Workers at a PetroChina plant in Liaoning province. [CFP]

China National Petroleum Corp (CNPC), the country's largest oil and gas producer, yesterday said its refining business profits rose to a record high in the first half after the government revised the fuel pricing system this year.

CNPC's refining business achieved robust growth although it processed less crude in the period year-on-year due to weak demand, according to a statement released yesterday. The company did not, however, give out any profit numbers.

The better-than-expected performance was a result of "restructuring in business", said Shen Diancheng, vice-president of CNPC's listed arm PetroChina Co.

PetroChina made a profit of 53.6 billion yuan in the first half of last year. It incurred 83 billion yuan in refining losses last year due to domestic price controls and shrinking sales of refined products towards the end of 2008.

CNPC boasts of a primary crude processing capacity of 140 million tons per year. It operates 26 refineries and petrochemical enterprises, mainly in northeast and northwest China.

The company produces over 40 percent of the nation's oil products, including gasoline, diesel fuel, kerosene and lube oil.

Currently CNPC operates three overseas joint venture refineries - in Sudan, Kazakhstan and Algeria.

Analysts said that the company's strong performance in the refining business was due to relatively stable oil prices.

The fluctuating oil price had the biggest effect on PetroChina's business performance, and other factors such as windfall taxes also played a role, said Liu Gu, energy analyst with Guotai Junan Securities.

China, the world's third-largest economy, raised domestic gasoline and diesel prices three times this year under a revised pricing formula.

CNPC will cut its investment budget by 10 percent, also lower its cost by 5 percent from the plan made at the beginning of this year, it said.

(China Daily July 18, 2009)