Rising demand helps boost Sinopec profit
(Shenzhen Daily/Agencies)
Updated: 2005-03-25 09:48

China Petroleum & Chemical Corp., Asia’s biggest oil refiner, may have increased second-half profit 85 percent to a record on surging demand for fuels and chemicals in the world’s fastest-growing major economy.

Net income probably rose to 20.2 billion yuan (US$2.4 billion) from 10.9 billion yuan, according to Thomson Financial survey. Sinopec, as Beijing-based China Petroleum is known, is scheduled to announce earnings March 29.

Chairman Chen Tonghai, 56, raised fuel prices faster than an increase in crude oil costs as China’s demand for cars, refrigerators and other consumer goods soard.

The rising income of Chinese households bolstered sales of fuels, plastics and paints and boosted demand for oil products at Sinopec, which produces two-thirds of the nation’s fuels.

Sinopec shares are trading at 7.4 times estimated 2005 earnings, compared with 15 for Exxon Mobil Corp., the world’s biggest publicly traded oil company. Exxon shares have gained 17 percent this year.

The price of crude oil in New York increased 34 percent last year, and has gained 23 percent so far in 2005, touching a record US$57.60 March 17.

Higher prices aren’t expected to stop China’s oil demand from growing this year.

The International Energy Agency said China’s oil demand may rise 7.9 percent to 6.88 million barrels a day.

Sinopec’s oil processing increased 14 percent last year to 133 million metric tons as the company produced 22 percent more diesel, 8.5 percent more gasoline, and 20 percent more kerosene.

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