EX-99.1

EX-99.1 2 d689917dex991.htm EX-99.1 EX-99.1

Exhibit 99.1

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

LOGO

PETROCHINA COMPANY LIMITED

(A joint stock limited company incorporated in the People’s Republic of China with limited liability)

(Hong Kong Stock Exchange Stock Code: 857; Shanghai Stock Exchange Stock Code: 601857)

ANNOUNCEMENT

First Quarterly Report of 2019

1.	Important Notice

1.1

The Board of Directors of PetroChina Company Limited (the “Company”), the Supervisory Committee and the Directors, Supervisors and Senior Management of the Company warrant that there are no material omissions from, or misrepresentation or misleading statements contained in this quarterly report, and jointly and severally accept full responsibility for the truthfulness, accuracy and completeness of the information contained in this quarterly report.

1.2	This quarterly report has been considered and approved at the second meeting of the Board of the Company in 2019. All Directors attended this meeting of the Board of Directors.

1.3	Mr. Wang Yilin, Chairman of the Board, Mr. Hou Qijun, Director and President of the Company, and Mr. Chai Shouping, Chief Financial Officer of the Company, warrant the truthfulness, accuracy and completeness of the financial statements set out in this quarterly report.

1.4

The financial statements of the Company and its subsidiaries (the “Group”) have been prepared in accordance with the China Accounting Standards (“CAS”) and the International Financial Reporting Standards (“IFRS”), respectively. The financial statements set out in this quarterly report are unaudited.

2.	Basic Data of the Company

2.1 Key Financial Data and Financial Indicators

2.1.1 Key Financial Data and Financial Indicators Prepared under IFRS


					Unit: RMB Million

Items	As at the end of the reporting period		As at the end of the preceding year		Changes from the end of the preceding year to the end of the reporting period (%)
Total assets		2,634,160		2,432,266		8.3
Equity attributable to owners of the Company		1,225,894		1,214,286		1.0

Items	From the beginning of the year to the end of the reporting period		From the beginning of the preceding year to the end of the preceding reporting period		Changes over the same period of the preceding year (%)
Net cash flows from operating activities		62,022		61,802		0.4

Items	From the beginning of the year to the end of the reporting period		From the beginning of the preceding year to the end of the preceding reporting period		Changes over the same period of the preceding year (%)
Revenue		591,041		542,654		8.9
Net profit attributable to owners of the Company		10,255		10,153		1.0
Return on net assets (%)		0.8		0.8		—
Basic earnings per share (RMB Yuan)		0.056		0.055		1.0
Diluted earnings per share (RMB Yuan)		0.056		0.055		1.0

2.1.2 Key Financial Data and Financial Indicators Prepared under CAS


					Unit: RMB Million

Items	As at the end of the reporting period		As at the end of the preceding year		Changes from the end of the preceding year to the end of the reporting period (%)
Total assets		2,634,448		2,432,558		8.3
Equity attributable to equity holders of the Company		1,226,174		1,214,570		1.0

Items	From the beginning of the year to the end of the reporting period		From the beginning of the preceding year to the end of the preceding reporting period		Changes over the same period of the preceding year (%)
Net cash flows from operating activities		62,022		61,802		0.4

Items	From the beginning of the year to the end of the reporting period		From the beginning of the preceding year to the end of the preceding reporting period		Changes over the same period of the preceding year (%)
Operating income		591,041		542,654		8.9
Net profit attributable to equity holders of the Company		10,251		10,150		1.0
Net profit after deducting non-recurring profit/loss items attributable to equity holders of the Company		13,731		12,348		11.2
Weighted average return on net assets (%)		0.8		0.8		—
Basic earnings per share (RMB Yuan)		0.056		0.055		1.0
Diluted earnings per share (RMB Yuan)		0.056		0.055		1.0


	Unit: RMB Million

Non-recurring profit/loss items	Profit/(loss) from the beginning of the year to the end of the reporting period
Net profit on disposal of non-current assets		32
Government grants recognised in the income statement		188
Reversal of provisions for bad debts against receivables		1
Net gains on disposal of subsidiaries		5
Other non-operating income and expenses		(4,826	)

Sub-total		(4,600	)

Tax impact of non-recurring profit/loss items		1,128
Impact of non-controlling interests		(8	)

Total		(3,480	)

2.1.3 Differences between CAS and IFRS

☒ Applicable ☐ Inapplicable

The consolidated net profit for the reporting period under IFRS and CAS were RMB16,049 million and RMB16,045 million, respectively, with a difference of RMB4 million; the consolidated shareholders’ equity as at the end of the reporting period under IFRS and CAS were RMB1,426,419 million and RMB1,426,700 million, respectively, with a difference of RMB281 million, which was primarily due to the revaluation for assets other than fixed assets and oil and gas properties revalued in 1999. During the restructuring in 1999, a valuation was carried out for assets and liabilities injected by China National Petroleum Corporation. On December 19, 2017, 中國石油天然氣集團公司, the Chinese name of CNPC was changed into 中國石油天然氣集團有限公司 (“CNPC” before and after the change of name). The valuation results on assets other than fixed assets and oil and gas properties were not recognised in the financial statements prepared under IFRS.

2.2	Total Number of Shareholders, Shareholdings of Top Ten Shareholders and Shareholdings of Top Ten Holders of Marketable Shares (or Shareholders of Shares Without Selling Restrictions) as at the end of the Reporting Period


Total number of shareholders as at the end of the reporting period		533,290 shareholders including 526,781 holders of A shares and 6,509 overseas holders of H shares (including 164 registered holders of the American Depository Shares).



