PetroChina Reports 130% Net Profit Increase; Plans To Develop Deeper Ties With US
China's largest oil and gas producer has revealed that it was able to increase its year-on-year net profits by more than 130 percent in 2018. PetroChina, a state-backed firm, also revealed its plans to develop deeper ties with energy companies in the United States in an effort to be a key player in helping both countries resolve their trade differences.
According to the firms' president, Hou Qijun, both China and the United States play big parts in the future of the global energy market. China is currently leading the way in the drive to diminish air pollution and in increasing the demand for natural gas.
The United States, on the other hand, is developing into a natural gas export powerhouse with massive export potential. PetroChina expects the United States to be the largest liquefied natural gas exporter by 2025, which means it will be vital for both nations to have good relations in order to play complementary roles in the global energy market.
The United States is currently developing advanced drilling technology, which will allow them to tap into larger crude oil and natural gas sources.
As of the moment, the country still matches China in terms of its dependency on oil imports. According to reports, China's dependency on foreign oil and gas imports has risen by about 45 percent for natural gas and 70 percent for oil. PetroChina currently has a 25-year contract with US oil and gas exporter Cheniere Energy.
Under the contract, China will be purchasing around 1.2 million tons of liquefied natural gas from the company each year. The first shipment arrived last year, but only 300,000 tons were delivered partly due to the recently imposed tariffs.
PetroChina reported a 130.7 percent year-on-year increase in net profits when compared to 2017. This equates to about US$7.86 billion in profits, which exceeded the company's own forecasts. The company is expected to further increase that number in 2019, with analysts predicting profits of around US$8.6 billion.
To cut the red tape in bringing in foreign capital to China, the government had recently removed the approval process for foreign investments in projects related to gas and oil exploration. Replacing the approval process will be a new registration system, which should entice more foreign companies to invest in China's development of its oil and gas resources.
The United States had previously complained about the different barriers in China, including its approval process, which made it difficult for foreign firms to enter various industries in the country.