SECURITIES AND EXCHANGE
COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN
ISSUER
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange
Act of 1934
For the month of
September 2023
Commission File
Number: 001-15006
PETROCHINA COMPANY
LIMITED
9 Dongzhimen North
Street, Dongcheng District
Beijing, The People’s
Republic of China, 100007
(Address of Principal Executive
Offices)
Indicate by check mark whether the registrant
files or will file annual reports under cover of Form 20-F or Form 40-F.
Form
20-F x Form 40-F o
EXHIBITS
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Interim report; |
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Notice to registered shareholders; |
| 99.3 |
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Notice to non-registered shareholders. |
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FORWARD-LOOKING STATEMENTS
This announcement
contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements reflect our current views with respect
to future events and are not a guarantee of future performance. Actual results may differ materially from information contained in these
forward-looking statements as a result of a number of factors.
We do not intend to
update or otherwise revise the forward-looking statements in this announcement, whether as a result of new information, future events
or otherwise. Because of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this announcement
might not occur in the way we expect, or at all.
You should not place
undue reliance on any of these forward-looking statements.
SIGNATURE
Pursuant to the requirements
of the Securities Exchange Act of 1934, the registrant has duly caused this announcement to be signed on its behalf by the undersigned,
thereunto duly authorized.
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PetroChina Company Limited |
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| Dated: September 19, 2023 |
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By: |
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/s/ WANG Hua |
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Name: |
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WANG Hua |
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Title: |
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CFO and Secretary to the Board of Directors |
PetroChina
2023 INTERIM REPORT
PETROCHINA COMPANY LIMITED
(a joint stock limited company incorporated
in the People's Republic of China with limited liability)
Stock Code: 857
xxxxx
PetroChina
2023 INTERIM REPORT
PETROCHINA COMPANY LIMITED
PetroChina
This interim report contains certain forward-looking statements with respect to
the financial position, operational results and business of the Group. These
forward-looking statements are, by their nature, subject to significant risk and
uncertainties because they relate to events and depend on circumstances that may
occur in the future and are beyond our control. The forward-looking statements
reflect the Group's current views with respect to future events and are not a
guarantee for future performance, nor do these statements constitute substantial
undertakings to investors by the Group. Actual results may differ from the
information contained in the forward-looking statements. Investors are advised
to exercise caution when dealing in the securities of the Company.
CONTENTS
002 IMPORTANT NOTICE
003 CORPORATE PROFILE
006 SUMMARY OF FINANCIAL DATA AND FINANCIAL
INDICATORS
009 CHANGES IN SHAREHOLDINGS AND INFORMATION ON SHAREHOLDERS
012 DIRECTORS' REPORT
033 SIGNIFICANT EVENTS
053 DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
056 RELEVANT INFORMATION ON THE BONDS
FINANCIAL STATEMENTS
059 PREPARED IN ACCORDANCE WITH CHINA ACCOUNTING
STANDARDS
156 PREPARED IN ACCORDANCE WITH INTERNATIONAL FINANCIAL REPORTING STANDARDS 184
DOCUMENTS AVAILABLE FOR INSPECTION
185 CONFIRMATION FROM THE DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
002
IMPORTANT NOTICE
The board of directors (the "Board" or "Board of Directors"), supervisory
committee ("Supervisory Committee") and all directors ("Directors"), supervisors
("Supervisors") and senior management of PetroChina Company Limited (the
"Company") warrant the truthfulness, accuracy and completeness of the
information contained in this interim report and that there are no
misrepresentation or misleading statements contained in, or material omissions
from the interim report, and severally and jointly accept legal responsibility
hereof. No substantial shareholder of the Company has obtained any funds from
the Company from non-operating activities. This interim report was approved at
the 3rd meeting of the ninth session of the Board. All directors of the Company
have attended this board meeting. Mr. Dai Houliang, Chairman of the Board, Mr.
Huang Yongzhang, Director and President of the Company, and Mr. Wang Hua, Chief
Financial Officer of the Company, warrant the truthfulness, accuracy and
completeness of the financial statements included in this interim report. The
financial statements of the Company and its subsidiaries (the "Group") have been
prepared in accordance with China Accounting Standards ("CAS") and International
Financial Reporting Standards ("IFRS"), respectively. The financial statements
in this interim report are unaudited. In overall consideration of situations
such as the operating results, financial position and cash flow of the Company
and to provide returns to the shareholders, the Board has resolved to declare an
interim dividend of RMB0.21 (inclusive of applicable tax) per share for 2023 on
the basis of a total of 183,020,977,818 shares of the Company as at June 30,
2023. The total amount of the interim dividends payable is approximately
RMB38,434 million. This interim report contains certain forward-looking
statements with respect to the financial position, operational results and
business of the Group. These forward-looking statements are, by their nature,
subject to significant risks and uncertainties because they relate to events and
depend on circumstances that may occur in the future and are beyond our control.
The forward-looking statements reflect the Group's current views with respect to
future events and are not a guarantee of future performance. Actual results may
differ from information contained in the forward-looking statements. Investors
are advised to exercise caution when dealing in the securities of the Company.
003
CORPORATE PROFILE
The Company was established as a joint stock company with limited liability
under the Company Law of the People's Republic of China (the "PRC" or "China")
on November 5, 1999 as part of the restructuring of the China National Petroleum
Corporation (the Chinese name has been changed from [] to [], the abbreviation
of which is "CNPC" before and after the change of name). The Group is the
largest oil and gas producer and seller occupying a leading position in the oil
and gas industry in the PRC and one of the largest companies in the PRC in terms
of revenue and one of the largest oil companies in the world. The Group
principally engages in, among other things, the exploration, development,
transmission, production and sales of crude oil and natural gas, and new energy
business; the refining of crude oil and petroleum products; the production and
sales of basic and derivative chemical products and other chemical products, and
new materials business; the marketing and trading business of refined products
and non-oil products; and the transmission and sales of natural gas. The
American Depositary Shares (the "ADSs"), H shares and A shares of the Company
were listed on the New York Stock Exchange, The Stock Exchange of Hong Kong
Limited (the "HKEx" or "Hong Kong Stock Exchange") and Shanghai Stock Exchange
on April 6, 2000, April 7, 2000 and November 5, 2007, respectively, among which,
the ADSs have been delisted from the New York Stock Exchange on September 8,
2022 (EST Time). Registered Chinese Name of the Company:
[]
English Name of the Company:
PetroChina Company Limited
Legal Representative of the Company:
Dai Houliang
Secretary to the Board:
Wang Hua
Address:
No. 9 Dongzhimen North Street
Dongcheng District
Beijing, PRC
Telephone:
86 (10) 5998 2622
Facsimile:
86 (10) 6209 9557
Email Address:
ir@petrochina.com.cn
004
Representative on Securities Matters:
Liang Gang
Address:
No. 9 Dongzhimen North Street
Dongcheng District
Beijing, PRC
Telephone:
86 (10) 5998 2622
Facsimile:
86 (10) 6209 9557
Email Address:
ir@petrochina.com.cn
Chief Representative of Hong Kong
Representative Office:
Wei Fang
Address:
Suite 3705, Tower 2, Lippo Centre
89 Queensway, Hong Kong, PRC
Telephone:
(852) 2899 2010
Facsimile:
(852) 2899 2390
Email Address:
hko@petrochina.com.hk
Legal Address of the Company:
16 Andelu
Dongcheng District
Beijing, PRC
Postal Code:
100011
Office Address of the Company:
No. 9 Dongzhimen North Street
Dongcheng District
Beijing, PRC
Postal Code:
100007
Website:
http://www.petrochina.com.cn
Company's Email Address:
ir@petrochina.com.cn
Newspapers for information disclosure:
A shares: China Securities Journal, Shanghai Securities News, Securities Times
and Securities Daily Website publishing this interim report designated by the
China Securities Regulatory Commission: http://www.sse.com.cn Copies of this
interim report are available at:
No. 9 Dongzhimen North Street,
Dongcheng District, Beijing, PRC
005
Places of Listing:
A Shares:
Shanghai Stock Exchange
Stock Name:
PetroChina
Stock Code:
601857
H shares:
Hong Kong Stock Exchange
Stock Name:
PETROCHINA
Stock Code:
857
Other Relevant Information:
Auditors of the Company:
Domestic Auditors:
PricewaterhouseCoopers Zhong Tian LLP
Address:
11/F, PricewaterhouseCoopers Centre
2 Corporate Avenue
202 Hu Bin Road
Huangpu District, Shanghai, PRC
Overseas Auditors:
PricewaterhouseCoopers
Public Interest Entity Auditor registered in accordance with the Financial
Reporting Council Ordinance
Address:
22/F, Prince's Building
Central, Hong Kong, PRC
006
SUMMARY OF FINANCIAL DATA AND FINANCIAL INDICATORS
1. Key Financial Data Prepared under IFRS
Unit: RMB million
Items
For the reporting period
For the same period of the preceding year (after adjustments)(a) For the same
period of the preceding year (before adjustments) Changes over the same period
of the preceding year (%)
Revenue
1,479,871
1,614,621
1,614,621
(8.3)
Profit for the period attributable to owners of the Company
85,272
81,627
82,391
4.5
Net cash flows from operating activities
221,706
196,061
196,061
13.1
Basic earnings per share (RMB)
0.47
0.45
0.45
4.5
Diluted earnings per share (RMB)
0.47
0.45
0.45
4.5
Return on net assets (%)
6.0
6.1
6.2
(0.1) percentage points
Items
As at the end of the reporting period As at the end of the preceding year (after
adjustments) As at the end of the preceding year (before adjustments) Changes
from the end of the preceding year to the end of the reporting period (%) Total
assets
2,719,277
2,670,079
2,673,485
1.8
Total equity attributable to owners of the Company
1,412,938
1,365,640
1,369,327
3.5
007
2. Key Financial Data Prepared under CAS
Unit: RMB million
Items
For the reporting period
For the same period of the preceding year (after adjustments) For the same
period of the preceding year (before adjustments) Changes over the same period
of the preceding year (%) Operating income
1,479,871
1,614,621
1,614,621
(8.3)
Net profit attributable to shareholders of the Company
85,276
81,624
82,388
4.5
Net profit after deducting non-recurring profit/loss items attributable to
shareholders of the Company 87,393
88,875
89,639
(1.7)
Net cash flows from operating activities
221,706
196,061
196,061
13.1
Basic earnings per share (RMB)
0.47
0.45
0.45
4.5
Diluted earnings per share (RMB)
0.47
0.45
0.45
4.5
Weighted average returns on net assets (%)
6.1
6.3
6.3
(0.2) percentage points
Items
As at the end of the reporting period As at the end of the preceding year (after
adjustments) As at the end of the preceding year (before adjustments) Changes
from the end of the preceding year to the end of the reporting period (%) Total
assets
2,719,541
2,670,345
2,673,751
1.8
Equity attributable to equity holders of the Company
1,413,191
1,365,889
1,369,576
3.5
(a) According to the Notice on Issuing Interpretation of Accounting Standards
for Business Enterprises No. 16 ("Interpretation No. 16") promulgated by the PRC
Ministry of Finance and Amendments to International Accounting Standard 12
Income Tax, the Group and the Company have made retrospective adjustments in
relation to relevant financial data for the compared period. For details, please
refer to the note 4(31) under the financial statements prepared in accordance
with CAS and note 2 under the financial statements prepared in accordance with
IFRS.
008
3. Non-recurring Profit/Loss Items
Unit: RMB million
Non-recurring profit/loss items
For the six months ended June 30, 2023
Losses on disposal of non-current assets
(701)
Government grants recognised in the income statement
395
Reversal of provisions for bad debts against receivables
541
Net gains arising from disposal of associates and joint ventures
13
Gains on disposal of subsidiaries
91
Losses/(Gains) on holding and disposal of other investments
(792)
Other non-operating income and expenses
(2,206)
Sub-total
(2,659)
Tax impact of non-recurring profit/loss items
573
Impact of non-controlling interests
(31)
Total
(2,117)
4. Differences between CAS and IFRS
The consolidated net profit of the Group under IFRS and CAS were RMB94,579
million and RMB94,583 million, respectively, with a difference of RMB4 million.
The consolidated shareholders' equity under IFRS and CAS were RMB1,588,046
million and RMB1,588,300 million, respectively, with a difference of RMB254
million. These differences under the different accounting standards were
primarily due to the valuation for assets other than fixed assets and oil and
gas properties revalued in 1999. During the restructuring of the Company in
1999, a valuation was carried out in 1999 for assets and liabilities injected by
CNPC. Valuation results on assets other than fixed assets and oil and gas
properties were not recognised in the financial statements prepared under IFRS.
009
CHANGES IN SHAREHOLDINGS AND INFORMATION ON SHAREHOLDERS
1. Changes in Shareholdings
During the reporting period, there was no change in the total number or
structure of shares of the Company arising from bonus issues or rights issue or
otherwise.
2. Shareholdings of Substantial Shareholders
The total number of shareholders of the Company as at June 30, 2023 was 502,195,
including 496,584 holders of A shares and 5,611 registered holders of H shares.
(1) Shareholdings of the top ten shareholders
Unit: Shares
Name of shareholders
Nature of shareholders
Number of shares held
Percentage of shareholding (%)
Increase/decrease during the reporting period (+, -)
Number of shares with selling restrictions
Number of shares pledged, marked or subject to lock-ups
CNPC
State-owned legal person
150,923,565,570 (1)
82.46
+3,819,948,462
0
0
HKSCC Nominees Limited(2)
Overseas legal person
20,900,912,815 (3)
11.42
+122,156
0
0
China Petrochemical Corporation
State-owned legal person
1,830,210,000
1.00
0
0
0
Hong Kong Securities Clearing Company Limited(4)
Overseas legal person
1,150,877,326
0.63
+234,714,391
0
0
China Securities Finance Corporation Limited
State-owned legal person
1,020,165,128
0.56
0
0
0
China Metallurgical Group Corporation
State-owned legal person
560,000,000
0.31
0
0
0
Central Huijin Asset Management Ltd.
State-owned legal person
201,695,000
0.11
0
0
0
Bosera Fund - Ansteel Group Corporation - Bosera Fund Xin'an No. 1 Single Asset
Management Plan State-owned legal person
171,360,700
0.09
-5,898,200
0
0
China Reform Investment Co., Ltd.
State-owned legal person
134,374,482
0.07
+134,374,482
0
0
Bank of Communication Co., Ltd. - E Fund SSE 50 Index Enhanced Securities
Investment Fund State-owned legal person
108,211,401
0.06
+76,211,500
0
0
010
(1) Such figure excludes the H shares indirectly held by CNPC through Fairy King
Investments Limited, an overseas wholly-owned subsidiary of CNPC. (2) HKSCC
Nominees Limited is a wholly-owned subsidiary of Hong Kong Exchanges and
Clearing Limited and acts as the nominee on behalf of other corporate or
individual shareholders to hold the H shares of the Company.
(3) 291,518,000 H shares were indirectly held by CNPC through Fairy King
Investments Limited, an overseas wholly-owned subsidiary of CNPC, representing
0.16% of the total share capital of the Company. These shares were held in the
name of HKSCC Nominees Limited. (4) Hong Kong Securities Clearing Company
Limited is a wholly-owned subsidiary of Hong Kong Exchanges and Clearing Limited
and acts as the nominee on behalf of investors of Hong Kong Stock Exchange to
hold the A shares of the Company listed on Shanghai Stock Exchange.
(2) Shareholdings of the top ten shareholders of shares without selling
restrictions Unit: Shares Ranking
Name of shareholders
Number of shares held
Type of shares
1
CNPC
150,923,565,570(1)
A shares
2
HKSCC Nominees Limited
20,900,912,815
H shares
3
China Petrochemical Corporation
1,830,210,000
A shares
4
Hong Kong Securities Clearing Company Limited
1,150,877,326
A shares
5
China Securities Finance Corporation Limited
1,020,165,128
A shares
6
China Metallurgical Group Corporation
560,000,000
A Shares
7
Central Huijin Asset Management Ltd.
201,695,000
A Shares
8
Bosera Fund - Ansteel Group Corporation - Bosera Fund Xin'an No. 1 Single Asset
Management Plan 171,360,700
A Shares
9
China Reform Investment Co., Ltd.
134,374,482
A Shares
10
Bank of Communication Co., Ltd. - E Fund SSE 50 Index Enhanced Securities
Investment Fund 108,211,401
A Shares
(1) Such figure excludes the H shares indirectly held by CNPC through Fairy King
Investments Limited, an overseas wholly-owned subsidiary of CNPC, which H shares
were held in the name of HKSCC Nominees Limited.
011
Description on the special repurchase accounts under the above-mentioned
shareholders: there is no special repurchase account among the above-mentioned
shareholders. Description on the voting rights entrusted by or to, or waived by
the above-mentioned shareholders: the Company is not aware of any voting rights
entrusted by or to, or waived by the above-mentioned shareholders. Statement on
related parties or parties acting in concert among the above-mentioned
shareholders: except for the fact that HKSCC Nominees Limited and Hong Kong
Securities Clearing Company Limited are subsidiaries of Hong Kong Exchanges and
Clearing Limited, the Company is not aware of any other connection among or
between the above top ten shareholders or that they are parties acting in
concert as provided for in the Measures for the Administration of Acquisitions
by Listed Companies.
(3) Disclosure of substantial shareholders under the Securities and Futures
Ordinance of Hong Kong As at June 30, 2023, so far as the Directors are aware,
persons other than a Director, Supervisor or senior management of the Company
who had interests or short positions in the shares or underlying shares of the
Company which are disclosable under Divisions 2 and 3 of Part XV of the
Securities and Futures Ordinance were as follows: Name of shareholders Nature of
shareholding
Number of shares
Capacity
Percentage of such shares in the same class of the issued share capital (%)
Percentage of total share capital (%)
CNPC
A Shares
150,923,565,570 (L)
Beneficial Owner
93.21
82.46
H Shares
291,518,000 (L) (1)
Interest of Corporation Controlled by the Substantial Shareholder
1.38
0.16
BlackRock, Inc.(2)
H Shares
1,472,617,558 (L)
Interest of Corporation Controlled by the Substantial Shareholder
6.98
0.80
(L) Long position
(1) 291,518,000 H shares (long position) were held by Fairy King Investments
Limited, an overseas wholly-owned subsidiary of CNPC. CNPC is deemed to be
interested in the H shares held by Fairy King Investments Limited. (2)
BlackRock, Inc., through various subsidiaries, had an interest in the H shares
of the Company, of which 1,472,617,558 H shares (long position) were held in the
capacity as interest of corporation controlled by the substantial shareholder
including 12,690,000 underlying shares through its holding of certain unlisted
derivatives (cash settled).
As at June 30, 2023, so far as the Directors are aware, save for disclosed
above, no person (other than a Director, Supervisor or senior management of the
Company) had an interest or short position in the shares of the Company
according to the register of interests in shares and short positions kept by the
Company pursuant to Section 336 of the Securities and Futures Ordinance. 3.
Information on Changes of Controlling Shareholder and its Ultimate Controller
There was no change in the controlling shareholder or the ultimate controller of
the Company during the reporting period.
012
DIRECTORS' REPORT
The Board hereby presents its directors' report for review.
1. Discussion and Analysis of Operations
In the first half of 2023, while the world economy faced slow recovery, China's
economy as a whole resumed growth, with its gross domestic product ("GDP")
increasing by 5.5%. Supply and demand in the global oil market were loosening,
and international crude oil prices were fluctuating downwards sharply from those
in the same period of last year. The Group strived to seize the market
opportunities by making overall arrangements for the promotion of works
including business development, reform and innovation, quality improvement and
profitability enhancement, safety and environmental protection. The Group also
strengthened its efforts in oil and gas exploration and development, increased
its reserves and output, continued to deepen the transformation and upgrading of
the refining and chemical business, enhanced its marketing and sales activities
continuously, steadily promoted green and low-carbon transformation, actively
promoted the layout of new energy, new materials and new business. With the
advantages of the integration of upstream and downstream and coordination of
industrial chain, the Group achieved the steady and efficient operation of both
oil and gas industry chains, the main production indicators improved
comprehensively. Though the international oil prices dropped significantly, the
Group realized a stable and increased profit and all business segments of the
Group are profitable. The Group also achieved significant improvement of free
cash flow as compared with that in the same period of last year and maintained a
healthy financial condition. (1) Market Review Crude Oil Market In the first
half of 2023, affected by factors including supply and demand fundamentals and
the U.S. Dollar interest hike, international crude oil prices fluctuated
downwards. The average spot price of Brent crude oil was US$79.66 per barrel,
representing a decrease of 26.2% as compared with US$107.94 per barrel in the
same period of last year; the average spot price of U.S. West Texas Intermediate
crude oil was US$74.76 per barrel, representing a decrease of 26.6% as compared
with US$101.85 per barrel in the same period of last year. Refined Products
Market In the first half of 2023, domestic market demand recovered steadily, and
refined products consumption showed recovering growth, returning essentially to
2019 levels. Domestic supply of refined products has accelerated recovery.
According to the data of the National Bureau of Statistics, the processed volume
of domestic crude oil in the first half of the year was 363.58 million tons,
representing an increase of 9.9% as compared with that in the same period of
last year. The trend of domestic refined products prices was basically
consistent with that of the international market crude oil prices. The PRC
government made adjustments for 11 times to the prices of domestic gasoline and
diesel products, and the prices of reference gasoline and diesel products
decreased, in aggregate, by RMB55 per ton and RMB50 per ton, respectively.
Chemical Products Market
In the first half of 2023, the global market for chemical products continued to
be sluggish, with the domestic market experiencing a fall in the market prices
of most chemical products, where the prices of alkene and downstream synthetic
resin decreased, the price of synthetic rubber slightly increased. The demand
for new chemical materials was strong with a growth rate much higher than that
of bulk chemical products.
Natural Gas Market
In the first half of 2023, the supply and demand in the international natural
gas market were loose, and the average transaction price of natural gas in the
major markets dropped sharply as compared with that in the same period of last
year. Benefitting from the domestic macroeconomic recovery, domestic natural gas
consumption showed a fast growth trend under a low base.
(2) Business Review
Oil, Gas and New Energy Business
Domestic Oil and Gas
In the first half of 2023, the Group enhanced its efforts in domestic oil and
gas exploration and development and increased its reserves and output, actively
promoted efficient exploration and high-profitability development. The Group
achieved multiple major discoveries and breakthroughs in Tarim, Sichuan, Ordos
and other basins. Under the market-oriented and profit-centred approach, the
Group optimized its production operation, vigorously ensured stable output of
old oil and gas fields,
014
accelerated profitable construction and production in new areas, domestic oil
and gas production remained steadily with some increment. The Group also
accelerated digitalization, and actively promoted the construction of
intelligent oil and gas fields. The domestic crude oil output of the Group
amounted to 392.3 million barrels, representing an increase of 1.2% as compared
with the 387.7 million barrels in the same period of last year. The marketable
natural gas output amounted to 2,417.3 billion cubic feet, representing an
increase of 7.3% as compared with 2,253.8 billion cubic feet in the same period
of last year. The oil and natural gas equivalent output amounted to 795.1
million barrels, representing an increase of 4.2% as compared with the output of
763.4 million barrels in the same period of last year. Overseas Oil and Gas
In the first half of 2023, the Group steadily promoted its overseas oil and gas
cooperations, made new progress in new project development and asset
optimization, and steadily promoted key projects in Central Asia and the Middle
East. The group enhanced the sizeable and profitable exploration and achieved
new discoveries in Chad's Doseo Basin. The Group's overseas crude oil output
amounted to 82.0 million barrels, representing an increase of 27.8% as compared
with 64.2 million barrels in the same period of last year. The marketable
natural gas output was 99.8 billion cubic feet, representing a decrease of 4.4%
as compared with 104.4 billion cubic feet in the same period of last year. The
oil and natural gas equivalent output was 98.7 million barrels, representing an
increase of 20.9% as compared with the 81.6 million barrels in the same period
of last year and accounting for 11.0% of the total oil and natural gas
equivalent output of the Group. In the first half of 2023, the Group recorded
the crude oil output of 474.3 million barrels, representing an increase of 5.0%
as compared with the output of 451.9 million barrels in the same period of last
year. The marketable natural gas output was 2,517.1 billion cubic feet,
representing an increase of 6.7% as compared with the output of 2,358.2 billion
cubic feet in the same period of last year. The oil and natural gas equivalent
output was 893.8 million barrels, representing an increase of 5.8% as compared
with the output of 845.0 million barrels in same period of last year. New Energy
In the first half of 2023, the Group adhered to the integration of oil, gas and
new energy business development, continuously optimized the development plan of
new energy business, actively explored the clean electricity and geothermal
markets and fully promoted the implementation of 10 million kilowatt-level new
energy projects in Xinjiang, Qinghai and other regions. The Group newly obtained
12.58 million kilowatts of clean electricity grid connection indicators and
newly signed contracts (agreements) in relation to geothermal heating with an
area of 26.33 million square meters. The Group accelerated the construction of
key projects, achieved full capacity grid connection of 150 thousand-kilowatt
self-absorption green power project on Jilin Oilfield, and commenced the
construction of the million-kilowatt photovoltaic power generator in the Tarim
oilfield and the 500 thousand-kilowatt wind power project in the Jilin oilfield.
In the first half of 2023, energy output from photovoltaic and wind power
generators amounted to 850 million kilowatts. The integration of the whole
industry chain promoted carbon capture, and utilization and storage ("CCUS")
businesses, injecting 749,000 tons of carbon dioxide in the first half of 2023.
015
Key Figures for the Oil, Gas and New Energy Segment
Unit
For the first half of 2023
For the first half of 2022
Changes (%)
Crude oil output
Million barrels
474.3
451.9
5.0
Of which: Domestic
Million barrels
392.3
387.7
1.2
Overseas
Million barrels
82.0
64.2
27.8
Marketable natural gas output
Billion cubic feet
2,517.1
2,358.2
6.7
Of which: Domestic
Billion cubic feet
2,417.3
2,253.8
7.3
Overseas
Billion cubic feet
99.8
104.4
(4.4)
Oil and natural gas equivalent output
Million barrels
893.8
845.0
5.8
Of which: Domestic
Million barrels
795.1
763.4
4.2
Overseas
Million barrels
98.7
81.6
20.9
Note: Figures have been converted at the rate of 1 ton of crude oil = 7.389
barrels and 1 cubic metre of natural gas = 35.315 cubic feet.
Refining, Chemicals and New Materials
In the first half of 2023, the Group conducted advanced research and accurately
grasped the market trend, optimized the allocation of crude oil resources and
rationally adjusted the refining load, refined products collection rate and
product structure. The Group processed 673.0 million barrels of crude oil,
representing an increase of 12.6% from 597.5 million barrels in the same period
of last year. The Group produced 58.856 million tons of refined products,
representing an increase of 14.3% from 51.510 million tons in the same period of
last year. The production of aviation kerosene and refined featured products
increased significantly. The Group optimized chemical plant loads through an
overall arrangement and actively promoted the development of new materials
business. Numbers of new products were successfully put into production. The
Company also dynamically optimized the marketing strategy of chemical products
and continued to increase in sales volumes and profitability. The commodity
volume of chemical products was 17.286 million tons, representing an increase of
8.4% from 15.945 million tons in the same period of last year. The output of
synthetic resin was 6.226 million tons, representing an increase of 5.7% from
5.889 million tons in the same period of last year. The output of new materials
was 624,000 tons, representing an increase of 56.0% as compared with that in the
same period of last year. With efforts to accelerate the construction of key
projects, Guangdong Chemical's integration project of refining and chemicals has
been put into full commercial operation, while the construction of ethylene
projects in Jilin and Guangxi progress steadily.
016
Key Figures for the Refining, Chemicals and New Materials Segment
Unit
For the first half of 2023
For the first half of 2022
Changes (%)
Processed crude oil
Million barrels
673.0
597.5
12.6
Gasoline, kerosene and diesel output
'000 tons
58,856
51,510
14.3
Of which:
Gasoline
'000 tons
23,938
22,012
8.7
Kerosene
'000 tons
6,288
3,764
67.1
Diesel
'000 tons
28,630
25,734
11.3
Refining yield
%
93.55
93.44
0.11 percentage point
Ethylene
'000 tons
3,988
3,763
6.0
Synthetic resin
'000 tons
6,226
5,889
5.7
Synthetic fibre raw materials and polymers
'000 tons
546
575
(5.0)
Synthetic rubber
'000 tons
493
550
(10.4)
Urea
'000 tons
1,023
1,385
(26.1)
Note: Figures have been converted at the rate of 1 ton of crude oil = 7.389
barrels
017
Marketing
Domestic Operations
In the first half of 2023, by seizing the favourable opportunity of economic
recovery and continuous regulation of the domestic refined products market, the
Group adopted various measures to expand quantity and improve profitability.
Adhering to the integration of wholesale and retail, mutual improvement of both
oil and non-oil products, the Group integrated its online and offline
businesses, implemented differentiated marketing strategies in different
sectors, products and regions, focused on the expansion of sales in key regions
and stations. With the significant increase of domestic refined product sales,
the Group secured the smooth production in the upstream of the industry chain
and achieved a sustained increase in market share. The Group continued to make
innovations in non-oil business operation modes and income and profit of non-oil
business both achieved growth.
The Group strived to make efforts in promoting
the construction of terminal sales network, actively developed gas stations,
photovoltaic stations, charging and swapping stations, hydrogen stations,
comprehensive energy service stations and continuously enhanced its service
capabilities.
International Trading Operations
In the first half of 2023, the
Group made overall arrangement in domestic and international markets, actively
explored high-end and high-profitable overseas markets, strengthened oil sales
in overseas upstream businesses. The Group also reasonably arranged the export
of domestic refined products and other products under profitability conditions,
ensured smooth operation of the industry chain and strived to enhance the
overall profit-creating capability of the entire industry chain. The Group sold
a total of 80.668 million tons of gasoline, kerosene and diesel in the first
half of 2023, representing an increase of 12.9% as compared with sales of 71.433
million tons at the same period of last year, among which the domestic sales of
gasoline, kerosene and diesel were 59.345 million tons, representing an increase
of 17.9% as compared with sales of 50.344 million tons at the same period of
last year.
018
Key Figures for the Marketing Segment
Production and Operations Data
Unit
For the first half of 2023
For the first half of 2022
Changes (%)
Total sales volume of gasoline, kerosene and diesel
'000 tons
80,668
71,433
12.9
of which:
Gasoline
'000 tons
33,396
29,820
12.0
Kerosene
'000 tons
8,797
6,050
45.4
Diesel
'000 tons
38,475
35,563
8.2
Domestic sales volume of gasoline, kerosene and diesel
'000 tons
59,345
50,344
17.9
of which:
Gasoline
'000 tons
25,546
23,041
10.9
Kerosene
'000 tons
4,804
2,824
70.1
Diesel
'000 tons
28,995
24,479
18.4
Number of gas stations and convenience stores
Unit
June 30, 2023
December 31, 2022
Changes (%)
Number of gas stations
Units
22,670
22,586
0.4
of which: self-operated gas stations
Units
20,619
20,564
0.3
Number of convenience stores
Units
19,376
20,600
(5.9)
Natural Gas Sales
In the first half of 2023, the Group took various measures to optimize the
structure of natural gas resource pools and strengthen industry chains synergy
to meet the market demand. The Group made advanced research of the market,
continuously optimized the natural gas market distribution and sales flow,
improved marketing strategies, actively promoted online transactions to increase
the market shares in high-end and profitable markets and continuously improve
the quality and profit of marketing. In the first half of 2023, the Group
achieved sales of 130.352 billion cubic meters of natural gas, roughly equal to
the 130.291 billion cubic meters in the same period of last year, of which
108.646 billion cubic meters were sold domestically, representing an increase of
4.8% from 103.719 billion cubic meters in the same period of last year.
2. Review of Operating Results
(1) The financial data set out below is extracted from the Group's interim
condensed consolidated financial statements prepared under IFRS
Consolidated Operating Results
In the first half of 2023, the Group achieved a revenue of
RMB1,479,871 million, representing a decrease of 8.3% as compared with the
revenue of RMB1,614,621 million in the same period of last year. Profit for the
period attributable to owners of the Company was RMB85,272 million, representing
an increase of 4.5% as compared with RMB81,627 million in same period of last
year. There was a basic earnings per share of RMB0.47.
Revenue The revenue of the Group was RMB1,479,871 million for the first half of
2023, representing a decrease of 8.3% as compared with the revenue of
RMB1,614,621
019
million in the same period of last year. This was primarily due to the combined
effect of the decline in the sales prices of most of the Group's oil and gas
products and increase in the sales volumes. The table below sets out the
external sales volume and average realised prices of the major products sold by
the Group in the first half of 2023 and 2022 and their respective percentages of
change:
Sales Volume ('000 tons)
Average Realised Price (RMB/ton)
For the first half of 2023
For the first half of 2022
Percentage of change (%)
For the first half of 2023
For the first half of 2022
Percentage of change (%)
Crude oil(a)
74,057
68,574
8.0
3,893
4,807
(19.0)
Natural gas (100 million cubic metres, RMB/'000 cubic metres)(b)
1,303.52
1,302.91
Even
2,105
2,521
(16.5)
Gasoline
33,396
29,820
12.0
7,989
8,701
(8.2)
Kerosene
8,797
6,050
45.4
5,728
6,095
(6.0)
Diesel
38,475
35,563
8.2
6,894
7,658
(10.0)
Polyethylene
3,071
3,227
(4.8)
7,368
8,151
(9.6)
Polypropylene
1,886
2,018
(6.5)
6,862
7,753
(11.5)
Lubricant
763
628
21.5
9,439
8,921
5.8
(a) The crude oil listed above represents all the external sales volume of crude
oil of the Group. (b) The natural gas listed above represents all the external
sales volume of natural gas of the Group. Operating Expenses Operating expenses
amounted to RMB1,359,254 million for the first half of 2023, representing a
decrease of 9.1% as compared with expenses of RMB1,495,606 million in the same
period of last year, of which: Purchases, Services and Other Purchases, services
and other amounted to RMB1,004,823 million for the first half of 2023,
representing a decrease of 9.6% as compared with RMB1,111,531 million in the
same period of last year. This was primarily due to the decrease in the Group's
purchase costs of crude oil and raw material oil. Employee Compensation Costs
Employee compensation costs (including salaries, various types of insurance,
housing provident fund, training costs and other relevant additional costs of
employees and market-oriented temporary and seasonal contractors) for the first
half of 2023 amounted to RMB77,798 million, representing an increase of 3.8% as
compared with costs of RMB74,927 million in the same period of last year. This
was primarily due to the employee compensation changes in tandem with profits.
Exploration Expenses Exploration expenses amounted to RMB9,098 million for the
first half of 2023, representing a decrease of RMB3,741 million as compared with
RMB12,839 million in the same period of last year. This was primarily due to the
Group's insistence on profitable exploration and optimization of oil and gas
exploration deployment.
020
Depreciation, Depletion and Amortisation
Depreciation, depletion and amortisation amounted to
RMB113,017 million for the first half of 2023, representing an increase of 9.9%
as compared with RMB102,863 million in the same period of last year. This was
primarily due to the increase of the production in oil and gas products, fixed
assets and oil and gas properties.
Selling, General and Administrative Expenses
Selling, general and administrative expenses amounted
to RMB28,647 million for the first half of 2023, roughly
equivalent to RMB28,409 million in the same period of last
year. The Group will continue to intensively promote quality
improvement and profitability enhancement and vigorously
control non-productive expenses.
Taxes other than Income Taxes Taxes other than
income taxes amounted to RMB130,220 million for the
first half of 2023, representing a decrease of 7.8% as
compared with taxes of RMB141,231 million in the same
period of last year, of which the consumption tax was
RMB88,256 million, representing an increase of 10% as compared with consumption
taxes of RMB80,222 million in the same period of last year; the resource taxes
was RMB14,509 million, representing a decrease of 10.5% as compared with
resource taxes of RMB16,210 million in the same period of last year; the crude
oil special gain levy was RMB6,758 million, representing a decrease of 71.1% as
compared with the levy of RMB23,346 million in the same period of last year.
Other Income/(Expenses), Net Other income, net
for the first half of 2023 amounted to RMB4,349 million as
compared with RMB23,806 million of other expense, net
recorded in the same period of last year. This was mainly
due to the changes in fair value of derivatives business
and the impact of the disposal of some low- or non-profitable
assets in the previous year.
Profit from Operations Profit from operations
amounted to RMB120,617 million in the first half of 2023,
representing an increase of 1.3% as compared with profits
of RMB119,015 million in the same period of last year.
Net Exchange Gain/(Loss) Net exchange gain
for the first half of 2023 amounted to RMB58 million,
representing an increase of RMB573 million as compared
with the net exchange loss of RMB515 million recorded in
the same period of last year. This was mainly due to the
change of average exchange rate of US dollar against
Renminbi.
Net Interest Expense Net interest expense amounted
to RMB8,587 million for the first half of 2023, representing
an increase of 3.8% as compared with RMB8,269 million
in the same period of last year. This was mainly due to the
combined effects of rising financing costs for overseas
businesses and the decline in the scale of interest-bearing
debts.
Profit before Income Tax Expense Profit before
income tax expense amounted to RMB121,755 million in
the first half of 2023, representing an increase of 2.9% as
compared with RMB118,335 million in the same period of
last year.
Income Tax Expense Income tax expense amounted
to RMB27,176 million for the first half of 2023, largely the
same as compared with RMB27,382 million in the same
period of last year.
Profit for the period Profit for the first half of 2023 amounted to RMB94,579
million, representing an increase of 4.0% as compared with RMB90,953 million in
the same period of last year.
021
Profit for the period attributable to Non-controlling interests Profit for the
period attributable to non-controlling interests amounted to RMB9,307 million
for the first half of 2023, largely the same as compared with RMB9,326 million
in the same period of last year.
Profit for the period attributable to Owners of the Company Profit for the
period attributable to owners of the Company amounted to RMB85,272 million for
the first half of 2023, representing an increase of 4.5% as compared with
profits of RMB81,627 million in the same period of last year.
Segment Results
Oil, Gas and New Energy
Revenue The revenue of the Oil, Gas and New
Energy segment for the first half of 2023 was RMB424,782 million, representing a
decrease of 5.0% from
RMB447,350 million as compared with the same period of last year. This was
primarily due to combined effects of the decline in the prices of crude oil and
natural gas and other oil and gas products and the increase in the sales volume.
The average realised crude oil price was US$74.15 per barrel, representing a
decrease of 21.7% from US$94.65 per barrel as compared with the same period of
last year.
Operating Expenses Operating expenses of the
Oil, Gas and New Energy segment were RMB339,267
million for the first half of 2023, representing a decrease
of 7.0% from RMB364,895 million as compared with the
same period of last year. This was primarily due to the
decrease in purchase costs and tax expenses. The unit
oil and gas lifting cost amounted to US$10.82 per barrel,
representing a decrease of 6.8% from US$11.61 per barrel
as compared with the same period of last year.
Profit from Operations In the first half of 2023, the Group's Oil, Gas and New
Energy segment closely monitored the changes in international oil prices,
prudently engaged in efficient exploration and profitable construction and
production. By strengthening its own analysis, study and judgment, the Group
enhanced the source control of investment and production operation costs and
strived to increase production and profitability. The Oil, Gas and New Energy
segment recorded a profit from operations of RMB85,515 million, representing an
increase of 3.7% from RMB82,455 million as compared with the same period of last
year.
Refining, Chemicals and New Materials
Revenue The revenue of the Refining, Chemicals
and New Materials segment for the first half of 2023
was RMB575,005 million, representing a decrease of
1.5% from RMB583,852 million as compared with the
same period of last year. This was primarily due to the
decrease in prices of refined products and most of the
chemical products, of which, the revenue of the refining
business was RMB450,559 million, basically the same
as RMB450,987 million in the same period of last year;
the revenue of the chemicals business was RMB124,446
million, representing a decrease of 6.3% from RMB132,865
million as compared with the same period of last year.
Operating Expenses Operating expenses of the
Refining, Chemicals and New Materials segment were
RMB556,655 million for the first half of 2023, representing a decrease of 0.6%
from RMB559,791 million as compared with the same period of last year. This was
primarily due to the decrease in the procurement costs of crude oil and raw
material oil. The unit cash processing cost of refining was RMB220.71 per ton,
representing an increase of 5.3% from RMB209.53 per ton as compared with the
same
022
period of last year. This was primarily due to the combined
effects of the increase in cost of fuel and power and the
increase in processing volume of crude oil.
Profit from Operations In the first half of 2023, facing the downward
fluctuation of international oil price, the Refining, Chemicals and New
Materials segment of the Group adhered to the principle of maximising the
overall profitability of the industry chain, strengthened the coordination
between production activities and sales activities, optimized product structure,
increased the production of high profitability and high added-value refining and
chemical products. The Group also improved the management level of processing
technology, continuously promoted the cost benchmarking analysis to enhance the
competitiveness of our products' costs. The Refining, Chemicals and New
Materials segment recorded a profit from operations of RMB18,350 million,
representing a decrease of 23.7% from RMB24,061 million as compared with the
same period of last year, of which, the refining business recorded a profit from
operations of RMB18,511 million, representing a decrease of 22.8% from RMB23,973
023
million as compared with the same period of last year, which
was primarily due to the narrowing in the profit margins of
the refining business; the chemical business recorded a
loss of RMB161 million, representing a decrease of RMB249
million compared with the operating profit of RMB88 million
in the same period of last year, which was primarily due to
the sluggish chemical market, resulting in narrowing of the
profit margins of most chemical products.
Marketing
Revenue The revenue of the Marketing segment
for the first half of 2023 was RMB1,225,310 million,
representing a decrease of 9.8% from RMB1,358,004
million as compared with the same period of last year. This
was primarily due to the decrease in the price of refined
products and the revenue from international trade.
Operating Expenses Operating expenses of the
Marketing segment were RMB1,214,365 million for the
first half of 2023, representing a decrease of 10.0% from
RMB1,349,482 million as compared with the same period of last year. This was
primarily due to a decrease in the expenditures relating to the purchase of
refined products from external suppliers and the expenditures relating to
international trade procurement.
Profit from Operations In the first half of 2023, the Marketing segment
reinforced its capability of conducting market research and making judgments,
seized market opportunities, actively promoted lean marketing, enhanced
development of important customers, continuously improved service quality and
customer experience, strived to increase refined products' market share and the
retail price realisation rate. The Group actively promoted the
professionalization of non-oil marketing business, strived to promote on-line
marketing and improve the quality of supply chain to increase the profitability
of non-oil business. The Group also actively explored high-end overseas markets,
enhanced the access to high-quality resources, continuously improved the
marketing and cross-markets operation capabilities in trading business to
increase the overall value of the industry chain. The Marketing segment recorded
a profit from operations of RMB10,945 million, representing an increase of 28.4%
from RMB8,522 million as compared with the same period of last year.
Natural Gas Sales
Revenue The revenue of the Natural Gas Sales
segment was RMB276,341 million for the first half of 2023,
representing an increase of 9.3% from RMB252,942 million
as compared with the same period of last year. This was
primarily due to the increase in sales volume of natural
gas.
Operating Expenses Operating expenses of the
Natural Gas Sales segment were RMB262,221 million for the first half of 2023,
representing an increase of 9.6% from RMB239,293 million in the same period of
last year. This was primarily due to the increase in procurement volume of
natural gas and unit price of imported natural gas. Profit from Operations In
the first half of 2023, the Natural Gas Sales segment made overall arrangement
regarding the procurement of natural gas, optimized natural gas source
structure, strived to control the procurement costs. The Group continuously
promoted low-cost development, implemented the concept of reducing costs and
improving profitability, controlled operation costs through optimizing overall
integration of our resource allocation. The Group adhered to the
professionalization of marketing activities, actively explored high-end and
high-profitability markets, fully utilized the function of value discovery
through online trading, strived to increase sales volume and profit. The Group
also continuously improved the natural gas end-customer business and
end-customer marketing network to increase the profitability of end-customer
business. The Natural Gas Sales segment
recorded a profit of RMB14,120 million, representing an
increase of 3.5% from RMB13,649 million in the same
period of last year.
024
In the first half of 2023, the Group's overseas operations(a) realized a revenue
of RMB525,247 million, accounting for 35.5% of the total revenue of the Group;
profit before income tax expense was RMB21,019 million, accounting for 17.3% of
the profit before income tax expense of the Group.
(a) Overseas operations do not constitute a separate operating segment of the
Group, and the financial data of overseas operations is included in the
financial data of each relevant operating segment mentioned above.
025
Assets, Liabilities and Equity
The following table sets out the key items in the consolidated balance sheet
of the Group:
June 30, 2023 December 31, 2022 Percentage of Change
RMB million RMB million %
Total assets 2,719,277 2,670,079 1.8
Current assets 660,423 613,867 7.6
Non-current assets 2,058,854 2,056,212 0.1
Total liabilities 1,131,231 1,135,913 (0.4)
Current liabilities 696,550 624,263 11.6
Non-current liabilities 434,681 511,650 (15.0)
Equity attributable to owners of the Company 1,412,938 1,365,640 3.5
Share capital 183,021 183,021 -
Reserves 334,575 332,334 0.7
Retained earnings 895,342 850,285 5.3
Total equity 1,588,046 1,534,166 3.5
Total assets amounted to RMB2,719,277 million,
representing an increase of 1.8% from RMB2,670,079
million as at the end of 2022, of which:
Current assets amounted to RMB660,423 million,
representing an increase of 7.6% compared to
RMB613,867 million as at the end of 2022, primarily due to the increase in cash
and cash equivalents and accounts receivable.
Non-current assets amounted to RMB2,058,854
million, representing an increase of 0.1% compared to
RMB2,056,212 million as at the end of 2022, primarily due to an increase in
other non-current assets and investments in associates and joint ventures. Total
liabilities amounted to RMB1,131,231 million, representing a decrease of 0.4%
from RMB1,135,913 million as at the end of 2022, of which: Current liabilities
amounted to RMB696,550 million, representing an increase of 11.6% from
RMB624,263 million as at the end of 2022, primarily due to the increase in
short-term borrowings and accounts payable and accrued liabilities.
