China’s Sinopec posts 25pc drop in Q1 profit

China’s state-owned Sinopec (0386) on Monday reported an over 25 percent year-on-year drop in first-quarter net profit, as demand for refined oil products weakened and international crude oil prices experienced wide fluctuations.

Sinopec said its net profit fell 25.4 percent year-on-year to 13.98 billion yuan (HK$14.88 billion) in the first quarter, while revenue dropped 6.9 percent to 735.36 billion yuan, according to an exchange filing.

The company’s production of oil and gas was 130.97 million barrels of oil equivalent, up by 1.7 percent year-on-year, among which natural gas production reached 368.43 billion cubic feet, up by 5.1 percent year-on-year.

Meanwhile, Sinopec said on Monday it had signed an agreement with a unit of Saudi Aramco to establish a joint venture company with a registered capital of 28.80 billion yuan.

The agreement was signed by Sinopec, its unit Fujian Petroleum Chemical Industry, and Saudi Aramco's Singaporean unit Aramco Asia Singapore.

Sinopec and its unit shall contribute 7.20 billion yuan and 14.40 billion yuan in cash, respectively. The remaining amount, representing 25 percent of the registered capital of the joint venture, will come from AAS.

The joint venture company, Fujian Sinopec Aramco Refining and Petrochemical, will engage in port operation, crude oil transportation, and other activities at the refinery and petrochemical complex in the Gulei Port Economic Development Zone, Zhangzhou, in China's Fujian province.

Staff reporter and Reuters