Covid lockdowns, a property market crisis and a struggling domestic economy weren’t enough to slow down China’s oil giants as they posted record first half profits.
PetroChina Co., Sinopec and Cnooc Ltd. each said they made historic amounts of money in the January-to-June period as surging prices for the oil and gas they produce outweighed higher import costs and sputtering domestic fuel consumption.
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The firms are expecting a turnaround in the economy to bolster results going forward. PetroChina’s chairman said government stimulus packages are bolstering oil demand, while top refiner Sinopec expects domestic fuel sales to jump 11% in the second half over the first.
“China’s economic growth is anticipated to rebound and remain within a reasonable range,” Sinopec said Sunday, after following PetroChina in posting record first-half profits. “Domestic demand for refined oil products and chemical products is expected to pick up, and demand for natural gas will maintain growth.”
Still, the firms cautioned that the global economy faces threats from stagflation and geopolitical tensions, the latter of which is likely to keep energy prices volatile. Global crude averaged $105 a barrel in the first six months, more than 60% higher than the same period in 2021, providing a windfall to producers after several years of depressed prices.
Company spending plans should also aid the government’s efforts to stimulate the economy. All three firms boosted capital expenditure over the first six months, and PetroChina and Sinopec are expecting a sharp acceleration in spending in the second half as they seek to keep growing oil and gas output to help meet China’s energy security needs.