PetroChina says profit may triple amid cost cuts
Shanghai, China - PetroChina Co, the country’s biggest oil and gas producer, forecast that full-year profit rebounded off a record low and may have tripled amid cost cutting and higher energy prices.
Net income for 2017 may have jumped by as much as 16bn yuan (US$2.5bn), the state-run oil giant said in a filing to the Hong Kong stock exchange, citing Chinese accounting standards. That implies net income of as much as 23.9bn yuan. Profit at the Beijing-based company will snap three years of declines after posting its worst-ever profit in 2016 as falling crude prices crushed profitability.
PetroChina credited the jump in net profit to rising prices of crude oil, fuels and natural gas, as well as optimising production and operations, cost cutting and increased efficiency. It also highlighted that its 2016 profit included a 24.5bn yuan one-time gain on the sale of a stake in its Trans-Asia Gas Pipeline Co, which links Central Asian countries to China’s western border.
PetroChina plays a key role in President Xi Jinping’s drive to use more natural gas. While it’s the country’s biggest producer, it’s also the largest importer, a trade that weighed on earnings in the third quarter and may put a brake on further gains as it sells the overseas gas at a loss.