Reforms lift PetroChina Q3 profit

PetroChina Co Ltd's crude oil output rose 2.2 percent to 698 million barrels in the first nine months of the year, the listed company said on Tuesday in its third-quarter report. [Photo / Xinhua]

PetroChina Co Ltd, the nation's largest oil and natural gas company, said on Tuesday that domestic fuel price reforms helped lift its third-quarter profit by 19 percent to 29.8 billion yuan ($4.9 billion).

Revenue was up 5.5 percent to 581.7 billion yuan, it announced.

The company said that the government's fuel price reforms, carried out earlier this year, allowed fuel prices to be more closely aligned with world markets.

That change improved conditions in its petroleum refining and natural gas sectors.

Losses in the refining and chemicals division shrank to 20 billion yuan for the first nine months, about half the year-earlier level.

Chairman Zhou Jiping said in a statement that the new pricing mechanism for refined products led to that decline.

In March, the country's top economic planner - the National Development and Reform Commission - introduced the new pricing system. It cut the 22-day pricing adjustment period to 10 days, and it also dropped the condition that international prices must fluctuate by 4 percent before domestic prices were adjusted.

Han Jingyuan, an analyst in the oil department of JYD Online, a bulk commodity consultancy in Beijing, said that the flexible pricing mechanism allows fuel prices to be determined by the market, not the government.

Between June 22 and Sept 30, fuel retail prices were raised four times and cut twice.

In the natural gas and pipeline segments, PetroChina realized a profit of 23.44 billion yuan in the first three quarters, compared with 885 million yuan for the same period last year. The surge reflected a government decision that allowed natural gas suppliers to raise prices on July 10.

On that date, charges for industrial users went up by an average of 15 percent, to 1.95 yuan per cubic meter. The government plans to double the share of natural gas in China's energy mix to 10 percent by 2020.

The company achieved a steady production increase during the first three quarters, with oil and natural gas equivalent output rising 4.3 percent year-on-year.

Crude oil output rose 2.2 percent to 698 million barrels, but the exploration and production division's profit fell 10 percent to 147 billion yuan because of higher costs and a 3.6-percent drop in the average selling price.

China's other energy giant, CNOOC Ltd, which acquired Canada-based Nexen Inc last year, reported an improved performance for the third quarter.

CNOOC , the nation's largest offshore oil and gas developer, achieved 56.14 billion yuan in sales in the third quarter, an increase of 15.9 percent year-on-year, the company said last week.

CNOOC said its performance got a boost from higher production volume.

During the quarter, the company's total net production rose 17.8 percent year-on-year to 103.4 million barrels of oil equivalent. Nexen contributed 16.1 million barrels of the total.

Li Fanrong, chief executive officer of the company, said that CNOOC made significant progress in exploration during the third quarter, including the Luda 5-2 North and Kenli 9-5/9-6 fields