Sinopec Says Profit Rises 17 Percent

HONG KONG – Asia’s largest oil and gas refiner by capacity, China Petroleum & Chemical Corp. – or Sinopec – said Monday its net profit for the first half of 2005 surged 17 percent, lifted by high oil prices and strong domestic demand from China’s booming economy.

Net profit in the six months through June totaled 19.65 billion Chinese yuan, or $2.43 billion, up from 16.75 billion yuan in the same period last year.

Revenue rose almost 32 percent to 368.45 billion yuan, $45.51 billion, from 279.45 billion yuan.

Chairman Chen Tonghai said in a statement that he expected China’s demand for refined products to increase steadily along with the country’s growing economy, while the appreciation of the currency, the yuan, will likely lower the company’s crude procurement costs and the price of imported chemical products.

China revalued the yuan on July 21, letting it rise about 2 percent against the dollar. The yuan now trades in a restricted float against a basket of currencies, including the dollar, euro, yen and Korean won.

Chen said while international crude oil prices are expected to remain high, the Chinese government will continue to keep refined oil product prices under control in the second half, he said.

Beijing-based Sinopec produced 136.7 million barrels of crude oil and 104.8 billion cubic feet of natural gas in the first six months. Most of the company’s oil and gas output is used for its refining and chemical production.

Sinopec said its capital expenditure in the first half was 22.55 billion yuan ($2.79 billion), of which 45 percent was used in oil exploration and production. The company said it expected a total capital expenditure of 62 billion yuan ($7.66 billion) for the entire 2005.

It said newly added proved crude oil reserves dropped 31 percent to 85.69 million barrels in the first half, while newly added proved natural gas reserves dropped 41 percent to 518.1 billion cubic feet.

Its proved oil reserves as of the end of June 2005 dropped 0.9 percent on year to 3.2 billion barrels, while natural gas reserves fell almost 6 percent to 3,446.3 billion cubic feet.

Sinopec proposed a first-half dividend of 0.04 yuan ($0.005), unchanged from last year.