OREANDA-NEWS. August 29, 2012. PetroChina Company Limited ("PetroChina" or “the Company", HKSE: 0857; NYSE: PTR; SSE: 601857) announced that in the first half of 2012, it upheld stable advancements in spite of difficulties in global economic recovery, high volatility in international oil prices, and slowing demand in petroleum and petrochemical markets. By correctly analyzing and forecasting operating environment, enhancing strategic planning, and making active responses to challenges, the Company realized steady growth in its production and operations, and achieved a series of significant progresses in its businesses and key projects in the first half of 2012, reported the press-centre of PetroChina.  

In the first half of 2012, the Company’s turnover was RMB1,046.661 billion, representing an increase of 9.9% as compared with last year. However, due to factors such as an increase in the amount of imported natural gas, the selling of imported natural gas at lower domestic prices, macroeconomic regulation and control over the refined oil price in China as well as the increase in costs, under the China Accounting Standards (“CAS”), net profit attributable to the equity holders of the Company decreased by 6.0% from the same period of last year to RMB62.024 billion, with basic earnings per share of RMB0.34; under the International Financial Reporting Standards (“IFRS”), net profit attributable to the owners of the Company decreased by 6.0% from the same period of last year to RMB62.026 billion with basic earnings per share of RMB0.34. As per resolution of the Board of Directors’, the Company will distribute 45% of its interim net profit under the IFRS as an interim dividend, or a proposed interim dividend of RMB0.1525 per share (inclusive of applicable taxes).

Exploration and Production
Domestic oil and gas reserves and output continued to go up, and the output of natural gas increased rapidly. Daqing Oilfield maintained stable production, and Changqing Oilfield maintained rapid growth in output. Regarding oil and gas exploration, the Company continued to carry out the “Peak Growth in Oil and Gas Reserves” Program and achieved major discoveries in Tarim, Junggar, Qaidam, Bohai Bay, Erdos and other regions. The Company maintained crude oil production in a stable and balanced manner by organizing oilfield development in a scientific manner and enhancing the construction of major production capacities. Regarding the production of natural gas, the Company enhanced its management, optimized and adjusted its operations and accelerated construction of priority output capacity projects. Moreover, construction of the coal seam gas industrial demonstration bases and shale gas projects were progressing smoothly. Projects featuring international cooperation were operated in a stable manner, and major projects maintained stable production.

In the first half of 2012, the Company’s crude output reached 452.4 million barrels of oil, representing a year on year increase of 1.5%; the output of marketable natural gas reached 1,292.4 billion cubic feet, representing a year on year increase of 9.0%; the Company’s total oil and gas output amounted to 667.9 million BOEs, representing an increase of 3.8% from the same period of last year. During the reporting period, the exploration and production segment actively modified its development pattern and enhanced its control over costs and expenses. As a result, the Exploration and Production segment achieved an operating profit of RMB 113.792 billion, representing an increase of 9.7% from the same period of the preceding year.

Refining and Chemicals
The Refining and Chemicals segment maintained stable and balanced production, geographically strategic deployment of downstream assets has basically taken shape, and the market competiveness and efficiency of the segment have been improved. In terms of production of the Refining and Chemicals segment, the Company optimized its allocation of resources, product structure and pace of production in accordance with the supply and demand situation. By tapping its internal potential; and controlling the production cost, refining and processing costs were kept under effective control and major technological and economic indicators improved in a consistent manner. The oil products upgrading program was implemented in an orderly manner, output of high-margin products was increased, and a group of new marketable chemical products were launched. Construction of major refining and chemicals projects progressed smoothly. Construction at Guangdong Petrochemical formally began, while the construction project at Sichuan Petrochemical was nearing completion. The refinery and ethylene projects at Fushun Petrochemical also proceed as scheduled.

In the first half of 2012, the Company processed 489.7 million barrels of crude oil, representing a decrease of 0.3% from the same period of last year; produced 43.826 million tons of gasoline, kerosene and diesel, representing an increase of 1.0% from the same period of last year; and produced 1.761 million tons of ethylene, representing a decrease of 3.2% from the same period of last year. During the reporting period, due to various factors including prolonged weakness in demand and the government’s macroeconomic regulation and control over price of domestic refined products, the Refining and Chemicals segment incurred a loss from operations amounting to of RMB28.875 billion, of which the refining business recorded a loss of RMB23.308 billion while the chemicals business recorded a loss of RMB5.567 billion.

