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Sinopec's 2024 Net Profit Plunges 16.8% Due to Falling Oil Prices, NEVs

The logo of China Petroleum & Chemical Corporation, or Sinopec, is displayed during the LNG 2023 energy trade show in Vancouver, British Columbia, Canada, July 12, 2023. REUTERS/Chris Helgren/File Photo
The logo of China Petroleum & Chemical Corporation, or Sinopec, is displayed during the LNG 2023 energy trade show in Vancouver, British Columbia, Canada, July 12, 2023. REUTERS/Chris Helgren/File Photo
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Sinopec's 2024 Net Profit Plunges 16.8% Due to Falling Oil Prices, NEVs

The logo of China Petroleum & Chemical Corporation, or Sinopec, is displayed during the LNG 2023 energy trade show in Vancouver, British Columbia, Canada, July 12, 2023. REUTERS/Chris Helgren/File Photo
The logo of China Petroleum & Chemical Corporation, or Sinopec, is displayed during the LNG 2023 energy trade show in Vancouver, British Columbia, Canada, July 12, 2023. REUTERS/Chris Helgren/File Photo

China Petroleum & Chemical Corp , known as Sinopec, reported a 16.8% decline in 2024 net profit on Sunday, citing lower crude oil prices and the accelerated development of the new energy vehicle (NEV) industry.
The world's largest oil refiner by capacity posted a net income of 50.3 billion yuan ($6.94 billion), based on Chinese accounting standards, in a Shanghai Stock Exchange filing, Reuters reported.
"In 2024, international crude oil prices fluctuated downward, the domestic transportation industry accelerated the replacement of new energy ... the gross profit margin was significantly narrowed," Sinopec said in the filing.
"The company made every effort to expand the market and sales ... (and) continues to strengthen cost and expense control, and take multiple measures to cope with market changes."
The fall in net income compares with a decline of 9.9% in 2023, also on falling oil prices.
The state oil and gas major's gasoline sales fell 0.7% and diesel sales fell 4.8%. Aviation fuel sales rose 7.3%. The figures included both domestic sales and exports.
Refinery throughput fell 2.14% last year to 252 million metric tons, equivalent to 5.06 million barrels per day. The company forecast a rise to 255 million tons this year.
Sinopec expects its crude oil production in 2025 to be 280.15 million barrels and natural gas output of 1,450.3 billion cubic feet.
The company said it set aside provision for asset impairment of 7.2 billion yuan ($993.3 million) in 2024 due to "market price fluctuations of some products, shutdowns or losses of individual production facilities".
In Sinopec's petrochemical business, sales of chemical fibers and plastics were up 19.8%.
Sinopec said it plans capital spending of 164.3 billion yuan this year to cover key investments such as exploration and development.

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Chevron Announces First Oil at Ballymore Project in Gulf of Mexico  

The logo and trading information for Chevron is displayed on a screen on the floor of the New York Stock Exchange (NYSE) in New York City, US, June 27, 2022. (Reuters)
The logo and trading information for Chevron is displayed on a screen on the floor of the New York Stock Exchange (NYSE) in New York City, US, June 27, 2022. (Reuters)
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Chevron Announces First Oil at Ballymore Project in Gulf of Mexico  

The logo and trading information for Chevron is displayed on a screen on the floor of the New York Stock Exchange (NYSE) in New York City, US, June 27, 2022. (Reuters)
The logo and trading information for Chevron is displayed on a screen on the floor of the New York Stock Exchange (NYSE) in New York City, US, June 27, 2022. (Reuters)

Chevron has started oil and gas production from a project in the US Gulf of Mexico, the oil major said on Monday, bringing the company a step closer toward its goal of growing production from the ocean basin by 50% this year.

The $1.6 billion project called Ballymore, located about 160 miles southeast of New Orleans, is composed of three wells that are expected to produce up to 75,000 barrels of oil per day.

Chevron aims to grow oil and gas production from the Gulf to 300,000 barrels of oil equivalent per day in 2026, and at the same time, it is working to cut up to $3 billion in costs across the business.

Instead of building a new production platform for Ballymore, the wells will transport oil and gas back to an existing platform, which the company said will allow it to increase production at less expense.

“Ballymore is interesting in that it's a tie-back to an existing facility, which has allowed us to bring production to market more quickly,” said Bruce Niemeyer, president of Americas exploration and production, in an interview.

The project is also Chevron's first in a geological formation of the Gulf called Norphlet, where the oil and gas industry has historically had fewer discoveries than in other parts of the ocean basin, he added.

Advancements in technology are key to expanding resource exploration, such as the use of ocean bottom nodes, which allow geophysicists to collect better data underneath the ocean floor, Niemeyer said.

Chevron is the operator of Ballymore with a 60% interest, while co-owner TotalEnergies has 40%.

Ballymore holds an estimated 150 million barrels of oil equivalent in potentially recoverable resources.

The company owns 370 leases in the Gulf of Mexico and expects to participate in a lease sale this year by US President Donald Trump's administration, Niemeyer said.

The Ballymore start-up comes after Chevron announced first oil in August at Anchor, a Gulf of Mexico project that is a technological breakthrough with the ability to operate in deepwater pressures of up to 20,000 pounds per square inch.