PetroChina 2Q profit rises by 15 percent

PetroChina posted a 15 percent rise in second-quarter profit, partly due to higher upstream earnings and improved refining margins. Second-quarter net profit rose to $5.5 billion in April-June.

PetroChina said it expected oversupply to persist in the domestic oil product market in the second half of the year and forecast oil prices would be volatile.

“The mild recovery of the global economy will remain highly uncertain in the second half of 2014 and the global oil price is still likely to fluctuate at high levels,” Zhou Jiping, PetroChina chairman said in an earnings statement.

“It is expected that the domestic economy will continue to develop at a reasonable pace, while downward pressure on the economy still exists.”

It said in March it would cut capital spending for the second consecutive year in 2014 as it sought to boost shareholder returns in the midst of a massive corruption probe. PetroChina and its parent firm, China National Petroleum Corp (CNPC), are at the centre of one of the biggest corruption investigations into the Chinese state sector in years, launched by the government more than half a year ago.

Speaking at an earnings briefing, PetroChina vice chairman and president Wang Dongjin said its production in Iraq, a major source of its overseas output, had been disrupted by activities of Islamic State militants.

Its overseas oil and gas output reached 67.1 million barrels, little changed from a year earlier. PetroChina aims to have production capacity of 1.5 billion cubic metres by the end of 2015.