PetroChina Profits Grow as Covid Rebound Boosts Oil Demand

(Bloomberg) -- PetroChina Co. surprised with higher first-quarter earnings as China’s economic recovery bolsters oil demand even as crude prices fell. 

Net income in the first quarter was 43.62 billion yuan ($6.3 billion), compared to 39.06 billion yuan in the same period last year, it said in an exchange filing Friday. The company posted record annual results for last year. 

PetroChina’s report comes a day after state-owned sister companies Sinopec and Cnooc Ltd. both said their first-quarter earnings fell from the previous year because of the drop in oil prices. Brent crude averaged about $82 a barrel from January to March, down from about $98 in the same period last year when prices spiked after Russia’s invasion of Ukraine.

China’s reopening has built up hopes for oil demand recovery. The country’s oil refinery throughput hit a record in March, supported by increasing road traffic and air travel. Sinopec, the country’s biggest refiner, said it expects refined products demand to grow by more than 10% this year. 

The profit increase was mainly due to increased domestic sales of oil and gas products, PetroChina said in the filing. Marketing operations also saw a 79% jump in profit, which the company attributed to its “active study and judgment” on international price trends.

PetroChina spent 50.85 billion yuan on capital expenditures in the first quarter, compared to 51.8 billion yuan in the same period last year. It announced earlier it would cut annual spending by 11% this year to counter external risks from a global economic slowdown. Quarterly output reached 452 million barrels of oil equivalent, up 4.9% from the same period last year. 

(Updates with additional details from fourth paragraph. A previous version corrected net income figure in second paragraph.)

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