Shareholdings of the top ten shareholders
Name of shareholder	Nature of shareholder	Percentage of shareholding (%)		Number of shares held			Number of shares with selling restrictions		Number of shares pledged or subject to lock-ups
CNPC	State-owned		80.87		148,010,665,536	⁽¹⁾		0		0
HKSCC Nominees Limited⁽²⁾	Overseas legal person		11.41		20,883,204,087	⁽³⁾		0		0
CNPC-CSC-17 CNPC E2 Pledge and Trust Special Account	State-owned legal person		2.09		3,819,989,252			0		3,819,989,252
CNPC-CSC-17 CNPC EB Pledge and Trust Special Account	State-owned legal person		1.12		2,051,488,603			0		2,051,488,603
China Securities Finance Corporation Limited	State-owned legal person		0.62		1,139,138,704			0		0
Beijing Chengtong Financial Holding Investment Co. Ltd.	State-owned legal person		0.53		972,762,646			0		0
Guoxin Investment Co., Ltd.	State-owned legal person		0.44		797,794,036			0		0
China Baowu Steel Group Corporation Limited	State-owned legal person		0.34		624,000,000			0		0
Ansteel Group Corporation	State-owned legal person		0.24		440,000,000			0		0
Hong Kong Securities Clearing Company Limited (HKSCC)⁽⁴⁾	Overseas legal person		0.13		229,807,062			0		0


Shareholdings of the top ten shareholders of shares without selling restrictions
Name of shareholders	Number of shares held		Type of shares
CNPC		148,010,665,536		A Shares
HKSCC Nominees Limited		20,883,204,087		H Shares
CNPC-CSC-17 CNPC E2 Pledge and Trust Special Account		3,819,989,252		A Shares
CNPC-CSC-17 CNPC EB Pledge and Trust Special Account		2,051,488,603		A Shares
China Securities Finance Corporation Limited		1,139,138,704		A Shares
Beijing Chengtong Financial Holding Investment Co. Ltd.		972,762,646		A Shares
Guoxin Investment Co., Ltd.		797,794,036		A Shares
China Baowu Steel Group Corporation		624,000,000		A Shares
Ansteel Group Corporation		440,000,000		A Shares
Hong Kong Securities Clearing Company Limited (HKSCC)		229,807,062		A Shares

Statement on constitution of affiliation or parties acting in concert among shareholders above:

Save for that both HKSCC Nominees Limited and Hong Kong Securities Clearing Company Limited are wholly-owned subsidiaries of Hong Kong Exchanges and Clearing Limited, the Company is not aware of any affiliation among the above ten shareholders or any one of them constituting parties acting in concert under the Administrative Measures for the Takeover of Listed Companies.


Notes:	(1)	Such figure excludes the H shares indirectly held by CNPC through Fairy King Investments Limited, an overseas wholly-owned subsidiary of CNPC.
	(2)	HKSCC Nominees Limited is a wholly-owned subsidiary of the Hong Kong Exchanges and Clearing Limited and acts as a nominee on behalf of other corporate or individual shareholders to hold the H shares of the Company.
	(3)	291,518,000 H shares were indirectly held by CNPC through Fairy King Investments Limited, an overseas wholly-owned subsidiary of CNPC, representing 0.16% of the total share capital of the Company. These shares were held in the name of HKSCC Nominees Limited.
	(4)	Hong Kong Securities Clearing Company Limited is a wholly-owned subsidiary of the Hong Kong Exchanges and Clearing Limited and, acting as a nominee holder, holds the A shares of the Company listed on the Shanghai Stock Exchange and invested by investors through The Stock Exchange of Hong Kong Limited.

2.3	Number of Shareholders of Preferred Shares, Shareholdings of Top Ten Shareholders of Preferred Shares and Shareholdings of Top Ten Shareholders of Preferred Shares without Selling Restrictions as at the end of the Reporting Period

☐ Applicable ☒ Inapplicable

2.4	Business Review

In the first quarter of 2019, the world economy grew at a slower pace with a greater downward pressure and risks of uncertainty. The economy of China continued to operate within a reasonable range and maintained its tendency to be generally steady with certain progress. In terms of the gross domestic productivity (GDP), there was a stable start for the year as it increased by 6.4% as compared with the same period of last year. The supply and demand in the international oil market moved towards a balanced state. The international oil prices fluctuated upwards and the average price decreased as compared with the same period of last year. The average spot price of the West Texas Intermediate crude oil was US$54.87 per barrel, representing a decrease of 12.8% as compared with the same period of last year, and the average spot price of North Sea Brent crude oil was US$63.13 per barrel, representing a decrease of 5.5% as compared with the same period of last year. While the growth of domestic refined oil consumption slowed down, the supply remained abundant.

Facing the complicated operational situation, the Group adhered to the guidelines of stable development, devoted major efforts to high-quality development, intensified the measures for broadening sources of income, reducing expenditures as well as cutting cost and enhancing efficiency, and sped up structural adjustment. The Group grasped the favourable opportunities offered by the upward movement of international oil price and the relatively fast growth of demand in the natural gas market to intensify the production and operation of its two business chains of oil and gas. As a result, the production and operation activities of the Group achieved a good start for the year. In the first quarter of 2019, the Group achieved a revenue of RMB591,041 million under IFRS, representing an increase of 8.9% from RMB542,654 million as compared with the same period of last year. The net profit attributable to owners of the company amounted to RMB10,255 million, representing an increase of 1.0% from RMB10,153 million as compared with the same period of last year.

In respect of exploration and production, the Group continued to optimise its exploration deployment, consolidated the resource base for maintaining the stability in oil production and increasing gas output, accelerated the build-up of the oil and gas production capacity, which led to an increase in the output of oil and gas as compared with the same period of last year. In the first quarter of 2019, crude oil output of the Group was 223.4 million barrels, representing an increase of 4.6% as compared with the same period of last year. Marketable natural gas output of the Group amounted to 999.9 billion cubic feet, representing an increase of 8.9% as compared with the same period of last year. The oil and gas equivalent output was 390.1 million barrels, representing an increase of 6.4% as compared with the same period of last year, of which the domestic oil and gas equivalent output was 337.5 million barrels, representing an increase of 5.0% as compared with the same period of last year, and the overseas oil and gas equivalent output was 52.6 million barrels, representing an increase of 16.0% as compared with the same period of last year. In the first quarter of 2019, in the exploration and production segment, the Group adhered to the low-cost strategy and devoted major efforts to broadening sources of income, reducing expenditures as well as cutting cost and enhancing efficiency. The oil and gas lifting cost decreased by 1.5% as compared with the same period of last year. Benefit from the combined impacts arising out of the increasing efforts on cost control, the Group’s exploration and production segment achieved a profit from operations of RMB14,326 million, representing an increase of 47.1% as compared with RMB9,741 million for the same period of last year.

