Total net profits of China's three oil giants exceeded 280 billion yuan ($38.44 billion) during the first nine months, a record high for the period, according to the companies' recent financial reports.

Boosted by strong global energy prices as well as expanding oil and natural gas output, January-September revenue of China National Petroleum Corp rose 30.6 percent year-on-year to 2.46 trillion yuan, while profit surged 60 percent to 120 billion yuan. China National Offshore Oil Corp Ltd's revenue hit 265.8 billion yuan over the period, up 67.6 percent, while profit surged to 108.7 billion yuan, up 105.9 percent.

However, as demand for major chemical products has been weak due to high crude oil prices and COVID-19, China Petrochemical Corp, also known as Sinopec and the world's largest refiner by volume, saw its net profit fall 5.6 percent in the first nine months to 56.66 billion yuan.

An analyst said that the surging profits for CNPC (PetroChina) and CNOOC are expected to continue over the near term with rising domestic energy demand.

The country's oil majors have been expanding their exploration and development efforts and optimizing the operation of oil and gas industrial chains to ensure stable oil and gas supplies in recent years, said Luo Zuoxian, head of intelligence and research at the Sinopec Economics and Development Research Institute.

Coordinated efforts have been made to maintain stable production and operations, which is especially important against the backdrop of escalating geopolitical tensions and fallout from the COVID-19 pandemic, Luo said.

"With the upcoming heating season, steady and sufficient domestic energy supply is especially important considering overseas market volatility," he added.

PetroChina's domestic crude oil output increased 2.7 percent year-on-year during the first nine months to 577 million barrels, while gas output was up 5.1 percent year-on-year to 3.296 trillion cubic feet. CNOOC completed a total net production of 461.5 million barrels of oil equivalent meanwhile, representing an increase of 9.3 percent year-on-year, hitting a record high for the same period of previous years.

Sinopec said its January-September domestic crude oil production reached 188 million barrels, up 0.8 percent year-on-year, while natural gas production was 913.81 billion cubic feet, up 4.1 percent.

All three oil majors have stepped up investment in exploration and development while actively expanding oil and gas production capacity, striving to increase reserves and production. While CNOOC saw its capital expenditure (capex) up 20.6 percent year-on-year to approximately 68.69 billion yuan for the first nine months, Sinopec said its capex stood at 104.0 billion yuan.

Sinopec said more than half was spent on exploration and production (E&P), mainly for crude oil capacity building in Shunbei and Tahe, natural gas capacity building in Chuanxi and Dongsheng, and the construction of storage and transportation facilities such as the relocation of Dongying crude oil depot and the Longkou LNG projects.

The oil giants also plan to continuously increase the supply of clean energy, responding to the general trend of energy transition.

While PetroChina said it has been promoting the new energies business with solid steps and continued to increase capex to promote the integrated development of oil, gas and new energies, Sinopec said it will continue stepping up its hydrogen energy business and related services such as hydrogen production, storage, transportation and sales, as well as battery charging and swapping, solar energy, wind energy and other new energy businesses and related services.

Li Ziyue, an analyst with BloombergNEF, said oil majors will likely continue to focus on clean fuels like natural gas as oil demand is set to fall due to the country's decarbonization drive.

The companies have made major strides in natural gas production in recent years as part of their efforts to achieve lower emissions via green transformation and it is believed they are still committed to enhancing gas production given that energy security is the top priority, Li said.

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