PR Newswire
BEIJING, March 26, 2017
BEIJING, March 26, 2017 /PRNewswire/ -- China Petroleum & Chemical Corporation ("Sinopec Corp." or the "Company") (HKEX: 386; SSE: 600028; NYSE: SNP) today announced its annual results for the twelve months ended 31 December 2016.
Financial Highlights
Business Highlights
In 2016, global economic recovery remained weak. Meanwhile, China's economy maintained stable growth, with its gross domestic product (GDP) grew by 6.7%. As international oil prices hovered at low levels and trended upwards, domestic oil products supply remained abundant, leading to fierce competition in the market. Demand for chemicals grew steadily while China's environmental regulations became more stringent. The Company proactively addressed the changing market by focusing on improving its product quality, operating efficiency and business upgrade. It accelerated the business restructuring and pressed ahead with measures to address market development, optimisation, cost reduction and risk control, coordinating all aspects of its work. As a result, the Company delivered o better-than-expected operating results.
Mr. Wang Yupu, Chairman of Sinopec Corp. said, "Over the past year, we focused on the transformation of our growth mode and structural adjustments, which enabled us to improve the quality and efficiency of our assets as well as to upgrade our operations. Under the management's leadership, the entire staff worked together to advance these goals. We achieved significant improvement in our operating results through relentless joint efforts to explore new markets, optimise our operations, reduce costs and improve risk management. All these achievements marked a good start to our 13th Five-Year Plan. In our efforts to implement supply-side structural reform, the Company benefited from an integrated value chain, which allowed our businesses to complement each other. As we increased the effective supply of petroleum and petrochemical products and related services to the community, we reaped economic benefits and improved our asset utilisation. Looking ahead into 2017, the Company will adhere to the development strategies of value-oriented growth, innovation-driven development, integrated resource allocation, openness to cooperation, and green low-carbon development. In accordance with our objective of progressing at a steady pace, we will drive upgrades in our businesses and drive new breakthroughs."
Business Review
Exploration and Production
In 2016, confronting low oil prices environment and harsh conditions in the upstream sector, the Company strengthened measures to rein in costs and address its weaknesses. At the same time, it gave priority to high-efficiency exploration activities, sustained exploration efforts and made a number of important new discoveries in the Xinjiang Tahe Basin, the Beibu Gulf in Guangxi and the Yin-E Basin in Neimongol respectively, along with new shale gas findings in the Yongchuan block in Sichuan. As to resources development, the Company adopted a profit-oriented approach, adjusted the development structure, enhanced cost discipline, and cut low-efficiency oil production and high-cost EOR operations. It implemented Phase Two of Fuling Shale Gas development project to increase natural gas production. It also completed the mixed ownership reform of Sichuan-to-East China Pipeline Co., leading to the improvement in its asset utilisation. The Company's oil and gas production declined by 8.6% year-on-year to 431.29 million barrels of oil equivalent. Its domestic crude production dropped by 13.2% from the previous year, while natural gas production went up by 4.3% from a year ago.
In 2016, the operating revenue of this segment was RMB 115.9 billion, representing a decrease of 16.4% over 2015. The decrease was mainly attributable to the decline of realised price of crude oil and natural gas as well as the decrease in sales volume of crude oil. Despite a loss of approximately RMB 36.6 billion was made, this segment still generated positive free cash flow.
In 2016, the Company proactively controlled its expenses. The oil and gas lifting cost was USD 16.65 per tonne, representing a decrease of 5.5% from the previous year amid a 13.2% decrease in crude oil price.
