CNPC Q3 net profits decline

By Zhao Qian

A China National Petroleum Corp (CNPC) station in Beijing. CNPC reported Thursday a quarter three net profit of 30.8 billion yuan ($4.51 billion), down 23.5 percent year-on-year. Photo: CFP

The net profits of China National Petroleum Corp (CNPC) in the third quarter reached 30.8 billion yuan ($4.51 billion), down 23.5 percent year-on-year, according to the company's quarterly report on the Shanghai Stock Exchange Thursday.

The net profits of the country's biggest oil company in the first nine months as a whole reached 81.35 billion yuan ($11.91 billion), a 14.4 percent decline from the same period last year.

"The drop in the international oil price was one of the main factors that drove down profits," Cui Kezeng, director of the research institute of Sublime China Information, a company offering oil related services, said Thursday.

"The oil price last year was over $100 per barrel, but the price has been around $70 per barrel this year," he said.

"The financial crisis also hit CNPC hard, leading to a decrease in its chemical product exports," Cui said.

In the first three quarters, CNPC produced 631 million barrels crude oil, a drop of 3.7 percent from the same period last year, the report said.

But natural gas production increased 11.3 percent year-on-year with a total of 1.52 trillion cubic feet (464.76 billion cubit meters). Cui predicted that the performance of CNPC in the fourth quarter would be better as a whole if the government increases the price of natural gas.

"The natural gas price at present is still at a relatively low level," Cui added.

CNPC was not the only oil producer whose operational performance dropped off. British Petroleum Company announced Tuesday that its net profits in the third quarter were $5.34 billion, down 34 percent from the same quarter last year.

CNPC's net profit decreased at a slower rate than some major foreign companies because of government price controls this year, Liu Bo, an analyst from Sinolink Securities, was quoted by China Business News as saying.

In May, the National Development and Reform Commission began reducing the government's influence in the oil pricing system. Government control of prices can sometimes help prevent inflation when international oil prices are high, but it often results in heavy losses for the country's refiners.

CNPC's share price on the A share market fell 1.87 percent to 13.14 yuan ($1.92) at the close Thursday.

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