We thank and welcome friends from media and all investors to participate in today's interview with us. Announcement: Due to pandemic prevention and control, we will not have face-to-face discussion through today's meeting. And also after today's meeting, we will also have other communications. Before we start, I'd like to introduce my colleagues. I'm PetroChina Board Secretary Wu Enlai, Executive Director and President Mr. Duan Liangwei, CFO Mr. Chai Shouping, and also colleagues from other business segments for PetroChina. Today's announcement includes four parts. First, financial review and analysis of 2020 H1. Next, operation performance review in H1 and the pipeline transactions. Then, president's address. And last, the Q&A session. Now, I would like to invite CFO Mr. Chai to report on the company's financial results in the first half of 2020. And also after that, he will also brief you on the pipeline transactions.
Thank you, Mr. Wu Enlai.
Now, I will review the company's financial performance in 2020 H1. In H1, due to COVID-19, low oil prices, and drastic contraction of domestic oil and gas demand, PetroChina's turnover and profits saw a big drop. The turnover for the company was RMB 929.045 billion, down 22.3%. Operating profit was minus RMB 6.043 billion, down RMB 76.706 billion. Net profit attributable to the parent was minus RMB 29.983 billion, down RMB 58.406 billion. Net EPS was RMB -0.164 . CapEx: In light of the oil prices, operation performance, and cash flow, PetroChina slashed CapEx and adjusted investment structure in a dynamic manner with coordinated efforts in developing key projects. CapEx was RMB 74.761 billion, down 11% year-on-year. The overall scale of which is well under control. E&P business, as the cornerstone of the company, remains a priority of the investment, taking up RMB 54.366 billion in CapEx, or 72.7% of the corporate total.
PetroChina's steady low-cost development strives to improve quality and efficiency and has effectively contained the major costs and fees. In 2020 H1, lifting cost was $9.64 per barrel, down 14% year-on-year. Cash processing fee was RMB 161.43 per ton, down 1.2% year-on-year. Marketing cost was RMB 429.3 per ton, up 14.2% year-on-year, mostly because of a 15.6% decline in refined product sales. The company has made reasonable investment arrangements, improved asset management, and debt structure. Financial performance is generally sound. As of June 30th, total assets were RMB 2.68 trillion, down 2.0% versus the end of last year. Debt ratio was 47.7%, up 0.5 percentage points versus the end of last year. Interest-bearing debt was RMB 528.491 billion, up 13.2% versus the end of last year, mainly due to increased low-cost financing and borrowing in support of production and operation, as well as CapEx.
Gearing ratio was 27.4%, up 3 percentage points versus the end of last year. The company emphasizes cash flow management, operating cash flow was RMB 79.08 billion, which was down 41.2% year-on-year. Free cash flow was minus RMB 26.318 billion, down 272.3% year-on-year, mostly due to the decline of profits and cash CapEx. The company will continue to enhance capital management and cash flow to better support its development. In 2020 H1, operating profit for E&P segment was RMB 10.351 billion, down RMB 43.277 billion. The price change of oil and gas products cut the profit by RMB 81.588 billion. The average realized price of crude was $39.02 per barrel, down 37.9% year-on-year. The sales change of oil and gas products added to the profit by RMB 15.299 billion. Higher crude sales added RMB 8.747 billion, while higher natural gas sales added RMB 6.116 billion.
OpEx and others cut the profit by RMB 23.012 billion. Lagged purchase added to profit by RMB 19.51 billion. Lagged taxes, except income tax, added RMB 4.531 billion. In 2020 H1, operating profit for refining and chemicals segment was minus RMB 10.54 billion, down RMB 16.91 billion. For refining business, operating profit was minus RMB 13.644 billion, down RMB 16.424 billion. Lagged refining gross margin cut the profit by RMB 21.75 billion. Lagged crude gross cut the profit by RMB 1.423 billion. Lagged other expenditure added to the profit by RMB 6.749 billion. For chemicals business, operating profit was RMB 3.104 billion, down RMB 486 million. Due to price changes, profit down RMB 19.283 billion. Due to sales changes, profit up RMB 6.948 billion. Lagged CapEx added to the profit by RMB 11.849 billion, mainly because lagged purchase, service, and other costs added to the profit by RMB 7.635 billion.
In the first half of 2020, for the marketing segment, operating profit was minus RMB 12.892 billion, down RMB 13.386 billion. Due to the drop in domestic oil product demand and high-cost inventory, domestic marketing business saw a loss of RMB 14.618 billion, up RMB 11.116 billion year-on-year, among which low gross margin cut the profit by RMB 8.819 billion. Lower sales cut the profit by RMB 2.510 billion. Lower OpEx added RMB 213 million. International trading operating profit was RMB 1.726 billion, down RMB 2.27 billion year-on-year. In H1 2020, natural gas and the pipeline segment realized an operating profit of RMB 14.372 billion, down RMB 3.93 billion. Natural gas marketing business suffered a loss of RMB 4.579 billion, up RMB 567 million year-on-year, mainly due to cheap spot LNG hitting the market and over-implementation of off-season gas price. The average city gate price in China was $6.96 per cu m, down 10.8% year-on-year.
Gross profit for domestically produced gas was RMB 7.253 billion, up RMB 62 million year-on-year. Importing natural gas and LNG suffered a loss of RMB 11.832 billion, up RMB 631 million. For pipeline transportation business, gross profit was RMB 20.364 billion, down RMB 1.674 billion. For city gas, gross profit was RMB 2.946 billion, down RMB 1.521 billion. More OpEx cut the profit by RMB 166 million. Due to COVID-19 and low oil prices, in H1 2020, PetroChina suffered a relatively large loss. Despite difficulties, the company always values rewarding shareholders. Taking into account the company's operation and financial performance, cash flow, and expected proceeds from pipeline transactions, PetroChina will pay out an interim dividend of RMB 0.08742 per share, RMB 16 billion in total, up 12.6% year-on-year. Now, I will continue to review the company's operating performance in 2020 H1 and pipeline transactions.
