CNPC and Sinopec not to be affected much by high oil price, experts
Record-high international oil prices in the latter half of this year would neither bring huge gains to CNPC, parent company of PetroChina (NYSE: PTR, HK: 0857) nor mar Sinopec’s (NYSE: SNP, HK: 0386, SH: 600028) profits too much, since the crude oil of CNPC mainly supply its own refineries and Sinopec’s loss from surging cost will be offset by robust demand for petrochemicals, generally believed by Chinese market analysts.
Since crude export only takes a slight weight in its business, Chinese largest oil explorer CNPC would not pocket huge profits amid soaring international oil prices, said Liang Jianmin, an analyst with Capital Securities.
“Though cost has been increasing, the surging demand for petrochemicals would eventually benefit Sinopec,” said Guang Qingyou, an oil expert with Center for China Study under Tsinghua University.
Petrochemical industry in 2007 is expected to grow above 20 percent over 2006, based on a report recently released by China Petroleum and Chemical Industry Association.
Li Yi, an analyst with www.oilboss.cn, however, believed the high oil price would directly favor such upstream companies as CNPC and CNOOC.
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