PetroChina wants natural gas to account for around half its output by the end of the decade, up from 37% currently, and to expand its overall output by 30%, it said last week.
At the same time, it said it would cut its full-year domestic oil output target by 3% as low oil prices have made some of its Chinese assets unviable.
The state-run oil major wants to produce 300 million tonnes of oil equivalent, or 6.02 million boepd, by 2030. This will mostly be driven by overseas projects, which by the same year should produce half its output, up from 14.4% in the first half of this year.
PetroChina’s global crude output slipped 1.4% year on year in the first six months of 2016 to 470.6 million barrels. Its gas output was on a different trajectory, expanding 7.4% to 1.66 tcf (47.01 bcm) while its total oil and gas output lifted 1.7% year on year to 748.2 million boe, but was down 1.3% from the previous six months.
As it unveiled its relatively downbeat half-year results – net profit dived 98% to 531 million yuan (US$79.5 million) – PetroChina also said it would not rule out selling more assets and using the gains to boost its sagging bottom line and fund dividend payouts.
“We have slashed our [full year] domestic oil output target set early this year from 106 million [2.12 million bpd] to 103 million tonnes [2.06 million bpd],” PetroChina’s vice chairman Wang Dongjin said on August 25. “This is mainly because we stopped construction of some projects whose break-even costs exceed that of expected oil prices and cut output at high-cost producing fields that could not generate the desired return.”
PetroChina has based its business plan on a forward view that oil prices will average US$45-50 per barrel in the second half of this year, US$50-60 next year and 2018, and US$60-80 in 2020.
“Our view is that oil price has probably bottomed out in this year’s first quarter,” Wang added. “With the total cost of oil production globally now at US$50-55 per barrel, it would be unsustainable for oil price to stay below that for much longer without causing declines in future output and reserves.”
This oil price forward view is partly behind PetroChina’s target to lift natural gas’ proportion of its total output to 50% from 37% currently, it said.