China's big oil firms post surging earnings

Sinopec and PetroChina benefit in third quarter as robust demand drives up profits

An employee walks on top of an oil tank at a Sinopec refinery in Wuhan, Hubei province. China's two big oil firms are on a roll.. Reuters
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China's two big oil giants PetroChina and Sinopec have reported strong third-quarter net profits on robust domestic demand.

State-owned PetroChina said late Monday that net profit for July-September was 4.69 billion yuan (Dh2.59 billion), jumping nearly four fold from the same period last year.

"International oil prices fluctuated within a wide range and the average price increased significantly compared with the same period last year," PetroChina said in a statement to the Hong Kong stock exchange, where it is listed.

Sinopec, the world's biggest oil refiner and the listed unit of state-owned China Petrochemical said net profit climbed 12.77 per cent year-on-year in the quarter to 11.49bn yuan.


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Sinopec attributed the "outstanding results" to steady Chinese economic growth which fuelled increased domestic consumption of refined oil products and strong demand for gasoline, kerosene and natural gas.

Analysts said Sinopec's refining business offset losses in its upstream operations caused by higher oil prices.

"Sinopec's upstream losses narrowed as oil prices slowly moved up," said Anna Yu, a Hong Kong-based analyst at ICBC International Research.

"Sinopec's refining business will continue to perform well in the fourth quarter and may register extra inventory gains if oil prices move up."

China's economy, the world's second-largest after the United States, expanded 6.8 per cent in July-September, down slightly from 6.9 per cent in each of the previous two quarters, but indicating stability after a years-long growth slowdown.

PetroChina shares were flat in Hong Kong in Tuesday morning trade and 0.72 per cent lower in Shanghai, where it is also listed.

Sinopec gained 1.40 per cent in Hong Kong but was 0.17 per cent lower in Shanghai.