Sinopec and PetroChina each saw revenue and profit tumble last year as the effect of the coronavirus pandemic impacted full-year financial results.

The spread of Covid-19 hammered global oil demand due to wide-scale lockdowns and reductions in air and road transport, leading to a steep decline in commodity prices that plunged many fossil fuel companies deep into the red.

ENERGY EXPLORED: SUBSCRIBE TO ACCELERATE

Gain valuable insight into the global oil and gas industry's energy transition from ACCELERATE, the free weekly newsletter from Upstream and Recharge. Sign up here today.

Sinopec posted a net profit of 33.1 billion yuan ($5.04 billion) for the full year 2020, a 42.9% drop from 2019 as revenues tumbled 28.8% year-on-year to 2.11 trillion yuan.

Sinopec’s oil and gas production reached 459.02 million barrels of oil equivalent last year, up 2.3% year-on-year, including 249.52 million barrels of oil and 1.07 trillion cubic feet of gas produced from fields in China.

Capital expenses were down to 135 billion yuan in 2020, as compared with 136.2 billion yuan in 2019, including 56.4 billion yuan spent on upstream exploration and production.

The remaining capex was spent on the development of other business segments, including 24.7 billion yuan spent on refining, 25.4 billion yuan on oil products sales and 26.2 billion yuan on chemicals.

Last year, Sinopec made a number of oil and gas discoveries in the Tarim, Sichuan and Bohai Bay basins, with gas reserves rising by 13.4% from 2019, the company said this week without disclosing the updated reserves figure.

The company is optimistic about an improved start to this year, setting its sights on a net profit of 16 billion to 18 billion yuan ($2.5 billion to 2.8 billion) for the first three months of this year, in sharp contrast to the 19.7 billion yuan loss in the same period of 2020.

Net profit at PetroChina last year was 19 billion yuan, down 58.4% from 2019, while revenues dropped 35% to 1.93 trillion yuan.

Hydrocarbon production increased 4.8% year-on-year to 1.41 billion barrels of oil equivalent, including 113 billion cubic metres of gas, representing an increase of 9.9% year-on-year. The 909 million barrels of oil was up 2.1% from 2019.

Oil and gas lifting costs went down by 8.3% to $11.1 per barrel. The net cash flow was robust at 318.58 billion yuan.

Profit earned from oil and gas exploration and production dropped to 23.1 billion yuan, as compared with 96.1 billion yuan earned in 2019.

However, gas sales and pipeline operations earned the company 72.4 billion yuan in profit, up 177.3% year-on-year, even though gas imports incurred 14.16 billion yuan in losses last year.

Board member Duan Liangwei said that the next 10 years will see China’s oil products demand decrease and crude demand level off, but gas consumption will continue to grow robustly.

For this year, PetroChina’s gas sales are expected to rise by 8.7% from last year to 350 Bcm. Domestic gas demand is expected to rise to about 430 Bcm by 2025, according to a PetroChina forecast.

PetroChina has also appointed Huang Yongzhang as its new president, replacing Duan Liangwei, who has been handed other roles within PetroChina.