Chinese giant says upstream business had “improved significantly” on higher international oil prices
China Petroleum & Chemical (Sinopec) said its half-year earnings jumped to the highest level on record as refining profits climbed and a rebound in crude prices brought its oil and gas exploration unit closer to breaking even.
Net income gained to 42.4 billion yuan (Dh22.76bn) in the first six months from 27.9bn yuan a year earlier, the world’s biggest refiner said in a filing to the Shanghai stock exchange on Sunday, citing international accounting standards. That is its best half-year profit on record, according to data compiled by Bloomberg dating back to 2000.
Sinopec flagged the jump in first-half earnings in a profit alert last month, adding that its upstream business had “improved significantly” because of higher international oil prices. The company, which makes most of its money from processing oil into fuels, has been burdened in recent years by losses from its exploration and production segment as its ageing fields have higher production costs.
“Good cost control and better margins from selling higher-grade fuel products helped offset higher oil purchase prices for Sinopec’s refining business,” said Tian Miao, an analyst at Everbright Sun Hung Kai in Beijing.
Sinopec shares in Hong Kong gained 1.2 per cent to close at HK$7.52 on Friday. The stock has risen 31 per cent this year compared with a 7.5 per cent decline in the city’s benchmark Hang Seng Index. Global benchmark Brent crude averaged about $71 per barrel between January and June from $53 a year earlier.
Alcatel Submarine Networks (ASN) has won a contract from Equinor for permanent reservoir monitoring (PRM) and deployment of digital technology to improve recovery at the Johan Castberg field in the Barents Sea.
The Johan Castberg field is estimated to have recoverable reserves of 450-650 million barrels and the company will use digital technology developed in Norway to help improve recovery from the Johan Castberg field.
ASN has signed a letter of intent with Nexans Norway for the delivery of subsea cable.
In January 2018, both companies had entered into a PRM framework agreement while signing a contract for the North Sea Johan Sverdrup field and Equinor has exercised an option in the PRM agreement to award the contract to ASN.
Johan Castberg and Johan Sverdrup, the first fields in the world to install the tool before the start of production, will share the PRM project management, resulting in synergies and savings.
US-based oil and gas company Apache has reportedly unveiled plans to increase its annual investment in exploration activities in Egypt to $1bn.
The decision comes after Apache CEO John Christmann held a meeting with Egypt’s Petroleum Minister Tarek al-Molla, Xinhua reported, citing a statement released by the Egyptian Petroleum Ministry.
The company’s intention to increase exploration is aimed at supporting Egypt’s reserves while helping to increase the country’s oil and gas production.
In a statement, the ministry said: “Christmann and Al-Molla discussed means to expand Apache’s exploration activities in Egypt, as well as the company’s ongoing projects and future investment plans in the country.”