Asia's largest oil refiner Sinopec said its profit will surge
over 50 percent in the first half of this year.
"The company estimates the first-half profit will rise more than
50 percent from a year earlier under the current operating
situation," Sinopec said in a statement yesterday.
The company's profit in the first quarter was 19.44 billion yuan
under international accounting standards, up 103.67 percent from
last year. First-quarter sales rose 23.08 percent to 279.64 billion
yuan, the quarterly report said.
It produced 70.96 million barrels of crude oil and 2 billion
cubic meters of natural gas in the first quarter, according to the
report.
Fluctuating international oil prices and high demand for
domestic petrochemical products mainly caused the profit increase,
Sinopec said in the statement.
"Sinopec's good first-quarter result is mainly driven by a lower
crude oil price in the period between December 2006 and February
2007," said Liu Gu, a senior energy analyst with Shenzhen-based
Guotai Jun'an Securities (Hong Kong) Ltd.
Crude oil prices in New York fell to an average of $58 a barrel
in the first quarter, down from $63 a year earlier.
"Sinopec's good cost control and increased sales also pushed up
profit," said Liu.
Sinopec's profit may have peaked in the first quarter, she said.
"With the crude oil price rise in the summer, Sinopec will have a
refining loss."
The company's refining business made a profit of 4.17 billion
yuan in the first quarter, compared with a loss of 7.88 billion
yuan a year earlier.
The company earlier signed an agreement with US energy giant
Exxon Mobil and Saudi Arabia's Saudi Aramco for a
mega-petrochemical expansion project and a fuel marketing venture
in Fujian Province to tap demand in eastern China.
It is the first Sino-foreign venture with integrated businesses
ranging from oil refining to chemical production and refined oil
sales in China.
Its 2006 refining loss widened to 25.3 billion yuan from 3.54
billion yuan a year earlier. The company, which imported 70 percent
of its crude oil, received 5 billion yuan in subsidies from the
government in 2006.
The company expects to extract more oil and gas by increasing
investment in upstream operations. It is now exploring the
356-billion-cubic-meter Puguang Gas Field in northeast Sichuan, the
largest found in China, from where it is piping gas to the
country's energy-thirsty eastern regions.
The company said the field was expected to supply 10 billion
cubic meters of gas by the end of 2008 and 15 billion cubic meters
by the end of 2009.
Sinopec's net income for 2006 increased 30 percent to a record
53.9 billion yuan as sales exceeded 1 trillion yuan for the first
time, it said on April 10.
Shares in Sinopec rose 0.99 percent to HK$7.17 yesterday on the
Hong Kong stock exchange.
(China Daily April 17, 2007)