China's oil giant PetroChina reports $162 bn liability

Weighed down by falling petroleum prices and slowdown of Chinese economy, oil giant PetroChina Co suffered a 67 percent slump in profits, the worst in about 15 years and ending up with a liability of USD 162 billion.

Among all non-financial A-share companies, State-owned PetroChina Co topped the list with 1.05 trillion yuan (USD 162.8 billion) liability, official media reported today.

State-run Securities Daily recorded the liability despite bringing down its debt ratio to 43.8 percent from 45.2 percent a year ago after slashing total debts by 3.5 percent last year.

PetroChina obtained regulatory approval in December to issue no more than 40 billion yuan worth of corporate bonds, state-run Xinhua news agency reported.

The thirst for liquidity came as oil companies reported a weaker year due to nosediving oil price.

Brent crude, the benchmark for more than half the world's oil, plunged 48 percent last year.

Chinese economy too weakened as it slowed down to 6.9 percent last year with forecast of further decline this year.

PetroChina reported a 67 percent slump in net profit to 35.5 billion yuan, marking its worst performance since 1999, according to the company's annual report.

The other mainland-listed oil magnet Sinopec reported a 32.1 percent decrease in net profit to 32.2 billion yuan, state-run China Daily reported.

Cost management has gained increasing attention, with PetroChina planning a 23 percent, or 155.7 billion yuan, cut on capital expenditure, the Securities Daily quoting Management sources.

Oil giants are also eyeing enhanced ownership reform to keep lean, analysts said.

PetroChina sold remaining natural gas reserves under its Xinjiang, Southwest, Huabei, Dagang, Liaohe and Changqing subsidiaries to local petroleum administrations for 3.51 billion yuan.

The company reported a 26.7 percent decrease in cash flow from operating activities to 261.31 billion yuan and a 25.8 percent slump in cash flow from investment activities.