PetroChina profit falls to lowest on record

[HONG KONG] PetroChina Co posted a greater-than- expected 82 per cent decline in first-quarter profit to the lowest on record as lower oil prices took a toll on earnings.

Net income at China's biggest oil and gas producer fell to 6.15 billion yuan (US$989 million), or 0.03 yuan a share, from 34.2 billion yuan, or 0.19 yuan, a year ago, Beijing-based PetroChina said Monday in a statement to the Hong Kong stock exchange.

PetroChina joined Cnooc Ltd, China's biggest offshore oil and gas explorer, to report an earnings decline as Brent, the benchmark for half of the world's crude trading, tumbled 42 per cent in the past ten months. PetroChina's profit was the lowest going back to the third quarter of 2007, which is as far as financial data for the company on the Bloomberg goes.

Sales fell 22 per cent to 410.3 billion yuan and the average realized crude price dropped 51 per cent to US$48.87 a barrel from a year ago, according to the statement. Oil and gas output rose 4.9 per cent to 381.2 million barrels of oil equivalent in the first quarter.

"The exploration and production segment performed well in the first quarter even as low crude prices dragged down margins," said Laban Yu, a Hong Kong-based analyst at Jefferies Group LLC, who has a buy recommendation on the stock. "The refining business will get better as high-priced crude imports were used up this quarter." PetroChina shares jumped by their daily trading limit of 10 per cent to 14.65 yuan in Shanghai Monday after a report that China may merge state-owned companies in the industry. China's state-asset regulator later denied giving the interview. PetroChina's parent China National Petroleum Corp. and China Petroleum & Chemical Corp., known as Sinopec, said in separate statements that they haven't heard from government or talked with each other.

BLOOMBERG.