PetroChina Company Limited PTR reported first-quarter 2022 earnings of RMB 39,059 million or RMB 0.21 per diluted share, up from RMB 27,719 million or RMB 0.15 per diluted share a year earlier.

One of China’s big three oil giants, PetroChina’s earnings were buoyed by surging energy prices and strong fuel demand.

Further, China’s dominant oil and gas producer’s total revenues during the period rose 41.2% from the 2021 level to RMB 779,368 million.

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Segment Performance

Upstream: PetroChina posted higher upstream (or ‘Exploration and Production’) output during the three months ended Mar 31, 2022. Crude oil output – accounting for 52% of the total – rose 1.6% from the year-ago period to 224.9 million barrels. This was supported by marketable natural gas output that was up by 5.2% to 1,235.5 billion cubic feet. As a result, PetroChina’s total production of oil and natural gas increased 3.3% year over year to 430.9 million barrels of oil equivalent. Of the total, domestic output contributed 389.8 million barrels of oil equivalent (up 4.5% year over year), or approximately 90%. While PTR’s production grew, it experienced higher oil and gas lifting cost that increased 8.4% from the same period of last year.

The upstream (or exploration & production) segment posted an operating income of RMB 38,798 million, more than tripling from the year-ago profit of RMB 12,882 million. Apart from volume gains, this was also due to a steep rise in oil prices. The average realized crude price during the first quarter of 2022 was $86.29 per barrel, 54.9% more than the year-ago period.

Downstream: The Beijing-based company’s Refining and Chemicals business recorded an operating profit of RMB 10,765 million compared to the year-earlier period income of RMB 14,675 million. The decline in the downstream division was due to higher raw material costs and narrowing chemical margins, partly offset by an improvement in oil processing volumes.

PetroChina’s refinery division processed 302.4 MMBbl of crude oil during the three-month period, up 1.5% from 2021. The company produced 3,091 thousand tons of synthetic resin in the period (up 17% year over year), besides manufacturing 1,959 thousand tons of ethylene (up 21.8%). PTR also produced 26,250 thousand tons of gasoline, diesel and kerosene during the period against 26,946 thousand tons a year earlier.

Natural Gas Marketing: 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 and increased realizations.

Overall, the segment’s income fell to RMB 8,946 million in the period under review, from the year-earlier profit of RMB 18,519 million.

Marketing: In marketing operations, the state-owned Group sold 35,282 thousand tons of gasoline, diesel and kerosene during the three-month period, down 2.7% year over year. The lower volumes were more than offset by reduced costs, higher margin and robust domestic market demand. Consequently, PetroChina’s Marketing segment recorded a profit of RMB 4,556 million compared to the prior-year earnings of RMB 3,315 million.