Sinopec's 2017 Profit Up
Chinese Sinopec March 25 said profit attributable to equity shareholders of the company for the year 2017 was yuan 51.24bn ($8.1bn), up 9.8% year on year due to higher realised product prices and reduced costs.
Company's turnover and other operating revenues reached yuan 2.36 trillion in 2017, up 22.2% from the previous year.
In the exploration and production segment, Sinopec implemented “a low-cost strategy to address the challenge of low oil prices, focused on high-efficiency exploration and development, and enlarged proved reserves to lay a stronger foundation for sustainable development.”
The company also developed its natural gas business as a new driver for profit growth. It built up the production capacity of the Fuling shale gas field to 10bn m3/yr. China’s domestic natural gas consumption saw strong surge last year, as apparent domestic gas consumption reached 237.3bn m3, up by 15.3% year on year.
Production of oil and gas was 448.79mn barrels of oil equivalent (1.23mn boe/d), with domestic crude production down by 3.2% from the previous year and natural gas production up by 19.1%.
Sinopec’s total capital expenditure in 2017 was yuan 99.38bn. Capital expenditure for the exploration and production segment was yuan 31.34bn, mainly for Fuling shale gas and Hangjinqi natural gas field development projects, Shengli and Northwest crude development projects, LNG terminals in Tianjin, Wen-23 gas storage and phase I of Xinjiang gas pipeline, as well as overseas projects.
Focus on natural gas in 2018
In 2018, the company’s capital expenditure is budgeted at yuan 117bn ($18.5bn), 18% higher than its 2017 capex of yuan 99.38bn in 2017. The exploration and production segment will account for expenditure of yuan 48.5bn, mainly for the shale gas development in southwest China, the natural gas project in north China and crude capacity building in northwest China, as well as natural gas pipelines and storage projects, and overseas oil and gas projects.
In 2018, Sinopec plans to produce 290mn barrels of crude oil down from about 294mn barrels in 2017. Its natural gas production is expected to be 974.1bn ft3 this year, up almost 7% on 2017.