Non-current liabilities amounted to RMB434,681
million, representing a decrease of 15.0% from
RMB511,650 million as at the end of 2022, primarily due to the optimization of
debt structure and the decrease in long-term borrowings.
Equity attributable to owners of the Company
amounted to RMB1,412,938 million, representing an
increase of 3.5% from RMB1,365,640 million as at the
end of 2022, primarily due to the increase in retained
earnings.
026
Cash Flows
As at June 30, 2023, the primary sources of funds of the Group were cash from
operating activities and short-term and long-term borrowings. The funds of the
Group were mainly used for operating activities, capital expenditures, repayment
of short-term and long-term borrowings and distribution of dividends to the
owners of the Company.
The table below sets out the cash flows of the Group for the first half of 2023
and 2022, respectively, and the amount of cash and cash equivalents as at the
end of each period:
For the six months ended June 30
2023 2022
RMB million RMB million
Net cash flows from operating activities 221,706 196,061
Net cash flows used for investing activities (119,409) (89,706)
Net cash flows used for financing activities (78,692) (26,141)
Translation of foreign currency 4,378 4,152
Cash and cash equivalents at end of the period 219,173 221,155
Net Cash Flows from Operating Activities
The net cash flows from operating activities for the first half of 2023 amounted
to RMB221,706 million, representing an increase of 13.1% from RMB196,061 million
as compared with the same period of last year.
This was primarily due to the increase in profits during the reporting period
and the improvement of working capital turnover efficiency. As at June 30, 2023,
the Group had cash and cash equivalents of RMB219,173 million, of which,
approximately 61.9% were denominated in Renminbi, approximately 34.7% were
denominated in US Dollars, approximately 3.0% were denominated in Hong Kong
Dollars and approximately 0.4% were denominated in other currencies.
Net Cash Flows Used for Investing Activities
The net cash flows used for investing activities for the first half of 2023
amounted to RMB119,409 million, representing an increase of 33.1% compared to
RMB89,706 million in the same period of last year. This was primarily due to an
increase in cash disbursements for construction of fixed assets, intangible
assets and other long-term assets.
Net Cash Flows Used for Financing Activities
The net cash flows used for financing activities for the first half of 2023
amounted to RMB78,692 million, representing an increase of RMB52,551 million
compared to RMB26,141 million in the same period of last year. This was
primarily due to the efforts made by the Group in optimizing its debt structure
and repayment of interest-bearing borrowings.
027
The net borrowings of the Group as at June 30, 2023 and December 31, 2022,
respectively, were as follows:
June 30, 2023 December 31, 2022
RMB million RMB million
Short-term borrowings (including current portion of long-term
borrowings) 162,257 100,639
Long-term borrowings 140,240 222,478
Total borrowings 302,497 323,117
Less: Cash and cash equivalents 219,173 191,190
Net borrowings 83,324 131,927
The following table sets out the borrowings' remaining contractual maturities at
the date of the statement of financial position, which are based on contractual
undiscounted cash flows including principal and interest, and the earliest
contractual maturity date:
June 30, 2023 December 31, 2022
RMB million RMB million
Within 1 year 174,923 107,461
Between 1 and 2 years 125,423 129,885
Between 2 and 5 years 50,108 102,490
After 5 years 17,031 16,500
367,485 356,336
Of the total borrowings of the Group as at June
30, 2023, approximately 33.7% were fixed-rate loans
and approximately 66.3% were floating-rate loans;
approximately 61.1% were denominated in Renminbi,
approximately 36.2% were denominated in US Dollars and
approximately 2.7% were denominated in other currencies.
As at June 30, 2023, the gearing ratio of the Group
(gearing ratio = interest-bearing borrowing / (interest-bearing
borrowing + total equity)) was 16.0% (December
31, 2022: 17.4%).
Capital Expenditures
For the first half of 2023, the Group continued to follow the investment return
standard and optimize investment scale and structure based on the idea of
rigorous investment, precise investment, profitable investment and
value-oriented investment. The capital expenditures of the Group was amounted to
RMB85,137 million, representing a decrease of 7.8% from RMB92,312 million as
compared with the same period of last year. The capital expenditures throughout
2023 is estimated at RMB243,500 million. The following table sets out the
capital expenditures incurred by the Group for the first half of 2023 and for
the first half of 2022 and the estimated capital expenditures for each of the
business segments of the Group throughout the year of 2023.
028
For the first half of 2023 For the first half of 2022 Estimates for 2023
RMB million (%) RMB million (%) RMB million (%)
Oil, Gas and New Energy 79,626 93.53 72,820 78.88 195,500 80.29
Refining, Chemicals and New Materials 3,471 4.07 16,827 18.23 34,000 13.96
Marketing 722 0.85 832 0.90 7,000 2.88
Natural Gas Sales 988 1.16 1,420 1.54 6,000 2.46
Head Office and Other 330 0.39 413 0.45 1,000 0.41
Total 85,137 100.00 92,312 100.00 243,500 100.00
Oil, Gas and New Energy
Capital expenditures for the Oil, Gas and New
Energy segment of the Group amounted to RMB79,626
million for the first half of 2023, which were primarily used
for the exploration and development with scale benefit
and profitability in key domestic basins such as Songliao,
Ordos, Junggar, Tarim, Sichuan and Bohai Bay, devoting greater efforts in the
exploration of unconventional resources such as shale gas and shale oil and
promoting new energy projects such as clean electricity, CCUS and hydrogen
energy demonstration projects; and the Group proactively focused on intensifying
its sizeable and profitable exploration activities in key areas overseas, while
improving the capacity construction of the key projects including those in
Middle East, Central Asia, America and Asia-Pacific and continuing to optimize
the asset structure, business structure and regional layout. The Group
anticipates that capital expenditures for the Oil, Gas and New Energy segment
throughout 2023 will amount to RMB195,500 million.
Refining, Chemicals and New Materials
Capital expenditures for the Refining, Chemicals
and New Materials segment of the Group amounted
to RMB3,471 million for the first half of 2023, which
were primarily used for the construction of large-scale
projects such as Ethylene projects of Jilin Petrochemical
Branch and Guangxi Petrochemical Branch, as well as transformation and upgrading
projects such as reduction of refining products and increase of chemical
products and new materials and new technologies. The Group anticipates that
capital expenditures for the Refining, Chemicals and New Materials segment
throughout 2023 will amount to RMB34,000 million.
Marketing
Capital expenditures for the Marketing segment of
the Group amounted to RMB722 million for the first half
of 2023, which were used primarily for the construction of
domestic integrated stations covering oil, gas, hydrogen,
electricity and non-oil products, improvement of terminal
029
network, the equipment construction of overseas oil and
gas storage and transportation and sales.
The Group anticipates that capital expenditures for
the Marketing segment throughout 2023 will amount to
RMB7,000 million.
Natural Gas Sales
Capital expenditures for the Natural Gas Sales
segment of the Group amounted to RMB988 million
for the first half of 2023, which were primarily used for
the construction of Fujian liquefied natural gas ("LNG")
receiving stations, natural gas branch lines and market
development projects for urban gas end-market.
The Group anticipates that capital expenditures
for the Natural Gas Sales segment throughout 2023 will
amount to RMB6,000 million.
Head Office and Other
Capital expenditures for the Head Office and Other segment for the first half of
2023 amounted to RMB330 million, which were primarily used for improvements of
scientific research facilities and construction of the IT system.
The Group anticipates that capital expenditures of
the Head Office and Other segment throughout 2023 will
amount to RMB1,000 million.
(2) The financial data set out below is extracted from the consolidated
financial statements of the Group prepared under CAS Principal operations by
segment under CAS
Income from
principal
operations for
the first half of
2023
Cost of
principal
operations
for the first
half of 2023
Gross
margin(a)
Changes in income
from principal
operations over the
same period of the
preceding year
Changes in cost of
principal operations
over the same
period of the
preceding year
Increase/
(decrease) in
gross margin
RMB million RMB million % % %
Percentage
points
Oil, Gas and New Energy 416,844 284,076 25.5 (5.1) (4.4) 3.5
Refining, Chemicals and
New Materials 571,634 435,604 6.5 (1.6) (4.1) 0.3
Marketing 1,207,130 1,170,130 3.0 (10.1) (9.2) (0.9)
Natural Gas Sales 273,819 262,892 3.9 9.4 10.4 (1.0)
Head Office and Other 168 119 - (18.4) (20.7) -
Inter segment elimination (1,022,823) (1,022,823) - - - -
Total 1,446,772 1,129,998 13.2 (8.7) (8.2) (0.5)
(a) Gross margin = Profit from principal operations / Income from principal
operations
030
Principal operations by region under CAS
For the first half of 2023 For the first half of 2022
Changes over
the same period of the
preceding year
Revenue from external customers RMB million RMB million %
Chinese mainland 954,624 928,165 2.9
Others 525,247 686,456 (23.5)
Total 1,479,871 1,614,621 (8.3)
Principal subsidiaries and associates of the Group
Registered
capital Shareholding
Amount of
total assets
Amount of
total liabilities
Amount of
net assets/
(liabilities)
Net profit/
(loss)
Company name
RMB
million % RMB million RMB million
RMB
million
RMB
million
Daqing Oilfield Company Limited 47,500 100 373,596 139,138 234,458 6,100
CNPC Exploration and
Development Company Limited 16,100 50 221,995 38,503 183,492 7,905
PetroChina Hong Kong Limited HK$7,592 million 100 158,048 54,196 103,852 4,753
PetroChina International Investment
Company Limited 31,314 100 108,488 184,326 (75,838) (3,120)
PetroChina International Co., Ltd. 18,096 100 305,826 203,040 102,786 7,373
PetroChina Sichuan Petrochemical
Co., Ltd. 10,000 90 27,991 2,960 25,031 480
China Oil and Gas Pipeline Network
Corporation 500,000 29.9 947,700 359,011 588,689 20,393
CNPC Finance Co., Ltd. ("CNPC
Finance") 16,395 32 521,935 436,670 85,265 3,027
CNPC Captive Insurance Co., Ltd. 6,000 49 11,980 4,603 7,377 238
China Marine Bunker (PetroChina)
Co., Ltd. 1,000 50 13,139 10,702 2,437 65
Mangistau Investment B.V. US$131 million 50 12,553 3,585 8,968 320
Trans-Asia Gas Pipeline Co., Ltd. 5,000 50 52,103 2,203 49,900 2,520
Note: For the nature of business and net profit of principal subsidiaries and
associates, please refer to note 6 and note 16 to the financial statements
prepared in accordance with CAS.
031
3. Business Prospects for the Second Half of
2023
In the second half of 2023, the world economy is
still facing downside risks, while China's economy will
continue to maintain the momentum of rebound, the
development foundation is still unstable. The international
crude oil market in general maintained an overall balance,
but there are still downside risks in oil prices; the demand
for natural gas market has improved. The consumption
in the domestic refined products market has gradually
recovered, and the demand for natural gas market has
maintained rapid growth. Facing new changes and new
challenges, the Group will continue to implement the
new development philosophy, actively integrate into
the new development pattern, implement high-quality
development requirements, vigorously implement the five
development strategies of innovation, resources, market,
internationalization and low-carbon transformation, focus
on developing its main business, strengthen enterprise
management, reform and innovation, improve quality and
efficiency, green transformation, digital transformation and
risk prevention, and strive to create value for shareholders.
In respect of oil, gas and new energy business,
the Group will vigorously strengthen risk exploration
of domestic oil and gas fields and strive to obtain new
strategic discoveries and breakthroughs. The Group
will strengthen the concentrated exploration in the fields
of reserve enhancement and actively implement the
sizeable and highly profitable reserves in key regions
and key areas such as Tarim Fuman, the northern slope
of Sichuan ancient uplift, the southern edge of Junggar
and Ordos. The Group will strengthen profitability and
increase reserves, conduct high-quality economically
recoverable reserves assessment and continuously
improve the balance of storage and production; the
Group will focus on maintaining the stable production of old oil and gas fields
and the profitable construction and production in new areas, accelerating the
promotion of demonstration projects for stable production of oil and gas in
Daqing, Changqing and other areas, solidly carrying out technical research on
improving oil recovery and improving the construction profitability of key
production capacity in Xinjiang Mahu and southern part of Sichuan.
The Group will further deepen cooperation in overseas oil and gas markets,
actively acquire large-scale and high-quality projects and continuously optimize
asset structure, business structure and regional layout. The Group will further
improve the special plans for new energy businesses and systematically promote
the optimization of new energy business layout; the Group will promote the
implementation of new energy projects in Xinjiang, Qinghai, Inner Mongolia and
other regions, strengthen the acquisition of clean electricity indicators and
the development of geothermal heating markets and strive to increase the supply
of clean energy; and the Group will accelerate the implementation of the CCUS
full industry chain demonstration project in the Songliao Basin.
In respect of refining, chemicals and new materials business, the Group will pay
close attention to market changes, timely optimize production plans, make
overall arrangements for processing loads of refining and chemical plants,
maintain efficient and stable operation of plants and actively increase the
production of marketable, profitable and characteristic refining products such
as paraffin, petroleum coke and high value-added chemical products such as
polyethylene bottle caps. The Group will deeply promote the development of new
materials business and accelerate the development of new products in Jilin
Petrochemical Branch and Liaoyang Petrochemical
Branch; the Group will enhance the ability to analyse and judge the chemical
market, actively build a customized customer service system, deepen the
application of "PetroChina e-Chemical" platform, continuously improve the
marketing system and comprehensively enhance profitability creation
capabilities. The Group will accelerate the construction of ethylene projects in
Jilin, Guangxi and other regions and advance the preliminary work of ethane to
ethylene phase II projects.
032
In respect of marketing business, the Group will further strengthen market
analysis and judgment, accurately grasp market trends, adhere to the balance of
quantity and profitability, refine marketing strategies, quickly link and
allocate resources, integrally promote marketing planning, product sales and
customer development and strive to consolidate and improve refined products
sales and market share. The Group will focus on the improvement of gasoline
retail capabilities and continuously strengthen retail terminals; the Group will
promote the integrated marketing of diesel wholesale and retail and strive to
improve sale profitability; the Group will develop non-oil business profitably,
enrich non-oil product categories, strengthen key single products, expand online
business, accelerate supply chain optimization and strive to increase revenue
and create profitability. The
Group will strengthen the improvement in the quality of terminal sales network
and accelerate the layout of new energy marketing business. The Group will
continuously improve the gas station environment and strive to improve customer
experience satisfaction.
In respect of the natural gas sales business, the
Group will optimize the resource structure and sales flow based on resource
prices and supply and demand changes, promote the tilt of incremental resources
towards profitable markets and high-end customers, enrich online trading
varieties, vigorously promote the entering into of medium and long-term
contracts and continuously improve marketing quality and profitability. The
Group will increase market development efforts and continuously improve terminal
sales and service capabilities. The Group will commence the construction of
Fujian LNG receiving station and accelerate the construction of natural gas
sales branch lines.
By Order of the Board of Directors
PetroChina Company Limited
Dai Houliang
Chairman
Beijing, the PRC
August 30, 2023
033
SIGNIFICANT EVENTS
1. Governance of the Company
During the reporting period, the Company operated
business in a regularized manner in accordance with
domestic and overseas regulatory requirements. Pursuant
to Articles of Association of PetroChina Company Limited
("Articles of Association"), relevant laws and regulations
and the securities regulatory rules of the jurisdictions in
which the Company is listed and in light of the actual
conditions of the Company, the Company formulated,
improved and effectively implemented the various rules
of procedure, and the relevant working system and
processes for the Board of Directors and its respective
committees. The Company's internal management
operations worked smoothly through the coordination and
balances among the shareholders' general meeting, the
Board and its respective committees, the Supervisory Committee and the
management led by the president of the Company; the roles of the governing
bodies such as the Board and management were further utilized and the efficient
management and organizational system were further improved; and the internal
management operation of the Company was further standardized and the management
level, the value creation ability and the market competitiveness of the Company
were further improved with the effective internal control management system.
During the reporting period, the Company convened
3 general meeting, 4 meetings of the Board and 3
meetings of the Supervisory Committee, adopting 15
resolutions of the general meeting (including 10 ordinary
and 5 special resolutions), 26 resolutions of the Board
and 11 resolutions of the Supervisory Committee. Such
meetings were prepared and convened in compliance with
the relevant laws and rules and the adopted resolutions
were lawful and valid.
During the reporting period, the Company's corporate governance met the
requirements set out in the normative documents relating to governance of listed
companies issued by the regulatory authorities and stock exchanges of the places
where the Company is listed, and no person with access to inside information was
found dealing in the shares of the Company against the relevant regulations.
2. Compliance with the Corporate Governance
Code
For the six months ended June 30, 2023, the
Company has complied with all the code provisions of Part Two of the Corporate
Governance Code set out in Appendix 14 to the Rules Governing the Listing of
Securities on The Stock Exchange of Hong Kong Limited (the "Hong Kong Listing
Rules").
On June 8, 2023, the term of the session of the
Board expired. Mr. Jiao Fangzheng ceased to serve as an executive Director and
chief geologist of the Company due to adjustment of work arrangements and
simultaneously stepped down as a member of the sustainable development committee
of the Board. Ms.
Elsie Leung Oi-sie has been appointed as Director for
6 years; and she ceased to serve as an independent non-executive Director due to
regulatory limitation on
term of office and simultaneously stepped down as
the chairperson of the examination and remuneration
committee of the Board. Mr. Tokuchi Tatsuhito has been
appointed as Director for 6 years; and he ceased to
serve as an independent non-executive Director due to
034
regulatory limitation on term of office and simultaneously
stepped down as a member of the examination and
remuneration committee of the Board.
On June 8, 2023, the 1st meeting of the ninth session of the Board was convened,
in which Directors considered and approved the resolution regarding the
appointment of members of Board committees. Mr. Dai Houliang was appointed as
the chairman of the nomination committee of the Board; Ms. Hung Lo Shan Lusan
was appointed as the chairperson of the audit committee of the Board; Mr. Hou
Qijun was appointed as the chairman of the investment and development committee
of the Board; Mr. Cai Jinyong was appointed as the chairman of the examination
and remuneration committee of the Board; and Mr. Huang Yongzhang was appointed
as the chairman of the sustainable development committee of the Board. The
member composition of the new Board committees is as follows:
Nomination Committee: Mr. Dai Houliang as the
chairman, Mr. Cai Jinyong and Mr. Jiang, Simon X. as
members
Audit Committee: Ms. Hung Lo Shan Lusan as the
chairperson, Mr. Duan Liangwei and Mr. Jiang, Simon X.
as members
Investment and Development Committee: Mr. Hou
Qijun as the chairman, Mr. Huang Yongzhang and Mr. Xie Jun as members
Examination and Remuneration Committee: Mr. Cai
Jinyong as the chairman, Mr. Duan Liangwei and Mr. Ho
Kevin King Lun as members
Sustainable Development Committee: Mr. Huang
Yongzhang as the chairman, Mr. Ren Lixin and Mr. Zhang Laibin as members
3. Formulation and Implementation of the Cash
Dividend Policy
In order to protect the interests of the shareholders, the Company provides in
the Articles of Association that, for the year when the net profit attributable
to the parent company and the cumulative undistributed profit are positive and
so long as the cash flows of the
Company may support its normal course of operation and sustainable development,
any cash dividends shall not be less than 30% of the net profit attributable to
the parent company for that year. The dividend of the Company shall be
distributed twice a year. The final dividend of the Company shall be decided by
the shareholders by way of an ordinary resolution. The shareholders may by way
of an ordinary resolution authorize the board of directors to decide on the
interim dividends. Since listing, the Company has been strictly complying with
the Articles of Association and relevant regulatory requirements and making
decisions on dividend distribution based on the principle of rewarding
shareholders. The shareholders also welcome the Company's prudent and active
dividend distribution policy. The independent Directors have performed their
duties conscientiously and diligently, expressed independent and objective
opinions on dividend distribution and played their due role. The Board has been
authorised by the shareholders the distribution of 2023 interim dividend and has
considered and approved the 2023 interim dividend at the 3rd meeting of the
ninth session of the Board, with the consent of independent Directors.
035
4. The Implementation of Final Dividend for
2022 and the Distribution Plan of the Interim
Dividend for 2023 and Closure of Register of
Members
(1) The Implementation of Final Dividend for the Year Ended December 31, 2022
The final dividend in respect of 2022 of RMB0.22
(inclusive of applicable tax) per share, amounting to a total
of RMB40,265 million, was approved at the 2022 annual
general meeting of the Company on June 8, 2023 and was
paid by the Company on June 28, 2023 (A Shares) and
July 28, 2023 (H Shares), respectively.
(2) The Distribution Plan of the Interim Dividend for 2023 and Closure of
Register of Members
The Board was authorised by the shareholders to approve the distribution of the
interim dividend for 2023 at the 2022 annual general meeting of the Company on
June 8, 2023. To provide returns to the shareholders, the Board has resolved to
declare an interim dividend of RMB0.21 (inclusive of applicable tax) per share
for 2023 on the basis of a total of 183,020,977,818 shares of the Company as at
June 30, 2023. The total amount of the interim dividends payable is
approximately RMB38,434 million and is expected to be paid on September 20, 2023
(A Shares) and October 30, 2023 (H Shares), respectively.
The interim dividend of the Company will be paid
to shareholders whose names appear on the register
of members of the Company at the close of trading on
September 19, 2023. The register of members of H shares will be closed from
September 14, 2023 to September 19, 2023 (both days inclusive) during which
period no transfer of H shares will be registered. In order to qualify for the
interim dividend, holders of H shares must lodge all transfer documents together
with the relevant share certificates at Hong Kong Registrars Limited on or
before 4:30 p.m., September 13, 2023. Holders of A shares whose names appear on
the register of members of the Company maintained at China Securities Depository
and Clearing Corporation Limited ("CSDC") at the close of trading on the
Shanghai Stock Exchange in the afternoon of September 19, 2023 will be eligible
for the interim dividend.
In accordance with the relevant provisions of the Articles of Association of
PetroChina Company Limited and relevant laws and regulations, dividends payable
to the shareholders of the Company shall be declared in Renminbi. Dividends
payable to the holders of A shares shall be paid in Renminbi, and for the A
shares of the Company listed on the Shanghai Stock Exchange and invested by the
investors through the Hong Kong Stock Exchange, dividends shall be paid in
Renminbi to the accounts of the nominal shareholders through
CSDC. Save for the H shares of the Company listed on the Hong Kong Stock
Exchange and invested by the investors through the Shanghai Stock Exchange and
Shenzhen Stock Exchange (the "H Shares under the Southbound Trading Link"),
dividends payable to the holders of H shares shall be paid in Hong Kong Dollars.
The applicable exchange rate shall be the average of the medium exchange rate
for Renminbi to Hong Kong Dollar as announced by the People's Bank of China for
the week prior to the declaration of the dividends by the Board.
Dividends payable to the holders of H Shares under the Southbound Trading Link
shall be paid in Renminbi. In accordance with the Agreement on Payment of Cash
Dividends on the H Shares under the Southbound Trading Link ([]) between the
Company and CSDC, CSDC will receive the dividends payable by the Company to
holders of the H Shares under the Southbound Trading Link as a nominal holder of
the H Shares under the Southbound Trading Link on behalf of investors and assist
the payment of dividends on the H Shares under the Southbound Trading Link to
investors thereof. The average of the medium exchange rate for Renminbi to Hong
Kong Dollar as announced
036
by the People's Bank of China for the week prior to the
declaration of the 2023 interim dividend by the Board
is RMB0.91674 to 1.00 Hong Kong Dollar. Accordingly,
the interim dividend will be 0.22907 Hong Kong Dollar
(inclusive of applicable tax) per H share.
The Company has appointed Bank of China (Hong
Kong) Trustees Limited as the receiving agent in Hong Kong (the "Receiving
Agent") and will pay the declared interim dividend to the Receiving Agent for
its onward payment to the holders of H shares. The interim dividend will be paid
by the Receiving Agent around October 30, 2023 to the holders of H shares by
ordinary mail at their own risks.
According to the Law on Corporate Income Tax of
the People's Republic of China ([]) and the relevant implementing rules which
came into effect on January 1, 2008 and was amended on
February 24, 2017 and December 29, 2018, the Company
is required to withhold corporate income tax at the rate
of 10% before distributing dividends to non-resident
enterprise shareholders whose names appear on the H
share register of members of the Company. Any H shares
registered in the name of non-individual shareholders,
including HKSCC Nominees Limited, other nominees,
trustees or other groups and organisations, will be treated
as being held by non-resident enterprise shareholders and
therefore will be subject to the withholding of the corporate
income tax. Any holders of H shares wishing to change
their shareholder status should consult their agents or
trust institutions on the relevant procedures. The Company
will withhold and pay the corporate income tax strictly
in accordance with the relevant laws or requirements
of the relevant governmental departments based on
the information that will have been registered on the
Company's H share register of members on September
19, 2023.
According to the Notice on Issues Concerning the
Collection and Management of Individual Income Tax
after the Abolishment of Guo Shui Fa [1993] No.045
promulgated by the State Taxation Administration (Guo
Shui Han [2011] No.348) [], the Company is required to withhold and pay the
individual income tax for individual holders of
H shares and individual holders of H shares are entitled to certain tax
preferential treatments according to the tax agreements between those countries
where the individual holders of H shares are resident and China and the
provisions in respect of tax arrangements between Chinese mainland and Hong Kong
(Macau). The Company will withhold and pay the individual income tax at the tax
rate of 10% on behalf of the individual H shareholders who are Hong Kong
residents, Macau residents or residents of those countries having agreements
with China for individual income tax rate in respect of dividend of 10%. For
individual H shareholders who are residents of those countries having agreements
with China for individual income tax rates in respect of dividend of lower than
10%, the Company would make applications on their behalf to seek entitlement of
the relevant agreed preferential treatments pursuant to the Circular on Issuing
Administrative Measures on Preferential Treatment Entitled by Non-residents
Taxpayers under Treaties (SAT Circular [2019] No.35) ([]) issued by the State
Taxation Administration. For individual H shareholders who are residents of
those countries having agreements with China for individual income tax rates in
respect of dividend of higher than 10% but lower than 20%, the Company would
withhold the individual income tax at the agreed-upon effective tax rate. For
individual H shareholders who are residents of those countries without any
taxation agreements with China or having agreements with China for individual
income tax in respect of dividend of 20% or other situations, the Company would
withhold the individual income tax at a tax rate of 20%.
The Company will determine the country of domicile of the individual H
shareholders based on the registered
037
address as recorded in the register of members of the
Company (the "Registered Address") on September 19,
2023 and will accordingly withhold and pay the individual
income tax. If the country of domicile of an individual H
shareholder is not the same as the Registered Address,
the individual H shareholder shall notify the share
registrar of the Company's H shares and provide relevant
supporting documents on or before 4:30 p.m., September
13, 2023 (address: Hong Kong Registrars Limited, Shops
1712-1716, Hopewell Centre, 183 Queen's Road East,
Wanchai, Hong Kong). If the individual H shareholder does not provide the
relevant supporting documents to the share registrar of the Company's H shares
within the time period stated above, the Company will determine the country of
domicile of the individual H shareholder based on the recorded Registered
Address on September 19, 2023.
The Company will not entertain any claims arising from and assumes no liability
whatsoever in respect of any delay in, or inaccurate determination of, the
status of the shareholders of the Company or any disputes over the withholding
and payment of tax. In accordance with the Notice of Ministry of Finance, the
State Taxation Administration, and the China Securities Regulatory Commission on
Taxation Policies concerning the Pilot Program of an Interconnection Mechanism
for
Transactions in the Shanghai and Hong Kong Stock
Markets (Cai Shui [2014] No.81) ([]), which became effective
on November 17, 2014, and the Notice of the Ministry of
Finance, the State Taxation Administration, and the China Securities Regulatory
Commission on Taxation Policies concerning the Pilot Program of an
Interconnection Mechanism for Transactions in the Shenzhen and Hong Kong Stock
Markets (Cai Shui [2016] No. 127) ([]), which became effective on December 5,
2016, with regard to the dividends obtained by individual Chinese mainland
investors from investment in the H shares of the Company listed on the Hong Kong
Stock Exchange through the Shanghai-Hong Kong Stock Connect and Shenzhen-Hong
Kong Stock Connect, the Company will withhold their individual income tax at the
tax rate of 20% in accordance with the register of individual Chinese mainland
investors provided by CSDC. As to the withholding tax having been paid abroad,
an individual investor may file an application for tax credit with the competent
tax authority of CSDC with an effective credit document. With respect to the
dividends obtained by Chinese mainland securities investment funds from
investment in the H shares of the Company listed on the Hong Kong Stock Exchange
through the Shanghai-Hong Kong Stock Connect and
Shenzhen-Hong Kong Stock Connect, the Company will
withhold tax with reference to the provisions concerning
the collection of tax on individual investors. The Company
will not withhold income tax on dividends obtained by
Chinese mainland enterprise investors, and Chinese
mainland enterprise investors shall file their income tax
returns and pay tax themselves instead.
With regard to the dividends obtained by the investors (including enterprises
and individuals) from investment in the A shares of the Company listed on
Shanghai Stock Exchange through the Hong Kong Stock
Exchange, the Company will withhold income tax at the tax rate of 10%, and file
tax withholding returns with the competent tax authority. Where any Hong Kong
investor is a tax resident of a foreign country and the rate of income tax on
dividends is less than 10%, as provided for in the tax treaty between the
country and the PRC, the enterprise or individual may directly, or entrust a
withholding agent to, file an application for the tax treatment under the tax
treaty with the competent tax authority of the Company.
Upon review, the competent tax authority will refund tax based on the difference
between the amount of tax having been collected and the amount of tax payable
calculated at the tax rate as set out in the tax treaty.
038
5. Material Litigation and Arbitration
During the Reporting Period, the Company has no material litigations or
arbitrations.
6. Items to which Fair Value Measurement Is Applied Unit: RMB million
Name of Items
Balance at the
beginning of the
reporting period
Balance at the end
of the reporting
period
Changes in the
reporting period
Profit/loss on the
changes in fair value
of the reporting
period
Investments in other equity instruments 950 883 (67) -
Receivables financing 4,376 8,815 4,439 -
Financial assets at fair value through
profit or loss 3,876 5,815 1,939 294
Financial liabilities at fair value through
profit or loss 1,698 4,258 2,560 -
Derivative financial instruments 9,987 7,185 (2,802) (1,629)
7. Material Acquisition, Disposal and
Restructuring of Assets
During the reporting period, the Company has no material acquisition, disposal
or restructuring of assets.
8. Material Connected Transactions
(1) Continuing connected transactions
(a) Connected transactions with CNPC
According to the Hong Kong Listing Rules and the
Shanghai Stock Exchange Listing Rules (the "SSE Listing
Rules"), as CNPC is the controlling shareholder of the Company, the transactions
between the Group and CNPC/ jointly-held entities constitute connected
transactions of the Group. The Group and CNPC/jointly-held entities are carrying
out certain existing continuing connected transactions. The above existing
continuing connected transactions and their annual caps from January 1, 2021 to
December 31, 2023 have been approved at the seventh meeting of the Board of 2020
and the third extraordinary general meeting of the Company of 2020 convened on
August 27, 2020 and November 5, 2020, respectively.
The Group and CNPC/jointly-held entities will continue
to carry out the continuing connected transactions referred
to in the following agreements:
1) Comprehensive Products and Services Agreement
2) Land Use Rights Leasing Contract and Supplemental Agreement
3) Buildings Leasing Contract (Amended)
4) Intellectual Property Licensing Contracts
5) Contract for the Transfer of Rights under Production Sharing Contracts
Please refer to the connected transactions section
of the 2022 annual report published by the Company
on the websites of the Hong Kong Stock Exchange and
the Shanghai Stock Exchange respectively on March
29, 2023 for details of these agreements. The details of
the Comprehensive Products and Services Agreement,
039
Land Use Rights Leasing Contract and Supplemental
Agreement, Buildings Leasing Contract (Amended) have
been published on the websites of the Shanghai Stock
Exchange (Announcement No: Lin 2020-036) and the
Hong Kong Stock Exchange on August 27, 2020. See
also the circular published on the website of the Hong
Kong Stock Exchange on September 15, 2020 and the
information of the third extraordinary general meeting of
the Company of 2020 published on the website of the
Shanghai Stock Exchange on October 29, 2020.
(b) Continuing connected transactions with CNPC
Finance
According to the Hong Kong Listing Rules and the
SSE Listing Rules, CNPC Finance is a connected person of the Group. During the
reporting period, the beginning balance of the Group's deposits with CNPC
Finance was RMB41,192 million, with cash inflow of RMB2,392,408 million and cash
outflow of RMB2,387,974 million during the reporting period, and the
end-of-period balance was RMB45,626 million; the Renminbi interest rate range
was from 0.20% to 3.30%. During the reporting period, the beginning balance of
the loans provided by CNPC Finance to the Group was RMB64,616 million, with new
loans of RMB18,218 million and repaid loans of RMB20,481 million during the
reporting period, and the end-of-period balance is RMB62,353 million. The
Renminbi interest rate range is from 2.40% to 4.18%. During the reporting
period, the acceptance bill of exchange and bill discount issued by CNPC Finance
for the Group were RMB9,285 million and RMB2,223 million.
The Company entered into a currency derivatives
service framework agreement with CNPC Finance on
March 29, 2023. Pursuant to the agreement, the Group conducted currency
derivatives transactions with CNPC
Finance in 2023, to lock in exchange rates, avoid market risks and achieve the
purpose of hedging in advance through currency derivatives transactions. The
term of the agreement will expire on December 31, 2023. Please refer to the
announcement published by the Company on the websites of the Hong Kong Stock
Exchange and the Shanghai Stock Exchange on March 29, 2023, respectively. During
the reporting period, the transaction amount of currency derivatives
transactions between CNPC Finance and the Group amounted to USD 3,264 million.
(2) Implementation of the continuing connected
transactions during the reporting period
During the reporting period, the actual total
transaction amounts of the connected transactions
between the Group and its related parties were
RMB250,510 million, among which the sales of goods and provision of services by
the Group to its related parties amounted to RMB64,332 million, representing 4%
of the same category transactions of the Group; the provision of goods and
services by the related parties to the Group amounted to RMB186,178 million,
representing 15% of the same category transactions of the Group. The balance of
the capital provided by the related parties to the Group amounted to RMB138,175
million.
(3) Details of the connected transactions during the reporting period have been
set out in note 63 under the
financial statements prepared in accordance with CAS
and note 18 under the financial statements prepared in
accordance with IFRS.
9. Material Contracts and the Implementation
Thereof
(1) During the reporting period, there were no
trusteeship, contractors and leasing of properties of other
companies by the Company or trusteeship, contractors
and leasing of properties of the Company by other
companies which was enacted during the reporting period
or extended from periods prior to the reporting period and
has generated profit to the Company of 10% or more of its
total profit for the reporting period.
040
(2) As at the end of the reporting period, the
Company and its subsidiaries had a guarantee balance of RMB208.664 billion,
including RMB4.686 billion for credit guarantee, RMB197.145 billion for
performance guarantee, RMB6.833 billion for financing guarantee, and the balance
of guarantees as at the end of the reporting period accounted for approximately
13.14% of the Group's net asset. The guarantee balance of the Company as at the
end of the reporting period did not include any guarantee provided to the
controlling shareholder of the Company, its ultimate controller and related
parties.
(3) The Company did not entrust any other person to carry out cash management
during the reporting period nor was there any such entrustment that was extended
from periods prior to the reporting period.
(4) The Company had no material external entrusted
loans during the reporting period.
(5) Save as disclosed in this interim report, during the reporting period, the
Company did not enter into any
material contract which requires disclosure.
10. Performance of Undertakings
In order to support the business development of the Company, consolidate the
relevant quality assets and avoid industry competition, CNPC, the controlling
shareholder of the Company, entered into the Agreement on Non-Competition and
Pre-emptive Right to Transactions (the "Agreement") with the Company on March
10, 2000.
As at the end of the reporting period, except for those already performed, the
undertakings not performed by CNPC including the follows: (1) certain overseas
oil and gas projects owned by CNPC are located in countries or regions in social
and political turbulence. In relation to such projects, foreign investors from
specific countries are restricted by the policies, laws and regulations of their
countries and cannot or are inconvenient to invest in companies that own such
assets, and in order to protect the safety of the Company's own supply chain and
reduce compliance risks, the Company has not yet decided to exercise the right
to acquire such projects; (2) after execution of the Agreement, CNPC obtained
certain business opportunities that competed or were likely to compete with the
principal business of the Company, which is not in strict compliance with the
Agreement.
Nevertheless, such industry competition primarily
concentrated on oil and gas exploration and development
operations at certain overseas countries and regions in
which the resources owned by CNPC were insufficient or
uncertain.
In connection with matters described above, CNPC
issued a Letter of Undertaking to the Company on June
20, 2014 and made additional undertakings that: (1) within
ten years from the date of the Letter of Undertaking,
after taking into account of political, economic and other
factors, the Company may request CNPC to sell offshore
oil and gas assets which remain in possession by CNPC
and which were in possession by CNPC as at the date of
the Letter of Undertaking; (2) for business opportunities
relating to investment in offshore oil and gas assets after
the date of the Letter of Undertaking, the relevant prior
approval procedure of the Company shall be initiated
strictly in accordance with the Agreement. Subject to the
applicable laws, contractual agreements and procedure
requirements, CNPC will sell to the Company offshore oil
and gas assets as described in items (1) and (2) above at
the request of the Company.
Save for the above additional undertakings,
undertakings made by CNPC in the Agreement remain
unchanged.
Save for the above undertakings, there is no material undertakings given by the
Company, any shareholders, ultimate controllers, purchasers, Director,
Supervisor or senior management or other related parties during the reporting
period.
041
11. Penalties on the Company and its Directors,
Supervisors, Senior Management, Controlling
Shareholder and Ultimate Controller and
Remedies Thereto
During the reporting period, none of the Company or its current Directors,
Supervisors, senior management, controlling shareholder or ultimate controller
of the Company was subject to any investigation by competent authorities,
enforcement by judicial or disciplinary departments, or was handed over to
judicial departments or subject to criminal liabilities, or subject to
investigation or administrative punishment by the China Securities Regulatory
Commission, or any denial of participation in the securities market or was
deemed unsuitable, or was imposed on material administrative penalty by other
administrative authorities or was subject to any public condemnation made by a
stock exchange.
12. Repurchase, Sale or Redemption of
Securities
The Company and its subsidiaries did not
repurchase, sell or redeem any listed securities of the
Company during the six months ended June 30, 2023.
13. Compliance with the Model Code for
Securities Transactions by Directors of Listed
Issuers
The Company has adopted the provisions in relation to dealing in shares of the
Company by Directors as set out in the Model Code for Securities Transactions by
Directors of Listed Issuers contained in Appendix 10 to the Hong Kong Listing
Rules (the "Model Code"). After specific enquiries being made to all the
Directors and Supervisors, each Director and Supervisor has confirmed to the
Company that each of them has complied with relevant standards set out in the
Model Code in the reporting period.
14. Interests of Directors, Supervisors and Chief
Executives in the Share Capital of the Company
As at June 30, 2023, none of the Directors,
Supervisors or chief executives had any interest and short positions in any
shares, underlying shares or debentures of the Company or any associated
corporation within the meaning of Part XV of the Securities and Futures
Ordinance required to be recorded in the register mentioned under Section 352 of
the Securities and Futures Ordinance or as otherwise notifiable to the Company
and the Hong Kong Stock Exchange by the Directors, Supervisors and chief
executives pursuant to the Model Code.
15. Creditworthiness of the Company and its
Controlling Shareholder and Ultimate Controller
During the reporting period, the Company and its controlling shareholder did not
incur any unperformed material court judgement that had come into force or any
significant outstanding debt that had become due and payable.
16. Audit Committee
The audit committee of the Company comprises Ms.
Hung Lo Shan Lusan, Mr. Duan Liangwei and Mr. Jiang, Simon X. The major
responsibilities of the audit committee are to review and monitor the financial
reporting system and internal control procedures of the Group and make
recommendations to the Board.
The audit committee of the Company has reviewed and confirmed the interim report
for the six months ended
June 30, 2023.
17. Disclosure of Other Information
Save as disclosed above, there have been no material changes in the information
disclosed in the annual report of the Group for the year ended December 31, 2022
in respect of matters required to be disclosed under paragraph 32 of Appendix 16
to the Hong Kong Listing Rules.
042
18. Index of Information Disclosure
Matter Names of newspaper of
publication
Date of publication
(or the time of release through
the website of the Hong
Kong Stock Exchange or the
Shanghai Stock Exchange, if the
disclosure was not published)
Website of release
Announcement of PetroChina Company
Limited on the Resignation of the
Company's Vice President
China Securities Journal,
Shanghai Securities News,
Securities Times, Securities
Daily
January 6 ,2023
Website of the Hong
Kong Stock Exchange
and the Shanghai
Stock Exchange
Announcement of PetroChina Company
Limited for Estimated Profit of the
Annual Results of 2022
China Securities Journal,
Shanghai Securities News,
Securities Times, Securities
Daily
January 19, 2023
Website of the Hong
Kong Stock Exchange
and the Shanghai
Stock Exchange
Announcement of PetroChina Company
Limited Regarding the Proposed
Release of the Registration of Pledge
and Trust for the Exchangeable
Corporate Bonds by the Controlling
Shareholder
China Securities Journal,
Shanghai Securities News,
Securities Times, Securities
Daily
February 17, 2023
Website of the Hong
Kong Stock Exchange
and the Shanghai
Stock Exchange
Announcement of PetroChina Company
Limited Regarding the Completion of
the Procedures for the Release of the
Registration of Pledge and Trust for the
Exchangeable Corporate Bonds by the
Controlling Shareholder
China Securities Journal,
Shanghai Securities News,
Securities Times, Securities
Daily
March 3, 2023
Website of the Hong
Kong Stock Exchange
and the Shanghai
Stock Exchange
Notice of Board Meeting March 17, 2023
Website of the Hong
Kong Stock Exchange
and the Shanghai
Stock Exchange
Announcement of PetroChina Company
Limited on Holding the 2022 Annual
Results Presentation Meeting
China Securities Journal,
Shanghai Securities News,
Securities Times, Securities
Daily
March 22, 2023
Website of the Hong
Kong Stock Exchange
and the Shanghai
Stock Exchange
Announcement on Resolutions of the
Fifteenth Meeting of the Eighth Session
of the Supervisory Committee of
PetroChina Company Limited
China Securities Journal,
Shanghai Securities News,
Securities Times, Securities
Daily
March 29, 2023
Website of the Hong
Kong Stock Exchange
and the Shanghai
Stock Exchange
Announcement on Resolutions of the
Twentieth Meeting of the Eighth Session
of the Board of PetroChina Company
Limited
China Securities Journal,
Shanghai Securities News,
Securities Times, Securities
Daily
March 29, 2023
Website of the Hong
Kong Stock Exchange
and the Shanghai
Stock Exchange
Announcement of PetroChina Company
Limited on Renewing the Appointment
of Accounting Firms
China Securities Journal,
Shanghai Securities News,
Securities Times, Securities
Daily
March 29, 2023
Website of the Hong
Kong Stock Exchange
and the Shanghai
Stock Exchange
Announcement on Guarantee
Arrangement of PetroChina Company
Limited in 2023
China Securities Journal,
Shanghai Securities News,
Securities Times, Securities
Daily
March 29, 2023
Website of the Hong
Kong Stock Exchange
and the Shanghai
Stock Exchange
Announcement of Continuing
Connected Transactions of PetroChina
Company Limited
China Securities Journal,
Shanghai Securities News,
Securities Times, Securities
Daily
March 29, 2023
Website of the
Shanghai Stock
Exchange
043
Matter Names of newspaper of
publication
Date of publication
(or the time of release through
the website of the Hong
Kong Stock Exchange or the
Shanghai Stock Exchange, if the
disclosure was not published)
Website of release
Announcement on 2022 Final Profit
Distribution Plan (A Shares) of
PetroChina Company Limited
China Securities Journal,
Shanghai Securities News,
Securities Times, Securities
Daily
March 29, 2023
Website of the Hong
Kong Stock Exchange
and the Shanghai
Stock Exchange
Announcement on Allowance for
Impairment of Assets by PetroChina
Company Limited
China Securities Journal,
Shanghai Securities News,
Securities Times, Securities
Daily
March 29, 2023
Website of the Hong
Kong Stock Exchange
and the Shanghai
Stock Exchange
Ongoing Report on Risk Assessment by
CNPC Finance Co., Ltd. and Expected
Financial Business in 2023
March 29, 2023
Website of the Hong
Kong Stock Exchange
and the Shanghai
Stock Exchange
2022 Annual Report of PetroChina
Company Limited March 29, 2023
Website of the Hong
Kong Stock Exchange
and the Shanghai
Stock Exchange
Results Announcement for the
Year ended December 31, 2022 of
PetroChina Company Limited (Summary
of the Annual Report)
China Securities Journal,
Shanghai Securities News,
Securities Times, Securities
Daily
March 29, 2023
Website of the Hong
Kong Stock Exchange
and the Shanghai
Stock Exchange
Internal Control Evaluation Report of
PetroChina Company Limited for 2022 March 29, 2023
Website of the Hong
Kong Stock Exchange
and the Shanghai
Stock Exchange
2022 Environmental, Social and
Governance Report March 29, 2023
Website of the Hong
Kong Stock Exchange
and the Shanghai
Stock Exchange
The 2022 Performance Report of
the Audit Committee of PetroChina
Company Limited
March 29, 2023
Website of the Hong
Kong Stock Exchange
and the Shanghai
Stock Exchange
2022 Work Report of Independent
Directors of PetroChina Company
Limited
March 29, 2023
Website of the Hong
Kong Stock Exchange
and the Shanghai
Stock Exchange
Special Report and Independent
Opinions of Independent Non-executive
Directors of PetroChina Company
Limited on the Company's Guarantee
Arrangement
March 29, 2023
Website of the Hong
Kong Stock Exchange
and the Shanghai
Stock Exchange
Independent Opinions of Independent
Non-executive Directors of PetroChina
Company Limited on Connected
Transactions between the Company
and CNPC Finance
March 29, 2023
Website of the Hong
Kong Stock Exchange
and the Shanghai
Stock Exchange
Independent Opinions of Independent
Non-executive Directors of PetroChina
Company Limited on the Resolutions
of the Twentieth Meeting of the Eighth
Session of the Board of PetroChina
Company Limited
March 29, 2023
Website of the Hong
Kong Stock Exchange
and the Shanghai
Stock Exchange
044
Matter Names of newspaper of
publication
Date of publication
(or the time of release through
the website of the Hong
Kong Stock Exchange or the
Shanghai Stock Exchange, if the
disclosure was not published)
Website of release
Independent Opinions of the
Independent Non-executive Directors
of PetroChina Company Limited on the
Company's 2022 Profit Distribution Plan
March 29, 2023
Website of the Hong
Kong Stock Exchange
and the Shanghai
Stock Exchange
Independent Opinions of the
Independent Non-executive Directors
of PetroChina Company Limited on
the Company's Currency Derivatives
Transactions in 2023
March 29, 2023
Website of the Hong
Kong Stock Exchange
and the Shanghai
Stock Exchange
Independent Opinions of the
Independent Non-executive Directors
of PetroChina Company Limited on the
General Mandate of Share Repurchase
by the General Meeting to the Board
March 29, 2023
Website of the Hong
Kong Stock Exchange
and the Shanghai
Stock Exchange
Pre-approval Opinions of the
Independent Non-executive Directors
of PetroChina Company Limited on the
Appointment of Domestic and Overseas
Accounting Firms of the Company for
2023
March 29, 2023
Website of the Hong
Kong Stock Exchange
and the Shanghai
Stock Exchange
Independent Opinions of the
Independent Non-executive Directors
of PetroChina Company Limited on the
Appointment of Domestic and Overseas
Accounting Firms of the Company for
2023
March 29, 2023
Website of the Hong
Kong Stock Exchange
and the Shanghai
Stock Exchange
Rules of Procedure of the Board of
PetroChina Company Limited March 29, 2023
Website of the Hong
Kong Stock Exchange
and the Shanghai
Stock Exchange
Administrative Measures for Information
Disclosure of PetroChina Company
Limited
March 29, 2023
Website of the Hong
Kong Stock Exchange
and the Shanghai
Stock Exchange
Measures for the Management of
Investor Relations of PetroChina
Company limited
March 29, 2023
Website of the Hong
Kong Stock Exchange
and the Shanghai
Stock Exchange
Regulations on the Administration of
Guarantees of PetroChina Company
Limited
March 29, 2023
Website of the Hong
Kong Stock Exchange
and the Shanghai
Stock Exchange
Financial Statements and Audit Report
of PetroChina Company Limited for the
year ended December 31, 2022
March 29, 2023
Website of the Hong
Kong Stock Exchange
and the Shanghai
Stock Exchange
Audit Report on Internal Control of
PetroChina Company Limited for 2022 March 29, 2023
Website of the Hong
Kong Stock Exchange
and the Shanghai
Stock Exchange
045
Matter Names of newspaper of
publication
Date of publication
(or the time of release through
the website of the Hong
Kong Stock Exchange or the
Shanghai Stock Exchange, if the
disclosure was not published)
Website of release
Special Audit Report on the Summary
of Non-Operational Funds Utilization
and Other Transaction of Related Funds
of PetroChina Company Limited
March 29, 2023
Website of the Hong
Kong Stock Exchange
and the Shanghai
Stock Exchange
Special Report on the Deposits, Loans
and Other Financial Businesses of
PetroChina Company Limited Involving
Connected Transactions with CNPC
Finance Co., Ltd. in 2022
March 29, 2023
Website of the Hong
Kong Stock Exchange
and the Shanghai
Stock Exchange
Announcement of the Proposed Re-election
and Appointment of Directors
and Supervisors of PetroChina
Company Limited
March 29, 2023
Website of the
Hong Kong Stock
Exchange
Continuing Connected Transactions of
PetroChina Company Limited regarding
Currency Derivative Transactions with
CNPC Finance Co., Ltd.
