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Tue, Jan 17, 2006 - Page 12 News List

PetroChina says output rose 1.5 percent last year


PetroChin:a Co (中國石油天然氣), the listed unit of China's largest oil and gas producer, said yesterday that its crude oil output last year rose 1.5 percent to 842 million barrels.

That's the highest annual output since the company listed in Hong Kong and New York in April 2000, the company said. Output in 2004 was 829.2 million barrels.

Natural gas sales last year totaled 32.5 billion cubic meters, up 27 percent from 2004.

Taken together, total oil and gas production last year was 1.03 billion barrels of oil equivalent, up 5.5 percent from a year earlier.

Analysts said the company needs to acquire more oil and gas fields at home or abroad in order to maintain output growth and meet domestic demand, as some of its domestic fields are getting old and depleted.

China has been a net crude importer since 1993 because it has not been able to meet the voracious demand of its booming economy. About 40 percent of its oil needs are imported.

PetroChina said last month that it is in talks to buy PetroKazakhstan Inc assets from its parent China National Petroleum Corp via a joint venture set up last year. The parent company bought PetroKazakhstan for US$4.2 billion in August through another of its units, CNPC International.

"If PetroChina successfully acquires the PetroKazakhstan assets from its parent this year, I guess its [total] output growth this year will rise to high single digit," said Belle Liang, an analyst at Core Pacific Yamaichi.

PetroChina said it made several sizable oil and gas discoveries inside and offshore China last year, and "expects to sustain a replacement ratio for crude oil reserves of above 100 percent."

"Looking towards 2006, China's economy is expected to grow steadily and demand for oil, gas and petrochemical products will remain strong," the company said in a statement.

The company said earlier that oil exploration and acquisitions remain at the top of its agenda. It has set a capital expenditure budget for last year of 97.5 billion yuan (US$12.0 billion), up from 95.4 billion yuan in 2004.

The Changqing oil field in the northwestern Shaanxi Province and the Tarim oil field in the northwestern Xinjiang region contributed the bulk of PetroChina's output growth, offsetting a marginal decline in output of its flagship Daqing oil field in northeastern Heilongjiang Province, the company said.

PetroChina also processed 752 million barrels of crude last year, up 6 percent from 2004. It is the country's second largest refiner by capacity after China Petroleum & Chemical Corp (中國石化), also known as Sinopec.

The average selling price of its crude oil last year was US$48.88 a barrel, up 44 percent from US$33.88 a barrel in 2004, as international oil prices soared on concerns about supplies and hurricane damage in the US.

Its average selling price of gas rose 4 percent last year to US$2.08 per thousand cubic feet.

PetroChina said it expects global crude oil prices to remain high.

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