Sinopec to invest 40.8 billion yuan in 2001

By an OGJ Online Correspondent

BEIJING, Apr. 17 -- China Petroleum & Chemical Corp. (Sinopec) plans to invest 40.8 billion yuan ($4.9 billion) in 2001, as compared with 42.3 billion yuan last year.

Sinopec recorded a net profit of 19 billion yuan last year as compared with 4.7 billion yuan in 1999.

Sinopec committed to investors during its initial public offerings in Hong Kong, New York, and London Stock Exchanges to invest 105.6 billion yuan in 3 years from 2001. The company raised $3.5 billion in the IPO.

Sinopec will spend the capital on the expansion of ethylene crackers and building oil and gas storage and transportation infrastructure in the north and east.

Of the total spending last year, 14.55 billion yuan went to oil and gas exploration and development, 5.51 billion yuan to the oil refining business, 16.08 billion yuan to expanding the oil retail market, and 6.205 billion yuan to chemical projects.

Sinopec's crude production last year rose 0.78% on year to 247.35 million bbl and natural gas production rose by 2.16% on year to 80.3 bcf.

On the refining side, Sinopec added 6 million tonnes/year sour crude refining capacity to its portfolio and raised the refinery operation rate to 81% from 1999's 67.7%.

Sinopec bought 10,000 gasoline stations last year, for a total of 20,259. The company will buy 4,000 more gasoline stations this year under the corporate plan to take 70% of oil retail markets in consumption centers in the east, north, and south after China joins the World Trade Organization (OGJ Online, Feb. 2, 2001).

The company also plans to raise 10 billion yuan through issuing of 3 billion A-Class shares in China. It will buy Sinopec Star Petroleum Co., now a subsidiary of Sinopec's parent company China Petrochemical Corp.

Sinopec Star focuses on exploration and production of crude oil and national gas, with E&P activities located in five basins of Tarim, Ordos, Songliao, Western Sichuan, and Eastern China Sea.

In addition to buying upstream assets, Sinopec will also use 1.47 billion yuan of the proceeds to be raised through issuing the A-shares to invest in a crude oil pipeline from Ningbo via Shanghai to end in Nanjing in east China, and 2.59 billion yuan in an oil product pipeline linking Maoming refinery via Guizhou province to terminate in Kunming city, the capital of Yunnan province in south and southwest China.

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