PetroChina profit declines 9.7 per cent

Beijing: Petro-China Co, the world's biggest company by market value, posted a 9.7 per cent drop in full-year profit, missing estimates, after oil prices fell from a record.

Net income declined to 103.4 billion yuan (Dh55.5 billion) from 114.5 billion yuan a year earlier, the Beijing-based oil producer and refiner said in a Hong Kong stock exchange filing. The median profit estimate of 14 analysts surveyed by Bloomberg News was 106.3 billion yuan.

Revenue dropped 4.7 per cent to 1.02 trillion yuan. PetroChina didn't give fourth-quarter figures.

Oil fell 38 per cent in 2009 as the worst recession since the Second World War curbed global demand for gasoline and diesel. Chairman Jiang Jiemin expects higher profit this year as fuel consumption in the world's fastest-growing major economy boosts crude prices and PetroChina adds energy assets overseas.

"Profit will surge, mainly because of high oil prices," Anna Yu, an energy analyst at Taifook Securities Group Ltd in Hong Kong, said before the announcement. "The exploration and production business will be the main driver," said Yu. She expects PetroChina's refining business to break even.

Profit may rise 28 per cent this year, according to a survey of 14 analysts' estimates compiled by Bloomberg. Taifook's Yu forecasts PetroChina's 2010 profit at 178 billion yuan based on a forecast that crude prices in New York will average $90 a barrel, compared with $62 last year and $99.75 in 2008.

China's biggest oil and gas producer has risen 36 per cent in Hong Kong trading in a year, regaining its position as the world's most valuable company from ExxonMobil Corp, which fell 5.2 per cent. PetroChina dropped 1.5 per cent to close at HK$8.82 yesterday, before the earnings were reported.

Exxon's net income dropped 23 per cent to $6.05 billion as the global recession weighed on fuel demand. PetroChina sells most of its oil products in the domestic market, where the economy expanded 10.7 per cent in the fourth quarter, the fastest pace since 2007.

Biggest car market

China overtook the US last year to become the world's biggest auto market, sparking demand for motor fuels. The country's crude oil processing rate rose to a record daily rate in February, according to government data.

"The main advantage that PetroChina has over other international oil majors is China itself," said Neil Beveridge, an energy analyst at Sanford C. Bernstein Ltd in Hong Kong. "While other companies are struggling, you have increasing demand for oil and a huge potential demand for gas."

China led the world out of recession last year as economic growth accelerated.

Bright future