Performance among China's "Big Three" oil companies has shown significant divergence. The international oil market's supply-demand dynamics shifted in 2025, with the annual average price of Brent crude falling by nearly 15% year-on-year. Coupled with declining domestic demand for refined oil products and narrowing profit margins in the chemical market, China's three major energy enterprises—Petrochina Company Limited (601857.SH), China Petroleum & Chemical Corporation (600028.SH), and Cnooc Limited (600938.SH)—collectively faced performance pressures.
Furthermore, since late February, escalating tensions in the Middle East have tested the resilience and risk management capabilities of their supply chains. Information from their earnings conferences reveals that these companies have outlined core development pathways for the next five years by finalizing annual capital expenditure plans and reshaping corporate visions and strategic objectives.
Operational resilience has become prominent under performance pressure. "In 2025, global oil supply reached a record high in nearly two decades, while demand growth slowed, leading to a shift from a tight to a loose supply-demand balance," stated Mu Xiuping, Senior Vice President and CFO of Cnooc Limited, during the 2025 earnings conference. He attributed the overall downward trend in international oil prices—with Brent averaging $68.2 per barrel, down nearly 15% year-on-year—to factors including economic growth expectations, geopolitical tensions, and monetary policy adjustments.
Squeezed by declining energy prices and weak demand, the performance of the three companies diverged noticeably. Cnooc Limited stabilized its fundamentals by leveraging upstream cost control advantages. Its 2025 operating revenue decreased by 5.3% to 398.22 billion yuan, with net profit attributable to shareholders dropping 11.5% to 122.082 billion yuan. China Petroleum & Chemical Corporation, impacted by downstream operations, saw a 9.46% decline in revenue to 2.78 trillion yuan and a 36.8% fall in net profit to 31.81 billion yuan, marking the fourth consecutive year of decline. Petrochina Company Limited demonstrated stronger resilience through balanced full-industry-chain operations, with revenue dipping only 2.5% to 2.86 trillion yuan and net profit declining 4.5% to 157.3 billion yuan, a smaller drop than its peers.
Hou Qijun, Chairman of China Petroleum & Chemical Corporation, highlighted that the sharp drop in international crude prices and low chemical margins were primary reasons for the significant profit decline. Specifically, average selling prices for all 11 major externally sold products fell, with crude oil, diesel, and basic chemical raw materials dropping over 7%. This led to a 11.7% reduction in revenue from externally sold petroleum products by the refining and marketing divisions to 1.62 trillion yuan, and a 9.6% decrease in chemical product sales revenue to 378 billion yuan. These two categories collectively accounted for over 70% of total operating revenue.
In response to market pressures, increasing upstream reserves and production became a key strategy for stability. In 2025, China Petroleum & Chemical Corporation's oil and gas output rose 1.9% to 525 million barrels of oil equivalent, a record high. Cnooc Limited's net production reached 777.3 million barrels, up 7%, maintaining years of growth. Petrochina Company Limited's output increased 2.5% to 1.8419 billion barrels of oil equivalent. According to Mu Xiuping, Cnooc Limited mitigated the adverse effects of volatile oil prices through practical cost reductions and stable production growth.
Addressing disruptions from Middle East tensions has become critical. The sudden escalation in late February introduced new variables into global energy supply, raising risks in the Strait of Hormuz. Investors are keenly focused on how oil and gas flow and how companies ensure supply security. Dai Houliang, Chairman of Petrochina Company Limited, assured that operations remain normal, as self-produced oil and gas, pipeline imports, overseas equity oil and gas from non-Middle East regions, and long-term contracts cover about 90% of crude processing and natural gas sales. Only approximately 10% of resources rely on Hormuz Strait imports, enabling stable long-term operations.
Dai added that Petrochina Company Limited formulated a specialized supply security plan in 2025, which is being implemented and refined as needed. While China Petroleum & Chemical Corporation and Cnooc Limited did not disclose specific route dependencies, both are enhancing supply chain resilience through domestic production increases and overseas diversification. For instance, Cnooc Limited holds interests in world-class projects across over 20 countries, including Indonesia, Australia, and Guyana, dispersing geopolitical risks. The company also made six new exploration discoveries in Chinese waters last year, supporting rapid reserve-to-production conversion.
"Global geopolitics and supply-demand conditions are undergoing profound adjustments. Countries worldwide are seeking diversified and stable energy portfolios," Mu noted, emphasizing the irreplaceable role of oil and gas. Accordingly, Cnooc Limited will steadfastly strengthen its core business, maintaining investment to build a solid reserve base.
Looking toward the 15th Five-Year Plan period, the companies are focusing on energy transition. China Petroleum & Chemical Corporation aims to build a new industrial structure centered on energy resources, supported by refining and chemicals, driven by three sales chains, and targeting new growth areas like new energy and materials. Its 2026 capital expenditure is planned at 131.6-148.6 billion yuan, with 72.3 billion yuan allocated to exploration and development.
Petrochina Company Limited upgraded its strategic vision to become a "world-class energy and chemical company," emphasizing dual drivers. It plans 279.4 billion yuan in capital expenditure for 2026, with 220.8 billion yuan directed to oil, gas, and new energy sectors. By 2030, new energy is expected to account for over 20% of total energy supply, reaching parity with oil and gas by 2035. New materials output is targeted to double by the end of the 15th Five-Year Plan.
Cnooc Limited Chairman Zhang Chuanjiang stated the company will leverage marine energy potential, maintain oil and gas as the "first curve," and accelerate transition to new energy as the "second curve." Its 2026 capital budget remains at 112-122 billion yuan, targeting 780-800 million barrels of oil equivalent production, while actively cultivating offshore wind power and other new energy industries.
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