PetroChina rewards investors with full profit payout on crude oil rise

By Aibing Guo on 8/24/2017

HONG KONG (Bloomberg) -- PetroChina plans to pay out its entire half-year net income to shareholders as the country’s biggest oil and gas producer benefited from higher global crude prices.

The Beijing-based company is rewarding shareholders profits of almost 12.7 billion yuan ($1.9 billion), up from 531 million yuan a year ago, it said in a filing to the Hong Kong stock exchange Thursday. Interim and special dividends totaled more than 0.069 yuan per share, nearly triple the forecast for almost 0.025 yuan for the period. Profit compares with an expected 10.6 billion yuan profit based on the average of three estimates compiled by Bloomberg.

Earnings by explorers including Western majors Exxon Mobil and Chevron improved as global oil prices in the first half of the year averaged about 30% higher than a year ago, near $53/bbl. While that increase has stabilized profits at China’s state-run producers it hasn’t proved high enough to reverse declines in the country’s crude fields while their focused has shifted toward natural gas to meet the rising domestic demand.

China’s oil output fell about 5% in the first half of this year putting it on course to produce the least amount of crude since 2009 and increasing its reliance on imported supplies. Natural gas output in the same period rose 8% to 74.1 billion cubic meters amid a push by President Xi Jinping’s government to burn cleaner fuels.

China National Petroleum, PetroChina’s parent, said last month that oil and gas output from its Changqing field, the nation’s biggest, reached 26.47 million tons in the first half, about 53% of the annual target. CNPC’s Daqing unit said domestic crude output during the period rose 6.1% from a year ago, while gas production rose almost 9%.

Lifting costs, or the production cost for each boe, fell 4.2% to $11.32.

PetroChina’s oil and gas output fell 3% to 725.7 MMboe, the company said in its statement. Global crude production declined 7.4% to 435.8 MMbbl, while gas output climbed 4.4% to almost 1,739 billion cubic feet.

Shares fell 0.8% to HK$4.82 in Hong Kong on Thursday before the statement was published. That compares with a 0.4% gain in the city’s benchmark Hang Seng Index.

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