Page 4 - AsianOil Week 14 2022

AsianOil COMMENTARY AsianOil

Oil and gas price rises boost

profits for China’s state-

owned energy giants

PetroChina, Sinopec and CNOOC Ltd all reported significantly higher

profits for 2021 thanks to higher oil and gas prices

PERFORMANCE CHINA’S three state-owned energy giants project of gas-fired power generation and new
– Sinopec, China National Petroleum Corp. energy.
WHAT: (CNPC) and China National Offshore Oil Corp. This is part of an overall capital expenditure
PetroChina, Sinopec (CNOOC) – are all seeing their profits rise budget of CNY242bn ($38.0bn) for 2022, down
and CNOOC Ltd have all thanks to higher oil and gas prices. Over the past 3.6% from CNY251bn ($39.5bn) in 2021 but
reported higher profits two weeks, the companies have reported higher representing the largest capex budget out of
for 2021. profits and stronger production in 2021, in line any oil company globally. The cuts compared
with global trends that all oil and gas companies with last year are mainly expected to affect its
WHY: – state-owned or not – are benefiting from. refining and chemicals operations. At the same
Among other factors, the Based on what has been seen so far in 2022, time, though, PetroChina will beef up its spend-
state-owned companies their profits will continue to grow further still, ing on exploration and production by 1.6% to
benefited from higher oil though additional oil and gas price volatility CNY181bn ($28.5bn). It intends to raise its oil
and gas prices. also cannot be ruled out, especially with China production by 1.2% y/y to 898.6mn barrels this
battling new outbreaks of the coronavirus year, and gas output 4.6% y/y to 4.63 tcf (130.1
WHAT NEXT: (COVID-19). bcm), and will pursue production increases
The companies will be across the Songliao, Ordos, Junggar and Tarim
spending on exploration PetroChina’s profits basins, among others.
and production, as well PetroChina, the listed arm of CNPC and China’s The company is also pursuing longer-term
as the energy transition, largest oil and gas producer, said on March 31 energy transition targets, including having
this year. that its net profit had more than quadrupled in renewable energies make up one-third of its
2021 as a result of strong oil and gas prices. energy portfolio by 2035 and 50% by 2050. Pet-
The company’s net profit for 2021 reached roChina is targeting a peak in its greenhouse PetroChina
CNY92bn ($14.5bn), up from CNY19bn gas (GHG) emissions in 2025, ahead of Chi-
($3.0bn) the previous year and representing its na’s national target of having emissions peak in is aiming to
highest profit since 2014. Its domestic crude 2030. The company’s GHG emissions in 2021 increase the
output reached 753.4mn barrels, representing came in at 159.54mn tonnes of carbon dioxide
a 1.3% year-on-year increase. PetroChina’s (CO2) equivalent, down 4.7% y/y. share of gas in its
marketable natural gas output rose to 4.22
trillion cubic feet (120bn cubic metres), up Sinopec’s record production mix to
5.7% y/y. Sinopec, for its part, has set the largest capex
The company noted that this was the highest budget in its history for 2022 after posting its 55% by 2025.
volume of gas it had ever produced, and that highest profit in a decade. (See AsianOil Week 13)
the share of gas in its output was continuing to The company is planning to invest CNY198bn
increase. This is in line with China’s broader ($31.1bn) this year, up 18% on 2021 and
pivot towards gas, on which the country is rely- exceeding the previous record of CNY181.7bn
ing heavily to reduce coal use and start the long ($28.6bn) spent in 2013. Around CNY81.5bn
process of decarbonisation. Indeed, PetroChina ($12.8bn) of the company’s capex budget for this
is aiming to increase the share of gas in its pro- year has been allocated to the upstream sector.
duction mix to 55% by 2025, up from 51.6% cur- “Looking ahead in 2022, the market demand
rently. It intends to spend CNY8bn ($1.3bn) this for refined oil will continued to recover, and
year on the construction of LNG receiving sta- demand for natural gas and petrochemical
tions, gas branch lines, market development pro- products will keep growing,” Sinopec said in the
jects for urban gas terminals and the integration statement.

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