Coronavirus lowers revenue of China's largest oil and gas company
China National Petroleum Corporation (CNPC), the country's largest producer and supplier of oil and gas products, reported a 14.4 percent decline in operating income for the first quarter of 2020, which amounted to about 509.1 billion yuan (about $ 72.71 billion). This was reported by Silkroadnews. Between January and March this year, net losses attributable to shareholders of the corporation amounted to 16.23 billion yuan. Over the same period last year, their net profit reached 10.25 billion yuan, the company’s quarterly report on the Shanghai and Xiangan stock exchanges said, according to China Daily. The report notes that losses occurred after the outbreak of COVID-19 significantly reduced market demand and affected industrial chains. In addition to the consequences of the pandemic, the main reason for CNPC’s profit decline was the global drop in oil prices: by the end of March, Brent and West Texas Intermediate crude oil prices fell by 73.25% and 66.53%, respectively. According to CNPC Chairman Dai Houlian, the company is facing unprecedented pressure. The coincidence of the two events of the "Black Swan" - the epidemic of a new coronavirus infection and a sharp drop in world oil prices - affects both supply and demand in the oil and natural gas markets, as a result of which the company had to cut costs this year. In the face of a precarious situation, CNPC will strengthen coordination between production chains, tighten cost controls and deepen market-oriented reform to maintain an orderly mode of operations, the company said.
