25 March 2009, Beijing – PetroChina Company Limited (“PetroChina” or “the Company”, HKSE: 00857; NYSE: PTR; SSE: 601857), announced today that according to International Financial Reporting Standards (“IFRS”), net profit attributable to equity holders of the Company was RMB114.431 billion for the year ended 31 December 2008. According to Chinese Accounting Standards (“CAS”), net profit attributable to equity holders of the Company was RMB113.798 billion for the year ended 31 December 2008.
In accordance with IFRS, the Company’s turnover in 2008 reached approximately RMB1,071 billion, representing an increase of 28.1% compared to 2007. The basic earnings per share was RMB0.63, approximately RMB0.19 less than that of 2007. According to a resolution passed by the Company’s board of directors, the board has recommended to pay final dividends of RMB0.14953 per share based on 45% of the net profit attributable to equity holders of the Company for the twelve months ended 31 December 2008 under IFRS. Together with the interim dividends of RMB0.13183 per share, the annual dividend for 2008 will be RMB0.28136 per share.
Mr. Zhou Jiping, Vice Chairman and President of PetroChina, said: "In 2008, despite the difficulties and challenges brought by natural disasters such as cold weather, rain and snow storms, frost and the severe earthquake in the Wenchuan area, the spreading of the global financial crisis and significant volatility in the oil market, the Company responded actively and effectively, continued to implement its strategies in three key areas, namely ‘resources’, ‘market’ and ‘internationalization’, and made every effort to improve operations. The realized profit of the Company was negatively affected to a certain extent as a result of the global financial crisis and state policy factors such as taxation and pricing. However, the overall development of the Company maintains a steady, orderly and healthy growth momentum.”
Exploration and Production
In 2008, the Company implemented the "Program of High Growth in Oil and Gas Reserves" in a comprehensive manner. The Company deepened its overall research and planning, strengthened the use of new technologies, accelerated the refined exploration of mature oilfields, and vigorously pushed forward pre-exploration and risk exploration. Significant exploration progress was achieved, in particular in oil and gas exploration in the Sichuan Basin, the Erdos Basin, the Bohai Bay Basin, the Junggar Basin and the Tarim Basin. The oil and gas reserves of the Company maintained a healthy growth momentum and achieved a more solid resource base. According to the evaluation of an independent valuer on the Company’s reserves, the Company achieved a consolidated oil and gas reserve replacement ratio of 1.165 in 2008.
In the development and production of oil and gas fields, the Company enhanced organization and coordination efforts, actively adopted new development methods and organized production and operation in a scientific manner. As a result, the Company achieved steady growth in crude oil output and rapid growth in natural gas output. In 2008, the total oil and natural gas output reached approximately 1.181 billion barrels of oil equivalent, representing a year-on-year increase of 5.7 %. Crude oil totaled approximately 871 million barrels, representing a year-on-year increase of 2.9% while marketable natural gas totaled approximately 1,864 billion cubic feet, representing a year-on-year increase of 14.5%.
During the period under review, the Exploration and Production segment continued to be the most important profit contributor and recorded a profit from operations of approximately RMB240.2 billion, representing an increase of 15.8% compared to 2007.
Refining and Marketing
In 2008, a series of large scale refining bases of the Company were completed and commissioned, leading to a substantial increase in refining capacities, with crude oil processing and production of key refined products reaching a historically high level. During the first three quarters of 2008, due to strong market demand and taking full advantage of the integration of refining and chemicals businesses, the Company implemented overall resources optimization and dedicated efforts to increase both production and supply. During the fourth quarter of 2008, the Company actively responded to a significant drop in market demand and modified the refining and processing loads in a timely manner. During the period under review, the Company’s refineries processed approximately 850 million barrels of crude oil, representing a year-on-year increase of 3.2%. The Company produced approximately 23.47 million tons of gasoline, approximately 2.21 million tons of kerosene and approximately 48.29 million tons diesel.
The Company made significant progress in the construction of its refining infrastructure. Dalian Petrochemical’s ten million-ton sulphur-bearing crude oil processing facilities completed construction and commenced operation, becoming the largest refinery base in the PRC. The main construction of Dushanzi Petrochemical and the installation of atmospheric vacuum facilities at the Guangxi Petrochemical project were basically completed.
In respect of the refined products sales businesses, the Company paid close attention to and succeeded in responding to market changes. The Company strived to improve marketing quality by adjusting its sales and marketing strategies in a timely manner. The distribution network was expanded to optimize sales. The average daily sales volume per service station reached 9.6 tons, reflecting growing profitability.
