Sinopec Oilfield Service Hikes 2020 Capex

Sinopec Oilfield Service Corp, a unit of state-run Sinopec, will hike capital expenditure in 2020 by 18.4% yr/yr as it plans to advance key projects, it said March 24 in a stock exchange filing.

This year, the company plans to arrange capital expenditure of yuan 3.4bn ($480mn) as against yuan 2.87bn last year. Sinopec Oilfield Service Corp’s decision to hike spending is in contract with the trend among most companies who are opting for radical cuts in response to the decline in oil prices and Covid-19 outbreak. At the time of the press, Brent was trading at $28/barrel.

“It is expected that the fluctuation of international oil prices will increase; the downward pressure on China's economy is increasing, but the basic trend of growth amid stability and long-term improvement remain unchanged, and the basic trend of rigid growth in oil and gas demand remains unchanged,” the company said.

In 2020, the company plans to sign new contracts worth yuan 68bn, of which yuan 39.6bn will be from within the Sinopec group, yuan 13bn from the domestic external market, and yuan 15.4bn from overseas market.

Meanwhile, Sinopec Oilfield Service Corp said its net profit and revenue in 2019 grew by 544% and 19.6%, respectively.