Strong fuel demand, higher crude prices drive estimate-beating gain

HONG KONG - PetroChina Co posted a 35 percent gain in profit last year, beating estimates, as crude prices rose and fuel demand increased in the world's fastest-growing major economy.

Net income climbed to 140 billion yuan ($21.3 billion), or 0.76 yuan a share, from 103.4 billion yuan, or 0.56 yuan a shares, in 2009, the Beijing-based company said in a statement to the Hong Kong Stock Exchange on Thursday. That compares with a mean estimate of 135.7 billion yuan in a Bloomberg survey of 17 analysts. PetroChina didn't give fourth-quarter figures.

PetroChina gained as the nation's economy grew at its fastest pace in three years, spurring fuel demand, helping to drive a 15 percent advance in New York crude prices in 2010. The company plans more overseas acquisitions after spending $9.2 billion since the start of last year on assets from oil sands in Canada to gas projects in Australia.

"Crude prices were one of the big drivers behind the company's performance," said Neil Beveridge, an analyst at Sanford C. Bernstein & Co in Hong Kong. "It also benefited from favorable pricing for gas."

The government raised gas prices by 25 percent in June, the first increase since 2007, to spur production of the cleaner-burning fuel. PetroChina and Royal Dutch Shell Plc completed the purchase of coal-bed gas producer Arrow Energy Ltd for A$3.5 billion ($3.4 billion) in August to help the Chinese company develop domestic reserves of the fuel.

Last month, PetroChina bought a half stake in Encana Corp's Cutbank Ridge gas assets in Canada for $5.4 billion, its biggest overseas deal.

PetroChina rose 14 percent in the past 12 months in Hong Kong trading, compared with the 4.2 percent gain by the Hang Seng Index. The stock fell 0.8 percent to close at HK$10.46 ($1.34) on Thursday, before the earnings announcement.

Bloomberg News

(China Daily 03/18/2011 page17)