March 30, 2016 [OPIS] - Sinopec, one of the largest oil companies in the world, said on Tuesday that it plans to increase oil refining volume in 2016 by 0.85% or 2 million tons from 2015.
In 2016, Sinopec plans to process 238 million tons of crude oil and produce 149 million tons of oil products.
In 2015, it processed 236 million tons of crude oil, up by 0.5% from the previous year, and produced 148 million tons of refined oil products, up by 1.5%.
The company had adjusted the product mix in response to market demand by increasing production of gasoline and kerosene.
OPIS reported in January that Sinopec had emerged as a major crude player in the Caribbean after picking up 10 million bbl of storage at St. Croix in the U.S. Virgin Islands.
The storage lease at St. Croix represents the first for Sinopec and Unipec, the oil trading arm of Sinopec, in the Caribbean. Sinopec has an oil products and crude trading presence in the U.S. markets via Unipec. Unipec is focused on Asian and Chinese physical oil markets, but it has made a move to connect the dots around the world in the past few years.
Sinopec’s net profit in 2015 was RMB 43.7 billion ($6.7 billion), decreased by 8.9% year on year, in accordance with the International Financial Reporting Standards (IFRS). The net profits reflect integrated advantages amid sluggish oil price.
The operating profits for the refinery segment and the chemical segment significantly increased to RMB 21.0 billion and RMB 19.7 billion, respectively. Both segments became the main drivers of the company’s profit and offset the less favorable upstream results.
The company’s total turnover and other operating revenue was RMB 2,018.9 billion, down by 28.6% year on year. The company’s operating profit was RMB 57.0 billion, representing a decline of 22.4% from last year.
Profit attributable to shareholders of the company was RMB 32.4 billion, 30.2% lower than last year. Basic earnings per share was RMB 0.268.
In 2015, the operating revenues of Sinopec’s refining segment were RMB 926.6 billion, representing a decrease of 27.2% over 2014. This was mainly attributable to the decreased price of refined oil products.
In 2015, the operating profit of this segment totaled RMB 21.0 billion, representing an increase of RMB 22.9 billion as compared with 2014.
Refining gross margin was RMB 318.1 per ton, representing an increase of RMB 105.1 per ton compared with 2014. In 2015, refining gross margin was $6.95/bbl, representing a year-on-year increase of 47.2%. The unit refining cash operating cost remained flat despite investments in refined oil products quality upgrading.
In light of the new pattern of supply and demand balance for oil products, Sinopec adjusted its marketing strategies and promoted the sales of high-octane gasoline and high-value-added products.
It optimized oil products pipeline layout and marketing network, and accelerated the construction of compressed natural gas service stations.
As a result, total retail volume and per-station pumped volume sustained growth despite intense market competition.
Total sales volume of refined oil products in 2015 was 189 million tons, of which domestic sales accounted for 171 million tons.
Operating revenues of this segment were RMB 1,106.7 billion, a decrease of 25.1% over 2014. The operating profit of this segment was RMB 28.9 billion, representing a decrease of 2.0% compared with 2014.
For 2016, Sinopec expects the world economy to be weak in recovery mode, while China’s economy maintained steady growth. International oil prices are expected to fluctuate at a low level, it said.
A gradual opening up of import license for crude oil will enable more competition in the Chinese market, Sinopec said. Quality upgrading for oil products will advance steadily and the demand pattern will be further adjusted. Growth in domestic demand for major petrochemical products will be steady.