In respect of refining and chemicals, the Group adjusted and optimised the allocation of resources and the structure of products based on market demands, increased the production of merchantable and high-profit products and reasonably adjusted the ratio of diesel to gasoline in its production from 1.25 for the same period of last year to 1.07 this year. The Group grasped the market opportunities arising in connection with the growth of needs for chemical products and continuously improved the processing load of its chemical production facilities, which resulted in an increase of 3.9% in the outputs of chemical commodity products as compared with the same period of last year. In the first quarter of 2019, the Group processed an aggregate amount of 291.6 million barrels of crude oil, representing an increase of 3.3% as compared with the same period of last year. The Group produced 27.708 million tons of gasoline, diesel and kerosene, representing an increase of 5.8% as compared with the same period of last year. In the first quarter of 2019, the profit from operations of refining and chemicals segment amounted to RMB2,999 million, representing a decrease of 5,442 million as compared with the profit from operations of RMB8,441 million for the same period of last year. The refining operations achieved a profit from operations of RMB46 million, representing a decrease of 3,860 million as compared with the profit from operations of RMB3,906 million for the same period of last year, mainly due to adverse effect in profit from inventories and the effect of internal price marketization. The chemicals operations achieved a profit from operations of RMB2,953 million, representing a decrease of 1,582 million as compared with the profit from operations of RMB4,535 million for the same period of last year, mainly due to the decrease in gross profit of chemical products .

In respect of marketing, grasping the favourable opportunities arising out in connection with the rise in the price of refined products, the Group promptly adjusted its marketing strategies based on the market conditions, kept expanding and increasing sales, and secured smooth back-up channels for refineries. The Group developed overseas high-profitability markets to ensure a smooth operation of the industrial chain and at the same time to improve the overall profitability. The Group sold 42.057 million tons of gasoline, diesel and kerosene, representing a decrease of 0.8% as compared with the same period of last year. In the first quarter of 2019, as a result of the increase in the gross profit of refined products and the increased profitability of marketing measures, the Group achieved a profit from operations of RMB3,517 million in the marketing segment, representing an increase of 88.6% as compared with the profit from operations of RMB1,865 million for the same period of last year.

In respect of natural gas and pipeline, the Group coordinated the utilisation of various resources such as domestically produced gas, imported gas and liquefied natural gas (“LNG”) and optimised the transportation and sale plan of natural gas. The Group continued to develop certain major high-profitability markets and to effectively enhance sales efficiency. At the same time, the Group also accelerated the development of the natural gas pipeline network which was interconnected under a rationalised layout and was also safe and efficient. In the first quarter of 2019, as a result of the rise in the price and sales of natural gas as compared with the same period of last year, the profit from operations of the natural gas and pipeline segment amounted to RMB12,582 million, representing an increase of 12.5% as compared with RMB11,187 million for the same period of last year. Among which, the Group made great efforts to take effective actions to control the loss incurred from sales of imported gas and LNG in the natural gas and pipeline segment, and the net loss incurred amounted to RMB3,289 million with an increase in sales volume, representing a decrease in net loss of RMB2,535 million from the net loss of RMB5,824 million of last year.

In the first quarter of 2019, the average realised price for crude oil of the Group was US$59.53 per barrel, representing a decrease of 5.8% as compared with the same period of last year, among which the domestic realised price was US$59.38 per barrel, representing a decrease of 6.5% as compared with the same period of last year; the average realised price for natural gas was US$6.63 per thousand cubic feet, representing an increase of 4.7% as compared with the same period of last year, among which the domestic realised price was US$6.55 per thousand cubic feet, representing an increase of 10.5% as compared with the same period of last year.

Summary of Key Operating Data for the First Quarter of 2019


Operating Data	Unit		For the three months ended March 31				Changes over the same period of the preceding year (%)

			2019		2018
Crude oil output		Million barrels		223.4		213.7		4.6
of which: domestic		Million barrels		182.7		180.0		1.5
overseas		Million barrels		40.7		33.7		21.0
Marketable natural gas output		Billion cubic feet		999.9		918.5		8.9
of which: domestic		Billion cubic feet		928.8		848.5		9.5
overseas		Billion cubic feet		71.1		70.0		1.5
Oil and natural gas equivalent output		Million barrels		390.1		366.8		6.4
of which: domestic		Million barrels		337.5		321.5		5.0
overseas		Million barrels		52.6		45.3		16.0
Processed crude oil		Million barrels		291.6		282.2		3.3
Gasoline, kerosene and diesel output		Thousand tons		27,708		26,181		5.8
of which: Gasoline		Thousand tons		12,032		10,594		13.6
Kerosene		Thousand tons		2,790		2,376		17.4
Diesel		Thousand tons		12,886		13,211		(2.5	)
Total sales volume of gasoline, kerosene and diesel		Thousand tons		42,057		42,409		(0.8	)
of which: Gasoline		Thousand tons		17,762		17,657		0.6
Kerosene		Thousand tons		4,544		4,382		3.7
Diesel		Thousand tons		19,751		20,370		(3.0	)

Operating Data	Unit		For the three months ended March 31				Changes over the same period of the preceding year (%)

			2019		2018
Output of key chemical products
Ethylene		Thousand tons		1,560		1,463		6.6
Synthetic resin		Thousand tons		2,479		2,370		4.6
Synthetic fiber raw materials and polymers		Thousand tons		372		384		(3.1	)
Synthetic rubber		Thousand tons		243		235		3.4
Urea		Thousand tons		0		70		(100.0	)


		Note:		Figures have been converted at the rate of 1 ton of crude oil = 7.389 barrels and 1 cubic metre of natural gas = 35.315 cubic feet.

