PetroChina, China's largest oil company and the second-largest in the world, said its second-quarter profit fell 12% to $4.5 billion as losses in the company's refining business countered the higher oil prices that have been a boon to so many of PetroChina's Western rivals.
PetroChina (PTR) said its refining business lost nearly $3.7 billion in the first half of this year as processing costs climbed by more than 3%. Downstream operations, including refining and marketing, accounted for 12% of PetroChina's operating income in 2010, Bloomberg News reported.
The refining loss meant PetroChina was able to post an increase of just 1% in first-half profits. That compares to an increase of 51% for smaller rival Cnooc (CEO), China's third-largest oil company.
PetroChina is looking to increase oil production by 3.3% to 885.8 million barrels this while boosting its natural gas production by 10%. Last year, the company said it plans to spend $60 billion over the next decade on global energy acquisitions in an effort to meet China's rising domestic demand.