On August 25, the No.1 oil refinery at the China Petroleum and Chemical Cooperation (Sinopec) issued a report of the first half of 2008. The report indicates its losses in the first half of the year were more than 23.7 billion RMB; while in the same period last year had earned 53.2 billion RMB. The sharp decrease amounted to over 144%.
However, Sinopec still earned 9.339 billion Yuan with the support of government subsidies.
It is understood that Sinopec can not profit on its own and will lose much as predicted, because the international oil price kept raising and the domestic product oil is not in place. Sinopec's achievement report reveals that its earnings in the first half year was 734.783 billion Yuan, which is 30.3% higher than the same period last year; but initial losses were more than 23.7 billion Yuan. The net profit was 9.339 billion Yuan, after including government compensation, in accordance with accounting principles of Chinese corporations. As a result, the board of directors decided to allot a mid-term share profit of 0.03 Yuan to each. It is known that Sinopec's net profit in the same period last year was 35.1 billion Yuan.
The report also indicates the refining department's loss of 46 billion Yuan in the first half of this year; while it earned 5.7 billion Yuan in the same period last year. Sinopec received 33.4 billion RMB in government compensation in the first half, which is more than the sum of past years' compensation. However, this still does not make up for the loss.
Looking towards the second half, Sinopec predicts that international oil prices would still be high; and domestic refineries are still facing tremendous pressure. Apart from quickening exploration and exploitation, Sinopec will also carry its full load of operations, while ensuring safety and stability. It plans to produce 89.75 million tons of oil, which is 5.5 million tons more than in the first half- 84.25 million tons. But Mr. Liu Youcheng said that since domestic product oil prices have been increasing since June 20 and international oil prices have decreased, Sinopec would restore its profitability.
By People's Daily Online
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