SHANGHAI: China’s biggest oil producer Petro­China’s net profit plunged 97.9 per cent in the first half of this year, it said on Wednesday, as it struggled with a weak domestic economy and low oil prices.

Net profit was 531 million yuan ($79.9m) in the January to June period, down drastically from the 25.4 billion yuan it made in the same period last year, PetroChina said in a statement to the Hong Kong stock exchange, where it is listed.

The figure was its lowest half-year net profit since it listed in 2000, Bloomberg News reported.

“Due to the combined effects of the slow recovery of global economy and geopolitical factors, the international crude oil prices reached the bottom and began to move up in an unsteady way,” PetroChina said in the earnings report.

At the same time, China’s economic growth slowed to 6.7pc in the first quarter, its weakest quarterly expansion in seven years.

“Low crude price is a killer for companies like PetroChina as they pretty much rely on oil incomes to make a living,” Tian Miao, a Beijing-based analyst at North Square Blue Oak, told Bloomberg.

“The performance is not unexpected and what they do in the second half hinges on whether oil can really rebound to a higher level.”

Earlier this year PetroChina reported its first quarterly loss since listing — a loss of13.79bn yuan in the January to March period.

The company warned of tougher conditions in the second half.

Financial markets “will tend to be unstable due to significant political events including Brexit”, it said, adding that the oil price was likely to keep fluctuating at a low level.

Before the earnings announcement, PetroChina closed down 0.19pc in Hong Kong but was 0.13pc higher in Shanghai, where it is also listed.

Published in Dawn, August 25th, 2016