PetroChina H1 Profit Plunges 63 Percent

PetroChina, China's biggest oil and gas producer, reported a 63 percent drop in first-half profits, with earnings upstream and in the marketing segment hit by lower prices, while earnings from natural gas jumped.

Net profit declined to 25.4 billion yuan ($3.97 billion) in the first six months of 2015, from 68.1 billion yuan a year earlier, the state-controlled company said on Thursday in a filing with the Hong Kong bourse.

Operating profits at the exploration and production segment shrank 68 percent to 32.9 billion yuan compared to the same period last year on low international crude prices, as PetroChina (PCCYF)'s crude output grew by 2.6 percent on the year to 477.5 million barrels.

But PetroChina forecast that its crude output would fall almost 2 percent in full-year 2015 to 927.1 million barrels, a slightly larger decline than it projected earlier this year.

The refining and chemicals business posted an operating profit of 4.66 billion yuan, compared to a loss in the same period last year of 3.44 billion yuan, as refinery runs fell almost 1 percent on the year.

The marketing division's operating profits fell 66 percent to 2.78 billion yuan on low prices for refined fuels.

The natural gas and pipeline segment saw big gains, with operating profit rising 264 percent to 14.9 billion yuan, despite big losses on imported natural gas from Central Asia and Myanmar and imported liquefied natural gas (LNGLF).

The company now accounts for 70 percent of the domestic natural gas market, Chairman Wang Yilin said at a news conference on the mid-year earnings.

Senior executives also said natural gas would be one of the company's main profit contributors, and estimated shale gas production capacity at 2.6 billion cubic metres in 2015, forecasting that to rise to 10 billion by 2020.

Reporting by Adam Rose