PetroChina third quarter profit surges on recovering oil prices, pipeline spin-off

BEIJING/SINGPOARE(Reuters) - PetroChina Co 601857.SS0857.HK, Asia's largest oil and gas producer, reported a surge of around 350% in third-quarter profit versus a year earlier, owing to recovering oil prices and revenue from pipelines spin-offs.

FILE PHOTO: PetroChina's logo is seen at its petrol station in Nantong, Jiangsu province, China March 28, 2018. REUTERS/Stringer

Net income reached 40.05 billion yuan ($6 billion) versus 8.86 billion the same period a year ago, and compared with a loss of 13.75 billion the previous quarter when decades-low oil prices hammered its revenue.

PetroChina in September completed the spin-off of its pipeline and storage facilities and a liquefied natural gas (LNG) terminal in Shenzhen to newly established PipeChina for 268.7 billion yuan.

Profit for the first nine months fell 73% year-on-year to 10.07 billion yuan.

Crude oil production between January and September rose 2.7% on the year to 701 million barrels, in response to Beijing’s urge to improve national energy security.

Total gas output increased 6.5% to 3,080 billion cubic feet. Its domestic operation, making up 94% of the total, rose 8.2% on year while that of overseas projects fell 16%.

The company, China’s second-largest refiner, processed 877.3 million barrels of crude during the period, down 3.2% from a year earlier.

Faced with growing competition amid massive refining surplus, PetroChina’s sales of gasoline, diesel and kerosene fell 13% on the year.

Thanks to lower oil-linked import costs and also a reduction in total purchases, PetroChina managed to narrow losses incurred at its natural gas import business to 17.5 billion yuan, 4.2 billion yuan smaller than a year ago.

While making new discoveries in key basins like Tarim and Junggar in the northwest and Sichuan in the southwest, PetroChina managed to lower operating costs for oil and gas to an average of $10.07 per barrel, down 11% on year.

Reporting by Muyu Xu in Beijing and Chen Aizhu in Singapore; Editing by David Holmes