3	Significant Events

3.1	Significant changes in key accounting items and financial indicators under CAS and explanation of such changes

☒ Applicable ☐ Inapplicable


Unit: RMB Million
Items	March 31, 2019		December 31, 2018		Changes (%)			Key explanation of the changes
Cash at bank and on hand		124,081		95,133		30.4		Mainly due to the change of fund position of the Company
Advances to suppliers		33,338		17,103		94.9		Mainly due to the increase in prepayments such as those for goods and materials
Right-of-use assets		182,133		—		—		In accordance with the Accounting Standards for Enterprises No.21 – Lease Standards (the “new lease standard”) effective from January 1, 2019, the comparative financial statements no longer need adjustment in respect of the recognition of the right-of-use assets (please refer to 3.6 Other significant events)
Long-term prepaid expenses		9,181		28,529		(67.8	)	Mainly due to the fact that advances of leasing which used to be classified as long-term prepaid expenses are classified as the right-of-use assets
Short-term borrowings		99,906		62,368		60.2		Mainly due to the increase of borrowings for production and operation
Other payables		48,383		33,808		43.1		Mainly due to the increase in other payables recognized based on volume of business
Current portion of non-current liabilities		35,584		75,370		(52.8	)	Mainly used to repay the long-term borrowings and debentures payable due within one year
Debentures payable		131,692		91,817		43.4		Mainly due to the issuance of debentures of RMB40 billion in the first quarter of 2019
Lease liabilities		163,171		—		—		In accordance with the new lease standard effective from January 1, 2019, the comparative financial statements no longer need adjustment in respect of the recognition of the lease liabilities (please refer to 3.6 Other significant events)


Items	For the three months ended March 31						Changes (%)			Key explanation of the changes

	2019			2018
Interest expenses		7,602			5,593			35.9		Mainly due to the generation of interest expense for recognition of lease liabilities according to the new lease standard
Interest income		797			581			37.2		Mainly due to the increase in the interests of bank deposits
Asset impairment losses		6			(4	)		—		Mainly due to the reversal of write down in inventories
Credit losses		(92	)		—			—		Mainly due to increase of the provision for bad debts of accounts receivables
Gains on asset disposal		18			81			(77.8	)	Mainly due to the decrease in gains on disposal of non-current assets
Other comprehensive income, net of tax		(784	)		(4,960	)		(84.2	)	Mainly due to the change of translation differences arising from translation of foreign currency financial statements of overseas subsidiaries under the influence of exchange rates
Other comprehensive income attributable to equity holders of the Company, net of tax		100			(3,800	)		—
Translation differences arising from translation of foreign currency financial statements		(18	)		(3,600	)		(99.5	)
Total comprehensive income		15,261			10,249			48.9		Mainly due to the change of other comprehensive income, net of tax
Total comprehensive income attributable to equity holders of the Company		10,351			6,350			63.0
Net cash flows from financing activities		28,053			(8,049	)		—		Mainly due to the decrease in cash repayments of borrowings

3.2	Developments and impacts of significant events as well as the analysis of and explanation for the solutions

☐ Applicable ☒ Inapplicable

3.3	Status of fulfilment of undertaking given by the Company, shareholders and ultimate controller

☒ Applicable ☐ Inapplicable

During the reporting period, the undertaking given by CNPC, the controlling shareholder of the Company, and the fulfilment thereof were consistent with the information disclosed in the section headed “Significant Events” of the 2018 Annual Report of the Company. There have been no events affecting the performance of these undertakings.

3.4	Caution and explanation as to the anticipated accumulated losses or significant changes over the same period of the preceding year

☐ Applicable ☒ Inapplicable

3.5	Securities investment

☐ Applicable ☒ Inapplicable

3.6	Other significant events

☒ Applicable ☐ Inapplicable

Changes in significant accounting policies

3.6.1

Changes and impact of CAS

The Ministry of Finance (“MOF”) issued a new accounting standard on leases in 2018. The new lease standard is a revision of the Accounting Standard for Business Enterprises No. 21 – Leases issued by MOF in 2006 (the “old lease standard”). The Group has adopted the new lease standard since January 1, 2019, and adjusted the accounting policies accordingly.

The new lease standard refines the definition of lease. The Group assesses whether a contract is a lease or contains any lease based on the revised definition of lease under the new lease standard. As to the contracts existing prior to the initial application of the new lease standard, the Group elects not to reassess whether they are leases or contain any lease on the date of initial application of the new lease standard.

Under the old lease standard, the Group, as a lessee, classifies a lease into a finance lease or an operating lease based on the assessment of whether the lease has transferred substantially all the risks and rewards related to the ownership of an asset to the Group.

The Group elects to adjust the opening balance of retained earnings and other related financial statement items for the year in which the new lease standard is initially applied, by the accumulated adjustments arising from the initial application of the new lease standard, and not to adjust the comparative figures.

As to the operating leases existing prior to the date of initial application, the Group measures the lease liabilities at the present value of the outstanding lease payment, discounted at the incremental borrowing rate as at the date of initial application, and measures the right-of-use assets based on an amount equal to the lease liabilities, with necessary adjustments to the prepaid rents.

Under the new lease standard, the Group recognised right-of-use assets of RMB181,782 million and RMB182,133 million and lease liabilities of RMB163,196 million and RMB163,171 million respectively as at January 1, 2019 and March 31, 2019.

3.6.2 Changes and impacts of IFRS

The Group has initially applied IFRS No.16 — Lease (“IFRS 16”) since January 1, 2019.

IFRS 16 introduced a single, on-balance sheet accounting model for lessees. As a result, the Group, as a lessee, has recognised right-of-use assets representing its rights to use underlying assets and lease liabilities representing its obligation to make lease payments. Lessor accounting remains the same with the previous policies.

The Group has applied IFRS 16 using the modified retrospective approach. The comparative information presented for 2018 has not been restated .

As a lessee, the Group previously classified leases as operating or finance leases based on its assessment of whether the lease has transferred substantially all the risks and rewards related to the ownership of the underlying asset. Under IFRS 16, the Group recognises right-of-use assets and lease liabilities for lease arrangements excluding short-term leases and leases with low-value assets - i.e. these lease arrangements are presented on-balance sheet.

However, the Group elected not to recognise right-of-use assets and lease liabilities for short-term leases and leases with low-value assets. The Group recognises the lease payments associated with these leases in profit or loss or as an expense on a straight-line basis over the lease term.

The Group recognised right-of-use assets of RMB240,642 million and RMB241,539 million and the lease liabilities of RMB163,196 million and RMB163,171 million respectively as at January 1, 2019 and March 31, 2019.

The difference in the recognition of right-of use assets for the initial adoption of the new lease standard under IFRS and CAS arose from the difference of the presentation of the Chinese land use right in the financial statements between the two standards.

