China’s giant state-owned oil corporations saw their first-quarter profits fall from the same period a year ago as a decline in international oil prices squeezed profit margins.
China Petroleum & Chemical Corporation, or Sinopec, the largest refiner in Asia, reported on Thursday an 11.8% drop in first-quarter net profit to $2.9 billion (20.1 billion Chinese yuan). As international crude oil prices fluctuated in a wide range and the spot price of Brent for the first quarter averaged $81.27 per barrel, down by 19.7% year on year, Sinopec’s realized crude oil price was $75.21 per barrel, down by 15.5% compared to $89.02 a barrel for the first quarter of 2022.
Sinopec’s refinery throughput fell by 3%, with gasoline production declining the most, by 8%. But total sales volume of refined oil products increased by 10.1% year on year in the first quarter due to the end of the Chinese Covid lockdowns.
“The domestic demand for refined oil products rebounded rapidly, demand for natural gas maintained growth year on year, and demand for chemical products recovered,” Sinopec said.
Another Chinese state-controlled giant, CNOOC Ltd, also reported on Thursday a drop in first-quarter net profit compared to the same period of 2022.
CNOOC’s net profit fell by 6.4% year-over-year and stood at $4.64 billion (32.1 billion yuan) for the first quarter of 2023. The company’s average realized crude oil price plunged by 23.9% to $74.17 per barrel, compared to $97.47 a barrel for the first quarter of 2022.
CNOOC, however, reported net production rising by 8.6% in the first three months of 2023 compared to the same period last year. Revenues increased by 7.5%.
Last month, CNOOC reported a record-high annual profit for 2022, thanks to the high oil and gas prices. CNOOC also boosted its net oil and gas production to 623.8 million barrels of oil equivalent (boe), which was a new record high. This year, the company is targeting another record in production and has set its goal at 650 million to 660 million boe.