BEIJING (REUTERS) - China Petroleum & Chemical Corp, better known as Sinopec, plans a 23.8 per cent increase in capital spending to 167.2 billion yuan (S$34.4 billion) in 2021 following recovery of oil prices and energy demand as the Covid-19 epidemic subsided.

Sinopec expects to spend 66.8 billion yuan on upstream exploration focusing on shale gas development in southwest China and construction of liquefied natural gas (LNG) terminals in coastal areas, up from 56.4 billion yuan last year.

"China's economy is recovering and is expected to achieve relatively good growth. Demand for refined oil products is expected to recover strongly and demand for natural gas and petrochemical products will continue to grow," the company said in a statement filed to the Shanghai Stocks Exchange on Sunday.

The company on Sunday also reported a 42.9 per cent drop in net profit to 32.92 billion yuan last year, the lowest since 2015, as the pandemic dented fuel consumption amid months-long lockdowns.

That just beat analysts' forecast for net profit of 32.3 billion yuan, according to IBES data from Refinitiv.

In 2020, Sinopec's crude oil throughput fell 4.7 per cent from a year earlier to 236.91 million tonnes, with gasoline and diesel output down 7.7 per cent and 4.3 per cent, respectively, while kerosene production plunged 34.6 per cent.

Its crude oil production was 280.22 million barrels in 2020, down 1.4 per cent year-on-year, and natural gas output at 1,072.3 billion cubic feet, was up 2.3 per cent from 2019.