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China’s state oil majors reported record profits for the first half of the year thanks to a rally in fuel prices, Bloomberg has reported, citing figures for PetroChina, Sinopec, and CNOOC.
The profits of PetroChina and CNOOC combined hit $21.58 billion for the period, Chinese media reported, noting the number was close to the two companies’ total earnings for 2021.
CNOOC’s profit alone was almost twice as high as its profit for the first half of 2021, at $10.5 billion.
Sinopec reported a 10-percent increase in first-half profits, to some $6.3 billion.
PetroChina reported earnings of some $12 billion for the first half of the year, which was a 55-percent increase on the year.
Like Big Oil, the Chinese state oil giants benefited from strong demand for oil and fuels and supply constraints.
“We are confident that market demand will keep recovering due to the easing of the pandemic and the implementation of favorable policies from the central government,” Sinopec president Ma Yongsheng was quoted by Bloomberg as saying.
PetroChina, on the other hand, struck a cautionary note, warning about the possibility of a global downturn resulting from the combination of high inflation, central bank rate hikes, and geopolitical tensions, ICIS reported, citing the company’s half-year report.
All three have recognized the downward risk for oil demand stemming from inflation trends and even said that the global economy might slip into stagflation. At the same time, geopolitical events were likely to fuel volatility in oil markets, the Chinese majors said.
China has been working to boost domestic oil production in order to reduce reliance on imports. In the first half of the year, PetroChina reported a 3.9-percent increase in output while CNOOC reported an 8-percent increase in output.
Capital spending also increased, as the state-owned companies played a big part in Beijing’s latest efforts to stimulate economic growth.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.