PetroChina Co.,
Asia
’s biggest company by market value, posted a
first-half profit that missed analysts’ estimates after increases in
state-controlled fuel prices lagged behind gains in crude oil costs.
Net income climbed 1 percent to 66 billion yuan
($10.3 billion), or 0.36 yuan per share, from 65.3 billion yuan, or 0.36 yuan,
a year earlier, the Beijing-based energy explorer and oil refiner said in a
Hong Kong
stock exchange filing today. That compares with the
67.3 billion-yuan median estimate of six analysts surveyed by Bloomberg.
PetroChina posted a 21 billion-yuan loss on its
refining and chemicals operations, eroding gains from higher crude prices and
production, the main earnings contributor.
China
’s largest energy company plans to spend at
least $60 billion this decade to buy oilfields and refineries abroad and to
expand its global oil trading business to help diversify from domestic
refining.
“Pressures from the regulatory environment are
dragging earnings,” said
Neil
Beveridge
, a Hong Kong-based
senior analyst at Sanford C. Bernstein & Co. “PetroChina is suffering from
refining losses.”
PetroChina has gained 13 percent in
Hong Kong
trading in the past 12 months, compared with the 4.3
percent decline in the benchmark
Hang
Seng
index. The stock rose 1.8 percent to HK$9.51
today, before the earnings announcement.
Oil Refining
China’s government, which controls fuel prices
to curb inflation that has reached a three-year high, raised tariffs by about
10 percent in two adjustments in the first half while crude in
New
York
averaged 26 percent higher from a year earlier.
Oil rose to a 30-month high of $114.83 a barrel
on May 2 and has since declined to about $86. Higher crude prices increased
operating expenses by 44 percent in the first six months, PetroChina said in
the statement.
China
may adjust fuel prices when crude costs change
more than 4 percent over 22 working days. The government last raised gasoline
and diesel prices by as much as 5.8 percent on April 7.
Refining and marketing accounted for 12 percent
of PetroChina’s operating income last year, while exploration and production
have a 78 percent share. Overall revenue rose 39 percent to 952.2 billion yuan
in the first six months.
Cnooc
Ltd. (883)
,
China
’s largest offshore energy explorer, boosted
first-half profit by 51 percent to a record, partly because oil and gas
production accounts for 99 percent of its income and it operates only one major
refinery.
Profit at
Exxon
Mobil Corp. (XOM)
, the only oil and
gas company bigger than PetroChina in market value, rose 54 percent in the
first half, while
Royal
Dutch Shell Plc (RDSA)
posted a 77-percent increase, according to the
companies last month.
Overseas Acquisitions
PetroChina produced 445.8 million barrels of
crude in the first half, up 5 percent from a year earlier, while the average
selling price increased 40 percent to $101.62 a barrel. Last
year, oil output expanded 1.7 percent to 858 million barrels.
The Chinese energy producer wants half its oil
and gas output to come from overseas by 2020, Chairman Jiang Jiemin said in an
interview last year. Less than a tenth of production now comes from abroad.
PetroChina paid C$1.9 billion ($1.9 billion) for
a 60 percent stake in Athabasca Oil Sands Corp.’s
MacKay
River
and
Dover
oil-sands projects last year. The Chinese
company and Shell also jointly purchased
Australia
’s Arrow Energy Ltd. for A$3.7 billion ($3.8
billion).
The unit of state-controlled China National
Petroleum Corp. this year bought a 50 percent stake in the European
oil-refining operations of Ineos Group Holdings Plc for $1.02 billion. The offer
for holdings in the refineries of
Grangemouth
,
Scotland
, and
Lavera
,
France
, was part of a joint-venture agreement between
PetroChina and Ineos.
In June, PetroChina walked away from a C$5.4
billion ($5.5 billion) bid for Encana Corp.’s Cutbank Ridge gas assets after
failing to agree on the price. The acquisition would have been its largest
overseas deal.
Full-year profit at PetroChina may rise 14 percent
to 159.4 billion yuan, a median estimate of 18 analysts surveyed by Bloomberg
shows.
PetroChina was overtaken by Apple Inc. as the
world’s second-largest by market value last year. Exxon
is the biggest.