Sinopec Half-year Profit Rises 41%

China Petroleum and Chemical Corp , known as Sinopec, reported its best six-month profit since the second half of 2014 on Sunday, the latest Chinese state oil major to report a surge in results due to a big recovery in crude prices from last year.

 

The country's largest refiner reported a first-half net profit attributable to equity shareholders of 27.1 billion yuan ($4.08 billion), up 40.7 percent on a year prior, based on Chinese accounting standards. Revenue for the period rose 32.6 percent to 1.166 trillion yuan.

 

Profit rose 40.1 percent to 27.92 billion yuan during the period based on international accounting standards.

 

The company attributed the strong performance to higher prices and sales of downstream products compared to the year-earlier period.

 

The data comes after China's largest oil producer PetroChina (PCCYF) and offshore oil and gas producer CNOOC Ltd each released on Thursday their best results in years.

 

Sinopec said it expects second half crude oil production to total 148 million barrels.

 

Sinopec also said it expects global oil prices to continue to fluctuate at low levels the rest of this year, while structural adjustments in China's energy sector mean natural gas demand will continue to grow quickly.

 

Sinopec has a larger downstream business than PetroChina, which focuses on upstream oil and gas production. But the refiner is facing headwinds from a glut in the domestic fuel market.

 

Total domestic fuel sales inched up 0.82 percent to 87.22 million tonnes in the first half.

 

Crude oil throughput rose 1.6 percent in the first six months to 117.79 million tonnes, as the pace of growth eased from 3.1 percent in the first quarter.

 

In a bid to reclaim market share, Sinopec and PetroChina have been involved in a pricing war in the retail fuel market since June.

 

Sinopec is also considering cutting up to 230,000 barrels per day (bpd) of crude runs in the third quarter to counter weaker demand, sources said.

 

A decline in Sinopec's crude oil production eased in the first half as the company invested more in upstream exploration and production.

 

Sinopec's capital spending on upstream development rose to 6.87 billion yuan in the first half, compared with 5.168 billion yuan in the same period last year.

 

($1 = 6.6465 Chinese yuan renminbi)

(Reporting by Elias Glenn)