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Energy

Sinopec Profit Rises as Company Moves Upstream (SNP, CEO)

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By Paul Ausick Published
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China Petroleum and Chemical Corp., commonly called Sinopec, (NYSE: SNP) reported a 2% profit gain for the 2011 fiscal year, even though the company has been hampered by a government-imposed lid on gasoline prices even as crude oil prices have soared.

The company’s CEO, formerly the head of Cnooc Ltd. (NYSE: CEO), said that Sinopec would try to balance its dominant position as a refiner — it’s China’s largest refiner — by adding more upstream assets in foreign countries. Sinopec also wants to explore for more hydrocarbons in western China and to speed up development of domestic shale gas fields. The catch is that the country produces no shale gas at the moment.

Sinopec Group, parent of Sinopec, has purchased some $48.1 billion worth of foreign assets since 2008 according to Reuters. The parent is expected to contribute some foreign assets to Sinopec Corp. over the next few years, assets that are expected to improve the company’s profitability.

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About the Author Paul Ausick →

Paul Ausick has been writing for 247Wallst.com for more than a decade. He has written extensively on investing in the energy, defense, and technology sectors. In a previous life, he wrote technical documentation and managed a marketing communications group in Silicon Valley.

He has a bachelor's degree in English from the University of Chicago and now lives in Montana, where he fishes for trout in the summer and stays inside during the winter.

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