PetroChina is losing money again?!
Before and after the release of the performance report, the popularity of this entry will rise rapidly, and the news on the website about "where did the money go" and "revealing the truth behind it" are endless.
While everyone is following the trend and ridiculing, few people seem to pay attention to the truth of the problem: Is PetroChina really losing money?
On March 25, PetroChina released its 2023 annual performance report, which showed that in 2023, PetroChina will achieve an operating income of 3.0 trillion yuan, and its operating performance will hit a record high for two consecutive years. The net profit attributable to the parent company was 161.15 billion yuan, a year-on-year increase of 8.3%.
01
Not only did he not lose money, but he also made a steady profit
The performance report is an intuitive indicator to test the business level of the enterprise. With the release of the 2023 annual performance report, the rumors of PetroChina's losses on the Internet are self-defeating.
After setting the best operating performance in history in 2022, PetroChina will make steady progress in 2023, with an operating income of 3.0 trillion yuan and a net profit attributable to the parent company of 161.15 billion yuan, once again handing over a brilliant report card.
From the perspective of business segments, PetroChina has performed very well in the oil and gas new energy business, achieving an operating profit of 148.70 billion yuan, becoming the main force for PetroChina to achieve good performance.
It is undeniable that for companies such as PetroChina, the oil prices that have been running at a high level in recent years have created "the right time and place" conditions for corporate profits. In 2023, the average price of Brent crude oil futures will reach $82.2 per barrel, and the price around $80 per barrel is obviously very comfortable for most oil companies.
However, in addition to "the right time and place", "people" have also become an indispensable part of profitability. In terms of upstream exploration and development alone, PetroChina will further increase its investment in exploration and development in 2023, continue to promote efficient exploration, strive to improve economic recoverable reserves, and make a number of major breakthroughs and important discoveries in key basins such as Ordos, Tarim, Sichuan and Bohai Bay. In 2023, PetroChina's oil and gas equivalent production will be 1.76 billion barrels, a year-on-year increase of 4.4%, of which domestic oil and gas equivalent production will be 1.56 billion barrels, a year-on-year increase of 3.4%.
In the direction of new energy, in order to cope with the trend of energy transition, PetroChina will continue to steadily expand its new energy business in 2023, and the development and utilization capacity of new energy will reach 11.5 million tons of standard coal per year, a year-on-year increase of 44%.
In terms of refining and chemical new materials business, in 2023, PetroChina will further promote the transformation of refining and chemical industry, move towards the middle and high end of the industrial chain and value chain, and achieve an operating profit of 36.94 billion yuan. The sales business achieved an operating profit of 23.96 billion yuan, and the natural gas sales business achieved an operating profit of 43.04 billion yuan.
(Figure: Profit distribution of PetroChina by business segment in 2023)
In fact, in the past three years, PetroChina's profitability has remained at a high level, especially in 2022, in the Fortune list of China's top 500 listed companies, PetroChina has become the first in the profitability of the real economy with a net profit of 149.38 billion yuan.
Even if we extend the timeline to 10 years, we can still get a definite answer from the earnings report: PetroChina has never lost money in the past 10 years.
02
Where does the loss theory come from?
In this case, why did the theory of China's oil losses come from?
In fact, in 2020, when the epidemic and oil prices were sluggish, oil companies did not have a good time. Several major oil giants lost hundreds of billions of dollars in half a year, handing over the worst semi-annual report in the history of Hyundai Oil.
PetroChina was not spared. In the first half of 2020, PetroChina suffered a loss of 29.98 billion, becoming the "conclusive source" of the company's loss news. However, it is obviously not rigorous enough to use the figures in the financial statements for a certain period of time to make partial generalizations. In the second half of 2020, PetroChina quickly turned losses into profits, achieving a profit of 33.49 billion yuan for the whole year.
After the cold winter, the life of oil companies has been much better.
In the past two years, the international oil and gas prices that have been running at a high level have created a solid foundation for oil and gas companies to achieve large-scale profits. It can be said that the major oil and gas companies have made a lot of money.