3.6.3 VAT rate and pipeline transportation price adjustment

On March 20, 2019, the MOF, the State Administration of Taxation, and the General Administration of Customs issued the Notice on Deepening the Policies Related to Value-Added Tax Reform (Announcement No. 39 of 2019 of the General Administration of Customs of the Ministry of Finance and the State Administration of Taxation). In order to further implement tax cuts and deepen the reform of value-added tax, from April 1, 2019, the current 16% rate for industries such as manufacturing is reduced to 13%, and the current 10% rate for industries such as transportation and construction is reduced to 9%. The tax rate of 6% keeps unchanged.

On March 29, 2019, the National Development and Reform Commission issued the Notice on Adjusting the Inter-provincial Pipeline Transportation Price of Natural Gas. According to the adjustment of the VAT rate, it was decided to adjust the pipeline transportation prices of 13 inter-provincial pipeline transportation enterprises such as PetroChina Beijing Natural Gas Pipeline Co., Ltd. from April 1, 2019.

The above matters do not affect the continuity of the business of the Group and the stability of the management, which is conducive to the continued healthy development of the Group’s businesses and the continued improvement of its future financial position and operating results.

By Order of the Board of Directors

PetroChina Company Limited

Wang Yilin

Chairman

Beijing, the PRC

April 29, 2019

As at the date of this announcement, the Board of Directors of the Company comprises Mr. Wang Yilin as the Chairman; Mr. Liu Yuezhen, Mr. Liu Hongbin and Mr. Duan Liangwei as non-executive Directors; Mr. Hou Qijun as an executive Director; and Mr. Lin Boqiang, Mr. Zhang Biyi, Ms. Elsie Leung Oi-sie, Mr. Tokuchi Tatsuhito and Mr. Simon Henry as independent non-executive Directors.

This announcement is published in English and Chinese. In the event of any inconsistency between the two versions, the Chinese version shall prevail.

Appendix

A. Financial statements for the first quarter of 2019 prepared in accordance with CAS

1.	Consolidated Balance Sheet


ASSETS	March 31, 2019		December 31, 2018
ASSETS	RMB million		RMB million
Current assets
Cash at bank and on hand		124,081		95,133
Notes and accounts receivable		91,581		74,815
Advances to suppliers		33,338		17,103
Other receivables		20,989		17,123
Inventories		169,947		174,586
Other current assets		59,202		54,368

Total current assets		499,138		433,128

Non-current assets
Investments in other equity instruments		939		760
Long-term equity investments		91,757		89,432
Fixed assets		672,984		685,848
Oil and gas properties		781,013		800,475
Construction in progress		221,108		219,594
Intangible assets		77,489		77,261
Right-of-use assets		182,133		—
Goodwill		42,128		42,273
Long-term prepaid expenses		9,181		28,529
Deferred tax assets		24,967		23,498
Other non-current assets		31,611		31,760

Total non-current assets		2,135,310		1,999,430

TOTAL ASSETS		2,634,448		2,432,558



Chairman	Director and President	Chief Financial Officer
Wang Yilin	Hou Qijun	Chai Shouping

1. Consolidated Balance Sheet (Continued)


LIABILITIES AND SHAREHOLDERS’ EQUITY	March 31, 2019			December 31, 2018
LIABILITIES AND SHAREHOLDERS’ EQUITY	RMB million			RMB million
Current liabilities
Short-term borrowings		99,906			62,368
Notes and accounts payable		225,186			252,994
Contract liabilities		76,529			68,076
Employee compensation payable		12,797			10,087
Taxes payable		68,339			82,744
Other payables		48,383			33,808
Current portion of non-current liabilities		35,584			75,370
Other current liabilities		949			939

Total current liabilities		567,673			586,386

Non-current liabilities
Long-term borrowings		179,353			177,605
Debentures payable		131,692			91,817
Lease liabilities		163,171			—
Provisions		134,513			132,780
Deferred tax liabilities		17,280			17,022
Other non-current liabilities		14,066			16,005

Total non-current liabilities		640,075			435,229

Total liabilities		1,207,748			1,021,615

Shareholders’ equity
Share capital		183,021			183,021
Capital surplus		128,710			128,683
Special reserve		15,057			13,831
Other comprehensive income		(32,297	)		(32,397	)
Surplus reserves		194,245			194,245
Undistributed profits		737,438			727,187

Equity attributable to equity holders of the Company		1,226,174			1,214,570

Non-controlling interests		200,526			196,373

Total shareholders’ equity		1,426,700			1,410,943

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY		2,634,448			2,432,558



Chairman	Director and President	Chief Financial Officer
Wang Yilin	Hou Qijun	Chai Shouping

2. Company Balance Sheet


ASSETS	March 31, 2019		December 31, 2018
ASSETS	RMB million		RMB million
Current assets
Cash at bank and on hand		33,072		15,309
Notes and accounts receivable		19,270		18,334
Advances to suppliers		21,865		6,267
Other receivables		16,226		14,316
Inventories		107,683		114,952
Other current assets		45,339		46,082

Total current assets		243,455		215,260

Non-current assets
Investments in other equity instruments		450		390
Long-term equity investments		393,095		388,818
Fixed assets		330,702		337,629
Oil and gas properties		544,604		557,121
Construction in progress		151,385		151,366
Intangible assets		59,121		58,890
Right-of-use assets		105,283		—
Long-term prepaid expenses		6,648		22,761
Deferred tax assets		18,295		17,910
Other non-current assets		7,772		7,884

Total non-current assets		1,617,355		1,542,769

TOTAL ASSETS		1,860,810		1,758,029



Chairman	Director and President	Chief Financial Officer
Wang Yilin	Hou Qijun	Chai Shouping

2. Company Balance Sheet (Continued)


LIABILITIES AND SHAREHOLDERS’ EQUITY	March 31, 2019		December 31, 2018
LIABILITIES AND SHAREHOLDERS’ EQUITY	RMB million		RMB million
Current liabilities
Short-term borrowings		82,760		61,873
Notes and accounts payable		91,715		121,473
Contract liabilities		53,914		47,184
Employee compensation payable		10,134		7,906
Taxes payable		41,775		58,734
Other payables		69,046		43,862
Current portion of non-current liabilities		21,923		63,028
Other current liabilities		224		217