In 2020 H1, with growing downward risks in the global economy, fluctuating oil prices, plunging domestic demand due to COVID-19, and increasing competition in China's oil and gas market, PetroChina continued to uphold the prudent development policy, actively coordinated the pandemic containment and our production operation reform development, and strived to improve quality and efficiency, timely adjusted CapEx, and maintained overall steady operation of oil and gas value chains. Since second quarter, operation performance has continued to improve, with core businesses in stable operation and well under control. In 2020 H1, the company's core businesses were in steady operation and well under control, with improving operation performance. First, we took the initiative in domestic E&P, with constant new breakthroughs in key areas. Second, overseas cooperation maintained steady progress with increasing exploration results. Third, we produced less refined products and more chemicals, with steady progress in refining and chemical structure.
Fourth, we strengthened the link between production and marketing. Sales of oil products were all rise. Fifth, end-user gas sales took a large rise. Pipelines maintained stable operations. We took initiatives in domestic E&P, with new breakthroughs in key areas. In 2020 H1, the company optimized its capacity building, cut investment on low-efficient and non-performing production capacity, and promoted science-based production. Crude output grew slightly while gas output grew robustly. We put efforts in E&P. 15 major discoveries and 21 major progress were made in risk explorations and concentrated explorations, including three strategic breakthroughs were made in Tarim and Sichuan Basin. [Foreign language] Manshen 1 well , at the heart of Tarim exploration, had a daily output of 624 cu m of oil and 370,000 cu m of gas. Tarim in [Foreign language] Manshen 1 well had a daily output of 54 cu m of oil and 33,000 cu m of gas.
[Foreign language] Manshen 1 wel l in Sichuan Basin had a daily production of over one million cubic meters, signifying major breakthroughs of oil and gas exploration in Tarim Basin, ultra-deep formation , and Sichuan Basin Permian System, which opens up new areas in oil and gas exploration and are expected to be sizable reserves. Junggar Basin [Foreign language] Mahu Fengc heng Zone and [Foreign language] Shaw an Sag Jiamuhe saw now important achievements in multi-layer 3D exploration, promising sizable oil reserves. Songliao Basin [Foreign language] Daqing Gulong Shale Oil saw major breakthroughs. Gulong Shale Oil [Foreign language] Ping 1 Well in Yi 1 had a daily output of 35 cu m of oil, a breakthrough in shale oil output, which also proves that Qingshankou Group in Daqing exploration area has geological conditions for sizable shale oil. Ordos Basin highlighted efficient and precision exploration.
Tianhuan Sag and Shanbei Chang 8 section are expected to add 200 million tons of oil in place. [Foreign language] Shenmu Mizhi Qingyang area added over 200 BCM of gas in place. Overseas projects worked on quality and efficiency improvement and saw increasing exploration results. In 2020 H1, the company navigated the low oil prices and pandemic, optimized development strategies of oil and gas fields to increase our profits, improved performance of new wells, and stimulated operation, boosted the development efficiency of oil and gas fields. New headway was made in overseas explorations. Risk explorations in Chad saw new breakthroughs. Five exploration wells in [Foreign language] Doseo Sag proved successful, securing 100 million tons of reserve. Major progress was also made in the exploration of Bongor Basin East Sag and North Slope Belts. Kazakhstan PK Project Block 260D and 1057 saw several new discoveries in rolling explorations.
In H1 2020, PetroChina saw a total crude output of 475 million barrels, up 5.2% year-on-year. Domestic production 373 million barrels, up 0.8% year-on-year. Marketable natural gas 2.15 TCF, up 9.4% year-on-year. Domestic production 2.02 TCF, up 10.9%. Oil and gas totaled 834 million BOEs, up 7% year-on-year. Overseas accounts for 124 million BOEs, up 17.3% year-on-year, or 14.8% of the corporate total. In refining and chemicals segment, we strive to reduce fuels and add chemicals production to further adjust product mix. In H1, PetroChina optimized allocation of crude resources and made due adjustments to the processing volume. In H1, crude throughput totaled 568 million barrels, down 4.9% year-on-year. Marketable refined products 52.0 million tons, down 8.2%. Gasoline, kerosene, and diesel were down 10.8%, 29.4%, and 0.8% respectively. Diesel-gasoline ratio stood at 1.18. Chemical commodities totaled 13.847 million tons, up 9.5% year-on-year.
Gasoline plants maintained high utilization rates, with total production at 3.103 million tons, up 4% year-on-year. Key projects like Guangdong Integrated Refining and Chemical Plant and ethane to ethylene gasoline projects in Tarim and Changqing are well underway.
We continue to integrate production and marketing. Sales of refined products are on the rise. In H1, PetroChina rose through the challenges of weak demand and high inventories, enhanced integration between production and marketing, and ensured stable operation of the crude oil industrial chain. We see the opportunity as China resumed work and production. Employed models like drive-through refueling and non-contact payment to improve service and marketing, which stopped the decline of refined product sales. For H1, sales of refined products 76.569 million tons, down 14.8% year-on-year. Gasoline, kerosene, and diesel were down 13.5%, 35.2%, and 11.2% respectively. Sales within China totaled 48.572 million tons, down 15.6% year-on-year.
Gasoline, kerosene, and diesel were down 13.5%, 28.7%, and 15.8% respectively. PetroChina now operates 22,384 gas stations, up 528. Total trade volume exceeded 240 million tons, up 5.1% year-on-year. End-user gas sales took a large rise. Pipelines maintained stable operation. Based on demand changes, we upgraded labeling management, optimized resource allocation, and sales structure, and took targeted measures to explore end-user market. In H1, gas sales totaled 119.767 BCM, down 4.4% year-on-year. Sales within China, 81.82 BCM, down 2.9% year-on-year. We continued with pipeline safety upgrading, started up projects like the middle part of the east route of Sino-Russia natural gas pipeline and Fuzhou connection pipeline. Shenzhen LNG export pipeline was completed. Taking the opportunity, I'd like to recap on the pipeline asset transactions announced a while ago.
