PetroChina warns of big fall in 2020 profits

China's biggest oil and gas producer, state-controlled PetroChina, said it expects its profit to have fallen by up to 63pc last year because of the effects of Covid-19 on oil prices and sales.

It expects profit to drop by 55-63pc, or 25bn-29bn yuan ($3.9bn-4.5bn), in 2020, according to preliminary estimates released by the company today. PetroChina made a profit of Yn45.7bn in 2019.

After taking into account one-off items, the company expects earnings to drop by Yn73bn-77bn, which would send it to a loss for the year.

Sales volumes of gasoline and diesel fell by 10-20pc last year because of the pandemic, and a sharp fall in oil prices forced it to make provisions for oil and gas asset impairments, PetroChina said, without giving details.

Operating results swung from a loss to a profit in the second half of last year as Covid-19 came under control in China.

PetroChina made a profit of Yn40.05bn in July-September, up more than fourfold from Yn8.83bn a year earlier. The company completed the sale of most of its oil and gas pipelines and some storage facilities to the newly formed PipeChina at the end of the quarter, for which it booked a profit of Yn45.82bn for the January-September period.

Profit fell by 73pc year on year in the first nine months of 2020 to Yn10.07bn, although this was a sharp recovery from a loss of Yn30bn for the January-June period.

Crude production rose by 2.7pc to 701.2mn bl (2.56mn b/d) during January-September, driven mainly by gains at PetroChina's overseas fields. Total upstream production was up by 4.3pc to 1.21bn bl of oil equivalent (442,000 boe/d).

By Kevin Foster