Total current liabilities		371,491		404,277

Non-current liabilities
Long-term borrowings		72,152		72,166
Debentures payable		125,000		85,000
Lease liabilities		89,705		—
Provisions		93,332		92,017
Other non-current liabilities		6,845		8,489

Total non-current liabilities		387,034		257,672

Total liabilities		758,525		661,949

Shareholders’ equity
Share capital		183,021		183,021
Capital surplus		127,859		127,859
Special reserve		8,183		7,373
Other comprehensive income		630		505
Surplus reserves		183,153		183,153
Undistributed profits		599,439		594,169

Total shareholders’ equity		1,102,285		1,096,080

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY		1,860,810		1,758,029



Chairman	Director and President	Chief Financial Officer
Wang Yilin	Hou Qijun	Chai Shouping

3. Consolidated Income Statement


	Three months ended March 31
	2019			2018
Items	RMB million			RMB million
Operating income		591,041			542,654
Less: Cost of sales		(469,670	)		(430,823	)
Taxes and surcharges		(55,034	)		(49,665	)
Selling expenses		(16,326	)		(15,323	)
General and administrative expenses		(14,667	)		(15,030	)
Research and development expenses		(3,580	)		(2,828	)
Finance expenses		(7,423	)		(6,070	)
Including: Interest expenses		7,602			5,593
Interest income		797			581
Asset impairment losses		6			(4	)
Credit losses		(92	)		—
Add: Other income		2,522			2,086
Investment income		2,478			2,148
Including: Income from investment in associates and joint ventures		2,341			2,088
Gains on asset disposal		18			81

Operating profit		29,273			27,226

Add: Non-operating income		550			443
Less: Non-operating expenses		(5,239	)		(3,379	)

Profit before taxation		24,584			24,290

Less: Taxation		(8,539	)		(9,081	)

Net profit		16,045			15,209

Classified by continuity of operations:
Net profit from continuous operation		16,045			15,209
Net profit from discontinued operation		—			—
Classified by ownership:
Shareholders of the Company		10,251			10,150
Non-controlling interests		5,794			5,059
Earnings per share
Basic earnings per share (RMB Yuan)		0.056			0.055
Diluted earnings per share (RMB Yuan)		0.056			0.055
Other comprehensive income		(784	)		(4,960	)
Other comprehensive income attributable to equity holders of the Company, net of tax		100			(3,800	)
(1) Items that will not be reclassified to profit or loss:
Changes in fair value of investments in other equity instruments		35			50
(2) Items that may be reclassified to profit or loss:
Share of other comprehensive income of equity-accounted investee		83			(250	)
Translation differences arising from translation of foreign currency financial statements		(18	)		(3,600	)
Other comprehensive income (net of tax) attributable to non-controlling interests		(884	)		(1,160	)

Total comprehensive income		15,261			10,249

Attributable to：
Equity holders of the Company		10,351			6,350
Non-controlling interests		4,910			3,899



Chairman	Director and President	Chief Financial Officer
Wang Yilin	Hou Qijun	Chai Shouping

4. Income Statement


	Three months ended March 31
	2019			2018
Items	RMB million			RMB million
Operating income		347,061			323,795
Less: Cost of sales		(269,272	)		(246,745	)
Taxes and surcharges		(43,194	)		(39,834	)
Selling expenses		(11,234	)		(10,611	)
General and administrative expenses		(11,509	)		(10,947	)
Research and development expenses		(1,761	)		(1,535	)
Finance expenses		(5,303	)		(4,447	)
Including: Interest expenses		5,286			4,416
Interest income		228			252
Asset impairment losses		(2	)		(24	)
Credit losses		(73	)		—
Add: Other income		2,227			1,635
Investment income		681			6,173
Including: Income from investment in associates and joint ventures		930			855
Gains on asset disposal		20			103

Operating profit		7,641			17,563

Add: Non-operating income		389			321
Less: Non-operating expenses		(1,078	)		(3,198	)

Profit before taxation		6,952			14,686

Less: Taxation		(1,682	)		(5,382	)

Net profit		5,270			9,304

Classified by continuity of operations:
Net profit from continuous operation		5,270			9,304
Net profit from discontinued operation		—			—
Earnings per share
Basic earnings per share (RMB Yuan)		0.029			0.051
Diluted earnings per share (RMB Yuan)		0.029			0.051
Other comprehensive income		125			(350	)
(1) Items that will not be reclassified to profit or loss:
Changes in fair value of investments in other equity instruments		45			(31	)
(2) Items that may be reclassified to profit or loss:
Share of other comprehensive income of equity-accounted investee		80			(319	)

Total comprehensive income		5,395			8,954



Chairman	Director and President	Chief Financial Officer
Wang Yilin	Hou Qijun	Chai Shouping

5. Consolidated Cash Flow Statement


Items	Three months ended March 31
	2019			2018
	RMB million			RMB million
Cash flows from operating activities
Cash received from sales of goods and rendering of services		668,029			609,010
Refund of taxes		353			1,093
Cash received relating to other operating activities		290			414

Sub-total of cash inflows		668,672			610,517

Cash paid for goods and services		(460,269	)		(413,488	)
Cash paid to and on behalf of employees		(30,553	)		(28,074	)
Payments of various taxes		(108,388	)		(93,121	)
Cash paid relating to other operating activities		(7,440	)		(14,032	)

Sub-total of cash outflows		(606,650	)		(548,715	)

Net cash flows from operating activities		62,022			61,802

Cash flows from investing activities
Cash received from disposal of investments		1,629			9,774
Cash received from returns on investments		780			1,047
Net cash received from disposal of fixed assets, oil and gas properties, intangible assets and other long-term assets		53			16

Sub-total of cash inflows		2,462			10,837

Cash paid to acquire fixed assets, oil and gas properties, intangible assets and other long-term assets		(60,872	)		(59,281	)
Cash paid to acquire investments		(245	)		(445	)

Sub-total of cash outflows		(61,117	)		(59,726	)

Net cash flows used for investing activities		(58,655	)		(48,889	)



Chairman	Director and President	Chief Financial Officer
Wang Yilin	Hou Qijun	Chai Shouping

