PetroChina’s third-quarter earnings rose on stronger oil prices even as China’s strict Covid Zero policy continues to constrain fuel demand.
The nation’s top oil and gas driller reported 37.88 billion yuan ($5.3 billion) in net income for the three months through September, according to an exchange filing on Thursday. That’s up 71% from the same period in 2021, although just shy of the pace set in its record first-half result.
Brent crude averaged 33% higher in the quarter compared to the same period last year. PetroChina produced 677 million barrels of crude oil in the first three quarters, up 2.2% from the previous year. Cleaner-burning natural gas, a focus for the company, saw a 5% jump in output.
China’s top oil and gas majors face increased pressure to lift output and help the nation avoid any shortfalls ahead of an expected colder-than-usual winter, and to help the country limit its import bill. Capital expenditures were 158 billion yuan in the first nine months, compared with an annual 2022 spending target of 242 billion yuan.
PetroChina reported 26 billion yuan in operation profits from the refining and chemical business in the first nine months, down from 32 billion yuan in the same period last year. Restrictions to stop the spread of Covid have slowed economic growth, reducing the need to transport goods and people across the countries’ roads and skies.
Downstream refining and chemical producers “face demand risks as the economic slowdown deepens despite margin relief on cheaper oil feedstock,” Bloomberg Intelligence analysts including Henik Fung said in a note.