PetroChina sells $2.4 billion assets to meet profit target

PetroChina has announced plans to sell pipeline stakes for $2.4 billion as the nation’s biggest oil and gas producer seeks to meet year-end profit targets amid a drive to reform state-owned enterprises. Beijing-based PetroChina’s board approved a plan to sell a 50 percent stake in Trans-Asia Gas Pipeline Co. to a unit of state-owned China Reform Holdings Corp., according to a statement to the Shanghai stock exchange.

PetroChina and its parent company, China National Petroleum Corp., are seeking to complete asset sales before the end of the year to help meet government-set annual profit goals. The government is also looking to spin off oil and gas pipelines from its energy companies into independent businesses as part of a President Xi Jinping’s sweeping overhaul of the country’s state-owned industries.

Efforts to meet the profit goals are complicated by China’s slowest economic growth in more than two decades and a global crude glut that has nearly halved prices over the past year. Oil is poised to spend a fourth month averaging below $50 a barrel, the longest stretch since the global financial crisis.

Income at PetroChina and its state-owned parent China National Petroleum Corp. has dropped “dramatically” this year, Wang Dongjin, a deputy general manager at CNPC and president of PetroChina, said in a statement.

Meanwhile, the company appointed Zhao Dong as chief financial officer to replace Yu Yibo, who has resigned, and transferred 3.5 billion yuan of assets to units owned by CNPC, it said in statements to the Hong Kong stock exchange. PetroChina’s board also approved a merger plan of subsidiaries Kunlun Energy Co. and PetroChina Kunlun Gas Co., it said in a separate release to the Shanghai stock exchange.

Trans-Asia Gas Pipeline builds and operates pipes that link Central Asian countries to China’s western province of Xinjiang. The sale is the first major divestment by either company since PetroChina sold a 20 billion yuan pipeline stake to institutional investors in 2013.