PetroChina Company Limited PTR reported 2021 earnings of RMB 92,161 million (or RMB 0.50 per share) — the highest since 2014 — compared with RMB 19,002 million or RMB 0.10 in the year-earlier period.

One of China’s big three oil giants, PetroChina’s earnings were buoyed by the recovery in energy prices and demand from the pandemic lows.

Further, China’s dominant oil and gas producer’s total revenues during the year rose 35.2% from the 2020 level to RMB 2,614,349 million.

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Segment Performance

Upstream: PetroChina posted essentially flat upstream output for the 12 months ended Dec 31, 2021. Crude oil volumes – accounting for around 55% of the total – fell 3.7% from the year-ago period to 887.9 million barrels but marketable natural gas output increased 4.7% to 4,420 billion cubic feet. As a result, PetroChina’s overall production of oil and natural gas remained almost unchanged year over year at 1,624.8 million barrels of oil equivalent. Of the total, domestic output contributed 1,457.4 million barrels of oil equivalent (up 3.4% year over year), or approximately 90%.

Despite stagnant production and higher oil and gas lifting cost (that increased 10.8% from 2020), the upstream (or exploration & production) segment’s operating income of RMB 68,452 million almost tripled from the year-ago profit of RMB 23,092 million. This was primarily on account of a steep rise in oil prices. Average realized crude price during 2021 was $65.58 per barrel, 62.6% higher than the year-ago period.

Downstream: The Beijing-based company’s Refining & Chemicals business recorded an operating profit of RMB 49,740 million. This compared with the year-earlier period loss of RMB 1,834 million. The turnaround in the downstream division was due to higher selling price and an increase in sales volume.

PetroChina’s refinery division processed 1,225 million barrels of crude oil last year, up 4% from 2020. The company produced 10,903 thousand tons of synthetic resin in the period (a rise of 6% year over year), besides manufacturing 6,713 thousand tons of ethylene (up 5.8%). It also produced 108,712 thousand tons of gasoline, diesel and kerosene during the period against 107,042 thousand tons a year earlier. The average capacity utilization during the year was 82.5%, up from 79.9% in 2020.

Natural Gas & Pipelines: An increase in natural gas purchase price and lower revenues due to pipeline asset restructuring dented the Chinese behemoth’s segment earnings. These factors were partly offset by higher volume, increased realizations and lower import losses.

While PetroChina did lose money to the tune of RMB 7,212 million on its imported natural gas business last year, it was significantly narrower than the 2020 loss of RMB 14,159 million due to quality enhancement initiatives by the company.

Overall, the segment’s income fell to RMB 43,965 million in the period under review, from the year-earlier profit of RMB 72,410 million.

Marketing: In marketing operations, the state-owned Group sold 163,307 thousand tons of gasoline, diesel and kerosene during the 12-month period, up 1.3% year over year. The higher volumes were supported by increased refined oil pricing, a rebound in domestic market demand and distribution optimization. Consequently, PetroChina’s Marketing segment recorded a profit of RMB 13,277 million compared to the prior-year loss of RMB 2,906 million.