China Oil Giants Enjoy Profit Rises Despite Weak Economy

SHANGHAI -- Despite weakness in the world's second-largest economy, China's major onshore oil firms Sinopec and PetroChina said profits rose in 2013.

Sinopec (IW 1000/333) -- a listed unit of China Petrochemical Corp -- said in a statement that its net profit edged up 3.5% to 66.1 billion yuan ($10.6 billion), and its revenue rose 3.4% at 2.9 trillion yuan thanks to "stable" domestic demand.

"China's economy kept turning for the better, so demand for oil and petrochemical products in the domestic market grew stably," Sinopec chairman Fu Chengyu said.

This year, "China's industrialization and urbanization push will facilitate stable growth in demand from the oil and petrochemical markets and provide room for development of the company," Fu said.

Sinopec was held partly responsible for a deadly pipeline explosion in the eastern city of Qingdao in November that killed more than 60 people and caused losses of more than $100 million.

Fu said the company had learned "unforgettable painful lessons" from the incident and vowed to improve safety, but gave no details on how it affected the bottom line.

PetroChina (IW 1000/5) said its net profit jumped 12.4% to 129.6 billion yuan in 2013 "despite the complex global and domestic economic environment."

Revenue for PetroChina, a listed unit of China National Petroleum Corp., rose 2.9% from a year earlier to 2.3 trillion yuan, the company said.

"Domestic demand for oil and gas will likely maintain fixed growth as the long-term trend of the domestic economy improving remains unchanged," PetroChina chairman Zhou Jiping said in a statement.

Ratings agency Moody's said Monday that a decline in the selling price of crude oil had some impact on PetroChina's upstream operations.

"PetroChina's improved performance in 201 was in line with our expectations," Moody's said.

Shares of the two companies ended mixed in Shanghai trading on Monday, with Sinopec falling 0.4% and PetroChina rising 0.4%.

But in Hong Kong, where they are also listed, Sinopec jumped 3.6% while PetroChina surged 5.5%.