PetroChina Q2 Profit Jumps
Net profit rises to 33.9 billion yuan vs 29.5 billion; PetroChina (PCCYF) says aims to make Athabasca payment soon.
PetroChina, the country's top oil and gas producer which also owns refineries, posted a 15 percent rise in second-quarter profit, partly due to higher upstream earnings and improved refining margins.
Second-quarter net profit rose to 33.9 billion yuan ($5.5 billion) in April-June from 29.5 billion yuan a year earlier, according to Reuters calculations based on PetroChina's first-half results released on Thursday.
That compares with an average forecast of 33.2 billion yuan by six analysts polled by Thomson Reuters.
PetroChina said it expected oversupply to persist in the domestic oil product market in the second half of the year and forecast oil prices would be volatile.
"The mild recovery of the global economy will remain highly uncertain in the second half of 2014 and the global oil price is still likely to fluctuate at high levels," chairman Zhou Jiping said in an earnings statement.
"It is expected that the domestic economy will continue to develop at a reasonable pace, while downward pressure on the economy still exists."
The state-run oil giant said first-half capital spending fell 15.8 percent on the year to 91.1 billion yuan.
It said in March it would cut capital spending for the second consecutive year in 2014 as it sought to boost shareholder returns in the midst of a massive corruption probe.
PetroChina and its parent firm, China National Petroleum Corp (CNPC), are at the centre of one of the biggest corruption investigations into the Chinese state sector in years, launched by the government more than half a year ago.
The Beijing-based company recorded a first-half operating profit of 4.36 billion yuan for its refining operations, up from a loss of 7.77 billion yuan in the same period in 2013.
Its overseas oil and gas output reached 67.1 million barrels, little changed from a year earlier.
Speaking at an earnings briefing, PetroChina vice chairman and president Wang Dongjin said its production in Iraq, a major source of its overseas output, had been disrupted by activities of Islamic State militants.
When asked when PetroChina will make payment of more than $1 billion for a 40 percent stake in the Dover oil sands project from Canadian firm Athabasca Oil Corp, Wang said: "It (the payment) will be made soon."
PetroChina was supposed to have completed the acquisition in June, but delayed payment amid the government-led corruption investigation into the Chinese company.
The investigation, part of a nationwide anti-corruption campaign led by Chinese President Xi Jinping, is still ongoing and there are no signs it will end soon.
The company also said on Thursday it had earmarked 7 billion yuan for shale gas development this year and plans to drill 154 shale gas wells in 2014 and 2015.
PetroChina aims to have production capacity of 1.5 billion cubic metres by the end of 2015.
By Charlie Zhu
