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    601857   CNE1000007Q1


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PetroChina Company Limited : PetroChina Achieves Record High in Oil and Gas Production in 2012 Steady Improvement in All the Business Segments

03/21/2013 | 05:38am EDT

21 March, 2013, Beijing - PetroChina Company Limited ("PetroChina" or "the Company", HKSE: 0857; NYSE: PTR; SSE: 601857) today announced that in the face of the complicated and harsh economic environment both domestically and abroad in 2012, the Company strenuously endeavoured to transform the mode of its development and focused on the quality and efficiency of its growth. On the one hand, production and operations progressed steadily as planned through enhanced management; on the other hand, the Company accelerated the construction of major projects and strengthened its foundation for long-term development. The Company focused on the development of its core oil and gas business and its oil and gas reserves continued to grow at highest rate, achieving a record high in oil and gas production. Meanwhile, the Company made a breakthrough in the strategic positioning for its refining and petrochemical operations, while improving the marketing structure for its oil products. Construction of the major pipeline networks made good progress and the Company's international operations also recorded steady growth. The Company enhanced its ability to respond to changes in the market and to achieve sustainable growth.

As of 31 December, 2012, according to both International Financial Reporting Standards ("IFRS") and China Accounting Standards ("CAS"), the Company achieved a turnover of RMB2,195,296 million, representing an increase of 9.6% as compared with last year. However, due to the impact of the macro regulation and control over the prices of domestic refined products, as well as the selling of imported natural gas at lower domestic prices, under the IFRS, profit attributable to shareholders of the Company in 2012 amounted to RMB115,326 million, representing a decrease of 13.3% as compared with last year. Basic earnings per share amounted to RMB0.63, representing a decrease of RMB0.1 as compared with last year. Under the CAS, net profit attributable to shareholders of the Company in 2012 amounted to RMB115,323 million, representing a decrease of 13.3% as compared with last year. Basic earnings per share amounted to RMB0.63, representing a decrease of RMB0.1 as compared with last year.

The Board of Directors has recommended to distribute 45% of its net profit according to the IFRS as final dividend for 2012, which is RMB0.13106 (inclusive of applicable taxes). Including the interim dividend for 2012 of RMB0.1525 per share (inclusive of applicable taxes), the proposed total dividend per share for 2012 will amount to RMB0.28356 (inclusive of applicable taxes). The Company will continue to work towards delivering attractive returns to its shareholders.

Exploration and Production

In 2012, the Company continued to execute its resource strategies, strengthened its pre-exploration and venture exploration of oil and focused on the exploration of natural gas. Active work was started in the exploration of non-conventional resources such as tight oil. The Company achieved notable results in its "Peak Growth in Oil and Gas Reserves" Program. The Company made a number of important discoveries and breakthroughs in Kuche and Tadong in the Tarim Basin, the Cambrian zone of Moxi-Gaoshiti in Sichuan and Jimusaer in Jungger Basin for tight oil as well as in Dongping, Qaidam Basin for natural gas. In addition, significant progress was made in Jiyuan and Huaqing in the Erdos Basin, Keshen and Tabei in Tarim Basin, Lukeqin in Tuha Basin and Mabei Slope in Jungger Basin.

The Company continued to carry out "foundation year" activities in the development of oilfields and achieved notable results in special control projects. Major development indicators of the existing oilfields continued to improve. Meanwhile, the build-up of production capacity in new oilfields proceeded smoothly. As a result of scientific organization of production operations, crude oil output grew steadily, natural gas operations developed rapidly, and cooperation with international companies in the area of non-conventional oil and natural gas achieved remarkable progress.

