China Petroleum & Chemical Corporation, known as Sinopec, said it incurred a loss of 1.6 billion yuan ($243 million) on its liquefied natural gas (LNG) imports in the first quarter due to higher costs.
The setback came as Sinopec reported an overall 25% rise in net income for the three-month period, a level last seen in the third quarter of 2020, thanks to elevated crude oil prices but weakening fuel demand due to pandemic restrictions.
Sinopec, Asia’s biggest oil refiner, reported 22.61 billion yuan in net profit under Chinese accounting standards, versus 17.93 billion yuan a year earlier, according to a filing to the Shanghai Stock Exchange.
Refinery throughput edged up 2.7% from a year ago to 64.19 million tonnes, or about 5.21 million barrels per day, with the growth capped by sliding fuel demand starting in March as authorities resumed a lockdown to contain a Covid flare-up.
“Global oil prices rose sharply in the first quarter, with average spot prices of Platts Brent crude oil up 66.3% at $101.2 per barrel. While domestic demand for natural gas, refined oil and chemical products maintained growth,” Sinopec said in the filing.
Refined Fuel Sales
However, its total refined fuel sales dipped 1.8% during January-March, compared with 6.8% growth during the same year-ago period, reflecting curbs in domestic fuel use due to authorities’ stringent mobility restrictions.
Crude oil production reached 69.07 million barrels, up 1% on the year, while natural gas output expanded 7.7% to 313.94 billion cubic feet.
Earnings before tax and interest at its exploration and production department nearly tripled year-ago levels to 11.5 billion yuan, while its vast refining sector posted a modest 15% growth in profits at 22.9 billion yuan.
The refiner expanded diesel output by nearly 10% on the year but lifted petrol production only 0.7%, a sign that car refuelling bears the brunt of demand destruction as lockdowns intensified since March.
Capital spending was 25.38 billion yuan, versus 23 billion yuan a year earlier, with the increases mainly channelled to the exploration and development sector.
- Reuters, with additional editing by George Russell