China: Sinopec to follow record year in profit with its biggest capital expenditure
The Chinese company is planning a major surge in energy production to continue capitalising on energy demand in a post pandemic world.
China Petroleum & Chemical Corp, known as Sinopec, registered in 2021 its best year for the decade in profits. To capitalise on this growth, the company is seeking to make its highest capital investment in history for this year.
The news comes after Beijing’s call on raising production to energy companies, as reported by the international news agency Reuters. The article specifies that the firm expects a 198 billion yan, which translates into roughly $31.10 billion, expenditure for 2022, beating its own record of 181.7 billion yuan in 2013 and up 18% from last year.
Most of the capital would be destined to enhance upstream processes at the crude oil bases in the Shunbei and Tahe field, the natural gas fields in the Sichuan province and the Inner Mongolia region. According to a recent statement published by the company, this investment will be fulfilled to meet the demand for fuel as the oil market continues to recover as well as the continuous growth for demand in gas and petrochemical products.
Back in 2021 Sinopec had its biggest profit of the decade back in 2021 thanks to 71.21 billion yuan in net earnings. As the post COVID era continues and energy demand and oil prices rise due to the recent armed crisis in Europe, the Chinese firm seeks to produce 281.2 million barrels of crude oil and 12,567 billion cubic feet of natural gas in 2022.
Reuters previously reported that Sinopec Group has suspended all dialogue for major investment and a gas marketing venture in Russia after the conflict with Ukraine erupted. The company followed a government call for caution as the several international competitors sanctioned the country after invading foreign territory.
