The following is excerpted from the question-and-answer section of the transcript.
(Questions from industry analysts are provided in full, but answers are omitted - download the transcript to see the full question-and-answer session)
Question: Rui Hua Ong - JPMorgan Chase & Co, Research Division - Analyst
: Congratulations on your strong result. This is Parsley from JPMorgan. My first question is your gas and pipeline earnings are quite strong, and just
now you mentioned the improvement in imported gas profits. Can you share some of the details? For example, how much was the profit interest
quarter? And roughly how much op impact was there from the loss of the PipeChina assets?
My second question is, if I look at PetroChina's E&P CapEx guidance, it is down by 6% year-on-year even though gas production guidance is up by
3% year-on-year, while crude oil CapEx guidance is flattish -- crude oil production guidance is flattish. So is there a difference in the CapEx intensity
between your oil and gas projects?
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APRIL 30, 2021 / 2:00AM, 601857.SS - Q1 2021 PetroChina Co Ltd Earnings Call (Chinese, English)
Unidentified Company Representative
[Interpreted] This is a question for Deputy Head of PetroChina answering your first question. There are several reasons behind the profits of Natural
Gas and Pipeline business. As mentioned in our presentation, in first quarter, we have -- the profit was up by RMB 7.16 billion.
As mentioned in the presentation, in China, the sales volume saw a substantial increase of 14.6% year-on-year growth, and the price for natural
gas sales also saw a 1% increase. Despite the impact from the restructuring of our pipeline business, in the first quarter, we achieved a profit of
RMB 2.98 billion. And also, we have a 29.9% equity investment in PipeChina. The return is RMB 1.58 billion. So in total, the profit is around RMB 3
billion.
For the Natural Gas and Pipeline business segment, we made a profit of RMB 11.3 billion. That is from the type of business that is RMB 3 billion.
And besides the factors of increased sales volume and prices, there is also a factor from the reducing of the cost of importing natural gas reduced
by around 20%.
As for the reasons behind the decline of importing natural gas costs, last year, in the low oil price environment, there is around 3 -- 9-month time
lag between the international oil prices and the importing natural gas price. So in the first quarter, the price was reflected, especially in the peak
season. And another reason is the appreciation of RMB from last year's RMB 6.97 to RMB 6.48 for this year. That's the reason for the decline of
importing natural gas cost. As international oil prices continue to recover and fluctuate, our benefits from this aspect might be eased.
Unidentified Company Representative
[Interpreted] Mr. Wang Shu-Jyuan from Planning Department is answering the second question.
Unidentified Company Representative
[Interpreted] Standing by the principle of company first, considering both the amounts and profitability and we set CapEx by the income control
the overall amount to put profitability first, ensuring CapEx dilution while cut the others, and PetroChina has set a CapEx of RMB 239 billion.
Business CapEx is similar to that of last year. In first quarter, despite the increase of oil prices, PetroChina has remained the strategic focus and will
continue to carry out prudent investment, targeted investment and profitable investments. And at present, we have no adjustment plan for our
CapEx. From fourth quarter, our products are going very smoothly. That's all.
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