Sinopec’s refining margins turn positive on higher oil prices
01:47, 30 August 2021
China Petroleum & Chemical, also known as Sinopec, reported a turnaround to first-half profit on Sunday as refining margins recovered to postive after plunging last year when oil prices fell into negative territory for the first time in history.
In April 2020, US crude oil futures dropped below zero for the first time ever as global demand freezed amid a COVID-19-induced global lockdown, when traders were paying buyers to take oil off their hands aftering running out of places to store unwanted crude oil reserves.
Asia’s biggest oil refiner said first-half refining margin rebounded to CNY561 (USD86.72) per tonne compared to a loss of CNY12 per tonne a year ago.
Asia’s biggest oil refiner
Sinopec posted first-half profit attributable of CNY39.95bn compared to loss of CNY21.84bn a year ago boosted by pick up in energy demand and higher crude oil prices.
The company said it refined nearly 14% more crude oil in the first six months of 2021 compared to last year.
Interim revenue rose 22.1% year-on-year to CNY1.26trn. An interim dividend of CNY0.16 per share will be distributed, Sinopec said.
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Second-half outlook
Sinopec said first-half oil and gas production rose 4.2% year-on-year to 235.29 million barrels of oil equivalent, while natural gas production jumped 13.7% year-on-year 582.6 billion cubic feet.
The company plans to produce 141 million barrels of crude oil and 633.5 billion cubic feet of natural gas in the second half of 2021.
Capital expenditures for the second half of the year are budgeted at CNY109.259bn, the company said.
“It is expected that the demand for refined oil will keep stable, the demand for chemical products will maintain a good growth rate, and the demand for natural gas will grow rapidly,” Sinopec said on second half of 2021.
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