ZCZC
BCN-15
CHINA-EARNINGS-OIL-PETROCHINA-SINOPEC
Gas demand fuels profit surge at Chinese oil giants
SHANGHAI, March 25, 2019 (BSS/AFP) – Chinese energy giant Sinopec, the
world’s largest oil refiner, said Monday its annual profit for 2018 soared by
almost a quarter thanks to growing domestic demand for natural gas.
Sinopec’s profit grew 23.4 percent to 63.1 billion yuan ($9.4 billion) in
2018, the company said in a report submitted to the Shanghai Stock Exchange.
Sinopec, whose official name is China Petroleum & Chemical Corporation,
said domestic consumption of natural gas rose 18.1 percent to 280.3 billion
cubic metres as the country’s environmental regulations became “more
stringent”.
The company has benefited from a policy shift under President Xi Jinping
aimed at raising natural gas consumption and reducing reliance on heavily
polluting coal.
“We will make vigorous efforts in pollution prevention and environmental
protection to raise the level of our green development,” Sinopec chairman Dai
Houliang said in the annual report.
Demand for chemicals “kept strong momentum” in 2018 while refined oil
products such as gasoline, diesel and kerosene consumption gained 6.0
percent.
China surpassed Japan in 2018 to become the largest natural gas importer
in the world, the official People’s Daily newspaper said Saturday, citing an
industry report.
PetroChina, the country’s biggest oil producer, also benefited from strong
natural gas demand along with rising crude oil prices as it reported on
Friday a 130.7 percent increase in profit to 52.6 billion yuan in 2018.
Sinopec proposed a 0.42 yuan per share dividend for 2018 and its chairman
Dai said the company’s capital expenditure for 2019 will increase 15.5
percent to 136.3 billion yuan.
However, some analysts doubt whether increased spending will lead to
reasonable returns.
“The oil companies may just be implementing the government’s order, even
if that means they produce oil at a high cost,” Laban Yu, an analyst with
Jefferies Financial Group Inc told Bloomberg News.
BSS/AFP/HR/1320