CNOOC suf­fers big loss on low oil price

Oil ma­jor loses 7.74b yuan, and PetroChina earn­ings drop 98% in the first six months


CNOOC Ltd posted its first-ever half-year loss as crude’s plunge and write­downs on as­sets, in­clud­ing Cana­dian oil sands, de­stroyed profit at China’s biggest offshore oil and gas pro­ducer.

The com­pany swung to a 7.74 bil­lion yuan ($1.16 bil­lion) loss in the Jan­uary to June pe­riod, com­pared with a net in­come of 14.7 bil­lion yuan a year ear­lier, the Bei­jing-based oil ex­plo­ration firm said in a state­ment to the Hong Kong Stock Ex­change on Wed­nes­day. Oil and gas rev­enue fell 28.5 per­cent to 55.08 bil­lion yuan.

Dur­ing the first half of the year, Brent crude, the global bench­mark, had an av­er­age price roughly 30 per­cent lower than in the same pe­riod in 2015, roil­ing global oil firms. Prices have whip­sawed this year, flip­ping five times be­tween bear and bull mar­kets, as pro­duc­tion from the year-on-year fall in CNOOC Ltd’s oil and gas rev­enue in the first half of this year na­tions out­side the Or­ga­ni­za­tion of Petroleum Ex­port­ing Coun­tries, in­clud­ing China and theUS, de­clines in the wake of a price crash that be­gan in 2014.

CNOOC’s out­put in the first six months of the year rose 0.6 per­cent to 241.5 mil­lion bar­rels of oil equiv­a­lent, CNOOC said in the state­ment. CNOOC said in Jan­uary that full-year pro­duc­tion will fall for the first time since 1999 and that cap­i­tal spend­ing would be capped at 60 bil­lion yuan. Full-year pro­duc­tion is fore­cast at 470 mil­lion to 485 mil­lion bar­rels this year, down from 496 mil­lion bar­rels of oil equiv­a­lent in 2015.

“Ben­e­fit­ing from the ef­fec­tive mea­sures of cost con­trol and ef­fi­ciency en­hance­ment, the com­pany achieved re­mark­able re­sults in cost sav­ing in the first half of the year,” CNOOC­said in the state­ment.

Also on Wed­nes­day, PetroChi­naCo, the­coun­try’s biggest oi­landgaspro­ducer, poste­d­its small­est half-year profit since it was pub­licly listed in 2000, as the crash in oil prices con­tin­ues to drag on earn­ings.

Net in­come dropped 98 per­cent to 531 mil­lion yuan. Rev­enue fell 15.8 per­cent to 739 bil­lion yuan. The com­pany was able to eke out a profit af­ter re­cov­er­ing from its firstever quar­terly loss ear­lier this year.

PetroChina’s to­tal global crude oil and gas out­put rose 1.7 per­cent to 748.2 mil­lion bar­rels of oil equiv­a­lent dur­ing the first half of the year, it said on Wed­nes­day. Cap­i­tal ex­pen­di­tures fell 17.5 per­cent to 50.9 bil­lion yuan.

ExxonMo­bil Corp and Royal Dutch Shell Plc in July re­ported their low­est quar­terly prof­its since 1999 and 2005, re­spec­tively. Chevron Corp is suf­fer­ing the long­est earn­ings slump in more than a quar­ter cen­tury and BP Plc posted its low­est refin­ing mar­gin in six years.

PetroChina Co’s rev­enue in the first half of this year

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