On July 23, 2020, the Board of PetroChina announced that the company entered into an agreement to sell certain assets, including major pipelines, some of the UGS, LNG terminals, and midstream oil and gas to PipeChina for equity interest in PipeChina and a cash consideration. In the transaction, the company will sell its equities in 12 subsidiaries, including PetroChina Pipeline, assets of indirectly affiliated entities with independent accounting, including pipeline branches and midstream oil and gas to PipeChina for a 29.9% equity in PipeChina and a cash consideration of over RMB 100 billion . The transactions uphold market-based principles and comply with ethical laws and regulations to safeguard the interests of the company and shareholders. It was a business decision eyeing our long-term development. First, PetroChina can focus more on upstream E&P and downstream market development. Second, it can ease the funding strains from relevant CapEx.
Third, PetroChina can fully utilize nationwide oil and gas transport and storage facilities to improve operation efficiency and value-adding capabilities. In the future, PetroChina and PipeChina will develop hand in hand as China's largest gas producer and importer and a major distributor and service provider in the end-user market. They'll fully utilize nationwide transport and storage facilities to improve operation efficiency and value-adding capabilities. PipeChina is expected to bring mid and long-term return on investment to support our core business. PipeChina will see through the investment, construction, operation, and maintenance of nationwide pipeline network, improve interconnectivity, and optimize operation of resources. It will not engage in petroleum E&P, import and export, production and sales, or other competitive sectors. The two parties entered into an operation agreement to ensure smooth connection between production and transportation. PetroChina will further guarantee investments into pipeline construction, improve operation efficiency, and help reduce transportation costs.
We will pursue the strategies of innovation, resources, markets, internationalization, green and low carbon, promote high-quality development of core businesses, strengthen foundations for sustainable development, improve value-adding capabilities, and better reward shareholders. After the transaction, we'll focus more on upstream E&P and downstream market expansion, fully utilize nationwide transport and storage facilities, leverage resource advantages, speed up downstream gas business layout, work on market expansion, and increase proportion of end-user business, speed up integration of gas and new energies to achieve green and low carbon transition. In 2025, we'll make solid progress in keeping oil production stable and gas output increasing, producing less refined products and more chemicals, as well as green and low carbon development. Within China, we expect stable crude output and rapid growth in gas. Overseas net production will continue to rise.
For refining and chemicals, we'll further upgrade product mix, increase high-value products, and improve end-user market capacity and profitability. We'll further improve natural gas industrial chain, accelerate its integration with new energies like wind, solar, hydrogen, and geothermal, etc., to achieve green and low carbon transition. Now, let's give the floor to Executive Director and President, Mr. Duan Liangwei.
Ladies and gentlemen, friends, good afternoon. Just now, my colleague, Mr. Chai Shouping, briefed you on our 2020 interim results. In 2020 H1, our industry suffered sudden changes. Oil and gas demand was curbed by COVID-19. International oil prices took a free fall that was rare in history. It put much pressure on oil and gas companies around the world and drew broad attention. Our production and operations were also under unprecedented impact and challenges.
In such complicated and challenging times, PetroChina coordinated various efforts, including epidemic control, resuming work and production, and maintaining business operations. We enforced a campaign to improve quality and efficiency with a focus on strict budgeting, carefully planned production, well-calibrated management, and ever-advancing technologies, timely adjusted down CapEx and slashed costs and expenditures to protect our profits and minimize the damage of COVID-19 and low oil prices. Since Q2, our performance has been improving month by month with a prudent financial performance. Decline in revenue is smaller than that of global oil prices. Profit has returned to positive since June. Oil and gas value chains maintained stable. E&P made strategic breakthroughs for upstream operations. It maintained strong and active with production underway. Restructuring in refining and chemicals segment was well underway. End-user gas sales saw large growth. Overseas cooperation was sound and progressive.
All these achievements would be impossible without your support. Thus, on behalf of the Board and management, I hereby extend sincere appreciation to all of you. We know that COVID-19 poses a profound impact on the industry. In the global oil and gas market, the growth will remain for an extended period, and true value chain competition will be increasingly fierce, which requires us to work harder and further improve the value of the company. At the same time, we also recognize that PetroChina is still at a period of important opportunities with many favorable conditions and comparative advantages. China's economic fundamentals sustaining sound and long-term growth remain unchanged and will not change. Currently, it's showing restorative growth and steady recovery. Since Q2, Chinese economic growth has returned to positive.
Government endeavors to boost domestic demand, promote higher standards, opening up and form a new development pattern with policies to cut taxes and fees, release liquidity, improve business environment, etc., which facilitates to further optimize layout, explore markets, cut costs, and raise profits. Recently, global oil prices and market demand are both picking up. It will help us further improve production operation and efficiency. Our long-standing comparative advantages in oil and gas resources, management technologies, and human capital are reinforced. Our foundation for development remains strong. We have full confidence about the future of PetroChina. In H2, PetroChina will maintain strategic focus, strengthen bottom-line thinking, press ahead with the system of production, supply, storage, and sales, deepen reforms and innovation, maintain stable operation, enhance management, front off risk, ensure safety, and actively address various challenges to scale new heights.
We will further improve quality and efficiency through optimization, cost-cutting, better operations, and further innovation. We will limit investments and expenditures to boost business performance and fulfill our targets. We will promote profit-oriented E&P set up explorations, and especially risk-taking exploration. We will strive for stable output in mature blocks and cost-effective capacity building in new ones. We will keep crude output stable with slight growth and rapidly increase natural gas output. We will improve overseas operations to maintain overall stable equity production. We will continue to steepen transition and upgrading our refining and chemicals segment, rationalize resource allocation, produce less refined products and more chemicals, and improve product mix to boost sales and profits. We will enhance marketing of refined products, strengthen inter-region coordination, synergy between oil and non-oil businesses, and precision marketing. We will focus on market exploration, increase retail volume and profits to make sure sales and market share are commensurate with profits.
For natural gas, we'll boost sales and profits at full throttle, optimize resource allocation, employ region and user-specific measures, and maximize market exploration to increase both volume and profits. We'll focus more on green and low carbon growth, emphasize new and renewable energies, increase the share of low and zero carbon energies, pursue clean production and environment-friendly industries, strengthen energy conservation and efficient utilization to create a green competitive edge. Ladies and gentlemen, dear friends, I sincerely hope that PetroChina can continue to enjoy your attention and support. We look forward to forging ahead and achieving greater success with you to share our development and achievements. Thank you.