March 29, 2023
Website of the
Hong Kong Stock
Exchange
Notice of Board Meeting April 18, 2023
Website of the Hong
Kong Stock Exchange
and the Shanghai
Stock Exchange
Notice of the Annual General Meeting
for the Year 2022, 2023 First A
Shareholders' Class Meeting and 2023
First H Shareholders' Class Meeting of
PetroChina Company Limited
China Securities Journal,
Shanghai Securities News,
Securities Times, Securities
Daily
April 24, 2023
Website of the
Shanghai Stock
Exchange
Proposed Election and Appointment
of Directors; Proposed Election and
Appointment of Supervisors; Provision
of Guarantees for Subsidiaries and
Affiliates Companies and Relevant
Authorization to the Board; General
Mandate to Repurchase Shares;
Amendments to the Rules of Procedure
of the Board of Directors; Notice of
Annual General Meeting; and Notice
of the 2023 First H Shareholders' Class
Meeting
April 24, 2023
Website of the
Hong Kong Stock
Exchange
Notice of the Annual General Meeting
for the Year 2022 April 24, 2023
Website of the
Hong Kong Stock
Exchange
Notice of the 2023 First H Shareholders'
Class Meeting April 24, 2023
Website of the
Hong Kong Stock
Exchange
Resolutions of the Twenty-first Meeting
of the Eighth Session of the Board of
PetroChina Company Limited
China Securities Journal,
Shanghai Securities News,
Securities Times, Securities
Daily
April 28, 2023
Website of the Hong
Kong Stock Exchange
and the Shanghai
Stock Exchange
046
Matter Names of newspaper of
publication
Date of publication
(or the time of release through
the website of the Hong
Kong Stock Exchange or the
Shanghai Stock Exchange, if the
disclosure was not published)
Website of release
First Quarterly Report of PetroChina
Company Limited of 2023
China Securities Journal,
Shanghai Securities News,
Securities Times, Securities
Daily
April 28, 2023
Website of the Hong
Kong Stock Exchange
and the Shanghai
Stock Exchange
2023 Follow-up Credit Rating Report of
PetroChina Company Limited May 29, 2023
Website of the Hong
Kong Stock Exchange
and the Shanghai
Stock Exchange
Meeting Materials of the Annual General
Meeting for the Year 2022, 2023 First A
Shareholders' Class Meeting and 2023
First H Shareholders' Class Meeting of
PetroChina Company Limited
May 31, 2023
Website of the Hong
Kong Stock Exchange
and the Shanghai
Stock Exchange
Announcement of Resolutions of the
First Meeting of the Ninth Board of
PetroChina Company Limited
China Securities Journal,
Shanghai Securities News,
Securities Times, Securities
Daily
June 8, 2023
Website of the Hong
Kong Stock Exchange
and the Shanghai
Stock Exchange
Announcement of Resolutions of the
First Meeting of the Ninth Supervisory
Committee of PetroChina Company
Limited
China Securities Journal,
Shanghai Securities News,
Securities Times, Securities
Daily
June 8, 2023
Website of the Hong
Kong Stock Exchange
and the Shanghai
Stock Exchange
Independent Opinions of the
Independent Non-executive Directors
of PetroChina Company Limited on
the Resolutions of the First Meeting
of the Ninth Session of the Board of
PetroChina Company Limited
June 8, 2023
Website of the Hong
Kong Stock Exchange
and the Shanghai
Stock Exchange
Announcement of PetroChina Company
Limited on the Election of Employee
Representative Supervisors
China Securities Journal,
Shanghai Securities News,
Securities Times, Securities
Daily
June 8, 2023
Website of the Hong
Kong Stock Exchange
and the Shanghai
Stock Exchange
Announcement of PetroChina Company
Limited on the Election of Chairman and
Vice Chairman of the Company and
Appointment of Senior Management of
the Company
China Securities Journal,
Shanghai Securities News,
Securities Times, Securities
Daily
June 8, 2023
Website of the Hong
Kong Stock Exchange
and the Shanghai
Stock Exchange
Legal Opinion of Beijing King and Wood
Mallesons on the Annual General
Meeting for the Year 2022, 2023 First A
Shareholders' Class Meeting and 2023
First H Shareholders' Class Meeting of
PetroChina Company Limited
June 8, 2023
Website of the Hong
Kong Stock Exchange
and the Shanghai
Stock Exchange
Announcement of Resolutions of the
Annual General Meeting for the Year
2022, 2023 First A Shareholders' Class
Meeting and 2023 First H Shareholders'
Class Meeting of PetroChina Company
Limited
China Securities Journal,
Shanghai Securities News,
Securities Times, Securities
Daily
June 8, 2023
Website of the Hong
Kong Stock Exchange
and the Shanghai
Stock Exchange
047
Matter Names of newspaper of
publication
Date of publication
(or the time of release through
the website of the Hong
Kong Stock Exchange or the
Shanghai Stock Exchange, if the
disclosure was not published)
Website of release
Announcement on Resolutions
Passed at the Annual General
Meeting for the Year 2022, the 2023
First A Shareholders' Class Meeting
and the 2023 First H Shareholders'
Class Meeting, Payment of the Final
Dividend, Appointment of Directors
and Supervisors, Appointment of the
Chairman of the Board and Chairman
of the Supervisory Committee and
Change of Members of the Board
Committees
June 8, 2023
Website of the
Hong Kong Stock
Exchange
List of Directors and Their Roles and
Functions June 8, 2023
Website of the Hong
Kong Stock Exchange
and the Shanghai
Stock Exchange
Announcement on the Implementation
of the 2022 Annual Equity Allocation of
PetroChina Company Limited
China Securities Journal,
Shanghai Securities News,
Securities Times, Securities
Daily
June 19, 2023
Website of the Hong
Kong Stock Exchange
and the Shanghai
Stock Exchange
Announcement of PetroChina Company
Limited on the Organization of
"Understanding Listed Companies"
Activities
China Securities Journal,
Shanghai Securities News,
Securities Times, Securities
Daily
June 19, 2023
Website of the Hong
Kong Stock Exchange
and the Shanghai
Stock Exchange
Announcement on Resolutions of the
Second Meeting of the Ninth Session
of the Board of PetroChina Company
Limited
China Securities Journal,
Shanghai Securities News,
Securities Times, Securities
Daily
June 27, 2023
Website of the Hong
Kong Stock Exchange
and the Shanghai
Stock Exchange
19. Performance of Environmental and Social
Responsibilities
The Company actively fulfilled its social responsibility, incorporated green and
low-carbon into its development strategies, strictly abided by the Environmental
Protection
Law of the People's Republic of China and other relevant regulations, to prevent
and control pollution, enhance ecological protection and devote to becoming an
excellent global citizen.
The Company always adheres to the concept of "development with protection,
protection with development and environmental protection priority", promoting
all-round development of ecological and environmental protection. The Company
deeply promotes clean production, energy saving and emission reduction and
strictly controlled the disposal of "three wastes". The Company achieved stable
and standard disposal of waste water and gas pollutants, reduced the total
disposal amount comprehensively and disposed solid waste in accordance with
laws. The Company continuously promoted the construction of green mines. The
Company strengthened the investigation and hidden dangers in ecological
environmental and risk prevention and control, with no major or above
environmental pollution and ecological damage events occurring during the
reporting period. Major environmental information about the Company is as
follows:
048
(1) Emission information
In the first half of 2023, the emissions of nitrogen oxides (NOx) was 24,700
tons, the emissions of general solid waste was 1,385,000 tons, and the emissions
of hazardous waste was 539,000 tons; the emissions of chemical oxygen demand
(COD) was 2,400 tons1. The waste information has been disclosed in accordance
with the relevant regulations and the requirements of the local environmental
protection authority. For details, please refer to the website of National Waste
Permit Management
Information Platform ([])
(http://permit.mee.gov.cn/permitExt/defaults/default-index!
getInformation.action).
(2) Construction and operation of pollution prevention
and control facilities, environmental impact assessment of
construction projects and other administrative licenses for
environmental protection
In the first half of 2023, in accordance with the
requirements of national and local pollution prevention
and environmental protection standards, the Company
established pollution prevention and control facilities
such as waste water, waste gas, solid waste and noise
and ensured its overall effective and stable operation.
The Company strictly standardizes the full-cycle
environmental storage of project construction, implements
the management requirements such as environmental
impact assessment of national construction projects, and
obtains EIA approvals from government departments in
accordance with the law. key pollutants disposal units
have obtained administrative licenses and disposed the
pollutants according to the license and laws.
(3) Contingency plan for environmental emergencies
and environmental self-monitoring program
The Company has carried out relevant work
in accordance with the national regulations on the
management of emergency plans for environmental
emergencies, prepared and issued the "PetroChina
Emergency Plan for Environmental Emergencies", fully
implemented monitoring networking for key pollution
sources, strictly monitored the emission of pollutants up
to standard by enterprises, and implemented dynamic
analysis and early warning for excessive and abnormal
emissions. As at the end of June 2023, there were 856
online monitoring pollution sources. The key pollution
sources required by the PRC have been fully monitored
and networked. The automatic monitoring of pollution
sources covers the Company's main production devices
and pollution sources.
(4) Administrative penalties imposed on environmental
issues during the reporting period
In the first half of 2023, the companies which are key pollutant disposal units
of the Company received 2 local environmental penalties for environmental
issues, with a total amount of RMB220,000. The above companies have disclosed
environmental information and administrative penalties on the website of local
environmental authorities in accordance with the relevant regulations of the
Ministry of Ecology and Environment of the People's Republic of China and the
requirements of local environmental authorities. For companies which are not key
pollutant disposal units, information on administrative penalties for
environmental issues has also been disclosed on the
1 Waste gas emissions statistics including torch emissions and the statistics of
general solid waste is the amount of disposal
entrusted by the Company to a third-party organization with
relevant qualifications.
049
website of local environmental protection authorities in
strict accordance with national and local government
requirements. Please refer to the details on the local
environmental protection authorities' website.
(5) Other Environmental Information
The Company accelerates green and low-carbon
transformation and development in accordance with
the three-step overall deployment of "clean substitution,
strategic succession and green transformation". The
Company insists on incorporating the dual-control
assessment targets of total greenhouse gas emissions
and intensity into the performance indicators of leaders at
all levels to strengthen the assessment and constraints;
vigorously carries out the creation of green enterprises,
improves the selection index system and strengthens
the leadership and incentives. The Company promoted
greenhouse gas emission reduction measures such as
clean substitution, air release recovery, closed process
transformation, ground system optimization, leakage
detection and repair, and actively carry out methane
control in oil and gas fields in an effort to reduce carbon
emissions.
(6) Performance of Social Responsibilities
The Company focused on industries, consumption,
intelligence, employment and other assistance directions
and continued to promote the rural revitalization plan.
The Company implemented the "Happy Countryside"
construction action to improve the rural living environment;
the Company utilized resource advantages and
continued to make efforts in rural tourism, warehousing
and transportation, and other fields; the Company
implemented the "Revitalizing Agriculture" lecture hall
construction action and carried out agricultural knowledge
education to the countryside and online training; the
Company carried out targeted training under the "Oil Seedling Plan" and teacher
training under the "Benefiting
Teachers Plan" to store energy for rural revitalization; the Company carried out
the "Go Baby" children's health security project, continued to implement the
"Xuhang Student Aid" and "Sunshine Student Aid" projects to help poor students
realize their University dreams and promoted the re-diagnosis of serious
diseases and the service of "Internet + Medical and Health"; the Company
explored the construction of a "Leling Home" service station to meet the diverse
elderly care service needs of the elderly population.
20. Employees
As at June 30, 2023, the Group had 386,912
employees (excluding 229,703 market-oriented temporary
and seasonal staff).
The Company has in place various equitable and competitive remuneration systems
to cater for different positions. An annual salary system is adopted for the
management, a positional wage system for managements and a positional
skill-based wage system for operators and workers. In addition, subsidies are
offered to those who possess more sophisticated technical and working skills.
Each employee is remunerated according to the level of their job position,
individual competence and contribution, and with changes in the relevant
factors, such remuneration will also be adjusted in a timely manner.
The Group has been consistently focused on
employee training as an important means of achieving
a robust company strategy based on talent. It serves to
increase the calibre of its staff and its competitiveness
and helps to build a harmonious enterprise. Employee
training of the Group covers basic concepts, policies
and regulations, knowledge required for a job position,
safety awareness, cultural knowledge and technical skills
as a fundamental basis. In practice, training revolves
around three comprehensive programmes, namely,
competences-building with respect to the political and
050
ideological abilities of all staff, the ability of the talent
echelon to perform their duties and the development and
honing of special talents through multiple dimensions,
multiple channels and in multiple ways to better meet
the requirements for the growth of the Group and the
construction of a talented team.
21. General Meetings
On June 8, 2023, the Company convened the 2022
annual general meeting, 2023 first A shareholders' class
meeting and 2023 first H shareholders' class meeting
pursuant to the Articles of Association by way of physical
meetings. Shareholders considered and passed 12
resolutions by non-cumulative voting and 3 resolutions by
cumulative voting; 10 ordinary resolutions were passed
and approved by more than half of the votes and 5 special
resolutions were passed and approved by more than
two thirds of the votes. For details, please refer to the
announcements published by the Company on June 8,
2023 on the websites of the Hong Kong Stock Exchange
and the Shanghai Stock Exchange, respectively.
22. Risk Factors
In its course of production and operation, the Group actively took various
measures to avoid and mitigate various types of risks. However, in practice, it
may not be possible to prevent all risks and uncertainties completely.
(1) Industry Regulations and Tax Policies Risk
The PRC government exercises supervision and
regulation over the domestic oil and natural gas industry.
These regulatory measures include the obtaining of
exploration and production licences, the payment of
industry-specific taxes and levies, and the implementation
of environmental protection policies and safety standards,
which may affect the Group's operating activities. Any
future changes in the PRC governmental policies in
respect of the oil and natural gas industry may also affect
the Group's business operations.
Taxes and levies are one of the major external
factors affecting the operations of the Group. The PRC
government has been actively implementing taxation
reforms, which may lead to future changes in the taxes
and levies relating to the operations of the Group, thereby
affecting the operating results of the Group.
(2) Price Fluctuations of Oil and Gas Risk
The Group is engaged in a wide range of oil and gas products-related activities
and part of its oil and gas products demands are met through external purchases
in international market. The prices of crude oil, refined products and natural
gas in the international market are affected by various factors such as changes
in global and regional politics and economy, demand and supply of oil and gas,
as well as unexpected events and disputes with international repercussions. The
domestic crude oil price is determined by reference to international price of
crude oil and the prices of domestic refined products are adjusted to reflect
the price changes in international crude oil market. Domestic natural gas prices
are prescribed by PRC government.
(3) Foreign Exchange Rate Risk
The Group conducts its business primarily in
Renminbi in the PRC, but it keeps certain foreign
currencies to pay for the imported oil and gas, equipment
and other raw materials as well as to repay financial
liabilities denominated in foreign currencies. Currently,
the PRC government has implemented a regulated
floating exchange rate regime based on market supply
and demand with reference to a basket of currencies.
However, Renminbi is still regulated in capital projects. The exchange rates of
Renminbi are affected by domestic and international economic and political
changes, and demand and supply for Renminbi. Future exchange rates of Renminbi
against other currencies may vary from the current exchange rates, which in turn
would affect the operating results and financial position of the Group.
051
(4) Market Competition Risk
The Group has distinctive advantages in resources
and is in a leading position in the oil and gas industry in
the PRC. At present, major competitors of the Group are
other large domestic oil and petrochemical producers
and distributors. With the further opening of the domestic
oil and petrochemical market, large foreign oil and
petrochemical companies and certain private enterprises
have become competitors of the Group in certain regions
and segments. The Group has been in a leading position
in the exploration and production business and natural
gas sales business in China, but the Group is facing
relatively intense competition in refining, chemicals and
marketing of refined products businesses.
(5) Uncertainty of the Oil and Gas Reserves Risk
According to industry characteristics and
international practices, both the crude oil and natural
gas reserve data disclosed by the Group are estimates
only. The Group has engaged internationally recognised
valuers to evaluate the crude oil and natural gas reserves
of the Group on a regular basis. However, the reliability
of reserves estimates depends on a number of factors,
assumptions and variables, such as the quality and
quantity of technical and economic data, the prevailing
oil and gas prices of the Group etc., many of which are
beyond the control of the Group and may be adjusted
over time. Results of drilling, testing and exploration after
the date of the evaluation may also result in revision of the
reserves data of the Group to a certain extent.
(6) Overseas Operations Risk
As the Group operates in a number of countries
around the world, it is subject to the influences of different
political, legal and regulatory factors prevailing in the
countries of operation, including countries which are
not very stable and are greatly different from developed
countries in certain material aspects. The risks involved
primarily include instability in political environment,
taxation policies, import and export restrictions as well as
regulatory requirements.
(7) Risk Relating to Climate Change
In recent years, the oil industry has been facing
ever increasing challenges posed by global climate
change. A number of international, domestic and regional
agreements restricting greenhouse gas emission have
been signed and become effective. If China or other
countries in which the Company operates take more
stringent measures to reduce greenhouse gas emission,
the revenue and profits earned by the Group may reduce
as a result of substantial capital expenditures and taxation
expenditures and increases in operating costs incurred
and even the strategic investments of the Group may be
subject to the unfavourable impact posed by the related
laws, regulations and regulatory requirements.
(8) Hidden Hazards and Force Majeure Risk
Oil and gas exploration, development, storage
and transportation and the production, storage and
transportation of refined products and petrochemical
products involve certain risks, which may cause
unexpected or dangerous events such as personal injuries
or death, property damage, environmental damage and
disruption to operations, etc. With the expansion in the
scale and area of operations, the hazard risks faced by
the Group also increase accordingly. In the meantime, new
regulations promulgated by the PRC in recent years set
out higher standard for production safety. The Group has
implemented a strict HSE management system and used
its best endeavours to avoid the occurrence of accidents.
However, the Group cannot completely avoid potential financial losses caused by
such contingent incidents. The Group has adopted strict implementation of laws
and regulations of the PRC and contributed funds and treated
052
the major safety and environmental risks found timely. In
addition, natural disasters such as earthquake, typhoon,
tsunami and emergency public health events may cause
losses to properties and personnel of the Group and may
affect the normal operations of the Group.
23. Details of Preference Shares
There was no matter concerning the preference
shares requiring disclosure during the reporting period.
24. Other Significant Events
China further clarifies the implementation calibre of consumption tax policies
for certain refined products
On June 30, 2023, the Ministry of Finance and the
State Taxation Administration issued the Announcement
on the Implementation Calibre of Consumption Tax
Policies for Certain Refined products (Announcement
No. 11 [2023] of the Ministry of Finance and the State Taxation Administration)
([]), which clearly defined that from the date of that announcement, consumption
tax on alkylated oil (iso-octane) shall be levied according to relevant
provisions on gasoline; consumption tax on petroleum ether, crude white oil,
light white oil, and certain industrial white oils (No. 5, No. 7, No. 10, No.
15, No. 22, No. 32, and No.
46) shall be levied according to relevant provisions on solvent oil; consumption
tax on mixed aromatics, heavy
aromatics, mixed C8, stable light hydrocarbons, light oil,
and light coal tar shall be levied according to relevant
provisions on naphtha; the levying of consumption tax on
aerospace kerosene shall be postponed by reference to
the provisions on aviation kerosene.
This event did not affect the continuity of the business and the stability of
management of the Group and was conducive to the sustainable and healthy
development of the refined products business and positive operating results of
the Group.
053
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
1. Change of Directors, Supervisors and senior
management of the Company
On January 6, 2023, Mr. Tian Jinghui resigned as
vice president of the Company due to age reason.
On June 8, 2023, the term of the session of the Board and the office of senior
management of the Company expired. Mr. Jiao Fangzheng ceased to serve as an
executive Director and chief geologist of the Company due to adjustment of work
arrangements and simultaneously stepped down as a member of the sustainable
development committee of the Board. Ms. Elsie Leung Oi-sie has been appointed as
Director for six years; and she ceased to serve as an independent non-executive
Director due to regulatory limitation on term of office and simultaneously
stepped down as the chairperson of the examination and remuneration committee of
the Board.
Mr. Tokuchi Tatsuhito has been appointed as Director for six years; and he
ceased to serve as an independent non-executive Director due to regulatory
limitation on term of office and simultaneously stepped down as a member of the
examination and remuneration committee of the Board; Mr. Yang Jigang ceased to
serve as vice president and
chief engineer of the Company due to age reason.
On June 8, 2023, upon election at the general
meeting of the Company, Mr. Dai Houliang, Mr. Hou
Qijun, Mr Duan Liangwei, Mr. Huang Yongzhang, Mr.
Ren Lixin and Mr. Xie Jun were elected as Directors; Mr. Cai Jinyong, Mr. Jiang,
Simon X., Mr. Zhang Laibin, Ms.
Hung Lo Shan Lusan and Mr. Ho Kevin King Lun were
elected as independent non-executive Directors; Mr.
Cai Anhui, Mr. Xie Haibing, Ms. Zhao Ying, Mr. Cai Yong and Mr. Jiang Shangjun
were elected as Supervisors.
Ms. Liao Guoqin, Mr. Fu Bin, Mr. Li Zhanming and Mr. Jin Yanjiang were elected
by the employees of the Company as the employee representative Supervisors. Upon
election of the Board, Mr. Dai Houliang was elected as the chairman of the
Company and Mr. Hou Qijun was elected as the vice chairman of the Company. Upon
election by the Supervisory Committee, Mr. Cai Anhui was elected as the chairman
of the Supervisory Committee.
Upon consideration and approval by the Board, Mr. Huang Yongzhang was appointed
as president of the
Company; Mr. Ren Lixin and Mr. Zhang Daowei were
appointed as senior vice president of the Company;
Mr. Zhang Minglu was appointed as safety director of
the Company; Mr. Zhu Guowen and Mr. Wan Jun were
appointed as vice president of the Company; Mr. Wang
Hua was appointed as chief financial officer of the Company, secretary to the
Board (Company secretary); Mr. Li Ruxin and Mr. He Jiangchuan were appointed as
vice president of the Company; Mr. Jiang Tongwen was appointed as the chief
geologist of the Company; and Mr. Yang Weisheng was appointed as chief engineer
of the Company. Upon consideration and approval by the Board, Mr. Dai Houliang,
Mr. Cai Jinyong and Mr. Jiang, Simon X. joined the nomination committee of the
Board, among which Mr. Dai Houliang is the chairman; Ms. Hung Lo Shan Lusan, Mr.
Duan Liangwei and Mr. Jiang, Simon
X. joined the audit committee of the Board, among which Ms. Hung Lo Shan Lusan
is the chairperson; Mr. Hou
Qijun, Mr. Huang Yongzhang and Mr. Xie Jun joined the investment and development
committee of the Board, among which Mr. Hou Qijun is the chairman; Mr. Cai
Jinyong, Mr. Duan Liangwei and Mr. Ho Kevin King Lun joined the examination and
remuneration committee of the Board, among which Mr. Cai Jinyong is the
chairman; and Mr. Huang Yongzhang, Mr. Ren Lixin and Mr. Zhang Laibin joined the
sustainable development committee of the Board, among which Mr. Huang Yongzhang
is the chairman.
054
2. Basic Particulars of the Current Directors, Supervisors and Other Senior
Management Directors Name Gender Age Position
Dai Houliang Male 59 Chairman of the Board
Hou Qijun Male 56 Vice Chairman of the Board and Non-executive Director
Duan Liangwei Male 55 Non-executive Director
Huang Yongzhang Male 56 Executive Director and President Ren Lixin Male 56
Executive Director and Senior Vice President
Xie Jun Male 55 Non-executive Director
Cai Jinyong Male 64 Independent Non-executive Director
Jiang, Simon X. Male 69 Independent Non-executive Director Zhang Laibin Male 61
Independent Non-executive Director Hung Lo Shan Lusan Female 57 Independent
Non-executive Director Ho Kevin King Lun Male 47 Independent Non-executive
Director
Supervisors
Name Gender Age Position
Cai Anhui Male 54 Chairman of the Supervisory Committee
Xie Haibing Male 52 Supervisor
Zhao Ying Female 55 Supervisor
Cai Yong Male 48 Supervisor
Jiang Shangjun Male 59 Supervisor
Liao Guoqin Female 59 Employee Representative Supervisor
Fu Bin Male 58 Employee Representative Supervisor
Li Zhanming Male 50 Employee Representative Supervisor
Jin Yanjiang Male 57 Employee Representative Supervisor
055
Other Senior Management
Name Gender Age Position
Zhang Daowei Male 50 Senior Vice President
Zhang Minglu Male 59 Safety Director
Zhu Guowen Male 56 Vice President
Wan Jun Male 57 Vice President
Wang Hua Male 49 Chief Financial Officer, Secretary to the Board (Company
Secretary)
Li Ruxin Male 56 Vice President
He Jiangchuan Male 57 Vice President
Jiang Tongwen Male 55 Chief Geologist
Yang Weisheng Male 51 Chief Engineer
3. Shareholdings of the Directors, Supervisors and Senior Management As at June
30, 2023, no current Directors, Supervisors or other senior management of the
Company or those ceased to be Directors, Supervisors or other senior management
of the Company during the reporting period held any shares of the Company. 4.
Change in Information of the Directors, Supervisors and Chief Executives
Disclosed pursuant to
Rule 13.51B(1) of the Hong Kong Listing Rules
Below is the latest information of the Directors, Supervisors and chief
executives of the Company disclosed pursuant
to Rule 13.51B(1) of the Hong Kong Listing Rules:
Ho Kevin King Lun, aged 47, is an independent Director, director of Macau Tai
Fung Bank Company Limited, chairman of Macau Anzac Group Company Limited,
director of Macau KNJ Investment, chairman of Macao Juvenile Venture
International Group and independent non-executive director of Asia Pioneer
Entertainment Holdings Limited. Mr. Ho received a doctorate degree and is a
deputy of the 13th and 14th National People's Congress. Mr. Ho served as senior
executive at Hong Kong Cathay Pacific Airways Limited in March 2000. Mr. Ho has
been appointed as a director of Macau Tai Fung Bank Company Limited since March
2008, the chairman of Macau Anzac Group Company Limited since August 2008, a
director of Macau KNJ Investment since May 2012, the chairman of Macao Juvenile
Venture International Group since May 2017, an independent non-executive
director of Asia Pioneer Entertainment Holdings Limited since October 2017 and
an independent Director since June 2023.
056
RELEVANT INFORMATION ON THE BONDS
1. Information on Bonds of the Company Issued but Not Yet Overdue Bond Name
Abbreviation Code Issue Date Value Date Due Date
Bond
Balance
(RMB 100
million)
Rate
(%)
Mode of
Repayment
Stock
Exchange
for Listing
2012 Corporate
Bond (First
Tranche) (15-
year term) 12 PetroChina
03 122211.SH 2012-11-22 2012-11-22 2027-11-22 20 5.04
Annual payment
of interests,
and one lump
sum repayment
of principal at
maturity
Shanghai
Stock
Exchange
2016 Corporate
Bond (First
Tranche) (10-
year term) 16 PetroChina
02 136165.SH 2016-01-18 2016-01-19 2026-01-19 47 3.50
Annual payment
of interests,
and one lump
sum repayment
of principal at
maturity
Shanghai
Stock
Exchange
2016 Corporate
Bond (Second
Tranche) (10-
year term) 16 PetroChina
04 136254.SH 2016-03-01 2016-03-03 2026-03-03 23 3.70
Annual payment
of interests,
and one lump
sum repayment
of principal at
maturity
Shanghai
Stock
Exchange
2016 Corporate
Bond (Third
Tranche) (10-
year term) 16 PetroChina
06 136319.SH 2016-03-22 2016-03-24 2026-03-24 20 3.60
Annual payment
of interests,
and one lump
sum repayment
of principal at
maturity
Shanghai
Stock
Exchange
2019 First
Tranche
Medium-term
Notes (MTN) 19 PetroChina
MTN001 101900113.IB 2019-01-22 2019-01-24 2024-01-24 31.3 2.70
Annual payment
of interests,
and one lump
sum repayment
of principal at
maturity
National
Inter-bank
Bond
Market
2019 Second
Tranche MTN
19 PetroChina
MTN002 101900114.IB 2019-01-22 2019-01-24 2024-01-24 27.5 2.70
Annual payment
of interests,
and one lump
sum repayment
of principal at
maturity
National
Inter-bank
Bond
Market
2019 Third
Tranche MTN
19 PetroChina
MTN003 101900222.IB 2019-02-21 2019-02-22 2024-02-22 100 3.66
Annual payment
of interests,
and one lump
sum repayment
of principal at
maturity
National
Inter-bank
Bond
Market
2019 Fourth
Tranche MTN
19 PetroChina
MTN004 101900221.IB 2019-02-21 2019-02-22 2024-02-22 100 3.66
Annual payment
of interests,
and one lump
sum repayment
of principal at
maturity
National
Inter-bank
Bond
Market
057
Bond Name Abbreviation Code Issue Date Value Date Due Date
Bond
Balance
(RMB 100
million)
Rate
(%)
Mode of
Repayment
Stock
Exchange
for Listing
2019 Fifth
Tranche MTN
19 PetroChina
MTN005 101900586.IB 2019-04-22 2019-04-23 2024-04-23 100 3.96
Annual payment
of interests,
and one lump
sum repayment
of principal at
maturity
National
Inter-bank
Bond
Market
2022 First
Green
Tranche MTN 22 PetroChina
GN001 132280041.IB 2022-04-27 2022-04-28 2025-04-28 5 2.26
Annual payment
of interests,
and one lump
sum repayment
of principal at
maturity
National
Inter-bank
Bond
Market
2022 Second
Green
Tranche MTN 22 PetroChina
GN002 132280055.IB 2022-06-15 2022-06-16 2025-06-16 20 2.19
Annual payment
of interests,
and one lump
sum repayment
of principal at
maturity
National
Inter-bank
Bond
Market
Notes:
1. Trading venue: the trading venue for 12 PetroChina 03, 16 PetroChina 02, 16
PetroChina 04 and 16 PetroChina 06 is the Shanghai Stock Exchange, and the
trading venue for 19 PetroChina MTN001, 19 PetroChina MTN002, 19 PetroChina
MTN003, 19 PetroChina MTN004, 19 PetroChina MTN005, 22 PetroChina GN001 and 22
PetroChina GN002 is the national inter-bank bond market.
2. Repayment of principal and payment of interest: for 12 PetroChina 03, 16
PetroChina 02, 16 PetroChina 04, 16 PetroChina 06, 19 PetroChina MTN001, 19
PetroChina MTN002, 19 PetroChina MTN003, 19 PetroChina MTN004, 19 PetroChina
MTN005, 22 PetroChina GN001 and 22 PetroChina GN002 payment of interests shall
be made annually, and one lump sum repayment of principal shall be made at
maturity.
3. Interest Payment and Redemption: during the reporting period, the interest
and the redemption part of 13 PetroChina 02, 20 PetroChina MTN001 and 20
PetroChina MTN002 were duly paid; the interest of 16 PetroChina 02, 16
PetroChina 04, 16 PetroChina 06, 19 PetroChina MTN001, 19 PetroChina MTN002, 19
PetroChina MTN003, 19 PetroChina MTN004, 19 PetroChina MTN005, 22 PetroChina
GN001 and 22 PetroChina GN002 were duly paid.
4. Investor suitability arrangements: 12 PetroChina 03 are offered and traded
publicly to public investors (ordinary investors); 16 PetroChina 02, 16
PetroChina 04 and 16 PetroChina 06 are offered and traded publicly to qualified
investors (professional investors); 19 PetroChina MTN001, 19 PetroChina MTN002,
19 PetroChina MTN003, 19 PetroChina MTN004, 19 PetroChina MTN005, 22 PetroChina
GN001 and 22 PetroChina GN002 are offered and traded publicly to institutional
investors in the national inter-bank bond market. 5. Applicable trading
mechanisms: matching transaction, click transaction, inquiry transaction,
bidding transaction and negotiation transaction at Shanghai Stock Exchange are
applicable to 12 PetroChina 03, 16 PetroChina 02, 16 PetroChina 04 and 16
PetroChina 06; circulation and transfer in the national inter-bank bond market
are applicable to 19 PetroChina MTN001, 19 PetroChina MTN002, 19 PetroChina
MTN003, 19 PetroChina MTN004, 19 PetroChina MTN005, 22 PetroChina GN001 and 22
PetroChina GN002. 6. Triggering and implementation of special clauses: 19
PetroChina MTN001 and 19 PetroChina MTN002 are attached with the option of the
issuer to adjust the coupon rate and the put option of the investors by the end
of the third year. Relevant clauses have not been triggered during the reporting
period.
7. The bonds issued by the Company were not overdue and there is no risk of
termination of listing and trading of the bonds issued by the Company.
058
2. Information on Follow-up Credit Rating of Bonds
During the reporting period, no adjustment was made by the credit rating
agencies to the credit rating of the Company or bonds.
3. Credit Enhancement Mechanism, Debt Repayment Plan and Safeguard Measures for
Debt Repayment During the reporting period, the credit enhancement mechanism,
debt repayment plan and the safeguard measures
for debt repayment are consistent with the provisions and relevant undertakings
set out in the offering circular, without any
change made thereto.
4. Mortgage, Pledge, Seizure, Freezing, Conditional Realisation, Impossible
Realisation, Impossible Use to Offset Debts and Other Situations and
Arrangements under Which Rights Are Restricted Relating to Assets As at the end
of the reporting period, there was no material restriction on the Company's
assets.
5. Major Accounting Data and Financial Indicators Relating to Corporate Bonds
Items June 30, 2023 December 31, 2022 Liquidity ratio 0.95 0.98
Quick ratio 0.71 0.71
Asset-liability ratio (%) 41.60 42.54
Note: The asset-liability ratio was calculated as total liabilities divided by
total assets at the end of each period. Items For the First Half of 2023 For the
First Half of 2022 Earnings before interest, taxes, depreciation and
amortization (EBITDA) (RMB million) 246,938 230,839
Net profit after deducting non-recurring profit items (RMB million)
96,669 98,218
Net cash flow used for investing activities (RMB million) (119,409) (89,706)
Net cash flow used for financing activities (RMB million) (78,692) (26,141)
Balance of cash and cash equivalents at the end of the period (RMB million)
219,173 221,155
EBITDA-to-Debt 0.82 0.69
Debt service coverage ratio 19.36 25.85
Cash debt service coverage ratio 32.28 34.50
EBITDA interest coverage ratio 35.69 46.63
Loan repayment ratio (%) 100 100
Interest coverage ratio (%) 100 100
Note: According to the requirements of Interpretation No.16, the Company
retroactively adjusted initial retained earnings and other related financial
statement items at the beginning of the period. For details, please refer to the
note 4(31) under the financial statements prepared in accordance with CAS.
059
PETROCHINA COMPANY LIMITED
UNAUDITED CONSOLIDATED AND COMPANY BALANCE SHEETS
AS OF JUNE 30, 2023
(All amounts in RMB millions unless otherwise stated)
June
30, 2023
December
31, 2022
June
30, 2023
December
31, 2022
ASSETS
Notes
The Group The Group The Company The Company
Current assets
Cash at bank and on hand 7 262,554 225,049 88,017 72,308
Financial assets at fair value through
profit or loss 5,815 3,876 - -
Derivative financial assets 8 15,007 21,133 108 192
Accounts receivable 9 81,361 72,028 17,691 17,969
Receivables financing 10 8,815 4,376 8,584 4,164
Advances to suppliers 11 24,237 13,920 14,436 9,365
Other receivables 12 39,166 45,849 13,406 9,410
Inventories 13 168,162 167,751 107,551 109,354
Other current assets 14 55,306 59,885 41,241 45,204
Total current assets 660,423 613,867 291,034 267,966
Non-current assets
Investments in other equity instruments 15 883 950 215 333
Long-term equity investments 16 279,101 269,671 480,851 471,795
Fixed assets 17 456,463 463,027 305,533 307,660
Oil and gas properties 18 815,212 832,610 620,218 628,338
Construction in progress 19 199,049 196,876 119,582 123,486
Right-of-use assets 20 128,606 132,735 55,881 58,000
Intangible assets 21 92,999 92,960 69,871 70,193
Goodwill 22 7,561 7,317 69 52
Long-term prepaid expenses 23 12,563 10,388 9,589 7,384
Deferred tax assets 37 17,561 16,293 - -
Other non-current assets 24 49,120 33,651 17,492 11,701
Total non-current assets 2,059,118 2,056,478 1,679,301 1,678,942
TOTAL ASSETS 2,719,541 2,670,345 1,970,335 1,946,908
The accompanying notes form an integral part of these financial statements.
Chairman Director and President Chief Financial Officer
Dai Houliang Huang Yongzhang Wang Hua
060
PETROCHINA COMPANY LIMITED
UNAUDITED CONSOLIDATED AND COMPANY BALANCE SHEETS
AS OF JUNE 30, 2023 (CONTINUED)
(All amounts in RMB millions unless otherwise stated)
LIABILITIES AND
SHAREHOLDERS' EQUITY Notes
June
30, 2023
December
31, 2022
June
30, 2023
December
31, 2022
The Group The Group The Company The Company
Current liabilities
Short-term borrowings 26 50,543 38,375 18,712 17,255
Financial liabilities at fair value through
profit or loss 4,258 1,698 - -
Derivative financial liabilities 8 7,822 11,146 55 -
Notes payable 27 17,995 15,630 17,725 15,213
Accounts payable 28 254,509 289,117 94,602 121,220
Contracts liabilities 29 75,614 77,337 57,023 55,861
Employee compensation payable 30 18,339 9,385 15,130 6,817
Taxes payable 31 46,063 53,514 27,012 34,512
Other payables 32 90,612 41,542 153,227 99,302
Current portion of non-current liabilities 33 119,138 70,561 94,380 53,157
Other current liabilities 11,657 15,958 5,772 10,572
Total current liabilities 696,550 624,263 483,638 413,909
Non-current liabilities
Long-term borrowings 34 123,139 169,630 47,053 90,743
Debentures payable 35 17,101 52,848 13,500 49,380
Lease liabilities 20 115,813 118,200 43,479 44,700
Provisions 36 145,976 142,081 107,083 104,553
Deferred tax liabilities 37 24,752 21,313 1,909 328
Other non-current liabilities 7,910 7,594 3,992 4,302
Total non-current liabilities 434,691 511,666 217,016 294,006
Total liabilities 1,131,241 1,135,929 700,654 707,915
Shareholders' equity
Share capital 38 183,021 183,021 183,021 183,021
Capital surplus 39 122,885 123,612 122,993 123,486
Special reserve 10,470 8,490 6,252 4,620
Other comprehensive income 58 (18,074) (19,062) 1,037 720
Surplus reserves 40 224,570 224,570 213,478 213,478
Undistributed profits 41 890,319 845,258 742,900 713,668
Equity attributable to equity holders of the
Company 1,413,191 1,365,889 1,269,681 1,238,993
Non-controlling interests 42 175,109 168,527 - -
Total shareholders' equity 1,588,300 1,534,416 1,269,681 1,238,993
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY 2,719,541 2,670,345 1,970,335 1,946,908
The accompanying notes form an integral part of these financial statements.
Chairman Director and President Chief Financial Officer
Dai Houliang Huang Yongzhang Wang Hua
061
PETROCHINA COMPANY LIMITED
UNAUDITED CONSOLIDATED AND COMPANY INCOME STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2023
(All amounts in RMB millions unless otherwise stated)
Items Notes
For the six
months
ended
June 30,
2023
For the six
months
ended
June 30,
2022
For the six
months
ended
June 30,
2023
For the six
months
ended
June 30,
2022
The Group The Group The Company The Company
Operating income 43 1,479,871 1,614,621 886,681 831,767
Less: Cost of sales 43 (1,164,467) (1,263,447) (684,195) (617,333)
Taxes and surcharges 44 (129,856) (140,600) (98,667) (106,595)
Selling expenses 45 (32,001) (32,772) (22,148) (22,545)
General and administrative expenses 46 (26,121) (24,344) (16,014) (14,747)
Research and development expenses 47 (9,651) (9,142) (8,127) (7,674)
Finance expenses 48 (9,188) (9,184) (6,672) (6,694)
Including: Interest expenses (12,184) (9,644) (7,500) (7,181)
Interest income 3,597 1,375 860 470
Add: Other income 49 8,371 6,406 7,883 6,154
Investment income 50 6,696 (4,380) 21,692 23,184
Including: Income from investment in
associates and joint ventures 9,667 8,104 6,726 6,107
Gains/(Losses) from changes in fair value 51 1,659 (8,432) (37) -
Credit impairment reversal/(losses) 52 413 (503) (28) (45)
Asset impairment losses 53 (1,461) (567) (6) (25)
Gains on asset disposal 54 148 349 123 257
Operating profit 124,413 128,005 80,485 85,704
Add: Non-operating income 55(a) 1,052 1,061 679 902
Less: Non-operating expenses 55(b) (3,712) (10,734) (3,424) (8,382)
Profit before taxation 121,753 118,332 77,740 78,224
Less: Taxation 56 (27,170) (27,382) (8,290) (9,426)
Net profit 94,583 90,950 69,450 68,798
Classified by continuity of operations:
Net profit from continuous operation 94,583 90,950 69,450 68,798
Net profit from discontinued operation - - - -
Classified by ownership:
Shareholders of the Company 85,276 81,624 69,450 68,798
Non-controlling interests 9,307 9,326 - -
Other comprehensive income, net of tax 58 4,026 11,806 317 148
Other comprehensive income (net of tax) attributable
to equity holders of the Company 1,109 8,687 317 148
(1) Item that will not be reclassified to profit or loss: Changes in fair value
of investments in other
equity instruments 56 (89) (82) (23)
(2) Items that may be reclassified to profit or loss: Other comprehensive income
recognised under
equity method 379 223 461 171
Cash flow hedges (2,738) 6,639 (62) -
Translation differences arising from translation
of foreign currency financial statements 3,412 1,914 - -
Other comprehensive income (net of tax) attributable
to non-controlling interests 2,917 3,119 - -
Total comprehensive income 98,609 102,756 69,767 68,946
Attributable to:
Equity holders of the Company 86,385 90,311 69,767 68,946
Non-controlling interests 12,224 12,445 - -
Earnings per share
Basic earnings per share (RMB Yuan) 57 0.47 0.45 0.38 0.38
Diluted earnings per share (RMB Yuan) 57 0.47 0.45 0.38 0.38
The accompanying notes form an integral part of these financial statements.
