Low Prices Hit PetroChina, Cnooc
Two major Chinese state-owned oil and gas companies, PetroChina and Cnooc, on August 24 announced poor results for the six months that ended on June 30 as energy prices continue to remain depressed thanks to the slowing domestic economy.
Cnooc declared a net loss of 7.74bn yuan ($1.16bn) compared with a profit of 14.7bn yuan in the same period last year. The number was pretty much in line with its guidance announced last month when it said net loss would likely be 8bn yuan. This is the first time that the company has posted a first half loss in more than decade.
Its first half revenue was 55.08bn yuan, down 28.5% on previous year. Impacted by the decline of international oil prices, company’s average realised oil price was $37.70/barrel in the first half of 2016, representing a decline of 34.5% year-on-year. The average realised natural gas price dropped by 16.2% on the previous year. Operating costs fell by 22.7% compared with previous year to $7.42/barrels of oil equivalent.
PetroChina's LNG infrastructure (Credit: PetroChina)
China’s biggest oil and gas producer PetroChina managed to stay in the black but reported a sharply reduced profit for the first half of FY 2016. State-owned company said profit attributable to its owners plunged to 531mn yuan, down from 25.4bn yuan in the same period last year.
Cut in gas prices boosted the sales of natural gas in domestic market by 10.6% over the same period in 2015. PetroChina sold 66.05bn m3 of natural gas during the first six months. However, owing to lower prices, the natural gas and pipeline business remained in the red.
PetroChina did not sound very optimistic about the rest of the year either. “In the second half of this year, the demand and supply of the domestic and international oil and gas market is not expected to undergo significant change,” it said.
Shardul Sharma