Thank you, Mr. President.[Foreign language] 然后呢，我们这个进入问答。 And then we will have Q&A session. [Foreign language] 大家好 [Foreign language] 您这几位请按静音。 Ladies and gentlemen, if you would like to ask a question, please press star and then one and wait for your turn. Thank you.
[Foreign language] 对，我们进入问答的环节。Okay, [Foreign language] 好，我们进入问答的环节啊。Now the floor is open to Q&A。 [Foreign language] 好，然后为了更多的人，能够参与到这个讨论里面，我想，每个人，不要超过两个问题。然后在提问题之前，也说一下这个服务的机构。然后我的同事在回答问题的话，也会报一些名字和他的部门。后面，我们第一个问题。The first question comes from Neil Beveridge of Sanford C. Bernstein.
Thank you very much for the presentation. Just a few questions for me. First of all, on the dividend, it's good to see the increase in dividend payment. What are you thinking for the full year dividend? Given the cash windfall from the pipeline payment, you know, how much of a special dividend should we be expecting for the full year? The second question is really around pipeline reform. So you mentioned some of the positives from pipeline reform, but there's also risks of greater competition in the gas market from this reform.
I just wonder if you could say a little bit about how you see these risks and what the company can do to minimize the gas losses that you're currently making. And then maybe one just final question. On the green low carbon energy plan, can you say a little bit more detail about how much investment PetroChina is planning on making and what areas you're going to focus on?
[Foreign language] 来自申博香港有限公司。我有三个问题。第一个，关于公司的派息政策。今年管道资产重组交易，这对于全年的派息会有什么样的影响？是否会有特别的派息？第二个问题是，管道资产的交易会对中国LNG市场带来更大的竞争。中石油会如何应对这样的竞争来尽量使风险最小化？第三个是关于公司的低碳绿色转型发展战略。请在这个，请问在这一方面公司有没有一些具体的举措？今年受这个疫情和低油价的影响，公司上半年出现了较大亏损。尽管面临到很多困难，公司还是注重股东回报，统筹考虑经营业绩、财务状况、现金流情况，也考虑了管道重组预期收益这样一些个因素吧。我们上半年派发股息每股人民币0.0872元。比如说这个派息呢，还是一个相对比较积极的、乐观的这样一个派息。那么未来公司还是秉承。
In the first half of this year, the company has suffered fairly large losses due to COVID-19 and the low oil prices. In the face of these difficulties, we still pay high attention to bring returns to our shareholders. On the basis of our consideration of the fundamentals of the company's development, our financial position, cash flow, and the one-off gain from pipeline asset restructuring, we decided to pay out an interim dividend of RMB 0.0872 per share.
We believe this is a quite active and optimistic payout.
[Foreign language] 未来这个公司还是继续要秉承回报股东这个原则。整体派息政策还是没有太大的变化。我们公司自上市以来一直是按照净利润的45%进行派息。那么2016年受低油价影响增加了特别派息，也考虑一些重组。那么未来的这个政策整个还是一个稳定的派息政策。
In the future, we will continue to pay high attention to bring value back to our shareholders. Generally speaking, our payout policy will remain stable and consistent. Since the company got listed, we have stuck to a payout policy of 45% of the net profit attributable to PetroChina. Since 2016, in the low oil price environment, the company paid out special dividends. In the future, we will continue to maintain stable payout policy and consider any restructuring opportunities.
[Foreign language] 第二个问题就是关于这个管网重组以后，天然气市场竞争更加激烈。实际上这次管道进行了重组，公司也把主要的管道资产、储气库，还有一些LNG接收站注入了国家管网公司。那么我们在国家管网公司，持有29.9%的股权，同时也能够获得现金对价1000亿以上。
As for the second question, the pipeline asset restructuring will bring up more competition in the natural gas market. In this time, the company has injected our main oil and gas pipelines, storages, and LNG terminals into PipeChina , and we will enjoy a 29.9% equity of PipeChina and a cash proceed of more than RMB 100 billion.
[Foreign language] 那么可以看到中国未来天然气市场竞争是越来越激烈，但是朝着市场化方向的这个变化还是在继续的。 We may estimate in the future the natural gas market in China will enjoy more and more future competition, but I think the overall trend of a market-oriented reform will remain constant. [Foreign language] 为了这个提高公司的竞争能力和抗风险能力，我们在天然气业务这一块，一是要加大这个上游国产天然气的生产力度，你们也看到今年我们上半年在这种低油价情况下，我们天然气的产量增长是双位数的增长。 To address these difficulties, competition, and to minimize the risks, the company will take several measures. The first one is we will ramp up our domestic natural gas production, and you can tell from our figures that in the first half of this year, in the low oil price environment, the natural gas production of PetroChina within China has enjoyed a double-digit growth rate. [Foreign language] 与此同时，我们也增加天然气终端，天然气下游的这样一些投资力度。大家也可以看到昆仑能源也发布了业绩，整个公司今年上半年整个燃气业务，就是终端燃气业务，它的这个增长速度也是比较快的。 In the meantime, we will focus more on the investment of our downstream natural gas business, including the end-user market development. In the first half of this year, the city gas business of Kunlun Energy has developed quite rapidly.
[Foreign language] 好，谢谢。 好，我是总裁段良伟，我把低碳战略这个情况啊，回答一下。 I'm Duan Liangwei, President of PetroChina.
I will answer your question concerning green and low carbon development. [Foreign language] 绿色低碳转型是公司既定的发展战略，也是积极履行能源公司作为企业公民的社会责任。 The green and low carbon development strategy is a strategy already decided by the company. It is our initiative to fulfill our corporate social responsibility as a corporate citizen. [Foreign language] 我公司正在编制新能源业务发展规划，初步确定了清洁替代、战略接替、绿色转型三步走的战略。 The company is preparing a plan on the new energy business development. We have already set up a three-step plan, including clean alternatives, strategic replacement, and green transition. [Foreign language] 努力构建化石能源与清洁能源全面融合发展的低碳能源生态圈。 We're trying to build a low carbon energy ecosystem with integrated development of fossil fuels and clean energy. [Foreign language] 十四五期间，公司将大力开发地热、风能、太阳能，加快天然气与新能源电力融合发展，推动轻产业链示范工程等。我们力争，到2050年实现净零排放的目标，谢谢。 In the 14th Five-Year Plan period, we will focus more on the development of geothermal, wind power, and solar energy. We will try to achieve integrated development of natural gas and new energy power, and we will launch pilot projects in the hydrogen industry chain.
