HONG KONG • China Petroleum & Chemical Corp's third-quarter pro- fit shot up more than six times as refining gains helped overcome deepening losses from oil and gas production.
Net income at the world's biggest refiner, known as Sinopec, rose to 10.2 billion yuan (S$2.1 billion) from 1.65 billion yuan a year ago, the Beijing-based company said in a statement to the Hong Kong stock exchange on Thursday. Revenue fell 3.1 per cent to 472 billion yuan.
Oil's two-year slide starting in 2014 has been a boon to fuel makers, including Sinopec.
Operating profits from refining, marketing and chemicals in the July to September period more than doubled to 24.1 billion yuan, according to Bloomberg calculations based on half-year and nine-month data from Sinopec.
The company does not release third-quarter operational figures.
"Sinopec is a big beneficiary of low crude prices as it buys most of the oil it processes from overseas," said Ms Tian Miao, a Beijing-based analyst at North Square Blue Oak.
"The low comparison basis from a year ago also makes the quarterly numbers look good."
Operating losses in exploration and production (E&P) deepened to 8.49 billion yuan from a loss of 1.62 billion yuan during the same period last year, according to Bloomberg calculations. Brent, the benchmark for half the world's crude, averaged about US$47 a barrel in the third quarter, down 8 per cent from a year ago.
After posting a 22 per cent drop in half-year profits, the third-quarter performance pulled net income for the first nine months of the year up 11 per cent to 30.1 billion yuan.
Sinopec's capital spending during the first nine months of the year totalled almost 25 billion yuan, a 34 per cent decline. Expenditures in just the third quarter were down 21 per cent from the previous year to 11.5 billion yuan, according to Bloomberg calculations.
The company's domestic crude output in the first nine months dropped 14 per cent to 191.26 million barrels as the explorer shut some ageing and high-cost oilfields, the company's statement showed.
The nation's total production has fallen 6.1 per cent during the same period, according to data from the National Bureau of Statistics.
"Sinopec's E&P unit is likely to extend losses in the fourth quarter and post the steepest production decline among the three Chinese oil majors in 2016, given its higher cost structure than its rivals," said analyst Lu Wang from Bloomberg Intelligence in Hong Kong.