Oil
PetroChina’s Net Profit rises to 12 percent,Boosted by Overseas growth
HONG KONG — Beijing-based PetroChina Co.’s 2013 net profit rose 12% from a year earlier, due to reduced refining losses and growth in overseas oil and gas production.
PetroChina and parent China National Petroleum Corp. have for years been building their international portfolio of upstream assets, and between them spent $20 billion on oil and gas projects in Australia, Mozambique, Peru and Brazil in 2013, according to data provider Dealogic. PetroChina’s November 2013 purchase of a 25% stake in Iraq’s huge West Qurna-1 field was among its recent acquisitions boosting its reserves PetroChina Chairman Zhou Jiping told reporters in Hong Kong the company is still looking to acquisitions to fuel growth even while it trims its 2014 capital spending by 7% to 296.5 billion yuan (US$47.6 billion) to boost shareholder return.
“In the past, we put great emphasis on speeding up our scale through high-intensity investments. The result was our revenue went up quickly but the profit didn’t go up accordingly. We now put more emphasis on quality and efficiency of our businesses,” Mr. Zhou said.
Last year, PetroChina reduced its capital spending by 9.6% to 318.7 billion yuan. This marked the energy giant’s first capital spending decline since its debut on the Hong Kong and New York stock exchanges in 2000.
Mr. Zhou said. PetroChina aims to build the company “into world level integrated energy group around 2020.”
PetroChina ‘s net profit for the year ended Dec. 31 rose to 129.6 billion yuan (US$20.8 billion) from 115.3 billion yuan the previous year, it said on Thursday. The result was above the average 126 billion yuan forecast of 30 analysts polled by Thomson Reuters.Revenue rose 2.9% to 2.26 trillion yuan, partly driven by a higher contribution from overseas production. Overall crude output for domestic and foreign fields rose 1.8% from a year earlier, while total natural gas output jumped 9.5% year-over-year.
Operating losses from its refining and chemical businesses narrowed to 24.4 billion yuan from 43.5 billion yuan, helped by the Chinese government’s increase in the prices of refined products in September.
China’s government often puts pressure on the country’s two largest refiners—PetroChina and Sinopec—to not raise prices of gasoline and diesel when crude oil prices surge in the global market as part of Beijing’s efforts to keep a lid on inflation.
Also, a change in China’s natural gas pricing mechanism, introduced in July, has helped PetroChina’s natural gas and pipeline business to swing to an operating profit of 28.9 billion yuan from an operating loss of 2.1 billion yuan. The company has lost billions of dollars from selling imported natural gas at deep discounts in the past few years.Last July’s change by economic planner the National Development and Reform Commission raised the price of natural gas for nonresidential users by an average of 15%.
Analysts said they expect PetroChina’s natural gas business will improve this year if Beijing further increases gas prices.
“We see good natural gas profitability from further price hikes and Chinese natural gas demand at low double-digit growth, which partly offsets a higher import burden,” J.P. Morgan said in a research report Tuesday.
China has been on an international quest to secure multiple sources of natural gas to help it meet targets to more than double the cleaner-burning fuel’s contribution to its energy mix to 10% by 2020 from less than 5% now.
In addition to expensive pipeline and liquefied natural gas projects, China is also trying to spur the development of unconventional supplies such as shale gas, which is gas trapped in rock formations.
– WALLSTREET JOURNAL
In a strategic move to revitalize Nigeria’s oil and gas sector, the Federal Government has unveiled two key fiscal incentives aimed at attracting investment and enhancing energy security.
The announcement was made by Mr. Wale Edun, the Minister of Finance and Coordinating Minister of the Economy on Wednesday.
The first initiative, the Value Added Tax (VAT) Modification Order 2024, introduces critical exemptions for essential energy products and infrastructure, including Diesel, Feed Gas, Liquefied Petroleum Gas (LPG), Compressed Natural Gas (CNG), Electric Vehicles, Liquefied Natural Gas (LNG) infrastructure, and Clean Cooking Equipment.
