BEIJING: China’s Sinopec Corp said on Sunday it would raise spending by 17.7 per cent this year after posting its best annual earnings since 2013.

The company, officially known as China Petroleum and Chemical Corp, said net income rose by 10.1 per cent year on year to 51.1 billion yuan ($8.10 billion) in 2017, while revenues climbed 22.2 per cent to 2.36 billion yuan as oil prices advanced.

Fourth-quarter net profit, however, came in at 12.746 billion yuan, down 26.1 per cent year on year, according to Reuters calculations.

In a statement to the Shanghai Stock Exchange, Sinopec said it had allocated 117 billion yuan of capital expenditure for 2018, up from an actual spend of 99.38 billion yuan last year.

That includes a 55 per cent hike in upstream spending to 48.5 billion yuan, as China’s biggest refiner looks to make the most of a rally in oil prices since early February to over $70 a barrel.

Rival PetroChina on Thursday said it would also lift spending on exploration and production in 2018, by 3.5 per cent, despite a drop in fourth-quarter earnings.

Sinopec said some of the funds would go towards building more shale gas production capacity in southwest China, as well as on boosting output from oil projects in the northwest of the country.

The company expects to produce 290 million barrels of crude oil in 2018, or approximately 795,000 barrels per day, which is slightly down from 293.7 million barrels in 2017 and would mean Sinopec’s oil output declining for a fourth straight year.

It also plans to produce 974.1 billion cubic feet of natural gas, up 6.8 per cent from 2017.

“We expect the natural gas market to grow rapidly and international oil prices to be stable,” Sinopec said.