State energy giant PetroChina reports 130 per cent increase in net profit, eyes energy cooperation with US
- Company reports net profit of 52.59 billion yuan for 2018
- We can improve the US-China trade structure, says president
PetroChina, the country’s largest oil and gas producer, will seek deeper ties with energy producers in the United States, with the hope of playing a key role in helping the two countries resolve their trade war, its president said on Thursday.
Hou Qijun highlighted the countries’ complementary roles in an energy market of the future, with China’s drive against air pollution continuing to boost demand for natural gas, and the US’s emergence as a gas export powerhouse in a few years’ time.
“Through this cooperation we can improve [the countries’] trade structure, which is conducive for the diversification of our energy import sources,” he said after the company’s results announcement.
PetroChina posted a 130.7 per cent year-on-year increase in net profit for 2018 to 52.59 billion yuan (US$7.86 billion), in line with its own expectations of between 50.8 billion and 52.8 billion yuan, announced in January.
For this year, the state-backed company is forecast to report a net profit of 57.5 billion yuan, according to an average of estimates by 18 analysts polled by Bloomberg.
PetroChina parent to quintuple exploration spending to help realise Xi’s national energy security goal
A final dividend of 6.27 fen and a special dividend of 2.73 fen per share was declared, bringing the company’s full-year payout to 17.88 fen, up 37.5 per cent from 13 fen in 2017.
Hou said development in advanced drilling technology had let the US become the world’s largest crude oil and natural gas producer over the past decade. Before that, its oil import dependency matched China’s today.
“Experts expect by 2025 that the US will become the world’s largest liquefied natural gas exporter … I am glad to see progress in the US-China trade talks, which have given us more confidence to further expand our energy cooperation with the US,” he said.
PetroChina beefs up oil and gas output goals as latest trade war tariffs target US energy shipments
This month, Beijing abolished an approval process for foreign cooperation projects in oil and gas exploration and development, replacing it with a registration system to cut red tape.
Analysts said the new system will help bring in foreign capital to help China develop oil and gas resources, and help reduce its dependency on foreign energy. Barriers in China to entry in various industries by foreign companies is one of the complaints put forward by the US.
“This far less onerous system, along with the enforcement of drill-it-or-lose-it rules, should lead PetroChina to pursue production sharing contracts, joint ventures and other structures to bring in foreign capital,” Jefferies analysts Laban Yu and Aaron Xiao said in a note on Tuesday.
Chinese President Xi Jinping last year instructed the country’s three state-backed oil and gas giants to raise production, only weeks before a 25 per cent tariff on US liquefied natural gas shipments was due to come into effect on August 23.
China’s foreign oil dependency rose to about 70 per cent and for natural gas to 45.3 per cent last year, against 52 per cent for oil in 2010 and 29 per cent for gas in 2012.
PetroChina has a 25-year contract to buy 1.2 million tonnes a year of liquefied natural gas from Cheniere Energy, a leading US exporter. The first shipment arrived in China mid last year, but Hou said only 300,000 tonnes was delivered so far, after the tariff was imposed.
