Wedoany.com Report-Apr. 29, On Monday, China Petroleum & Chemical Corp, known as Sinopec, reported a 27.6% decline in first-quarter net income compared to the previous year. The company, listed on the Shanghai Stock Exchange, attributed the drop to lower oil prices and challenges in its refining segment, including reduced fuel sales and narrow margins. Net income for January to March reached 13.26 billion yuan ($1.82 billion).
A man takes pictures near a screen displaying a view of Sinopec's liquefied natural gas (LNG) terminal at the oil company's booth during the China International Fair for Trade in Services (CIFTIS) in Beijing, China September 1, 2022.
Sinopec, the world’s largest refiner by capacity, noted a 4% year-on-year decrease in China’s refined fuel demand during the first quarter. Gasoline consumption faced pressure from increased electrification, while diesel demand was limited by economic challenges. The company’s crude oil processing fell 1.8% to 62.13 million metric tons, equivalent to 5.04 million barrels per day. Total refined fuel sales dropped 7.1% to 55.59 million tons, with domestic sales at 43.2 million tons, down 5.3%.
In contrast, Sinopec’s ethylene production, essential for petrochemicals, increased by 17.7% to 3.86 million tons, marking a recovery from two years of declines for the same period. However, the chemical division reported a loss of 1.32 billion yuan, citing: “A severe market environment of continuously low margins.”
Crude oil production decreased 1.2% to 69.53 million barrels, or approximately 773,000 barrels per day, while natural gas output grew 5.1% to 368.4 billion cubic feet. Capital spending totaled 18.25 billion yuan, a reduction from 20.5 billion yuan the previous year. About 70% of this was directed to upstream projects, including oil developments in Jiyang and Tahe, and the Fuling shale gas project.
Sinopec’s Hong Kong-listed shares ended the day up 0.25%, though they have declined 11.5% year-to-date. The company continues to navigate a complex market environment, balancing production adjustments with investments in key energy projects.
