PetroChina Co. Ltd. (NYSE: PTR) filed a statement with Hong Kong authorities on Friday indicating that profits for the 2015 fiscal year are expected to fall by 60% to 70% from the previous year. The filing is a preliminary, unaudited estimate. In the filing, PetroChina said:
In 2015, due to the factors such as the price of international crude oil has declined significantly and the price of domestic natural gas has been driven down, a relatively large reduction in the Company’s profit occurred.
Facing the sophisticated and severe operation situation, the Company insisted on steady development, exercised strict control over investment scale, implemented the strategy of low cost, optimized its production, operated on a market-oriented basis and promoted asset restructuring, which have achieved good results and effectively alleviated the adverse effects to Company’s results due to the decline of the price of oil and gas.
In 2016, the market of international oil and gas is expected to continue to slump, the market competition will be further intensified. The Company will actively implement the four strategies including resource, marketing, internationalization and innovation, actively implement measures for broadening sources of income and reducing expenditure as well as cutting costs and enhancing efficiency, and optimize its business layouts and asset structures in order to endeavour to bring continuing returns to all shareholders.
PetroChina is a fully integrated oil company with upstream, midstream and downstream operations. It operates as a subsidiary of China National Petroleum, the state-owned oil company of China.
The government has tried to help the company by suspending retail fuel price cuts while crude trades below $40 a barrel. Because the company is government-owned, the government sets the price it can charge consumers, and that has never really worked on PetroChina’s behalf.