PetroChina reports $1b Q1 profits amid plunging oil prices

Workers of PetroChina Co check facilities in Qinshui county, Shanxi province. [Chen Yuanzi for China Daily]

BEIJING - Chinese oil giant PetroChina on Monday released what it said was "better-than-expected operating results" for the first quarter as net profits plummeted 82 percent to 6.15 billion yuan ($1 billion).

The company attributed the slump to plunging oil prices and weak domestic demand.

However, the results were better than expected, the company said, thanks to its low-cost development program, which has further reduced costs while increasing efficiency, and promoting reform and innovation as growth drivers.

The company said that it had taken proactive measures to cope with the plunge in oil prices and emphasized cost reduction and efficiency improvement, resulting in a 3.7 percent reduction in operating costs year on year for exploration and production.

In the first quarter, the company's crude oil output was 239.4 million barrels, representing an increase of 3.3 percent year on year; natural gas output was 850.8 billion cubic feet, up 7.7 percent.

Amid sagging oil prices, the company also streamlined its sales strategies by focusing on prioritized regions and high-margin products. As a result, the company sold 37.71 million tons of gasoline, diesel and kerosene, up 10.4 percent year on year.

The net profit data came after its Shanghai-listed shares surged by the daily limit of 10 percent on Monday amid reports of a new government resolution to step up mergers and acquisitions among centrally-administered State-owned enterprises, which may involve PetroChina. However, the reports are yet to be confirmed.

In a separate statement filed with Hong Kong Exchanges and Clearing Ltd on Monday, PetroChina dismissed the reports, saying that neither it or its parent company had received any such notification from the government.