PetroChina produces 3.7pc more oil and gas
Output growth outstrips global peers' declines
PetroChina said oil and gas production rose 3.7 per cent in the first six months, the lowest level of first-half growth in three years, on a decline in oil output at its ageing major oilfield.
The company yesterday said it pumped 552.7 million barrels of oil and gas equivalent (boe) in the first half, up from 533.2 million boe in the same period last year, or 49.5 per cent of its targeted 1.11 billion boe for 2007.
Growth was slower than the 10.85 per cent recorded for the same period last year when production was bolstered by the acquisition of its parent's overseas assets and 5.32 per cent in the same period of 2005.
Nevertheless, PetroChina outperformed its global peers, most of which recorded declines. In the first quarter, its year-on-year output growth of 3.7 per cent outstripped a decrease of 3 per cent at ExxonMobil, a fall of 6.6 per cent at Royal Dutch/Shell, a drop of 3 per cent at BP and a 0.36 per cent fall at Total.
Global oil firms are struggling to maintain output levels as major oil finds have become more difficult to come by, despite rising investment in exploration amid high oil prices.
Mature oil wells typically experience a natural output decline rate of 8 to 10 per cent a year, including PetroChina's Daqing oilfield in Heilongjiang. However, the company managed slight growth at new fields in Xinjiang and Inner Mongolia.
PetroChina produced 419.7 million barrels of crude oil in the first half, up just 0.1 per cent year-on-year, while gas production surged 16.5 per cent to 798 billion cubic feet.
Its crude oil selling price averaged US$57.66 a barrel, down 1.86 per cent on a year earlier and was a US$2.17 discount to the US59.83 average of the Minas oil benchmark its price was linked to with a one-month time lag, according to Bloomberg data.
The Brent international crude oil benchmark price had risen 25.6 per cent to US$76.37 a barrel by last Friday from the start of the year. However, PetroChina's selling price is more closely related to Minas benchmark, which fell 4.8 per cent during the comparable period.
Citigroup analyst Graham Cunningham and CLSA China oil and gas analyst Gordon Kwan wrote in separate research notes that both the oil price and output achieved by PetroChina were in line with expectations.
The company's average gas selling price rose 4.53 per cent year-on-year to US$2.54 per thousand cubic feet in the first half. Output of ethylene, a key base petrochemical, surged 30.1 per cent in the first half to 1.30 million tonnes.
Shares of PetroChina, the world's second biggest oil firm by market value, fell 1.12 per cent to HK$12.26 yesterday as investors cashed in after a recent rally. The stock was still up 11.25 per cent for the year despite yesterday's drop.
