Chinese oil giant PetroChina (HKSE: 0857-OL.HK – news) has posted its lowest profit since 1999 with the company citing a struggling global economy and slump in international oil prices last year.
State-owned PetroChina’s net profit tumbled 66.7 percent year-on-year to 35.65 billion yuan ($ 5.50 billion) in 2015, the company said in a statement filed to the Shanghai stock exchange late Wednesday. The profit figure was the weakest since 1999, according to Bloomberg News.
Annual revenue dropped 24.4 percent on the year to 1.73 trillion yuan, the statement said, as benchmark crude oil prices slumped by nearly half.
“In 2015, the global economic recovery slowed down, the downward pressure on China’s economy continuously intensified, the overall supply in the oil and gas market was sufficient and the international oil prices kept dropping,” the statement said.
China’s economy, the world’s second largest, grew an annual 6.9 percent last year — the lowest in a quarter of a century — which dragged on the global recovery.
PetroChina’s Shanghai-listed stock was down 1.41 percent on Thursday afternoon.
The company plans to shut down oil and gas fields that have no hope of making profits, PetroChina chairman Wang Yilin said in Hong Kong on Wednesday, according to Bloomberg, marking its first output cut in 17 years.
In 2015, PetroChina’s crude oil output — both domestic and overseas — reached 971.9 million barrels, up 2.8 percent from 2014, according to the company.
PetroChina’s parent China National Petroleum Corp. is among the government-owned enterprises Beijing is calling on to become more market-oriented to help reform the lumbering state sector.
As part of the reform drive, PetroChina sold half of a pipeline unit for $ 2.4 billion to spin off non-core assets. It (Other OTC: ITGL – news) also announced plans to integrate assets in three pipeline subsidiaries into a single company to reduce operating costs (Other OTC: UBGXF – news) .