Based on the independent reserve appraiser's evaluation, the Company achieved a more secured resource base with the reserve replacement ratio at 1.04 for the year. The Company's total crude oil output reached 916.5 million barrels, representing an increase of 3.4% as compared with last year, marking the fastest growth rate in the Company's history. Output of marketable natural gas reached 2,558.8 billion cubic feet, representing an increase of 6.8% as compared with last year. Output of oil and natural gas equivalent amounted to 1,343.1 million barrels, representing an increase of 4.5% as compared with last year. Output of oil and gas equivalent at Daqing Oilfield remained stable at over 40 million tons, while output at Changqing Oilfield was over 42 million tons, making it the most productive oil and gas field in China.

In 2012, the Exploration and Production segment actively responded to oil prices changes by organizing the production of oil and gas in a scientific manner and continuously consolidating the basis for sustainable development. As a result, the segment's profit from operations for 2012 amounted to RMB214,955 million, down 2.1% year-on-year due to such factors as higher depreciation and depletion costs, etc.

Refining and Chemicals

In 2012, the Company's refining and chemicals businesses firmly followed market direction and focused on efficiency. It further optimized the allocation of resources, the processing load, products structure, repairing maintenance arrangements and sales of chemical products. The Company's refineries processed 1,012.5 million barrels of crude oil, representing an increase of 2.8% compared with the previous year. The Company produced 91.016 million tons of gasoline, diesel and kerosene, representing an increase of 4.4% as compared with last year. All of the automobile gasoline and diesel produced by the Company reached National Grade III Emission Standard as scheduled, and the gasoline supplied to the Beijing market reached Beijing Grade V Emissions Standards. The percentage of high-grade gasoline produced by the Company reached 98.4%, representing an increase of 1.7 percentage points over the same period of last year.

The Company achieved breakthroughs in the strategic positioning of its refining and chemicals business, with regional distribution of refining capacity being further optimized and construction of the scalable and centralized refining and chemicals bases progressing steadily. Construction at the Sichuan Petrochemical was completed. Construction has commenced at the Guangdong Petrochemical project. Approval was received from the State for the Yunnan Petrochemical project. The oil refining and ethylene project at Fushun Petrochemical and the ethylene revamping project at Daqing Petrochemical, as well as capacity expansion of the oil refining project at Hohhot Petrochemical, were completed and production commenced on schedule.

Due to the fact that international crude oil prices remained high, the prices of domestic refined products were subject to macro regulation and control and the declining demand in the refining and chemicals market, the Refining and Chemicals segment recorded operating losses of RMB43,511 million in 2012. Of which, the refining operations recorded operating losses of RMB33,672 million, representing a decrease of RMB26,415 million as compared with last year, while the chemicals operations recorded operating losses of RMB9,839 million, representing an increase of RMB8,060 million as compared with last year.


In 2012, the marketing operations of the Company were faced with a slowdown in the growth rate in demand, frequent fluctuations in oil prices and fierce competition in the domestic refined products market. In view of these, the Company's marketing operations leveraged market trends and developed a marketing strategy on a scientific basis, achieving an efficient resource allocation for the maximum economic advantages. As a result, the Company was able to respond effectively to market changes. In 2012, the Company achieved sales volume of 115 million tons of refined products, which was slightly higher than that of last year. With its continuing emphasis on optimising the marketing network, the Company steadily pushed forward the development of high-margin and strategic markets. As a result, 748 new service stations and 13 oil depots were developed over the year, bringing the Company's total number of service stations to 19,840. The Company's share of the retail market reached 39.3%.

The Marketing segment recorded a profit from operations of RMB16,391 million for 2012, representing a decrease of 20.6% as compared with last year due to the impact of weak demand in the refined products market.

Natural Gas and Pipeline

In 2012, the Company coordinated and balanced the utilization of domestic and overseas resources. The Company also tapped into the market potentials in the Bohai Rim, Yangtze Delta and Sichuan-Chongqing markets, strengthened marketing efforts in key areas and high-margin markets, and pushed forward the simultaneous commencement of gas supply to new users of both the Second West-East Gas Pipeline (East Section) and the Shandong Pipeline Network. As a result of all of these measures, natural gas sales volume continued to maintain a double-digit growth rate.

