Chinese oil firms tipped to post steep plunge in interim profits
Lower oil and gas prices, output cuts continue to weigh heavily on bottom lines
China’s three state-backed oil and gas firms are expected to report this week some of their worst interim results since their stock market listings, as lower oil and gas output and prices continued to take a toll on their bottom lines.
Had it not booked an estimated non-recurring accounting gain of 24 to 25 billion yuan from a stake disposal in its gas pipeline assets in Central Asia in the second quarter, it would have been deep in the red. It earlier posted a first-quarter net loss of 13.78 billion yuan, its first ever quarterly loss.
“Given [the Brent crude oil benchmark] averaged [30.6 per cent lower year-on-year] at US$40.3 a barrel in the first half of the year, we expect all Chinese companies under coverage to [have incurred] a loss in upstream [oil] production,” Sanford Bernstein senior analyst Neil Beveridge said in a note.