Betting on new energy: Which of the "Big Three Oil" companies will lead the transformation?

Recently, the annual reports for 2025 from China’s “three oil majors” have all been released. Combined, they achieved attributable net profits of 311.19B yuan, showing a certain ability to withstand shocks.

In 2025, the international crude oil market set a test for oil and gas companies. The Brent crude oil futures average price for the full year fell to $68.19 per barrel, down 14.6% year on year; this figure directly determined the baseline performance of China National Petroleum (CNPC), Sinopec, and CNOOC for the full year.

Recently, the annual reports for 2025 from China’s “three oil majors” have all been released. Combined, they achieved attributable net profits of 8B yuan, showing a certain ability to withstand shocks. During the last period of falling oil prices, the “three oil majors” all chose to hedge the price decline through capacity expansion, stabilize expectations through dividends, and use transformation to find new room for growth and development resilience.

Strong resilience to risks

In the face of the shock from falling oil prices in 2025, the “three oil majors’” different business structures determine differences in their risk resilience.

CNPC, whose operations run throughout the upstream and downstream, shows the strongest ability to absorb volatility. Its annual report shows that for the full year, attributable net profit was 311.19B yuan, down only 4.48% year on year; daily net profit still reached 430 million yuan. Major breakthroughs CNPC achieved in the Tarim, Sichuan, and Ordos basins provide support for China’s domestic crude oil output to achieve its largest increase since the “14th Five-Year Plan” period.

CNPC Chairman Dai Houliang said at the earnings briefing that in 2025, facing the adverse impact of international oil prices moving downward, CNPC adhered to making progress while ensuring stability, fully leveraged its integrated upstream-downstream advantages, and achieved steady business performance with resilience. “We not only held the profitability bottom line, but also made breakthrough progress in natural gas and new energy, laying a solid foundation for becoming a world-class company that stays vibrant for generations,” he emphasized. He added that the modernization of the corporate governance system and governance capabilities has been advancing continuously, core competitiveness has kept strengthening, and this reflects strategic resolve and risk resilience in complex conditions.

CNOOC was also hit by oil prices. Although net profit decreased 11.49% year on year, its net profit margin of 30.67% still ranks first among the “three oil majors,” and the basic position of its high-margin businesses has not been shaken. According to its annual report, CNOOC secured multiple million-ton-class oil fields in the Bohai Sea area, production ramp-up for the deepwater project in Guyana exceeded expectations, and the main cost of its barrel-oil business is kept around $28. Sinopec’s upstream segment also performed well: exploration and development operating gains grew 18% against the trend, reaching the highest level in nearly a decade. The third shale gas field at the billion-cubic-meter class discovered in the Sichuan Basin also provides protection for stable production at the Fuling shale gas field.

The sustained pressure on downstream refining and chemical businesses, contrasted with the steady development of upstream segments, has become a key variable behind the performance differentiation among the “three oil majors.” Sinopec, which has a higher share of downstream refining and chemical operations, absorbed the biggest pressure. Attributable net profit was 157.3B yuan, down 36.78% year on year. Although the upstream segment contributed a considerable increment, it was still not enough to offset the drag from the downstream segment.

At the earnings briefing, Sinopec Director and President Wan Tao said that due to unfavorable factors such as a large rise in crude oil prices, tight availability of imported crude oil resources, and high freight rates, the company’s refining and chemical production and operations faced significant challenges.

Natural gas grows against the trend to provide steady support

Against the backdrop of pressure on the refining and chemical segment and narrowing growth room for traditional fuel businesses, the natural gas segment’s growth against the trend has become the most stable source of support for the “three oil majors” in their 2025 performance.

CNPC’s annual report shows that in 2025, domestic sales of natural gas reached 31.81B cubic meters, up 5.6% year on year; operating profit was 247.53B yuan, up 12.6% year on year against the trend, becoming a key lever to hedge the upstream exploration segment’s profit decline. Sinopec secured its third shale gas field at the billion-cubic-meter class in the Sichuan Basin, providing resource support for stable production at the Fuling shale gas field.