Chairman Director and President Chief Financial Officer
Dai Houliang Huang Yongzhang Wang Hua
062
PETROCHINA COMPANY LIMITED
UNAUDITED CONSOLIDATED AND COMPANY CASH FLOW STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2023
(All amounts in RMB millions unless otherwise stated)
Items Notes
For the six
months
ended
June 30,
2023
For the six
months
ended
June 30,
2022
For the six
months
ended
June 30,
2023
For the six
months
ended
June 30,
2022
The Group The Group
The
Company
The
Company
Cash flows from operating activities
Cash received from sales of goods and rendering of services 1,551,276 1,633,397
961,492 924,079
Cash received relating to other operating activities 50,361 119,395 8,200 6,672
Sub-total of cash inflows 1,601,637 1,752,792 969,692 930,751
Cash paid for goods and services (1,042,933) (1,101,917) (607,179) (567,652)
Cash paid to and on behalf of employees (70,179) (66,661) (50,565) (48,163)
Payments of various taxes (203,200) (233,126) (138,756) (156,152)
Cash paid relating to other operating activities (63,619) (155,027) (14,816)
(19,968)
Sub-total of cash outflows (1,379,931) (1,556,731) (811,316) (791,935)
Net cash flows from operating activities 60(a) 221,706 196,061 158,376 138,816
Cash flows from investing activities
Cash received from disposal of investments 24,669 21,796 5,556 2,911
Cash received from returns on investments 5,226 4,687 26,838 33,015
Net cash received from disposal of fixed assets, oil and gas
properties, intangible assets and other long-term assets 372 247 333 142
Net cash received from disposal of subsidiaries and other
business units 80 3,849 - 386
Sub-total of cash inflows 30,347 30,579 32,727 36,454
Cash paid to acquire fixed assets, oil and gas properties,
intangible assets and other long-term assets (112,418) (102,278) (82,171)
(68,638)
Cash paid to acquire investments (37,155) (17,705) (7,304) (4,364)
Net cash paid for the acquisition of subsidiaries and other
business entities (183) (302) - -
Sub-total of cash outflows (149,756) (120,285) (89,475) (73,002)
Net cash flows used for investing activities (119,409) (89,706) (56,748)
(36,548)
Cash flows from financing activities
Cash received from capital contributions 229 237 - -
Including: Cash received from non-controlling interests'
capital contributions to subsidiaries 229 237 - -
Cash received from borrowings 345,092 436,624 34,837 82,195
Sub-total of cash inflows 345,321 436,861 34,837 82,195
Cash repayments of borrowings (371,433) (445,469) (72,515) (88,789)
Cash payments for interest expenses and distribution of
dividends or profits (46,794) (10,641) (43,645) (7,852)
Including: Subsidiaries' cash payments for distribution of
dividends or profits to non-controlling interests (3,006) (2,520) - -
Cash payments relating to other financing activities (5,786) (6,892) (3,096)
(2,912)
Sub-total of cash outflows (424,013) (463,002) (119,256) (99,553)
Net cash flows used for financing activities (78,692) (26,141) (84,419) (17,358)
Effect of foreign exchange rate changes on cash and cash
equivalents 4,378 4,152 - -
Net Increase in cash and cash equivalents 60(b) 27,983 84,366 17,209 84,910
Add: Cash and cash equivalents at the beginning of the period 191,190 136,789
68,808 31,955
Cash and cash equivalents at the end of the period 60(c) 219,173 221,155 86,017
116,865
The accompanying notes form an integral part of these financial statements.
Chairman Director and President Chief Financial Officer
Dai Houliang Huang Yongzhang Wang Hua
063
PETROCHINA COMPANY LIMITED
UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
FOR THE SIX MONTHS ENDED JUNE 30, 2023
(All amounts in RMB millions unless otherwise stated)
Items
Shareholders' equity attributable to the Company
Non-controlling
interests
Total
shareholders'
equity
Share
capital
Capital
surplus
Special
reserve
Other
comprehensive
income
Surplus
reserves
Undistributed
profits Sub-total
Balance at December 31,
2021 183,021 127,375 9,231 (34,737) 211,970 766,955 1,263,815 145,309 1,409,124
Change in accounting
policy (Note 4(31)) - - - - (302) (2,751) (3,053) - (3,053)
Balance at January 1,
2022 183,021 127,375 9,231 (34,737) 211,668 764,204 1,260,762 145,309 1,406,071
Changes in the six
months ended June 30,
2022
Total comprehensive
income - - - 8,687 - 81,624 90,311 12,445 102,756
Special reserve-safety
fund reserve
Appropriation - - 2,642 - - - 2,642 130 2,772
Utilisation - - (720) - - - (720) (54) (774)
Profit distribution
Distribution to
shareholders - - - - - (17,610) (17,610) (7,261) (24,871)
Other equity movement
Capital contribution
from non-controlling
interests - - - - - - - 10,256 10,256
Acquisition of
subsidiaries - - - - - - - 62 62
Others - (4,334) - 5 - (5) (4,334) 9 (4,325)
Balance at June 30, 2022 183,021 123,041 11,153 (26,045) 211,668 828,213
1,331,051 160,896 1,491,947
The accompanying notes form an integral part of these financial statements.
Chairman Director and President Chief Financial Officer
Dai Houliang Huang Yongzhang Wang Hua
064
PETROCHINA COMPANY LIMITED
UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
FOR THE SIX MONTHS ENDED JUNE 30, 2023 (CONTINUED)
(All amounts in RMB millions unless otherwise stated)
Items
Shareholders' equity attributable to the Company Total
shareholders'
equity
Share
capital
Capital
surplus
Special
reserve
Other
comprehensive
income
Surplus
reserves
Undistributed
profits Sub-total
Non-controlling
interests
Balance at December 31,
2022 (before adjustment) 183,021 123,612 8,490 (19,062) 224,957 848,558
1,369,576 168,527 1,538,103
Change in accounting
policy (Note 4(31)) - - - - (387) (3,300) (3,687) - (3,687)
Balance at December 31,
2022 (adjusted) 183,021 123,612 8,490 (19,062) 224,570 845,258 1,365,889
168,527 1,534,416
Balance at January 1,
2023 183,021 123,612 8,490 (19,062) 224,570 845,258 1,365,889 168,527 1,534,416
Changes in the six months
ended June 30, 2023
Total comprehensive
income - - - 1,109 - 85,276 86,385 12,224 98,609
Special reserve-safety
fund reserve
Appropriation - - 3,541 - - - 3,541 139 3,680
Utilisation - - (1,561) - - - (1,561) (62) (1,623)
Profit distribution
Distribution to
shareholders - - - - - (40,265) (40,265) (6,030) (46,295)
Other equity movement
Capital contribution
from non-controlling
interests - - - - - - - 385 385
Acquisition of
subsidiaries - - - - - - - 6 6
Disposal of subsidiaries - - - - - - - (56) (56)
Others - (727) - (121) - 50 (798) (24) (822)
Balance at June 30, 2023 183,021 122,885 10,470 (18,074) 224,570 890,319
1,413,191 175,109 1,588,300
The accompanying notes form an integral part of these financial statements.
Chairman Director and President Chief Financial Officer
Dai Houliang Huang Yongzhang Wang Hua
065
PETROCHINA COMPANY LIMITED
UNAUDITED COMPANY STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
FOR THE SIX MONTHS ENDED JUNE 30, 2023
(All amounts in RMB millions unless otherwise stated)
Items
Share
capital
Capital
surplus
Special
reserve
Other
comprehensive
income
Surplus
reserves
Undistributed
profits
Total shareholders'
equity
Balance at December 31,
2021 183,021 127,207 4,829 250 200,878 654,956 1,171,141
Change in accounting
policy (Note 4(31)) - - - - (302) (2,718) (3,020)
Balance at January 1, 2022 183,021 127,207 4,829 250 200,576 652,238 1,168,121
Changes in the six months
ended June 30, 2022
Total comprehensive
income - - - 148 - 68,798 68,946
Special reserve-safety
fund reserve
Appropriation - - 1,975 - - - 1,975
Utilisation - - (456) - - - (456)
Profit distribution
Distribution to
shareholders - - - - - (17,610) (17,610)
Others - (4,280) - - - - (4,280)
Balance at June 30, 2022 183,021 122,927 6,348 398 200,576 703,426 1,216,696
The accompanying notes form an integral part of these financial statements.
Chairman Director and President Chief Financial Officer
Dai Houliang Huang Yongzhang Wang Hua
066
PETROCHINA COMPANY LIMITED
UNAUDITED COMPANY STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
FOR THE SIX MONTHS ENDED JUNE 30, 2023 (CONTINUED)
(All amounts in RMB millions unless otherwise stated)
Items
Share
capital
Capital
surplus
Special
reserve
Other
comprehensive
income
Surplus
reserves
Undistributed
profits
Total shareholders'
equity
Balance at December 31,
2022 (before adjustment) 183,021 123,486 4,620 720 213,865 717,152 1,242,864
Change in accounting
policy (Note 4(31)) - - - - (387) (3,484) (3,871)
Balance at December 31,
2022 (adjusted) 183,021 123,486 4,620 720 213,478 713,668 1,238,993
Balance at January 1, 2023 183,021 123,486 4,620 720 213,478 713,668 1,238,993
Changes in the six months
ended June 30, 2023
Total comprehensive
income - - - 317 - 69,450 69,767
Special reserve-safety
fund reserve
Appropriation - - 2,651 - - - 2,651
Utilisation - - (1,019) - - - (1,019)
Profit distribution
Distribution to
shareholders - - - - - (40,265) (40,265)
Others - (493) - - - 47 (446)
Balance at June 30, 2023 183,021 122,993 6,252 1,037 213,478 742,900 1,269,681
The accompanying notes form an integral part of these financial statements.
Chairman Director and President Chief Financial Officer
Dai Houliang Huang Yongzhang Wang Hua
067
1 COMPANY BACKGROUND
PetroChina Company Limited (the "Company") was established as a joint stock
company with limited liability on November 5, 1999 by [] (China National
Petroleum Corporation ("CNPC")) as the sole proprietor in accordance with the
approval Guo Jing Mao Qi Gai [1999] No. 1024 "Reply on the approval of the
establishment of PetroChina Company Limited" from the former State Economic and
Trade Commission of the People's Republic of China ("China" or "PRC"). CNPC
restructured ("the Restructuring") and injected its core business and the
related assets and liabilities into the Company. [] was renamed [] ("CNPC"before
and after the change of name) on December 19, 2017. CNPC is a wholly state-owned
company registered in China. The Company and its subsidiaries are collectively
referred to as the "Group". The Group is principally engaged in (i) the
exploration, development, transportation and production and marketing of crude
oil and natural gas, and new energy business; (ii) the refining of crude oil and
petroleum products, production and marketing of primary petrochemical products,
derivative petrochemical products and other chemical products, and new materials
business; (iii) the marketing of refined products and non-oil products, and
trading business; and (iv) the transportation of natural gas and the sale of
natural gas. The principal subsidiaries of the Group are listed in Note 6(1).
The financial statements were approved by the Board of Directors on August 30,
2023.
2 BASIS OF PREPARATION
The financial statements of the Group are prepared in accordance with Accounting
Standards for Business Enterprises issued by the Ministry of Finance (the "MOF")
and other regulations issued thereafter (hereafter referred to as the
"Accounting Standard for Business Enterprises", "China Accounting Standards" or
"CAS"). The financial statements have been prepared on the going concern basis.
These financial statements also comply with the disclosure requirements of the
financial statements and notes of "Regulation on the Preparation of Information
Disclosures by Companies Issuing Securities, No.15: General Requirements for
Financial Reports" as revised by the China Securities Regulatory Commission
("CSRC") in 2014. 3 STATEMENT OF COMPLIANCE WITH THE ACCOUNTING STANDARDS FOR
BUSINESS ENTERPRISES The consolidated and the Company's financial statements for
the six months ended June 30, 2023 truly and completely present the financial
position of the Group and the Company as of June 30, 2023 and their financial
performance and their cash flows for the six months then ended in compliance
with the Accounting Standards for Business Enterprises.
068
4 PRINCIPAL ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES
(1) Accounting Period
The accounting period of the Group starts on January 1 and ends on December 31.
(2) Operating Cycle
The Group takes the period from the exploration or acquisition of the crude oil,
natural gas and other assets for exploring, transporting and processing and etc.
to their realisation in cash and cash equivalent as a normal operating cycle.
(3) Recording Currency
The recording currency of the Company and most of its subsidiaries is Renminbi
("RMB"). The Group's consolidated financial statements are presented in RMB.
(4) Measurement Properties
Generally are measured at historical cost unless otherwise stated at fair value,
net realisable value or present value.
(5) Foreign Currency Translation
(a) Foreign currency transactions
Foreign currency transactions are translated into RMB at the exchange rates
prevailing at the date of the transactions.
Monetary items denominated in foreign currencies at the balance sheet date are
translated into RMB at the exchange rates prevailing at the balance sheet date.
Exchange differences arising from these translations are recognised in profit or
loss except for those arising from foreign currency specific borrowings for the
acquisition, construction of qualifying assets in connection with capitalisation
of borrowing costs. Non-monetary items denominated in foreign currencies
measured at historical cost are translated into RMB at the historical exchange
rates prevailing at the date of the transactions at the balance sheet date. The
effect of exchange rate changes on cash is presented separately in the cash flow
statement.
069
(b) Translation of financial statements represented in foreign currency Assets
and liabilities of each balance sheet of the foreign operations are translated
into RMB at the closing rates at the balance sheet date, while the equity items
are translated into RMB at the exchange rates at the date of the transactions,
except for the retained earnings and the translation differences in other
comprehensive income. Income and expenses for each income statement of the
foreign operations are translated into RMB at the exchange rates or the
approximate exchange rates at the date of the transactions. The currency
translation differences resulted from the above-mentioned translations are
recognised as other comprehensive income. The cash flows of overseas operations
are translated into RMB at the approximate exchange rates at the date of the
transactions. The effect of exchange rate changes on cash is presented
separately in the cash flow statement. (6) Cash and Cash Equivalents Cash and
cash equivalents refer to all cash on hand and deposit held at call with banks,
short-term highly liquid investments that are readily convertible to known
amounts of cash and which are subject to an insignificant risk of changes in
value.
(7) Financial Instrument
Financial instruments include cash at bank and on hand, financial assets at fair
value through profit or loss, derivative financial assets, accounts receivables,
equity securities other than those classified as long-term equity investments,
accounts payables, derivative financial liabilities, borrowings, debentures
payable and share capital, etc.
(a) Recognition and initial measurement of financial assets and financial
liabilities A financial asset or financial liability is recognised in the
balance sheet when the Group becomes a party to the contractual provisions of a
financial instrument. A financial asset (unless it is an accounts receivable
without a significant financing component) and financial
liability is measured initially at fair value. For financial assets and
financial liabilities at fair value through profit or loss, any related directly
attributable transaction costs are charged to profit or loss; for other
categories of financial assets and financial liabilities, any related directly
attributable transaction costs are included in their initial costs. A trade
receivable, without significant financing component or practical expedient
applied for one year or less contracts is initially measured at the transaction
price according to Note 4(22).
070
(b) Classification and subsequent measurement of financial assets (i)
Classification of the financial assets held by the Group
The classification of financial assets is generally based on the business model
in which a financial asset is managed and its contractual cash flow
characteristics. On initial recognition, a financial asset is classified as
measured at amortised cost, at fair value through other comprehensive income
("FVOCI"), or at fair value through profit or loss ("FVTPL").
Financial assets are not reclassified subsequent to their initial recognition
unless the Group changes its business model for managing financial assets in
which case all affected financial assets are reclassified on the first day of
the first reporting period following the change in the business model. A
financial asset is measured at amortised cost if it meets both of the following
conditions and is not designated as at FVTPL ?
it is held within a business model whose objective is to collect contractual
cash flows;
its contractual terms give rise on specified dates to cash flows that are
solely payments of principal and
interest on the principal amount outstanding.
A financial asset is measured at FVOCI if it meets both of the following
conditions and is not designated as at
FVTPL:
it is held within a business model whose objective is achieved by both
collecting contractual cash flows and
selling financial assets;
its contractual terms give rise on specified dates to cash flows that are
solely payments of principal and
interest on the principal amount outstanding.
On initial recognition of an equity investment that is not held for trading, the
Group may irrevocably elect to designate it as a financial assets at FVOCI. This
election is made on an investment-by-investment basis, and from the perspective
of the issuer, related investment is in line with the definition of equity
instruments.
071
All financial assets not classified as measured at amortised cost or FVOCI as
described above are measured at FVTPL.
The business model in which a financial asset is managed refers to how the Group
manages its financial assets in order to generate cash flows. That is, the
Group's business model determines whether cash flows will result from collecting
contractual cash flows, selling financial assets, or both. The Group determines
the business model for managing financial assets according to the facts and
based on the specific business objectives for the managing the financial assets
determined by the Group's key management personnel. In assessing whether the
contractual cash flows are solely payments of principal and interest on the
principal amount outstanding, the Group considers the contractual cash flow
characteristics of the instrument. For the purposes of this assessment,
"principal" is defined as the fair value of the financial assets at initial
recognition. "Interest" is defined as consideration for the time value of money
and for the credit risk associated with the principal amount outstanding during
a particular period of time and for other basic lending risks and costs, as well
as a profit margin. The Group also assesses whether the financial asset contains
a contractual term that could change the timing or amount of contractual cash
flows such that it would not meet this condition. (ii) Subsequent measurement of
the financial assets Financial assets at FVTPL:
These financial assets are subsequently measured at fair value. Gains and
losses, including any interest or dividend income, are recognised in profit or
loss, unless the financial assets are a part of hedging relationship. Financial
assets measured at amortised cost:
These assets are subsequently measured at amortised cost using the effective
interest method. Gains or losses on financial assets that are measured at
amortised cost and are not a part of any hedging relationship shall be
recognised in profit or loss when the financial asset is derecognised, through
the amortisation process or in order to recognise impairment gains or losses.
Debt investments at FVOCI:
These assets are subsequently measured at fair value. Interest income calculated
using the effective interest method, impairment and foreign exchange gains and
losses are recognised in profit or loss. Other gains and losses are recognised
in other comprehensive income. On derecognition, gains and losses accumulated in
other comprehensive income are reclassified to profit or loss.
072
Equity investments at FVOCI:
These assets are subsequently measured at fair value. Dividends are recognised
in profit or loss. Other gains and losses are recognised in other comprehensive
income. On derecognition, gains and losses accumulated in other comprehensive
income are reclassified to retained earnings.
(c) Classification and subsequent measurement of financial liabilities Financial
liabilities are classified as measured at FVTPL or amortised cost. Financial
liabilities at FVTPL: A financial liability is classified as at FVTPL if it is
classified as held-for-trading (including derivative financial
liability) or it is designated as such on initial recognition.
Financial liabilities at FVTPL are subsequently measured at fair value. Gains
and losses, including any interest expense, are recognised in profit or loss,
unless the financial liabilities are part of a hedging relationship. Financial
liabilities at amortised cost: Other financial liabilities are subsequently
measured at amortised cost using the effective interest method. (d) Offsetting
Financial assets and financial liabilities are generally presented separately in
the balance sheet, and are not offset. However, a financial asset and a
financial liability are offset and the net amount is presented in the balance
sheet when both of the following conditions are satisfied: the Group currently
has a legally enforceable right to set off the recognised amounts; the Group
intends either to settle on a net basis, or to realise the financial asset and
settle the financial liability simultaneously.
073
(e) Derecognition of financial assets and financial liabilities Financial asset
is derecognised when one of the following conditions is met:
the Group's contractual rights to the cash flows from the financial asset
expire; the financial asset has been transferred and the Group transfers
substantially all of the risks and rewards of ownership of the financial asset;
or the financial asset has been transferred, although the Group neither
transfers nor retains substantially all of the risks and rewards of ownership of
the financial asset, it does not retain control over the transferred asset.
Where a transfer of a financial asset in its entirety meets the criteria for
derecognition, the difference between the two amounts below is recognised in
profit or loss:
the carrying amount of the financial asset transferred measured at the date of
derecognition; the sum of the consideration received from the transfer and, when
the transferred financial asset is a debt investment at FVOCI, any cumulative
gain or loss that has been recognised directly in other comprehensive income for
the part derecognised.
The Group derecognises a financial liability (or part of it) only when its
contractual obligation (or part of it) is extinguished, the difference between
the carrying amount extinguished and the consideration paid is recognised in
profit or loss. (f) Impairment
The Group recognises loss allowances for expected credit loss ("ECL") on
financial assets measured at amortised cost , contract assets and debt
investments measured at FVOCI. Financial assets measured at fair value,
including debt investments or equity investments at FVTPL, equity investments
designated at FVOCI and derivative financial assets, are not subject to the ECL
assessment.
074
(i) Measurement of ECLs
ECLs are a probability-weighted estimate of credit losses. Credit losses are
measured as the present value of all cash shortfalls (i.e. the difference
between the cash flows due to the entity in accordance with the contract and the
cash flows that the Group expects to receive).
The maximum period considered when estimating ECLs is the maximum contractual
period (including extension options) over which the group is exposed to credit
risk. Lifetime ECLs are the ECLs that result from all possible default events
over the expected life of a financial instrument.
12-month ECLs are the portion of ECLs that result from default events that are
possible within the 12 months after the balance sheet date (or a shorter period
if the expected life of the instrument is less than 12 months). Loss allowances
for trade receivables and contract assets are always measured at an amount equal
to lifetime ECL. ECLs on these financial assets are estimated using a provision
matrix based on the Group's historical credit loss experience, adjusted for
factors that are specific to the debtors and an assessment of both the current
and forecast general economic conditions at the balance sheet date.
Except for trade receivables and contract assets, the Group measures loss
allowance at an amount equal to 12-month ECL for the following financial
instruments that have low credit risk for which credit risk has not increased
significantly since initial recognition, and at an amount equal to lifetime ECL
for trade receivables and contract assets.
When determining whether the credit risk of a financial asset has increased
significantly since initial recognition and when estimating ECL, the Group
considers reasonable and supportable information that is relevant and available
without undue cost or effort, including forward-looking information. (ii)
Financial instruments that have low credit risk The credit risk on a financial
instrument is considered low if the financial instrument has a low risk of
default, the borrower has a strong capacity to meet its contractual cash flow
obligations in the near term and adverse changes in economic and business
conditions in the longer term may, but will not necessarily, reduce the ability
of the borrower to fulfil its contractual cash flow obligations.
(iii) Significant increases in credit risk
In assessing whether the credit risk of a financial instrument has increased
significantly since initial recognition, the Group compares the risk of default
occurring on the financial instrument assessed at the balance sheet date with
that assessed at the date of initial recognition.
075
(iv) Credit-impaired financial assets
At each balance sheet date, the Group assesses whether financial assets carried
at amortised cost and debt investments at FVOCI are credit-impaired. A financial
asset is 'credit-impaired' when one or more events that have a detrimental
impact on the estimated future cash flows of the financial asset have occurred.
Evidence that a financial asset is credit-impaired includes the following
observable data:
significant financial difficulty of the borrower or issuer; a breach of
contract, such as a default or delinquency in interest or principal payments;
for economic or contractual reasons relating to the borrower's financial
difficulty, the Group having granted to the borrower a concession that would not
otherwise consider; it is probable that the borrower will enter bankruptcy or
other financial reorganisation; or the disappearance of an active market for
that financial asset because of financial difficulties.
(v) Presentation of allowance for ECL
ECLs are remeasured at each balance sheet date to reflect changes in the
financial instrument's credit risk since initial recognition. Any change in the
ECL amount is recognised as an impairment gain or loss in profit or loss. The
Group recognises an impairment gain or loss for all financial instruments with a
corresponding adjustment to their carrying amount through a loss allowance
account, except for debt investments that are measured at FVOCI, for which the
loss allowance is recognised in other comprehensive income. (vi) Write-off The
gross carrying amount of a financial asset is written off (either partially or
in full) to the extent that there is no realistic prospect of recovery. A
write-off constitutes a derecognition event. This is generally the case when the
Group determines that the debtor does not have assets or sources of income that
could generate sufficient cash flows to repay the amounts subject to the
write-off. However, according to the Group's procedures for recovery of amounts
due, financial assets that are written off could still be subject to enforcement
activities. Subsequent recoveries of an asset that was previously written off
are recognised as a reversal of impairment in profit or loss in the period in
which the recovery occurs.
076
(g) Determination of financial instruments' fair value Regarding financial
instruments, for which there is an active market, fair value is the price that
would be
received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date. If there is no
active market for a financial instrument, valuation techniques shall be adopted
to determine the fair value.
When measuring fair value, the Group takes into account the characteristics of
the particular asset or liability (including the condition and location of the
asset and restrictions, if any, on the sale or use of the asset) that market
participants would consider when pricing the asset or liability at the
measurement date, and uses valuation techniques that are appropriate in the
circumstances and for which sufficient data and other information are available
to measure fair value. Valuation techniques mainly include the market approach,
the income approach and the cost approach.
(h) Derivative financial instruments and hedge accounting Derivative financial
instruments are recognised initially at fair value. At each balance sheet date,
the fair value
is remeasured. The gain or loss on remeasurement to fair value is recognised
immediately in profit or loss, except where the derivatives qualify for hedge
accounting. Hedge accounting is a method which recognises the offsetting effects
on profit or loss of changes in the fair values of the hedging instrument and
the hedged item in the same accounting period, to represent the effect of risk
management activities.
Hedged items are the items that expose the Group to risks of changes in future
fair value or future cash flows and that are designated as being hedged and that
must be reliably measurable. The Group's hedged items include a forecast
transaction that is settled with an undetermined future market price and exposes
the Group to risk of variability in cash flows, etc.
A hedging instrument is a designated derivative whose changes in future fair
value or cash flows are expected to offset changes in the fair value or the cash
flows of the hedged item. The hedging relationship meets all of the following
hedge effectiveness requirements:
(i) There is an economic relationship between the hedged item and the hedging
instrument, which share a risk and that gives rise to opposite changes in fair
value that tend to offset each other. (ii) The effect of credit risk does not
dominate the value changes that result from that economic relationship. (iii)
The hedge ratio of the hedging relationship is the same as that resulting from
the quantity of the hedged item that the entity actually hedges and the quantity
of the hedging instrument that the entity actually uses to hedge that quantity
of hedged item. However, that designation shall not reflect an imbalance between
the weightings of the hedged item and the hedging instrument.
077
Cash flow hedges
Cash flow hedge is a hedge of the exposure to variability in cash flows that is
attributable to a particular risk associated with all, or a component of, a
recognised asset or liability or a highly probable forecast transaction, and
could affect profit or loss. As long as a cash flow hedge meets the qualifying
criteria for hedge accounting, the amount of cash flow hedges reserve is the
lower of the following two absolute amounts: The cumulative gain or loss on the
hedging instrument from inception of the hedge; The cumulative change in present
value of the expected future cash flows on the hedged item from inception of the
hedge.
The gain or loss on the hedging instrument that is determined to be an effective
hedge is recognised in other comprehensive income.
The portion of the gain or loss on the hedging instrument that is determined to
be an ineffective hedge is recognised in profit or loss.
The amount that has been accumulated in the cash flow hedge reserve shall be
accounted for as follows ? If a hedged forecast transaction subsequently results
in the recognition of a non-financial asset or non-financial liability, or a
hedged forecast transaction for a non-financial asset or a non-financial
liability becomes a firm commitment for which fair value hedge accounting is
applied, the entity shall remove that amount from the cash flow hedge reserve
and include it directly in the initial cost or other carrying amount of the
asset or the liability.
For cash flow hedges, other than those covered by the preceding two policy
statements, that amount shall be reclassified from the cash flow hedge reserve
to profit or loss as a reclassification adjustment in the same period or periods
during which the hedged expected future cash flows affect profit or loss. If the
amount that has been accumulated in the cash flow hedge reserve is a loss and
the Group expects that all or a portion of that loss will not be recovered in
one or more future periods, the Group immediately reclassify the amount that is
not expected to be recovered into profit or loss.
078
In case of the following circumstances, the Group discontinues the use of hedge
accounting: when the hedging relationship no longer meets the risk management
objective on the basis of which it qualified for hedge accounting (ie. the
entity no longer pursues that risk management objective); or when a hedging
instrument expires or is sold, terminated, exercised; or there is no longer an
economic relationship between the hedged item and the hedging instrument or the
effect of credit risk starts to dominate the value changes that result from that
economic relationship; or no longer meets the criteria for hedge accounting.
When the Group discontinues hedge accounting for a cash flow hedge, it shall
account for the amount that has been accumulated in the cash flow hedge reserve
as follows: If the hedged future cash flows are still expected to occur, that
amount shall remain in the cash flow hedge reserve and shall be accounted for as
cash flow hedges.
If the hedged future cash flows are no longer expected to occur, that amount
shall be immediately reclassified from the cash flow hedge reserve to profit or
loss as a reclassification adjustment. A hedged future cash flow that is no
longer highly probable to occur may still be expected to occur, if the hedged
future cash flows are still expected to occur, that amount shall remain in the
cash flow hedge reserve and shall be accounted for as cash flow hedges.
(8) Inventories
Inventories include crude oil and other raw materials, work in progress,
finished goods and spare parts and consumables, and are measured at the lower of
cost and net realisable value. Inventories are initially measured at cost. Cost
of inventories comprises all costs of purchase, costs of conversion and other
expenditure incurred in bringing the inventories to their present location and
condition. In addition to the purchase cost of raw materials, work in progress
and finished goods include direct labour costs and an appropriate allocation of
production overheads.
Cost of inventories is determined primarily using the weighted average method.
The cost of finished goods and work in progress comprises cost of crude oil,
other raw materials, direct labour and production overheads allocated based on
normal operating capacity. Spare parts and consumables include low cost
consumables and packaging materials. Low cost consumables are amortised with
graded amortisation method and packaging materials are expensed off in full.
079
Provision for decline in the value of inventories is measured as the excess of
the carrying value of the inventories over their net realisable value. Net
realisable value is the estimated selling price in the ordinary course of
business less the estimated costs of completion and the estimated costs
necessary to make the sale and relevant taxes. The net realisable value of
materials held for use in the production is measured based on the net realisable
value of the finished goods in which they will be incorporated. The net
realisable value of the inventory held to satisfy sales or service contracts is
measured based on the contract price, to the extent of the quantities specified
in sales contracts, and the excess portion of inventories is measured based on
general selling prices. The Group adopts perpetual inventory system.
(9) Long-term Equity Investments and Joint Operations
Long-term equity investments comprise the Company's equity investments in
subsidiaries, and the Group's equity investments in joint ventures and
associates.
Long-term equity investments acquired through business combinations: For a
long-term equity investment acquired through a business combination under common
control, the proportionate share of the carrying value of shareholders' equity
of the combined entity in the consolidated financial statements of the ultimate
controlling party shall be treated as initial cost of the investment on the
acquisition date. For a long-term equity investment obtained through a business
combination not involving entities under common control, the initial cost
comprises the aggregate of the fair value of assets transferred, liabilities
incurred or assumed, and equity securities issued by the Company, in exchange
for control of the acquiree.
Long-term equity investments acquired through other than business combinations:
For an acquisition settled in cash, the initial cost of investment shall be the
actual cash consideration paid. For an acquisition settled by the issuance of
equity securities, the initial cost of investment shall be the fair value of
equity securities issued. (a) Subsidiaries Investments in subsidiaries are
accounted for at cost in the financial statements of the Company and are
consolidated after being adjusted by the equity method accounting in
consolidated financial statements. Long-term equity investments accounted for at
cost are measured at the initial investment cost unless the investment is
classified as held for sale. The cash dividends or profit distributions declared
by the investees are recognised as investment income in the income statement.
A listing of the Group's principal subsidiaries is set out in Note 6(1).
080
(b) Joint ventures and associates
Joint ventures are arrangements whereby the Group and other parties have joint
control and rights to the net assets of the arrangements. Associates are those
in which the Group has significant influence over the financial and operating
policies.
The term "joint control" refers to the contractually agreed sharing of control
of an arrangement, which exists only when decisions about the relevant
activities (activities with significant impact on the returns of the
arrangement) require the unanimous consent of the parties sharing control. The
term "significant influence" refers to the power to participate in the
formulation of financial and operating policies of an enterprise, but not the
power to control, or jointly control, the formulation of such policies with
other parties.
The investments in joint ventures and associates are accounted for using the
equity method accounting. The excess of the initial cost of the investment over
the share of the fair value of the investee's net identifiable assets is
included in the initial cost of the investment. While the excess of the share of
the fair value of the investee's net identifiable assets over the cost of the
investment is instead recognised in profit or loss in the period in which the
investment is acquired and the cost of the long-term equity investment is
adjusted accordingly. Under the equity method accounting, the Group's share of
its investees' post-acquisition profits or losses and other comprehensive income
is recognised as investment income or losses and other comprehensive income
respectively. When the Group's share of losses of an investee equals or exceeds
the carrying amount of the long-term equity investment and other long-term
interests which substantively form the net investment in the investee, the Group
does not recognise further losses as provisions, unless it has obligations to
bear extra losses which meet the criteria of recognition for liabilities
according to the related standards for contingencies. Movements in the investee
owner's equity other than profit or loss, other comprehensive income and profit
distribution should be proportionately recognised in the Group's equity,
provided that the share interest of the investee remained unchanged. The share
of the investee's profit distribution or cash dividends declared is accounted
for as a reduction of the carrying amount of the investment upon declaration.
The profits or losses arising from the intra-Group transactions between the
Group and its investees are eliminated to the extent of the Group's interests in
the investees, on the basis of which the investment income or losses are
recognised. The unrealised loss on the intra-Group transaction between the Group
and its investees, of which nature is asset impairment, is recognised in full
amount, and the relevant unrealised loss is not allowed to be eliminated. If the
Group invests a business to investee as a long-term equity investment but not
obtain control, the fair value of the invested business shall be used as the
initial investment cost of the long-term equity investment. The difference
between the carrying amount of the initial cost of the investment and the
invested business is recognised in profit or loss.
081
(c) Impairment of long-term equity investments
For investments in subsidiaries, joint ventures and associates, if the
recoverable amount is lower than its carrying amount, the carrying amount shall
be written down to the recoverable amount (Note 4(16)). After an impairment loss
has been recognised, it shall not be reversed in future accounting periods for
the part whose value has been recovered.
(d) Joint Operations
A joint operation is an arrangement whereby the Group and other joint operators
have joint control and the Group has rights to the assets and obligation for the
liabilities, relating to the arrangement. The Group recognises items related to
its interest in a joint operation as follows: its solely-held assets, and its
share of any assets held jointly; its solely-assumed liabilities, and its share
of any liabilities incurred jointly; its revenue from the sale of its share of
the output arising from the joint operation; its share of the revenue from the
sale of the output by the joint operation; its solely-incurred expenses, and its
share of any expenses incurred jointly.
(10) Fixed Assets
Fixed assets comprise buildings, equipment and machinery, motor vehicles and
other. Fixed assets purchased or constructed are initially recorded at cost. The
fixed assets injected by the state-owned shareholder during the Restructuring
were initially recorded at the valuated amount approved by the relevant
authorities managing state-owned assets.
Subsequent expenditures for fixed assets are included in the cost of fixed
assets only when it is probable that in future economic benefits associated with
the items will flow to the Group and the cost of the items can be measured
reliably. The carrying amount of the replaced part is derecognised. All other
subsequent expenditures are charged to profit or loss during the financial
period in which they are incurred. Fixed assets are depreciated using the
straight-line method based on the balance of their costs less estimated residual
values over their estimated useful lives. For those fixed assets being provided
for impairment loss, the related depreciation charge is determined based on the
net value lessening the impairment recognised over their remaining useful lives.
082
The estimated useful lives, estimated residual value ratios and annual
depreciation rates of the fixed assets are as follows:
Estimated useful lives
Estimated
residual value ratio %
Annual
depreciation rate %
Buildings 8 to 40 years 5 2.4 to 11.9
Equipment and Machinery 4 to 30 years 3 to 5 3.2 to 24.3
Motor Vehicles 4 to 14 years 5 6.8 to 23.8
Others 5 to 12 years 5 7.9 to 19.0
The estimated useful lives, estimated residual values and depreciation method of
the fixed assets are reviewed, and adjusted if appropriate, at year end. An
asset's carrying amount is written down immediately to its recoverable amount if
the asset's carrying amount is greater than its recoverable amount (Note 4(16)).
The carrying amounts of fixed assets are derecognised when the fixed assets are
disposed or no future economic benefits are expected from their use or disposal.
When fixed assets are sold, transferred, disposed or damaged, gains or losses on
disposal are determined by comparing the proceeds with the carrying amounts of
the assets, adjusted by related taxes and expenses, and are recorded in profit
or loss in the disposal period. (11) Oil and Gas Properties Oil and gas
properties include the mineral interests in properties, wells and related
facilities arising from oil and gas exploration and production activities.
The costs of obtaining the mineral interests in properties are capitalised when
they are incurred and are initially recognised at acquisition costs. Exploration
license fee, production license fee, rent and other costs for retaining the
mineral interests in properties, subsequent to the acquisition of the mineral
interests in properties, are charged to profit or loss.
The Ministry of Natural Resources in China issues production licenses to
applicants on the basis of the reserve reports approved by relevant authorities.
The oil and gas properties are amortised at the field level based on the unit of
production method except for the mineral interests in unproved properties which
are not subjected to depletion. Unit of production rates are based on oil and
gas reserves estimated to be recoverable from existing facilities based on the
current terms of production licenses.
The carrying amount of oil and gas properties is reduced to the recoverable
amount when their recoverable amount is lower than their carrying amount. The
recoverable amount is the higher of an asset's fair value less costs to sell and
the present value of the estimated future cash flow expected to be derived from
the asset (or asset group, the same below) (Note 4(16)).
083
(12) Construction in Progress
Construction in progress is recognised at actual cost. The actual cost comprises
construction costs, other necessary costs incurred and the borrowing costs
eligible for capitalisation to prepare the asset for its intended use.
Construction in progress is transferred to fixed assets when the assets are
ready for their intended use, and depreciation begins from the following month.
Oil and gas exploration costs include drilling exploration costs and the
non-drilling exploration costs, the successful efforts method is used for the
capitalisation of the drilling exploration costs. Drilling exploration costs
included in the oil and gas exploration costs are capitalised as wells and
related facilities when the wells are completed and economically proved reserves
are found. Drilling exploration costs related to the wells without economically
proved reserves less the net residual value are recorded in profit or loss. The
related drilling exploration costs for the sections of wells with economically
proved reserves are capitalised as wells and related facilities, and the costs
of other sections are recorded in profit or loss. Drilling exploration costs are
temporarily capitalised pending the determination of whether economically proved
reserves can be found within one year of the completion of the wells. For wells
that are still pending determination of whether economically proved reserves can
be found after one year of completion, the related drilling exploration costs
remain temporarily capitalised only if sufficient reserves are found in those
wells and further exploration activities are required to determine whether they
are economically proved reserves or not, and further exploration activities are
under way or firmly planned and are about to be implemented. Otherwise the
related costs are recorded in profit or loss. If proved reserves are discovered
in a well, for which the drilling exploration costs have been expensed
previously, no adjustment should be made to the drilling exploration costs that
were expensed, while the subsequent drilling exploration costs and costs for
completion of the well are capitalised. The non-drilling exploration costs are
recorded in profit or loss when incurred. Oil and gas development costs are
capitalised as the respective costs of wells and related facilities for oil and
gas development based on their intended use. The economically proved reserves
are the estimated quantities of crude oil and natural gas, which, by analysis of
geoscience and engineering data, can be estimated with reasonable certainty to
be economically producible from a given date forward, from known reservoirs, and
under existing economic conditions, operating methods, and government
supervision regulation before the time at which contracts providing the right to
operate expire, unless evidence indicates that renewal is reasonably certain,
regardless of whether the estimate is a deterministic estimate or probabilistic
estimate. The Group sells the products or by-products produced before the fixed
assets reach the scheduled useable state, or in the research and development
process, which be determined as trial operation sales. Related income and cost
is present respectively in financial statements according to the daily
activities and non-routine activities. Belongs to daily activities, in
"Operating income" and "Cost of sales" project list, belongs to non-routine
activities, shown in "Gains on asset disposal" and other projects.
084
(13) Intangible Assets and Goodwill
Intangible assets include land use rights and patents, etc., and are initially
recorded at cost. The intangible assets injected by the state-owned shareholder
during the Restructuring were initially recorded at the valued amount approved
by the relevant authorities managing the state-owned assets. Land use rights are
amortised using the straight-line method over 30 to 50 years. If it is
impracticable to allocate the amount paid for the purchase of land use rights
and buildings between the land use rights and the buildings on a reasonable
basis, the entire amount is accounted for as fixed assets. The franchise is
initially recorded at actual cost, and amortised using the straight-line method
over estimated useful lives of gas station.
Patent and other intangible assets are initially recorded at actual cost, and
amortised using the straight-line method over their estimated useful lives.
The carrying amount of intangible assets is written down to its recoverable
amount when the recoverable amount is lower than the carrying amount (Note
4(16)). The estimated useful years and amortisation method of the intangible
assets with finite useful life are reviewed, and adjusted if appropriate, at
each financial year-end. The initial cost of goodwill represents the excess of
cost of acquisition over the acquirer's interest in the fair value of the
identifiable net assets of the acquiree under a business combination not
involving entities under common control.
Goodwill is not amortised and is stated in the balance sheet at cost less
accumulated impairment losses (Note 4(16)). On disposal of an asset group or a
set of asset groups, any attributable goodwill is written off and included in
the calculation of the profit or loss on disposal.
(14) Research and Development
Research expenditure incurred is recognised as an expense. Costs incurred on
development projects shall not be capitalised unless they satisfy the following
conditions simultaneously: In respect of the technology, it is feasible to
finish the intangible asset for use or sale; It is intended by management to
finish and use or sell the intangible asset; It is able to prove that the
intangible asset is to generate economic benefits; With the support of
sufficient technologies, financial resources and other resources, it is able to
finish the development of the intangible asset, and it is able to use or sell
the intangible asset; and The costs attributable to the development of the
intangible asset can be reliably measured.
085
Costs incurred on development projects not satisfying the above conditions shall
be recorded in profit or loss of the current period. Costs incurred on
development recorded in profit or loss in previous accounting periods shall not
be re-recognised as asset in future accounting periods. Costs incurred on
development already capitalised shall be listed as development expenditure in
the balance sheet, which shall be transferred to intangible asset from the date
when the expected purposes of use are realised.
(15) Long-term Prepaid Expenses
Long-term prepaid expenses are the expenses that should be borne by current and
subsequent periods and should be amortised over more than one year. Long-term
prepaid expenses are amortised using the straight-line method over the expected
beneficial periods and are presented at cost less accumulated amortisation. (16)
Impairment of Non-current Assets Fixed assets, oil and gas properties except for
mineral interests in unproved properties, construction in progress, intangible
assets with finite useful life, long-term equity investments, long-term prepaid
expenses and right-of-use assets are tested for impairment if there is any
indication that an asset may be impaired at the balance sheet date. An
impairment loss is recognised for the amount by which the asset's carrying
amount exceeds its recoverable amount if the impairment test indicates that the
recoverable amount is less than its carrying amount. The recoverable amount is
the higher of an asset's fair value less costs to sell and the present value of
the estimated future cash flow expected to be derived from the asset. Impairment
should be assessed and recognised for each individual asset. If it is not
possible to estimate the recoverable amount of an individual asset, the
recoverable amount of the group of assets to which the asset belongs is
determined. A group of assets is the smallest group of assets that is able to
generate independent cash flow.
The goodwill, presented separately in financial statements, is allocated to each
asset group or set of asset groups, which is expected to benefit from the
synergies of the combination for the purpose of impairment testing, and should
be subject to impairment assessment at least on an annual basis regardless
whether there exists any indicators of impairment. Where the impairment
assessment indicates that, for the cash-generating unit (that includes the
allocated goodwill), the recoverable amount is lower than the carrying value,
then an impairment loss will be recorded.
The mineral interests in unproved properties are tested annually for impairment.
If the cost incurred to obtain a single property is significant, the impairment
test is performed and the impairment loss is determined on the basis of the
single property. If the cost incurred to obtain a single property is not
significant and the geological structure features or reserve layer conditions
are identical or similar to those of other adjacent properties, impairment tests
are performed on the basis of a group of properties that consist of several
adjacent mining areas with identical or similar geological structure features or
reserve layer conditions.
Once an impairment loss of these assets is recognised, it is not allowed to be
reversed even if the value can be recovered in subsequent period.
086
(17) Borrowing Costs
Borrowing costs incurred that are directly attributable to the acquisition and
construction of fixed assets and oil and gas properties, which require a
substantial period of time for acquisition and construction activities to get
ready for their intended use, are capitalised as part of the cost of the assets
when capital expenditures and borrowing costs have already incurred and the
activities of acquisition and construction necessary to prepare the assets to be
ready for their intended use have commenced. The capitalisation of borrowing
costs ceases when the assets are ready for their intended use. Borrowing costs
incurred thereafter are recognised as financial expense. Capitalisation of
borrowing costs should be suspended during periods in which the acquisition or
construction of a fixed asset is interrupted abnormally, and the interruption
lasts for more than 3 months, until the acquisition or construction is resumed.
