Sinopec posts growth in first-half revenue

Energy and chemical giant Sinopec Corp on Sunday reported higher first-half revenue this year because of stronger demand for gas and oil.

The company's financial report said revenue grew 15.3 percent year-on-year to 1.5 trillion yuan ($209.8 billion) in the first six months of 2019.

"Sinopec's revenue growth came amid a demand increase for oil, gas, and chemical products like ethylene," said Lin Boqiang, head of the China Institute for Studies in Energy Policy at Xiamen University.

However, its net profit was 31.3 billion yuan, down 24.67 percent year-on-year.

"There are many challenges that the company faces like weak oil prices, uncertainties from the global oil market and the problem of overcapacity that China's chemical industry has been facing, which are the possible reasons for the slump in its net profit," Lin added.

The company's production of gas and oil garnered 103.8 billion yuan for it in revenue, up 18.1 percent compared with the same period last year. Aside from an increase of sales volume, Sinopec said the revenue increase was also due to a rise in the sales price for gas and liquefied natural gas.

Sinopec production hit 226.63 million barrels in oil-gas equivalent weight in the period, up 0.9 percent year-on-year. Crude oil production was 141.68 million barrels, with domestic production hitting 124.05 million barrels, and overseas production reaching 17.63 million barrels.

Gas production in the first six months was 509.5 billion cubic feet, up 7 percent year-on-year.

Sinopec's crude oil processing, refined oil production, and naphtha production contributed 597.8 billion yuan to Sinopec's revenue, up 0.8 percent year-on-year. The company said the increase was mainly due to a rise in production efficiency and sales volume.

For the first six months, Sinopec processed 124 million metric tons of crude oil, a 2.7 percent year-on-year increase, and produced 78.94 million tons of refined oil, or fuel oil, a 3.4 percent year-on-year increase. It also reported a 3.6 percent year-on-year growth in naphtha output to 20 million tons.

Sinopec said sales volume for refined oil, or fuel oil, grew 9.6 percent year-on-year to 126.91 million tons. That sector churned out 691.8 billion yuan in revenue, up 3.5 percent year-on-year.

The company's revenue from chemical production rose 1.6 percent year-on-year to 260.5 billion yuan. Sinopec said this was due to an increase in chemical production. Its major product, ethylene, saw a 6.5 percent increase in production to 6.16 million tons.

Looking ahead, the company plans to produce 142 million barrels of crude oil in the second half of this year, with domestic production hitting 125 million barrels and overseas production 17 million barrels respectively.

It also plans to produce 507 billion cubic feet of gas and process 124 million tons of crude oil for fuel oil production in the next six months, said the company's financial report. Sinopec will produce 6.04 million tons of ethylene in the next six months, the report added.

Zheng Xin contributed to the story.