Page 10 - AsianOil Week 34

AsianOil EAST ASIA AsianOil
Sinopec’s H1 profit falls 25%
PERFORMANCE
CHINA’S state-run Sinopec, Asia’s largest re ner, saw its rst-half net pro t shrink 24.7% year on year to CNY31.34bn ($4.38bn) owing to heightened competition in the domestic fuel market.
Pro ts shrank even as revenue for the period climbed by 15.3% y/y to CNY1.5tn ($209.57bn) under Chinese accounting standards.
Pro t for the second quarter slipped 27% y/y to CNY16.58bn ($2.32bn), although this was an improvement on the rst quarter’s CNY14.76bn ($2.06bn), according to Reuters’ calculations.
“Domestic demand of re ned oil products continued to grow in the rst half of this year, [but] competition in the market was extremely ercewithamplesupplies,”Sinopecsaid.
e gross re ning margins (GRMs) of state- owned majors have been squeezed as the coun- try’s independently owned re nery operators launch bigger and more sophisticated capacity that is solely focused on the domestic market. e private sector has been excluded from Bei- jing’s oil product export quotas for several years, forcing them to sell their output on the domestic market and creating an increasingly cutthroat operating environment.
Privately owned Hengli Petrochemical and Zhejiang Petrochemical have both launched 400,000 bpd integrated complexes in Dalian and Zhoushan respectively.
e country’s re ners set a new throughput record of 53.7mn tonnes (13.12mn bpd) in June, according to gures from the National Bureau of Statistics (NBS). Although runs slowed to 52.6mn tonnes (12.44mn bpd) in July, this was still a 4% increase y/y.
e state re ner raised its throughput rate to 123.92mn tonnes (5.02mn bpd) in the rst half, up from 120.72mn tonnes (4.89mn bpd) in the same period of 2018. Run rates are predicted to easeinthesecondhalfto124mntonnes(4.94mn bpd), which is still up on last year’s 123.28mn tonnes (4.91mn bpd).
Rising runs across the country coupled with slowing demand growth for oil products saw Sin- opec’s GRMs contract by 29.6% y/y to CNY383 ($53.51) per tonne in the rst six months.
In the upstream, the company’s crude produc- tion slipped 1.4% y/y to 141.68mn barrels (783,000 bpd), while its natural gas output expanded by 7% to 509.5bn cubic feet (14.43 bcm).™
Aramco, PetroChina and traders interested in Petrobras refinery sale
FINANCE & INVESTMENT
THE planned privatisation of eight re neries by state-run Brazilian rm Petrobras is attracting large state and independent oil and trading rms, including Saudi Aramco. Sources close to pro- ceedings were quoted by Reuters this week as saying that roughly 20 companies had signed non-disclosure agreements (NDAs) and were mulling making an o er, with the rst round of non-binding o ers due on October 11. e sources noted that signature of the NDA was not indicative that the rms would bid.
State rms Saudi Aramco, PetroChina and Sinopec, both of China, are said to be interested. e latter is already involved in a joint venture (JV) in Brazil with Repsol of Spain. e sources
said that traders Vitol, Glencore and Tra gura were in the running alongside local rm Ultra- par Participacoes and Raizen, a JV of Brazil’s Cosan and Royal Dutch Shell.
e re neries up for privatisation have a com- bined crude processing capacity of 1.1mn barrels per day (bpd) and industry estimates have said that the sale could earn Petrobras $18bn.
Reuters’ sources noted that the bidding groups were likely to include private pipeline operators, with French rm Engie and Canada’s Brook eld mentioned on account of their recent acquisition of Petrobras assets. Aramco’s possi- ble involvement would t well with the compa- ny’s massive downstream growth strategy.
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w w w . N E W S B A S E . c o m Week 34 28•August•2019