For a borrowing taken specifically for the acquisition or construction
activities for preparing fixed asset and oil and gas property eligible for
capitalisation, the to-be-capitalised amount of interests shall be determined
according to the actual costs incurred less any income earned on the unused
borrowing fund as a deposit in the bank or as a temporary investment.
Where a general borrowing is used for the acquisition or construction of fixed
asset and oil and gas property eligible for capitalisation, the Group shall
calculate and determine the to-be-capitalised amount of interests on the general
borrowing by multiplying the part of the accumulative asset disbursements in
excess of the weighted average asset disbursement for the specifically borrowed
fund by the weighted average actual rate of the general borrowing used. The
actual rate is the rate used to discount the future cash flow of the borrowing
during the expected existing period or the applicable shorter period to the
originally recognised amount of the borrowing. (18) Employee Compensation (a)
Short-term benefits Employee wages or salaries, bonuses, social security
contributions such as medical insurance, work injury insurance, maternity
insurance and housing fund, measured at the amount incurred or at the applicable
benchmarks and rates, are recognised as a liability as the employee provides
services, with a corresponding charge to profit or loss or included in the cost
of assets where appropriate.
(b) Post-employment benefits-Defined Contribution Plans
Pursuant to the relevant laws and regulations of the People's Republic of China,
the Group participated in a defined contribution basic pension insurance in the
social insurance system established and managed by government organisations. The
Group has similar defined contribution plans for its employees in its overseas
operations. The Group makes contributions to basic pension insurance plans based
on the applicable benchmarks and rates stipulated by the government. Basic
pension insurance contributions are recognised as part of the cost of assets or
charged to profit or loss as the related services are rendered by the employees.
087
In addition, the Group joined the corporate annuity plan approved by relevant
PRC authorities. Contribution to the annuity plan is charged to expense as
incurred. The Group has no other material obligation for the payment of pension
benefits associated with schemes beyond the contributions described above. (19)
Government grants
Government grants are non-reciprocal transfers of monetary or non-monetary
assets from the government to the Group except for capital contributions from
the government in the capacity as an investor in the Group. A government grant
is recognised when there is reasonable assurance that the grant will be received
and that the Group will comply with the conditions attaching to the grant.
If a government grant is in the form of a transfer of a monetary asset, it is
measured at the amount received or receivable. If a government grant is in the
form of a transfer of a non-monetary asset, it is measured at fair value.
Government grants related to assets are grants whose primary condition is that
the Group qualifying for them should purchase, construct or otherwise acquire
long-term assets. Government grants related to income are grants other than
those related to assets. A government grant related to an asset is recognised
initially as deferred income and amortised to profit or loss in a reasonable and
systematic manner within the useful life of the relevant assets. A grant that
compensates the Group for expenses or losses to be incurred in the future is
recognised initially as deferred income, and recognised in profit or loss or
released to relevant cost in the period in which the expenses or losses are
recognised. A grant that compensates the Group for expenses or losses already
incurred is recognised to profit or loss or released to related cost
immediately.
Government grants related to daily activities are recognised in other income or
written down the related cost and expenses according to the nature of business
activities. Government grants related to non-daily activities are recognised in
non-operating income or expenses.
(20) Provisions
Provisions for product guarantee, quality onerous contracts etc. are recognised
when the Group has present obligations, and it is probable that an outflow of
economic benefits will be required to settle the obligations, and the amounts
can be reliably estimated.
Provisions are measured at the best estimate of the expenditures expected to be
required to settle the present obligation. Factors surrounding the contingencies
such as the risks, uncertainties and the time value of money shall be taken into
account as a whole in reaching the best estimate of provisions. Where the effect
of the time value of money is material, the best estimate is determined by
discounting the related future cash flows. The increase in the discounted amount
of the provision arising from the passage of time is recognised as interest
expense.
088
Asset retirement obligations which meet the criteria of provisions are
recognised as provisions and the amount recognised is the present value of the
estimated future expenditure determined in accordance with local conditions and
requirements, while a corresponding addition to the related oil and gas
properties of an amount equivalent to the provision is also created. This is
subsequently depleted as part of the costs of the oil and gas properties.
Interest expenses from the assets retirement obligations for each period are
recognised with the effective interest method during the useful life of the
related oil and gas properties. Due to technological progress, legal
requirements or changes in the market environment, changes in the provisions
caused by changes in the amount of expenditure, estimated time of retirement
obligations, discount rate, etc., may occur in fulfilling the retirement
obligation. For an increase in provisions, the cost of oil and gas properties
will be increased accordingly; for a decrease in provisions, the cost of oil and
gas properties will be deducted within the limit of the carrying amount of
assets related to decommissioning expenses. If a decrease in the provision
exceeds the carrying amount of the oil and gas properties recognised
corresponding to the provision, the excess shall be recognised immediately in
profit or loss. If the conditions for the recognition of the provisions are not
met, the expenditures for the decommissioning, removal and site cleaning will be
expensed in profit or loss when occurred. (21) Income tax Current and deferred
taxes are recognised in profit or loss, except for income tax arising from
business combination or transactions or events which are directly included in
owners' equity (including other comprehensive income).
Current tax is the expected tax payable on the taxable income for the year,
using tax rates stipulated by the tax law, and any adjustment to tax payable in
respect of previous years. At the balance sheet date, current tax assets are
offset against current tax liabilities if the Group has a legal right to settle
on a net basis and intends to settle on a net basis, or to realise the asset and
settle the liability simultaneously.
Deferred tax assets and deferred tax liabilities are calculated and recognised
based on the differences (temporary differences) arising between the tax bases
of assets and liabilities and their carrying amounts. The deductible losses,
which can be utilised against the future taxable profit in accordance with tax
law, are regarded as temporary differences and a deferred tax asset is
recognised accordingly. The deferred tax assets and deferred tax liabilities are
not accounted for the temporary differences resulting from initial recognition
of an asset or liability in a transaction other than a business combination that
at the time of the transaction affects neither accounting nor taxable profits
(or deductible loss) and do not result in an equivalent amount of taxable and
deductible temporary differences. At the balance sheet date, deferred tax assets
and deferred tax liabilities are determined using tax rates that are expected to
apply to the period when the related deferred tax asset is realised or the
deferred tax liability is settled.
Deferred tax assets of the Group are recognised for deductible temporary
differences and deductible losses and tax credits to the extent that it is
probable that future taxable profit will be available against which the
deductible temporary differences, deductible losses and tax credits can be
utilised.
089
Deferred tax liabilities are recognised for taxable temporary differences
arising from investments in subsidiaries, associates and joint ventures, except
where the timing of the reversal of the temporary difference is controlled by
the Group and it is probable that the temporary difference will not reverse in
the foreseeable future. Deferred tax assets are recognised for deductible
temporary differences arising from investments in subsidiaries, associates and
joint ventures, to the extent that, and only to the extent that, it is probable
that the temporary differences will reverse in the foreseeable future and
taxable profit will be available against which the temporary differences can be
utilised. Deferred tax assets and liabilities which meet the following
conditions shall be presented on a net basis: Deferred tax assets and
liabilities are related to the income tax of the same entity within the Group
levied by the same authority;
This entity within the Group is legally allowed to settle its current tax assets
and liabilities on a net basis.
(22) Revenue Recognition
Revenue is the gross inflow of economic benefits arising in the course of the
Group's ordinary activities when the inflows result in increase in shareholders'
equity, other than increase relating to contributions from shareholders. Revenue
is recognised when the Group satisfies the performance obligation in the
contract by transferring the control over relevant goods or services to the
customers.
Where a contract has two or more performance obligations, the Group determines
the stand-alone selling price at contract inception of the distinct good or
service underlying each performance obligation in the contract and allocates the
transaction price in proportion to those stand-alone selling prices. The Group
recognises as revenue the amount of the transaction price that is allocated to
each performance obligation. The stand-alone selling price is the price at which
the Group would sell a promised good or service separately to a customer. If a
stand-alone selling price is not directly observable, the Group considers all
information that is reasonably available to the entity, maximises the use of
observable inputs to estimate the stand-alone selling price. For the contract
which the Group grants a customer the option to acquire additional goods or
services (such as loyalty points), the Group assesses whether the option
provides a material right to the customer. If the option provides a material
right, the Group recognises the option as a performance obligation, and
recognises revenue when those future goods or services are transferred or when
the option expires. If the stand-alone selling price for a customer's option to
acquire additional goods or services is not directly observable, the Group
estimates it, taking into account all relevant information, including the
difference in the discount that the customer would receive when exercising the
option or without exercising the option, and the likelihood that the option will
be exercised.
090
The transaction price is the amount of consideration to which the Group expects
to be entitled in exchange for transferring promised goods or services to a
customer, excluding amounts collected on behalf of third parties. The Group
recognises the transaction price only to the extent that it is highly probable
that a significant reversal in the amount of cumulative revenue recognised will
not occur when the uncertainty associated with the variable consideration is
subsequently resolved. To determine the transaction price for contracts in which
a customer promises consideration in a form other than cash, the Group measures
the non-cash consideration at fair value. If the Group cannot reasonably
estimate the fair value of the non-cash consideration, the Group measures the
consideration indirectly by reference to the stand-alone selling price of the
goods or services promised to the customer in exchange for the consideration.
The consideration which the Group expects to refund to the customer is
recognised as refund liabilities and excluded from transaction price. Where the
contract contains a significant financing component, the Group recognises the
transaction price at an amount that reflects the price that a customer would
have paid for the promised goods or services if the customer had paid cash for
those goods or services when (or as) they transfer to the customer. The
difference between the amount of promised consideration and the cash selling
price is amortised using an effective interest method over the contract term.
The Group does not adjust the consideration for any effects of a significant
financing component if it expects, at contract inception, that the period
between when the Group transfers a promised good or service to a customer and
when the customer pays for that good or service will be one year or less.
The Group satisfies a performance obligation over time if one of the following
criteria is met; or otherwise, a performance obligation is satisfied at a point
in time: The customer simultaneously receives and consumes the benefits provided
by the Group's performance as the Group performs;
The customer can control the asset created or enhanced during the Group's
performance; The Group's performance does not create an asset with an
alternative use to it and the Group has an enforceable right to payment for
performance completed to date.
For performance obligation satisfied over time, the Group recognises revenue
over time by measuring the progress towards complete satisfaction of that
performance obligation. When the outcome of that performance obligation cannot
be measured reasonably, but the Group expects to recover the costs incurred in
satisfying the performance obligation, the Group recognises revenue only to the
extent of the costs incurred until such time that it can reasonably measure the
outcome of the performance obligation.
For performance obligation satisfied at a point in time, the Group recognises
revenue at the point in time at which the customer obtains control of relevant
goods or services. To determine whether a customer has obtained control of goods
or services, the Group considers the following indicators:
091
The Group has a present right to payment for the product or service; The Group
has transferred physical possession of the goods to the customer; The Group has
transferred the legal title of the goods or the significant risks and rewards of
ownership of the goods to the customer; and The customer has accepted the goods
or services.
The Group determines whether it is a principal or an agent, depending on whether
it obtains control of the specified good or service before that good or service
is transferred to a customer. The Group is a principal if it controls the
specified good or service before that good or service is transferred to a
customer, and recognises revenue in the gross amount of consideration to which
it has received (or receivable). Otherwise, the Group is an agent, and
recognises revenue in the amount of any fee or commission to which it expects to
be entitled. The fee or commission is the net amount of consideration that the
Group retains after paying the other party the consideration, or is the
established amount or proportion.
A contract asset is the Group's right to consideration in exchange for goods or
services that it has transferred to a customer when that right is conditional on
something other than the passage of time. The Group recognises loss allowances
for expected credit loss on contract assets (Note 4(7)(f)). Accounts receivable
is the Group's right to consideration that is unconditional (only the passage of
time is required). A contract liability is the Group's obligation to transfer
goods or services to a customer for which the Group has received consideration
(or an amount of consideration is due) from the customer.
The following is the description of accounting policies regarding revenue from
the Group's principal activities: (a) Sales of goods The Group shall recognise
revenue when (or as) the customer obtains control of relevant product. Obtaining
control of relevant product means that a customer can dominate the use of the
product and obtain almost all the economic benefits from it. (b) Rendering of
services
The Group recognises its revenue from rendering of services on performance
progress. Customers simultaneously receive the service as the Group performs its
obligation over time and consume the benefits arising from the Group's
performance. Otherwise, a performance obligation is satisfied at a point in
time, the Group shall recognise revenue when (or as) the customer obtains
control of revenue service. (c) Loyalty points Under its customer loyalty
programme, the Group allocates a portion of the transaction price received to
loyalty points that are redeemable against any future purchases of the Group's
goods or services. This allocation is based on the relative stand-alone selling
prices. The amount allocated to the loyalty programme is deferred, and is
recognised as revenue when loyalty points are redeemed or expire.
092
(23) Contract Costs
Contract costs are either the incremental costs of obtaining a contract with a
customer or the costs to fulfil a contract with a customer.
Incremental costs of obtaining a contract are those costs that the Group incurs
to obtain a contract with a customer that it would not have incurred if the
contract had not been obtained. The Group recognises as an asset the incremental
costs of obtaining a contract with a customer if it expects to recover those
costs, unless the expected amortisation period is one year or less from the date
of initial recognition of the asset, in which case the costs are expensed when
incurred. Other costs of obtaining a contract are expensed when incurred. If the
costs to fulfil a contract with a customer are not within the scope of
inventories or other accounting standards, the Group recognises an asset from
the costs incurred to fulfil a contract only if those costs meet all of the
following criteria:
The costs relate directly to an existing contract or to a specifically
identifiable anticipated contract, including direct labour, direct materials,
allocations of overheads (or similar costs), costs that are explicitly
chargeable to the customer and other costs that are incurred only because the
Group entered into the contract; The costs generate or enhance resources of the
Group that will be used in satisfying (or in continuing to satisfy) performance
obligations in the future; and The costs are expected to be recovered.
Assets recognised for the incremental costs of obtaining a contract and assets
recognised for the costs to fulfil a contract (the "assets related to contract
costs") are amortised on a systematic basis that is consistent with the transfer
to the customer of the goods or services to which the assets relate and
recognised in profit or loss for the current period. The Group recognises the
incremental costs of obtaining a contract as an expense when incurred if the
amortisation period of the asset that the entity otherwise would have recognised
is one year or less. The Group recognises an impairment loss in profit or loss
to the extent that the carrying amount of an asset related to contract costs
exceeds:
Remaining amount of consideration that the Group expects to receive in exchange
for the goods or services to which the asset relates; less the costs that relate
directly to providing those goods or services that have not yet been recognised
as expenses.
093
(24) Leases
A contract is lease if the lessor conveys the right to control the use of an
identified asset to lessee for a period of time in exchange for consideration.
At inception of a contract, the Group assesses whether a contract is, or
contains, a lease. A contract is, or contains, a lease if the contract conveys
the right to control the use of an identified asset for a period of time in
exchange for consideration. To assess whether a contract conveys the right to
control the use of an identified asset, the Group assesses whether:
the contract involves the use of an identified asset. An identified asset may be
specified explicitly or implicitly specified in a contract and should be
physically distinct, or capacity portion or other portion of an asset that is
not physically distinct but it represents substantially all of the capacity of
the asset and thereby provides the customer with the right to obtain
substantially all of the economic benefits from the use of the asset. If the
supplier has a substantive substitution right throughout the period of use, then
the asset is not identified; the lessee has the right to obtain substantially
all of the economic benefits from use of the asset throughout the period of use;
the lessee has the right to direct the use of the asset.
For a contract that contains more separate lease components, the lessee and the
lessor separate lease components and account for each lease component as a lease
separately. For a contract that contains lease and non-lease components, the
lessee and the lessor separate lease components from non-lease components. For a
contract that contains lease and non-lease components, the lessee allocates the
consideration in the contract to each lease component on the basis of the
relative stand-alone price of the lease component and the aggregate stand-alone
price of the non-lease components. The lessor allocates the consideration in the
contract in accordance with the accounting policy in Note 4(22).
(a) The Group as a lessee
The Group recognises a right-of-use asset and a lease liability at the lease
commencement date. The right-of-use asset is initially measured at cost, which
comprises the initial amount of the lease liability, any lease payments made at
or before the commencement date (less any lease incentives received), any
initial direct costs incurred and an estimate of costs to dismantle and remove
the underlying asset or to restore the site on which it is located or restore
the underlying asset to the condition required by the terms and conditions of
the lease. The right-of-use asset is depreciated using the straight-line method.
If the lessee is reasonably certain to exercise a purchase option by the end of
the lease term, the right-of-use asset is depreciated over the remaining useful
lives of the underlying asset. Otherwise, the right-of-use asset is depreciated
from the commencement date to the earlier of the end of the useful life of the
right-of-use asset or the end of the lease term. Impairment losses of
right-of-use assets are accounted for in accordance with the accounting policy
described in Note 4(16).
094
The lease liability is initially measured at the present value of the lease
payments that are not paid at the commencement date, discounted using the
interest rate implicit in the lease or, if that rate cannot be readily
determined, the Group's incremental borrowing rate.
A constant periodic rate is used to calculate the interest on the lease
liability in each period during the lease term with a corresponding charge to
profit or loss or included in the cost of assets where appropriate. Variable
lease payments not included in the measurement of the lease liability is charged
to profit or loss or included in the cost of assets where appropriate as
incurred.
Under the following circumstances after the commencement date, the Group
remeasures lease liabilities based on the present value of revised lease
payments: There is a change in the amounts expected to be payable under a
residual value guarantee; There is a change in future lease payments resulting
from a change in an index or a rate used to determine those payments;
There is a change in the assessment of whether the Group will exercise a
purchase, extension or termination option, or there is a change in the exercise
of the extension or termination option . When the lease liability is remeasured,
a corresponding adjustment is made to the carrying amount of the right-of-use
asset, or is recorded in profit or loss if the carrying amount of the
right-of-use asset has been reduced to zero. The Group has elected not to
recognise right-of-use assets and lease liabilities for short-term leases that
have a lease term of 12 months or less and leases of low-value assets. The Group
recognises the lease payments associated with these leases in profit or loss or
as the cost of the assets where appropriate using the straight-line method over
the lease term.
(b) The Group as a lessor
The Group determines at lease inception whether each lease is a finance lease or
an operating lease. A lease is classified as a finance lease if it transfers
substantially all the risks and rewards incidental to ownership of an underlying
asset irrespective of whether the legal title to the asset is eventually
transferred. An operating lease is a lease other than a finance lease. There are
no significant finance leases for the Group. Lease receipts from operating
leases is recognised as income using the straight-line method over the lease
term. The initial direct costs incurred in respect of the operating lease are
initially capitalised and subsequently amortised in profit or loss over the
lease term on the same basis as the lease income. Variable lease payments not
included in lease receipts are recognised as income as they are earned.
095
(25) Dividend Distribution
Dividend distribution is recognised as a liability in the period in which it is
approved by a resolution of shareholders' general meeting.
(26) Business Combination
Accounting treatments for business combinations involving entities under common
control and not under common control.
A transaction constitutes a business combination when the Group obtains control
of one or more entities (or a group of assets or net assets). Business
combination is classified as either business combinations involving enterprises
under common control or business combinations not involving enterprises under
common control. For a transaction not involving enterprises under common
control, the acquirer determines whether acquired set of assets constitute a
business. The Group may elect to apply the simplified assessment method, the
concentration test, to determine whether an acquired set of assets is not a
business. If the concentration test is met and the set of assets is determined
not to be a business, no further assessment is needed. If the concentration test
is not met, the Group shall perform the assessment according to the guidance on
the determination of a business. When the set of assets the group acquired does
not constitute a business, acquisition costs should be allocated to each
identifiable assets and liabilities at their acquisition?date fair values. It is
not required to apply the accounting of business combination described as below.
(a) Business combination under common control
A business combination involving entities under common control is a business
combination in which all of the combining entities are ultimately controlled by
the same party or parties both before and after the business combination, and
that control is not transitory. The net assets obtained by the acquirer are
measured based on their carrying value in the consolidated financial statement
of the ultimate controlling party at the combination date. The difference
between the carrying value of the net assets obtained and the carrying value of
the consideration is adjusted against the capital surplus. If the capital
surplus is not sufficient to be offset, the remaining balance is adjusted
against retained earnings.
Costs incurred directly attributable to the business combination are recorded in
profit or loss when incurred. The transaction costs of the equity securities or
debt securities issued which are attributable to the business combination are
recorded in the initial recognition costs when acquired. The combination date is
the date on which one combining entity obtains control of other combining
entities.
096
(b) Business combination not under common control
A business combination involving entities not under common control is a business
combination in which all of the combining entities are not ultimately controlled
by the same party or parties both before and after the business combination. The
acquisition costs paid and the acquiree's identifiable asset, liabilities and
contingent liabilities, if the recognition criteria are met, are measured at
their fair value at the acquisition date. Where the cost of combination exceeds
the acquirer's interest in the fair value of the acquiree's identifiable net
assets, the difference is recognised as goodwill. Where the cost of combination
is less than the acquirer's interest in the fair value of the acquiree's
identifiable net assets, the difference is recognised directly in profit or
loss. Costs which are directly attributable to the business combination are
recorded in profit or loss when incurred. The transaction costs of the equity
securities or debt securities issued which are attributable to the business
combination are recorded in the initial recognition costs when acquired. The
acquisition date is the date on which the acquirer obtains control of the
acquiree.
(27) Basis of Preparation of Consolidated Financial Statements The scope of
consolidated financial statements includes the Company and its subsidiaries
controlled by the
Company. Control exists when the Group has all the following: power over the
investees; exposure, or rights to variable returns from its involvement with the
investees and has the ability to affect those returns through its power over the
investee. When assessing whether the Group has power, only substantive rights
(held by the Group and other parties) are considered.
Subsidiaries are fully consolidated from the date on which control is
transferred to the Group. They are deconsolidated from the date that control
ceases. Where a subsidiary was acquired, through a business combination
involving entities under common control, the financial statements of the
subsidiary are included in the consolidated financial statements based on the
carrying amounts of the assets and liabilities of the subsidiary in the
financial statements of the ultimate controlling party as if the combination had
occurred at the date that the ultimate controlling party first obtained control.
The opening balances and the comparative figures of the consolidated financial
statements are also restated. And their net profit earned before the combination
date shall be presented separately in the consolidated income statement.
When the accounting policies and accounting periods of subsidiaries are not
consistent with those of the Company, the Company will make necessary
adjustments to the financial statements of the subsidiaries in accordance with
the Company's accounting policies and accounting periods. Where a subsidiary was
acquired during the reporting period, through a business combination involving
entities not under common control, the identifiable assets and liabilities of
the acquired subsidiaries are included in the scope of consolidation from the
date that control commences, based on the fair value of those identifiable
assets and liabilities at the acquisition date.
097
All material intercompany balances, transactions and unrealised gains within the
Group are eliminated upon consolidation. The portion of the shareholders' equity
or net profit of the subsidiaries that is not attributable to the Company is
treated as non-controlling interests and total comprehensive income and
presented separately within shareholders' equity in the consolidated balance
sheet or within net profit and total comprehensive income in the consolidated
income statement.
(28) Segment Reporting
The Group determines its operating segments based on its organisational
structure, management requirements and internal reporting system. On the basis
of these operating segments, the Group determines the reporting and disclosure
of segmental information.
An operating segment refers to a component of the Group that simultaneously meet
the following criteria: (1) the component can generate revenue and incur
expenses in ordinary activities; (2) the component's operating results can be
regularly reviewed by the Group's management to make decisions about resource
allocation to the component and assess its performance; (3) the Group can obtain
financial information relating to the financial position, operating results and
cash flows, etc. of the component. When two or more operating segments exhibit
similar economic characteristics and meet certain requirements, the Group may
aggregate these operating segments into a single operating segment.
The Group also discloses total external revenue derived from other regions
outside China's mainland and the total non-current assets located in other
regions outside China's mainland. (29) Related Party If a party has the power to
control, jointly control or exercise significant influence over another party,
or vice versa, or where two or more parties are subject to common control or
joint control from another party, they are considered to be related parties.
Related parties may be individuals or enterprises. Enterprises with which the
Company is under common control only from the State and that have no other
related party relationships are not regarded as related parties.
098
Related parties of the Group and the Company include, but are not limited to the
following parties. (a) The holding company of the Company; (b) The subsidiaries
of the Company;
(c) The parties that are subject to common control with the Company; (d)
Investors that have joint control over the Group;
(e) Investors that have exercise significant influence over the Group; (f) Joint
ventures of the Group;
(g) Associates of the Group;
(h) Principle individual investors of the Group and close family members of such
individuals; (i) key management personnel of the Company or the Company's
holding company, and close family members
of such individuals;
(j) Other enterprises controlled, jointly controlled by the Group's major
investors individually or by family members close to them; (k) Other enterprises
controlled, jointly controlled, by key management personnel of the Company or
the
Company's holding company or by family members close to them; (l) Joint ventures
or associates of the Company with other members of the Group (including the
holding company and the subsidiaries); and (m) Joint ventures of the Group with
other joint ventures or associates of the Group. In addition to the related
parties stated above, the Company determines related parties based on the
disclosure requirements of Administrative Procedures on the Information
Disclosures of Listed Companies issued by the CSRC.
(30) Critical Accounting Estimates and Judgements
Estimates and judgements are continually evaluated and are based on historical
experience and other factors, including expectations of future events that are
believed to be reasonable under the circumstances. The critical accounting
estimates and key assumptions that have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities within the next
financial year are outlined below:
099
(a) Estimation of oil and natural gas reserves Estimates of oil and natural gas
reserves are key elements in the Group's investment decision-making process.
They are also important elements in testing for impairment related to oil and
gas production activities. Changes in proved oil and natural gas reserves,
particularly proved developed reserves, will affect unit-of-production
depreciation, depletion and amortisation recorded in the income statements for
property, plant and equipment related to oil and gas production activities. An
increase/reduction in proved developed reserves will decrease/ increase
depreciation, depletion and amortisation charges. Proved reserve estimates are
subject to revision, either upward or downward, based on new information, such
as from development drilling and production activities or from changes in
economic factors, including product prices, contract terms, evolution of
technology or development plans, etc.
(b) Estimation of impairment of fixed assets and oil and gas properties Fixed
assets and oil and gas properties are reviewed for possible impairments when
events or changes in circumstances indicate that the carrying amount may not be
recoverable. Determination as to whether and how much an asset is impaired
involves management estimates and judgements such as future price of crude oil
and natural gas, refined and chemical products, the production costs, the
product mix, production volumes, production profile and the oil and gas
reserves. However, the impairment reviews and calculations are based on
assumptions that are consistent with the Group's business plans taking into
account current economic conditions. Favourable changes to some assumptions, or
not updating assumptions previously made, may allow the Group to avoid the need
to impair any assets, whereas unfavourable changes may cause the assets to
become impaired. For example, when the assumed future price and production
profile of crude oil used for the expected future cash flows are different from
the actual price and production profile of crude oil respectively experienced in
the future, the Group may either over or under recognise the impairment losses
for certain assets. (c) Estimation of asset retirement obligations Provision is
recognised for the future decommissioning and restoration of oil and gas
properties. The amounts of the provision recognised are the present values of
the estimated future expenditures. The estimation of the future expenditures is
based on current local conditions and requirements, including legal
requirements, technology, price level, etc. In addition to these factors, the
present values of these estimated future expenditures are also impacted by the
management plan for the decommissioning of oil and gas properties, the
estimation of the economic lives of oil and gas properties and estimates of
discount rates. Changes in any of these estimates will impact the operating
results and the financial position of the Group over the remaining economic
lives of the oil and gas properties. According to changes in the internal and
external environment, accounting standards and group asset retirement expense
measures and other relevant regulations, oil and gas field companies recalculate
their asset retirement obligations of oil and gas properties based on the latest
parameters to more objectively reflect the actual situation of the Group's asset
retirement obligation of oil and gas properties.
100
(31) Change in significant accounting policy
In 2022, the Ministry of Finance promulgated the Notice on the Issuance of
Interpretation of Accounting Standards for Business Enterprises No. 16
(hereinafter referred to as Interpretation No. 16). From 1 January 2023 the
Group and the Company took effect Interpretation No. 16 and recognize deferred
tax on transactions that, on initial recognition, give rise to equal amounts of
taxable and deductible temporary differences. The cumulative effect of
recognising these adjustments is recognized in retained earnings and other
related financial statement items at the beginning of the earliest comparative
period. The Group and the Company have retroactively adjusted the single
transactions that existed between 1 January 2022 and the effective date and the
comparable financial statements for the year 2022 have been restated
accordingly. Other than the above effects, the amendments have no material
impact on the financial statements of the Group and the Company.
(a) Accounting treatment of recognition of deferred tax related to assets and
liabilities arising from a single transaction not appling the initial
recognition exemption Content and reason of accounting policy
change
Affected financial
statement items
Amount affected
January 1, 2022
The Group The Company
The Group and the Company accordingly
recognise deferred tax liabilities and
deferred tax assets for the equivalent
amount of taxable and deductible temporary
differences arising from lease transactions
in which lease liabilities and right-of-use
assets are initially recognised at the
commencement date of the lease term, and
transactions such as oil and gas properties
in which asset retirement obligations exist
and provisions are recognised and included
in the cost of the related assets.
Deferred tax assets (87) -
Deferred tax liabilities 2,966 3,020
Undistributed profits (2,751) (2,718)
Surplus reserves (302) (302)
December 31, 2022
The Group The Company
Deferred tax assets (3,406) (3,543)
Deferred tax liabilities 281 328
Undistributed profits (3,300) (3,484)
Surplus reserves (387) (387)
For the six months ended June 30, 2022
The Group The Company
Taxtion (764) (602)
101
5 TAXATION
The principal taxes and related tax rates of the Group are presented as below:
Types of taxes Tax rate Tax basis and method Value Added Tax (the "VAT") 13%,
9%, 6% Based on taxable value added amount. Tax payable is calculated using the
taxable sales amount multiplied by the applicable tax rate less current period's
deductible VAT input.
Resource Tax 6% Based on the revenue from sales of crude oil and natural gas.
Consumption Tax Based on quantities Based on sales quantities of taxable
products. RMB 1.52 per litre for unleaded gasoline, naphtha, solvent oil and
lubricant. RMB 1.2 per litre for diesel and fuel oil. Corporate Income Tax 15%
to 82% Based on taxable income. Crude Oil Special Gain Levy 20% to 40% Based on
the sales of domestic crude oil at prices higher than a specific level.
City Maintenance and Construction Tax 1%, 5% or 7% Based on the actual VAT and
consumption tax paid. Educational surcharge 2% or 3% Based on the actual VAT and
consumption tax paid. Urban and Township Land Use Tax RMB 0.9~30 Based on the
actual land area occupied in each provinces, autonomous regions and
municipalities.
According to "Notice Concerning Import Tax Policies Related to Exploration,
Development and Utilization of Energy Resources During the 14th Five-Year Plan
Period"(Cai Guan Shui [2021] No.17) jointly issued by Ministry of Finance, State
Taxation Administration and General Administration of Customs, for the period
from January 1, 2021 to December 31, 2025, the import value-added tax (VAT) of
the import link shall be returned in proportion to the projects of cross-border
natural gas pipelines and imported liquefied natural gas (LNG) receiving storage
and transportation units approved by National Development and Reform Commission.
This also includes natural gas imported from the expansion project of the import
LNG receiving storage and transportation plant approved by the provincial
governments. The import duties of equipment, instruments, zero accessories and
special tools shall be exempted to the self-employed projects carrying out oil
(natural gas) exploration and development operations in particular areas within
the territory of China. The import duties and import value-added tax (VAT) of
equipment, instruments, zero accessories and special tools shall be exempted to
the Sino-foreign cooperation project carrying out oil (natural gas) exploration
and development operations within the winning block of onshore oil (natural gas)
approved by the State, projects carrying out oil (natural gas) exploration and
development operations in China's oceans, emergency rescue projects for offshore
oil and gas pipelines, and projects carrying out coal seam gas exploration and
development operations in China.
102
Ministry of Finance and State Taxation Administration jointly issued the "Notice
on Reduction of Resource Tax Assessed on Shale Gas" (Cai Shui [2018] No.26) on
March 29, 2018. Pursuant to such notice, in order to promote the development and
utilization of shale gas and effectively increase natural gas supply, from April
1, 2018 to March 31, 2021, a reduction of 30% will apply to the resource tax
assessed on shale gas (at the prescribed tax rate of 6%). On March 15, 2021,
Ministry of Finance and State Taxation Administration jointly issued "Notice on
Extending the Implementation Period of Some Preferential Tax Policies" (Notice
2021 No.6 issued by Ministry of Finance and State Taxation Administration) to
announce the implementation period of that preferential tax policies would be
extended to December 31, 2023.
Pursuant to the Notice from Ministry of Finance on the "Increase of the
Threshold of the Crude Oil Special Gain Levy" (Cai Shui [2014] No. 115), the
threshold of the crude oil special gain levy shall be USD 65 per barrel, which
has 5 levels and is calculated and charged according to the progressive and
valorem rates on the excess amounts from January 1, 2015.
In accordance with the Circular jointly issued by Ministry of Finance, the
General Administration of Customs of the PRC and State Taxation Administration
on Issues Concerning Tax Policies for In-depth Implementation of Western
Development Strategy (Cai Shui [2011] No.58), the corporate income tax for the
enterprises engaging in the encouraged industries in the Western China Region is
charged at a preferential corporate income tax rate of 15% from January 1, 2011
to December 31, 2020. Certain branches and subsidiaries of the Company in the
Western China Region obtained the approval for the use of the preferential
corporate income tax rate of 15%. Ministry of Finance, State Taxation
Administration and the NDRC issued the Announcement on Continuing the Income Tax
Policy for Western Development (Notice No.23 of 2020 of the MOF, the SAT, the
NDRC), the corporate income tax for the enterprises engaging in the encouraged
industries in the Western China Region is charged at a preferential corporate
income tax rate of 15% from January 1, 2021 to December 31, 2030. According to
"Notice Concerning Levy of Import Consumption Tax on Certain Refined Oil
Products"(Notice 2021 No.19 issued by Ministry of Finance, General
Administration of Customs and State Taxation Administration), which takes effect
on 12 June 2021, for imported goods under HS code 27075000 and whose aromatic
hydrocarbon mixtures lower than 95% by volume distils below 200 degrees Celsius,
the import consumption tax shall be levied at the unit tax rate of 1.52
RMB/liter for naphtha; Import consumption tax on naphtha shall be levied at the
unit tax rate of 1.52 yuan/liter for imported products classified into HS code
27079990 and 27101299. For the imported products which are classified into HS
code 27150000 and the mineral oil distilled below 440 degrees Celsius is more
than 5% by volume, it shall be regarded as fuel oil, and the import consumption
tax shall be levied at the unit tax of 1.2 yuan/ liter.
103
6 BUSINESS COMBINATION AND CONSOLIDATED FINANCIAL STATEMENTS
(1) Principal subsidiaries
Attributable equity
interest
%
Company name
Acquisition
method
Country
of
incorporation
Registered
capital Principal activities
Type of
legal
entity
Legal
representative
Closing
effective
investment
cost
Direct
holding
Indirect
holding
Attributable
voting
rights %
Consolidated
or not
Daqing Oilfield
Company
Limited
Established PRC 47,500 Exploration, production and sale
of crude oil and natural gas
Limited
liability
company
Zhu
Guowen
66,720 100.00 - 100.00 Yes
CNPC
Exploration and
Development
Company
Limited (i)
Business
combination
under
common
control
PRC 16,100 Exploration, production and sale
of crude oil and natural gas
outside the PRC
Limited
liability
company
Chen
Jintao
23,778 50.00 - 57.14 Yes
PetroChina Hong
Kong Limited
Established HK HK Dollar
("HKD")
7,592
million
Investment holding. The principal
activities of its subsidiaries,
associates and joint ventures
are the exploration, production
and sale of crude oil in and
outside the PRC as well
as natural gas sale and
transmission in the PRC
Limited
liability
company
N/A 25,590 100.00 - 100.00 Yes
PetroChina
International
Investment
Company
Limited
Established PRC 31,314 Investment holding. The principal
activities of its subsidiaries,
associates and joint
ventures are the exploration,
development and production of
crude oil, natural gas, oilsands
and coalbed methane outside
the PRC
Limited
liability
company
Ye
Xiandeng
35,041 100.00 - 100.00 Yes
PetroChina
International
Company
Limited
Established PRC 18,096 Marketing of refined products
and trading of crude oil and
petrochemical products,
storage, investment in refining,
chemical engineering, storage
facilities, service station, and
transportation facilities and
related business in and outside
the PRC
Limited
liability
company
Wu
Junli
18,953 100.00 - 100.00 Yes
PetroChina
Sichuan
Petrochemical
Company
Limited
Established PRC 10,000 Engaged in oil refining,
petrochemical, chemical
products production,
sales, chemical technology
development, technical transfer
and services
Limited
liability
company
Wang
Qiang
21,600 90.00 - 90.00 Yes
KunLun Energy
Company
Limited (ii)
Business
combination
under
common
control
Bermuda HK Dollar
("HKD")
160 million
Investment holding. The principal
activities of its principal
subsidiaries, associates and
joint ventures are the sales of
natural gas, sales of liquefied
petroleum gas and liquefied
natural gas processing and
terminal business in the
PRC and the exploration
and production of crude oil
and natural gas in the PRC,
the Republic of Kazakhstan,
the Sultanate of Oman, the
Republic of Peru, the Kingdom
of Thailand and the Republic of
Azerbaijan
Limited
liability
company
Fu Bin HK Dollar
("HKD")
87 million
- 54.38 54.38 Yes
(i) The Company consolidated the financial statements of the entity because it
is exposed to, or has rights to, variable returns from its involvement with the
entity and has the ability to affect those returns through its power over the
entity. (ii) Kunlun Energy Co., Ltd. is a company listed on The Stock Exchange
of Hong Kong Limited.
104
(2) Exchange rates of international operations' major financial statement items
Company name Assets and liabilities
June 30, 2023 December 31,2022
PetroKazakhstan Inc. 1 USD =7.2258 RMB 1 USD =6.9646 RMB
PetroChina Hong Kong Limited 1 HKD =0.9220 RMB 1 HKD =0.8933 RMB Singapore
Petroleum Company Limited 1 USD =7.2258 RMB 1 USD =6.9646 RMB Owner's equity
items, except for "undistributed profit", are using the spot exchange rate at
the time of incurrence. Revenue, expense and cash flow items are using the spot
rate or an approximate spot exchange rate on the date of the transaction.
7 CASH AT BANK AND ON HAND
June 30, 2023 December 31, 2022
Cash on hand 13 12
Cash at bank 258,429 221,483
Other cash balances 4,112 3,554
262,554 225,049
The Group's cash at bank and on hand included the following foreign currencies
as of June 30, 2023:
Foreign currency Exchange rate RMB equivalent
USD 15,986 7.2258 115,512
HKD 7,275 0.9220 6,708
KZT 12,087 0.0159 192
Others 651
123,063
The Group's cash at bank and on hand included the following foreign currencies
as of December 31, 2022:
Foreign currency Exchange rate RMB equivalent
USD 13,249 6.9646 92,274
HKD 7,032 0.8933 6,281
KZT 24,304 0.0151 367
Others 787
99,709
105
The Group's cash at bank and on hand in foreign currencies mainly comprise cash
at bank. The Group's cash at bank and on hand included margin account deposits
with carrying amount of RMB 2,140 as impawn USD borrowings as of June 30, 2023
(December 31, 2022: RMB 2,586). 8 DERIVATIVE FINANCIAL ASSETS AND DERIVATIVE
FINANCIAL LIABILITIES Derivative financial assets and derivative financial
liabilities of the Group are mainly commodity futures, commodity swaps and
commodity forwards contracts. See Note 62.
9 ACCOUNTS RECEIVABLE
The Group The Company
June
30, 2023
December
31, 2022
June
30, 2022
December
31, 2022
Accounts receivable 83,900 74,917 18,169 18,404
Less: Provision for bad debts (2,539) (2,889) (478) (435)
81,361 72,028 17,691 17,969
The aging of accounts receivable and related provision for bad debts are
analysed as follows:
The Group
June 30, 2023 December 31, 2022
Amount
Percentage of
total balance %
Provision for
bad debts Amount
Percentage of
total balance %
Provision for
bad debts
Within 1 year 81,279 97 (737) 72,319 96 (1,012)
1 to 2 years 757 1 (276) 544 1 (278)
2 to 3 years 343 - (107) 844 1 (542)
Over 3 years 1,521 2 (1,419) 1,210 2 (1,057)
83,900 100 (2,539) 74,917 100 (2,889)
The Company
June 30, 2023 December 31, 2022
Amount
Percentage of
total balance %
Provision for
bad debts Amount
Percentage of
total balance %
Provision for
bad debts
Within 1 year 17,547 97 (82) 17,936 98 (38)
1 to 2 years 162 1 (1) 4 - -
2 to 3 years 16 - - 203 1 (171)
Over 3 years 444 2 (395) 261 1 (226)
18,169 100 (478) 18,404 100 (435)
106
The aging is counted starting from the date when accounts receivable are
recognised. The Group measures loss allowance for accounts receivable at an
amount equal to lifetime ECLs. The ECLs were calculated by reference to the
historical actual credit loss experience. The rates were considered the
differences between economic conditions during the period over which the
historical data has been collected, current conditions and the Group's view of
economic conditions over the expected lives of the receivables. The Group
performed the calculation of ECL rates by the operating segment and geography.
Gross carrying
amount
Impairment
provision on
individual basis
Impairment provision
on provision matrix basis
Loss
June 30, 2023 allowance
Weighted-average
loss rate
Impairment
provision
Current (not past due) 78,300 - 0.8% 636 636
Within one year past due 3,212 45 1.8% 58 103
One-two years past due 598 - 45.3% 271 271
Two-three years past due 305 - 37.0% 113 113
Over three years past due 1,485 621 92.0% 795 1,416
83,900 666 1,873 2,539
Gross carrying
amount
Impairment
provision on
individual basis
Impairment provision
on provision matrix basis
Loss
December 31, 2022 allowance
Weighted-average
loss rate
Impairment
provision
Current (not past due) 68,951 - 1.1% 803 803
Within one year past due 3,951 380 1.1% 38 418
One-two years past due 476 - 55.3% 263 263
Two-three years past due 522 172 70.3% 246 418
Over three years past due 1,017 446 94.7% 541 987
74,917 998 1,891 2,889
As of June 30, 2023, the top five debtors of accounts receivable of the Group
amounted to RMB 19,594, representing 23% of total accounts receivable, and the
corresponding balance of provision for bad and doubtful debts is RMB 547 (As of
December 31, 2022, the top five debtors of accounts receivable of the Group
amounted to RMB 20,574, representing 27% of total accounts receivable, and the
corresponding balance of provision for bad and doubtful debts is RMB 529).
During the six months ended June 30, 2023 and the six months ended June 30,
2022, the Group had no significant write-off of accounts receivable.
107
10 RECEIVABLES FINANCING
Receivables financing mainly represents bills of acceptance issued by banks for
the sale of goods and rendering of services. The Group's business model of
financial assets at fair value through other comprehensive income is achieved
both by collecting contractual cash flows and selling of these assets. On June
30, 2023 and December 31, 2022, all receivables financing of the Group are due
within one year.
11 ADVANCES TO SUPPLIERS
June 30, 2023 December 31, 2022
Advances to suppliers 24,578 14,261
Less: Provision for impairment (341) (341)
24,237 13,920
As of June 30, 2023 and December 31,2022, advances to suppliers of the Group are
mainly aged within one year.
As of June 30, 2023, the top five debtors of advances to suppliers of the Group
amounted to RMB 14,237, representing 58% of total advances to suppliers (As of
December 31, 2022, the top five debtors of advances to suppliers of the Group
amounted to RMB 8,979, representing 63% of total advances to suppliers).
12 OTHER RECEIVABLES
The Group The Company
June
30, 2023
December
31, 2022
June
30, 2023
December
31, 2022
Interest receivable 468 910 2 -
Dividends receivable 282 312 21 41
Other receivables (a) 38,416 44,627 13,383 9,369
Total 39,166 45,849 13,406 9,410
108
(a) The aging analysis of other receivables and the related provision for bad
debts are analysed as follows: The Group June 30, 2023 December 31, 2022
Amount
Percentage of
total balance %
Provision for
bad debts Amount
Percentage of
total balance %
Provision for
bad debts
Within 1 year 33,444 82 (130) 39,376 83 (126)
1 to 2 years 1,805 4 (193) 1,913 4 (152)
2 to 3 years 877 2 (18) 823 2 (33)
Over 3 years 5,048 12 (2,417) 5,298 11 (2,472)
41,174 100 (2,758) 47,410 100 (2,783)
The Company
June 30, 2023 December 31, 2022
Amount
Percentage of
total balance %
Provision for
bad debts Amount
Percentage of
total balance %
Provision for
bad debts
Within 1 year 11,029 74 (27) 7,004 66 (25)
1 to 2 years 1,925 13 (949) 1,882 17 (903)
2 to 3 years 424 3 (14) 364 3 (48)
Over 3 years 1,415 10 (420) 1,545 14 (450)
14,793 100 (1,410) 10,795 100 (1,426)
The aging is counted starting from the date when other receivables are
recognised. As of June 30, 2023, the top five debtors of other receivables of
the Group amounted to RMB 15,448, representing 38% of total other receivables,
and there is no provision for bad and doubtful debts (As of December 31, 2022,
the top five debtors of other receivables of the Group amounted to RMB 19,170,
representing 40% of total other receivables, and there is no provision for bad
and doubtful debts). As of June 30, 2023 and December 31, 2022, the Group's
other receivables are mainly in the first stage. During the six months ended
June 30, 2023 and the six months ended June 30, 2022, the Group had no
significant write-off of other receivables.
109
13 INVENTORIES
June 30, 2023 December 31, 2022
Cost
Crude oil and other raw materials 62,555 56,756
Work in progress 15,560 14,448
Finished goods 96,279 104,722
Spare parts and consumables 113 109
174,507 176,035
Less: Write down in inventories (6,345) (8,284)
Net book value 168,162 167,751
14 OTHER CURRENT ASSETS
The balance of other current assets mainly consists of value-added tax
recoverable and prepaid income tax.
