PetroChina’s Profits Sink by Reuters @FortuneMagazine 3:47 AM EDT E-mail Tweet Facebook Linkedin Share icons PetroChina ptr , the country’s largest oil and gas producer, reported sharply lower profits for the first half of the year, hit by slowing demand growth for refined products as well as weak crude oil and natural gas prices. Faced with the worst downturn in the oil sector in a generation, the state-owned company said profit attributable to its owners plunged to 531 million yuan ($79.8 million), from 25.4 billion yuan in the same period last year. While demand growth in the world’s second-largest oil user slows, competition heated up from the country’s independent oil refineries known as “teapots” ushered into the market about a year ago, forcing state companies to cut refinery production. See also: Monsanto Pulls New GM Cotton Seed from India in a ‘Major Escalation’ PetroChina said its refinery throughput from January to June fell 2.5% on the year. Output of key refined fuels fell 6.5%, led by diesel, which sank 15%. Low oil prices also led PetroChina to cut production at high-cost domestic fields, with first-half crude output at home down 4.2% versus a year earlier. Its natural gas import business was hit by weaker domestic prices and slowing demand, recording a net loss of 8.006 billion yuan, including pipeline gas from Central Asia and Myanmar as well as global purchases of liquefied natural gas. See also: Pakistan Signs Deal On Its Second LNG Import Terminal For more on natural gas, watch Fortune’s video: That loss, however, narrowed by 2.62 billion yuan versus a year earlier, thanks to improved efficiency in pipeline transportation, it said. Turnover sank 15% to 739.1 billion yuan from 877.6 billion last year due to lower prices of crude oil, natural gas and refined products, it said.