Chinese Oil Giants Expect Bumper Profits For 2022 On Spike In Prices

China’s largest state-controlled oil and gas firms on Thursday guided for a surge in net profits for 2022 as commodity prices jumped last year and Chinese firms doubled down on efforts to boost domestic production.

The country’s largest oil and gas E&P company, PetroChina, said today that its preliminary net profit for last year surged by 68% compared to 2021, Bloomberg reported.

China National Offshore Oil Corporation (CNOOC), for its part, said its preliminary figures for 2022 showed that net profit doubled last year.

From January to September, PetroChina reported $16.66 billion in profits, for a 60% jump year over year.   

CNOOC reported an 89.1% annual surge in its net profit for the third quarter, pushed up by higher oil and gas prices. Net profit for the nine months to September more than doubled as it surged by 105.9%. CNOOC’s revenues for Q3 surged by 53.7%, as the average realized prices for crude and liquids jumped by 36.1% year over year to $95.80 per barrel in the third quarter, and the average realized gas prices increased by 15.1%, CNOOC said at the end of October.   

Last week, CNOOC said it would raise its capital expenditure for 2023 and expects nine new projects in which it participates to come online this year in China, Guyana, and Brazil.  

Chinese companies have been reporting recently higher domestic production as the government directed the state-held giants a few years ago to boost domestic oil and gas production as part of a plan to boost energy security.

Since the Russian invasion of Ukraine, China has stepped up efforts to bolster domestic fossil fuel production. This policy resulted in a record-high coal production in 2022, at 4.496 billion tons, which was a 9% increase compared to 2021, according to the National Bureau of Statistics of China. China’s natural gas production also hit a record high of 217.8 billion cubic meters in 2022, up by 6.4% on the year, while imports of natural gas fell by 9.9%, the Chinese data showed.    

By Charles Kennedy for Oilprice.com

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