Recently, the 2023 annual reports released by China's three major oil companies showed that due to factors such as the fall in international oil prices throughout the year, the overall revenue of the three major oil companies in 2023 declined to varying degrees; at the same time, overall market supply and demand were loose. Against the background, the three major oil companies are accelerating the promotion of increasing reserves and production and low-carbon transformation.

Recently, China's three major oil companies, namely China Petrochemical Corporation (hereinafter referred to as "Sinopec"), China National Offshore Oil Corporation (hereinafter referred to as "CNOOC"), and China National Petroleum Corporation (hereinafter referred to as "China Petroleum") have successively released their 2023 annual reports (hereinafter referred to as the "Report"). According to the report, affected by factors such as the decline in international oil prices throughout the year, the overall revenue of the three major oil companies in 2023 declined to varying degrees, with PetroChina having the largest decline, reaching 7%. However, in terms of parent net profit, PetroChina still maintained positive growth against the trend, while Sinopec and CNOOC fell along with revenue.

Overall, against the background of gradual recovery of global oil demand and overall easing of market supply and demand in 2023, the three major oil companies are accelerating the promotion of increasing reserves and production and low-carbon transformation, demonstrating their strength and responsibility as the main force of energy.

Falling oil prices drag down revenue

Data from the 2023 annual reports of the three major oil companies show that in 2023, Sinopec had the highest revenue, reaching 3.2122 billion yuan, but a decrease of about 3.2% from the same period last year. PetroChina followed closely, achieving revenue of approximately 3.011 billion yuan, a decrease of approximately 7% from the same period last year. CNOOC's revenue in 2023 will be relatively low, at 416.6 billion yuan, a year-on-year decrease of 1%.

The simultaneous decline in revenue of the three major oil companies was related to the decline in international crude oil prices last year.

PetroChina pointed out in its annual report that the decline in revenue was mainly due to the combined impact of falling prices of oil and gas products such as crude oil and natural gas and increased sales. Sinopec also stated that the decrease in main business income was mainly due to the decline in the prices of crude oil, refined oil and chemicals. CNOOC also pointed out that the decline in revenue was mainly due to the increase in oil and gas sales and trade volume and the decline in oil prices in the international market.

Data shows that in 2023, world oil demand will gradually recover, market supply and demand will be generally loose, geopolitical impact will gradually weaken, and international oil prices will decline year-on-year. The average spot price of Brent crude oil for the whole year was US$82.64/barrel, down 18.4% year-on-year; the average spot price of West Texas Intermediate crude oil in the United States was US$77.67/barrel, down 17.8% year-on-year. Taking PetroChina as an example, annual report data shows that in 2023, the average realized price of PetroChina's crude oil was US$76.60/barrel, down 16.8% from US$92.12/barrel in the same period last year; the average realized price of exported natural gas dropped by 22.7% year-on-year. The average realized price of gasoline, firewood and kerosene dropped by 5%-11.7%, and the average realized price of polyethylene and polypropylene dropped by 5.2% and 8.7% respectively.

It is worth noting that against the background of falling international oil prices, PetroChina still achieved positive growth in net profit, the best level for the same period in history. The annual report shows that it achieved a net profit attributable to its parent company of 161.15 billion yuan in 2023, a year-on-year increase of 8.3%, ranking first among the three major oil companies. CNOOC and Sinopec achieved net profits attributable to the parent company of 123.8 billion yuan and 60.463 billion yuan respectively, down 13% and 9.9% year-on-year respectively.

Remarkable results in increasing reserves and increasing production

As the main force in ensuring oil and gas supply in China, the three major oil companies have implemented high-quality development requirements, vigorously strengthened oil and gas exploration and development, and continued to promote increased reserves and production.

PetroChina pointed out in its annual report that in 2023, a number of major breakthroughs and important discoveries have been made in key basins such as Ordos, Tarim, Sichuan, and Bohai Bay, and two 10,000-meter exploration wells, including the Shendi Tako-1 well and the Chuanke-1 well; Strengthen the stable production of old oil and gas fields and the construction of benefits and production in new areas, crude oil production has remained stable and increasing, and natural gas production continues to grow rapidly. In 2023, the company's oil and gas equivalent output will be 1.76 billion barrels, a year-on-year increase of 4.4%. Domestic oil and gas equivalent output was 1.56 billion barrels, a year-on-year increase of 3.4%, of which crude oil output was 770 million barrels, a year-on-year increase of 0.8%; saleable natural gas output was 4.7 trillion cubic feet, a year-on-year increase of 6.0%.

