28 Apr 2010 09:37

Oil prices boost PetroChina's Q1 net profit by 72.7 pct

Shanghai. April 28. INTERFAX-CHINA - The rise in crude oil prices helped boost net profits of PetroChina Co. Ltd. by 72.7 percent year-on-year in the first quarter this year to RMB 32.49 billion ($4.76 billion), the company announced on April 28.

According to the announcement, PetroChina, the listed arm of China National Petroleum Corp. (CNPC), produced 210 million barrels of crude oil in the first quarter, up 2.1 percent year-on-year, while its natural gas output increased by 16.5 percent year-on-year to 609.9 billion cubic feet.

Over the same period, it processed 215 million barrels of crude oil, up 16.2 percent year-on-year, and 18.82 million tons of gasoline, diesel and kerosene, up 15.0 percent year-on-year. Its oil product sales volume climbed by 27.3 percent year-on-year to 27.05 million tons.

Gordon Kwan, an oil analyst with Mirae Asset Securities, wrote in a research note on April 28 that the profit boost is in line with industry forecasts, as realized oil prices shot up 89 percent year-on-year to $70 per barrel.

In the first quarter, PetroChina led a consortium of oil companies in securing service contracts to develop the Halfaya Oilfield in Iraq. The company also recently bought a 60% stake in two oil sands projects in Canada and partnered with Shell Oil Co. to acquire Australian coalbed methane producer Arrow Energy.

Kwan said that the company has positioned itself well for long-term growth, given its recent investments in the Canadian oil sands projects as well as in heavy oil tar projects in Venezuela. He said that these projects have a much higher cost than the company's existing domestic portfolio and will require record-setting levels of capital for upstream exploration and production. But he believes that concerns over higher capital expenditures will be relieved by higher future oil prices.

PetroChina hopes to boost its crude oil output by 1.2 percent this year to 853 million barrels and increase its natural gas output by 6.7 percent to 2.25 trillion cubic feet.