China Petroleum and Chemical Corporation
), also known as Sinopec, reported third quarter 2013 net income
of 22.02 billion yuan (US$3.59 billion), up approximately 61.7%
sequentially. Higher retail fuel prices contributed largely to
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Revenues in the third quarter improved 7.1% to 724.7 billion yuan
(US$117.8 billion) from 676.7 billion yuan (US$110.0 billion) in
the prior-year quarter.
During the first nine-month period ending Sep 30, 2013, Sinopec's
crude oil production grew 1.9% year over year to 249.7 million
barrels, while natural gas volumes expanded 10.9% year over year
to 486.3 billion cubic feet. Domestic crude oil production
increased 1.4% year over year to 232.2 million barrels, while
overseas volumes increased 9.3% year over year to 17.5 million
Total oil and gas production grew 4.0% year over year to 330.8
million barrels of oil equivalent.
A sharp decline in crude oil prices resulted in a 15.5% fall in
the Exploration and Production (E&P) segment's operating
profit from the prior-year quarter. The figure came in at 46.7
billion yuan (US$7.6 billion).
The company's Refining business recorded refinery throughput of
174.2 million tons (up 6.4% year over year). Refining margins
significantly improved to $5.49/barrel, up 149.5% year over year.
The Marketing and Distribution segment sold 134.6 million tons of
refined oil products, reflecting a 4.9% year-over-year increase.
The output of ethylene from the Chemicals segment was 7.398
million tons, up 5.3% from the year-ago level.
Capital expenditures for the first nine months of 2013 totaled
86.95 billion yuan.
Capital expenditure for the E&P segment was RMB 41.25
billion, mainly used for development in tight oil development in
south Ordos, heavy oil development in west Shengli at shallow
stratus, new blocks in the Tahe Oilfield, Yuanba and the Daniudi
gas fields, and the Shandong LNG project.
Capital expenditure for the Refining Segment was RMB 12.71
billion, used mainly for upgrading oil product quality and
revamping projects in Wuhan, Anqing and Maoming.
In the Chemicals segment, RMB12.76 billion was used for the
construction of the Wuhan 800,000-tpa ethylene project, the Hubei
syngas-to-MEG project and the Hainan aromatics project.
Capital expenditure for the Marketing and Distribution segment
was RMB 17.36 billion, used mainly for developing and revamping
service stations (including gas stations), the construction of
refined oil product pipelines and depots, and for insuring safety
and improving the environment.
The company added 671 new service stations (including gas
stations) over the first three quarters of 2013. A total of RMB
2.86 billion was used for Corporate and Other purposes, such as
construction of R&D facilities and IT projects.
Sinopec currently has a Zacks Rank #4 (Sell). However, there are
other Zacks Ranked #1 (Strong Buy) stocks in the oil and gas
TransAtlantic Petroleum Ltd.
Exterran Partners, L.P.
Matador Resources Company
) - that appear rewarding in the short term.