PetroChina to add 3.5 mil mt standard coal/year of green energy capacity in 2021

PetroChina has targeted increasing its green energy production and utilization capacity by 3.5 million mt standard coal/year in 2021, as part of its effort to meet emission peak by around 2025 and neutrality by 2050, president Huang Yongzhang said during the company's interim result conference call late on Aug. 26.

In the first half of the year, the company developed a new contracted geothermal heating area spanning 10 million square meters and won several approvals for wind power and solar power development.

The capacity of its under-construction geothermal, wind power, and solar power, and other alternative projects totaled 350,000 mt of standard coal/year, according to Huang.

PetroChina has also kicked off a hydrogen purification project while constructing six hydrogen refueling centers, Huang said.

PetroChina brought its first two hydrogen refueling centers online in 2021 in Taizicheng and Futian in northern China for the 2022 Winter Olympics.

In addition, the company set up six new energy bases to develop its clean energy projects in Yumen, Qinghai, Jidong, Jilin, Daqing and Beijing-Tianjing-Hebei, in the northern part of China, Huang added.

PetroChina also targets to increase its capital expenditures on low carbon and green energy development in the coming years to have oil, gas, and new energy to each account for a third of its energy mix by 2035, according to Dai Houliang, the Chairman of PetroChina.

In H1 2021, PetroChina's oil and gas production was at 819.6 million barrels of oil equivalent, with crude oil output accounting for 54.1% or 443.1 million barrels, according to the company report.

Dai said PetroChina's subsidiaries will have their own new energy development plan based on their different geographical strengths in solar, wind, or geothermal, but that natural gas had an important role in the company's energy transition journey.

PetroChina is China's top upstream producer holding most of the onshore oil and gas fields in China, but also has significant solar, wind, and geothermal resources.

The company's natural gas production rose by 6.7% year on year to 61.15 Bcm in H1, accounting for 58.5% of China's gas production in the same period, according to data from the company report and National Bureau of Statistics.

Secure domestic oil, gas output

In contrast to its international peers, PetroChina spends the bulk of its capital upstream to secure the country's energy supplies.

In the first six months, 73.2% of its capex or Yuan 54.08 billion ($8.35 billion) went into exploration and development, according to CFO Chai Shouping.

As a result, its oil and gas output in China grew 0.6% and 6.7%, respectively, on the year. This was despite the global output declining 1.7% year on year to 819.6 million boe or 4.53 million boe/day in H1.

The company also announced on Aug. 25 a "strategic breakthrough" in shale oil, and that it had identified about 1.27 billion mt worth of additional geological reserves in the Gulong formation in the aging flagship Daqing oil field.

This would help PetroChina produce 1 million mt/year of oil by 2025 from the Gulong shale formation.

PetroChina aims to spend a total of Yuan 239 billion in 2021, a 3.9% year-on-year decline. In H1, its total capex was Yuan 73.88 billion, falling 1.2% year on year.

The company's exploration and production sector reported a profit from operation of Yuan 30.87 billion, rising 198.2% year on year in January-June, amid a recovery in oil prices.

The company's refining sector reported profit from operations of Yuan 13.46 billion in H1, compared with a loss of Yuan 13.64 billion in H1 2020.

The company refined 606.1 million barrels of crude oil in H1, up 6.7% year on year to meet 49% of its 2021 target of 1.25 billion barrels.

PetroChina's operational results

* Oil, gas outputs from both domestic and overseas

Source: company report

PetroChina's domestic production (Unit: mil mt)

* conversion factor: 1 cubic meter = 35.31 cubic feet

** conversion factor: 1 mt = 7.389 barrels

^ Divide PetroChina's output by China's total production

Source: Company report, National Bureau of Statistics