Chinese Oil Majors Report Mixed Success in Q1 & Q2

China's major oil producers have reported a mixed first half of profits.

China National Offshore Oil Corporation (CNOOC), China Petroleum & Chemical Corp (Sinopec) and PetroChina have shown mixed fortunes in the first half of 2011, thanks mainly to increased refining and crude costs.

CNOOC reported a record first half profit for this year with earnings of 39.3 billion yuan ($537m), up 34% from 25.9 billion a year earlier. China's top offshore oil and gas producer's record profits were partly the result of the rising price of crude, which averaged at $110.5 per barrel in the first half. The oil giant has revised down its target for the second half, however, to 331-341 million barrels of oil equivalent (boe) from 355-365 million as a result of the Bohai oil spill and delays in acquisition.

Sinopec has also reported a decent 12% increase in first half profits to 41.2 billion yuan ($6.5bn), surpassing industry analysts 36 billion yuan predictions. State-owned Sinpoc has profited from controlling losses in the refining sector and managed to process 62% more oil than its rival PetroChina. The oil giant posted a loss of 12.2bn yuan from processing 800 million barrels, compared to PetroChina's 23.4bn yuan loss from refining 491 million barrels.

PetroChina, the world's second-most valuable oil and gas producer after US giant Exxon Mobil, posted flat profits roughly in line with the same period in 2010 largely due to higher oil prices, expensive natural gas imports and its inability to offset refining losses. The state-owned company reported a net profit of 66bn yuan ($10.3) for the first half, up just 1% from a year earlier and slightly lower than Reuters' 68.3bn yuan prediction. The company plans to recoup some losses through increased Q2 & Q3 crude oil production by 3.3% to 886m barrels as well as boosting natural gas output by 10% at 2.45 trillion cubic feet.

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