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PetroChina Q3 2019 profit tumbles on lower oil prices, slowing gas demand

November 13/2019

MOSCOW (MRC) -- PetroChina Co, Asias largest oil and gas producer, reported a sharp fall in third-quarter profit on Wednesday, dragged down by weaker global energy prices and slowing growth in its domestic gas market, reported CNBC.

Net profit for the July to September quarter was 8.83 billion yuan (USD1.25 billion), down 58.4% compared with the same period a year ago and the weakest quarterly results this year, according to a company filing with Hong Kong stock exchange.

For the first nine months of 2019, net income fell 23.4% from a year earlier to 37.25 billion yuan, the state firm said.

"Amid an increasingly complex and rigid global economic and trade environment ... international oil prices have fallen over last year," the company said.

"Domestically, Chinas refined fuel supply capacity is in severe overcapacity...(and) growth in the natural gas market is slowing."

Revenue for the quarter edged up 1.8% from a year ago to 618.14 billion yuan. For the first nine months, revenue rose 5.1% to 1.81 trillion yuan.

PetroChina also said its natural gas import business recorded a 21.76 billion yuan net loss during the January-September period, deepening from a 19.96 billion loss recorded for the same period in 2018 due to a weaker Chinese currency and higher import cost.

The groups crude oil output increased 2.9% during the first nine months versus a year earlier to 682.7 million barrels, while gas output rose 8.7% to 289.3 billion cubic feet (bcf).

The stronger growth in gas versus crude oil production follows an accelerated drilling programme in key basins such as Sichuan in the southwest, Ordos in the north and Tarim in the northwest.

This has also led to sizeable discoveries such as conventional gas deposits in the Bozi-9 well in the Tarim basin of Xinjiang region and shale gas in the Changqing-Weiyuan and Taiyang blocks in Sichuan.

The companys Hongkong-listed shares have fallen by 18% so far this year, weighed by concerns that Beijings plan to set up a national oil and gas pipeline group will force it to cede control of its dominant pipeline assets, which have generated steady revenues.

PetroChina, which is also Chinas second-largest oil refiner, processed 906 million barrels of crude in the first nine months of the year, up 4.3% from a year earlier.

Despite the growth in throughput, PetroChinas operating profits at its refining department shrank nearly 90% during the period to 3.4 billion yuan as a domestic supply overhang squeezed margins, the firm said.

As MRC informed earlier, in April 2019, LyondellBasell announced that PetroChina will use the LyondellBasell Hostalen "Advanced Cascade Process" technology to produce 1,100,000 metric tons per year of high density polyethylene (HDPE) capacity. Licensor selection had been done by China HuanQiu Contracting & Engineering Co., Ltd. (HQC), a wholly owned subsidiary of PetroChina. The low-pressure slurry process technology will be used for a 300,000-mt/year HDPE unit to be built in Korla City, Xinjiang Province, a 400,000-mt/year plant in Jieyang City, Guangdong Province and a 400,000-mt/year plant in Yulin City, Shaanxi Province in the P.R. China.

According to MRC's ScanPlast report, Russia's September estimated HDPE consumption fell to 70,570 tonnes from 108,320 tonnes a month earlier. Russian producers reduced their output due to maintenance works, whereas imports were high partially because of an increase in US shipments. The estimated HDPE consumption totalled 862,170 tonnes in January-September 2019, up by 7% year on year. HDPE imports increased by 47%, whereas production dropped by 5% due to a long period of maintenance works at three production capacities.

PetroChina Company Limited, is a Chinese oil and gas company and is the listed arm of state-owned China National Petroleum Corporation, headquartered in Dongcheng District, Beijing. It is China's biggest oil producer.
Author:Margaret Volkova
Tags:PP, PE, crude and gaz condensate, propylene, HDPE, ethylene, gas processing, petrochemistry, LyondellBasell, PetroChina, China, Russia.
Category:General News
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