Chinese crude producers are likely to cut capital expenditure (capex) this year. But integrated oil companies will cope better in the lower oil price environment than firms with an upstream or downstream bias. State-controlled PetroChina expects its 2015 profit to be lower by 60-70pc on the year, indicating that it will be about 32bn-43bn yuan ($4.9bn-6.5bn) compared with Yn107bn in 2014. PetroChina made a Yn30.6bn profit in January-September 2015, suggesting that fourth-quarter profits may have fallen to as low as Yn1.4bn. The drop in profitability is likely to lead to further capex cuts this year. PetroChina began trimming capex in 2015, when like-for-like expenditure fell by 22pc on the year to Yn148bn in the first nine months.
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