(SNP) or Sinopec reported operating profit of RMB 35.1 billion for the six months ended 30 June 2016, in accordance with the International Financial Reporting Standards, representing a decline of 13.3% from the same period past year.
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During the first six months of the year, Sinopec posted a net profit of $2.98 B, down from $3.8 B a year earlier.
“China’s economic growth is expected to be steady in the second half of 2016, which will drive the growth of domestic demand for refined oil products and petrochemical products”, the company said in a statement, It added, however, that over-supply in the global oil market is likely to persist and worldwide oil prices will remain low.
Sinopec said its first-half refinery operations fell 2.51 percent on-year.
Analysis from S&P Global Platts said Chinese oil demand declined by about a half percent from the first half of previous year.
SNP outshined domestic state-run rivals PetroChina (PTR -0.3%) and Cnooc (CEO -0.3%) in H1 as its refining business helped it weather the drops in crude oil and natural gas prices. The rule boosted margins during Sinopec’s first quarter, when net income tripled from a year ago to 6.66 billion yuan. That’s roughly equal to nearly 4.67 million barrels a day, according to Bloomberg calculations.
“The consumption mix of oil products shall continue to change, and demand for chemical products will be gradually moving to more high-end products”, the company said.
The first-half result was a sharp contrast to the performance of the nation’s other two oil majors, China National Petroleum Corporation and China National Offshore Oil Corporation.
Sinopec’s Shuibei oil field, a new discovery in the middle west of the Tarim basin, has oil reserves of 1.2 billion tonnes and 500 billon cubic meters of natural gas deposit, it said. According to Platts, China imported almost 4 percent more oil in June year-on-year, while net production fell 9 percent.
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Chemicals production recorded a 3.8 per cent fall in operating profit to 9.68 billion yuan from 10.1 billion yuan. In the second half of 2016, Sinopec plans to slightly cut on crude production and produce 147 million barrels of crude oil, including 125 million barrels of domestic production and overseas production of 22 million barrels.
