(Reuters) – China Petroleum & Chemical Corp (600028.SS), reported 25% surge in net income for the first quarter of 2022, a level last seen in the third quarter of 2020, thanks to elevated crude oil prices but weakening fuel demand as tight COVID controls weighed.
Asia’s top oil refiner, also known as Sinopec, reported 22.61 billion yuan ($3.45 billion) net profit under Chinese accounting standards, versus 17.93 billion yuan a year earlier, according to a filing to the Shanghai Stock Exchange on Wednesday.
Refinery throughput edged up 2.7% from a year ago to 64.19 million tonnes, or about 5.21 million barrels per day, with the growth capped by sliding fuel demand starting in March as authorities resumed lockdown to contain a flare-up of coronavirus.
“Global oil prices rose sharply in the first quarter, with average spot prices of Platts Brent crude oil up 66.3% at $101.2 per barrel. While domestic demand for natural gas, refined oil and chemical products maintained growth,” Sinopec said in the filing.
However, its total refined fuel sales dipped 1.8% during January-March, compared with a 6.8% growth during the same year-ago period, reflecting curbs in domestic fuel use due to authorities’ stringent mobility restrictions.
Crude oil production reached 69.07 million barrels, up 1% on the year, while natural gas output expanded 7.7% to 313.94 billion cubic feet.
Earnings before tax and interest at its exploration and production department nearly tripled year-ago levels to 11.5 billion yuan, while its vast refining sector posted a modest 15% growth in profits at 22.9 billion yuan.
The refiner expanded its diesel output by nearly 10% on the year but lifted gasoline production only 0.7%, a sign that gasoline bears the brunt of demand destruction as lockdown intensifies since March.
Capital spending was 25.38 billion yuan, versus 23 billion yuan a year earlier, with the increases mainly chanelled to the exploration and development sector. The company has vowed to make more discoveries in geologically difficult shale oil and gas resources.