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These exemptions are designed to reduce living costs for Nigerians, promote energy security, and accelerate the transition to cleaner energy alternatives.
The second initiative, the Notice of Tax Incentives for Deep Offshore Oil & Gas Production, offers new tax relief options for deep offshore exploration projects.
This measure aims to position Nigeria’s deep offshore basin as a premier destination for international oil and gas investments, boosting the country’s appeal to foreign investors.
These reforms are part of a broader set of policy initiatives, known as Policy Directives 40-42, endorsed by President Bola Ahmed Tinubu.
The directives reflect the administration’s commitment to fostering sustainable development in the energy sector and enhancing Nigeria’s competitive edge in the global oil and gas market.
By Yemie Adeoye
NIGERIA’s President Bola Tinubu has announced that the protracted ExxonMobil-Seplat upstream oil divestment will be formally approved by the Minister of petroleum within a matter of days, just as he announced his government’s intention to expand the Compress natural Gas, CNG buses initiative.
The President who stated this during his Independence day nationwide broadcast stated that the move is in line with his administration’s commitment to free enterprise, free entry and free exit in investments which is the hallmark of his administration investment policy.
“Fellow compatriots, our administration is committed to free enterprise, free entry, and free exit in investments while maintaining the sanctity and efficacy of our regulatory processes. This principle guides the divestment transactions in our upstream petroleum sector, where we are committed to changing the fortune positively. As such, the ExxonMobil Seplat divestment will receive ministerial approval in a matter of days, having been concluded by the regulator, NUPRC, in line with the Petroleum Industry Act, PIA. This was done in the same manner as other qualified divestments approved in the sector.”
The President also seized the opportunity to plead with Nigerians to be patient with his administration’s reform policies. “As your President, I assure you that we are committed to finding sustainable solutions to alleviate the suffering of our citizens. Once again, I plead for your patience as the reforms we are implementing show positive signs, and we are beginning to see light at the end of the tunnel”.
“Our energy transition programme is on course. We are expanding the adoption of the Presidential Initiative on Compressed Natural Gas for mass transit with private sector players. The Federal Government is ready to assist the thirty-six States and FCT in acquiring CNG buses for cheaper public transportation.
Fellow Nigerians, while we are working to stabilise the economy and secure the country, we also seek to foster national unity and build social harmony and cohesion. Our economy can only thrive when there is peace”. he enthused.
As part of the administration’s push to improve Ease of Doing Business (EoDB), Nigeria’s Vice President Kashim Shettima has expressed support for ExxonMobil’s plan to invest $10 billion in the country’s deep-water oil sector.
Speaking on Wednesday, September 25, 2024, during a meeting with ExxonMobil executives at the 79th United Nations General Assembly (UNGA) in New York, Shettima called the investment “a clear testament to the administration’s economic reforms and investor-friendly policies.”
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This announcement follows news that international maritime company DP World intends to develop a multibillion-dollar port project in Nigeria.
Stanley Nkwocha, Senior Special Assistant to the President on Media and Communications, shared the development in a statement on Wednesday. He quoted Shettima as saying: “ExxonMobil’s potential investment aligns with the vision of President Bola Ahmed Tinubu’s administration for a more investment-friendly Nigeria.
We are committed to fostering an environment that supports such transformative projects.”Shettima also discussed the administration’s broader efforts to improve the ease of doing business, highlighting the “Renewed Hope Agenda,” which aims to simplify bureaucratic processes, enhance transparency, and offer fiscal incentives to attract global investors.
“Our administration has taken bold steps to unify the exchange rate, remove fuel subsidies, and implement tax reforms. These measures, though challenging in the short term, are intended to create a stable and predictable business environment in the long term,” he added.
On the oil and gas sector, Shettima mentioned that the government is revising the fiscal framework for deep-water operations to attract investment while ensuring fair returns for the Nigerian people.
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