15 INVESTMENT IN OTHER EQUITY INSTRUMENTS
June 30, 2023 December 31, 2022
Houpu Clean Energy Group Co., Ltd. 294 251
China Pacific. Insurance (Group) Co., Ltd. - 120
Other items 589 579
883 950
16 LONG-TERM EQUITY INVESTMENTS
The Group
December
31, 2022 Additions Reduction
June
30, 2023
Associates and joint ventures (a) 275,106 12,020 (2,418) 284,708
Less : Provision for impairment (b) (5,435) (182) 10 (5,607)
269,671 279,101
The Company
December
31, 2022 Additions Reduction
June
30, 2023
Subsidiaries (c) 262,900 2,936 (198) 265,638
Associates and joint ventures 209,286 8,042 (1,734) 215,594
Less : Provision for impairment (391) - 10 (381)
471,795 480,851
110
As of June 30, 2023, the above-mentioned investments are not subject to
restriction on conversion into cash or remittance of investment income.
(a) Principal associates and joint ventures of the Group Company
name
Country of
incorporation Principal activities
Registered
capital
Interest held%
Voting
rights
%
Accounting
method
Strategic
decisions
relating
to the
Group's
Direct Indirect activities
China Oil and
Gas Piping
Network
Corporation
("PipeChina")
PRC Pipeline transport,
storage service,
import of equipment,
import and export of
techniques, science and
technology research,
research and application
of informatization,
technology consulting,
technology service,
technology transfer,
promotion of technology
500,000 29.90 - 29.90 Equity
method
Yes
China
Petroleum
Finance Co.,
Ltd. ("CP
Finance")
PRC Deposits, loans,
settlement, lending, bills
acceptance discounting,
guarantee and other
banking business
16,395 32.00 - 32.00 Equity
method
No
CNPC Captive
Insurance
Co., Ltd.
PRC Property loss insurance,
liability insurance, credit
insurance and deposit
insurance; as well as the
application of the above
insurance reinsurance
and insurance capital
business
6,000 49.00 - 49.00 Equity
method
No
China Marine
Bunker
(PetroChina)
Co., Ltd.
PRC Oil import and export
trade and transportation,
sale and storage
1,000 - 50.00 50.00 Equity
method
No
Mangistau
Investment
B.V.
Netherlands Engaged in investment
activities, the principal
activities of its
main subsidiaries
are exploration,
development and sales
of oil and gas
USD 131
million
- 50.00 50.00 Equity
method
No
Trans-Asia Gas
Pipeline Co.,
Ltd.
PRC Main contractor,
investment holding,
investment management,
investment consulting,
enterprise management
advisory, technology
development, promotion
and technology
consulting
5,000 - 50.00 50.00 Equity
method
No
111
Investments in principal associates and joint ventures are listed below:
Investment
cost
December
31, 2022
Investment
income
recognised
under equity
method
Other
comprehensive
income
Cash
dividend
declared Others
June
30, 2023
PipeChina 149,500 157,045 5,316 - - (538) 161,823
CP Finance 10,223 26,662 969 458 (455) - 27,634
CNPC Captive
Insurance Co., Ltd. 2,450 3,545 117 - (47) - 3,615
China Marine Bunker
(PetroChina) Co., Ltd. 1,298 978 24 2 - - 1,004
Mangistau Investment
B.V. 21 4,216 160 108 - - 4,484
Trans-Asia Gas
Pipeline Co., Ltd. 2,500 23,590 1,260 100 - - 24,950
Interest in associates
Summarised consolidated statement of financial information in respect of the
Group's principal associates and reconciliation to carrying amount is as
follows: PipeChina CP Finance
CNPC Captive
Insurance Co., Ltd.
June
30, 2023
December
31, 2022
June
30, 2023
December
31, 2022
June
30, 2023
December
31, 2022
Percentage ownership
interest (%) 29.90 29.90 32.00 32.00 49.00 49.00
Current assets 126,915 104,889 436,713 401,971 10,748 8,859
Non-current assets 820,785 816,301 85,222 126,363 1,232 2,349
Current liabilities 115,790 132,266 432,790 442,283 965 470
Non-current liabilities 243,221 199,675 3,880 3,823 3,638 3,504
Net assets 588,689 589,249 85,265 82,228 7,377 7,234
Net assets attributable to
owners of the Company 541,215 525,235 85,265 82,228 7,377 7,234
Group's share of net assets 161,823 157,045 27,285 26,313 3,615 3,545
Goodwill - - 349 349 - -
Carrying amount of interest
in associates 161,823 157,045 27,634 26,662 3,615 3,545
112
Summarised statement of comprehensive income and dividends received by the Group
is as follows: PipeChina CP Finance
CNPC Captive
Insurance Co., Ltd.
For the six
months
ended
June 30,
2023
For the six
months
ended
June 30,
2022
For the six
months
ended
June 30,
2023
For the six
months
ended
June 30,
2022
For the six
months
ended
June 30,
2023
For the six
months
ended
June 30,
2022
Operating income 60,583 55,516 8,414 6,150 492 355
Net profit 20,393 18,080 3,027 2,756 238 214
Other comprehensive income - - 1,432 531 - -
Total comprehensive income 20,393 18,080 4,459 3,287 238 214
Total comprehensive income
attributable to owners of the
Company 17,780 14,740 4,459 3,287 238 214
Group's share of total
comprehensive income 5,316 4,407 1,427 1,052 117 105
Dividends received by the Group - - 455 414 47 44
Interest in joint ventures
Summarised consolidated balance sheet as included in their own financial
statements, adjusted for fair value adjustments and differences in accounting
policies in respect of the Group's principal joint ventures and reconciliation
to carrying amount is as follows:
China Marine Bunker
(PetroChina) Co., Ltd. Mangistau Investment B.V.
Trans-Asia Gas
Pipeline Co., Ltd.
June
30, 2023
December
31, 2022
June
30, 2023
December
31, 2022
June
30, 2023
December
31, 2022
Percentage ownership
interest (%) 50.00 50.00 50.00 50.00 50.00 50.00
Non-current assets 1,760 1,803 10,590 10,392 51,377 48,715
Current assets 11,379 10,551 1,963 1,196 726 644
Including: cash and cash
equivalents 1,749 1,661 836 431 718 634
Non-current liabilities 197 196 2,835 2,333 2,105 2,105
Current liabilities 10,505 9,778 750 823 98 74
Net assets 2,437 2,380 8,968 8,432 49,900 47,180
Net assets attributable to
owners of the Company 2,122 2,070 8,968 8,432 49,900 47,180
Group's share of net assets 1,061 1,035 4,484 4,216 24,950 23,590
Less : Provision for
impairment (57) (57) - - - -
Carrying amount of interest
in joint ventures 1,004 978 4,484 4,216 24,950 23,590
113
Summarised statement of comprehensive income and dividends received by the Group
is as follows:
China Marine Bunker
(PetroChina) Co., Ltd.
Mangistau Investment
B.V.
Trans-Asia Gas Pipeline
Co., Ltd.
For the
six months
ended June
30, 2023
For the
six months
ended June
30, 2022
For the
six months
ended June
30, 2023
For the
six months
ended June
30, 2022
For the
six months
ended June
30, 2023
For the
six months
ended June
30, 2022
Operating income 26,579 40,154 6,266 6,792 8 7
Finance expenses (101) (70) (131) (146) (15) (57)
Including: Interest income 50 5 3 4 15 13
Interest expense (148) (68) (106) (66) (23) (24)
Taxation (18) (13) (309) (505) (47) -
Net profit 65 42 320 1,070 2,520 1,767
Other comprehensive income/(loss) 7 59 216 (504) 200 (531)
Total comprehensive income 72 101 536 566 2,720 1,236
Total comprehensive income
attributable to owners of the Company 52 64 536 566 2,720 1,236
Group's share of total comprehensive
income 26 32 268 283 1,360 618
Dividends received by the group - - - 627 - -
(b) Provision for impairment
June 30, 2023 December 31, 2022
Associates and joint ventures
Petrourica S.A. (3,463) (3,345)
PetroChina Shouqi Sales Company Limited (60) (60)
PetroChina Beiqi Sales(Beijing) Company Limited (49) (49)
Others (2,035) (1,981)
(5,607) (5,435)
(c) Subsidiaries
Investment in subsidiaries:
Investment
cost
December
31, 2022 Additions Deduction
June
30, 2023
Daqing Oilfield Company Limited 66,720 66,720 - - 66,720
PetroChina International Investment Company Limited 35,041 35,041 - - 35,041
PetroChina Hong Kong Limited 25,590 25,590 - - 25,590
CNPC Exploration and Development Company Limited 23,778 23,778 - - 23,778
PetroChina Sichuan Petrochemical Company Limited 21,600 21,600 - - 21,600
PetroChina International Company Limited 18,953 18,953 - - 18,953
Others 71,218 2,936 (198) 73,956
Total 262,900 2,936 (198) 265,638
114
Summarised financial information in respect of the Group's principal
subsidiaries with significant non-controlling interest is as follows: Summarised
balance sheet is as follows: CNPC Exploration and
Development Company Limited
PetroChina Sichuan
Petrochemical Company Limited
June
30, 2023
December
31, 2022
June
30, 2023
December
31, 2022
Percentage ownership interest (%) 50.00 50.00 90.00 90.00
Current assets 23,847 20,186 3,655 4,391
Non-current assets 198,148 190,630 24,336 22,131
Current liabilities 23,915 15,463 2,683 1,700
Non-current liabilities 14,588 20,904 277 313
Net assets 183,492 174,449 25,031 24,509
Summarised statement of comprehensive income is as follows:
CNPC Exploration and
Development Company Limited
PetroChina Sichuan
Petrochemical Company Limited
For the six
months ended
June 30, 2023
For the six
months ended
June 30, 2022
For the six
months ended
June 30, 2023
For the six
months ended
June 30, 2022
Operating income 24,965 29,067 29,549 28,067
Net profit 7,905 7,552 480 926
Total comprehensive income 13,043 12,994 480 926
Profit attributable to non-controlling
interests 4,162 4,238 48 93
Dividends paid to non-controlling interests 2,000 4,213 - 44
Summarised statement of cash flow is as follows:
CNPC Exploration and
Development Company Limited
PetroChina Sichuan
Petrochemical Company Limited
For the six
months ended
June 30, 2023
For the six
months ended
June 30, 2022
For the six
months ended
June 30, 2023
For the six
months ended
June 30, 2022
Net cash flows from/(used for) operating
activities. 3,287 9,091 3,277 (1,420)
115
17 FIXED ASSETS
December 31, 2022 Additions Reduction June 30, 2023
Cost
Buildings 275,004 3,151 (567) 277,588
Equipment and Machinery 849,136 16,444 (1,372) 864,208
Motor Vehicles 21,004 211 (317) 20,898
Others 49,132 1,969 (1,161) 49,940
Total 1,194,276 21,775 (3,417) 1,212,634
Accumulated depreciation
Buildings (125,730) (6,301) 392 (131,639)
Equipment and Machinery (497,093) (18,604) 998 (514,699)
Motor Vehicles (16,434) (459) 274 (16,619)
Others (26,503) (1,239) 473 (27,269)
Total (665,760) (26,603) 2,137 (690,226)
Fixed assets, net
Buildings 149,274 145,949
Equipment and Machinery 352,043 349,509
Motor Vehicles 4,570 4,279
Others 22,629 22,671
Total 528,516 522,408
Provision for impairment
Buildings (6,478) (2) 48 (6,432)
Equipment and Machinery (49,741) (14) 47 (49,708)
Motor Vehicles (100) - 1 (99)
Others (9,170) (547) 11 (9,706)
Total (65,489) (563) 107 (65,945)
Net book value
Buildings 142,796 139,517
Equipment and Machinery 302,302 299,801
Motor Vehicles 4,470 4,180
Others 13,459 12,965
Total 463,027 456,463
116
Depreciation charged to profit or loss provided on fixed assets for the six
months ended June 30, 2023 was RMB 24,466 (for the six months ended June 30,
2022: RMB 22,645). Cost transferred from construction in progress to fixed
assets was RMB 16,992 (for the six months ended June 30, 2022: RMB 7,839) . As
of June 30, 2023, the Group's fixed assets under operating leases are mainly
equipment and machinery, the net book value of which amounted to RMB 1,675
(December 31, 2022: RMB 1,704) . As of June 30, 2023, Fixed assets with a book
value of RMB 791(December 31, 2022: RMB 861) are used as collateral for
long-term borrowings of RMB 926 (December 31, 2022: RMB 1,074) (Note 34).
18 OIL AND GAS PROPERTIES
December 31, 2022 Additions Reduction June 30, 2023
Cost
Mineral interests 72,719 3,434 - 76,153
Wells and related facilities 2,580,885 70,412 (1,243) 2,650,054
Total 2,653,604 73,846 (1,243) 2,726,207
Accumulated depletion
Mineral interests (25,360) (1,822) - (27,182)
Wells and related facilities (1,692,265) (86,749) 1,020 (1,777,994)
Total (1,717,625) (88,571) 1,020 (1,805,176)
Oil and gas properties, net
Mineral interests 47,359 48,971
Wells and related facilities 888,620 872,060
Total 935,979 921,031
Provision for impairment
Mineral interests (33,540) (1,899) - (35,439)
Wells and related facilities (69,829) (558) 7 (70,380)
Total (103,369) (2,457) 7 (105,819)
Net book value
Mineral interests 13,819 13,532
Wells and related facilities 818,791 801,680
Total 832,610 815,212
117
Depletion charged to profit or loss provided on oil and gas properties for the
six months ended June 30, 2023 was RMB 79,035 (for the six months ended June 30,
2022: RMB 70,744). Cost transferred from construction in progress to oil and gas
properties was RMB 57,582 (for the six months ended June 30, 2022: RMB 46,394) .
As of June 30, 2023, the asset retirement obligations capitalised in the cost of
oil and gas properties amounted to RMB 128,839 (December 31, 2022: RMB 127,213).
Related depletion charge for the six months ended June 30,
2023 was RMB 2,795 (for the six months ended June 30, 2022: RMB 2,907).
19 CONSTRUCTION IN PROGRESS
Project Name Budget
December
31, 2022 Additions
Transferred
to fixed
assets or
oil and gas
properties
Other
Reduction
June
30, 2023
Proportion
of construction
compared
to budget
Capitalised
interest
expense
Including:
capitalised
interest
expense
for current
year
Source
of
fund
Refining and
chemical
transformation
and upgrading
project of Jilin
Petrochemical
Company 33,926 586 1,013 - - 1,599 5% - - Self
Guangxi
Petrochemical
integration of
refining and
petrochemical
transformation
and upgrading
project 30,459 96 1,101 (858) - 339 4% - - Self
Fujian LNG
receiving
station project 5,628 86 42 - - 128 2% - - Self
Others 204,087 79,576 (73,716) (4,884) 205,063 2,131 199
204,855 81,732 (74,574) (4,884) 207,129 2,131 199
Less:
Provision for
impairment (7,979) (101) - - (8,080)
196,876 199,049
For the six months ended June 30, 2023, the capitalised interest expense
amounted to RMB 199 (for the six months ended June 30, 2022: RMB 674). The
average annual interest rates used to determine the capitalised amount for the
six months ended June 30, 2023 are 3.49% (for the six months ended June 30,
2022: 4.19%).
118
20 LEASES
The leases where the Group is a lessee
Right-of-use Assets
December 31, 2022 Additions Reduction June 30, 2023
Cost
Land 102,643 160 (92) 102,711
Buildings 58,633 1,643 (1,289) 58,987
Equipment and Machinery 6,595 331 (143) 6,783
Others 1,191 131 (292) 1,030
Total 169,062 2,265 (1,816) 169,511
Accumulated depreciation
Land (13,897) (1,701) 45 (15,553)
Buildings (18,644) (3,259) 860 (21,043)
Equipment and Machinery (2,957) (866) 118 (3,705)
Others (753) (61) 286 (528)
Total (36,251) (5,887) 1,309 (40,829)
Provision for impairment
Buildings (76) - - (76)
Total (76) - - (76)
Net book value
Land 88,746 87,158
Buildings 39,913 37,868
Equipment and Machinery 3,638 3,078
Others 438 502
Total 132,735 128,606
The Group's use of right assets mainly include leased land, buildings, equipment
and machinery. The leases underlying assets classified as buildings are mainly
the leased gas filling stations, oil storages and office buildings. The leases
underlying assets classified as equipment and machinery are mainly drilling
equipment, production equipment and other movable equipment.
Depreciation charged to profit or loss provided on right-of-use assets for the
six months ended June 30, 2023 was RMB 5,887 (for the six months ended June 30,
2022: RMB 6,064).
119
Lease Liabilities
June 30, 2023 December 31, 2022
Lease liabilities 123,225 125,760
Less: Lease liabilities due within one year (Note 33) (7,412) (7,560)
115,813 118,200
Analysis of the undiscounted cash flow of the lease liabilities is as follows ?
June 30, 2023 December 31, 2022
Within 1 year 12,981 13,244
Between 1 to 2 years 11,614 11,301
Between 2 to 5 years 30,309 30,995
Over 5 years 144,330 148,974
199,234 204,514
21 INTANGIBLE ASSETS
December 31, 2022 Additions Reduction June 30, 2023
Cost
Land use rights 99,433 2,330 (212) 101,551
Franchise 24,003 144 (34) 24,113
Patents 6,853 8 (1) 6,860
Others 20,424 652 (247) 20,829
Total 150,713 3,134 (494) 153,353
Accumulated amortisation
Land use rights (28,608) (1,565) 36 (30,137)
Franchise (9,981) (370) 5 (10,346)
Patents (4,251) (117) - (4,368)
Others (13,839) (667) 203 (14,303)
Total (56,679) (2,719) 244 (59,154)
Intangible assets, net
Land use rights 70,825 71,414
Franchise 14,022 13,767
Patents 2,602 2,492
Others 6,585 6,526
Total 94,034 94,199
Provision for impairment (1,074) (126) - (1,200)
Net book value 92,960 92,999
120
Amortisation charged to profit or loss provided on intangible assets for the six
months ended June 30, 2023 was RMB 2,523 (for the six months ended June 30,
2022: RMB 2,335 ).
22 GOODWILL
June 30, 2023 December 31, 2022
Cost
PetroIneos Trading Limited 4,883 4,710
Singapore Petroleum Company 3,180 3,067
Others 850 846
Total 8,913 8,623
Provision for impairment (1,352) (1,306)
Net book value 7,561 7,317
Goodwill primarily relates to the acquisition of Singapore Petroleum Company and
PetroIneos Trading Limited, subsidiaries in the marketing segment, completed in
2009 and 2011, respectively.
23 LONG-TERM PREPAID EXPENSES
December 31, 2022 Additions Reduction June 30, 2023
Catalyst 4,786 3,335 (858) 7,263
Lease asset improvement expenses 2,498 65 (301) 2,262
Others 3,104 269 (335) 3,038
Total 10,388 3,669 (1,494) 12,563
24 OTHER NON-CURRENT ASSETS
Other non-current assets consist primarily of long-term receivables, time
deposits over one year, prepayments for construction project and equipment.
121
25 PROVISION FOR ASSETS
December
31, 2022 Additions Reversal
Write-off
and others
June 30,
2023
Bad debts provision 6,013 134 (541) 32 5,638
Including:
Bad debts provision for accounts receivable 2,889 129 (509) 30 2,539
Bad debts provision for other receivables 2,783 5 (32) 2 2,758
Provision for impairment of advances to
suppliers 341 - - - 341
Provision for declines in the value of inventories 8,284 1,613 (168) (3,384)
6,345
Provision for impairment of long-term equity
investments 5,435 - - 172 5,607
Provision for impairment of fixed assets 65,489 16 - 440 65,945
Provision for impairment of oil and gas properties 103,369 - - 2,450 105,819
Provision for impairment of construction in
progress 7,979 - - 101 8,080
Provision for impairment of intangible assets 1,074 - - 126 1,200
Provision for impairment of goodwill 1,306 - - 46 1,352
Provision for impairment of right-of-use assets 76 - - - 76
Provision for impairment of other non-current
assets 224 2 (8) 2 220
Total 199,249 1,765 (717) (15) 200,282
26 SHORT-TERM BORROWINGS
June 30, 2023 December 31, 2022
Guarantee - USD 1,709 1,393
Unsecured - RMB 11,814 7,393
Unsecured - USD 32,924 26,522
Unsecured - JPY 3,944 3,018
Unsecured - Others 152 49
50,543 38,375
As of June 30, 2023, the above guaranteed USD borrowings were mainly guaranteed
by minority shareholders of relevant non-wholly-owned subsidiaries. The weighted
average interest rate for short-term borrowings as of June 30, 2023 is 4.08% per
annum
(December 31, 2022: 3.64% ).
122
27 NOTES PAYABLE
As of June 30, 2023, notes payable mainly represented commercial acceptance (As
of December 31, 2022, mainly represented commercial acceptance). All notes
payable are matured within one year. 28 ACCOUNTS PAYABLE The aging of accounts
payable are analysed as follows:
The Group
June 30, 2023 December 31, 2022
Amount
Percentage of
total balance % Amount
Percentage of
total balance %
Within 1 year 225,300 89 258,054 89
1 to 2 years 10,534 4 12,143 4
2 to 3 years 4,873 2 5,039 2
Over 3 years 13,802 5 13,881 5
254,509 100 289,117 100
As of June 30, 2023, accounts payable aged over one year amounted to RMB 29,209
(December 31, 2022: RMB 31,063), and mainly comprised of unsettled payables to
suppliers. 29 CONTRACT LIABILITIES Contract liabilities mainly represented
advances from customers related to the sales of refined oil, natural
gas,chemical products and crude oil etc. As of June 30, 2023, the contract
liabilities aged over one year amounted to 3,788 (December 31, 2022: 4,064). The
majority of related obligations were expected to be performed with corresponding
revenue recognised within one year.
30 EMPLOYEE COMPENSATION PAYABLE
(1) Employee compensation payable listed as below
December 31, 2022 Addition Reduction June 30, 2023
Short-term employee benefits 9,348 67,032 (58,119) 18,261
Post-employment benefits - defined
contribution plans 34 11,586 (11,545) 75
Termination benefits 3 61 (61) 3
9,385 78,679 (69,725) 18,339
The employee compensation payable includes the salary of employees and
marketized temporary and seasonal workers, various insurance, housing fund,
training expenses and other surcharges.
123
(2) Short-term employee benefits
December 31, 2022 Addition Reduction June 30, 2023
Wages, salaries and allowances 3,192 51,355 (42,621) 11,926
Staff welfare - 3,336 (3,336) -
Social security contributions 561 5,553 (5,557) 557
Including:
Medical insurance 544 5,130 (5,134) 540
Work-related injury insurance 14 396 (396) 14
Maternity insurance 3 27 (27) 3
Housing provident funds 3 5,253 (5,251) 5
Labour union funds and employee
education funds 5,539 1,504 (1,325) 5,718
Others 53 31 (29) 55
9,348 67,032 (58,119) 18,261
(3) Post-employment benefits-defined contribution plans
December 31, 2022 Additions Reduction June 30, 2023
Basic pension insurance 27 7,449 (7,416) 60
Unemployment insurance 2 262 (261) 3
Annuity 5 3,875 (3,868) 12
34 11,586 (11,545) 75
As of June 30, 2023, employee benefits payable did not contain any balance in
arrears.
31 TAXES PAYABLE
June 30, 2023 December 31, 2022
Value added tax payable 8,153 9,504
Income tax payable 6,807 16,471
Consumption tax payable 14,457 8,436
Others 16,646 19,103
46,063 53,514
32 OTHER PAYABLES
As of June 30, 2023, other payables mainly comprised construction fee, deposit,
earnest money, caution money and insurance payables. Other payables aged over
one year amounted to RMB 7,763 (December 31, 2022:
RMB 7,298).
124
33 CURRENT PORTION OF NON-CURRENT LIABILITIES
June 30, 2023 December 31, 2022
Long-term borrowings due within one year 75,227 37,264
Debentures payable due within one year 36,487 25,000
Long-term payables due within one year 12 737
Lease liabilities due within one year 7,412 7,560
119,138 70,561
34 LONG-TERM BORROWINGS
June 30, 2023 December 31, 2022
Guarantee - RMB 3,432 3,690
Guarantee - USD 103 103
Impawn - RMB 2,553 2,329
Impawn - USD 2,168 3,134
Mortgage - RMB 926 1,074
Unsecured - RMB 115,379 130,031
Unsecured - USD 69,924 62,883
Unsecured - Others 3,881 3,650
198,366 206,894
Less: Long-term borrowings due within one year (Note 33) (75,227) (37,264)
123,139 169,630
As of June 30, 2023, the above-mentioned guaranteed borrowings were mainly
guaranteed by CNPC and its subsidiaries. The RMB impawn borrowings were mainly
impawned by the right to charge for natural gas. The US dollar impawn borrowings
were impawned by the deposit of RMB 2,140 (December 31, 2022: RMB 3,286). And
the secured liabilities are secured by fixed assets with a book value of RMB
791; Constructions in progress with a book value of RMB 162 and intangible
assets with a book value of RMB 25 (December 31, 2022: fixed assets with a book
value of RMB 861; Constructions in progress with a book value of RMB 410 and
intangible assets with a book value of RMB 65).
The maturities of long-term borrowings at the dates indicated are analysed as
follows:
June 30, 2023 December 31, 2022
Between one and two years 77,570 73,267
Between two and five years 29,455 80,876
After five years 16,114 15,487
123,139 169,630
125
The weighted average interest rate for long-term borrowings as of June 30, 2023
is 4.15% (December 31, 2022: 3.38% ).
The fair value of long-term borrowings (including long-term borrowings due
within one year) amounted to RMB 193,891 (December 31, 2022: RMB 197,891 ). The
fair value are based on discounted cash flows using applicable discount rates
based upon the prevailing market rates as at balance sheet date of the Group's
availability of financial instruments (terms and characteristics similar to the
above-mentioned borrowings).
35 DEBENTURES PAYABLE
Debentures' Name Issue date
Term of
Debentures
Annual
interest
rate%
December
31, 2022
Principal
Additions
Changes
in interest
payable
Principal
Reduction
June
30, 2023
2012 PetroChina Company Limited Corporate
Debentures first tranche - 15 years
November
22,2012 15 - year 5.04 2,000 - 61 - 2,061
2013 PetroChina Company Limited Corporate
Debentures first tranche - 10 years
March
15,2013 10 - year 4.88 4,000 - - (4,000) -
Kunlun Energy Company Limited priority notes -
10 years
May
13,2015 10 - year 3.75 3,468 133 19 - 3,620
2016 PetroChina Company Limited Corporate
Debentures first tranche - 10 years
January
18,2016 10 - year 3.50 4,700 - 73 - 4,773
2016 PetroChina Company Limited Corporate
Debentures second tranche - 10 years
March
1,2016 10 - year 3.70 2,300 - 28 - 2,328
2016 PetroChina Company Limited Corporate
Debentures third tranche - 10 years
March
22,2016 10 - year 3.60 2,000 - 20 - 2,020
2019 PetroChina Company Limited first tranche
medium-term notes - 5 years
January
22,2019 5 - year 2.70 3,130 - 37 - 3,167
2019 PetroChina Company Limited second
tranche medium-term notes - 5 years
January
22,2019 5 - year 2.70 2,750 - 32 - 2,782
2019 PetroChina Company Limited third tranche
medium-term notes - 5 years
February
21,2019 5 - year 3.66 10,000 - 129 - 10,129
2019 PetroChina Company Limited fourth
tranche medium-term notes - 5 years
February
21,2019 5 - year 3.66 10,000 - 129 - 10,129
2019 PetroChina Company Limited fifth tranche
medium-term notes - 5 years
April
22,2019 5 - year 3.96 10,000 - 75 - 10,075
2020 PetroChina Company Limited first tranche
medium-term notes - 3 years April 8,2020 3 - year 2.42 10,000 - - (10,000) -
2020 PetroChina Company Limited second
tranche medium-term notes - 3 years April 8,2020 3 - year 2.42 10,000 - -
(10,000) -
2020 PetroChina Kunlun Gas Company Limited
first tranche medium-term notes - 3 years
April
23,2020 3 - year 2.43 1,000 - - (1,000) -
2022 PetroChina Company Limited first tranche
medium-term green notes - 3 years
April
27,2022 3 - year 2.26 500 - 2 - 502
2022 PetroChina Company Limited second
tranche medium-term green notes - 3 years
June
15,2022 3 - year 2.19 2,000 19 2 (19) 2,002
77,848 152 607 (25,019) 53,588
Less: D ebentures Payable due within one year
(Note 33) (25,000) (36,487)
52,848 17,101
The above-mentioned debentures were issued at the par value, without premium or
discount. As of June 30, 2023, the above-mentioned debentures which were
guaranteed by CNPC and its subsidiaries amounted to RMB 2,000 (December 31,
2022: RMB 6,000).
126
The fair value of the debentures amounted to RMB 53,308 (December 31, 2022: RMB
88,879). The fair value are based on discounted cash flows using an applicable
discount rate based upon the prevailing market rates as at the balance sheet
date of the Group's availability of financial instruments (terms and
characteristics similar to the above-mentioned debentures payable).
36 PROVISIONS
December 31, 2022 Additions Reduction June 30, 2023
Asset retirement obligations 142,081 4,702 (807) 145,976
Asset retirement obligations are related to oil and gas properties.
37 DEFERRED TAX ASSETS AND LIABILITIES
Deferred tax assets and liabilities before offset are listed as below: (a)
Deferred tax assets
June 30, 2023 December 31, 2022
Deferred tax
assets
Deductible
temporary
differences
Deferred tax
assets
Deductible
temporary
differences
Impairment, depreciation and depletion of
assets 9,908 50,523 7,614 35,175
Lease liabilities(Note 4(31)) 29,608 121,342 30,186 123,868
Provisions-Asset retirement
obligations(Note 4(31)) 33,686 141,835 32,433 139,249
Wages and welfare 2,114 10,144 1,424 6,159
Carry forward of losses 1,827 8,221 1,560 7,326
Others 16,327 67,418 17,016 69,874
93,470 399,483 90,233 381,651
At June 30, 2023, certain subsidiaries of the Company did not recognise deferred
tax asset of deductible tax losses carried forward of 111,005 (December 31,
2022: RMB 112,702), of which RMB 1,677 (for the six months ended June 30,
2022:RMB 2,923) was incurred for the six months ended June 30, 2023, because it
was not probable that the related tax benefit will be realised. These deductible
tax losses carried forward of RMB 187,RMB 403,RMB 3,860,RMB 1,669,RMB 1,435 and
RMB 103,451 will expire in 2023, 2024, 2025, 2026, 2027, 2028 and thereafter,
respectively.
127
(b) Deferred tax liabilities
June 30, 2023 December 31, 2022
Deferred tax
liabilities
Taxable
temporary
differences
Deferred tax
liabilities
Taxable
temporary
differences
Depreciation and depletion of assets 38,162 140,749 33,780 131,829
Right-of-use assets(Note 4(31)) 27,153 115,263 28,046 118,592
Oil and gas properties- Asset retirement
obligations(Note 4(31)) 5,846 27,227 6,347 28,797
Others 29,500 129,753 27,080 124,349
100,661 412,992 95,253 403,567
Deferred tax assets and liabilities after offset are listed as below:
June 30, 2023 December 31, 2022
Deferred tax assets 17,561 16,293
Deferred tax liabilities 24,752 21,313
38 SHARE CAPITAL
June 30, 2023 December 31, 2022
H shares 21,099 21,099
A shares 161,922 161,922
183,021 183,021
The assets and liabilities injected by CNPC in 1999 had been valued by China
Enterprise Appraisal Co., Ltd .. The net assets injected by CNPC had been
exchanged for 160 billion state-owned shares of the Company with a par value of
RMB 1.00 yuan per share. The excess of the value of the net assets injected over
the par value of the state-owned shares had been recorded as capital surplus.
Pursuant to the approval of CSRC, on April 7, 2000, the Company issued
17,582,418,000 foreign capital stock with a par value of RMB 1.00 yuan per
share, in which 1,758,242,000 shares were converted from the prior stateowned
shares of the Company owned by CNPC.
The above-mentioned foreign capital stock represented by 13,447,897,000 H shares
and 41,345,210 ADSs (each representing 100 H shares), were listed on the Stock
Exchange of Hong Kong Limited and the New York Stock Exchange Inc. on April 7,
2000 and April 6, 2000, respectively. The Company issued an additional
3,196,801,818 new H shares with a par value of RMB 1.00 yuan per share on
September 1, 2005. CNPC also converted 319,680,182 state-owned shares it held
into H shares and sold them concurrently with PetroChina's issuance of new H
shares.
128
The Company issued 4,000,000,000 A shares with a par value of RMB 1.00 yuan per
share on October 31, 2007. The A shares were listed on the Shanghai Stock
Exchange on November 5, 2007. Following the issuance of the A shares, all the
existing state-owned shares issued before November 5, 2007 held by CNPC have
been registered with the China Securities Depository and Clearing Corporation
Limited as A shares.
The Company submitted an application to the U.S. Securities and Exchange
Commission in August 2022 to delist its depositary receipts from the New York
Stock Exchange. The depositary receipts are in the process of cancellation.
39 CAPITAL SURPLUS
December 31, 2022 Additions Reduction June 30, 2023
Capital premium 84,328 - - 84,328
Other capital surplus
Capital surplus under the old CAS 40,955 - - 40,955
Others (1,671) - (727) (2,398)
123,612 - (727) 122,885
40 SURPLUS RESERVES
December
31, 2022
Change in
accounting policy
(Note 4(31))
January
1, 2023 Additions Reduction
June
30, 2023
Statutory Surplus Reserves 224,917 (387) 224,530 - - 224,530
Discretionary Surplus Reserves 40 - 40 - - 40
224,957 (387) 224,570 - - 224,570
Pursuant to the Company Law of PRC, the Company's Articles of Association and
the resolution of Board of Directors, the Company is required to transfer 10% of
its net profit to a Statutory Surplus Reserves. Appropriation to the Statutory
Surplus Reserves may be ceased when the fund aggregates to 50% of the Company's
registered capital. The Statutory Surplus Reserves may be used to make good
previous years' losses or to increase the capital of the Company upon approval.
The Discretionary Surplus Reserves is approved by a resolution of shareholders'
general meeting after Board of Directors' proposal. The Company may convert its
Discretionary Surplus Reserves to make good previous years' losses or to
increase the capital of the Company upon approval. The Company has not extracted
Discretionary Surplus Reserves for the six months ended June 30, 2023 (for the
six months ended June 30, 2022: None).
129
41 UNDISTRIBUTED PROFITS
For the six months
ended June 30, 2023
For the six months
ended June 30, 2022
Undistributed profits at beginning of the period (before
adjustment) 848,558 766,955
Change in accounting policy(Note 4(31)) (3,300) (2,751)
Undistributed profits at beginning of the period (adjusted) 845,258 764,204
Add: Net profit attributable to equity holders of the Company 85,276 81,624
Less: Dividends payable to ordinary shares (40,265) (17,610)
Others 50 (5)
Undistributed profits at end of the period 890,319 828,213
Final dividends attributable to owners of the Company in respect of 2022 of RMB
0.22 yuan (inclusive of applicable tax) per share , amounting to a total of RMB
40,265 were approved by the shareholders in the Annual General Meeting on June
8, 2023 and were paid on June 28, 2023 (A shares) and July 28, 2023 (H shares).
As authorised by shareholders in the Annual General Meeting on June 8, 2023, the
Board of Directors resolved to distribute interim dividends attributable to
owners of the Company in respect of 2023 of RMB 0.21 yuan (inclusive of
applicable tax) per share amounting to a total of RMB 38,434 according to the
issued 183,021 million shares on August 30, 2023. The dividends were not paid by
the end of the reporting period, and were not recognised as liability at the end
of the reporting period, as they were declared after the date of the statement
of financial position.
42 NON-CONTROLLING INTERESTS
Non-controlling interests attributable to non-controlling interests of
subsidiaries:
Percentage of
shares held by
non-controlling
interests %
Profit or loss
attributable to
non-controlling
interests
Dividends
declared to
non-controlling
interests
Balance of
non-controlling
interests
CNPC Exploration and Development
Company Limited 50.00 4,162 2,000 93,521
KunLun Energy Company Limited 45.62 3,289 2,564 48,895
PetroChina Sichuan Petrochemical
Company Limited 10.00 48 - 2,503
Others 30,190
175,109
130
43 OPERATING INCOME AND COST OF SALES
The Group
For the six months ended June 30, 2023 For the six months ended June 30, 2022
Income Cost Income Cost
Principal operations (b) 1,446,772 1,129,998 1,583,941 1,230,664
Other operations (c) 33,099 34,469 30,680 32,783
Total 1,479,871 1,164,467 1,614,621 1,263,447
Including: Revenue from
contracts with
customers (a) 1,478,970 1,613,842
Other revenue 901 779
The Company
For the six months ended June 30, 2023 For the six months ended June 30, 2022
Income Cost Income Cost
Principal operations (b) 860,169 656,512 807,368 591,220
Other operations (c) 26,512 27,683 24,399 26,113
Total 886,681 684,195 831,767 617,333
Including: Revenue from
contracts with
customers (a) 886,168 831,275 ?
Other revenue 513 492
(a) Revenue from contracts with customers
For the six months ended
June 30, 2023
Type of contract
Oil, Gas and
New energy
Refining,
Chemicals and
New materials Marketing
Natural
Gas Sales
Head Office
and Other Total
Type of goods and services
Crude oil 293,104 - 380,795 - - 673,899
Natural gas 78,532 - 184,554 259,155 - 522,241
Refined products - 471,849 614,586 - - 1,086,435
Chemicals products - 99,785 27,185 - - 126,970
Pipeline transportation
business - - - 515 - 515
Non-oil sales in gas stations - - 17,049 - - 17,049
Others 53,025 3,287 498 16,630 1,244 74,684
Intersegment elimination (355,390) (418,608) (235,988) (12,676) (161)
(1,022,823)
Total 69,271 156,313 988,679 263,624 1,083 1,478,970
Geographical classification
China's mainland 34,128 156,313 498,577 263,624 1,083 953,725
Others 35,143 - 490,102 - - 525,245
Total 69,271 156,313 988,679 263,624 1,083 1,478,970
131
For the six months ended
June 30, 2022
Type of contract
Oil, Gas and
New energy
Refining,
Chemicals and
New materials Marketing
Natural
Gas Sales
Head Office
and Other Total
Type of goods and services
Crude oil 318,018 - 443,069 - - 761,087
Natural Gas 75,793 - 242,222 234,226 - 552,241
Refined products - 471,760 624,297 - - 1,096,057
Chemicals Products - 109,019 32,680 - - 141,699
Pipeline transportation
business - - - 388 - 388
Non-oil Sales in Gas
Stations - - 15,045 - - 15,045
Others 53,437 2,993 142 18,289 1,243 76,104
Intersegment elimination (373,035) (406,955) (238,399) (10,260) (130)
(1,028,779)
Total 74,213 176,817 1,119,056 242,643 1,113 1,613,842
Geographical classification
China's mainland 46,060 176,817 460,755 242,643 1,113 927,388
Others 28,153 - 658,301 - - 686,454
Total 74,213 176,817 1,119,056 242,643 1,113 1,613,842
The Company
Type of contract
For the six months ended
June 30, 2023
For the six months ended
June 30, 2022
Type of goods and services
Crude oil 231,743 260,581
Natural gas 312,136 280,993
Refined products 830,977 773,231
Chemical products 103,382 108,849
Non-oil sales in gas stations 15,034 13,383
Others 32,819 32,011
Intersegment elimination (639,923) (637,773)
Total 886,168 831,275
Revenue from contracts with customers is mainly recognised at a point in time.
132
(b) Income and cost of sales from principal operations The Group
For the six months ended June 30, 2023 For the six months ended June 30, 2022
Income Cost Income Cost
Oil, Gas and New energy 416,844 284,076 439,108 297,245
Refining, Chemicals and New
materials 571,634 435,604 580,780 454,032
Marketing 1,207,130 1,170,130 1,342,268 1,289,295
Natural Gas Sales 273,819 262,892 250,358 238,020
Head Office and Other 168 119 206 150
Intersegment elimination (1,022,823) (1,022,823) (1,028,779) (1,048,078)
Total 1,446,772 1,129,998 1,583,941 1,230,664
The Company
For the six months ended June 30, 2023 For the six months ended June 30, 2022
Income Cost Income Cost
Oil, Gas and New energy 325,426 248,983 350,354 271,735
Refining, Chemicals and New
materials 489,282 379,931 479,937 373,375
Marketing 448,180 431,158 404,618 388,611
Natural Gas Sales 237,036 236,244 210,027 207,433
Head Office and Other 168 119 206 150
Intersegment elimination (639,923) (639,923) (637,774) (650,084)
Total 860,169 656,512 807,368 591,220
(c) Income and cost of sales from other operations The Group
For the six months ended June 30, 2023 For the six months ended June 30, 2022
Income Cost Income Cost
Sale of materials 3,337 3,065 3,282 3,101
Non-oil sales in gas stations 17,049 15,493 15,045 13,849
Others 12,713 15,911 12,353 15,833
Total 33,099 34,469 30,680 32,783
The Company
For the six months ended June 30, 2023 For the six months ended June 30, 2022
Income Cost Income Cost
Sale of materials 3,289 2,612 3,040 2,765
Non-oil sales in gas stations 15,034 13,681 13,383 12,319
Others 8,189 11,390 7,976 11,029
Total 26,512 27,683 24,399 26,113
133
44 TAXES AND SURCHARGES
For the six months ended
June 30, 2023
For the six months ended
June 30, 2022
Consumption tax 88,256 80,222
Resource tax 14,509 16,210
City maintenance and construction tax 8,820 8,705
Educational surcharge 6,506 6,373
Urban and township land use tax 1,947 1,867
Crude oil special gain levy 6,758 23,346
Others 3,060 3,877
129,856 140,600
45 SELLING EXPENSES
For the six months ended
June 30, 2023
For the six months ended
June 30, 2022
Employee compensation costs 10,912 10,838
Depreciation, depletion and amortisation 7,491 7,615
Transportation expenses 5,808 6,888
Lease, packing, warehouse storage expenses 1,685 1,329
Others 6,105 6,102
32,001 32,772
46 GENERAL AND ADMINISTRATIVE EXPENSES
For the six months ended
June 30, 2023
For the six months ended
June 30, 2022
Employee compensation costs 16,327 16,068
Depreciation, depletion and amortisation 3,295 3,030
Safety fund 3,629 2,727
Technology service expense 420 446
Other taxes 187 448
Others 2,263 1,625
26,121 24,344
134
47 RESEARCH AND DEVELOPMENT EXPENSES
For the six months ended
June 30, 2023
For the six months ended
June 30, 2022
Employee compensation costs 3,999 3,321
Depreciation, depletion and amortisation 646 647
Fuel and material consumption 397 223
Others 4,609 4,951
9,651 9,142
48 FINANCE EXPENSES
For the six months ended
June 30, 2023
For the six months ended
June 30, 2022
Interest expenses 12,383 10,318
Include: Interest expenditure on lease liabilities 2,617 2,728
Less: Capitalized interest (199) (674)
Less: Interest income (3,597) (1,375)
Exchange losses 14,041 9,435
Less: Exchange gains (14,099) (8,920)
Others 659 400
9,188 9,184
49 OTHER INCOME
For the six months ended
June 30, 2023
For the six months ended
June 30, 2022
Refund of import value-added tax, relating to the import
of natural gas 7,486 5,743
Refund of value-added tax, relating to the change from
business tax to value-added tax 89 40
Others 796 623
8,371 6,406
135
50 INVESTMENT INCOME
The Group
For the six months ended
June 30, 2023
For the six months ended
June 30, 2022
Share of profit of associates and joint ventures 9,667 8,104
Gains on disposal of subsidiaries 91 49
Investment loss from disposal of derivative financial
instruments (4,279) (13,985)
Gains from ineffective portion of cash flow hedges 882 1,128
Gains on investments in other equity instruments 10 7
Other investment income 325 317
6,696 (4,380)
The Company
For the six months ended
June 30, 2023
For the six months ended
June 30, 2022
Dividends declared by subsidiaries 14,843 17,041
Share of profit of associates and joint ventures 6,726 6,107
Gains on disposal of subsidiaries 66 40
Gains on investments in other equity instruments 5 6
Other investment income/(loss) 52 (10)
21,692 23,184
51 CHANGES IN FAIR VALUE GAINS AND LOSSES
For the six months ended
June 30, 2023
For the six months ended
June 30, 2022
Net fair value gains/(losses) on financial assets and
financial liabilities at fair value through profit or loss 1,536 (8,108)
Unrealised gains/(losses) from ineffective portion of cash
flow hedges, net 123 (324)
1,659 (8,432)
136
52 CREDIT IMPAIRMENT REVERSAL/( LOSSES)
For the six months ended
June 30, 2023
For the six months ended
June 30, 2022
Accounts receivable 380 (420)
Other receivables 27 6
Others 6 (89)
413 (503)
53 ASSET IMPAIRMENT LOSSES
For the six months ended
June 30, 2023
For the six months ended
June 30, 2022
Impairment losses for declines in the value of inventories 1,445 568
Impairment losses for fixed assets and oil and gas
properties 16 -
Impairment losses for other non-current assets - (1)
1,461 567
54 GAINS FROM ASSET DISPOSALS
For the six
months ended
June 30, 2023
For the six
months ended
June 30, 2022
Amount recognised in nonrecurring
profit or loss for
the six months ended
June 30, 2023
Gains from disposal of fixed assets and oil
and gas properties 52 139 52
Losses from disposal of construction in
progress - (5) -
Gains from disposal of intangible assets 73 88 73
Gains from disposal of other long-term assets 23 127 23
148 349 148
55 NON-OPERATING INCOME AND EXPENSES
(a) Non-operating income
For the six
months ended
June 30, 2023
For the six
months ended
June 30, 2022
Amount recognised in nonrecurring
profit or loss for
the six months ended
June 30, 2023
Government grants 395 391 395
Others 657 670 657
1,052 1,061 1,052
137
(b) Non-operating expenses
For the six
months ended
June 30, 2023
For the six
months ended
June 30, 2022
Amount recognised in nonrecurring
profit or loss for
the six months ended
June 30, 2023
Fines 16 47 16
Donation 219 208 219
Extraordinary loss 95 309 95
Damage or scrapping of non-current assets 849 7,219 849
Others 2,533 2,951 2,533
3,712 10,734 3,712
56 TAXATION
For the six months ended
June 30, 2023
For the six months ended
June 30, 2022
Income taxes 25,740 34,517
Deferred taxes (Note 4(31)) 1,430 (7,135)
27,170 27,382
The tax on the Group's profit before taxation differs from the theoretical
amount that would arise using the corporate income tax rate in the PRC
applicable to the Group as follows: For the six months ended
June 30, 2023
For the six months ended
June 30, 2022
Profit before taxation 121,753 118,332
Tax calculated at a tax rate of 25% 30,438 29,583
Tax return true-up (372) 76
Effect of income taxes from international operations
different from taxes at the PRC statutory tax rate 2,275 5,464
Effect of preferential tax rate (8,586) (9,000)
Tax effect of income not subject to tax (2,695) (1,738)
Tax effect of expenses not deductible for tax purposes 4,717 3,433
Tax effect of temporary differences and losses not
recognised as deferred tax assets 1,393 (436)
Taxation 27,170 27,382
138
57 EARNINGS PER SHARE
Basic and diluted earnings per share for the six months ended June 30, 2023 and
June 30, 2022 have been computed by dividing profit attributable to owners of
the Company by the 183,021 million shares issued and outstanding during the
period. There are no potential dilutive ordinary shares, and the diluted
earnings per share are equal to the basic earnings per share.