The construction of oil and gas strategic passways as well as domestic trunk pipeline networks proceeded smoothly during the year. The Second West-East Gas Pipeline became fully operational and was ready to supply gas to Hong Kong. Coming on stream of the North Section of Zhongwei-Guiyang Gas Pipeline effectively raised the Company's capability to supply gas to the Sichuan-Chongqing Area. Construction work has formally begun for the Third West-East Gas Pipeline, which will become another energy transmission artery in China. The Third West-East Gas Pipeline is the first project where both the Company and external funds are used for its construction and operation and has set a new model for the Company to operate major projects. It also has major significance in China's economic development and optimization of the energy resource structure.

As a result of an increase in the loss incurred on imports of natural gas and LNG, the Natural Gas and Pipeline segment recorded operating losses of RMB2,110 million for 2012, representing a decrease of RMB17,640 million from the profit from operations of RMB15,530 million for 2011. The sales of imported natural gas and LNG in 2012 recorded a loss of approximately RMB41,900 million.

International Trading

In 2012, the Company actively responded to a complicated political and economic situation in the world and effectively averted operational risks. The acquisition of non-conventional natural gas interest from Shell and Encana Corporation were successfully completed. Breakthroughs were made in the development of new projects. The Company accelerated its pace of increasing the oil and gas output of key projects in the Middle East, Central Asia and South America, with the Rumaila Project in Iraq achieving an average daily output of 1.35 million barrels for the year and the Halfaya Project in Iraq successfully meeting the initial commercial production target earlier than scheduled. The Company's overseas oil and natural gas production remained stable, with oil and natural gas equivalent output reaching 136.9 million barrels, representing a growth of 13.3% as compared with last year.

The Company strengthened the bringing in of resources and kept on expanding trading volumes by making full use of a number of effective measures. The construction of three oil and gas operating hubs in Asia, Europe and the America proceeded steadily.

In 2012, the Company's overseas operations (Note) achieved notable results and further increased their contribution to the Company. Turnover of overseas operations amounted to RMB702,660 million and profit before income tax of the overseas operations amounted to RMB32,672 million, representing 32% of the Company's total turnover and 19.6% of the Company's profit before income tax, respectively.

Outlook for 2013

In 2013, the world economy is expected to recover, albeit at a moderate rate.  Demand for energy will continue to grow. The Chinese government will continue to strengthen macro-economic controls and to implement active fiscal policies and prudent currency policies in order to maintain healthy economic growth and development. The Company will strive to center its production and operations on quality and efficiency, adhere to the strategy of resources, market and internationalization, prioritize the development of its oil and gas core businesses, emphasize strategic development and core competency capability, and ensure a steady and relatively fast development of all of its businesses. 

Note: The four operating segments of the Company are Exploration and Production, Refining and Chemicals, Marketing and Natural Gas and Pipeline. Overseas operations do not constitute a separate operating segment of the Company. The financial data for overseas operations is included in the financial data of the respective operating segments mentioned above.


Additional information on PetroChina is available at the Company's website: http://www.petrochina.com.cn
Issued by PetroChina Company Limited

For further information, please contact:
PetroChina Company Limited

Senior Assistant Secretary to the Board of Directors:
Mao Zefeng Fax: (8610) 6209 9558
Tel: (8610) 5998 6262 Email: hko@petrochina.com.hk
Communication Office:
Yuan Xinxiang Fax: (8610) 6209 9558
Tel: (8610) 5998 6037 Email: yuanxx@petrochina.com.cn
PR Agency (Overseas media):
Hill & Knowlton Asia Limited Fax: (852) 2576 3551
Shirley Lo Tel: (852) 2894 6214
Email: shirley.lo@hillandknowlton.com.hk
PR Agency (Domestic media):
EverBloom Investment Consulting Lt. Co. Fax: (8610) 6553 6211
Shen Di Tel: (8610) 5166 3828
E-mail: di.shen@everbloom.com.cn

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