CHINA Petroleum & Chemical Corp. said Friday its net profit for the first half of 2014 was up 7.5 percent year on year as Asia’s biggest refiner widened the margin it earned from processing crude oil into fuels.

    Net income rose to 32.5 billion yuan (US$5.3 billion), or 0.28 yuan a share, up from 30.3 billion yuan, or 0.25 yuan, a year earlier, said the Beijing-based company, known as Sinopec.

    Sinopec is at the forefront of a China government push to restructure State-controlled companies and allow markets a bigger role in the allocation of resources. The company is seeking to raise 100 billion yuan by selling about a third of its retail unit.

    “Cost efficiency has kicked in for refining and the turnaround should be very sustainable,” said Gordon Kwan, head of oil and gas research at Nomura International Hong Kong Ltd. “The second half could be better as they are fine-tuning their product mix as well as deploying their capital more wisely.”

    Refining margin, defined as sales minus crude oil and feedstock costs plus taxes, other than income tax, divided by crude oil throughput and feedstock, rose by 90.8 yuan a metric ton to 300.3 yuan, according to the company’s interim report. Operating profit for refining operations climbed almost 46 times to 9.76 billion yuan in the period from a year earlier, according to the filing.

    Oil and gas output rose 8 percent to 237 million barrels of oil equivalent, while total sales declined 4.2 percent to 1.36 trillion yuan. Capital expenditure was 39.2 billion yuan in the first half, with 20.7 billion yuan spent on exploration and production.

    Shale gas production reached an average of 3.2 million cubic meters a day at Fuling, China’s biggest shale producing project, in southwestern China’s Chongqing. (SD-Agencies)