Both companies said a slump in global crude prices and slowing domestic demand led to the dip in earnings.
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PetroChina’s capital expenditures in the first half of the year fell 17.5 percent to 50.9 billion yuan.
0857, -0.95% and offshore oil explorer Cnooc Ltd.
Net income dropped 98 percent to 531 million yuan.
China National Petroleum Corporation (CNPC) registered a nearly 97.9 percent decline in its net profit, making only 531 million yuan (almost 80 million US dollars), while China National Offshore Oil Corporation (CNOOC) saw a loss of 7.74 billion yuan.
China’s biggest oil and gas producer PetroChina managed to stay in the black but reported a sharply reduced profit for the first half of FY 2016. Despite the loss, the company declared an interim dividend of HK$ 0.12 per share.
Oil has whipsawed this year, flipping five times between bear and bull markets, as output from nations outside the Organization of Petroleum Exporting Countries, including China and the USA, declines in the wake of a price crash that began in 2014.
CNPC said in July that it earned a profit in the first half of the year of 27.6 billion yuan, without providing details. A major part of the 10.4 billion yuan asset write-down was linked to its Canadian oil sands operations, including the Long Lake project which was hit by a deadly blast and an oil spill incident previous year. Shares of PetroChina were down 0.8% in recent trading, while shares of China National Offshore Oil Corporation or Cnooc were down 2%. “In the second half of this year, the demand and supply of the domestic and global oil and gas market is not expected to undergo significant change”, it said.
Global crude prices rose by a third in the first six months of the year, recovering from their lowest in more than a decade of $27 a barrel in mid-January amid hopes that major producers would cut output, helping to erode a global surplus.
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PetroChina shares at one point fell to 5.16 Hong Kong dollars on the city’s stock exchange, down 2.09% from Wednesday’s close.
