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    Toby Shek

    Research Analyst at Citibank

    Toby Shek's questions to PETROCHINA CO (PCCYF) leadership

    Toby Shek's questions to PETROCHINA CO (PCCYF) leadership • Q3 2022

    Question

    Toby Shek from Citibank asked about the reasons for the significant Q3 performance decline in the Refining & Chemicals (R&C) sector, the outlook for Q4, and sought confirmation on recent government actions regarding diesel export quotas.

    Answer

    An executive from the Finance Department explained that the R&C sector's Q3 profitability decline of RMB 10 billion was due to falling crude prices narrowing gasoline and diesel margins, lower domestic consumption from COVID-19, and losses in chemical operations. He expressed optimism for a Q4 recovery. Mr. Sun from the Production Operation Management Department confirmed PetroChina received an additional export quota of 4.95 million tons. He clarified that diesel exports are contingent on satisfying domestic demand first and that the company has sufficient supply and capacity to meet rising domestic needs by adjusting run rates and product mix.

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    Toby Shek's questions to PETROCHINA CO (PCCYF) leadership • Q2 2022

    Question

    Toby Shek from Citibank questioned the substantial increase in capital expenditures, particularly in the E&P segment, asking for allocation details, return on invested capital, and investment in new energy. He also asked about the profitability impact on the Refining and Chemicals business from high crude prices in the second quarter.

    Answer

    Vice President Ren Lixin confirmed H1 CapEx was CNY 92.31 billion, up 24.9%, with the E&P segment accounting for CNY 72.82 billion. The average return on invested capital was 5.6%. Vice President and Chief Engineer Yang Jigang explained that the refining business navigated high crude prices by focusing on stable operations, value chain optimization, and strict cost controls. Profitability was supported by these efficiency efforts as well as inventory gains from rising prices.

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    Toby Shek's questions to PETROCHINA CO (PCCYF) leadership • Q1 2022

    Question

    Toby Shek from Citibank followed up on natural gas sales, asking for the proportion of direct sales to end-users. He also inquired about any adjustments to the utilization ratio of refining and chemical plants in response to market softness in Q2.

    Answer

    An executive from the production operation management department stated that in Q1, sales to end-users accounted for approximately 28% of total domestic natural gas sales. In response to a later question, another executive confirmed that the company has made in-time adjustments to its refining capacity and utilization ratio to balance production and marketing amid market changes.

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