PetroChina’s first-half profit drops 63% on oil market rout

AIBING GUO

HONG KONG (Bloomberg) -- PetroChina Co., the nation’s biggest oil and gas producer, posted a 63% decline in first-half profit as oil prices slumped, lagging analyst estimates.

Net income dropped to 25.4 billion yuan ($4 billion), or 0.14 yuan a share, in the six months ended June 30, from 68.1 billion yuan, or 0.37 yuan, a year earlier, the Beijing-based company said Thursday in a statement to the Hong Kong stock exchange.

The average of three analysts estimates compiled by Bloomberg was a profit of 30.3 billion yuan.

PetroChina is suffering amid the collapse in oil prices as it depends on exploration and production for most of its revenue. Crude has tumbled as producers sustain output to protect market share, worsening a global oversupply. Brent, the benchmark for about half the world’s crude, averaged about $59/bbl in the first half of the year, down 45% from the same period in 2014.

The explorer produced 2.6% more oil in the first half from the year earlier period. Sales dropped 24% to 878 billion yuan, according to the statement. Capital expenditure dropped 33% to 61.7 billion yuan. PetroChina produced 736 MMboe in the first half, up 2.9% from a year earlier. The company’s average realized crude price fell 45% to 2,478 yuan per ton, while average natural gas prices rose 0.4%.