in the first six months on a year-on-year basis if production stays at the current level and crude prices don’t go much lower,” said Yu.
Oil and gas output rose 2.3 percent to 363.4 million barrels of oil equivalent in the first quarter. Operating profit at PetroChina’s exploration and production business dropped 7.5 percent to 52.7 billion yuan because of “lower realized crude prices, higher costs and some policy factors in overseas projects,” the company said in the statement.
Operating profit at the energy producer’s natural gas and pipeline business increased 27 percent to 1.39 billion yuan, which included a 12.1 billion-yuan loss at its liquefied natural gas business, it said.
Recommended for you
