PetroChina Issues Profit Warning

China's biggest oil and gas producer PetroChina has stated that it expects the 2016 net profit to drop by a steep 70-80% to between yuan 7.1bn ($1.03bn) and yuan 10.7bn ($1.06bn), compared with yuan 35.65bn in 2015 as prices remained on the lower side.

With global market oversupplied with oil and gas, prices remained depressed, especially in the second half of 2016, PetroChina said. Meanwhile, the prices of domestic natural gas also declined drastically as compared with the same period of last year. “Due to the comprehensive influence of the above factors, the net profit attributable to equity holders of the Company in 2016 decreased significantly,” the company said January 25.

In 2017, the company expects supply and demand in the global oil market to gradually balance out and the prices to recover. However, it emphasised that various uncertainties still remain.

PetroChina's controlling shareholder is state-owned China National Petroleum Corporation (CNPC). In its 2015 annual report, published last year, CNPC's share was 86.35%.

Shardul Sharma