Weak de­mand for re­fined oil, gas hits CNOOC, PetroChina

| In­dus­try sees prices un­der pres­sure amid con­tin­ued un­cer­tain econ­omy

China Daily (Canada) - - BUSINESS - By DUJUAN dujuan@chi­nadaily.com.cn

Lead­ing oil and nat­u­ral gas com­pa­nies PetroChina Co Ltd and CNOOC Ltd re­ported first-half re­sults on Thurs­day that re­flected weaker de­mand for re­fined prod­ucts. CNOOC, the largest do­mes­tic off­shore oil and gas pro­ducer, recorded a 2.3 per­cent year-on-year de­cline in firsthalf net profit to 33.6 bil­lion yuan ($5.47 bil­lion).

Com­ment­ing on the profit drop, Chief Fi­nan­cial Of­fi­cer Zhong Hua said in­creased sell­ing prices had failed to off­set higher pro­duc­tion costs.

The com­pany’s av­er­age oil price was $106.30 a bar­rel in the first half, up 2 per­cent, while the av­er­age gas price rose 13.5 per­cent year-on-year to $6.44 per 1,000 cu­bic feet.

The op­er­at­ing cost was $11.78 per bar­rel of oil equiv­a­lent, up 7 per­cent, mainly at­trib­ut­able to the con­sol­i­da­tion of two more months of Canada-based Nexen Inc’s per­for­mance, ac­cord­ing to the re­port.

The com­pany’s all-in cost was $43.20 per BOE, up 2 per­cent year-on-year.

CNOOC closed its $15.1 bil­lion ac­qui­si­tion of oil and gas pro­ducer Nexen in Fe­bru­ary 2013, a deal in­tended to raise the par­ent’s an­nual out­put by 20 per­cent and proven re­serves by 30 per­cent.

Chief Ex­ec­u­tive Of­fi­cer Li Fan­rong said the com­pany will con­tinue to im­prove its as­set struc­ture.

Sep­a­rately, PetroChina, the coun­try’s largest oil and gas ex­plorer, re­ported net profit growth of 4 per­cent to 68 bil­lion yuan.

Helped by the cen­tral gov­ern­ment’s gas pric­ing re­form, PetroChina’s gas and pipe­line seg­ment achieved first-half op­er­at­ing profit of 4 bil­lion yuan.

Ex­clud­ing year-ear­lier gains from di­vest­ment of pipe­line as­sets and op­er­a­tions, the seg­ment’s op­er­at­ing profit was up 7 bil­lion yuan.

Crude out­put edged up 0.2 per­cent to 500 mil­lion bar­rels and oil prod­uct out­put in­creased 1.9 per­cent to about 46 mil­lion met­ric tons.

The re­fin­ing and chem­i­cal seg­ment re­mained in the red with an op­er­at­ing loss of 3.4 bil­lion yuan, but that rep­re­sented a nar­row­ing of the di­vi­sion’s loss by 12.4 bil­lion yuan from a year ear­lier.

Crude oil out­put from over­seas op­er­a­tions to­taled 56.2 mil­lion bar­rels, and mar­ketable nat­u­ral gas out­put reached 65 bil­lion cu­bic feet.

The oil and nat­u­ral gas equiv­a­lent out­put was 67.1 mil­lion bar­rels, on par with the year-ear­lier vol­ume, the com­pany said.

The com­pany


that prospects for the mild re­cov­ery of the global econ­omy will re­main highly un­cer­tain in the sec­ond half and global oil prices will face down­ward pres­sure.

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