Gas imports have hampered profitability at China's largest oil and gas producer.
PetroChina Co Ltd, the fifth-largest company in the world by revenue, posted a 33% fall in third quarter profit during the July-September period. Net profit dropped to 24.9 billion yuan ($3.99 billion) from 37.4 billion yuan ($6 billion) a year earlier, according to company accounts. The poor performance lags behind industry analysts Reuters' estimate of 29.2 billion yuan ($4.72) for the same period.
China's increasing appetite for natural gas is pushing its state-owned oil companies further and further afield for cheaper imports. Government-controlled tariffs, which require the nation's oil and gas companies to sell at below-market prices, put serious pressure on the majors' profitability. “Loss-making on gas”, offers Sonia Song, an analyst at Nomura Holdings Inc., “is not likely to slow down for PetroChina, especially in the near term.”
The energy giant is required to double gas imports over the next three years, irrespective of profitability, causing it to seek more and more ventures overseas.