Good refining results, fuel pricing revisions boost Sinopec profit

Hong Kong: China Petrochemical Corporation, the nation's largest refiner known as Sinopec Group, increased its profit last year after a "relatively good" performance by its oil-processing business, the company's senior adviser said.

The parent of Hong Kong-listed China Petroleum and Chemical Corporation gained from "moderate crude oil prices" and a revision in the government's fuel-pricing system that assured a profit for refiners, Zhou Yuan, a former vice president at the group, told reporters in Beijing yesterday. He declined to give figures.

Crude oil prices on the New York Mercantile Exchange fell about 38 per cent last year to an average of $62 (Dh227.6) a barrel, cutting costs at Sinopec Group that relies on imports for about 80 per cent of its raw-material needs.

"If crude oil prices average about $70 a barrel this year, our refining business will perform as well," Zhou said.

Crude oil for April delivery was at $81.44 a barrel in electronic trading on the New York Mercantile Exchange yesterday morning.

More than half of the group's refining units are capable of processing low-quality crude oil, which would reduce costs further, according to Zhou.

It currently costs the company's Zhenhai refinery, the nation's largest, about 120 yuan (Dh64.45) to process one metric ton of crude, he said. "The number is competitive among our global peers," Zhou said.

The group's refining business is making "marginal profits" at current crude prices of about $80 a barrel, he said.

China Petroleum will start operating in May a natural gas pipeline linking its Puguang field in the southwestern province of Sichuan to eastern China, Zhou said.