Tomahawk, WI 08/29/2014 (Basicsmedia) – China’s top oil and gas producer PetroChina Company Limited (ADR) (NYSE:PTR) posted a 15% increase in second-quarter profit, which according to Bloomberg’s Intelligence Grace Lee is a clear representation of the Chinese economy. Increased profits has been attributed to improved upstream earnings as well as improved refining margins.

Lee maintains that an increase in profit for PetroChina Company Limited (ADR) (NYSE:PTR) is clear indication of how China is slowly becoming self-energy sufficient. PetroChina reported a profit of 33.9 billion Yuan, up from 29.5 billion reported a year ago.

“What really drives this companies; what really makes them tick is a reflection of the Chinese economy in general. So if you look at some of the positives we have seen these companies cutting capex especially for PetroChina Company Limited (ADR) (NYSE:PTR) and Sinopec Shanghai Petrochemical Co. (ADR) (NYSE:SHI) and this is really a reflection of China trying to reduce overcapacity in many of its sectors like we are finding in chemicals,” said Mrs. Lee.

The second half of the year according to Lee will mostly be made’ of reforms especially in the pricing of Natural gas that should considerably affect PetroChina Company Limited (ADR) (NYSE:PTR) in terms of higher costs of imports. Sinopec Shanghai Petrochemical Co. (ADR) (NYSE:SHI) is also expected to sell its marketing business in the second half of the year.

“It will be really interesting to watch, what these companies are doing with the cash whether or not they are returning it to shareholders or moving up into upstream,” said Mrs. Lee.

PetroChina Company Limited (ADR) (NYSE:PTR) had announced in March that it was planning to reduce its capital spending as one of the ways of bolstering shareholders value.

China’s energy companies have not immersed their efforts into the Shale-production business as is the case in the U.S. Lee is of the opinion that most companies see the space as immature with too much needed in terms of understanding the geology of the country. Most of the companies in China according to Lee are in the exploration phase in terms of Shale-productions.

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