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August 29, 2009

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Home » Business » Energy

PetroChina seeks to increase investments

PETROCHINA Co plans to increase investments in the downstream business as an easing of curbs on fuel prices helped the oil giant post better-than-expected quarterly earnings.

Asia's largest oil and gas producer plans to acquire more overseas refineries after completing the purchase of Singapore Petroleum Co, President Zhou Jiping said in Hong Kong.

The company yesterday reported first-half net profit fell 7.2 percent to 50.5 billion yuan (US$7.4 billion) from a year earlier on lower crude oil prices and weak demand.

But its net profit of 31.54 billion yuan for the April-June quarter represented the best earnings in three quarters, thanks to improved conditions and two fuel price hikes in June as a new pricing mechanism eased pressure on China's refining sector.

The median estimate of seven analysts polled by Bloomberg News was a 30.9-billion-yuan profit in the second quarter.

"Whilst the outlook for China's economy generally looks steady and optimistic, the foundation for an economic rebound is not well established," PetroChina cautioned in a statement. "The oil and petrochemical markets are also facing uncertainties in their recovery."

PetroChina's annual refining capacity will reach 200 million tons in seven to eight years, and it also aims for a 40-percent share in the domestic refining market, Zhou said without giving comparison figures.

It processed 389.3 million barrels of crude oil between January and June, a drop of 8.4 percent from a year ago, PetroChina said.

Crude oil output fell 4.8 percent to 417.7 million barrels in the first half. The average realized crude price was US$42.46 a barrel, down 54.6 percent.

Zhou said there is no new information over a potential bid by PetroChina's parent, China National Petroleum Corp, for Spain's Repsol YPF SA's Argentine unit. But he said the company is interested in energy assets in South America.


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