In this way, we hope by the year 2050, we will reach a near-zero emission target.
The next question comes from Horace Tse of Credit Suisse.
[Foreign language] 好，管理层你们好，我是 Credit Suisse 的 Horace，我这边有一个问题，就是在管道剥离以后呢，公司对于未来的天然气发展的目标，会不会有所改变，这个牵涉到就是中长期的一个天然气产量的一个目标，这方面的一个就是改变，好，谢谢。 With Credit Suisse. I have a question concerning the natural gas business development. After the pipeline restructuring, will you change your target in this business segment development plan, especially the production in the medium to long term?
我来回答这个问题，我是中国石油财务总监柴守平。管道剥离以后，公司整个天然气战略实际上还是仍然把天然气作为公司发展的成长性、价值性的这样一个最主要的战略。整个发展的目标，一个是在上游上，我们还是增加国内天然气的产量。刚才我也说了，因为上游的国内天然气产量，现在每年增长都是平均下来7%-8%的增长速度。那么上游天然气呢，它的回报率也是比较高的，毛利率都在10%-20%之间。 I'm Chai Shouping, CFO. After the transaction, the company will still take natural gas business as a strategic business of the company, which we believe will bring value to us. And concerning the different objectives, I think first we will continue to enhance our domestic natural gas production. And in recent years, the domestic natural gas production growth rate has maintained between 7% to 8%. And this business segment, this domestic production, can bring better returns to the company.
Its growth margin has been around 10%-20%. [Foreign language] 与此同时，我们还是要大力发展终端燃气业务，也包括气电一体化业务。 Second, we will focus more on the end-user business, including city gas, and especially the natural gas power generation. [Foreign language] 那么公司整个战略还是把天然气做一个非常重要的战略，来进行发展。大家也知道天然气是一个高效低碳的这样一个清洁能源，是未来这个能源的清洁，发展过程中，不可替代的这样一个能源。 The natural gas business will continue to be a very important business segment for us. And as you know, natural gas is a very high-efficient, low-carbon, and clean energy form. In the future, in the company's energy transition, natural gas will have an irreplaceable position.
好，谢谢。 下面有请来自Morgan Stanley的Andy Meng请问。 好，谢谢各位领导。我是来自Morgan Stanley的分析师Andy Meng。有两个问题。那第一个问题呢，我们是看到上半年公司在上游的这个降本当中呢，做得非常不错。我们的lifting cost下降了14%左右。那想问一下整个在上游业务当中，未来有没有继续进行降本增效的这样一个空间？第二个问题呢，是关于我们的炼化和销售板块。那我们知道整个这个炼化行业应该说在国内现在面临的是一个严重的产能过剩的这样一个行业局面。所以在这个板块当中，我们是如何考虑未来的竞争策略，如何来提质增效，为股东创造价值，谢谢。 From Morgan Stanley, two questions. First, in the first half of this year, the company has done quite a good job in reducing costs, especially in the upstream segment. The lifting cost was cut by 14%. So my question is, is there any more room for you to contain the costs in the upstream segment?
Second, as for your refining and chemicals business and the marketing business, right now in China, there's overcapacity in the refining and chemicals business segment. What is the company's future policies to face competition in this market and to bring more value to shareholders, especially as you have outlined in your plan of improving quality and efficiency?
[Foreign language] 我来回答第一个问题。我是中国石油财务总监柴守平。那么今年上半年面对这个疫情和低油价，公司还是大力开展提质增效行动，把削减成本，这个削减成本作为一个重要的工作来进行开展。那么上半年我们这个降本增效也是取得非常好的成绩，尤其操作成本9.64美元每桶，同比下降14%。我可以说这个成果还是非常不错的。那么一般性和管理费用也下降了8.6%，融资成本也得到了较大的下降，所以成本管控还是起到非常好的效果。 I'm Chai Shouping, CFO. This year impacted by COVID-19 and the low oil prices, the company has made tremendous efforts to improve quality and efficiency of our development, and especially in containing cost. We have achieved quite positive results in this regard. For instance, the lifting cost was $9.64 per barrel, down by 14%. SG&A went down by 8.6%, and our financing cost was also brought down quite substantially.
[Foreign language] 而上半年我们通过持续降低成本、开展体制增效这样一些活动，是我们增利了145亿元。 These efforts in improving quality and efficiency and in containing cost have contributed around RMB 14.5 billion to the company. [Foreign language] 那么下半年我们还是要继续坚持低成本战略。当然这个降低成本也是并不是无止境的，也是这个降的难度也是越来越大的。那么公司还是要继续坚持这样低成本战略，加大两金的管控这个控制力度，强化库存管理，推进整个成本费用的持续下降。 In the following months in this year, we will stick to our low cost strategy, but we also understand this will become increasingly difficult for us to contain cost. But we will remain steadfast in this strategy to try to cut and contain the inventory and the receivables to enhance inventory management and to achieve reduction in relevant fees.
[Foreign language] 好，谢谢。 非常感谢。 好，我是总裁段良伟，把这个炼化转型情况呢，回答一下。 I'm President Duan Liangwei. I will answer your question concerning refining and chemicals. [Foreign language] 正如您所讲到的，中国现在的市场，炼化下游业务呢，应该说是竞争激烈，这也是市场化充分的体现。 As you mentioned, China's refining and chemicals market has been facing very fierce competition, and it is also a reflection of a market economy. [Foreign language] 中国石油产炼销这个产业链呢，是完整的，应该说呢，油气的生产、炼油、化工和成品销售，这个完整的产业链呢，也是我们中国石油的优势。 PetroChina enjoys an advantage as an integrated energy company.