5. Consolidated Cash Flow Statement (Continued)


Items	Three months ended March 31
	2019			2018
	RMB million			RMB million
Cash flows from financing activities
Cash received from capital contributions		47			99
Including: Cash received from non-controlling interests’ capital contributions to subsidiaries		47			99
Cash received from borrowings		236,358			232,444
Cash received relating to other financing activities		—			9

Sub-total of cash inflows		236,405			232,552

Cash repayments of borrowings		(195,031	)		(234,194	)
Cash payments for interest expenses and distribution of dividends or profits		(6,043	)		(6,313	)
Including: Subsidiaries’ cash payments for distribution of dividends or profits to non-controlling interests		(472	)		(389	)
Capital reduction of subsidiaries		(10	)		(94	)
Cash payments relating to other financing activities		(7,268	)		—

Sub-total of cash outflows		(208,352	)		(240,601	)

Net cash flows from financing activities		28,053			(8,049	)

Effect of foreign exchange rate changes on cash and cash equivalents		(1,004	)		(2,071	)

Net increase in cash and cash equivalents		30,416			2,793

Add: Cash and cash equivalents at beginning of the period		85,598			122,777

Cash and cash equivalents at end of the period		116,014			125,570



Chairman	Director and President	Chief Financial Officer
Wang Yilin	Hou Qijun	Chai Shouping

6. Company Cash Flow Statement


Items	Three months ended March 31
	2019			2018
	RMB million			RMB million
Cash flows from operating activities
Cash received from sales of goods and rendering of services		401,019			370,329
Refund of various taxes		353			809
Cash received relating to other operating activities		15,452			8,940

Sub-total of cash inflows		416,824			380,078

Cash paid for goods and services		(273,281	)		(244,655	)
Cash paid to and on behalf of employees		(13,079	)		(19,348	)
Payments of various taxes		(74,377	)		(70,885	)
Cash paid relating to other operating activities		(5,495	)		(5,764	)

Sub-total of cash outflows		(366,232	)		(340,652	)

Net cash flows from operating activities		50,592			39,426

Cash flows from investing activities
Cash received from disposal of investments		2,575			14,195
Cash received from returns on investments		289			5,537
Net cash received from disposal of fixed assets, oil and gas properties, intangible assets and other long-term assets		49			125

Sub-total of cash inflows		2,913			19,857

Cash paid to acquire fixed assets, oil and gas properties, intangible assets and other long-term assets		(42,342	)		(39,160	)
Cash paid to acquire investments		(6,990	)		(14,216	)

Sub-total of cash outflows		(49,332	)		(53,376	)

Net cash flows used for investing activities		(46,419	)		(33,519	)



Chairman	Director and President	Chief Financial Officer
Wang Yilin	Hou Qijun	Chai Shouping

6. Company Cash Flow Statement (Continued)


Items	Three months ended March 31
	2019			2018
	RMB million			RMB million
Cash flows from financing activities
Cash received from borrowings		108,481			83,601
Cash received relating to other financing activities		—			10

Sub-total of cash inflows		108,481			83,611

Cash repayments of borrowings		(88,724	)		(80,841	)
Cash payments for interest expenses and distribution of dividends or profits		(4,150	)		(5,119	)
Cash payments relating to other financing activities		(2,017	)		—

Sub-total of cash outflows		(94,891	)		(85,960	)

Net cash flows from financing activities		13,590			(2,349	)

Effect of foreign exchange rate changes on cash and cash equivalents		—			—

Net increase in cash and cash equivalents		17,763			3,558

Add: Cash and cash equivalents at beginning of the period		13,109			44,432

Cash and cash equivalents at end of the period		30,872			47,990



Chairman	Director and President	Chief Financial Officer
Wang Yilin	Hou Qijun	Chai Shouping

B.	Financial statements for the first quarter of 2019 prepared in accordance with IFRS

1.	Consolidated Statement of Comprehensive Income


	Three months ended March 31
	2019			2018
	RMB million			RMB million
REVENUE		591,041			542,654

OPERATING EXPENSES
Purchases, services and other		(394,315	)		(359,539	)
Employee compensation costs		(32,792	)		(30,083	)
Exploration expenses, including exploratory dry holes		(6,202	)		(6,198	)
Depreciation, depletion and amortisation		(55,010	)		(51,483	)
Selling, general and administrative expenses		(15,995	)		(16,705	)
Taxes other than income taxes		(55,263	)		(49,900	)
Other expense, net		(2,027	)		(706	)

TOTAL OPERATING EXPENSES		(561,604	)		(514,614	)

PROFIT FROM OPERATIONS		29,437			28,040

FINANCE COSTS
Exchange gain		1,967			3,042
Exchange loss		(2,352	)		(3,865	)
Interest income		797			581
Interest expense		(7,602	)		(5,593	)

TOTAL NET FINANCE COSTS		(7,190	)		(5,835	)

SHARE OF PROFIT OF ASSOCIATES AND JOINT VENTURES		2,341			2,088

PROFIT BEFORE INCOME TAX EXPENSE		24,588			24,293
INCOME TAX EXPENSE		(8,539	)		(9,081	)

PROFIT FOR THE PERIOD		16,049			15,212

OTHER COMPREHENSIVE INCOME
Items that will not be reclassified to profit or loss
Fair value loss from financial assets measured at fair value through other comprehensive income		96			50
Items that are or may be reclassified subsequently to profit or loss
Currency translation differences		(963	)		(4,760	)
Share of the other comprehensive income of associates and joint ventures accounted for using the equity method		83			(250	)

OTHER COMPREHENSIVE INCOME, NET OF TAX		(784	)		(4,960	)

TOTAL COMPREHENSIVE INCOME FOR THE PERIOD		15,265			10,252

PROFIT FOR THE PERIOD ATTRIBUTABLE TO:
Owners of the Company		10,255			10,153
Non-controlling interests		5,794			5,059

		16,049			15,212

TOTAL COMPREHENSIVE INCOME FOR THE PERIOD ATTRIBUTABLE TO:
Owners of the Company		10,355			6,353
Non-controlling interests		4,910			3,899

