China Petroleum and Chemical Corporation SNP, also known as Sinopec, reported first-half 2021 total revenues of 1,261,603 million yuan, up 22.1% year over year. The integrated energy giant reported operating profit of 58,109 million yuan for the first half, turning around from a loss of 21,659 million yuan in the year-ago period.

The results were aided by strong fuel demand recovery and an improved oil pricing scenario.

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Operational Performance

Exploration and Production: For the first half of 2021, Sinopec’s crude oil production fell 1.5% year over year to 138.15 million barrels. Natural gas volumes increased 13.7% year over year to 582.60 billion cubic feet. Domestic crude oil production declined marginally year over year to 123.62 million barrels, while overseas volumes fell 10.4% year over year to 14.53 million barrels. Total oil and gas production increased 4.2% year over year to 235.29 million barrels of oil equivalent.

Segmental operating income for the first half was recorded at 6,233 million yuan against operating loss of 6,002 million yuan in the year-ago period due to higher total oil and gas production and rising crude prices.

Refining: The company’s Refining business saw a 13.7% year-over-year improvement in refinery throughput to 126.11 million tons. It produced 72.19 million tons of petroleum products, up 7.4% from the prior-year level.

Due to higher throughput volumes, the segment reported an operating income of 39,398 million yuan, turning around from a loss of 31,689 million yuan.

Marketing and Distribution: The segment sold 109.13 million tons of refined oil products, up 2% year over year.

From this segment, the company generated an operating profit of 16,068 million yuan, up 85.5% from the year-ago period’s 8,664 million yuan owing to improving consumption of refined oil products in the domestic market.

Chemicals: The segment recorded an operating profit of 13,005 million yuan for first-half 2021, skyrocketing 328.4% year over year on rising production of ethylene and synthetic fiber.

Cost and Expenses

Total operating expenses for the first half were recorded at 1,203,494 million yuan, up from 1,054,723 million yuan in the year-ago period. Purchased crude oil, products and operating supplies and costs were 947,242 million yuan, up from the year-ago level of 835,004 million yuan. SG&A costs increased to 25,748 million yuan from 24,373 million yuan in the comparable period of 2020. Exploration costs, including dry holes, rose to 4,846 million yuan from 4,465 million yuan in the first half of 2020.