China Petroleum and Chemical Corporation, or Sinopec Corp said on Thursday net profit for the first three quarters of the year rose 11.2 percent versus a year earlier on the back of a stronger performance from refining.
The state-controlled energy firm, Asia’s largest refiner, recorded net earnings of 30.11 billion yuan ($4.44 billion)during January-September, the company said an emailed statement.
Smaller rival CNOOC Ltd on Wednesday reported a 15.2 percent fall in third-quarter oil and gas sales as its predominant offshore oil and gas business was hit by weaker prices.
Sinopec’s earnings growth for the three quarters, versus a 22-percent year-on-year drop in net profits for the first half of 2016 suggested its business improved in the third quarter.
The company said its oil and gas output fell 8 percent on year in the January-September period, with crude oil down 12.6 percent as it was forced to cut output at loss-making fields in response to weaker oil prices.
Its refinery throughput fell 1.7 percent in the period over a year earlier to 175 million tonnes (4.68 million barrels per day), but the group recorded a 3.5 percent increase in total fuel sales.
“In face of rapid production growth from independent refiners and ample market supply, Sinopec has focused on readjusting fuel mix to further lift output of gasoline and kerosene,” the company said.
Sinopec said gasoline and kerosene had had a much more rapid increase in consumption compared with lackluster demand in diesel, China’s main transport and industrial fuel.
Fuel demand growth in China, the world’s second-largest consumer, moderated along with the broader economy. But domestic competition heated up following moves to allow more than a dozen independent refineries to import crude oil for the first time since late 2015.
As these independents boosted refinery throughput, state majors came under pressure to reduce operations.
Sinopec also said its chemicals department contributed to the earning growth by raising production of higher-value products and by using lower-cost feedstock for producing petrochemicals.