We have a full value chain from the production of oil and gas to refining and chemicals and to the marketing of oil products. [Foreign language] 未来的发展过程中，我们将通过技术上的创新、精益管理、转型升级来，压控生产过程成本，来转型生产出适合中国市场的高端化的化工产品。 In the future, we will rely on technological innovation, fine management, transformation, and upgrading to cut and contain our costs, and we will produce more high-end chemical products suitable for the Chinese market. [Foreign language] 随着中国经济的发展，我们判断未来中国市场上化工品的需求还是呈增长的态势。我想中国石油要充分发挥我们资源优势、技术优势、管理优势，在这方面取得一些更好的进展，谢谢。 Along with the development of China's economy, we believe the demand for chemicals products in the Chinese market will continue to increase, and we will fully utilize our resource advantages, technical advantages, and management advantages to try to achieve more positive results in this regard.
[Foreign language] 非常感谢。 下面有请来自Bank of America的Matty Zhao提问。 管理层好，我是来自Bank of America的Matty Zhao，
想请教管理层两个问题，第一个是关于二季度咱们炼化板块，这个库存，因为低油价具体的库存的损失大概是多少，那么我们也看到化工板块，相比于一季度的业绩有一个比较大的改善，想请教一下管理层对于下半年化工板块我们的利润的一个展望，这是第一个问题。第二个问题，也想请教一下管理层关于我们天然气的进口的亏损情况，二季度以及对于全年的展望，谢谢。 With Bank of America, two questions. The first one is concerning refining and chemicals business. Due to the low oil prices, the inventory has suffered losses, especially in Q2, but for chemicals, the performance in Q2 has improved versus Q1.
So how do you look at the profitability of your chemicals business in the second half of this year? Second, could you please give us a figure about your input gas losses in the second quarter and how to look at the full year? Thank you.
[Foreign language] 好，我是总裁段良伟。我想就刚才第一个问题，尝试做一下回答。 I'm President Duan Liangwei. I will answer your first question. [Foreign language] 因为随着二季度，3月下旬到4月份，国际油价大跌，成品油价格也出现大幅下滑，炼油企业，这个特点，因为它需要有库存，决定了库存，有一些跌价损失。 From the end of March to April, we have seen dramatic reduction of crude oil prices, which has also brought down the prices of refined oil products in China, and our refining chemicals business segment has suffered losses in its inventory. [Foreign language] 但是我们通过，灵活的控制原油的采购节奏、采购时机，通过，统筹我们库存销售的节奏和库存的降幅，应该说到了二季度末，基本上把我们库存的叠加损失，做了消化，实现了比较好的效果。 But we have better managed the timing and the pace of crude procurement and also the pace of the sales of our inventory, and by the end of Q2, we have achieved quite positive results from these efforts.
[Foreign language] 我们化工板块的生产情况呢，并没有随着油价下跌呢，有大的波动，而是呢，在这个市场需求的方面呢，感觉到比较稳定。所以中国石油的量化业务呢，化工呢，一直是保持着高负荷满负荷的生产，所以这样的话，也是在我们整个量化效益过程中呢，化工业务呢，也创造了很好的，也取得了很好的成效，做了很大贡献。预计下半年化工业务呢，仍然维持着啊，比较稳健的一个情况，产销和创销呢，基本稳定，谢谢。 For the chemicals business, the performance of this business segment has not fluctuated along with the crude price. It's because the demand for chemicals has remained quite stable, and the facilities have maintained very high run rates, and these business segments have contributed a lot to the company's overall performance. So, in the second half of this year, we believe that the production, sales, and profit contribution from this business segment will remain quite stable.
[Foreign language] 第二个问题由我来回答，我是CFO柴守平。那么今年上半年公司整个进口天然气是305亿方，亏损了118亿元，同比增亏了6.3亿元。 I'm Chai Shouping, CFO. In the first half of this year, our imported volume of natural gas was 30.5 BCM, and it has suffered a loss of RMB 11.8 billion, up by RMB 630 million. [Foreign language] 那么亏损这个增亏的主要原因有两，一个就是国家发改委阶段性降低非居民用气价格，就提前执行了淡季价格。 There are two reasons for that. First, the NDRC has decided to apply an off-season natural gas price for non-residential gas users.
[Foreign language] 再有一个原因就是受这个现货LNG影响，这个天然气这个供大于求，在中国市场体现的比较严重。 And second is there's quite a large oversupply of natural gas in the Chinese market, especially impacted by spot LNG. [ Foreign language] 那么未来下半年公司还想继续进口天然气，进口的量和上要比和上半年基本相当，或还要多于上半年。 In the following months of this year, we will continue to import natural gas at almost the same level of the first half, or a little bit larger than the volume of first half. [ Foreign language] 那么总体来看，下半年要它的这个亏损的情况可能要比上半年要好一些。 But as for the losses from imported gas, we believe the second half will see better results than the first half. [ Foreign language] 主要是进口气的成本，单位每方这个天然气的这个价格，进口的价格可能要低于上半年，这主要根据这个油价挂钩来测算的。 It's mainly because the imported cost, the natural gas prices, will be lower than the first half because it's linked with the oil prices. [ Foreign language] 那么公司还是要积极采取一些措施，控制进口气亏损，主要是通过控制规模、调整节奏、推进市场化、标签化和价格服役来控制进口气亏损。 But we will continue to take a lot of measures to contain the losses, including the containment of the size of import, the timing of import, to have more market-oriented selling prices, to have labeling selling prices, and also the renegotiation of import prices.
[ Foreign language] 好，谢谢。好的，下面有请来自上证报的陈其珏先提问。好的，谢谢。我是来自上海证券报的陈其珏，有两个问题想问一下管理层。一个是想问一下，因为我们知道今年年初的时候，疫情爆发以后，国内的生产经营，各方面都处于停摆，所以石油油气的需求也下降得非常厉害。那么之后，国内的疫情已经基本受控，想问一下最近一两个月，国内的油气需求复苏的情况是怎么样？然后第二个问题是关于最近的这个洪灾的，最近因为在长江中游和上游都出现了比较严重的洪灾情况，汛情对公司的生产运行是不是造成了一定的影响？谢谢。With Shanghai Securities News, two questions. First, since the outbreak of COVID-19 at the beginning of this year, China's economy has stopped its production, and it has brought down the oil gas demand dramatically in the Chinese market. But gradually, the pandemic was very effectively contained, so I'm wondering about the recovery of oil and gas demand in the Chinese market, especially in the past one or two months. Second is this year, there have been quite serious floods along the Yangtze River. I'm wondering about the impact on the company's production and operation.
