PetroChina Co Ltd, Asia's top oil and gas producer, reported a sharp fall in quarterly earnings due to a squeeze on refining margins, but high crude prices fuelled a surge in profits at two other energy firms in the region. Global crude oil prices jumped by nearly half in January-June to top $140 a barrel on tight supplies and a weak dollar, boosting the profitability of oil majors from Exxon Mobil Corp to Royal Dutch Shell to record levels.
But state-run PetroChina and Sinopec Corp have found themselves squeezed between skyrocketing crude prices and state-capped fuel prices, a massive burden for suppliers in the largest fuel market after the United States. Chinese offshore producer CNOOC Ltd, which has no significant refining exposure, fared much better, beating forecasts with an 89 percent increase in first-half profits, while underlying earnings at Woodside Petroleum Ltd, Australia's No 2 oil and gas producer, rose 86 percent over the same period.
Analysts expect PetroChina to face a tough time again in the second half, even after Beijing raised gasoline and diesel prices by 18 percent late in June, because the government may scrap a tax rebate on imported crude. PetroChina also paid out a whopping 47.8 billion yuan ($7 billion) in special levies on domestic crude oil sales - known as windfall taxes, which increase with rises in crude prices.
PetroChina, the largest of China's energy triumvirate said its net profit fell 38 percent to 24.74 billion yuan in April-June versus 39.69 billion yuan a year earlier. The result lagged a consensus forecast for 26.05 billion yuan from five analysts polled by Reuters.
PetroChina has said it won a government subsidy to compensate for refining losses in the second quarter of this year, but is not sure whether it will be extended to the current quarter. Seeking new markets, PetroChina unveiled a HK$7.59 billion ($973 million) acquisition of a controlling stake in affiliate on CNPC (Hong Kong) form their mutual parent firm, giving it entry into city gas distrubtion and other end-user markets.
For CNOOC, China's No 3 producer, record crude prices and an 8.3 percent increase in net production of oil and gas pushed first half net profit to 27.54 billion yuan from 14.55 billion yuan a year earlier, topping a consensus forecast for 22.9 billion yuan from eight analysts polled by Reuters Estimates.
Woodside's underlying earnings, which exclude one-time items, nearly doubled to A$1 billion ($862 million). Woodside shares ended 3.4 percent higher on Wednesday, outperforming a flat S&P/ASX 200 Index PetroChina results came after the Hong Kong market close.
Shares in PetroChina fell 27 percent in January-June, versus Sinopec's 38 percent fall and CNOOC's 1 percent gain. Hong Kong's benchmark Hang Seng Index fell 21 percent. PetroChina trades at 12.4 times forecast earnings, against Sinopec's 15.9 times, Exxon Mobil's 8.5 and BP's 6.