Refineries help Sinopec defy oil drop
US electric automaker TeslaMotors Inc plans to open at least 10 newstores this year in China, which recently became Energy giantits second-largestChina Petroleum market& Chemicalafter Corp,the Unitedbetter knownStates as in Sinopec,the first has quarter defied of global2016, low with oil a and growth gas prices,rate of as moreit saw thana 206 300 percent percent, surgea senior in net official profit of due Tesla to toldits refining China Daily margins onWednesday.during the first quarter“We of are the very year. confident aboutNet profitour future jumpedin China.to almostThe development$1 billion duringof our businessthe first threeis sustainable,” months, saida huge Zhu improvementXiaotong, president comparedof with Tesla an China. 84.6 percent drop logged in the Zhu same said periodthat the last last year. couple Revenueof years at has Asia’s seen a biggest significant oil refiner changegrew 153.4in percent public to perceptions13.1 billion yuan, toward compared electric with cars a in 79.2 China. percent fall in the first “People’sthree months interestof 2015.in the ModelThe companyS two years said ago the rising was based profit on froma senseits oil-refiningof curiosity. activitiesNow Tesla had buyers offset are losses very from rational,its upstreamthey want businessesa car that suchcan as fulfilloil explorationtheir travelingand productionneeds,” he said.— conditions also hitting “The many transformationof its rivals hard is after vital fallingas demandoil pricesis now wiped much out more gains. sustainable,” Zhu added. China National Petroleum Corp With fell stronginto a net policy loss support,of 13.8 China’s new-energy vehicles sector recorded an explosive growth last year. The country produced 340,471 NEVs and sold 331,092, an increase of 330 percent and 340 percent respectively from the previous year, data from the China Association of Automobile Manufacturers showed.
The automaker does not release its sales in any single market.
Globally, it delivered 14,820 billioncars in yuan the ($2.13first quarter, billion) upin the about quarter,50 from percent net profit year-onyear.of 6.15 billionIt aims yuanto deliver during 80,000the sameto 90,000 period cars last year, globally according this year. to a filing to the stock exchangeTesla’s in confidenceHong Kong. in the ChinaIt was marketthe company’sis also due first to net strong loss governmentsince listing support.in the ShanghaiBoth central bourse and in 2007.local governments China Nationalhave offered Offshore preferential Oil Corp, policiesthe country’swith regard top to offshoreNEVs. For oil example,and gas producer, Shanghai offers free license plates for several NEV models, instead of the bidding policy for gasoline vehicles.
On Tuesday, Tesla China said the company’s models had once again been approved for free license plates by the Shanghai transportation authority.
The Shanghai government renews its list of automakers eligible for free NEV license plates annually. This year’s alsolist reportedwas announcedlower revenues several for days the ago. period, citing the sharp declineTesla alsoin internationalplans to build oil a prices. factory in China. At the end of last Lin year, Boqiang, Tesla directorCEO Elonof the Musk China said Centerthat the for companyEnergy Economyplanned to Researchbuild a factoryat Xiamen in China University,in three years, said withoutthat CNPC providing and CNOOC,details such whichas are the heavily location. dependent on their strugglingMusk has upstreamsaid on manybusinesses, occasions were that hit Tesla’sthe most vision by is low crude prices.
For petrochemical companies such as Sinopec, however, he said falling oil prices lowered the cost for refining, bringing higher returns.
He now expects prices to rise after two years of falls, as the global oil glut is gradually eased.
“For one thing, producers are pulling back or writing off investment in response to lower prices,” he said. “On the other hand, once global demand outpaces supply, it’s only a matter of time before prices recover.”
With current oil prices just above $40 a barrel, Lin predicted that as long prices continue rising, results of “three barrels of oil three oil majors (trio)” in the second quarter “will certainly be better”.
“There are signs of a price rebound as production declines in the United States and producers cut output. I see no reason why the oil prices cannot rise to $50 a barrel by the end of this year,” he said.
China Petroleum & Chemical Corp employees inspect natural gas pipelines in Zibo, Shandong province. Sinopec’s profit jumped to $1 billion during the first quarter of this year.