58 OTHER COMPREHENSIVE INCOME
Other comprehensive income attributable to equity
holders of the Company
December
31, 2022
Amounts
recognised
in income
statements
Amounts
accumulated
in other
comprehensive
income reclassified
to retained
earnings
June 30,
2023
Items that will not be reclassified to profit or loss Including: Changes in fair
value of investments in other equity instruments 370 56 (121) 305
Items that may be reclassified to profit or loss
Including: Other comprehensive income recognized
under equity method 1,112 379 -- 1,491
Cash flow hedges 11,273 (2,738) -- 8,535
Translation differences arising from translation
of foreign currency financial statements (31,774) 3,412 -- (28,362)
Others (43) - -- (43)
Total (19,062) 1,109 (121) (18,074)
59 SUPPLEMENT TO INCOME STATEMENT
Expenses are analysed by nature:
For the six months
ended June 30, 2023
For the six months
ended June 30, 2022
Operating income 1,479,871 1,614,621
Less: Changes in inventories of finished goods and work
in progress 6,986 (47,525)
Raw materials and consumables used (1,011,809) (1,064,006)
Employee benefits expenses (77,798) (74,927)
Depreciation, depletion and amortisation expenses (113,001) (102,863)
Investment loss from disposal of derivative financial
instruments (4,279) (13,985)
Gain from ineffective portion of cash flow hedges 882 1,128
Gains/(Losses) from changes in fair value 1,659 (8,432)
Credit impairment reversal/(losses) 413 (503)
Assets impairment losses (1,461) (567)
Lease expenses (1,062) (1,075)
Finance expenses (9,188) (9,184)
Other expenses (146,800) (164,677)
Operating profit 124,413 128,005
139
60 NOTES TO CONSOLIDATED AND COMPANY CASH FLOWS
(a) Reconciliation from the net profit to the cash flows from operating
activities The Group The Company For the six
months
ended
June 30,
2023
For the six
months
ended
June 30,
2022
For the six
months
ended
June 30,
2023
For the six
months
ended
June 30,
2022
Net profit 94,583 90,950 69,450 68,798
Add: Asset impairment losses 1,461 567 6 25
Credit (reversal)/losses (413) 503 28 45
Depreciation and depletion of fixed asset and oil and
gas properties 103,501 93,389 65,340 61,668
Depreciation and depletion of right-of-use assets 5,887 6,064 2,995 3,014
Amortisation of intangible assets 2,523 2,335 2,019 1,898
Amortisation of long-term prepaid expenses 1,090 1,075 972 1,266
Gains on disposal of fixed assets, oil and gas
properties, intangible assets and other long-term
assets (148) (349) (123) (257)
Damage or scrapping of fixed assets and oil and gas
properties 849 7,219 251 5,613
Capitalised exploratory costs charged to expense 4,884 5,821 3,931 4,863
Safety fund reserve 2,057 1,998 1,571 1,519
Finance expenses 9,188 9,184 6,672 6,694
Investment (income)/losses (6,696) 4,380 (21,692) (23,184)
(Gains)/Losses from changes in fair value (1,659) 8,432 37 -
Changes in deferred taxation 1,430 (7,135) 1,528 (4,933)
(Increase)/Decrease in inventories (1,856) (78,419) 1,797 (37,464)
Increase in operating receivables (26,217) (86,750) (10,231) (34,400)
Increase in operating payables 31,242 136,797 33,825 83,651
Net cash flows from operating activities 221,706 196,061 158,376 138,816
(b) Net increase in cash and cash equivalents The Group The Company
For the six
months
ended
June 30,
2023
For the six
months
ended
June 30,
2022
For the six
months
ended
June 30,
2023
For the six
months
ended
June 30,
2022
Cash at the end of the period 219,173 221,155 86,017 116,865
Less: Cash at the beginning of the period (191,190) (136,789) (68,808) (31,955)
Add: Cash equivalents at the end of the period - - - - Less: Cash equivalents at
the beginning of the period - - - - Increase in cash and cash equivalents 27,983
84,366 17,209 84,910
140
(c) Cash and cash equivalents
The Group The Company
June 30,
2023
December 31,
2022
June 30,
2023
December 31,
2022
Cash at bank and on hand 262,554 225,049 88,017 72,308
Less: Time deposits with maturities over 3
months (43,381) (33,859) (2,000) (3,500)
Cash and cash equivalents at the end of
the period 219,173 191,190 86,017 68,808
61 SEGMENT REPORTING
The Group is principally engaged in a broad range of petroleum related products,
services and activities. The Group's operating segments comprise: Oil, Gas and
New energy, Refining, Chemicals and New material, Marketing, Natural Gas Sales
and Head Office and Other. On the basis of these operating segments, the
management of the Company assesses the segmental operating results and allocates
resources. Sales between operating segments are conducted principally at market
price. Additionally, the Group presents geographical information based on
entities located in regions with a similar risk profile.
The Oil, Gas and New energy segment is engaged in the exploration, development,
transportation, production, marketing of crude oil and natural gas and new
energy business. The Refining, Chemicals and New materials segment is engaged in
the refining of crude oil and petroleum products, production and marketing of
primary petrochemical products, derivative petrochemical products, other
chemical products and new materials business. The Marketing segment is engaged
in the marketing of refined products and non-oil products, and the trading
business.
The Natural Gas Sales segment is engaged in the transportation and sale of
natural gas. The Head Office and Other segment relates to cash management and
financing activities, the corporate center, research and development, and other
business services supporting the other operating business segments of the Group.
The accounting policies of the operating segments are the same as those
described in Note 4 - "Principal
Accounting Policies and Accounting Estimates".
141
(1) Operating segments
(a) Segment information as of and for the six months ended June 30, 2023 is as
follows: Oil, Gas and New energy
Refining,
Chemicals and
New materials Marketing
Natural
Gas Sales
Head
Office and
Other Total
Revenue 424,782 575,005 1,225,310 276,341 1,256 2,502,694
Less: Intersegment revenue (355,390) (418,608) (235,988) (12,676) (161)
(1,022,823)
Revenue from external
customers 69,392 156,397 989,322 263,665 1,095 1,479,871
Segment expenses (i) (262,700) (234,619) (786,675) (60,333) (9,398) (1,353,725)
Segment profit/(loss) 86,528 19,609 14,030 14,130 (8,151) 126,146
Unallocated income and
expenses (1,733)
Operating profit 124,413
Depreciation, depletion
and amortisation 86,939 14,096 8,703 2,444 819 113,001
Asset impairment losses - 90 1,355 16 - 1,461
Credit reversal/(losses) 41 - (391) (62) (1) (413)
Capital expenditures 79,626 3,471 722 988 330 85,137
June 30, 2023
Segment assets 1,537,904 485,785 618,946 342,409 1,712,573 4,697,617
Other assets 28,869
Elimination of intersegment
balances (ii) (2,006,945)
Total assets 2,719,541
Segment liabilities 611,310 236,870 402,361 125,103 596,918 1,972,562
Other liabilities 70,815
Elimination of intersegment
balances (ii) (912,136)
Total liabilities 1,131,241
142
(b) Segment information as of December 31, 2022 and for the six months ended
June 30, 2022 is as follows: Oil, Gas and New energy
Refining,
Chemicals and
New materials Marketing
Natural
Gas Sales
Head
Office and
Other Total
Revenue 447,350 583,852 1,358,004 252,942 1,252 2,643,400
Less: Intersegment revenue (373,035) (406,955) (238,399) (10,260) (130)
(1,028,779)
Revenue from external
customers 74,315 176,897 1,119,605 242,682 1,122 1,614,621
Segment expenses (i) (277,649) (205,397) (905,569) (64,582) (10,702) (1,463,899)
Segment profit/(loss) 90,049 25,658 30,613 13,860 (9,458) 150,722
Unallocated income and
expenses (22,717)
Operating profit 128,005
Depreciation, depletion and
amortisation 79,045 12,021 8,666 2,280 851 102,863
Asset impairment losses (1) 20 548 - - 567
Credit impairment losses (20) (3) 260 266 - 503
Capital expenditures 72,820 16,827 832 1,420 413 92,312
December 31, 2022
Segment assets 1,503,805 484,704 614,300 341,546 1,679,722 4,624,077
Other assets 28,400
Elimination of intersegment
balances (ii) (1,982,132)
Total assets 2,670,345
Segment liabilities 581,261 243,417 404,991 135,361 590,604 1,955,634
Other liabilities 74,827
Elimination of intersegment
balances (ii) (894,532)
Total liabilities 1,135,929
(i) Segment expenses include cost of sales, taxes and surcharges, selling
expenses, general and administrative expenses, research and development
expenses, other income. (ii) Elimination of intersegment balances represents
elimination of intersegment accounts and investments.
143
(2) Geographical information
Revenue from external customers
For the six
months ended
June 30, 2023
For the six
months ended
June 30, 2022
China's mainland 954,624 928,165
Others 525,247 686,456
1,479,871 1,614,621
Non-current assets (i) June 30, 2023 December 31, 2022
China's mainland 1,847,501 1,853,721
Others 185,459 178,343
2,032,960 2,032,064
(i) Non-current assets mainly include non-current assets other than financial
instruments and deferred tax assets. 62 FINANCIAL RISK MANAGEMENT
1. Financial risk
The Group's activities expose it to a variety of financial risks, including
market risk, credit risk and liquidity risk. (1) Market risk
Market risk is the possibility that changes in foreign exchange rates, interest
rates and the prices of crude oil and gas products will adversely affect the
value of assets, liabilities and expected future cash flows. (a) Foreign
exchange risk The Group conducts its domestic business primarily in RMB, but
maintains a portion of its assets in other currencies to pay for imported crude
oil, natural gas, imported equipment and other materials and to meet foreign
currency financial liabilities. The Group is exposed to currency risks arising
from fluctuations in various foreign currency exchange rates against the RMB.
The RMB is not a freely convertible currency and is regulated by the PRC
government. Limitations on foreign exchange transactions imposed by the PRC
government could cause future exchange rates to vary significantly from current
or historical exchange rates. Additionally, the Group operates internationally
and foreign exchange risk arises from future acquisitions and commercial
transactions, recognised assets and liabilities and net investments in foreign
operations. Certain entities in the Group might use currency derivatives to
manage such foreign exchange risk.
144
(b) Interest rate risk
The Group has no significant interest rate risk on interest-bearing assets. The
Group's exposure to interest rate risk arises from its borrowings(including
debentures payable). The Group's borrowings at floating rates expose the Group
to cash flow interest rate risk and its borrowings at fixed rates expose the
Group to fair value interest rate risk. However, the exposure to interest rate
risk is not material to the Group. A detailed analysis of the Group's borrowings
and debentures payable, together with their respective interest rates and
maturity dates, is included in Note 34 and 35.
(c) Price risk
The Group is engaged in a wide range of oil and gas products-related activities.
Prices of oil and gas products are affected by a wide range of global and
domestic factors which are beyond the control of the Group. The fluctuations in
such prices may have favourable or unfavourable impacts on the Group. The Group
uses derivative financial instruments, including commodity futures, commodity
swaps and commodity options, to hedge some price risks efficiently.
As at June 30, 2023, the Group had certain commodity contracts of crude oil,
refined oil products and chemical products designated as hedges. As at June 30,
2023, the fair value of such derivative hedging financial instruments is
derivative financial assets of 14,910 (December 31, 2022: 20,988) and derivative
financial liabilities of 7,141 (December 31, 2022: 10,941).
As at June 30, 2023, it is estimated that a general increase/decrease of USD 10
per barrel in basic price of derivative financial instruments, with all other
variables held constant, would impact the fair value of derivative financial
instruments, which would decrease/increase the Group's profit for the year by
approximately 1,543 (December 31, 2022: RMB 331), and resulting in an
decrease/increase of approximately 372 in other comprehensive income of the
Group (December 31, 2022: RMB 1,074).This sensitivity analysis has been
determined assuming that the change in prices had occurred at the balance sheet
date and the change was applied to the Group's derivative financial instruments
at that date with exposure to commodity price risk. (2) Credit risk Credit risk
arises from cash at bank and on hand, credit exposure to customers with
outstanding receivable balances, other receivables and long-term recievables.
A substantial portion of the Group's cash at bank and on hand are placed with
the major state-owned banks and financial institutions in China and management
believes that the credit risk is low. The Group performs ongoing assessment of
the credit quality of its customers, and sets appropriate credit limits taking
into account the financial position and past history of defaults of customers.
The aging analysis of accounts receivable and related provision for bad debts
are presented in Note 9.
145
The carrying amounts of cash at bank and on hand, accounts receivable, other
receivables and receivables financing included in the consolidated balance sheet
represent the Group's maximum exposure to credit risk. No other financial assets
carry a significant exposure to credit risk. The Group has no significant
concentration of credit risk.
(3) Liquidity risk
Liquidity risk is the risk that the Group will encounter difficulty in meeting
obligations associated with financial liabilities.
In managing its liquidity risk, the Group has access to funding at market rates
through equity and debt markets, including using undrawn committed borrowing
facilities to meet foreseeable borrowing requirements. Given the low level of
gearing and continued access to funding, the Group believes that its liquidity
risk is not material.
Analysis of the Group's long-term borrowings, debentures payable and lease
liabilities based on the remaining period at the balance sheet date to the
contractual maturity dates are presented in Note 34, 35 and 20. 2. Capital
management The Group's objectives when managing capital are to safeguard its
ability to continue as a going concern, optimise returns for equity holders and
to minimise its cost of capital. In meeting its objectives of managing capital,
the Group may issue new shares, adjust its debt levels or the mix between
short-term and long-term borrowings. The Group monitors capital on the basis of
the gearing ratio which is calculated as interest-bearing borrowings/
(interest-bearing borrowings + total equity), interest-bearing borrowings
include short-term and long-term borrowings, debentures payable and ultra
short-term financing bond. The gearing ratio at June 30, 2023 is 16.00%
(December 31, 2022: 17.39%).
3. Fair value estimation
The methods and assumptions applied in determining the fair value of each class
of financial assets and financial liabilities of the Group at June 30, 2023 and
December 31, 2022 are disclosed in the respective accounting policies.
Financial assets and financial liabilities that measured at amortised cost
include: cash at bank and on hand, accounts receivable, other receivables,
long-term receivables, short-term borrowings, accounts payables, note payable,
long-term borrowings, debentures payable, etc. The fair values of fixed rate
long-term borrowings and debentures payable are likely to be different from
their respective carrying amounts. Analysis of the fair values and carrying
amounts of long-term borrowings and debentures payable are presented in Note 34
and Note 35, respectively. Except for these, the carrying amounts of other
financial assets and financial liabilities that are not measured at fair value
approximate their fair values.
146
The Group's investments in financial assets at fair value through profit or
loss, financial liabilities at fair value through profit or loss, derivative
financial instruments, receivables financing and other equity instruments are
measured at fair value on the balance sheet date. The fair value of financial
assets at fair value through profit or loss and financial liabilities at fair
value through profit or loss are mainly categorised into Level 1 of the fair
value hierarchy, which are based on the unadjusted quoted prices in active
markets for identical assets or liabilities as inputs used in the valuation
techniques. The fair value of derivative financial instruments are mainly
categorised into Level 1 and Level 2 of the fair value hierarchy, which are
based on the unadjusted quoted prices in active markets for identical assets or
liabilities as inputs used in the valuation techniques, or the inputs other than
quoted prices included within Level 1 that are observable either directly or
indirectly. Receivables financing are mainly categorised into Level 3 of the
fair value hierarchy, which are based on that Receivables financing are mainly
short-term bills of acceptance issued by banks, their fair values approximate
the face values of the bills. The investments in other equity instruments are
measured at fair value at the end of the reporting period. The investments in
other equity instruments are mainly categorised into Level 1 of the fair value
hierarchy, which are based on the unadjusted quoted prices in active markets for
identical assets or liabilities as inputs used in the valuation techniques. As
of June 30, 2023, financial assets continuing to be measured at fair value are
listed in three levels as follows: Level 1 Level 2 Level 3 Total Financial
assets Financial assets at fair value through profit or loss-- Financial assets
at fair value through profit or loss 5,815 - - 5,815 Derivative financial
assets-- Derivative financial assets 2,221 12,786 - 15,007 Receivables
financing-- Receivables financing - - 8,815 8,815 Investments in other equity
instruments-- other equity instruments 552 - 331 883 Total 8,588 12,786 9,146
30,520 As of June 30, 2023, financial liabilities continuing to be measured at
fair value are listed in three levels as follows:
Level 1 Level 2 Level 3 Total
Financial liabilities
Financial Liabilities at fair value through profit or loss--
Financial Liabilities at fair value through profit or loss 4,258 - - 4,258
Derivative financial liabilities--
Derivative financial liabilities 1,412 6,410 - 7,822
Total 5,670 6,410 - 12,080
147
As of December 31, 2022, financial assets continuing to be measured at fair
value are listed in three levels as follows:
Level 1 Level 2 Level 3 Total
Financial assets
Financial assets at fair value through profit or loss--
Financial assets at fair value through profit or loss 3,876 - - 3,876
Derivative financial assets--
Derivative financial assets 14,508 6,625 - 21,133
Receivables financing--
Receivables financing - - 4,376 4,376
Investments in other equity instruments--
other equity instruments 623 - 327 950
Total 19,007 6,625 4,703 30,335
As of December 31, 2022, financial liabilities continuing to be measured at fair
value are listed in three levels as follows:
Level 1 Level 2 Level 3 Total
Financial liabilities
Financial Liabilities at fair value through profit or loss--
Financial Liabilities at fair value through profit or loss 1,698 - - 1,698
Derivative financial liabilities--
Derivative financial liabilities 983 10,163 - 11,146
Total 2,681 10,163 - 12,844
The Group uses discounted cash flow model with inputted interest rate and
commodity index, which were influenced by historical fluctuation and the
probability of market fluctuation, to evaluate the fair value of the bills
receivable classified as Level 3 financial assets.
63 RELATED PARTIES AND RELATED PARTY TRANSACTIONS
(1) Parent Company
(a) General information of parent company
CNPC, the immediate parent of the Company, is a limited liability company
directly controlled by the PRC government.
Type of
Legal Entity
Place of
incorporation
Legal
representative Principal activities
China National
Petroleum
Corporation
Limited liability
company
(wholly state-wned)
PRC Dai Houliang
Oil and gas exploration and development,
refining and petrochemical, oil product
marketing, oil and gas storage and
transportation, oil trading, construction and
technical services and petroleum equipment
manufacturing etc.
148
(b) Registered capital and changes in registered capital of the parent company
December 31, 2022 Additions Reduction June 30, 2023 China National Petroleum
Corporation 486,900 - - 486,900
(c) Equity interest and voting rights of parent company June 30, 2023 December
31, 2022
Equity interest % Voting rights % Equity interest % Voting rights %
China National Petroleum Corporation 82.62 82.62 80.54 80.54
(2) Subsidiaries
Details about subsidiaries and related information are disclosed in Note 6(1).
(3) Nature of related parties that are not controlled by the Company Names of
related parties Relationship with the Company China Oil and Gas Piping Network
Corporation Associate
China Petroleum Finance Co., Ltd. Associate
CNPC Captive Insurance Co., Ltd. Associate China National Aviation Fuel Group
Limited Associate China Marine Bunker (PetroChina) Co., Ltd. Joint venture
Mangistau Investment B.V. Joint venture
Trans-Asia Gas Pipeline Co., Ltd. Joint venture
CNPC Bohai Drilling Engineering Co., Ltd. Fellow subsidiary of CNPC CNPC
Oriental Geophysical Exploration Co., Ltd. Fellow subsidiary of CNPC CNPC
Chuanqing Drilling Engineering Co., Ltd. Fellow subsidiary of CNPC Daqing
Petroleum Administrative Bureau Co., Ltd. Fellow subsidiary of CNPC Liaohe
Petroleum Exploration Bureau Co., Ltd. Fellow subsidiary of CNPC China Petroleum
Pipeline Bureau Co., Ltd. Fellow subsidiary of CNPC CNPC Transportation Co.,
Ltd. Fellow subsidiary of CNPC CNPC Material Company Co., Ltd. Fellow subsidiary
of CNPC China National Oil and Gas Exploration and Development Corporation Co.,
Ltd. Fellow subsidiary of CNPC China National United Oil Co., Ltd. Fellow
subsidiary of CNPC CNPC Shared Operation Co. Ltd Fellow subsidiary of CNPC
149
(4) Summary of significant related party transactions
(a) Related party transactions with CNPC and its subsidiaries: The Company and
CNPC entered into a new Comprehensive Products and Services Agreement on August
27, 2020 for a period of three years effective from January 1, 2021. The
Comprehensive Products and Services Agreement provides for a range of products
and services which may be required and requested by either party. The products
and services to be provided by CNPC and its fellow subsidiaries to the Group
under the Comprehensive Products and Services Agreement include construction and
technical services, production services, supply of material services, social
services, ancillary services and financial services. The products and services
required and requested by either party are provided in accordance with (1)
government-prescribed prices; or (2) where there is no government-prescribed
price, with reference to relevant market prices; or (3) where neither (1) nor
(2) is applicable, then the actual cost incurred or the agreed contractual
prices are used. On August 25, 2011, based on the Land Use Rights Leasing
Contract signed for a period of 50 years from 2000, the Company and CNPC entered
into a supplemental agreement to the Land Use Rights Leasing Contract which took
effect on January 1, 2012. The expiry date of the supplemental agreement is the
same as the Land Use Rights Leasing Contract, which is in 2050. The Company and
CNPC may adjust area and rental payable for the leased land parcels every three
years taking into consideration of production and operations of the Company and
the prevailing market price. On August 27, 2020, the Company and CNPC each
issued a confirmation letter to the Land Use Rights Leasing Contract, which
adjusted the rental payable and the area for the leased land parcels with effect
from January 1, 2021. The Company agreed to rent from CNPC and its fellow
subsidiaries parcels of land with an aggregate area of approximately 1,142
million square metres with annual rental payable (exclusive of tax and charges)
approximately 5,673 based on the area of leased land parcels and the current
market conditions. Apart from the annual rental payable and are for the leased
parcels, the other terms in the Land Use Rights Leasing Contract and
supplemental agreement remained.
On August 24, 2017, the Company entered into a new Buildings Leasing Contract
with CNPC, which took effect on January 1, 2018 for a period of 20 years. The
Company and CNPC may adjust the area of buildings leased and the rental fees
every three years as appropriate by reference to the production and operations
of the Company and the prevailing market prices, but the adjusted rental shall
not exceed the comparable fair market prices. On August 27, 2020, the Company
and CNPC issued a confirmation letter to the 2017 Buildings Leasing Contract,
which adjusted the annual rental payable and the area for the leased which took
effect on January 1, 2021. Buildings covering an aggregate area of 1,287.5
thousand square meters were leased at annual rental payable approximately 713 in
accordance with the confirmed rental area and the current property market
conditions. Apart from the annual rental payable and area of the leased
building, the other terms in the Building Leasing Contract remains unchanged.
150
Notes
For the six
months ended
June 30, 2023
For the six
months ended
June 30, 2022
Sales of goods and services rendered to CNPC and its
subsidiaries (1) 19,654 28,474
Purchase of goods and services from CNPC and its subsidiaries:
Fees paid for construction and technical services (2) 54,099 55,969
Fees for production services (3) 75,574 62,056
Social services charges (4) 825 654
Ancillary services charges (5) 544 461
Material supply services (6) 6,698 6,645
Interest income (7) 405 186
Interest expense (8) 1,577 1,585
Other financial service expense (9) 1,368 1,245
Rental and other expenses paid to CNPC and its fellow
subsidiaries (10) 3,216 3,105
Purchases of assets from CNPC and its subsidiaries (11) 458 297
Notes:
(1) Primarily crude oil, natural gas, refined products, chemical products and
the supply of water, electricity, gas, heat, measurement, quality inspection,
etc. (2) Construction and technical services comprise geophysical survey,
drilling, well cementing, logging, well testing, oil
testing, oilfield construction, refineries and chemical plants construction,
engineering design and supervision, repair of
equipment, etc.
(3) Production services comprise the repair of machinery and equipment, supply
of water, electricity and gas, provision of services such as communications,
transportation, fire fighting, asset leasing, environmental protection and
sanitation, maintenance of roads, manufacture of replacement parts and
machinery, etc. (4) Social services comprise mainly security service, education,
hospitals, preschool, etc. (5) Ancillary services comprise mainly property
management and provision of training centres, guesthouses, canteens, public
shower rooms, etc.
(6) Material supply services comprise mainly purchase of materials, quality
control, storage of materials and delivery of materials, etc. (7) The bank
deposits in CNPC and its fellow subsidiaries as of June 30, 2023 were RMB 53,421
(December 31, 2022: RMB
47,656).
(8) The loans from CNPC and its fellow subsidiaries including long-term
borrowings, long-term borrowings due within one year and short-term borrowings
as of June 30, 2023 were RMB 138,175 (December 31, 2022: RMB 133,453). (9) Other
financial service expense primarily refers to expense of insurance and other
services. (10) Rental and other expenses paid to CNPC and its subsidiaries refer
to: 1) Rental was calculated and paid in accordance with the Building and Land
Use Rights leasing contract between the Group and CNPC. 2) Rents and other
payments (including all rents, leasing service fees and prices for exercising
purchase options) were paid according to other lease agreements entered in to by
the Group and CNPC and its fellow subsidiaries. (11) Purchases of assets
principally represent the purchases of manufacturing equipment, office equipment
and transportation equipment.
151
(b) Related party transactions with associates and joint ventures: The
transactions between the Group and its associates and joint ventures are
conducted at governmentprescribed
prices or market prices.
For the six months ended
June 30, 2023
For the six months ended
June 30, 2022
(a) Sales of goods
- Crude Oil 9,397 11,334
- Refined products 26,152 12,290
- Chemical products 188 378
- Natural Gas 8,471 1,736
(b) Sales of services 470 103
(c) Purchases of goods 13,391 14,398
(d) Purchases of services 31,373 39,403
(5) Commissioned loans
The Company with its subsidiaries, the Group with CNPC and its subsidiaries ,
commissioned CP Finance and other financial institutions to provide loans to
each other, charging interest in accordance with the prevailing interest rates.
Loans between the Company and its subsidiaries have been eliminated in the
consolidated financial statements. As of June 30, 2023, the eliminated
commissioned loans include the loans provided by the Company to its subsidiaries
amounted to RMB 211(December 31, 2022: RMB 150) and the loans provided to the
Company by its subsidiaries amounted to RMB 30,936 (December 31, 2022: RMB
29,744). (6) Guarantees CNPC and its subsidiaries provided guarantees of part of
loans and debentures for the Group, see Note 34 and Note 35.
152
(7) Receivables and payables with related parties
(a) Receivables from related parties
June 30, 2023 December 31, 2022
CNPC and its subsidiaries
Accounts receivable 5,322 2,250
Receivables financing - 1,000
Advances to suppliers 14,125 6,513
Other receivables 3,016 4,063
Other non-current assets 18,589 6,439
Associates and joint ventures
Accounts receivable 2,971 1,565
Advances to suppliers 111 105
Other receivables 2,171 2,056
Other current assets 8,175 8,300
Other non-current assets 11,006 10,319
As of June 30, 2023, the provisions for bad debts of the receivables from
related parties amounted to RMB
475(December 31, 2022: RMB 475).
As of June 30, 2023, the receivables from related parties represented 33%
(December 31, 2022: 25%) of total receivables.
(b) Payables to related parties
June 30, 2023 December 31, 2022
CNPC and its subsidiaries
Notes payable 382 639
Accounts payable 40,644 49,671
Other payables 5,588 3,803
Contract liabilities 1,185 493
Lease liabilities (including lease liabilities due within one year)
97,061 98,143
Associates and joint ventures
Notes payable - 26
Accounts payable 1,621 3,114
Other payables 77 206
Contract liabilities 38 27
As of June 30, 2023, the payables to related parties represented 26% (December
31, 2022: 28%) of total payables.
153
(8) Key management personnel compensation
For the six months ended
June 30, 2023
For the six months ended
June 30, 2022
RMB'000 RMB'000
Key management personnel compensation 6,433 5,060
64 CONTINGENT LIABILITIES
(1) Bank and other guarantees
At June 30, 2023 and December 31, 2022, the Group did not guarantee related
parties or third parties any
significant borrowings or others.
(2) Environmental liabilities
The PRC has enacted comprehensive environmental laws and regulations that affect
the operation of the oil and gas industry. Management believes that there are no
probable liabilities under existing legislation, except for the amounts which
have already been reflected in the consolidated financial statements, which may
have a material adverse effect on the financial position of the Group.
As of June 30, 2023, the amounts of asset retirement obligations which have
already been reflected in the consolidated financial statements relating to
environmental liability were RMB 145,976 (December 31, 2022:
142,081) (Note 36).
(3) Legal contingencies
During the reporting period, the Group has complied with domestic and overseas
laws and regulatory requirements. Notwithstanding certain insignificant lawsuits
as well as other proceedings outstanding of the group, management believes that
any resulting liabilities will not have a material adverse effect on the
financial position of the Group.
(4) Group insurance
The Group has insurance coverage for certain assets that are subject to
significant operating risks, thirdparty liability insurance against claims
relating to personal injury, property and environmental damages that result from
accidents, and employer liabilities insurance. The potential effect on the
financial position of the Group of any liabilities resulting from future
uninsured incidents cannot be estimated by the Group at present.
154
65 COMMITMENTS
(1) Capital commitments
At June 30, 2023, the Group's capital commitments contracted but not provided
for, were RMB 2,495(December
31, 2022: RMB 882).
These capital commitments are transactions mainly with CNPC and its fellow
subsidiaries. (2) Exploration and production licenses The Group is obligated to
make annual payments with respect to its exploration and production licenses to
the Ministry of Natural Resources. Payments incurred were RMB 48 for the six
months ended June 30, 2023 (for the six months ended June 30, 2022: RMB 35).
According to the current policy, estimated annual payments for the next five
years are as follows:
June 30, 2023
Within one year 500
Between one and two years 500
Between two and three years 500
Between three and four years 500
Between four and five years 500
155
FINANCIAL STATEMENTS SUPPLEMENTARY INFORMATION
1 NON-RECURRING PROFIT/LOSS ITEMS
For the six
months ended
June 30, 2023
For the six
months ended
June 30, 2022
Losses on disposal of non-current assets (701) (6,870)
Government grants recognised in the income statement 395 391
Reversal of provisions for bad debts against receivables 541 51
Net gains arising from the disposal of associates and joint
ventures 13 -
Gains on disposal of subsidiaries 91 49
Losses/(Gains) on holding and disposal of other
investments (792) -
Other non-operating income and expenses (2,206) (2,845)
(2,659) (9,224)
Tax impact of non-recurring profit/loss items 573 1,956
Impact of non-controlling interests (31) 17
Total (2,117) (7,251)
2 SIGNIFICANT DIFFERENCES BETWEEN IFRS AND CAS
The consolidated net profit for the year under IFRS and CAS were RMB 94,579 and
RMB 94,583, respectively, with a difference of RMB 4; the consolidated
shareholders' equity for the year under IFRS and CAS were RMB 1,588,046 and RMB
1,588,300, respectively, with a difference of RMB 254. These differences under
the different accounting standards were primarily due to the revaluation for
assets other than fixed assets and oil and gas properties revalued in 1999.
During the Restructuring in 1999, a valuation was carried out in 1999 for assets
and liabilities injected by CNPC. Valuation results other than fixed assets and
oil and gas properties were not recognised in the financial statements prepared
under IFRS.
156
PETROCHINA COMPANY LIMITED
UNAUDITED CONSOLIDATED INTERIM CONDENSED
STATEMENT OF COMPREHENSIVE INCOME
For the six months ended June 30, 2023 and June 30, 2022 (All amounts in RMB
millions unless otherwise stated)
Notes Six months ended June 30
2023 2022
RMB RMB
REVENUE 4 1,479,871 1,614,621
OPERATING EXPENSES
Purchases, services and other (1,004,823) (1,111,531)
Employee compensation costs (77,798) (74,927)
Exploration expenses, including exploratory dry holes (9,098) (12,839)
Depreciation, depletion and amortisation (113,017) (102,863)
Selling, general and administrative expenses (28,647) (28,409)
Taxes other than income taxes 5 (130,220) (141,231)
Other income/(expenses), net 4,349 (23,806)
TOTAL OPERATING EXPENSES (1,359,254) (1,495,606)
PROFIT FROM OPERATIONS 120,617 119,015
FINANCE COSTS
Exchange gain 14,099 8,920
Exchange loss (14,041) (9,435)
Interest income 3,597 1,375
Interest expense (12,184) (9,644)
TOTAL NET FINANCE COSTS (8,529) (8,784)
SHARE OF PROFIT OF ASSOCIATES AND JOINT VENTURES 9,667 8,104
PROFIT BEFORE INCOME TAX EXPENSE 6 121,755 118,335
INCOME TAX EXPENSE 7 (27,176) (27,382)
PROFIT FOR THE PERIOD 94,579 90,953
OTHER COMPREHENSIVE INCOME
Item that will not be reclassified to profit or loss Fair value changes in
equity investment measured at fair value through other comprehensive income 79
(168)
Currency translation differences 2,894 3,198
Items that are or may be reclassified subsequently to profit or loss Currency
translation differences 3,412 1,914
(Losses)/gains on cash flow hedges (2,738) 6,639
Share of the other comprehensive income of associates and joint
ventures accounted for using the equity method 379 223
OTHER COMPREHENSIVE INCOME, NET OF TAX 4,026 11,806
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD 98,605 102,759
PROFIT FOR THE PERIOD ATTRIBUTABLE TO:
Owners of the Company 85,272 81,627
Non-controlling interests 9,307 9,326
94,579 90,953
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD ATTRIBUTABLE TO:
Owners of the Company 86,381 90,314
Non-controlling interests 12,224 12,445
98,605 102,759
BASIC AND DILUTED EARNINGS PER SHARE ATTRIBUTABLE TO
OWNERS OF THE COMPANY (RMB) 8 0.47 0.45
The accompanying notes are an integral part of these interim financial
statements.
157
PETROCHINA COMPANY LIMITED
UNAUDITED CONSOLIDATED INTERIM CONDENSED
STATEMENT OF FINANCIAL POSITION
As of June 30, 2023 and December 31, 2022
(All amounts in RMB millions unless otherwise stated )
Notes June 30, 2023 December 31, 2022
RMB RMB
NON-CURRENT ASSETS
Property, plant and equipment 10 1,470,724 1,492,513
Investments in associates and joint ventures 278,998 269,569
Equity investments measured at fair value through other
comprehensive income 876 943
Right-of-use assets 199,500 203,065
Intangible and other non-current assets 85,505 69,813
Deferred tax assets 17,561 16,293
Time deposits with maturities over one year 5,690 4,016
TOTAL NON-CURRENT ASSETS 2,058,854 2,056,212
CURRENT ASSETS
Inventories 11 168,162 167,751
Accounts receivable 12 81,361 72,028
Derivative financial instruments 19 15,007 21,133
Prepayments and other current assets 118,709 119,654
Financial assets at fair value through other comprehensive
income 19 8,815 4,376
Financial assets at fair value through profit or loss 5,815 3,876
Time deposits with maturities over three months but within one
year 43,381 33,859
Cash and cash equivalents 219,173 191,190
TOTAL CURRENT ASSETS 660,423 613,867
CURRENT LIABILITIES
Accounts payable and accrued liabilities 13 393,124 372,369
Contract liabilities 75,614 77,337
Income taxes payable 6,807 16,471
Other taxes payable 39,256 37,043
Short-term borrowings 14 162,257 100,639
Derivative financial instruments 19 7,822 11,146
Lease liabilities 7,412 7,560
Financial liabilities at fair value through profit or loss 4,258 1,698
TOTAL CURRENT LIABILITIES 696,550 624,263
NET CURRENT LIABILITIES (36,127) (10,396)
TOTAL ASSETS LESS CURRENT LIABILITIES 2,022,727 2,045,816
EQUITY
EQUITY ATTRIBUTABLE TO OWNERS OF THE COMPANY:
Share capital 183,021 183,021
Retained earnings 895,342 850,285
Reserves 334,575 332,334
TOTAL EQUITY ATTRIBUTABLE TO OWNERS OF THE
COMPANY 1,412,938 1,365,640
NON-CONTROLLING INTERESTS 175,108 168,526
TOTAL EQUITY 1,588,046 1,534,166
NON-CURRENT LIABILITIES
Long-term borrowings 14 140,240 222,478
Asset retirement obligations 145,976 142,081
Lease liabilities 115,813 118,200
Deferred tax liabilities 24,742 21,297
Other long-term obligations 7,910 7,594
TOTAL NON-CURRENT LIABILITIES 434,681 511,650
TOTAL EQUITY AND NON-CURRENT LIABILITIES 2,022,727 2,045,816
The accompanying notes are an integral part of these interim financial
statements.
158
PETROCHINA COMPANY LIMITED
UNAUDITED CONSOLIDATED INTERIM CONDENSED
STATEMENT OF CASH FLOWS
For the six months ended June 30, 2023 and June 30, 2022 (All amounts in RMB
millions unless otherwise stated )
Six months ended June 30
2023 2022
RMB RMB
CASH FLOWS FROM OPERATING ACTIVITIES
Profit for the period 94,579 90,953
Adjustments for:
Income tax expense 27,176 27,382
Depreciation, depletion and amortisation 113,017 102,863
Capitalised exploratory costs charged to expense 4,884 5,821
Safety fund reserve 2,057 1,998
Share of profit of associates and joint ventures (9,667) (8,104)
Accrual of provision for impairment of receivables, net (413) 502
Write down in inventories, net 1,445 568
Loss on disposal and scrap of property, plant and equipment 797 7,060
Gain on disposal and scrap of other non-current assets (96) (190)
Gain on disposal of subsidiaries (91) (49)
Fair value (gain)/loss (1,659) 8,432
Dividend income (10) (7)
Interest income (3,597) (1,375)
Interest expense 12,184 9,644
Changes in working capital:
Accounts receivable, prepayments and other current assets (26,217) (86,750)
Inventories (1,856) (78,419)
Accounts payable and accrued liabilities 45,501 138,381
Contract liabilities (1,723) 5,209
CASH FLOWS GENERATED FROM OPERATIONS 256,311 223,919
Income taxes paid (34,605) (27,858)
NET CASH FLOWS FROM OPERATING ACTIVITIES 221,706 196,061
The accompanying notes are an integral part of these interim financial
statements.
159
PETROCHINA COMPANY LIMITED
UNAUDITED CONSOLIDATED INTERIM CONDENSED
STATEMENT OF CASH FLOWS (CONTINUED)
For the six months ended June 30, 2023 and June 30, 2022 (All amounts in RMB
millions unless otherwise stated )
Six months ended June 30
2023 2022
RMB RMB
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures (111,354) (102,191)
Acquisition of investments in associates and joint ventures (1,750) (187)
Acquisition of intangible assets and other non-current assets (1,064) (87)
Acquisition of subsidiaries (183) (302)
Acquisition of financial assets at fair value through profit or loss (3) -
Proceeds from disposal of property, plant and equipment 105 89
Proceeds from disposal of other non-current assets 295 158
Proceeds from disposal of investments and investments in associates 80 3,849
Proceeds from disposal of financial assets at fair value through profit or loss
435 -
Interest received 2,899 1,176
Dividends received 2,327 3,511
(Increase)/decrease in time deposits with maturities over three months (11,196)
4,278
NET CASH FLOWS USED FOR INVESTING ACTIVITIES (119,409) (89,706)
CASH FLOWS FROM FINANCING ACTIVITIES
Repayments of short-term borrowings (361,385) (364,054)
Repayments of long-term borrowings (10,048) (81,415)
Repayments of lease liabilities (5,786) (6,892)
Interest paid (8,194) (6,684)
Dividends paid to non-controlling interests (3,006) (2,520)
Dividends paid to owners of the Company (35,594) (1,437)
Increase in short-term borrowings 327,266 370,643
Increase in long-term borrowings 17,826 65,981
Cash contribution from non-controlling interests 229 237
NET CASH FLOWS USED FOR FINANCING ACTIVITIES (78,692) (26,141)
TRANSLATION OF FOREIGN CURRENCY 4,378 4,152
Increase in cash and cash equivalents 27,983 84,366
Cash and cash equivalents at beginning of the period 191,190 136,789
Cash and cash equivalents at end of the period 219,173 221,155
The accompanying notes are an integral part of these interim financial
statements.
160
PETROCHINA COMPANY LIMITED
UNAUDITED CONSOLIDATED INTERIM CONDENSED
STATEMENT OF CHANGES IN EQUITY
For the six months ended June 30, 2023 and June 30, 2022 (All amounts in RMB
millions unless otherwise stated ) Attributable to owners of the Company
Noncontrolling
Interests
Total
Equity
Share
Capital
Retained
Earnings Reserves Subtotal
RMB RMB RMB RMB RMB RMB
Balance at December 31, 2021 183,021 771,980 308,560 1,263,561 145,308 1,408,869
Change in accounting policy (Note 2) - (2,751) (302) (3,053) - (3,053)
Balance at January 1, 2022 183,021 769,229 308,258 1,260,508 145,308 1,405,816
Profit for the six months ended June 30,
2022 - 81,627 - 81,627 9,326 90,953
Other comprehensive income for the six
months ended June 30, 2022 - - 8,687 8,687 3,119 11,806
Special reserve-safety fund reserve - - 1,922 1,922 76 1,998
Dividends - (17,610) - (17,610) (7,261) (24,871)
Capital contribution from non-controlling
interests - - - - 10,256 10,256
Acquisition of subsidiaries - - - - 62 62
Others - (5) (4,329) (4,334) 9 (4,325)
Balance at June 30, 2022 183,021 833,241 314,538 1,330,800 160,895 1,491,695
Balance at December 31, 2022 (before
adjustment) 183,021 853,585 332,721 1,369,327 168,526 1,537,853
Change in accounting policy (Note 2) - (3,300) (387) (3,687) - (3,687)
Balance at December 31, 2022 (adjusted) 183,021 850,285 332,334 1,365,640
168,526 1,534,166
Balance at January 1, 2023 183,021 850,285 332,334 1,365,640 168,526 1,534,166
Profit for the six months ended June 30,
2023 - 85,272 - 85,272 9,307 94,579
Other comprehensive income for the six
months ended June 30, 2023 - - 1,109 1,109 2,917 4,026
Special reserve-safety fund reserve - - 1,980 1,980 77 2,057
Dividends - (40,265) - (40,265) (6,030) (46,295)
Capital contribution from non-controlling
interests - - - - 385 385
Acquisition of subsidiaries - - - - 6 6
Disposal of subsidiaries - - - - (56) (56)
Others - 50 (848) (798) (24) (822)
Balance at June 30, 2023 183,021 895,342 334,575 1,412,938 175,108 1,588,046
The accompanying notes are an integral part of these interim financial
statements.
161
1 ORGANISATION AND PRINCIPAL ACTIVITIES
PetroChina Company Limited (the "Company") was established as a joint stock
company with limited liability on November 5, 1999 by ??????????? (China
National Petroleum Corporation ("CNPC")) as the sole proprietor in accordance
with the approval Guo Jing Mao Qi Gai [1999] No. 1024 "Reply on the approval of
the establishment of PetroChina Company Limited" from the former State Economic
and Trade Commission of the People's Republic of China ("China" or "PRC"). CNPC
restructured ("the Restructuring") and injected its core business and the
related assets and liabilities into the Company. ??????????? was renamed ?????
