China Petroleum & Chemical Corp, known as Sinopec, disclosed a 9.9% decrease in its net profit for 2023, as cited by Reuters. The decline was influenced by diminishing oil and gas prices, although it was cushioned by the resurgence in fuel demand.
In a filing to the Shanghai Stock Exchange, the largest oil refiner globally based on capacity reported a net income of 60.5 billion yuan ($8.37 billion) adhering to Chinese accounting standards.
Sinopec acknowledged grappling with a “complicated operating environment and intense competition” throughout the previous year, as stated in their communication to Reuters.
Comparatively, 2023’s performance was marginally inferior to that of 2022, where the company witnessed a 6.9% dip in net income owing to the impact of COVID-19 restrictions on fuel and chemicals consumption.
However, there were signs of recovery in certain sectors. Notably, aviation fuel and gasoline experienced an uptick in demand following the pandemic, spurred by a surge in passenger air traffic and increased domestic driving activity in China.
Gasoline sales from the state-owned oil and gas giant escalated by 14.3%, while diesel sales saw a rise of 6.4%. The most notable surge was in aviation fuel sales, which soared by 49.5%.
These statistics encompass both domestic sales and exports. In 2023, refineries capitalized on robust export opportunities, particularly witnessing substantial growth in overseas shipments of diesel and jet fuel.
Refinery throughput surged by 6.3% in the past year, reaching an unprecedented 257.52 million metric tons, equivalent to approximately 5.15 million barrels per day.
Projections from the company indicate an anticipated increase to 260 million tons for the current year.
While Sinopec foresees a slight decline in crude oil production to 279.06 million barrels this year compared to 280.23 million barrels in 2023, there’s an expected rise in natural gas production to 1,380 billion cubic feet from the previous year’s 1,292 billion cubic feet.
However, its petrochemical segment showed subdued performance, witnessing a decrease in sales of chemical fibers and plastics by 1.8%.
For the upcoming fiscal year, Sinopec has outlined capital spending plans totaling 173 billion yuan, earmarked for critical investments such as exploration and development. This marks a decrease from the 176.8 billion yuan allocated in the previous year.
