PetroChina 2012 profit drops 13.3 per cent on higher gas import costs, price controls

BEIJING, China – State-owned energy company PetroChina Ltd. said Thursday its 2012 profit tumbled 13.3 per cent due to price controls and higher costs for imported gas.

The Beijing-based company, the world’s biggest oil producer by volume, said it earned 115.3 billion yuan ($18.3 billion), or 0.63 yuan (10 U.S. cents) per share, compared with 132.9 billion yuan the previous year. Revenue rose 9.6 per cent to 2.2 trillion yuan ($384 billion).

PetroChina blamed slower Chinese economic growth, stronger gas demand that required bigger imports at high global prices and government controls that limit the company’s ability to pass on its costs to consumers.

Growth in the world’s second-largest economy slowed to 7.8 per cent last year, its lowest rate since the 1990s following a decade of double-digit annual expansion.

Despite that deceleration, China’s gas imports rose 31.1 per cent compared with 2011, forcing energy companies to pay higher global prices and resell supplies at controlled domestic prices, PetroChina said.

The company passed Exxon Mobil as the world’s biggest oil producer in 2011 as it outspent Western rivals to acquire reserves in places such as Canada, Iraq and Qatar.

Total crude output rose 3.4 per cent to 916.5 million barrels while gas output increased 6.8 per cent to 2.6 trillion cubic feet, the company said.

In December, a PetroChina subsidiary struck a $2.2 billion deal with Canada’s Encana Corp. to explore and develop shale natural gas in Alberta. They agreed to spend $4.1 billion together on drilling and other work over the next four years.

Also in December, PetroChina paid $1.6 billion for BHP Billiton’s stakes in two natural gas projects off Australia’s west coast.

This month, PetroChina’s parent, China National Petroleum Corp., agreed to pay Italy’s ENI S.p.A $4.2 billion for a 20 per cent stake in a gas field in Mozambique. The two companies also agreed to jointly explore shale gas development at a field in China’s southwest.


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