PetroChina targets 3.2 pc output growth per year
Company to increase natural gas sales despite losses on imports of gas and falling profits caused by Beijing's anti-inflation energy price controls
PetroChina, the nation's largest oil and gas producer, aims to raise total output by an average of 3.2 per cent in the three years to 2015, although profit has been falling in the past two years because of energy price controls.
The firm posted a net profit of 115.3 billion yuan (HK$142.5 billion) for last year, down 13.3 per cent from 2011 and around 7.5 per cent lower than analysts' average estimates.
Vice-president Sun Longde said the company aimed to raise total oil and gas output to 200 million tonnes of oil equivalent (toe) in 2015 from 181.8 million toe last year.
Of the target, between 87.6 million toe and 95.6 million toe, or 44 per cent to 48 per cent, would come from natural gas, up from 31.8 per cent last year.
"PetroChina sees natural gas as the fastest-growing and the most strategic business segment," Sun said. He said the company aimed to sell between 127.5 million toe and 135.4 million toe of gas in 2015, implying the volume of gas imports would continue to rise over the next three years.
However, the firm lost 41.9 billion yuan last year on gas imports via a pipeline from Turkmenistan and in liquefied form via tankers from other nations, because the domestic gas price was kept much lower than international levels, as part of Beijing's effort to tame inflation and protect the poor. PetroChina lost 21 billion yuan on gas imports in 2011.
Sun said a trial reform in Guangdong province and Guangxi Zhuang autonomous region last year, which linked gas prices to those of internationally priced alternative fuels, had helped reduce losses.
"Reform has also begun in Sichuan province early this year. We hope these reforms will spread to other parts of the nation soon," he said.
A research note by British bank Barclays said PetroChina's gas cost burden might rise in the near term, given that the mainland's imports of liquefied natural gas had risen 37 per cent since the start of the year.
PetroChina also made an operating loss of 33.7 billion yuan on oil refining, down from a loss of 60 billion yuan in 2011.
The losses were again because Beijing kept domestic motor fuel prices lower than international levels to fight inflation, while crude oil prices stayed high.
PetroChina's vice-president in charge of marketing, Liu Hongbin, said he believed Beijing would make further reforms this year to the fuel pricing system so that they would be more closely linked to international prices. "The government is committed to the reform," he said.
For this year, PetroChina aims to raise its oil output by 1.6 per cent and gas output by 7 per cent. It has budgeted 355 billion yuan for capacity expansion and upgrades, only slightly up from 352.5 billion yuan last year.