Exploration and Production: Summary of Operations | |||
| Twelve-month periods ended 31 | Changes | |
2016 | 2015 | % | |
Oil and gas production (mmboe) | 431.29 | 471.91 | (8.6) |
Crude oil production (mmbbls) | 303.51 | 349.47 | (13.2) |
China | 253.15 | 296.34 | (14.6) |
Overseas | 50.36 | 53.13 | (5.2) |
Natural gas production (bcf) | 766.12 | 734.79 | 4.3 |
Refining
In 2016, the Company completed the upgrading of vehicle gasoline and diesel to National V standards before the schedule and actively promoted the upgrading of oil products to Beijing VI standards. It advanced the adjustment of its product structure and increased output of gasoline (especially premium gasoline) and kerosene, with the diesel-to-gasoline ratio further declining to 1.19. Moreover, the Company actively responded to the challenges of abundant market supply, and succeeded in maintaining the utilisation rate at a high level. Meanwhile, through superior feedstock optimization by its international trading business, the Company further cut crude procurement costs and achieved moderate increase in product exports. It brought its centralized marketing advantages into full play to further improve the margins for LPG, asphalt and other products. In 2016, the Company processed 236 million tonnes of crude and produced 149 million tonnes of refined oil products, up by 0.53% from the previous year. Gasoline production and kerosene production increased by 4.4% and 4.6% respectively.
In 2016, the operating revenues of this segment were RMB 855.8 billion, representing a decrease of 7.6% from 2015. This was mainly attributable to the decrease in refined oil products prices. In 2016, this segment seized the favorable opportunities arising from the bottoming out of crude oil prices to reinforce management in crude oil procurement, adjusted product mix based on market needs, increased export volume, and made great efforts to improve the profitability of self-distributed products. As a result, the operating performance of this segment significantly improved. In 2016, the operating profit of this segment totaled RMB 56.3 billion, representing an increase of RMB 35.3 billion as compared with 2015.
In 2016, refining gross margin was RMB 471.9 per tonne, representing an increase of RMB 153.8 per tonne as compared with 2015. The unit refining cash operating cost was RMB 165.7 per tonne, representing a decrease of RMB 1.9 per tonne when compared with 2015. The decrease was mainly because the Company enforced strict cost control, improved operating efficiency, as well as decreased operational costs in fuel, power and other auxiliaries facilities.
Refining: Summary of Operations | |||
| For the twelve months | Changes | |
2016 | 2015 | (%) | |
Refinery throughput (million tonnes) | 235.53 | 236.49 | (0.4) |
Gasoline, diesel and kerosene production (million tonnes) | 149.17 | 148.38 | 0.5 |
Gasoline (million tonnes) | 56.36 | 53.98 | 4.4 |
Diesel (million tonnes) | 67.34 | 70.05 | (3.9) |
Kerosene (million tonnes) | 25.47 | 24.35 | 4.6 |
Light chemical feedstock production (million tonnes) | 38.54 | 38.81 | (0.7) |
Light yield (%) | 76.33 | 76.50 | (0.17) percentage |
Refining yield (%) | 94.70 | 94.75 | (0.05) percentage |
Note: Includes 100% of production of joint ventures. |
Marketing and Distribution
In 2016, the Company actively responded to changes in the market environment. It made the advantages of its integrated business model and distribution network into full play and achieved solid operating results. It optimised internal and external resources and achieved growth both in total sales volume and retail scale. It made timely adjustments to its marketing strategies, promoted effective supply and further expanded the retail volume of premium gasoline. It also improved its marketing network by accelerating the planning and construction of service stations and refined oil product pipelines. The Company increased the focus on vehicle-used natural gas business and expedited the construction and operation of CNG/LNG stations, achieving 25% growth in sales volume of vehicle-used natural gas. In 2016, the total sales volume of oil products was 195 million tonnes, of which domestic sales accounted for 173 million tonnes. Its non-fuel business maintained rapid growth with business scale increased and margins strengthened. The non-fuel business transaction volume reached RMB 35.1 billion, up by 41.4% from the previous year.
In 2016, the operating profit of this segment was RMB 32.2 billion, representing an increase of 11.4% when compared with 2015. The increase was mainly because the segment made full use of the advantages of end user marketing network, actively expanded the gasoline market, increased the sales volume of high octane number gasoline, made efforts to improve total sales volume, coordinate internal and external resources, increased the spread between sales and procurement prices as compared with 2015, and achieved better performance.
Marketing and Distribution: Summary of Operations | |||
| For twelve months | Changes | |
2016 | 2015 | % | |
Total sales volume of refined oil products (million tonnes) | 194.84 | 189.33 | 2.9 |
Total domestic sales volume of refined oil products (million tonnes) Werbung Mehr Nachrichten zur China Petroleum & Chemical ADR Aktie kostenlos abonnieren
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