China Petroleum & Chemical Corp, Asia's largest refiner by capacity, said today its first-half net profit climbed 8.9 percent from a year earlier, as high crude prices offset losses in its refining division, The Associated Press reported.

The company, commonly known as Sinopec, said its net profit for the six months ended June 30 was 21.4 billion yuan (US$2.7 billion), up from 19.7 billion yuan in the first half of 2005, based on international accounting standards, the report said.

Revenue rose to 482.0 billion yuan from 359.2 billion yuan a year earlier.

China's refiners generally have been unable to pass higher costs from high crude oil prices on to consumers due to domestic price controls.

But an expansion in Sinopec's resource holdings, combined with surging oil prices, helped make up for losses in refining.

"This allowed us to deliver satisfactory structural reforms and operating performance," Chen Tonghai, Sinopec's chairman, said in a statement.

Sinopec, whose shares are traded in Hong Kong and New York, was trading at 4.47 Hong Kong dollars (56 US cents) early today, down 1.1 percent.

Sinopec's losses in refining soared, to 16.6 billion yuan in the first half, up from a loss of 1.3 billion yuan in first-half 2005, the company said.

It said its exploration and production business saw its operating profit nearly double, to 33.3 billion yuan, from 17.8 billion yuan a year earlier.

Sinopec said its state-owned parent company, China Petrochemical Corp, plans spend 11.9 billion yuan to buy back shares from three state shareholders -- China Orient Asset Management Corp., China Cinda Asset Management Corp and China Development Bank.

The company did not give a reason for the plan, which likely is associated with its release today of a shareholding reform plan aimed at shifting government-held, nontradable shares into the market.

Similar reforms have been conducted over the past year among scores of state-owned companies.

(For more biz stories, please visit Industry Updates)