©Reuters. FILE PHOTO: A pump is seen at the Shengli oil field operated by Sinopec in Dongying, Shandong province, China January 12, 2017. Picture taken January 12, 2017. REUTERS/Chen Aizhu/File photo
By Muyu Xu and Chen Aizhu
BEIJING (Reuters) – China Petroleum & Chemical Corp, better known as Sinopec (NYSE:), is planning its biggest capital investment in history by 2022 after posting its best profit in a decade, echoing Beijing’s call for energy companies increase production.
Sinopec expects to spend 198 billion yuan ($31.1 billion) in 2022, up 18% from a year ago, surpassing the previous record of 181.7 billion yuan set in 2013, according to a company statement filed with the Stock Exchange. from Shanghai on Sunday.
It plans to invest 81.5 billion yuan in upstream development, especially foundations in the Shunbei and Tahe fields, and fields in Sichuan province and the Inner Mongolia region.
“Looking ahead to 2022, the market demand for refined oil will continue to recover and the demand for natural gas and petrochemical products will continue to grow,” Sinopec said in the statement.
He also warned about the possible impacts of geopolitical challenges and the volatility of oil prices on the investment and operation of companies abroad. But the firm did not name any specific project.
Reuters reported that Sinopec Group had suspended talks on a major petrochemical investment and gas trading company in Russia, heeding a cautionary tale from the government as sanctions over the Ukraine invasion mount.
Prices have risen 52% so far this year and hit $139 a barrel in early March, fueled by fears of a supply disruption following the Russian invasion of Ukraine.
Sinopec posted its highest profit in a decade in 2021 on the back of recovery in energy demand and oil price increases in the post-COVID-19 era, with net profit reaching 71.21 billion yuan.
It plans to produce 281.2 million barrels of crude oil and 12,567 million cubic feet of natural gas in 2022, compared to its production of 279.76 million barrels and 1,199 million cubic feet in 2021.
Beijing seeks to ensure energy security in the country amid intensifying geopolitical risks. It wants to keep annual crude oil production at 200 million tons and increase natural gas production to more than 230 billion cubic meters (bcm) by 2025 from 205 bcm in 2021.
Crude throughput and production of refined oil products at Sinopec are expected to remain around the same level in 2022 as a year ago, at 258 million tons and 147 million tons, respectively.
But demand for gasoline and diesel is taking a hit in China as more than 2,000 daily COVID cases have prompted local authorities to impose strict travel restrictions, while manufacturers suspended operations amid supply chain obstructions. .
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