Marketing
With regard to the marketing of refined products, the Company dedicated more efforts into assessing and analyzing the market for the purpose of improving the effectiveness of sales and further improved its capability to develop new markets. Despite facing the adverse situation of a weak domestic demand for oil products, the Company made flexible adjustments in its marketing strategy, strengthened end-sales and optimized its sales structure, and as a result, increased retail sales volume. Moreover, the Company devoted more resources to high-margin markets, driving the sales volume of high-grade gasoline to increase significantly. Fuel oil and lube oil businesses developed smoothly and the non-oil business grew rapidly.

In the first half of 2012, sales of gasoline, kerosene and diesel amounted to 73.068 million tons, of which sales of gasoline increased by 13.8% from the same period last year. The Company put considerable effort into market expansion and developed 318 new service stations, bringing the total number of service stations to 19,469, and the Company’s share of retail market reached 40.2%. Therefore, the Company further enhanced its market competitiveness. During the reporting period, due to a further downturn in the domestic economy and weak demand for refined products, the operating profit from operations of the Marketing segment amounted to RMB10.001 billion, representing a decrease of 26.4% from the same period of the preceding year.

Natural Gas and Pipeline
Construction of oil and gas strategic channels and the key domestic trunk pipeline networks progressed in an orderly manner and the sales volume of natural gas grew rapidly. The Tai’an, Shanghai and Shenzhen branches of the trunk of second West-East Gas Pipeline were completed and launched for operation, and major strategic channels, including the Hong Kong branch of second West-East Gas Pipeline and the western section of third West-East Gas Pipeline commenced construction. Domestically produced gas and imported gas were balanced effectively. The Company concentrated its efforts in developing the high-margin markets with a focus on key regions such as the Yangtze River Delta, Pearl River Delta, Bohai Rim, Sichuan Province and Chongqing. Market development of newly built pipelines progressed smoothly.

In the first half of 2012, the sales volume of natural gas amounted to 43.621 billion cubic meters, an increase of 15.7% from the same period of last year. During the reporting period, as a results of the widening in losses from natural gas imports from Central Asia and LNG imports, the Natural Gas and Pipeline segment realized an operating profit of RMB1.637 billion, representing a decreased of 84.7% from the same period of last year.

Overseas Business
The Company’s overseas businesses recorded stable growth in spite of the complex environment. The oil and gas exploration achieved new breakthroughs in Nigeria and Chad, expanding the resource base for large-scale capacity construction. The development of new projects made considerable progress. And the Company engaged in strategic cooperation with major international oil companies and resource-rich countries. In the Middle East, Central Asia and South America, the pace of production of major projects were accelerated, and output was increased. In particular, daily crude oil production at the Rumaila Oilfield in Iraq reached 1.33 million barrels, and the Halfaya Oilfield achieved its initial commercial output target 15 months ahead of the schedule. In the first half of 2012, the Company’s overseas businesses realized net oil and gas production of 62.45 million barrels of oil equivalent, an increase of 0.9% from the same period of last year, accounting for 9.4% of the Company’s total output.

The scale and quality of international trading operations also improved steadily. The Company’s oil and gas operation hub in Asia has achieved obvious improvement in its market competiveness and influence; the Company’s oil and gas operation hub in Europe has completed the business integration with INEOS Group Holdings plc.; and the trading volume of the Company’s oil and gas operation hub in the Americas increased continuously. In the first half of 2012, trading volume of the Company reached 81.93 million tons, bringing the total trading value to USD65.5 billion, representing an increase of 18.7% and 28.4%, respectively, from the same period of last year.

Outlook
The macroeconomic environment will remain complicated and severe in the second half of 2012. Under this backdrop, PetroChina will firmly uphold the overall principle of “steady growth”, push forward and execute work plans more efficiently and with continuous and stable improvements. Specifically, the Company will put more efforts into assessing and forecasting external situations and enhancing its sensitivity to opportunities, hardships, responsibilities and risks, and will respond to all challenges in the most appropriate manner. Furthermore, the Company will enhance its scientific management and improve quality and effectiveness so as to achieve all production and operational indicators.