-External environment remains challenging
-Responding with action: divestments on target; simplification and efficiency
programmes continue to deliver positive results
-Sales of refined oil reach 40 million tonnes for the first time
-Continued fuel quality upgrading sees diesel to gasoline ratio lowered to
1.06
-Corporate restructuring and streamlining of management completed
China Petrochemical Corp. (Sinopec Group), the world’s largest refining company, forecasts that its 2018 profit jumped over 50 percent on the back of lower costs and rising sales as the group improved efficiency despite a tough economic environment.
Sinopec, whose mission is to “provide energy for better life”, achieved the stellar performance with an unwavering commitment to high quality and a focus on deepening supply-side reforms.
Sinopec made big strides in 2018 in expanding market share both at home and abroad. In the domestic oil & gas exploration and production business, Sinopec stabilized and revived the upstream production of crude oil, and effectively scaled up production of natural gas, while slashing the total cost of production per unit through improved efficiency. Domestic sales of oil products also increased amid fierce competition as the group enhanced collaboration between production and sales segments.
Chemicals marketing volume also rose from the previous year as the group deepened integration between production, marketing, research and application, while fine-tuning services to meet customers’ individual needs. The group also aggressively expanded sales of refined oil, which exceeded 40 million tonnes for the first time and total sales of lubricant rose 5 percent from last year; of which high-end products jumped 10 percent.
The group also strove to meet diversified demands for chemical feedstock and oil products at home, and overseas with an expansion in exports. In its overseas oil & gas business, Sinopec reinforced cost control in managing existing upstream portfolios, and actively pushed ahead with asset disposals, resulting in a continuous reduction in the group’s overseas cash operating cost per barrel.
In its oil refining business, Sinopec maintained strong sales momentum as the group enhanced coordination between production and marketing, while vigorously optimizing product slate based on market conditions and profitability. Diesel to gasoline ratio was lowered to 1.06, as the group completed quality upgrading of the fuel.
In the chemicals production and operation segment, Sinopec capitalized on favorable market conditions to boost efficiency, by closely integrating production with sales, and speeding up adjustment of product slate. The cost of producing each tonne of ethylene continued to fall, while the proportion of synthetic chemical products with high added value continued to rise.
In the field of natural gas, Sinopec strengthened coordination between self-produced gas and imported LNG (Liquified Natural Gas) and accelerated the pace of entering the end user market by building pipelines and LNG receiving facilities.
Good progress was also made in the petroleum engineering services segment. The value of newly-signed domestic and overseas contracts rose from a year earlier as the group further consolidated the business and disposed of loss-making projects. In refining and petrochemical engineering services, Sinopec optimized its business structure and increased contract sales by expanding into new markets, including areas along China’s milestone “Belt and Road” initiative.
In 2018, Sinopec deepened reforms. The group set up its international cooperation department and established units in capital and finance. The group also redefined the relationship between speciality units such as natural gas, pipeline, reserve and transportation. In addition, Sinopec completed its corporate restructuring, streamlined its management and strengthened personal property rights.
Significant technological development was also made in 2018. The group strengthened incentives to convert technology into applications, reinforced the study of cutting-edge technologies, and continued to develop its new energy research center, technology incubator and R&D labs.
About Sinopec
China Petroleum & Chemical Corporation (Sinopec Corp.) is a listed company on domestic and international stock exchanges based in Beijing. The company, incorporated in 2000, is the world’s largest oil refining, gas and petrochemical conglomerate with integrated upstream, midstream and downstream operations, strong oil and petrochemical core businesses. Sinopec is committed to its mission of “Powering Better Life” and vision of building a world leading energy and chemical company that addresses the needs of all people.
SOURCE Sinopec
