OREANDA-NEWS. March 30, 2011. PetroChina (601857, 0857.HK) will continue to expand overseas during the 12th Five-Year Plan period and focus on the development of unconventional oil and gas resources such as coal bed methane, shale gas and oil sands, reports China Securities Journal, citing the company's C.F.O., Zhou Mingchun.

According to Zhou, a rise in the oil price will be positive for earnings when the international oil price is below USD 90 per barrel. However, when the international oil price exceeds USD 90 per barrel, increases in the oil price will be negative for PetroChina.

The natural gas pipeline connecting China and Turkmenistan was put into operations in 2010. The volume of natural gas transported hit 4.3 billion cubic meters, generating sales volume of 3.9 billion tons.

According to PetroChina, it is incurring a loss of 0.88 yuan per cubic meter from the natural gas imported from this pipeline.

It was reported that due to the different cost base of natural gas imported from various sources, natural gas prices vary widely in China.

Natural gas consumption accounts for approximately 3.8 percent of total primary energy consumption in China as of end 2010. The rato is 23 pecent in developed countries.

According to the report, PetroChina generated 2010 net profit of 139.99 billion yuan, with earnings per share of 0.76 yuan. Capital expenditure totaled 276.21 billion yuan.

According to BOCOM International, capital expenditure had increased at a compound annual rate of 16.6 percent since 2006, reflecting the increased rate of obsolescence of its oil fields and the difficulty involved in exploring and developing new resources.

The report added that PetroChina benefits from a subsidy of 0.2 yuan per cubic meter of coal bed methane extracted.