(Yicai) Aug. 27 -- Chinese energy giant PetroChina said earnings fell in the first half for the first time in five years because of a slump in crude oil and fuel prices and weaker product sales.

Net profit fell 5.4 percent to CNY84 billion (USD11.7 billion) in the six months ended June 30 from a year earlier, according to the Beijing-based company's financial report released yesterday. Revenue dropped 6.7 percent to CNY1.45 trillion (USD202.7 billion).

Half of PetroChina’s eight major products sold offshore saw sales decline, led by polypropylene, gasoline, and diesel. In addition, the average price of six fell, including kerosene, crude oil, diesel, and gas, with crude oil tumbling 12.3 percent to CNY3,690 (USD515) per ton and diesel 9.4 percent to CNY6,213 (USD870) per ton.

Shares of PetroChina [SHA: 601857], the listed arm of state-owned China National Petroleum Corporation, closed 1.6 percent lower at CNY8.63 (USD1.21) apiece in Shanghai today. Its Hong Kong-traded stock [HKG: 0857] fell 0.5 percent to HKD7.39 (95 US cents).

PetroChina said it expects the international crude oil market to remain oversupplied in the second half, weighing on global oil prices, while the Chinese market for refined oil will continue to face competition from alternative energy sources, but natural gas demand will likely recover rapidly.

As a result, PetroChina will accelerate the transformation and upgrading of its legacy businesses, while strategically expanding into emerging sectors such as new energy and new materials, it said. The company will also push the large-scale development of its vehicle charging and battery-swapping operations, and speed up coordination across all business segments.

In a separate announcement made the same day, the firm said subsidiary PetroChina Taihu Beijing Investment plans to establish three joint ventures via cash contributions with relevant partners for a controlling stake in all three. Each JV will fully acquire one of Xinjiang Gas Storage, Xiangguosi Gas Storage, and Liaohe Gas Storage. 

Xinjiang Gas will be bought for CNY10 billion (USD1.4 billion), Xiangguosi Gas for CNY17.1 billion, and Liaohe Gas for CNY13 billion, PetroChina noted, adding that these are related-party transactions and do not constitute a significant asset restructuring. 

The acquisitions aim to consolidate relevant gas storage assets, optimize and integrate high-quality assets and businesses, and promote the stable operation and high-quality development of the natural gas supply chain, it said.

By fully acquiring the three companies, PetroChina will add 10.97 billion cubic meters of working gas storage capacity, which will help match its storage and peak shaving capacity to its natural gas sales volume, the company said.

Editor: Martin Kadiev