Sinopec also puts energy supply assurance first, continues to promote the seven-year action plan, consolidates the resource base, oil and gas reserves and production continue to grow, and has achieved remarkable results in increasing reserves, stabilizing oil, increasing gas and reducing costs. The annual oil and gas equivalent output was 504.09 million barrels, a year-on-year increase of 3.1%. Among them, domestic crude oil output was 251.63 million barrels; natural gas output was 1.3378 billion cubic feet, a year-on-year increase of 7.1%. At the same time, we will accelerate the construction of a world-class refining and chemical industry base, expand advantageous production capacity, and steadily promote "oil conversion" and "oil conversion". Refining, polyolefin and other production capacity ranks first in the world, and oil and gas equivalent output and crude oil processing volume have reached a record high, and the proportion of high value-added chemical products continues to increase.

As the main body of exploration and development in China's offshore oil and gas fields, CNOOC oil and gas exploration has maintained a good momentum. A total of 9 new discoveries have been made throughout the year. The net confirmed reserves have reached the best results in history. The reserve life has remained above 10 years for seven consecutive years. At home, a number of large-scale billion-ton oil fields have been implemented and the first large-scale gas field with a deep coal seam has been discovered; overseas, the Guyana project has obtained another 100-ton oil field. The net oil and gas output was 678 million barrels of oil equivalent, setting a record high for five consecutive years. Bohai Oilfield maintains its status as China's largest crude oil production base.

Create new advantages in green competition

** As traditional energy companies, while promoting the increase of oil and gas reserves and production and ensuring national energy security, the three major oil companies are also actively promoting the integrated development of oil and gas fields and new energy sources, and "multiple points bloom" in geothermal, photovoltaic, wind power, green hydrogen and other businesses to create new advantages in green competition. **

PetroChina pointed out in its annual report that in 2023, its new energy business will achieve large-scale and leapfrog development and actively promote the implementation of new energy projects in Xinjiang, Qinghai, Jilin, Heilongjiang and other regions. In 2023, wind power and photovoltaic power generation capacity will be 2.2 billion kilowatt-hours, and new wind and photovoltaic power generation will be added. The installed capacity of 3.7 million kilowatts; the cumulative geothermal heating area exceeds 35 million square meters, and the newly signed geothermal heating contract area exceeds 40 million square meters; the total production capacity of high-purity hydrogen reaches 6600 tons/year. Tarim Oilfield has built a 1.1 million-kilowatt photovoltaic power station, North China Oilfield has built Beijing's first medium-deep geothermal heating demonstration project, and Yumen Oilfield has built electrolyzed water hydrogen production project. The new energy development and utilization capacity reached 11.5 million tons of standard coal per year;CCUS injected 1.592 million tons of carbon dioxide.

Ma Yongsheng, Chairman of Sinopec, said in his annual report speech that the company has orderly promoted the construction of "oil, gas, hydrogen and electricity services" integrated energy service providers, launched and implemented a three-year action plan for the development of charging networks, and fully promoted the development of charging and replacing business; focusing on hydrogen energy transportation, green hydrogen refining and refining have laid out hydrogen energy business and opened up hydrogen corridors; wind and solar power generation has steadily increased, breakthroughs have been made in CCUS industrialization, and green and low-carbon development advantages have accelerated.

CNOOC has also solidly carried out energy conservation and carbon reduction and steadily promoted new energy business. The annual green electricity consumption translates into carbon reduction of more than 440,000 tons, and the offshore oil and gas fields achieve the recycling of more than 50,000 square meters per day of torch gas. In 2023, the world's first semi-submersible "Shuangbai" far-reaching sea-floating wind power project "Haiyu Guanlan" with a water depth of more than 100 meters and an offshore distance of more than 100 kilometers will be successfully connected to the grid for power generation, with a cumulative supply of more than 14 million degrees of green electricity. China's first offshore carbon dioxide sequestration demonstration project was officially put into operation, and the Daya Bay CCS/CCUS cluster research and demonstration project was solidly advanced.

original title:"Three barrels of oil":Accelerate transformation based on ensuring supply