?????? (CNPC before and after the change of name) on December 19, 2017. CNPC is
a wholly state-owned company registered in China. The Company and its
subsidiaries are collectively referred to as the "Group". The Group is
principally engaged in (i) the exploration, development, transportation and
production and marketing of crude oil and natural gas, and new energy business;
(ii) the refining of crude oil and petroleum products, production and marketing
of primary petrochemical products, derivative petrochemical products and other
chemical products, and new materials business; (iii) the marketing of refined
products and non-oil products, and trading business; and (iv) the transportation
and the sale of natural gas (Note 15). 2 BASIS OF PREPARATION AND ACCOUNTING
POLICIES The unaudited consolidated interim condensed financial statements
("interim financial statements") have been prepared in accordance with
International Accounting Standard ("IAS") 34 "Interim Financial Reporting" ("IAS
34"). Except as described below, the accounting policies applied in the
preparation of the interim financial statements are consistent with those of the
consolidated financial statements for the year ended December 31, 2022, which
have been prepared in accordance with International Financial Reporting
Standards ("IFRS") as issued by the International Accounting Standards Board
("IASB"). The changes in accounting policies are also expected to be reflected
in the 2023 annual financial statements.
The IASB has issued the following amendments to IFRSs that are first effective
for the current accounting period of the Group:
Amendments to IFRS 17 "Insurance Contracts "
Amendments to IAS 1 and IFRS Practice Statement 2 "Disclosure of Accounting
Policies" Amendments to IAS 8 "Definition of Accounting Estimates" Amendments to
IAS 12"Deferred Tax related to Assets and Liabilities arising from a Single
Transaction"
162
Deferred Tax related to Assets and Liabilities arising from a Single Transaction
- Amendments to IAS 12 The amendments to IAS 12 "Deferred Tax related to Assets
and Liabilities arising from a Single Transaction" require companies to
recognise deferred tax on transactions that, on initial recognition, give rise
to equal amounts of taxable and deductible temporary differences.
The amendment should be applied to transactions that occur on or after the
beginning of the earliest comparative period presented. In addition, the Group
should recognise deferred tax assets (to the extent that it is probable that
they can be utilised) and deferred tax liabilities at the beginning of the
earliest comparative period for all deductible and taxable temporary differences
associated with:
Right-of-use assets and lease liabilities; and
Decommissioning, restoration and similar liabilities, and the corresponding
amounts recognised as part of the cost of the related assets;
The cumulative effect of recognising these adjustments is recognised in the
retained earnings (or other component of equity, as appropriate) at the
beginning of the earliest comparative period. The impact of applies the
amendments on the consolidated statement of financial position are summarised as
follows:
Amount of adjustment
January 1, 2022 December 31, 2022
Deferred tax assets (87) (3,406)
Deferred tax liabilities 2,966 281
Retained earnings (2,751) (3,300)
Reserves (302) (387)
Amount of adjustment
Six months ended June 30, 2022
Income Tax Expense (764)
163
Other than the above effects, none of these developments have had a material
effect on how the Group's results and financial position for the current or
prior periods which have been prepared or presented in this interim financial
statements. The Group has not applied any new standard or interpretation that is
not yet effective for the current accounting period.
The interim financial statements as of June 30, 2023 and for the six months
period ended June 30, 2023 and June 30, 2022 included herein are unaudited but
reflect, in the opinion of the Board of Directors, all adjustments (which
generally includes only normal recurring adjustments) necessary to properly
prepare the interim financial statements, in all material respects, in
accordance with IAS 34. The results of operations for the six months period
ended June 30, 2023 are not necessarily indicative of the results of operations
expected for the year ending December 31, 2023.
Costs that are incurred unevenly during the financial year are accrued or
deferred in the interim financial statements only if it would be also
appropriate to accrue or defer such costs at the end of the financial year. 3
CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS Estimates and judgements are
regularly evaluated and are based on historical experience and other factors,
including expectations of future events that are believed to be reasonable under
the circumstances. The matters described below are considered to be the most
critical in understanding the estimates and judgements that are involved in
preparing the Group's interim financial statements: The significant judgements
made by management in applying the Group's accounting policies and the key
sources of estimation uncertainty were the same as those described in the last
annual financial statements. (a) Estimation of oil and gas reserves Estimates of
oil and natural gas reserves are key elements in the Group's investment
decision-making process. They are also important elements in testing impairment
of property, plant and equipment (Note 3(b)). Changes in proved oil and gas
reserves, particularly proved developed reserves, will affect unit-of-production
depreciation, depletion and amortisation recorded in the Group's interim
financial statements for property, plant and equipment relating to oil and gas
production activities. An increase/reduction in proved developed reserves will
decrease/ increase depreciation, depletion and amortisation charges. Proved oil
and gas reserves estimates are subject to revision, either upward or downward,
based on new information, such as from development drilling and production
activities or from changes in economic factors, including product prices,
contract terms, evolution of technology or development plans, etc.
164
(b) Estimation of impairment of property, plant and equipment Property, plant
and equipment, including oil and gas properties, are reviewed for possible
impairments when events or changes in circumstances indicate that the carrying
amount may not be recoverable. Determination as to whether and how much an asset
is impaired involves management estimates and judgements such as the future
price of crude oil, natural gas, refined and chemical products, the operation
costs, the product mix, production volumes, production profile and the oil and
gas reserves. The impairment reviews and calculations are based on assumptions
that are consistent with the Group's business plans taking into account current
economic conditions. Favourable changes to some assumptions, may allow the Group
to avoid the need to impair any assets or make it necessary to reverse an
impairment loss recognised in prior periods, whereas unfavourable changes may
cause the assets to become impaired. For example, when the assumed future price
and production profile of crude oil used for the expected future cash flows are
different from the actual price and production profile of crude oil respectively
experienced in future, the Group may either over or under recognise the
impairment losses for certain assets. (c) Estimation of asset retirement
obligations Provision is recognised for the future decommissioning and
restoration of oil and gas properties. The amount of the provision recognised is
the present values of the estimated future expenditures. The estimation of the
future expenditures is based on current local conditions and requirements,
including legal requirements, technology, price levels, etc. In addition to
these factors, the present values of these estimated future expenditures are
also impacted by the management plan for the decommissioning of oil and gas
properties, the estimation of the economic lives of oil and gas properties and
estimates of discount rates. The estimations and underlying assumptions are
reviewed on an ongoing basis. Revisions to accounting estimates are recognised
in the period in which the estimate is revised if the revision affects only that
period, or in the period of the revision and future periods if the revision
affects both current and future period.Changes in any of these estimates will
impact the operating results and the financial position of the Group over the
remaining economic lives of the oil and gas properties. According to changes in
the internal and external environment, accounting standards and Group asset
retirement expense measures and other relevant regulations, oil and gas field
companies recalculate their asset retirement obligations of oil and gas
properties based on the latest parameters to more objectively reflect the actual
situation of the Group's asset retirement obligation of oil and gas properties.
165
4 REVENUE
Revenue represents revenues from the sale of crude oil, natural gas, refined
products, chemical products, nonoil products, etc., and from the transportation
of crude oil, and natural gas. Revenue from contracts with customers is mainly
recognised at a point in time. The revenue information for the period ended June
30, 2023 and 2022 are as follows:
For the six months ended
June 30, 2023
Type of Contract
Oil, Gas and
New Energy
Refining,
Chemicals and
New Material Marketing
Natural
Gas Sales
Head Office
and Other Total
Type of goods and services
Crude oil 293,104 - 380,795 - - 673,899
Natural gas 78,532 - 184,554 259,155 - 522,241
Refined products - 471,849 614,586 - - 1,086,435
Chemical products - 99,785 27,185 - - 126,970
Pipeline transportation
business - - - 515 - 515
Non-oil sales in gas
stations - - 17,049 - - 17,049
Others 53,025 3,287 498 16,630 1,244 74,684
Intersegment elimination (355,390) (418,608) (235,988) (12,676) (161)(1,022,823)
Revenue from contracts
with customers 69,271 156,313 988,679 263,624 1,083 1,478,970
Other revenue 121 84 643 41 12 901
Total 69,392 156,397 989,322 263,665 1,095 1,479,871
Geographical Region
China's mainland 34,128 156,313 498,577 263,624 1,083 953,725
Others 35,143 - 490,102 - - 525,245
Revenue from contracts
with customers 69,271 156,313 988,679 263,624 1,083 1,478,970
Other revenue 121 84 643 41 12 901
Total 69,392 156,397 989,322 263,665 1,095 1,479,871
166
For the six months ended
June 30, 2022
Type of Contract
Oil, Gas and
New Energy
Refining,
Chemicals and
New Material Marketing
Natural
Gas Sales
Head Office
and Other Total
Type of goods and services
Crude oil 318,018 - 443,069 - - 761,087
Natural gas 75,793 - 242,222 234,226 - 552,241
Refined products - 471,760 624,297 - - 1,096,057
Chemical products - 109,019 32,680 - - 141,699
Pipeline transportation
business - - - 388 - 388
Non-oil sales in gas
stations - - 15,045 - - 15,045
Others 53,437 2,993 142 18,289 1,243 76,104
Intersegment elimination (373,035) (406,955) (238,399) (10,260) (130)(1,028,779)
Revenue from contracts
with customers 74,213 176,817 1,119,056 242,643 1,113 1,613,842
Other revenue 102 80 549 39 9 779
Total 74,315 176,897 1,119,605 242,682 1,122 1,614,621
Geographical Region
China's mainland 46,060 176,817 460,755 242,643 1,113 927,388
Others 28,153 - 658,301 - - 686,454
Revenue from contracts
with customers 74,213 176,817 1,119,056 242,643 1,113 1,613,842
Other revenue 102 80 549 39 9 779
Total 74,315 176,897 1,119,605 242,682 1,122 1,614,621
5 TAXES OTHER THAN INCOME TAXES
Six months ended June 30
2023 2022
RMB RMB
Consumption tax 88,256 80,222
Resource tax 14,509 16,210
City maintenance and construction tax 8,820 8,705
Educational surcharge 6,506 6,373
Urban and township land use tax 1,947 1,867
Crude oil special gain levy 6,758 23,346
Others 3,424 4,508
130,220 141,231
167
6 PROFIT BEFORE INCOME TAX EXPENSE
Six months ended June 30
2023 2022
RMB RMB
Items credited and charged in arriving at the profit before income tax expense
include:
Credited
Dividend income from equity investment measured at fair value
through other comprehensive income 10 7
Reversal of provision for impairment of receivables 549 52
Reversal of write down in inventories 168 18
Gain on disposal of investment in subsidiaries 91 49
Gain from ineffective portion of cash flow hedges 882 1,128
Charged
Amortisation of intangible and other assets 2,114 3,410
Depreciation and impairment losses:
Owned property, plant and equipment 103,517 93,389
Right-of-use assets 7,386 6,064
Cost of inventories recognised as expense 1,164,467 1,250,608
Provision for impairment of receivables 136 554
Interest expense (i) 12,184 9,644
Loss on disposal and scrap of property, plant and equipment 797 7,060
Variable lease payments, low-value and short-term lease
payment not included in the measurement of lease liabilities 1,062 1,075
Research and development expenses 9,651 9,142
Write down in inventories 1,613 586
Investment loss from disposal of derivative financial instruments 4,279 13,985
(i) Interest expense
Interest expense 12,383 10,318
Include: Interest on lease liabilities 2,617 2,728
Less: Amount capitalised (199) (674)
12,184 9,644
7 INCOME TAX EXPENSE
Six months ended June 30
2023 2022
RMB RMB
Current taxes 25,740 34,517
Deferred taxes(Note 2) 1,436 (7,135)
27,176 27,382
168
In accordance with the relevant PRC income tax rules and regulations, the PRC
corporate income tax rate applicable to the Group is principally 25%. In
accordance with the Circular jointly issued by the Ministry of Finance ("MOF"),
the General Administration of Customs of the PRC and the State Administration of
Taxation ("SAT") on Issues Concerning Tax Policies for In-depth Implementation
of Western Development Strategy (Cai Shui [2011] No.58) and the Notice on
Continuing the Income Tax Policy for Western Development (Notice No.23 of 2020
of the MOF, the SAT, the NDRC), the corporate income tax for the enterprises
engaging in the encouraged industries in the Western China Region is charged at
a preferential corporate income tax rate of 15% from January 1, 2011 to December
31, 2030. Certain branches and subsidiaries of the Company in the Western China
Region obtained the approval for the use of the preferential corporate income
tax rate of 15%. 8 BASIC AND DILUTED EARNINGS PER SHARE Basic and diluted
earnings per share for the six months ended June 30, 2023 and June 30, 2022 have
been computed by dividing profit attributable to owners of the Company by
183,021 million shares issued and outstanding during the period.
There are no potentially dilutive ordinary shares.
9 DIVIDENDS
Six months ended June 30
2023 2022
RMB RMB
Interim dividends attributable to owners of the Company for 2023 (a) 38,434 -
Interim dividends attributable to owners of the Company for 2022 (c) - 37,076
(a) As authorised by shareholders in the Annual General Meeting on June 8, 2023,
the Board of Directors resolved to distribute interim dividends attributable to
owners of the Company in respect of 2023 of RMB 0.21 yuan (inclusive of
applicable tax) per share, amounting to a total of RMB 38,434 on August 30,
2023. The dividends were not paid by the end of the reporting period, and were
not recognised as liability at the end of the reporting period, as they were
declared after the date of the statement of financial position.
(b) Final dividends attributable to owners of the Company in respect of 2022 of
RMB 0.22 yuan (inclusive of applicable tax) per share, amounting to a total of
RMB 40,265, were approved at the 2022 Annual General Meeting held on June 8,
2023 and were paid on June 28, 2023 (A shares) and July 28, 2023 (H shares). (c)
Interim dividends attributable to owners of the Company in respect of 2022 of
RMB 0.20258 yuan (inclusive of applicable tax) per share, amounting to a total
of RMB 37,076, were paid on September 20, 2022 (A shares) and October 28, 2022
(H shares).
(d) Final dividends attributable to owners of the Company in respect of 2021 of
RMB 0.09622 yuan (inclusive of applicable tax) per share, amounting to a total
of RMB 17,610, were approved at the 2021 Annual General Meeting held on June 9,
2022 and were paid on June 28, 2022 (A shares) and July 29, 2022 (H shares).
169
10 PROPERTY, PLANT AND EQUIPMENT
RMB
Cost
At January 1, 2023 4,052,735
Additions 89,524
Disposals or write offs (13,111)
Currency translation differences 16,822
At June 30, 2023 4,145,970
Accumulated depreciation and impairment
At January 1, 2023 (2,560,222)
Charge for the period and others (104,169)
Impairment charge (16)
Disposals or write offs 2,278
Currency translation differences (13,117)
At June 30, 2023 (2,675,246)
Net book value
At June 30, 2023 1,470,724
RMB
Cost
At January 1, 2022 3,790,946
Additions 136,259
Disposals or write offs (41,859)
Currency translation differences 14,214
At June 30, 2022 3,899,560
Accumulated depreciation and impairment
At January 1, 2022 (2,331,650)
Charge for the period and others (136,047)
Disposals or write offs 23,965
Currency translation differences (10,391)
At June 30, 2022 (2,454,123)
Net book value
At June 30, 2022 1,445,437
170
11 INVENTORIES
June 30, 2023 December 31, 2022
RMB RMB
Crude oil and other raw materials 62,555 56,756
Work in progress 15,560 14,448
Finished goods 96,279 104,722
Spare parts and consumables 113 109
174,507 176,035
Less: Write down in inventories (6,345) (8,284)
168,162 167,751
12 ACCOUNTS RECEIVABLE
June 30, 2023 December 31, 2022
RMB RMB
Accounts receivable 83,900 74,917
Less: Provision for impairment of accounts receivable (2,539) (2,889)
81,361 72,028
The aging analysis of accounts receivable (net of impairment of accounts
receivable) based on the date of revenue recognition, as of June 30, 2023 and
December 31, 2022 is as follows:
June 30, 2023 December 31, 2022
RMB RMB
Within 1 year 80,542 71,307
Between 1 and 2 years 481 266
Between 2 and 3 years 236 302
Over 3 years 102 153
81,361 72,028
The Group offers its customers credit terms up to 180 days.
171
Movements in the provision for impairment of accounts receivable are as follows:
Six months ended June 30
2023 2022
RMB RMB
At beginning of the period 2,889 1,414
Provision for impairment of accounts receivable 129 457
Reversal of provision for impairment of accounts receivable (509) (37)
Receivables written off as uncollectible and others 30 19
At end of the period 2,539 1,853
13 ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
June 30, 2023 December 31, 2022
RMB RMB
Trade payables 154,143 172,546
Salaries and welfare payable 18,339 9,385
Dividends payable 8,276 581
Notes payable 17,995 15,630
Construction fee and equipment cost payables 100,366 116,571
Others (i) 94,005 57,656
393,124 372,369
(i) Others consist primarily of deposit, earnest money, caution money and
insurance payables, etc. The aging analysis of trade payables as of June 30,
2023 and December 31, 2022 is as follows: June 30, 2023 December 31, 2022 RMB
RMB
Within 1 year 144,583 162,431
Between 1 and 2 years 1,830 2,682
Between 2 and 3 years 1,209 1,072
Over 3 years 6,521 6,361
154,143 172,546
172
14 BORROWINGS
June 30, 2023 December 31, 2022
RMB RMB
Short-term borrowings excluding current portion of long-term
borrowings 50,543 38,375
Current portion of long-term borrowings 111,714 62,264
162,257 100,639
Long-term borrowings 140,240 222,478
302,497 323,117
The movements in borrowings are analysed as follows:
RMB
Balance at January 1, 2023 323,117
Increase in borrowings 347,581
Decrease in borrowings (371,433)
Currency translation differences 3,232
Balance at June 30, 2023 302,497
The following table sets out the borrowings' remaining contractual maturities at
the date of the statement of financial position, which are based on contractual
undiscounted cash flows including principal and interest, and the earliest
contractual maturity date:
June 30, 2023 December 31, 2022
RMB RMB
Within 1 year 174,923 107,461
Between 1 and 2 years 125,423 129,885
Between 2 and 5 years 50,108 102,490
After 5 years 17,031 16,500
367,485 356,336
The fair values of the Group's long-term borrowings including the current
portion of long-term borrowings are RMB 247,199 at June 30, 2023 (December 31,
2022: RMB 286,770). The carrying amounts of short-term borrowings approximate
their fair values.The fair values are based on discounted cash flows using
applicable discount rates based upon the prevailing market rates of interest
available to the Group for financial instruments with substantially the same
terms and characteristics at the dates of the consolidated statement of
financial position. Such discount rates ranged from 2.18% to 6.87% per annum as
of June 30, 2023 (December 31, 2022: 2.13% to 5.48%) depending on the type of
the borrowings.
173
15 SEGMENT INFORMATION
The Group is principally engaged in a broad range of petroleum related products,
services and activities. The Group's operating segments comprise: Oil, Gas and
New energy, Refining, Chemicals and New materials, Marketing, Natural Gas Sales
and Head Office and Other. On the basis of these operating segments, the
management of the Company assesses the segmental operating results and allocates
resources. Sales between operating segments are conducted principally at market
prices. Additionally, the Group presents geographical information based on
entities located in regions with a similar risk profile. The Oil, Gas and New
energy segment is engaged in the exploration, development, transportation,
production, marketing of crude oil and natural gas and new energy business.
The Refining, Chemicals and New materials segment is engaged in the refining of
crude oil and petroleum products, production and marketing of primary
petrochemical products, derivative petrochemical products, other chemical
products and new materials business. The Marketing segment is engaged in the
marketing of refined products and non-oil products, and the trading business.
The Natural Gas Sales segment is engaged in the transportation and sale of
natural gas. The Head Office and Other segment relates to cash management and
financing activities, the corporate center, research and development, and other
business services supporting the operating business segments of the Group. The
accounting policies of the operating segments are the same as those described in
Note 2 "Basis of Preparation and Accounting Policies".
174
The segment information for the operating segments for the six months ended June
30, 2023 and 2022 are as follows:
Six months ended
June 30, 2023
Oil, Gas and
New Energy
Refining,
Chemicals and
New Materials Marketing
Natural
Gas Sales
Head Office
and Other Total
RMB RMB RMB RMB RMB RMB
Revenue 424,782 575,005 1,225,310 276,341 1,256 2,502,694
Less: intersegment sales (355,390) (418,608) (235,988) (12,676) (161)(1,022,823)
Revenue from external
customers 69,392 156,397 989,322 263,665 1,095 1,479,871
Depreciation, depletion and
amortisation (86,939) (14,096) (8,703) (2,460) (819) (113,017)
Profit / (loss) from operations 85,515 18,350 10,945 14,120 (8,313) 120,617
Finance costs:
Exchange gain 14,099
Exchange loss (14,041)
Interest income 3,597
Interest expense (12,184)
Total net finance costs (8,529)
Share of profit / (loss) of
associates and joint
ventures 2,291 (23) 697 5,559 1,143 9,667
Profit before income tax
expense 121,755
Income tax expense (27,176)
Profit for the period 94,579
Capital expenditures 79,626 3,471 722 988 330 85,137
June 30, 2023
Segment assets 1,488,624 483,562 600,477 167,789 1,677,903 4,418,355
Other assets 28,869
Investments in associates
and joint ventures 49,072 2,176 18,461 174,619 34,670 278,998
Elimination of intersegment
balances (a) (2,006,945)
Total assets 2,719,277
Segment liabilities 611,310 236,870 402,361 125,103 596,918 1,972,562
Other liabilities 70,805
Elimination of intersegment
balances (a) (912,136)
Total liabilities 1,131,231
175
Six months ended
June 30, 2022
Oil, Gas and
New Energy
Refining,
Chemicals and
New Materials Marketing
Natural
Gas Sales
Head Office
and Other Total
RMB RMB RMB RMB RMB RMB
Revenue 447,350 583,852 1,358,004 252,942 1,252 2,643,400
Less: intersegment sales (373,035) (406,955) (238,399) (10,260) (130)(1,028,779)
Revenue from external
customers 74,315 176,897 1,119,605 242,682 1,122 1,614,621
Depreciation, depletion and
amortisation (79,045) (12,021) (8,666) (2,280) (851) (102,863)
Profit / (loss) from operations 82,455 24,061 8,522 13,649 (9,672) 119,015
Finance costs:
Exchange gain 8,920
Exchange loss (9,435)
Interest income 1,375
Interest expense (9,644)
Total net finance costs (8,784)
Share of profit of associates
and joint ventures 1,923 31 530 4,563 1,057 8,104
Profit before income tax
expense 118,335
Income tax expense (27,382)
Profit for the period 90,953
Capital expenditures 72,820 16,827 832 1,420 413 92,312
December 31, 2022
Segment assets 1,457,543 482,452 596,463 171,643 1,646,141 4,354,242
Other assets 28,400
Investments in associates
and joint ventures 46,053 2,205 17,829 169,903 33,579 269,569
Elimination of intersegment
balances (a) (1,982,132)
Total assets 2,670,079
Segment liabilities 581,261 243,417 404,991 135,361 590,604 1,955,634
Other liabilities 74,811
Elimination of intersegment
balances (a) (894,532)
Total liabilities 1,135,913
176
Geographical information
Revenue Non-current assets (b)
Six months
ended
June 30, 2023
Six months
ended
June 30, 2022 June 30, 2023 December
31, 2022
RMB RMB RMB RMB
China's mainland 954,624 928,165 1,847,244 1,853,462
Others 525,247 686,456 185,459 178,343
1,479,871 1,614,621 2,032,703 2,031,805
(a) Elimination of intersegment balances represents elimination of intersegment
accounts and investments. (b) Non-current assets mainly include non-current
assets other than financial instruments and deferred tax assets. 16 CONTINGENT
LIABILITIES (a) Bank and other guarantees At June 30, 2023 and December 31,
2022, the Group did not guarantee related parties or third parties any
significant borrowings or others.
(b) Environmental liabilities
The PRC has enacted comprehensive environmental laws and regulations that affect
the operation of the oil and gas industry. Management believes that there are no
probable liabilities under existing legislation, except for the amounts which
have already been reflected in the interim financial statements, which may have
a material adverse effect on the financial position of the Group.
As of June 30,2023, the amounts of asset retirement obligations which have
already been reflected in the interim financial statements relating to
environmental liability were RMB 145,976 (December 31, 2022: RMB 142,081).
177
(c) Legal contingencies
During the reporting period, the Group has complied with domestic and overseas
laws and regulatory requirements. Notwithstanding certain insignificant lawsuits
as well as other proceedings outstanding, management believes that any resulting
liabilities will not have a material adverse effect on the financial position of
the Group. (d) Group insurance The Group has insurance coverage for certain
assets that are subject to significant operating risks, thirdparty liability
insurance against claims relating to personal injury, property and environmental
damages that result from accidents and employer liabilities insurance. The
potential effect on the financial position of the Group of any liabilities
resulting from future uninsured incidents cannot be estimated by the Group at
present. 17 COMMITMENTS (a) Capital commitments At June 30, 2023, the Group's
capital commitments contracted but not provided for mainly relating to property,
plant and equipment were RMB 2,495 (December 31, 2022: RMB 882). These capital
commitments are transactions mainly with CNPC and its fellow subsidiaries.
(b) Exploration and production licenses
The Company is obligated to make annual payments with respect to its exploration
and production licenses to the Ministry of Natural Resources. Payments incurred
were RMB 48 for the six months ended June 30, 2023 (2022:
RMB 35).
According to the current policy, estimated annual payments for the next five
years are as follows:
June 30, 2023 June 30, 2022
RMB RMB
Within one year 500 500
Between one and two years 500 500
Between two and three years 500 500
Between three and four years 500 500
Between four and five years 500 500
178
18 RELATED PARTY TRANSACTIONS
CNPC, the immediate parent of the Company, is a limited liability company
incorporated in PRC and directly controlled by the PRC government. Equity
interest and voting rights of CNPC in the Company from January 2023 to June 2023
was 82.62% (2022: 80.54%).
Related parties include CNPC and its fellow subsidiaries, their associates and
joint ventures, other stateowned enterprises and their subsidiaries which the
PRC government has control, joint control or significant influence over, and
enterprises which the Group is able to control, jointly control or exercise
significant influence over, key management personnel of the Company and CNPC and
their close family members. (a) Transactions with CNPC and its fellow
subsidiaries, associates and joint ventures The Group has extensive transactions
with other companies in CNPC and its fellow subsidiaries, associates and joint
ventures. Due to the relationships, it is possible that the terms of the
transactions between the Group and other members of CNPC and its fellow
subsidiaries, associates and joint ventures are not the same as those that would
result from transactions with other related parties or wholly unrelated parties.
The principal related party transactions with CNPC and its fellow subsidiaries,
associates and joint ventures, which were carried out in the ordinary course of
business, are as follows: The Company and CNPC entered into a new Comprehensive
Products and Services Agreement on August 27, 2020 for a period of three years
effective from January 1, 2021. The Comprehensive Products and Services
Agreement provides for a range of products and services which may be required
and requested by either party. The products and services to be provided by CNPC
and its fellow subsidiaries to the Group under the Comprehensive Products and
Services Agreement include construction and technical services, production
services, supply of material services, social services, ancillary services and
financial services. The products and services required and requested by either
party are provided in accordance with (1) government-prescribed prices; or (2)
where there is no government-prescribed price, with reference to relevant market
prices; or (3) where neither (1) nor (2) is applicable, then the actual cost
incurred or the agreed contractual prices are used.
179
On August 25,2011, based on the Land Use Rights Leasing Contract signed for a
period of 50 years from 2000, the Company and CNPC entered into a supplemental
agreement to the Land Use Rights Leasing Contract which took effect on January
1, 2012. The expiry date of the supplemental agreement is the same as the Land
Use Rights Leasing Contract, which is in 2050. The Company and CNPC may adjust
area and rental payable for the leased land parcels every three years taking
into consideration of production and operations of the Company and the
prevailing market price. On August 27, 2020, the Company and CNPC each issued a
confirmation letter to the Land Use Rights Leasing Contract, which adjusted the
rental payable and the area for the leased land parcels with effect from January
1, 2021. The Company agreed to rent from CNPC and its fellow subsidiaries
parcels of land with an aggregate area of approximately 1,142 million square
metres with annual rental payable (exclusive of tax and government charges)
approximately RMB 5,673 based on the area of leased land parcels and the current
market conditions. Apart from the annual rental payable and are for the leased
parcels, the other terms in the Land Use Rights Leasing Contract and
supplemental agreement remained.
On August 24, 2017, the Company entered into a new Buildings Leasing Contract
with CNPC, which took effect on January 1, 2018 for a period of 20 years. The
Company and CNPC may adjust the area of buildings leased and the rental fees
every three years as appropriate by reference to the production and operations
of the Company and the prevailing market prices, but the adjusted rental shall
not exceed the comparable fair market prices. On August 27, 2020, the Company
and CNPC issued a confirmation letter to the Buildings Leasing Contract, which
adjusted the annual rental payable and the area for the leased which took effect
on January 1, 2021. Buildings covering an aggregate area of 1,287.5 thousand
square meters were leased at annual rental payable approximately RMB 713 in
accordance with the confirmed rental area and the current property market
conditions. Apart from the annual rental payable and area of the leased
building, the other terms in the Building Leasing Contract remains unchanged.
Transactions with CNPC and its fellow subsidiaries, associates and joint
ventures are summarised as follows: Sales of goods represent the sale of crude
oil, refined products, chemical products and natural gas, etc. The total amount
of these transactions amounted to RMB 60,863 for the six months ended June 30,
2023 (2022: RMB 51,804).
Sales of services principally represent the provision of services in connection
with the transportation of crude oil and natural gas, etc. The total amount of
these transactions amounted to RMB 3,469 for the six months ended June 30, 2023
(2022: RMB 2,511). Purchases of goods and services principally represent
construction and technical services, production services, social services,
ancillary services and material supply services, etc. The total amount of these
transactions amounted to RMB 182,504 for the six months ended June 30, 2023
(2022: RMB 179,586).
180
Purchases of assets principally represent the purchases of manufacturing
equipment, office equipment and transportation equipment, etc. The total amount
of these transactions amounted to RMB 458 for the six months ended June 30, 2023
(2022: RMB 297 ).
Interest income represents interest from deposits placed with CNPC and its
fellow subsidiaries. The total interest income amounted to RMB 405 for the six
months ended June 30, 2023 (2022: RMB 186 ). The balance of deposits at June 30,
2023 was RMB 53,421 (December 31, 2022: RMB 47,656). Interest expense and other
financial service expense, principally represents interest charged on the loans
from CNPC and its fellow subsidiaries, insurance fee charged on the insurance
services from CNPC and its fellow subsidiaries, etc. The total amount of these
transactions amounted to RMB 2,945 for the six months ended June 30, 2023 (2022:
RMB 2,830).
The borrowings from CNPC and its fellow subsidiaries at 30 June, 2023 were RMB
138,175 (December 31,
2022: RMB 133,453).
Rents and other payments paid to CNPC and its fellow subsidiaries including (1)
the rental expense paid by the Group according to Land Use Rights Leasing
Contract and Buildings Leasing Contract between the Group and CNPC; (2) the
payable by the Group (including all rents, leasing service fees and prices for
exercising purchase options) for the period according to the leasing agreements
entered into by the Group and CNPC and its fellow subsidiaries. The total rents
and other payments amounted to RMB 3,216 for the six months ended June 30, 2023
(2022: RMB 3,105).
Amounts due from and to CNPC and its fellow subsidiaries, associates and joint
ventures included in the following accounts captions are summarised as follows:
June 30, 2023 December 31, 2022
RMB RMB
Accounts receivable 8,288 3,810
Prepayments and other current assets 27,127 20,566
Financial assets at fair value through other comprehensive
income - 1,000
Intangible and other non-current assets 29,595 16,758
Accounts payable and accrued liabilities 48,312 57,459
Contract liabilities 1,223 520
Lease liabilities 97,061 98,143
181
(b) Key management compensation
Six months ended June 30
2023 2022
RMB'000 RMB'000
Emoluments and other benefits 5,162 4,136
Contribution to retirement benefit scheme 1,271 924
6,433 5,060
(c) Transactions with other state-controlled entities in the PRC Apart from
transactions with CNPC and its fellow subsidiaries, associates and joint
ventures, the Group's
transactions with other state-controlled entities include but are not limited
to the following:
Sales and purchases of goods and services;
Purchases of assets;
Lease of assets; and
Bank deposits and borrowings
These transactions are conducted in the ordinary course of the Group's business.
19 FAIR VALUE ESTIMATION
The methods and assumptions applied in determining the fair value of each class
of financial assets and financial liabilities of the Group at June 30, 2023 and
December 31, 2022 are disclosed in the respective accounting policies.
Financial assets and financial liabilities that measured at amortised cost
include: cash and cash equivalents, time deposits with maturities over three
months but within one year, accounts receivable, other receivables, longterm
receivables, short-term borrowings, trade payables, notes payable, long-term
borrowings, etc.The fair values of fixed rate long-term borrowings are likely to
be different from their respective carrying amounts. Analysis of the fair values
and carrying amounts of long-term borrowings is presented in Note 14. Except for
this, the carrying amounts of other financial assets and financial liabilities
that are not measured at fair value approximate their fair value.
182
The Group's investments in FVTPL, derivative financial instruments and FVOCI are
measured at fair value on the balance sheet date. The fair value of FVTPL are
categorised into Level 1 of the fair value hierarchy, which are based on the
unadjusted quoted prices in active markets for identical assets or liabilities
as inputs used in the valuation techniques.The fair value of derivative
financial instruments are mainly categorised into Level 1 and Level 2 of the
fair value hierarchy, which are based on the unadjusted quoted prices in active
markets for identical assets or liabilities as inputs used in the valuation
techniques, or the inputs other than quoted prices included within Level 1 that
are observable either directly or indirectly. Bills receivable in FVOCI are
mainly categorised into Level 3 of the fair value hierarchy, which are based on
that bills receivable are mainly short-term bills of acceptance issued by
banks,and their fair values approximate the face values of the bills. The equity
investments in FVOCI that are not held for trading are measured at fair value at
the end of the reporting period. The fair value of such equity investments are
mainly categorised into Level 1 of the fair value hierarchy, which are based on
the unadjusted quoted prices in active markets for identical assets or
liabilities as inputs used in the valuation techniques. As of June 30, 2023,
financial assets and financial liabilities continuing to be measured at fair
value are listed as follows in three levels:
Level 1 Level 2 Level 3 Total
RMB RMB RMB RMB
Financial assets
Financial assets at fair value through profit or loss:
-Financial assets at fair value through profit or loss 5,815 - - 5,815
Derivative financial instruments ?
-Derivative financial assets 2,221 12,786 - 15,007
Financial assets at fair value through other
comprehensive income:
-Bills receivable - - 8,815 8,815
-Other investments 552 - 324 876
8,588 12,786 9,139 30,513
Financial liabilities
Financial liabilities at fair value through profit or loss
-Financial liabilities at fair value through profit or loss 4,258 - - 4,258
Derivative financial instruments ?
-Derivative financial liabilities 1,412 6,410 - 7,822
5,670 6,410 - 12,080
183
As of December 31, 2022, financial assets and financial liabilities continuing
to be measured at fair value are listed as follows in three levels:
Level 1 Level 2 Level 3 Total
RMB RMB RMB RMB
Financial assets
Financial assets at fair value through profit or loss:
-Financial assets at fair value through profit or loss 3,876 - - 3,876
Derivative financial instruments?
-Derivative financial assets 14,508 6,625 - 21,133
Financial assets at fair value through other
comprehensive income:
-Bills receivable - - 4,376 4,376
-Other investments 623 - 320 943
19,007 6,625 4,696 30,328
Financial liabilities
Financial liabilities at fair value through profit or loss
-Financial liabilities at fair value through profit or loss 1,698 - - 1,698
Derivative financial instruments?
-Derivative financial liabilities 983 10,163 - 11,146
2,681 10,163 - 12,844
The Group uses discounted cash flow model with inputted interest rate and
commodity index, which were influenced by historical fluctuation and the
probability of market fluctuation, to evaluate the fair value of the bills
receivable classified as Level 3 financial assets.
184
DOCUMENTS AVAILABLE FOR INSPECTION
The following documents will be available for inspection at the headquarters of
the Company in Beijing upon request by the relevant regulatory authorities and
shareholders in accordance with the laws and regulations or the Articles of
Association:
1. The financial statements under the hand and seal of Mr. Dai Houliang,
Chairman of the Company, Mr. Huang Yongzhang, Director and President of the
Company and Mr. Wang Hua, Chief Financial Officer of the Company. 2. The
original copies of the documents and announcements of the Company published in
the
newspaper designated by the China Securities Regulatory Commission during the
reporting period.
3. The interim report published on other stock markets.
185
CONFIRMATION FROM THE DIRECTORS, SUPERVISORS AND
SENIOR MANAGEMENT
According to the relevant provisions and requirements of the Securities Law of
the People's Republic of China and the Measures for Information Disclosure of
Companies Offering Shares to the Public promulgated by the China Securities
Regulatory Commission, as the Directors, Supervisors and senior management of
PetroChina Company Limited, we have carefully reviewed the interim report for
2023 and concluded that this interim report truly, accurately and completely
represents the business performance of the Company, it contains no
misrepresentation, misleading statements or material omissions and its
preparation and review process complies with laws, regulations and the
requirements of the China Securities Regulatory Commission.
Signatures of the Directors, Supervisors and senior management:
Dai Houliang Hou Qijun Duan Liangwei Huang Yongzhang Ren Lixin Xie Jun Cai
Jinyong Jiang, Simon X. Zhang Laibin Hung Lo Shan Lusan Ho Kevin King Lun Cai
Anhui Xie Haibing Zhao Ying Cai Yong Jiang Shangjun Liao Guoqin Fu Bin Li
Zhanming Jin Yanjiang Zhang Daowei Zhang Minglu Zhu Guowen Wan Jun Wang Hua Li
Ruxin He Jiangchuan Jiang Tongwen Yang Weisheng
August 30, 2023
This interim report is prepared in English and Chinese. In the event of any
inconsistency between the English and Chinese versions, the Chinese version
shall prevail.
xxxxx
xxxxx
xxxxx
PETROCHINA COMPANY LIMITED
( )
(a joint stock limited company incorporated in the People's Republic of China
with limited liability)
(Stock Code: 857)
NOTIFICATION LETTER
19 September 2023
Dear Shareholder,
PetroChina Company Limited (the "Company")
- Notice of Publication of 2023 Interim Report ("Current Corporate
Communications")
The English and Chinese versions of the Company's Current Corporate
Communications are available on the Company's website at www.petrochina.com.cn
and the website of HKEXnews at www.hkexnews.hk, or the arranged printed form(s)
of Current Corporate Communications is enclosed (if applicable). You may access
the Current Corporate Communications by browsing through the Company's website
or the website of HKEXnews.
Shareholders may at any time choose to receive free of charge Corporate
Communications (Note) either in printed form, or read the website version; and
either in English language version only, Chinese language version only or both
language versions, notwithstanding any wish to the contrary they have previously
conveyed to the Company. If you want to receive another printed version of the
Current Corporate Communications, please complete the Request Form on the
reverse side and send it to the Company c/o Hong Kong Registrars Limited (the
"Hong Kong Share Registrar"), using the mailing label and need not to affix a
stamp when returning (if posted in Hong Kong). Otherwise, please affix an
appropriate stamp. The address of Hong Kong Share Registrar is 17M Floor ,
Hopewell Centre, 183 Queen's Road East, Wan Chai, Hong Kong. The Request Form
may also be downloaded from the Company's website at www.petrochina.com.cn or
the website of HKEXnews at www.hkexnews.hk.
If you would like to change your choice of language or means of receipt of the
Company's Corporate Communications in future, please write or send an email to
PetroChina.ecom@computershare.com.hk to the Company c/o the Hong Kong Share
Registrar. Even if you have chosen (or are deemed to have consented) to receive
all future Corporate Communications via website but for any reason you have
difficulty in receiving or gaining access to the Current Corporate
Communications, the Company will promptly upon your request send the Current
Corporate Communications to you in printed form free of charge.
Should you have any queries relating to any of the above matters, please call
the Company's telephone hotline at (852) 2862 8688 during business hours from
9:00 a.m. to 6:00 p.m. from Monday to Friday, excluding public
holidays or send an email to PetroChina.ecom@computershare.com.hk.
By order of the Board PetroChina Company Limited WANG Hua Company Secretary
Note: Corporate Communications include but not limited to (a) the directors'
report, its annual accounts together with a copy of the auditors' report and,
where applicable, its summary financial report; (b) the interim report and,
where applicable, summary interim report; (c) a notice of meeting; (d) a listing
document; (e) a circular; and (f) a proxy form.
PETH-19092023-2(0)
CCS5769 PETH
Request Form
To:
PetroChina Company Limited (the "Company") (Stock Code: 857)
c/o Hong Kong Registrars Limited
17M Floor, Hopewell Centre, 183 Queen's Road East,
Wan Chai, Hong Kong
I/We have already received a printed copy of the Current Corporate
Communications in Chinese/English or have chosen (or are deemed to have
consented) to read the Current Corporate Communications posted on the Company's
website, I/We would like to receive another printed version of the Current
Corporate Communications of the Company as indicated below:
(Please mark ONLY ONE (X) of the following boxes)
I/We would like to receive a printed copy in English now.
I/We would like to receive a printed copy in Chinese now.
I/We would like to receive both the printed English and Chinese copies now.
Name(s) of Shareholder(s)#
Signature
(Please use ENGLISH BLOCK LETTERS)
Address#
Contact telephone number
(Please use ENGLISH BLOCK LETTERS)
Date
# You are required to fill in the details if you download this request form from
the Company's Website.
Notes
1. Please complete all your details clearly.
2. If your shares are held in joint names, the shareholder whose name stands
first on the register of members of the Company in respect of the joint holding
should sign on this Request Form in order to be valid.
3. Any form with more
than one box marked (X), with no box marked (X), with no signature or otherwise
incorrectly completed will be void.
4. For the avoidance of doubt, we do not accept any other instructions written
on this Request Form. 5. Please note that both printed English and Chinese
versions of all the Company's Corporate Communications which we have sent to our
Shareholders in the past 12 months are available from the Company on request.
They are also available on the Company's website (www.petrochina.com.cn) for
five years from the date of first publication.
19092023 1 0
Mailing Label
Computershare Hong Kong Investor Services Limited
Freepost No. 37
Hong Kong
Please cut the mailing label and stick it on an envelope to return this Request
Form to us. No postage is necessary if posted in Hong Kong.
Get in touch with us
Send us an enquiry
Rate our service
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PETROCHINA COMPANY LIMITED
( )
(a joint stock limited company incorporated in the People's Republic of China
with limited liability)
( Stock Code:857)
NOTIFICATION LETTER
19 September 2023
Dear Non-registered Holder (1),
PetroChina Company Limited (the "Company")
- Notice of Publication of 2023 Interim Report ("Current Corporate
Communications")
The English and Chinese versions of the Company's Current Corporate
Communications are available on the Company's website at www.petrochina.com.cn
and the website of HKEXnews at www.hkexnews.hk. You may access the Current
Corporate Communications by browsing through the Company's website or the
website of HKEXnews.
If you want to receive a printed version of the Current Corporate
Communications, please complete the Request Form on the reverse side and return
it to the Company c/o Hong Kong Registrars Limited (the "Hong Kong Share
Registrar") by using the mailing label at the bottom of the Request Form (no
need to affix a stamp if posted in Hong Kong; otherwise, please affix an
appropriate stamp). The address of the Hong Kong Share Registrar is 17M Floor,
Hopewell Centre, 183 Queen's Road East, Wan Chai, Hong Kong. The Request Form
may also be downloaded from the Company's website at www.petrochina.com.cn or
the website of HKEXnews at www.hkexnews.hk.
Should you have any queries relating to any of the above matters, please call
the Company's telephone hotline at (852) 2862 8688 during business hours from
9:00 a.m. to 6:00 p.m. from Monday to Friday, excluding public holidays or send
an email to PetroChina.ecom@computershare.com.hk.
By order of the Board PetroChina Company Limited WANG Hua Company Secretary
Note: (1) This letter is addressed to Non-registered Holders ("Non-registered
Holder" means such person or company whose shares are held in The Central
Clearing and Settlement System (CCASS) and who has notified the Company from
time to time through Hong Kong Securities Clearing Company Limited to receive
Corporate Communications). If you have sold or transferred your shares in the
Company, please disregard this letter and the Request Form on the reverse side.
2023.9.19.
PETH-19092023-1(0)
CCS5770 PETH_NRH
Request Form
To:
PetroChina Company Limited (the "Company")
(Stock Code: 857)
c/o Hong Kong Registrars Limited
17M Floor, Hopewell Centre, 183 Queen's Road East,
Wan Chai, Hong Kong
I/We have already received a printed copy of the Current Corporate
Communications in Chinese/English or have chosen (or are deemed to have
consented) to read the Current Corporate Communications posted on the Company's
website, I/We would like to receive another printed version of the Current
Corporate Communications of the Company as indicated below:
(Please mark ONLY ONE(X) of the following boxes)
I/We would like to receive a printed copy in English now. I/We would like to
receive a printed copy in Chinese now. I/We would like to receive both the
printed English and Chinese copies now.
Name(s) of Non-registered holder(s)#
Signature
Please use ENGLISH BLOCK LETTERS )
Address#
Contact telephone number
Please use ENGLISH BLOCK LETTERS )
Date
# You are required to fill in the details if you download this request form from
the Company's Website.
Notes
1. Please complete all your details clearly.
2. If your shares are held in joint names, the shareholder whose name stands
first on the register of members of the Company in respect of the joint holding
should sign on this Request Form in order to be valid.
3. Any form with more than one box marked (X), with no box marked (X), with no
signature or otherwise incorrectly completed will be void.
4. For the avoidance of doubt, we do not accept any other instructions written
on this Request Form.
5. Please note that both printed English and Chinese versions of all the
Company's Corporate Communications which we have sent to our Shareholders in the
past 12 months are available from the Company on request. They are also
available on the Company's website (www.petrochina.com.cn) for five years from
the date of first publication.
19092023 1 0
Mailing Label
Computershare Hong Kong Investor Services Limited
Freepost No. :37
Hong Kong
Please cut the mailing label and stick it on an envelope to return this Request
Form to us. No postage is necessary if posted in Hong Kong.
Get in touch with us
Send us an enquiry
Rate our service
Lodge a complaint
Contact Us
www.computershare.com/hk/contact
Petrochina (PK) (USOTC:PCCYF)
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