A pump is pictured at Sinopec-operated Shengli Oilfield in Dongying, Shandong Province, China, January 12, 2017. The photo was taken on January 12, 2017. REUTERS/Qin Aizhou/file photo

BEIJING, March 27 (Reuters) – China Petroleum and Chemical Corporation (600028.SS)Sinopec, known as Sinopec, is planning its highest capital investment in history for 2022 after posting its best profit in a decade, echoing Beijing’s call for energy companies to ramp up production.

Sinopec expects to spend 198 billion yuan ($31.10 billion) in 2022, up 18% from last year and surpassing the previous record of 181.7 billion yuan set in 2013, according to the company’s statement submitted to the Shanghai Stock Exchange on Sunday.

It plans to invest 81.5 billion yuan in upstream exploitation, mainly crude oil bases in Shunbei and Tahe fields, and natural gas fields in Sichuan Province and Inner Mongolia.

“Looking forward to 2022, market demand for refined oil will continue to recover, and demand for natural gas and petrochemical products will continue to grow,” Sinopec said in the statement.

He also warned of the potential effects of geopolitical challenges and volatile oil prices on investment and employment in offshore companies. But the company did not name any specific project.

Reuters reported that Sinopec Group has suspended talks about a major investment in petrochemicals and a gas marketing project in Russia, in response to a government call for caution as sanctions escalate over the invasion of Ukraine. Read more

Brent oil prices are up 52% ​​so far this year and hit $139 a barrel in early March, spurred by fears of supply disruptions in the wake of Russia’s invasion of Ukraine.

Sinopec posted its biggest profit in a decade in 2021 on the back of recovering energy demand and increasing oil prices in the post-COVID era, with a net profit of 71.21 billion yuan.

It plans to produce 281.2 million barrels of crude oil and 12,567 billion cubic feet of natural gas in 2022, up from its production of 279.76 million barrels and 1,199 billion cubic feet in 2021.

Beijing is seeking to ensure the country’s energy safety amid rising geopolitical risks. It wants to keep annual crude oil production at 200 million tons and increase natural gas production to more than 230 billion cubic meters by 2025 from 205 billion cubic meters in 2021. Read more

Sinopec’s crude oil production and production of refined petroleum products are expected to remain at about the same level in 2022 compared to last year, at 258 million tons and 147 million tons, respectively.

But demand for gasoline and diesel has waned in China as more than 2,000 daily COVID-19 cases prompted local authorities to impose strict travel restrictions while manufacturers suspended operations amid supply chain clogs. Read more

(dollar = 6.3658 Chinese yuan)

(Reporting by Muyu Shu and Chen Aizhou). Editing by Jerry Doyle

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