On the evening of October 29, China National Petroleum Corporation (CNPC) announced its financial results, revealing significant figures that encapsulate the state of the nation's energy sectorFor the first three quarters of 2024, CNPC reported revenue of 2.26 trillion yuan and a net profit attributed to shareholders of 132.52 billion yuan, marking a modest year-on-year increase of 0.7%. This news followed the release of quarterly reports from the "Big Three" oil companies in China, which include CNPC, Sinopec, and CNOOC—often collectively referred to as the "Three Barrels of Oil."

According to the collective data shared in their quarterly results, the trio achieved a combined net profit of approximately 293.43 billion yuan for the first nine months of the yearCNPC's profit stood at 132.52 billion yuan, while Sinopec reported a net profit of 44.25 billion yuanCNOOC delivered an impressive 116.66 billion yuan in net profit, demonstrating robust performance amidst fluctuating oil prices and market conditions.

Central to the success of these corporations is their commitment to resource exploration and production

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As major players in China's energy supply chain, the Three Barrels of Oil rely heavily on technological innovation to enhance efficiency in exploration activitiesIn the first three quarters of 2024, CNPC experienced stable growth in oil and gas production, achieving an equivalent output of 1.342 billion barrelsThis 2% increase year-on-year is a testament to the company's focus on expanding its reserves and production capabilities.

It's particularly noteworthy that CNOOC reported significant growth compared to the previous year, achieving record highs in both net production and profit for the same periodThe company's net production reached 542.1 million barrels of oil equivalent, reflecting an 8.5% increase from the prior yearThis success is largely attributed to contributions from key oil and gas fields, such as the Bohai Middle 19-6 and Enping 20-4 fieldsCNOOC's management expressed confidence in their momentum, stating their intention to achieve set annual production targets without compromise into the fourth quarter.

In stark contrast, Sinopec faced challenges due to declining international oil prices, with their net profit dropping significantly by 16.5% compared to the previous year

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The company indicated that the global oil market experienced significant volatility, particularly in the first half of the year, followed by a rapid decline in prices during the third quarterThe average spot price for Brent crude oil was around $82.8 per barrel in the first three quarters, dropping to $80.2 in the third quarter alone, which represented declines of 7.6% year-on-year and 5.6% compared to the preceding quarter.

Despite these setbacks, Sinopec is taking proactive measures to streamline operations and reduce costs in response to the challenging market conditionsTheir focus has shifted to optimizing production and enhancing operational efficiency, with progress noted in high-quality exploration and effective resource developmentSignificant advancements have been made in shale gas exploration in the Sichuan Basin and the North Bay Basin, while the construction of the Shenglijiyang Shale Oil Demonstration Area is progressing well.

Transitioning to new energy sources is another critical aspect of the restructuring efforts undertaken by the Three Barrels of Oil

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Recognizing the necessity for diversification in income sources, these companies are increasingly leveraging renewable energy initiativesA white paper released on August 29 emphasized the symbiotic relationship between traditional and renewable energy, highlighting the need for the stable support offered by conventional energy while simultaneously scaling up renewable energy development.

In a bid to seamlessly integrate their oil and gas exploration with new energy initiatives, CNPC has ramped up its efforts in renewable energy projectsDuring the first three quarters, CNPC noted that the operational profit from both oil and gas, as well as renewable energy ventures, reached 144.26 billion yuan, reflecting an 8.7% increase year-on-yearTheir strategy includes the establishment of large-scale renewable energy bases, while also pushing for rapid advancements in solar power, geothermal energy, hydrogen, and carbon capture utilization and storage (CCUS).

Sinopec has focused particularly on hydrogen energy within its transportation services, accelerating the development of its charging and gas refueling networks to foster steady growth in hydrogen transportation

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The ambition is to transform into a comprehensive energy service provider that encompasses oil, gas, hydrogen, and electricity.

CNOOC is also positioning itself to become a leader in offshore wind energy, actively integrating oil and gas production with wind power, with a goal of increasing the proportion of green energy in their portfolioThe company is also driving forward the industrialization of carbon capture and storage technologies.

Looking towards the future, reports from Everbright Securities suggest a favorable environment for high-dividend assets such as the Three Barrels of Oil amidst expectations of sustained low-interest ratesFurthermore, these companies are responding proactively to the Belt and Road Initiative, expanding their overseas operations and capabilitiesTheir affiliated service and engineering companies are leveraging the advantages provided by their parent companies to unlock new industry opportunities abroad, aiming for continuous growth and profitability in the international market.