Shares for China’s state-run oil giant PetroChina Co. ($PTR) were trading higher in Friday’s session following the release of impressive fourth-quarter and full year earnings statements.
The centerpiece of PetroChina’s financial results were clearly the 12 percent increase in profits during the year to $20.8 billion, a substantial improvement on the previous year’s $18 billion, and ahead of estimates that had that figure at roughly $20.2 billion. Revenue was up to a staggering $370 billion, driven largely by the government increasing the sale-price of gas for industrial consumers by 15 percent.
Operational results were also impressive however, with oil and gas production rising by 4.2 percent to 1.4 billion barrels of equivalent. Furthermore, PetroChina provided production guidance for 2014 that sees output reaching 1.44 billion barrels.
Also notable however was the company’s commitment to cost-cutting. Petrochina managed to wrangle-down capital spending by 9.6 percent in 2013, it’s first significant spending reductions since 2000, and expects a 7 percent reduction to $47.85 billion for 2014.
The cuts must also be seen in the context of the push to open up sections of China’s oil and gas industry to private money, in particular pipelines, exploration, and refining businesses.
PetroChina is the second largest company in the industry behind ExxonMobil (XOM) , as well as one of the largest publicly traded entities in the world, but for whom the end of 2013 was particularly turbulent due to a rare and highly publicized corruption probe that left none of country’s three major energy producers untouched. Since the removal of former company head Jiang Jiemin along with three other executives, the focus has been on core assets, exploration and construction in particular.
Ahead of Friday’s closing bell, shares for PTR were up 4 percent to $103.56, a slight pullback from the day’s high of $104.35, and on volume that was twice the company’s three-month average.