PetroChina, the nation's largest oil and gas producer, posted a 3.7 per cent year-on-year increase in oil and gas output in the first quarter, although this revenue-positive effect has been partly offset by a 2.36 per cent fall in its average crude oil selling price. The company yesterday reported production of 277.6 million barrels of oil equivalent for the three-month period, up from 267.7 million barrels in the same quarter last year. The growth rate is lower than the 4.9 per cent recorded during all of last year. Of the figure, crude output edged up 0.7 per cent year on year to 209.2 million barrels, slower than the 0.9 per cent registered for last year. Marketable natural gas output increased 14 per cent to 410.6 billion cubic feet in the first quarter, also slower than the 22.5 per cent rise seen last year. First-quarter production was hampered by severe weather conditions, which led to the shutting of some oil and gas wells in Liaohe, Dagang and Jidong. The company's average crude selling price slipped 2.36 per cent year on year in the quarter to US$53.84 a barrel from US$55.14. Analysts noted the company had outperformed the international crude oil benchmark, Minas, that its selling price is normally tied to on a one-month delayed basis. The company did not provide an explanation and a spokesman was unavailable for comment. Minas averaged US$58.08 a barrel from the start of February to yesterday, 8.7 per cent below the US$63.67 a barrel between February 1 and April 30 last year, according to Bloomberg data. BOC International analyst Lawrence Lau said PetroChina's average oil selling prices were typically several US dollars below Minas, and that the price variances were not stable from quarter to quarter. The oil giant also posted a 35.2 per cent jump to 649,000 tonnes in first-quarter output of ethylene, a basic chemical used to make downstream chemicals for a wide variety of manufacturing industries. Mr Lau attributed the rise to new production coming on stream. Meanwhile, China Petroleum & Chemical Corp (Sinopec) chief financial officer Dai Houliang said that the company received approval from the government in August last year to change its crude oil benchmark from Cinta to Duri. Under the revised pricing system, the company posted a 17.03 per cent year-on-year decline in realised oil price to 2,582.7 yuan a tonne - about US$47.80 a barrel - in the first quarter. The decline is comparable with the 16.5 per cent fall in Duri. Duri, which is more viscous and more expensive to refine, averaged US$47.64 in the first quarter. This was US$7.20 a barrel lower than that of Cinta. A Sinopec spokesman said the change was due to higher output of heavier oil from the company's oilfields in western China. Analysts said the lower crude price helped lift the company's refining profit margin and shift some profit from upstream production to its refining division. Higher throughput of low-quality crude has seen its refining cost rise 18.85 per cent year on year in the first quarter to 145 yuan per tonne.