China’s Sinopec announced a 2.6% rise in net profit for the first half of the year, thanks to record oil and gas output offsetting weaker domestic demand for refined fuel and petrochemicals. The company, officially known as China Petroleum & Chemical Corp, reported a net income of 37.1 billion yuan ($5.21 billion) from January to June, as per a filing with the Shanghai stock exchange.
Sinopec, the world’s largest oil refiner by capacity, achieved a record high in oil and gas production, reaching 257.66 million barrels of oil equivalent, up 3.1% year-on-year. Natural gas production rose by 6% to 700.57 billion cubic feet, while crude oil output increased slightly by 0.6% to 140.53 million barrels.
Despite a 2.1% increase in refined product sales to 119 million metric tons, domestic sales fell 2.5% to 90.14 million tons. Total revenue dropped by 1.1% to 1.58 trillion yuan due to declining diesel and petrochemical sales and prices. Diesel sales decreased by 13.8% and gasoline by 0.2%, whereas aviation fuel sales grew by 7.5%.
To counter weak diesel demand and a shift towards electric vehicles, Sinopec is expanding its LNG refueling and EV charging businesses. In the first half, China’s apparent natural gas consumption rose 10%, but domestic refined product consumption fell by 0.5%. Looking forward, Sinopec expects crude oil throughput to remain stable in the second half at around 126 million tons.