Chinese oil majors see higher profits at higher demand

China's top five oil companies saw profits up 13.2 % in March from the same period a year ago, as stimulus package pushed up energy demand, according to a report released by the China Petroleum and Chemical Industry Association (CPCIA). Their March profits rose 160 % from February to yuan 28.25 bn ($ 4.15 bn), according to the report.
The "top five" includes China National Petroleum Corporation, China Petroleum and Chemical Corporation, China National Offshore Oil Corp, Sinochem and Shaanxi Yanchang Petroleum (Group).

The negative impacts of the global financial crisis on China's petrochemical sector was deepening, but the month-on-month figure showed signs of recovering as prices of some petrochemical products began to stabilize, said the report. Analysts said the profit increase was due to the government decision to raise the prices of oil products. PetroChina's president Zhou Jiping said in March that the price rise would add yuan 1.26 bn of profits for the company every month. However, the industrial value through January-March dropped 14 % from a year ago, to yuan 1.26 tn. The figure for March alone was yuan 498.35 bn, down 8.4 % year on year, according to the report.

It is the first time in more than a decade that the petrochemical sector has seen declines in both industrial value and sales revenue. It is likely that the falling trend would continue in the second quarter, said Feng Shiliang, CPCIA deputy secretary.
He said the exports would continue to deteriorate, and the overcapacity would still be prominent.