PetroChina posted weaker-than-expected first-half profit and flagged a slowdown in second-half output growth, saying expansion overseas was now a key part of its strategy. The net profit of the nation's largest oil and gas producer grew 29.4 per cent year on year to 65.33 billion yuan (HK$74.72 billion) in the first half of the year, 4.9 per cent less than a 68.7 billion yuan median estimate of nine analysts surveyed by Bloomberg. Oil and gas production operating profit jumped 94.9 per cent to 73.37 billion yuan, driven mainly by a 62 per cent rise in the average price of oil to US$74.30 a barrel. Oil output rose 1.7 per cent to 424.7 million barrels, while gas output gained 12.9 per cent to 1.15 trillion cubic feet in the six-month period. The average price of gas increased 6.2 per cent to 0.84 yuan per cubic metre. The oil and gas results were largely offset by a 78.3 per cent decline in refining operating profit to 2.99 billion yuan, and a 27.4 per cent fall in chemicals profit to 2.47 billion yuan. Fuel distribution profit edged up 3.3 per cent to 7.53 billion yuan and natural gas distribution profit gained 13.7 per cent to 11.22 billion yuan. Full-year output growth is targeted at 1.2 per cent for oil and 6.7 per cent for gas, as indicated in March. When asked about the production growth slowdown, PetroChina vice-chairman Zhou Jiping did not provide an explanation, except that it was the outcome of an analysis of the economy and oil price trends. But he said PetroChina aims to raise gas output growth to more than 10 per cent in the medium term. Zhou said expansion in Central Asia, Africa, North America, the Middle East and the Asia-Pacific region was a key part PetroChina's strategy. Its first-half overseas oil and gas output rose 8.3 per cent year on year to 55.2 million barrels of oil equivalent. He did not respond to questions about whether the company was in talks to buy assets from troubled BP, which plans to sell up to US$30 billion worth over 18 months to pay for damage caused by its spill in the Gulf of Mexico. Mirae Asset Securities head of energy research Gordon Kwan wrote in a report in June that BP's half-owned BP-TNK, which operates mostly in Russia, is the most enticing to PetroChina. BP has reason to want to divest the stake as a hostile political environment in Russia meant TNK-BP has been unable to start production at its giant Kovykta gas field in East Siberia that is targeting the China market. Kwan estimated a buyout of BP's stake could cost US$36 billion.