China's biggest oil company posts 52% drop in profit

[HONG KONG] China National Petroleum Corp, the country's biggest oil and gas producer and the parent of PetroChina Co, said profit fell 52 per cent as lower oil prices punished global explorers.

Profit last year fell to 82.5 billion yuan (S$17.1 billion), the Beijing-based company said in a statement on its website on Wednesday. The unlisted, state-owned company didn't specify whether the profit is pretax, gross or net. Revenue fell 26 per cent to 2 trillion yuan, while oil and gas output rose 1.8 per cent to 259.5 million metric tons, it said.

"We properly dealt with all the risks and challenges and steered the company from the model of chasing speedy expansion to a model focusing more on quality growth," Chairman Wang Yilin said in the statement.

CNPC owns oil and gas assets in politically unstable areas, including Sudan, and controls 86 per cent of the listed company.

PetroChina's net profit tumbled 67 per cent to 35.5 billion yuan in 2015, the lowest since 1999, the company said last month. Brent crude averaged US$54 a barrel last year, from US$99 the year before.

CNPC last year added 730 million tons of crude and 570 billion cubic metres of natural gas reserves in China. It didn't provide a figure for total reserves. Its pipeline network reached 80,000km. The company employs 1.52 million people.

Mr Wang said last month the company won't cut frontline oil and gas workers as it seeks to reduce costs to cope with low energy prices. CNPC was also said to be among the few state- owned companies selected for reform to become a strategic holding company.

Domestic crude production reached 111.4 million tons (about 2.24 million barrels a day), accounting for 52 per cent of the country's total, according to the company. Domestic natural gas output reached 95.5 billion cubic metres, about 73 per cent of the nation's total.

CNPC sold 116.3 million tons of oil products last year, 40 per cent of the country's market share. Domestic natural gas sales rose 2.6 per cent to 122.6 billion cubic metres.

BLOOMBERG