The FINANCIAL — Despite the plunges in global oil prices and sluggish domestic oil and gas demand, PetroChina Company Limited focused its development guidelines of “quality, profitability and sustainability”.
Under the latter, PetroChina has put in significant efforts to improve resources allocation and to manage on production and operations. It has further reduced costs while increasing efficiency, promoted reform and innovation as driving forces for growth, actively adapted to the “new normal” condition under low oil price environment, and achieved its sound outcome of low cost development.
In the first quarter of 2015, the Company realized net profit of RMB6,150 million attributable to the Company’s shareholders, based on the China Accounting Standards (“CAS”).
In exploration and production segment, the Company continued to execute the reserves growth peak project and organized production of oil and gas in a scientific manner, achieving a stable increase in oil and gas output. In the first quarter of 2015, the Company’s crude oil output reached 239.4 million barrels, representing an increase of 3.3% as compared with the same period last year. Marketable natural gas output reached 850.8 billion cubic feet, representing an increase of 7.7% as compared with the same period last year. Oil and gas equivalent output was 381.2 million barrels, representing an increase of 4.9% as compared with the same period last year, of which overseas oil and gas equivalent output was 48.9 million barrels, representing an increase of 40.9% as compared with the same period last year. In the exploration and production segment, the Company took proactive measures to cope with the plunge in oil prices and emphasized cost reduction and efficiency improvement, resulting in a 3.7% reduction in unit operating costs as compared with the same period last year. However, mainly affected by the plunge of average realized crude oil prices, the exploration and production segment achieved an operating profit of RMB17,299 million, representing a decrease of 67.2% as compared with the same period last year. Yet, it remained the most important contributor to the Company’s profits, according to PetroChina.
In refining and chemicals segment, the Company has adhered to the principle of market-orientation and profitability, prudently managed its processing load and actively carried out production, seeking to reverse its losses. In the first quarter of 2015, the Company processed 253.5 million barrels of crude oil, representing a decrease of 0.4% as compared with the same period last year. The Company produced 23.346 million tons of gasoline, diesel and kerosene, representing a decrease of 0.4% over the same period last year. The refining and chemicals segment incurred an operating loss of RMB5,065 million. Affected by the reduced refining margin caused by the drop in oil prices, the refining operations suffered a loss of RMB3,785 million. Facing a prolonged slump in the chemical market, the Company continuously strengthened its chemical product structure. Its chemical business incurred an operating loss of RMB1,280 million, reducing the loss by RMB2,896 million over the same period last year.
In marketing segment, the Company has focused on marketing in high-efficiency regions and sales of high-margin products, as well as strengthened its end-sales capabilities to face challenges such as the weak domestic demand for refined products and falling prices. As a result of these efforts, the Company sold 37.710 million tons of gasoline, diesel and kerosene, representing an increase of 3.555 million tons or 10.4% as compared with the same period last year. In international trade, the Company has effectively managed market and finance risks and further improved its operating capabilities and profitability. Due to slimmer margins caused by falling prices of refined products, the marketing segment incurred an operating loss of RMB2,591 million.
In natural gas and pipelines segment, the Company has coordinated the utilization of various resources such as domestically produced gas, imported gas and liquefied gas. It has continued to strengthen management on the demand side, making headway in the construction of new pipelines and the development of high-efficiency markets, which ensured sales profitability. In the first quarter of 2015, operating profit for the natural gas and pipeline segment reached RMB7,355 million, an increase of 428.4% as compared with the same period last year, representing continued growth. In particular, the net loss incurred from sales of imported gas and LNG in the natural gas and pipeline segment reached RMB7,166 million, reducing the loss by RMB4,939 million as compared with the same period last year.
In the first quarter of 2015, the average realized price for the Company’s crude oil was US$48.87 per barrel, representing a drop of 51.2% as compared with the same period last year. This was mainly due to the plunge in global crude oil prices. The average realized price for natural gas was US$6.24 per thousand cubic feet, representing a decrease of 0.8% as compared with the same period last year, mainly due to the combined effects of the change in sales structure and the fluctuation of foreign exchange rates.
In the second quarter of 2015, the Company will continue to put significant efforts to raise quality and efficiency, drive the sustained and healthy development of main businesses, enhance the coordination and management of production and operations, and increase the efficiency and profitability of operations, to meet its goal for the full year.
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