(Bloomberg) -- PetroChina Co. posted record earnings for the first half of the year as high drilling output and strong oil prices helped it weather weakening fuel demand in China.
China’s largest oil and gas driller said output rose to 905.5 million barrels of oil equivalent in the period. Beijing has pushed its state-owned oil giants to invest heavily in production to help the nation meet energy security goals.
An uptick in oil prices helped make those investments pay off. Global benchmark Brent averaged more than $83 a barrel in the first half, compared with about $80 over the same period in 2023. PetroChina also announced a 6 billion yuan ($842 million) acquisition of its parent company’s electricity unit as it seeks to jump start its clean energy transition.
The firm’s net income was 88.61 billion yuan for the six months through June, compared with 85.27 billion yuan in the same period last year, it said in an exchange filing on Monday.
The boost from upstream activities helped offset a weaker fuel market, which was hit by China’s sputtering economy and growing electrification of the transport fleet. Crude refining is one of China’s worst-performing industries, according to the statistics bureau, with accumulated losses in the first half stretching to 16 billion yuan.
PetroChina said it would pay 0.22 yuan per share for the interim dividend. Morgan Stanley upgraded the company to overweight earlier this month due to sustainable high yields and structural growth in gas.
The company also announced the acquisition of 100% of CNPC Electric Energy from another unit at its parent company, state-owned China National Petroleum Corp. The acquisition will allow the company to improve its power trading business and scale up its green development strategy, it said in a statement.
PetroChina said earlier this year that it planned to add 30 gigawatts of renewable generation to its portfolio in 2024 and advanced a pledge to power its operations with 100% clean energy to 2033, 17 years earlier than previously promised.
CNPC Electric Energy also has permission to distribute power externally, which could allow PetroChina to eventually transition into a third grid company in the country to challenge utility giants State Grid Corp. of China and China Southern Power Grid Co., Morgan Stanley analysts including Jack Lu said in a research note.
--With assistance from Lucille Liu.
(Updates with additional details and analyst comments throughout.)
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