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China's Oil Giants Report Huge Profits
China's No.2 and No. 3 oil giants announced Monday that they registered huge profits due to sales increases and cost-cutting efforts.
China Petroleum and Chemical Corp. (Sinopec), the second largest domestic oil company, said its net profit in the first half of this year surged 27.5 percent to 9.5 billion yuan (about 1. 1 billion U.S. dollars).
Sinopec, the largest refiner in Asia, said in a statement that profit was derived from the expansion of crude oil and natural gas production, and that sales rose for refined oil and petrochemical products at a higher price during the period.
On Monday, China National Offshore Oil Company (CNOOC), the third largest oil company, announced it made pre-tax earnings of 6. 5 billion yuan (about 785.9 million U.S. dollars), up 11.3 percent year-on-year.
But CNOOC's net profit for the six-month period dropped by 4.2 percent to 4.62 billion yuan (about 588 million U.S. dollars) due to higher taxes.
The company is required to pay a normal 30 percent profit tax, doubling a favorable 15 percent that had been granted before CNOOC was listed in Hong Kong and New York in February this year.
Normalized tax rates resulted in a rise in tax expense of 1.84 billion yuan (222 million U.S. dollars) in the January-June period, CNOOC's statement said.
As for Sinopec, analysts said the company's profit growth resulted from the price hike of domestic refined oil products and the company's cost-cutting program.
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