In China, recently, Sinopec and CNOOC have successively released their 2023 performance reports. Among them, Sinopec achieved annual revenue of 3.21 trillion yuan and net profit attributable to the parent company of 60.5 billion yuan, while CNOOC achieved revenue of 416.6 billion yuan and net profit attributable to the parent company of 123.8 billion yuan, maintaining a high profit level.
At the same time, the profits of international oil giants have been "soaring" in the past three years.
TotalEnergies turned a profit in 2021 and recorded a record net profit in 2022. ExxonMobil recorded a net profit of $55.7 billion in 2022, setting a new profit record for Western oil giants. International oil majors such as bp and Shell have also set new records for their highest profits in recent years.
Obviously, the overall improvement of the industry has laid the foundation for enterprises to earn high profits. In the face of 2024, can this positive situation be continued?
In fact, the oil and gas industry still faces a lot of uncertainty in 2024. The potential risk of economic slowdown, changes in the geopolitical situation, and the irreversible global trend of green and low-carbon transformation will affect the development of the oil industry.
Although many institutions have lowered their international oil price forecasts for 2024, oil prices are still expected to be within the "comfort zone" of the oil industry. The EIA's latest forecast puts Brent at an average spot price of $83 in 2024, while Goldman Sachs expects Brent crude oil to be between $70 and $90 per barrel in 2024.
Oil prices at medium to high levels may continue to support oil companies to achieve high profits.
03
From "huge" to "powerful"
In addition to the blessing of external factors, a major change set off by China's oil companies from within is more worthy of attention.
Since 2020, PetroChina has actively responded to the three-year reform of state-owned enterprises. In the past three years, the oil fields and mining areas that were once integrated with "enterprises and societies" have been transformed, the asset burden that was once big has disappeared, and the iron rice bowls and chaotic lives of employees have become a market-oriented mechanism that "can go up and down" and "can enter and exit", and the state-owned enterprises that have been criticized by many people as "big but not strong" have used this to stir up "a pool of spring water".
The results of the reforms are clear.
In 2020, PetroChina implemented measures to improve quality and efficiency by 32 billion yuan, in 2021, the loss of all sub-subsidiaries decreased by 14.8% compared with the previous year, and in 2022, the labor productivity of all employees increased by 25% compared with the previous year. If all this is put in the context of the great turmoil and change in the industry brought about by external factors, everything will seem more meaningful.
Becoming more flexible means that enterprises have a stronger ability to resist risks, and enterprises have become bolder, which means that innovation has brought more breakthroughs.
Of course, it would be a mistake to judge PetroChina's value only by whether it can deliver a brilliant report card.
On March 4, 2024, in the hinterland of Taklamakan in Xinjiang, the "forbidden area of life", the deep Taco 1 well finally succeeded in breaking through 10,000 meters after more than 270 days of hard work, and explored the first 10,000-meter deep well in mainland China with almost no similar reference materials. Behind this is the responsibility of the "pillar" of PetroChina's energy supply, and it is also the continuous exploration of scientific and technological self-reliance and self-reliance.
(Photo: Deep Taco 1 Well Picture from China Petroleum News Center)
At an altitude of more than 5,000 meters above sea level, in Shuanghu County, Nagqu, Tibet, stands the world's highest gas station, and it takes 12 hours to transport refined oil from the Lhasa Railway Receiving and Unloading Depot here, and as long as a week. What is not quite matched is that due to the high-altitude ecological relocation in the county, there are only more than 1,000 people left, and the demand for oil is not high, but PetroChina has always stuck here, behind which is their responsibility to ensure people's livelihood.
It is true that companies like PetroChina have abundant resources, but they also shoulder heavier responsibilities. Serving the country with energy has never been an empty phrase for them.
"Shouldering the responsibility and mission of high-quality development of the energy industry," Dai Houliang, chairman and party secretary of PetroChina, said in a recent article, which may be the foundation of state-owned enterprises like PetroChina.