The sliding price of crude has again hit the profits of the China Petroleum and Chemical Corporation, more commonly known as Sinopec.
The state-controlled energy firm said its net income fell 21.6 percent in the first six months of the year compared with the same period last year. It was 19.9 billion yuan (2.67 billion euros), down from 25.4 billion yuan a year earlier.
It is, however, more than double the company’s net profit in the second half of last year
Sinopec was forced to cut output at loss-making fields with crude oil production down 11.4 percent and its oil and gas output falling by six percent year-on-year.
China is the world’s second-largest consumer of fuel but the rate at which demand has increased has moderated as the country’s broader economic growth has slowed.
Sinopec profit slides on oil price: Asia’s largest oil refiner has disappointed investors, despite rising dom… https://t.co/HDPVQoRGDF— Mining Jobs/News (@MiningJobsAU) August 29, 2016
At the same time the company, which is Asia’s largest refiner, came under domestic competition after more than a dozen independent refineries were allowed to import crude oil for the first time since late 2015.
The refining part of the business did help it weather the slump in crude oil prices.
The company was upbeat in a statement saying: “China’s economic growth is expected to be steady in the second half of 2016, which will drive the growth of domestic demand for refined oil products and petrochemical products.”
“The consumption mix of oil products shall continue to change, and demand for chemical products will be gradually moving to more high-end products,” the company said.
But it added that over-supply in the international oil market is likely to persist and international oil prices will remain low.