Profits Gush at China’s Three Oil Majors

China’s three state-owned oil and gas giants recorded strong profit growth in the third quarter as generally rising global oil prices and strong growing domestic demand contributed toward healthy returns.

PetroChina Co. Ltd., the listed arm of China National Petroleum Corp., racked up the biggest profits of the three, with net profits surging to 21.04 billion yuan ($3.03 billion) for the quarter, according to a filing with the Hong Kong Stock Exchange. It was the company’s highest quarterly increase since September 2014, and up 348.5% from the third quarter a year earlier.

Revenues for the first nine months of the year reached 1.71 trillion yuan, down a percentage point on revenue for the six months. PetroChina attributed its success to domestic “optimization” of its business but mainly “grasped the favorable opportunities offered by the rising oil prices and the increasing market demand for natural gas.”

China Petroleum and Chemical Corp. (Sinopec) also saw strong gains in the third quarter, with net profit rising to 18.38 billion yuan, up 60% on a year earlier, as refining margins improved, its filing with the Hong Kong Stock Exchange said on Tuesday. The figure was nevertheless slightly down on second quarter profits, which reached 23.6 billion yuan.

China National Offshore Oil Corp. (CNOOC) had a third-quarter net profit of 49.8 billion yuan, up 33.4% from the same period a year earlier, its Hong Kong filing stated. It marked the company’s strongest third-quarter performance since 2015, according to Reuters.

CNOOC is unlikely to reach its capital expenditure target of 70 billion to 80 billion yuan for the year, it said in a briefing on the quarterly results, according to S&P Global, as several major planned projects in Uganda, Canada and elsewhere faced delays.

The company’s net production stood at 113.8 million barrels of oil equivalent in the third quarter, a slight dip of 2.1% year on year.

China is the world’s second-largest consumer of oil, using around 13% of the global total, according to the BP Statistical Review of World Energy 2018. The Economist Intelligence Unit forecasts oil and gas consumption to grow at an annual rate of 2.4% and 6% respectively over the next four years.

Contact reporter Ke Dawei (daweike@caixin.com)