PetroChina 2011 profit drops 5 pct

PetroChina Company Limited (PetroChina), China's largest oil and gas producer, reported Thursday that its net profit in 2011 declined 5 percent from a year ago.

PetroChina's net profit totaled 132.96 billion yuan (21.13 billion U.S. dollars) and earnings per share dropped 0.03 yuan to 0.73 yuan in 2011 according to the international financial reporting standards (IFRS), the company said in a statement filed with the Shanghai and Hong Kong stock exchanges.

The statement attributed the drop in net profit to China's macro control over refined oil prices, selling prices of imported natural gas being higher than selling prices, as well as large increase in taxes and fees.

China's current oil pricing mechanism was introduced in May 2009. The system gives the government the right to adjust domestic fuel, diesel and gas prices when average prices for Brent, Cinta, and Dubai crude oil move by 4 percent within 22 consecutive working days.

The country's top economic planning body said Wednesday that China will reform the pricing mechanism this year by reducing the price adjustment cycle and improving pricing transparency.

According to the IFRS, the company's business revenues totaled 2 trillion yuan, up 36.7 percent year-on-year.

The company's total gas and oil output last year reached 1.29 billion barrels of oil equivalent, up 4.7 percent, with crude oil output up 3.3 percent and natural gas output up 7.9 percent.

PetroChina is the Hong Kong- and Shanghai-listed subsidiary of the China National Petroleum Corporation. Its share price in Shanghai dropped 1.62 percent Thursday to end at 9.71 yuan per share, while the price in Hong Kong dropped 2 percent to 10.74 Hong Kong dollars (1.38 U.S. dollars).