		15,265			10,252

BASIC AND DILUTED EARNINGS PER SHARE ATTRIBUTABLE TO OWNERS OF THE COMPANY (RMB YUAN)		0.056			0.055

2.	Consolidated Statement of Financial Position


	March 31, 2019			December 31, 2018
	RMB million			RMB million
NON-CURRENT ASSETS
Property, plant and equipment		1,675,089			1,705,901
Investments in associates and joint ventures		91,687			89,362
Financial assets measured at fair value through other comprehensive income		917			738
Advance operating lease payments		—			78,240
Right-of-use assets		241,539			—
Intangible and other non-current assets		97,693			98,298
Deferred tax assets		24,967			23,498
Time deposits with maturities over one year		3,130			3,101

TOTAL NON-CURRENT ASSETS		2,135,022			1,999,138

CURRENT ASSETS
Inventories		169,947			174,586
Accounts receivable		79,903			58,507
Prepayments and other current assets		113,529			88,594
Notes receivable		11,678			16,308
Time deposits with maturities over three months but within one year		8,067			9,535
Cash and cash equivalents		116,014			85,598

TOTAL CURRENT ASSETS		499,138			433,128

CURRENT LIABILITIES
Accounts payable and accrued liabilities		287,315			297,828
Contract liabilities		76,529			68,076
Income taxes payable		13,140			5,728
Other taxes payable		55,199			77,016
Short-term borrowings		135,490			137,738

TOTAL CURRENT LIABILITIES		567,673			586,386

NET CURRENT LIABILITIES		(68,535	)		(153,258	)

TOTAL ASSETS LESS CURRENT LIABILITIES		2,066,487			1,845,880

EQUITY
EQUITY ATTRIBUTABLE TO OWNERS OF THE COMPANY:
Share capital		183,021			183,021
Retained earnings		742,437			732,182
Reserves		300,436			299,083

TOTAL EQUITY ATTRIBUTABLE TO OWNERS OF THE COMPANY		1,225,894			1,214,286
NON-CONTROLLING INTERESTS		200,525			196,372

TOTAL EQUITY		1,426,419			1,410,658

NON-CURRENT LIABILITIES
Long-term borrowings		311,045			269,422
Asset retirement obligations		134,513			132,780
Lease liabilities		163,171			—
Deferred tax liabilities		17,273			17,015
Other long-term obligations		14,066			16,005

TOTAL NON-CURRENT LIABILITIES		640,068			435,222

TOTAL EQUITY AND NON-CURRENT LIABILITIES		2,066,487			1,845,880



Chairman	Director and President	Chief Financial Officer
Wang Yilin	Hou Qijun	Chai Shouping

3.	Consolidated Statement of Cash Flows


	Three months ended March 31
	2019			2018
	RMB million			RMB million
CASH FLOWS FROM OPERATING ACTIVITIES

Profit for the period		16,049			15,212
Adjustments for:
Income tax expense		8,539			9,081
Depreciation, depletion and amortisation		55,010			51,483
Capitalised exploratory costs charged to expense		3,014			1,552
Safety fund reserve		1,284			1,111
Share of profit of associates and joint ventures		(2,341	)		(2,088	)
Provision for impairment of receivables, net		92			(2	)
Write down in inventories, net		(6	)		6
Loss/(gain) on disposal of property, plant and equipment		45			(67	)
Gain on disposal of other non-current assets		(80	)		(9	)
Interest income		(797	)		(581	)
Interest expense		7,602			5,593
Changes in working capital:
Accounts receivable, prepayments and other current assets		(35,269	)		(30,521	)
Inventories		4,693			(1,048	)
Accounts payable and accrued liabilities		23,638			24,513
Contract liabilities		(8,453	)		823

CASH FLOWS GENERATED FROM OPERATIONS		73,020			75,058
Income taxes paid		(10,998	)		(13,256	)

NET CASH FLOWS FROM OPERATING ACTIVITIES		62,022			61,802

3. Consolidated Statement of Cash Flows (Continued)


	Three months ended March 31
	2019			2018
	RMB million			RMB million
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures		(58,942	)		(57,120	)
Acquisition of investments in associates and joint ventures		(96	)		(69	)
Prepayments on long-term operating leases		(901	)		(977	)
Acquisition of intangible assets and other non-current assets		(1,029	)		(1,184	)
Proceeds from disposal of property, plant and equipment		52			16
Proceeds from disposal of other non-current assets		43			4
Interest received		476			421
Dividends received		304			626
Decrease in time deposits with maturities over three months		1,438			9,394

NET CASH FLOWS USED FOR INVESTING ACTIVITIES		(58,655	)		(48,889	)

CASH FLOWS FROM FINANCING ACTIVITIES
Repayments of short-term borrowings		(132,241	)		(155,882	)
Repayments of long-term borrowings		(62,790	)		(78,312	)
Payments of lease liabilities		(7,268	)		—
Interest paid		(5,571	)		(5,924	)
Dividends paid to non-controlling interests		(472	)		(389	)
Increase in short-term borrowings		170,099			158,506
Increase in long-term borrowings		66,259			73,938
Capital contribution from non-controlling interests		47			99
Decrease in other long-term obligations		(10	)		(85	)

NET CASH FLOWS FROM FINANCING ACTIVITIES		28,053			(8,049	)

TRANSLATION OF FOREIGN CURRENCY		(1,004	)		(2,071	)

Increase in cash and cash equivalents		30,416			2,793
Cash and cash equivalents at beginning of the period		85,598			122,777

Cash and cash equivalents at end of the period		116,014			125,570

4. Segment Information


	Three months ended March 31
	2019			2018
	RMB million			RMB million
Revenue
Exploration and Production
Intersegment sales		123,570			115,486
Revenue from external customers		28,772			24,005

		152,342			139,491
Refining and Chemicals
Intersegment sales		167,104			150,276
Revenue from external customers		43,502			46,533

		210,606			196,809
Marketing
Intersegment sales		79,776			64,715
Revenue from external customers		412,925			381,489

		492,701			446,204
Natural Gas and Pipeline
Intersegment sales		8,680			7,558
Revenue from external customers		105,666			90,492

		114,346			98,050
Head Office and Other
Intersegment sales		34			8
Revenue from external customers		176			135

		210			143
Total revenue from external customers		591,041			542,654

Profit from operations
Exploration and Production		14,326			9,741
Refining and Chemicals		2,999			8,441
Marketing		3,517			1,865
Natural Gas and Pipeline		12,582			11,187
Head Office and Other		(3,987	)		(3,194	)

		29,437			28,040