It can be seen that natural gas, as a bridge energy during the low-carbon transition transition period, is becoming an important pillar for companies to balance fluctuations in traditional businesses and stabilize overall performance.

New energy remains the “three oil majors’” bet on the future.

In 2025, the “three oil majors” clearly accelerated their deployment in the new energy sector. CNPC’s generation volume from wind and solar power reached 7.93 billion kWh, up 68.0% year on year. The area of newly signed geothermal heating contracts exceeded 100 million square meters. The company chose a development path that integrates “oil and gas + new energy,” deploying photovoltaics and wind power in oilfield regions and replacing fossil energy consumption during the production process with green power.

Sinopec, meanwhile, is fully building itself into an integrated energy service provider for “oil, gas, hydrogen, electricity, and services.” At the earnings briefing, Sinopec Chairman Hou Qijun stated clearly that the company will accelerate the development of the hydrogen energy industry as an important business within new energy, and is unwavering in its goal to firmly build “China’s first hydrogen energy company” in the “15th Five-Year Plan” period. According to the annual report, Sinopec has built more than 13k charging and swapping stations; in 2025, the charging volume on its charging operations platform exceeded 5 billion kWh, up nearly 200% year on year.

CNOOC is taking offshore wind power as a key breakthrough direction. The annual report discloses that it has acquired over 11 million kW of new energy resources. The deepwater floating offshore wind project “CNOOC Guilanghao” has been operating stably, and it has set a goal that by 2030, the revenue share from new energy business will reach 10%.

Industry insiders say that over the next five to ten years, whichever company can form a sustainable profit model first in the new energy sector will take the initiative in the next round of competition.

The “breakthrough” path continues to move toward the “new”

If the 2025 performance can be seen as a concentrated test of the strategic choices made in the past, then the direction of capital expenditure reflects the “three oil majors’” future “breakthrough” path.

CNOOC’s strategy is the clearest: it continues to go deeper into offshore oil and gas, its core advantage. According to the annual report, CNOOC’s net production in 2026 is expected to be 780 to 60.8B barrels of oil equivalent, steadily moving toward its targets of 65 million to 70 million tons of domestic output. With years of technological accumulation and cost control capabilities, CNOOC is turning its advantages in deepwater oil and gas development into continued resource succession capability.

At the earnings exchange meeting, CNOOC’s Senior Vice President and Chief Financial Officer Mu Xiuping said that the recent rise in international oil prices is beneficial to the company overall, and as it is gradually reflected in accounting, it will also gradually show up in the company’s results. This also means that during high-oil-price windows, CNOOC’s capacity release will directly translate into profit growth.

CNPC chose a path of “stabilizing oil production and increasing natural gas, with oil and gas operating side by side,” while also accelerating the integration of new energy with traditional businesses. In 2025, in the natural gas segment, the company is trying to turn its resource advantage into a market advantage by expanding domestic sales scale and optimizing procurement costs, cultivating natural gas as a second stable source of profits. In addition, the company continues to push the “oil and gas + new energy” integrated development model, lowering production costs of traditional businesses while providing application scenarios and capacity for new energy operations.

As the “three oil majors” company with the highest share of downstream businesses, Sinopec faces not only the test of oil price volatility, but also structural challenges such as peak demand for refined products and oversupply in the chemical market. The annual report shows that on the one hand, Sinopec plans to increase investment in the exploration and development segment to 72.3 billion yuan in 2026, striving to achieve bigger breakthroughs in upstream operations; on the other hand, it will focus on quality from the downstream side, promoting the refining and chemical business toward high-end transformation through “reducing oil and increasing chemicals, reducing oil and increasing specialties,” while relying on its massive terminal network to speed up its transition into an integrated energy service provider.

Original headline: Latest annual reports released—performance differentiation, and the “three oil majors” accelerate transformation

By | This reporter Qu Peiran

Produced by | China Energy News (cnenergy)

Edited by | Yan Zhiqiang