During the first half of the year, the Company continued to step up its efforts in purusing the strategies related to resources, marketing and international development. It continued to enhance safe production, environmental protection and energy saving. As a result, the Company achieved strong profits on stable progress in production and operation.
"Investors and the public have paid tremendous attention and have given strong support to us. With the strong sense of responsibility to the shareholders, to the community, to the public and to the staff, PetroChina has consistently placed the Company development as its top priority. The Company's scale of business and its ability for sustainable development have been further enhanced. The development encouraged a significant increase in the Company's value and kept our overall business in a good position." said PetroChina's Chairman Jiang Jiemin.
For the six months ended 30 June 2007, the Company recorded a turnover of RMB392.73 billion, representing an increase of 20.3% from the same period last year. The half-year operating profit reached RMB109.13 billion, recording a decrease of 5.3% from the same period last year. The decrease in operating profit was due to various factors including the special levy imposed by the state, the increased safe production expense, the Company's business expansion and the surge of the nation's commodity prices. The Board of Directors of the Company proposed to allocate 45% of the half-year net profit for paying interim dividends for 2007, equivalent to approximately RMB0.205690 per share.
Exploration and Production
Since the beginning of 2007, the Company has achieved a series of milestones in oil and gas exploration by strengthening its foothold in several key basins across the country, deepening the geological studies, focusing on new technology application as well as stepping up its efforts in core projects and strategic development. The Company discovered the Jidong Nanpu Oilfield in Jidong shallow water areas of Bohai Bay, which contains oil reserves of up to one billion tons. Verified by the state in mid August, the new discovery contains 445 million tons of proven reserves of original oil in place. The three-level reserves of original oil and gas in place have reached 1.18 billion tons. The Company also made progress in the exploration work in Erdos, Songliao, Junggar, Sichuan and Tarim Basins. At the moment, the Company's overall development of the oil and gas exploration business is well-positioned and its reserve is entering a high growth stage. The Company now enjoys a stronger foundation of resources, which facilitates its further development.
In the first half of the year, overcoming the odds and various natural disasters, the Company achieved stable progress in oil and gas output. During the reporting period, the Company's oil and gas output amounted to 553 million barrels of oil equivalent, representing an increase of 3.7% from the same period of 2006. It produced 420 million barrels of crude oil, representing an increase of 600,000 barrels or 0.1% from the same period of 2006, and 798 billion cubic feet of marketable natural gas, representing an increase of 16.5% from the same period of 2006. The Company's natural gas production maintained a strong growth momentum.
During the first half of 2007, the Company's Exploration and Production segment recorded an operating profit of RMB96.44 billion, which was RMB28.02 billion lower than that of the same period in 2006. This was due to the decrease in crude oil price, the increase in purchase expenses as well as the special levy imposed by the state.
In the first half of 2007, the Company's Refining and Marketing segment, with further structure adjustment, maintained steady production growth on the strong market demand. The Company processed 408 million barrels of crude oil, representing an increase of 3.8% from the same period of 2006. It produced 10.67 million tons of gasoline, representing a decrease of 3.6% from the same period of 2006 and produced 23.889 million tons of diesel, representing an increase of 7.5% from the same period of 2006.
During this reporting period, the Company continued to expand its marketing network for refined products by building more service stations in major cities, at new districts of the developed areas, at highways and at the prime transportation zones.
During the first half of 2007, the Company's Refining and Marketing segment achieved a turnaround. The segment recorded an operating profit of RMB3.93 billion, representing an increase of RMB17.82 billion over the same period of 2006.
Natural Gas and Pipeline
During the first half of 2007, the construction of major oil and gas pipelines proceeded smoothly. The capacity expansion projects of the West-East Gas Pipeline was smoothly conducted as planned. The Jintan gas storage facilities were filled up and put into operation. Construction of the Lanzhou-Yinchuan gas pipeline, which connects the Sebei-Xining-Lanzhou Pipeline, was completed and successfully put into trial operation in late July. Currently the Company has sucessfully established a gas supply network in its four key natural gas fields. In addition, the Beijing Oil and Gas Pipeline Network Dispatching Center commenced its operation.
During the first half of 2007, the Natural Gas and Pipeline segment recorded an operating profit of RMB6.13 billion, representing an increase of RMB1.54 billion or 33.6% compared to the same period of 2006.
The Natural Gas and Pipeline segment has become the Company's new growth point and is poised to grow significantly. Moving forward, the Company plans to build a number of key oil and gas pipelines which include the Second West-East Gas Pipeline and the Lanzhou-Zhengzhou-Changsha product oil pipeline. The Company will further enhance its capacity to strengthen its supply capabilities and basis of future development.
Chemicals and Marketing
The Chemical and Marketing segment achieved economies of production scale and was operated in a safe and stable manner. The Company continued to make improvements in key operational performance indexes. Resources allocation and product mix were further optimized. The realized output of commercial chemical products reached 7.83 million tons, representing an increase of 1.2 million tons or 18.1% compared to the output of 6.63 million tons over the same period of 2006. The Company produced 1.305 million tons of ethylene and 1.997 million tons of synthetic resin during the period, representing a year-on-year increase of 30.1% and 31% respectively.
In the first half of 2007, the Company's Chemicals and Marketing segment recorded an operating profit of RMB5.4 billion, representing an increase of RMB2.49 billion or 85.6% from the same period of 2006. The increase was attributed to the operation of the new production capacity which lifted the overall production and sales volume. In addition, the surge of chemical product prices also encouraged the growth.
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