Middle East Situation | China National Petroleum Corporation: Currently, the company's operations are generally normal

PetroChina (00857) Chairman Dai Houliang said that, regarding the situation in the Middle East, the company’s operations are currently generally normal overall. Crude oil and natural gas imported through the Strait of Hormuz account for about 10% of the company’s total operating volume. Therefore, the company’s two major upstream and downstream oil and gas industry chains can ensure long-term stable operations, though its investment business in the Middle East has been affected to varying degrees as well. He said that last year, the company formulated an economic contingency plan for trade to ensure supply and guarantees, in order to maintain the safety and stability of the industrial chain and supply chain. The plan is being implemented in an orderly manner, and it is also continuously reviewed and improved.

He said that, with regard to the preliminary planning outline released by the Chinese government, in the next five years China’s economy will continue to grow. The planning outline has clearly set out major initiatives such as building a new energy system and building energy intensity, which will provide the company with excellent strategic opportunities and broad market space. He pointed out that the company’s overall goal is that by the end of the “14th Five-Year Plan” period (the 15th-Five-Year-Plan end), the company will comprehensively achieve high-quality development, and overall build itself into a world-class enterprise. In the oil and gas and new energy sectors, the company will further strengthen its energy-efficient supply capacity, continuously increase its efforts in domestic exploration and development and in increasing reserves and production, consolidate the development of domestic crude oil production and domestic natural gas production, and also the production volumes from overseas oil and gas interests.

Regarding domestic chemical “anti-competitive overcapacity” (anti-“involution”), he believes that, at present, it is being promoted and has already shown results. In the chemical market, competition in low-end segments is fierce, while demand still outstrips supply in high-end segments. He indicated that the key is to resolve structural contradictions. The company is accelerating the adjustment of its industrial structure, making strategic deployments to actively respond to market changes, further optimizing existing capacity, and will also closely monitor government policies.