Chinese NOCs see upstream gains and downstream losses

China’s state-owned oil companies have succeeded in raising domestic oil and gas production, but their refining businesses are being squeezed

China’s three NOCs continued to grow their E&P businesses strongly in H1 2024, but there were signs of weakness in downstream operations due to softer-than-expected fuel sales resulting from challenging economic conditions and greater use of cleaner transport. China’s central government has pushed its state-controlled oil and gas giants—PetroChina, Sinopec and CNOOC to invest heavily in production to help the nation meet energy security goals amid rising geopolitical tensions. The firms were responsible for 93% of domestic oil output in H1, and their focus on this combined with higher international oil prices drove their combined net profit for the period 10.3% higher than a year ago, to