PetroChina, the largest oil and gas company in Asia, announced on Monday a 21% year-on-year increase in net profit for the third quarter of 2023. The company’s net profit reached a record high of 46.38 billion yuan ($6.3 billion), driven by increased production and improving domestic fuel demand.

While PetroChina’s net profit soared, its revenue fell by 4.6% to 802 billion yuan. This decline can be attributed to lower realized oil and gas prices.

PetroChina’s crude oil output between January and September rose by 4.3% compared to the previous year, reaching 706 million barrels. This growth includes a significant increase of 22% in overseas production, totaling 122 million barrels.

Additionally, natural gas output increased by 6.1% to 3,656.6 billion cubic feet.

“The company seized the opportune timing of recovery in Chinese macro economy and rebounds in oil and gas markets,” PetroChina said.

Despite its strong performance, PetroChina faced challenges in oil and gas prices. The company reported a realized oil price of $75.30 per barrel during the nine-month period, representing a 21% decrease compared to the previous year, as global oil prices fell following a spike prompted by Russia’s invasion of Ukraine.

Domestic gas prices also fell by 4.8% to $8.81 per thousand cubic feet.

PetroChina’s refining capacity has also seen growth where crude oil processing at the company’s refineries increased by 16.5% in the first nine months of the year, reaching 1,044 million barrels or 3.82 million barrels per day.

This increase is in line with other national refiners that have ramped up production to meet recovering domestic fuel demand as well as cashing in on the lucrative export business.

The company’s total sales of gasoline, diesel, and jet kerosene rose by 13.4% compared to the previous year, reaching 125.6 million tons. Domestic sales accounted for 93 million tons, representing a 17% year-on-year growth.

Notably, kerosene sales experienced the highest growth, surging by nearly 50% to 14.3 million tons during the nine-month period.

Meanwhile, Capital spending between January and September amounted to 174 billion yuan, a 10% increase compared to the previous year.

The company has focused on exploring for natural gas and oil, as well as investing in downstream and petrochemical operations.

In September, PetroChina started the construction of a $3 billion petrochemical complex in the western region of Xinjiang.