[ Foreign language] 好，我是总裁段良伟。这两个问题，我放在一起给您回答一下。I'm President Duan Liangwei。国内疫情爆发之后，油气市场需求大幅下滑，在2月份，体现最明显。在二季度开始，逐步，随着国内经济恢复，复工复产，需求在稳步上升，到了6月份，基本恢复到了往年的同期的水平。Since the outbreak of COVID-19, the oil and gas demand in China has dropped dramatically, and especially in this February.
But entering into Q2, along with the recovery of the Chinese economy and the production and work resumption, we have seen quite a steady increase of demand, and in this June, the demand has recovered to about the same level of previous years. [ Foreign language] 但是从6月下旬以来，全国27个省区市出现了洪涝灾害，对工矿基建和物流运输方面的成品的需求产生的影响比较大，加上部分地区疫情反复，体现在柴油销量大幅下滑。 But starting from the end of this June, there are 27 provinces, autonomous regions, or municipalities witnessed serious floods, which has brought down the demand for oil products from industries, mining sector, infrastructure development, and logistics sectors. And plus the resurgence of COVID-19, we have also seen quite a dramatic reduction of diesel consumption. [ Foreign language] 67月份柴油销量公司是同比下降了8.2%，导致我们库存柴油库存有所上升，谢谢。 In this June and July, the sales of diesel of Greater China went down by 8.2%, which has brought up our inventory, thank you.
[ Foreign language] 下面有请来自香港经济日报的陈韵妍提问。 好的，管理层你好，我有两个问题。第一个问题就是刚才也谈到就是那个原油市场现在发现了那个供过于求的现象，那你们预计那个下半年的油价会是怎么样的态势？那如果低油价持续的话，这集团会有什么的应对的措施？第二个问题就是你们刚才也提到就是在未来会发展那个新能源的业务，比如说就是风能、太阳能跟地热，就是你们在新能源方面的话，就是那个投资额会占你们的资本开支多少呢？那未来会不会有一个比较定期的目标，比如说就是风能跟太阳能方面，就是会占你们的收入多少呢？谢谢。 With Hong Kong Economic Times, the first question is about oil prices. As you said, there's an oversupply in crude oil market.
When we look at the second half of this year, what do you think the crude price will stand, and what measures will you take to cope with this low oil price environment? And second, as you have introduced, the company in the future will focus more on new energy, including wind power, solar energy, and geothermal. What about the specific numbers of investment in this business segment and its proportion in your overall context? And what about the estimated profitability from, for instance, wind power and solar energy?
I'm CFO Chai Shouping. Impacted by COVID-19, the crude price went down dramatically, and there's an oversupply of crude oil in the international market in the first half of this year. The excessive supply is about 5%-10%, and it has brought down the crude Brent oil price, which was about $39, down by 40%.
[ Foreign language] 面对这个油价大幅下跌，我公司也是采取了一系列措施，比如今年上半年我们通过开展提质增效活动，控制这个成本，降低资本性开支，也起到了非常明显的成效。刚才我也报告了，我们提质增效取得145亿元的这样一个成效，我们的资本性开支降低20%到30%这样一个水平，成本下降10%。 To cope with the dropping oil prices, the company has taken a series of measures, including to improve the quality and efficiency of the company's development. We have contained the cost, which was brought down by about 10%. We also have cut our capital expenditures by about 20%-30%, and these efforts have contributed around RMB 14.5 billion to the company. [ Foreign language] 预计今年下半年油价要略好于上半年，我们预计全年的油价能达到布伦特41到43美元每桶这样一个水平。 We estimate the oil price in the second half of this year will be better than the first half, and for the full year, the average Brent is estimated to be $41-$43. [ Foreign language] 那么面对这个低油价这种形势，公司还是一如既往地坚持低成本战略，坚持提质增效，采取各种措施来应对面前所面临的各种挑战。 In the face of low oil prices, the company will stick to our low-cost strategies to improve quality and efficiency, and we will take a lot of measures to address the challenges.
[ Foreign language] 好，第二个问题由我们规划计划部门的刘文涛女士回答。 刚才这个关于提到新能源的投资的问题，目前的话，我们公司正在开展十四五的新能源的规划。那么从现在呢，目前的情况来看，我们这几年呢，也在做一些探索，像在地热呀，太阳能啊，包括氢能这方面的做些探索。目前我们现在的投资规模大概每年的话到10到20个亿的投资规模吧，然后随着未来十四五的话，我们在加大在氢能啊，太阳能这方面的协同的话，或者是跟那个风电的电力方面的协同的话，我们估计的话，在规划上我们大概是从30到50亿增加到100亿左右吧，但是这个要根据我们最后这个十四五规划的执行的后几年看这个进展的情况。总体上我们目前规划是这样规划的。 I'm Liu Wentao, Deputy Director General of PetroChina's Planning Department.
As for your question around new energy, the company is now preparing a 14th Five-Year Plan, and in the previous years, we have tried to work into the areas of geothermal, solar energy, and hydrogen, and right now we have a CapEx of about RMB 1 billion -2 billion in these sectors. In the 14th Five-Year Plan period, we will try to achieve more synergy from this new energy, along with the natural gas power generation, and we will increase the investment in these segments from 30%-50% to about, from RMB 3 billion -5 billion to about RMB 10 billion, but the specific figure will depend on the progress we achieve, in these segments during the 14th Five-Year Plan period.
[ Foreign language] 第二方面，我们更多的是要和社会和这个加强合资合作，通过这个多元化的方式来开展这个新能源的业务. The second, we will try to work more with our partners, for instance, in establishing joint ventures to develop new energy, to have more diversified methods to develop new energy business.
