China's Sinopec lifts upstream capex to four-year high, plans record crude runs
* Untapped proven reserve from Shengli field tumbled
* Sinopec plans 4.9 mln bpd in record crude runs
* Q4 profits dampened by trading arm losses
(Adds detail, background)
BEIJING, March 24 (Reuters) - Asia's top refiner China
Petroleum & Chemical Corp (Sinopec) boosted
spending on exploration and production by 41 percent last year
as crude oil reserves tumbled at its biggest oilfield.
Sinopec's upstream capital expenditure rose to 59.6 billion
yuan ($8.9 billion), its highest since 2014, as the company
prepares to ramp up exploration at the Shengli oilfield and
shale gas blocks in the southwestern Sichuan province.
The jump in spending was partially in response to Beijing's
call for energy security, while untapped proven crude reserve
from Shengli fell to 16 million barrels by the end of 2018 from
49 million barrels in 2017.
Sinopec also came under more pressure to source cheap crude
as it plans record refinery runs in 2019.
Its total cost for purchasing crude oil rose 41 percent to
701 billion yuan because of higher global oil prices.
Sinopec plans to increase its crude processing rate to 4.92
million barrel per day (bpd), up from 4.88 million bpd last
Its gasoline sales volumes last year were up 4.9 percent to
88 million tonnes, while diesel sales volumes dipped by 4.7
percent. Average diesel prices, however, rose 19 percent last
The refiner on Sunday posted its smallest quarterly net
profit since at least the third quarter of 2016 after its oil
trading business Unipec registered one of China's largest
derivatives trading losses in nearly a decade.
Sinopec's fourth-quarter net profit plunged 76 percent from
a year ago to only 3.1 billion yuan because of the one-off
Unipec trading loss. Its revenue increased 33 percent to 818
billion yuan in the period, according to Reuters calculations.
Sinopec said Unipec had a net loss of 4.02 billion yuan last
year. Unipec lost 4.65 billion yuan on crude oil hedging in the
For 2018 as a whole the state-owned company still managed
robust growth. Net earnings rose 23 percent to 63 billion yuan,
the best annual results since 2013, and total revenue of 2.89
trillion yuan compared with 2.36 trillion yuan a year earlier.
The strong growth was mainly because of higher sales prices
and volumes of refined products and chemicals, the company said
in a filing to Shanghai Stock Exchange on Sunday.
The company issued a dividend of 0.26 yuan per share.
($1 = 6.7162 Chinese yuan renminbi)
(Reporting by Meng Meng, Min Zhang and Dominique Patton
Editing by Neil Fullick and David Goodman)
First Published: 2019-03-24 11:26:56
Updated 2019-03-24 13:13:56
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