PetroChina's First-Half Profit Drops 63% on Oil Market Rout

Net income dropped to 25.4 billion yuan ($4 billion), or 0.14 yuan a share, in the six months ended June 30, from 68.1 billion yuan, or 0.37 yuan, a year earlier, the Beijing-based company said Thursday in a statement to the Hong Kong stock exchange. The average of three analysts estimates compiled by Bloomberg was a profit of 30.3 billion yuan.

PetroChina is suffering amid the collapse in oil prices as it depends on exploration and production for most of its revenue. Crude has tumbled as producers sustain output to protect market share, worsening a global oversupply, amid concern that demand growth from China is stalling. Brent, the benchmark for about half the world’s crude, averaged about $59 a barrel in the first half of the year, down 45 percent from the same period in 2014.

More from Bloomberg.com: Ukraine Agrees to 20% Principal Writedown With Main Creditors

“The global oil price is likely to keep fluctuating at a low level,” the company said in its earnings release. “The growth of domestic demand for oil and gas will slow down and the market competition will get tougher.”

PetroChina produced 736 million barrels of oil equivalent in the first half, up 2.9 percent from a year earlier. The company’s average realized crude price fell 45 percent, while average natural gas prices rose 0.4 percent. Sales dropped 24 percent to 878 billion yuan, according to the statement. Capital expenditure declined 33 percent to 61.7 billion yuan.