During the period under review, due to the macro-economic control of the domestic prices of refined products and shrinking sales of refined products toward the end of 2008, the Refining and Marketing segment recorded a loss from operations of RMB82.97 billion. This segment is the main source of revenue of external sales for the Company.
Chemicals and Marketing
In 2008, the Company achieved large scale, efficient, safe and steady operation in the Chemicals and Marketing segment. Key technological and economic indicators improved continuously, and the allocation of resources and product mix were further optimized. In view of the significant changes in the chemical market, the Company adopted strategic pricing to promote sales and reduce inventories, strengthened direct sales to major customers, and expanded the export of products. During the period under review, the output of chemical products was 16.27 million tons, representing a year-on-year increase of 4.6% while the output of ethylene was 2.68 million tons, representing an increase of 3.7% compared to 2007. The output of synthetic resin was approximately 4.10 million tons, an increase of 3.5% year-on-year. The output of synthetic fiber raw materials and polymer was approximately 1.64 million tons, an increase of 12.2% year-on-year. The outputs of synthetic rubber and urea were approximately 340,000 tons and approximately 3.82 million tons respectively, increases of 10.6% and 5.2% respectively when compared to 2007.
As a result of weak market demand and a drop in product prices, the Chemicals and Marketing segment recorded a loss from operations of approximately RMB2.88 billion.
Natural Gas and Pipeline
In 2008, the Company coordinated the efforts of oil and gas pipeline network construction with downstream marketing development and achieved a rapid growth of natural gas sales. The construction of oil and gas pipelines with strategic importance achieved significant breakthroughs. The construction of the Second West-East Gas Pipeline commenced. The construction of domestic oil and gas pipelines were actively pushed ahead. The main construction of the Lanzhou-Zhengzhou mainline of the Lanzhou-Zhengzhou-Changsha Oil Product Pipeline was completed. The construction of the Yongqing-Tangshan-Qinhuangdao Natural Gas Pipeline proceeded in an orderly manner. The construction of a 17 billion capacity enhancement of the First West-East Gas Pipeline made good progress and transmission capacity of the western section reached 17 billion cubic meters per annum. Construction of the Sebei-Xining-Lanzhou Oil Product Pipeline commenced and the first phase of the LNG projects in Dalian and Jiangsu also commenced construction. The urban natural gas and other natural gas utilization projects were pushed forward in an orderly manner.
The Company leveraged the advantages of the nationwide gas pipeline network and achieved an overall balanced development in the production, transportation, marketing and storage of natural gas. While the Company achieved safe and steady supply of natural gas in key cities and the public utilities sector and to key customers, the Company also ensured the safe and steady supply of natural gas during the Beijing Olympics. The Company made every effort to ensure supply of natural gas to support areas that suffered from natural disasters of rain, snow storm and frost as well as rescue operations in the earthquake. These efforts have helped build the Company’s positive image as a socially responsible corporation.
The Natural Gas and Pipeline segment recorded profit from operations of approximately RMB16.06 billion during the period under review, representing a year-on-year increase of 28.5%. The Natural Gas and Pipeline segment is rapidly increasing its profit contributions to the Company.
International Business
In 2008, the Company’s international business maintained robust growth in both reserves and production and is progressively increasing its contribution to the Company’s performance. Overseas explorations in Chad and Kazakhstan resulted in significant oil discovery. During the reporting period, the Company’s overseas oil and gas net production reached 92.10 million barrels of oil equivalent, up 50% year-on-year and accounting for 7.8% of the Company’s total production. The Company’s international trade of oil and gas recorded stable development, with realized trading volume reaching 57.40 million tons, representing a year-on-year increase of 54.5%.
Business Prospects of the Company in 2009
In 2009, the Company is expected to face severe challenges. The global financial crisis will have further impact on the overall economy and the demand and supply situation in the global oil market will not have marked improvement. The Company’s production and operations will be confronted with huge difficulties amid the uncertainties and unexpected risks of the external environment. However, the fundamentals of PetroChina’s sustainable development remain unchanged. PetroChina is still in its strategic development stage with opportunities and possesses integrated strengths and capabilities for sustainable development.
The Company will proceed with confidence and strive to overcome the difficulties. The Company will vigorously implement its strategies in the areas of ‘resources’, ‘market’ and ‘internationalization’ and react to changing market conditions with flexibility. By adjusting and enhancing its structure, changing its method of development, focusing on investment control, reducing cost and improving product and service quality, PetroChina will be able to maintain steady and rapid growth. These will also help enhance the overall competence, international competitiveness and capability for sustainable development of the Company. PetroChina will strive to maximise returns to its equity holders and society.
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Additional information on PetroChina is available at the Company’s website: http://www.petrochina.com.cn
Issued by PetroChina Company Limited
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PetroChina Company Limited
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