PetroChina hits record in oil and gas output

PetroChina, the world’s third-largest energy company by market value, said Monday that it increased oil and gas output to a record last year after including production from Kazakhstan for the first time.

Output rose 5.2 percent to the equivalent of 2.9 million barrels a day, according to a statement PetroChina posted on its Web site. Crude oil output rose 0.8 percent, while natural gas production jumped 23.5 percent. PetroChina, which is based in Beijing, revised its 2005 output numbers lower, without giving any reasons.

The chairman of PetroChina, Chen Geng, last year paid its parent China National Petroleum $2.74 billion for control of PetroKazakhstan, to meet demand for gas and oil in China. Drilling in western China helped push natural gas output to a record.

“Domestic and overseas crude output both increased last year,” Mao Zefeng, a PetroChina spokesman in Hong Kong, said by telephone after the numbers were announced. “Overseas oil output grew at a faster pace.”

PetroChina shares closed Monday 1.9 percent higher at 9.96 Hong Kong dollars, or $1.28.

In 2006, PetroChina overtook BP and Royal Dutch Shell to become the world’s third-largest oil company after its shares surged 37 percent in the past year.

Crude output from overseas fields rose 7.6 percent to 48.4 million barrels in 2006, compared with 45 million barrels a year earlier, according to the company’s statement.

PetroChina completed a purchase of a 67 percent stake in PetroKazakhstan last month from its state-run parent, China National Petroleum.

PetroChina expects the acquisition to help raise production by 5 percent a year for the next five years.

The company is increasing exploration spending locally and abroad to increase production and meet rising demand in China. PetroChina is also raising domestic gas output as the Chinese government encourages the use of cleaner burning fuels to cut pollution and reduce the nation’s reliance on imports.

“The production numbers are within expectations, in which natural gas continues to dominate output,” Jason Xu, an analyst in Shanghai at KGI Consulting, said. “The Chinese government is changing the pricing mechanism for natural gas and earnings will improve as prices rise.”

The top Chinese economic planning agency, the National Development and Reform Commission, raised natural gas prices by as much as 10 percent at the end of 2005, to bring domestic prices closer to international levels.

PetroChina is managing output at the Daqing field, the biggest and oldest in China, to extend its productive life as reserves dwindle. The Daqing field produced 43.4 million metric tons, or about 318 million barrels, of crude oil in 2006, PetroChina said Monday.

Crude oil output rose to 829.7 million barrels in 2006 from 822.9 million barrels in 2005. Gas production surged to 1.38 trillion cubic feet from 1.12 trillion cubic feet. In March, PetroChina projected crude output for 2006 of 826.6 million barrels and a total gas and oil output equivalent to 1.06 billion barrels.

“Production of major products was better than anticipated,” PetroChina said in the statement. “The exploration business was fruitful and oil and gas production reached another record.”

The company’s average oil price rose 23.6 percent last year to $59.76 a barrel from $48.37 a year earlier, it said, while the price for gas gained 16.6 percent to $2.46 per thousand cubic feet, or 28 cubic meters, from $2.11. Oil reached a record price of $78.40 a barrel on the New York Mercantile Exchange on July 14.

PetroChina processed 785 million barrels of oil into fuels at its refineries in the last year, 4.3 percent more than the 752.3 million barrels processed a year earlier. PetroChina’s crude output in the fourth quarter of last year stood at 203.6 million barrels and gas output reached 375.3 billion cubic feet, the company said. Total oil and gas output reached the equivalent of 268.4 million barrels between October and December, it said.