CNOOC reports record profits, while Sinopec shows a modest two percent improvement.
China National Offshore Oil Corp (CNOOC) has reported record profits of CNY 70.26 billion ($11 billion) in 2011, up 29% from CNY 54.4 billion in 2010. Fellow state-owned giant China Petrochemical Corp, or Sinopec, has also reported profits of CNY 73.3 billion ($11.8 billion with revenues up 31% to CNY 2.5 trillion ($404.1 billion although overall profitability slowed to just 2% due to higher refining costs and rising crude prices.
CNOOC, China's top offshore oil producer, hit its forecast target and posted a 29% rise in net income in 2011. Unlike its peers PetroChina and Sinopec, CNOOC's profit comes solely from exploration and production, meaning that where other majors suffered under government pressure to keep oil prices down, CNOOC was able to benefit from the high price of crude.
Despite strong profits last year, CNOOC chairman Wang Yilin expects profits to slow this year as the company struggles to grow production and control costs. The oil giant is also eyeing a series of overseas acquisitions and focus on unconventional assets, like deepwater, which may also slow 2012 profitability.
Sinopec, the fifth largest company in the world by revenue, has struggled with profitability throughout 2011. Although the company is Asia's largest oil refiner by far, the refining unit is their most cost-inefficient unit, suffering a CNY 35.8 billion ($5.8 billion) loss in operating profits last year.
Fu Chengyu expects the economic slowdown in 2012 to ease the demand for refined products and chemicals – a mixed prospect for Sinopec, whose chemical unit showed a 78% increase to CNY 26.7 billion ($4.3 billion) in 2011.