Red ink for Sinopec unit
Sinopec Oilfield Services reportedly swung to a loss in the first quarter as a widespread slump in field activity, largely due to low oil prices, took a toll on the earnings of the Chinese contractor.
The unit of state-owned Sinopec reported a net loss of 368.7 million yuan ($59.43 million) for the period, compared with a net profit of 260.3 million yuan a year earlier, Reuters reported, citing a Chinese-language results statement.
The reversal follows spending cuts by national oil companies, majors and independents that have hit the orderbooks of contractors worldwide and slashed their revenue.
Parent Sinopec saw its full-year profit for 2014 drop by nearly a third as lower oil prices offset increased output.
The earnings drop comes amid a state-instigated investigation to stamp out alleged corruption at Chinese state-owned enterprises that has targeted senior officials both at Sinopec Oilfield Services and its Beijing-based parent.
The contractor last year forged a joint venture with US peer player Weatherford International , as well as Shengli Highland Petroleum Equipment Company, targeting China’s emerging unconventional oil and gas plays.
Meanwhile, Sinopec this week denied reports that a merger with compatriot state-owned giant PetroChina was on the cards.
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