PetroChina reveals 58 per cent decline in profit, to shift focus to natural gas with oil demand set to fall amid country’s decarbonisation drive

Name: China vows carbon neutrality by 2060 during one-day UN biodiversity summit
Uploaded: 2021-03-25T12:30:26.000Z
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Description: China vows carbon neutrality by 2060 during one-day UN biodiversity summit

Company says net profit for last year amounted to 19 billion yuan (US$2.9 billion), down 58.4 per cent from 2019

‘We see the demand for cleaner burning natural gas continuing to rise,’ says president

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A PetroChina receiving terminal in China’s Jiangsu province. Despite its bullishness about the gas market, the company aims to only raise gas output by 3.2 per cent this year. Photo: Reuters

Eric Ng

Published: 8:30pm, 25 Mar 2021Updated: 8:30pm, 25 Mar 2021

PetroChina, the country’s largest oil and gas producer, expects crude oil demand to peak and then fall within the next 10 years, as China pursues a goal for carbon dioxide to peak by 2030.

The company has cut its oil output growth target to 0.4 per cent for this year, after growth of 1.4 per cent last year, it said on Thursday as it announced its annual results. It revealed that its net profit for 2020 amounted to 19 billion yuan (US$2.9 billion), down 58.4 per cent from 2019. The result was also slightly below a consensus estimate of 19.5 billion yuan made by 21 analysts polled by Bloomberg.

“Crude oil demand is already at a plateauing stage and will gradually fall. But we see the demand for cleaner burning natural gas continuing to rise,” said Duan Liangwei, the company’s president. He said he expected gas demand to grow 8.7 per cent this year, while the average growth for the five years to 2025 might reach 5.7 per cent.

The stage for China’s oil demand to enter long-term decline has been set by President Xi Jinping, who in September last year set the goal for carbon dioxide emissions to peak before 2030 and for China to achieve net zero emissions by 2060.

And PetroChina will cope with the resulting decline in demand for coal and oil, the most carbon-intensive fossil fuels, by raising its gas production, according to Dai Houliang, the company’s chairman. “We aim to raise natural gas’s contribution to our total output to 55 per cent by 2025, and we will also invest in gas-fired power plants, wind, solar, geothermal and hydrogen projects,” he added.

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China vows carbon neutrality by 2060 during one-day UN biodiversity summit

But, despite its bullishness about the gas market, PetroChina aims to only raise its gas output by 3.2 per cent this year, down from 9.9 per cent last year, something the management did not explain on Thursday.