Lower oil prices dented first-half earnings at oil giant PetroChina and offshore specialist Cnooc, but helped Asia’s top refiner Sinopec, though rebounding crude prices may reverse their fortunes in the second half.
Crude prices hit a 19-month low below $50 a barrel in January before recovering to a 10-month high above $70 a barrel at the end of June. Depressed prices are a windfall for refiners but hit profits for producers.
Analysts say the rebound, which peaked at a record $78.77 at the beginning of this month, could flip earnings growth expectations for China’s oil triumvirate in the second half, especially as the government is expected to keep a lid on product prices in the near future.

Losses
“The refining arms of Sinopec and PetroChina will have suffered from losses again in the third quarter when oil prices jumped above $70,” said Tom Chan, an analyst at Sun Hung Kai Investment Services.
“But I don’t think the government will raise oil products prices in the near term because of high inflation and because they had made profits in the first half.”
PetroChina, the world’s No. 2 oil company by market capitalization, should kick off earnings for the Chinese oil trio on Thursday with a 4.8 per cent dip in January-June profit to 76.7 billion yuan ($10.1 billion), based on the average forecasts of six analysts polled by Reuters.
Refiner Sinopec is expected to enjoy a near-60 per cent jump in first-half earnings to 34.1 billion yuan ($4.49 billion), according to forecasts by four analysts.
And Cnooc, which draws the bulk of its profit from finding and developing oil and gas, could post a 15 per cent fall in interim earnings.
China, the world’s second-largest oil consumer, is not producing enough to meet fast-growing demand, so overseas acquisitions remain high on the agenda for all three companies, after a string of purchases from Kazakhstan to Nigeria.
To fulfill their ambitions both at home and abroad, both PetroChina and Cnooc plan to tap China’s red-hot equity markets.

(Gulf News)