petrochina

PetroChina Achieves Steady Production and Operations in First Quarter of 2016


with Revenue Sources Broadened, Costs further Reduced

and Profitability Improved Month-by-Month

2016-04-28   

28 April, 2016, Beijing – PetroChina Company Limited ("PetroChina" or “the Company", HKSE: 0857; NYSE: PTR; SSE: 601857) fully implemented its measures to broaden revenue sources, reduce costs and improve profitability, maintained the safety, stability and control of its production and operations in the first quarter of 2016, amid a severe environment characterized by a prolonged slump in international oil prices. By adhering to steady development and focusing on improving quality and profitability, the Company optimized oil and gas production based on the principle of profitability, kept crude processing volume stable with the product mix of gasoline, kerosene and diesel aligned with market demand. Output of high-margin products increased fast, while sales of natural gas rose significantly. 

In the first quarter of 2016, as a result of plummeting international oil prices, the average realized price of the Company's crude oil was US$27.27 per barrel, representing a decrease of 44.2% over the same period last year. The average realized price of natural gas was US$4.886 per thousand cubic feet, representing a decrease of 21.7% compared with the same period last year. Net loss attributable to the shareholders of the Company reached RMB13,790 million, based on International Financing Reporting Standards and the China Accounting Standards. As international oil prices stabilized and the effective implementation of the Company’s measures to reduce costs and improve profitability gained traction, PetroChina’s operational and financial results in the first quarter improved month by month. The Company saw a substantial revenue increase in March and recorded a profit in the same month. Currently, the Company maintains a healthy financial position with debt-to-capital ratio and debt-to-asset ratio remaining stable, and free cash remaining positive.

In the Exploration and Production segment, the Company optimized the organization of exploration and built a resources-rich foundation for sustainable development. The latter included industrial oil flow obtained in Mesozoic erathem of Dawa area in Liaohe Oilfield with the preliminary discovery of oil reserves exceeding 10 million tons. The Company arranged oil and gas production in a reasonable manner with a focus on profitability. Domestic oil and gas output fell slightly while overseas oil and gas output maintained stable growth. In the first quarter of 2016, the Company’s crude oil output reached 242.7 million barrels, representing an increase of 1.4% compared with the same period last year. Marketable natural gas output reached 891.4 billion cubic feet, representing an increase of 4.8% compared with the same period last year. Oil and gas equivalent output was 391.3 million barrels, representing an increase of 2.6% compared with the same period last year. Of this, domestic oil and gas equivalent output was 331.8 million barrels, representing a decrease of 0.2% compared with the same period last year, and overseas oil and gas equivalent output was 59.5 million barrels, representing an increase of 21.5% compared with the same period last year. In the Exploration and Production segment, the Company adhered to a low-cost strategy, emphasized cost reduction, resulting in an 8.2% reduction in lifting costs per unit compared with the same period last year. However, due to factors such as plummeting average realized crude oil and gas prices, the Exploration and Production segment recorded a loss from operations of RMB20,268 million.

In the Refining and Chemicals segment, the Company continuously improved efficiency and profitability by adhering to the principle of market-orientation and profitability, optimizing its resources allocation and product structure, increasing the production and sales of high-margin products, as well as by developing new products with specialties. In the first quarter of 2016, the Company processed 247.2 million barrels of crude oil, representing a decrease of 2.5% compared with the same period last year. The Company produced 22.312 million tons of gasoline, diesel and kerosene, representing a decrease of 4.4% over the same period last year. It made adjustments in step with market conditions, optimizing and reducing the gasoline to diesel ratio by 0.40 over the same period last year to 1.44. In the first quarter of 2016, the Refining and Chemicals segment recorded a profit from operations of RMB14,651 million, representing an improvement of RMB19,716 million over the same period of previous year. As a result of the increase in gross margin and optimization of the product structure, the Refining operations recorded a profit from operations of RMB11,541 million, representing an improvement of RMB15,326 million over the same period of previous year. The Chemicals operations took advantage of the improved chemicals market conditions, including the increase in demand and decrease in the costs of raw materials of certain products. It continuously optimized the product structure and increased the output and sales of high-margin products. As a result, the Chemicals operations achieved a profit from operations of RMB3,110 million, representing an improvement of RMB4,390 million over the same period last year.

In the Marketing segment, the Company focused on marketing in high- profitability regions and on sales of high-margin products, as well as strengthened its integrated marketing capability to tackle the adverse environment caused by weak domestic demand for refined products, falling prices and fierce market competition, aiming to enhance its overall profitability. The Company sold 37.126 million tons of gasoline, diesel and kerosene during the period. In international trade, the Company effectively managed market risks and further improved its operating capabilities and profitability. Due to the increase in gross margin of highly effective products and greater profitability resulting from marketing efforts, the Marketing segment recorded a profit from operations of RMB426 million in the first quarter of 2016, representing an improvement of RMB3,017 million over the same period last year.

For the Natural Gas and Pipeline segment, the Company ensured the sales profitability by coordinating various resources including domestic gas, imported gas and liquefied natural gas (LNG), strengthening the management of demand, as well as pushing forward the construction of new pipelines and the development of markets with high profitability in an orderly manner. In the first quarter of 2016, due to the factors such as lower gas prices, the Natural Gas and Pipeline segment achieved a profit from operations of RMB4,717 million, of which the net loss incurred from sales of imported gas and LNG narrowed by RMB1,105 million from the same period last year.

Looking ahead into the second quarter and the full year of 2016, the Company believes that the oversupply in oil and gas market will persist. However, the Company sees a number of favorable conditions that will improve its operational performance including the recent rebound in international oil prices, the recovering domestic refined oil market on the back of an improved Chinese economy, the decrease in the losses incurred from imported natural due to lower costs and the Company’s restless efforts to further reduce costs and improve profitability. In addition, the Company plans to complete the transaction of the Trans-Asia Gas Pipeline cooperative project in the second quarter of this year, which will have a positive impact on its interim and annual financial results for this year. PetroChina will strive to promote steady development and enhance the quality of its development and profitability. Guided by its overall target of “Steady Development, Adjusting Structure, Fixing Weakness, Enhancing Profitability and Controlling Risks”, PetroChina will continue to optimize its oil and gas production plan, strive to boost natural gas output and sales, as well as continue to adjust its product structure to improve the profitability of refining and chemicals operations. It will proactively respond to changing market conditions by reinforcing its marketing capabilities and effectiveness, strengthen risk management to enhance the operating profitability of its overseas businesses, fully tap the potential of its integration advantages, and ensure the achievement of its full-year target, thereby delivering greater returns to shareholders.

 

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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       

 

For further information, please contact:

PetroChina Company Limited

 

Joint Company Secretary

Mao Zefeng                                                                                                                   Fax: (8610) 6209 9558

Tel: (8610) 5998 6262                                                                                                E-mail: maozf@petrochina.com.cn

 

General Administration Department (former PR Department):

Yuan Xinxiang                                                                                                              Fax: (8610) 6209 9558            

Tel: (8610) 5998 6037                                                                                                E-mail: yuanxx@petrochina.com.cn

 

PR Agency (Overseas media):

Hill+Knowlton Strategies         

Benny Liu                                                                                                                      Fax: (852) 2576 1990
Tel: (852) 2894 6315                                                                                                  E-mail: benny.liu@hkstrategies.com

 

PR Agency (Domestic media):

EverBloom Investment Consulting Lt. Co.  

Shen Di                                                                                                                         Fax: (8610) 8562 3181

Tel: (8610) 5166 3828                                                                                               E-mail: di.shen@everbloom.com.cn