[ Foreign language] 下面有请来自中金公司的Nelson Wang提问. 好的，非常感谢，李老刚刚多次提到了这个下游终端的发力，所以我就这个领域，请教两个问题. 我第一个问题，就是下游的终端其实就是昆仑能源，然后，我们看上半年披露的数据的话，昆仑在咱们中石油内部的天然气市场份额可能不到20%，就是用昆仑的零售气量除以中石油在国内的天然气的供应量来计算. 那公司是否有一些长期的指引，比如说未来五年这个比率可以提到40%、50%，我就随便举个例子，想请教一下领导的看法. 我第二个问题，就是在这个后国家管网公司的时代，中石油有哪些举措去帮助昆仑能源进一步抢占市场？我们以前的用资源换市场的这个战略，有没有一些新的方法？也想请教一下，非常感谢. With CICC, my question is for your downstream business segment. As you mentioned, you will focus more to develop your end-user business, and as I understand, right now, Kunlun Energy takes no more than 20% of the gas market. I'm wondering about how will you help Kunlun Energy to increase this figure? For instance, in the following five years, what targets will achieve 40% or even more? And second, after the pipeline transaction, how will you help Kunlun Energy to develop the market and to gain more market shares?
[ Foreign language] 第一个问题由昆仑能源CFO Miao Yong来回答. Mr. Miao Yong, the CFO of Kunlun Energy, will answer your first question.
You have mentioned about the proportion of the sales volume of Kunlun Energy in PetroChina total volume , and in recent years, the sales volume and end-user business of Kunlun Energy have developed quite rapidly, especially since October of 2018, when we have seen a restructuring or improvement of the natural gas system. In the year 2019, the sales volume and end-user business were increased by over 25%, and the figure was 27.6% in the first half of this year, which are quite fairly large growth rates. But these sales volume and its market share are quite lagging behind, especially in its proportion of the sales volume and the market share of PetroChina. So we are trying every effort to enhance natural gas sales from our end-user business and to increase our market share.
[ Foreign language] 随着国家的能源结构的调整和加大天然气利用政策的实施，国内的天然气销量，应该也有个比较好的增长。在这个大的背景下，我们也希望终端的销售能力，能够和我们股份公司的天然气销量的占比，不断提高。从远期来说，目前是不到20%，我们希望用3到5年或者更长的时间，能够逐步达到30%到40%左右。谢谢。 Along with the energy restructuring in China and the launching of federal policies to enhance the natural gas utilization in China, we believe the natural gas sales volume will increase in the future, and we hope that Kunlun sales proportion in PetroChina's sales volume will increase accordingly. Right now, the figure is lower than 20%. We hope in three to five years' time, it will increase to 30%-40%.
[ Foreign language] 第二个问题我来回答，我是柴寿平。那么管网剥离以后，中石油还将一如既往地支持昆仑能源的发展。 I'm Chai Shouping, CFO. After the pipeline transaction, PetroChina will continue to render support to Kunlun Energy. [ Foreign language] 我们将在资源供给、市场开拓、业务协同方面大力支持昆仑能源。 We will strongly support the development of Kunlun Energy in terms of resource supply, market development, and business synergies.
Okay，因为时间的问题，我想如果大家还有问题的话，我们再最后一个问题，最后一位提问者。
Okay, thank you. Time. One last question, please. 最后有请中信的王佩提问。
[ Foreign language] 好的，谢谢各位领导，谢谢给我这个提问的机会。我这边有两个关于炼油化工方面的问题，第一个就是关于到上半年咱们地板价保护机制下面，我们大概具体的多少的风险准备金，然后目前这一块是怎么处理的，或者说我们公司大概是按照什么样的准则或者原则来具体的。第二个问题就是刚才领导在讲那个推介材料的时候提到了，我们6月份开始已经由之前的亏损转为盈利了。那么我能否问一下，目前我们炼油化工这一块的库存的原料原油方面的成本大概是什么水平？谢谢领导。 I have two questions around refining and chemicals.
First, under the floor mechanism in first half of this year, how have you registered your Price Adjustment Risk Fund, and under what principles or standards you rebook this fund? And second, starting from this June, you have mentioned that the profit has turned positive. I'm wondering about the cost of your inventory in your refining and chemicals business segment, especially the cost of crude oil.
I'm Wang Jinbo, Deputy Director General of PetroChina's Finance Department. In March, NDRC has issued a notice about Price Adjustment Risk Fund collection because the crude price has triggered the floor mechanism, and PetroChina has calculated the production and sales volume of oil products, and we have booked about RMB 13 billion of this fund. It has been put under the current cost, but it has not, it has not been submitted yet.
[ Foreign language] 好，关于第二个问题，关于6月份这个原油目前呢，这个炼化段的原油库存成本情况，这个应该这么说呢，这个我们到2020年6月末的库存呢，大约原油库存大约有530多万吨，这个库存的成本呢，就像刚才我们总裁段总说的，随着这个油价的这个市场的恢复，包括这个时间的推移呢，我们按照移动加权平均呢，库存叠加的损失呢，已经基本上释放完毕。那么6月份的库存的原油成本呢，基本上和我们当时的原油成本呢保持一致。 In June 2020, we have witnessed your question is around cost of inventory of refining and chemicals in the segment, and at the end of June 2020, the inventory is around 5.3 million tons, and along with the recovery of the markets, we have utilized a weighted average calculation method, and the inventory loss has been released by the end of June 2020, and the cost has returned to the market level. OK，
[Unknown Speaker] [ Foreign language] 我想咱们讨论还是比较充分的，但我也同时想大家还有很多问题，愿意和一起来讨论交流。那明天的话，我们全天有电话路演，大家可以进一步讨论。另外接下来以后呢，我们也还有这个多场的这种电话的交流吧，大家有什么问题随时可以电话进来，随时可以和我们预约电话，咱们一起来讨论。非常感谢大家今天出席这次电话会议，谢谢大家。 Today we had quite several discussions, and tomorrow we will have several rounds of conference calls, and we welcome your questions in the future. We thank you for your participation.