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Chinese oil major PetroChina plans to raise capital investment to RMB191.3bn ($28bn) in response to recovering oil prices, up from RMB172.4bn last year, in the latest sign of recovery for the oil sector.

China’s largest oil producer saw profits fall 78 percent in 2016 to RMB7.86bn ($1.1bn), its third consecutive decline due to the multi-year slump in oil prices that ended last year.

Revenues fell 6.3 percent, to RMB1.62tn, it said in a filing to the stock exchange on Thursday.

However, the company said it will increase its capital expenditure this year after a 15 per cent cut in 2016. PetroChina said it expects the global economy “to continue to recover moderately”, and will focus on developing key basins to “raise the exploration investment efficiency”.

The more optimistic outlook is in line with its state-owned rivals, Sinopec and CNOOC. Both also plan to boost capital expenditures by more than 40 percent.

Chinese oil majors have cut high-cost production in an effort to stay in the black, moves that until recently would have been politically difficult. But Beijing used the period of low prices to retire many fields that were no longer economically viable.

PetroChina’s parent China National Petroleum Corp has the largest burden of legacy fields, some of which have production costs of above $80/bbl. CNPC also controls oil-dependent ‘company towns’ in Northeast China that are losing population as young adults leave.

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