AS oil’s collapse leaves some fields with no chance to turn a profit, China’s biggest crude oil producer is ready to cut its losses.

    PetroChina Co. sees oil and gas output falling the first time in 17 years as it shuts high-cost fields that have “no hope” of making profits at current prices, said Wang Dongjin, the firm’s president.

    “The current price level leaves PetroChina little choice but to give them up,” said Laban Yu, head of Asia oil and gas equities at Jefferies Group LLC in Hong Kong. “The forecast output decline is the direct result of PetroChina’s plan to shut down aging and high-cost fields.”

    PetroChina, the world’s biggest oil company by market capitalization after Exxon Mobil Corp., said output will slide 2.7 percent this year to 1.45 billion barrels of oil equivalent as a drop in crude production overwhelms higher gas output.

    PetroChina’s output plan may help further ease the swelling of global oil supply and nudge prices higher from the 12-year low they tumbled to earlier this year. The worst may be past as supplies outside the Organization of Petroleum Exporting Countries and supply disruptions in member countries shrink a global glut, the International Energy Agency said this month.

    China’s output in 2016 will decline as much as 5 percent from last year’s record 4.3 million barrels a day, according to estimates last month from Nomura Holdings Inc. and Sanford C. Bernstein & Co. That would be the first drop in seven years and the biggest in records going back to 1990.

    “This year we will close oil and gas fields that have no hope of making profit under current oil prices,” Wang said. Workers affected by the shutdown will be redeployed or offered early retirement.

    Brent, the global benchmark, dropped to an average of about US$54 a barrel last year, from roughly US$99 the year before, prompting global oil energy companies to write down assets, slash earnings and cut capital expenditure plans.

    Despite the pain, PetroChina and its parent China National Petroleum Corp. won’t resort to laying off frontline oil and gas workers as a way to cut costs, chairman Wang Yilin said this month. (SD-Agencies)