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PetroChina Q3: Lower profit on weak oil prices

PetroChina Q3

PetroChina Q3 profits dropped as low crude prices hit their upstream business while increased activity at teapot refineries have cut refinery production at the state-run energy company. PetroChina photo.

PetroChina Q3 profit down 76.9 per cent

By Meng Meng and Dominique Patton

BEIJING, Oct 28 (Reuters) – PetroChina Q3 reports showed sharply lower profits for the third quarter as weaker crude prices eroded margins at China’s largest oil and gas producer.

Faced with the worst downturn in the oil sector in a generation, the company said on Friday profit attributable to its owners plunged 76.9 per cent to 1.2 billion yuan ($177.01 million) for the July-September period.

China’s state-run energy companies have come under a lot of pressure as low crude prices have hit their upstream business, while increasing output from independent oil refiners known as “teapots” have forced them to cut refinery production.

Oil prices have fallen sharply since mid-2014 amid a persistent supply glut as OPEC producers kept churning out more in a bid to defend market share.

That squeezed out high-cost producers in many regions, including the United States, China and Brazil, helping crude futures recover around 35 per cent this year.

PetroChina’s crude output fell to 696.6 million barrels in the first three quarters from 722.9 million barrels a year earlier.

Weak oil prices also hurt revenue at CNOOC Ltd, China’s offshore oil and gas specialist.

State-run Sinopec Corp, however, posted a higher net profit for the first three quarters on a stronger performance in refining.

PetroChina’s shares closed down 0.55 per cent on Hong Kong’s Hang Seng index, which ended down 0.8 per cent.

(Reporting by Meng Meng and Dominique Patton; editing by Mark Potter and Jason Neely)

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