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Chinese energy giant Sinopec says net profit slumped 29.7% in 2014, blaming a 'precipitous' drop in global crude oil price/AFP

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China energy giants’ H1 profits fall on low oil prices

Chinese energy giant Sinopec says net profit slumped 29.7% in 2014, blaming a 'precipitous' drop in global crude oil price/AFP

Chinese energy giant Sinopec says net profit slumped 29.7% in 2014, blaming a ‘precipitous’ drop in global crude oil price/AFP

SHANGHAI, Aug 27- Two of China’s biggest energy companies, Sinopec and CNOOC, saw their first half net profits slump as low international oil prices and a weak global economy hit the bottom line, they said.

Refiner Sinopec’s net profit for the first six months slumped 22.3 percent to 24.43 billion yuan ($3.81 billion), it said late Wednesday in a statement to the Hong Kong stock exchange, where it is listed.

“In the first half of 2015, the global economic recovery remained slow,” Sinopec chairman Wang Yupu said in the statement. “International crude oil prices plunged in the second half of last year and fluctuated at low level in the first half.”

Oil prices hit their lowest levels since early 2009 this week over concerns China’s slowing economy will curb demand for the commodities that have helped drive its growth over the past three decades.

Sinopec said domestic demand for crude oil and natural gas also slowed in the first half.

China’s economy grew 7.0 percent in each of the first two quarters, slowing from a 7.4 percent expansion last year, which was its weakest since 1990.

Sinopec’s revenue dropped 23.3 percent year on year to 1.04 trillion yuan in the January-June period.

“Looking into the second half, with a general over supply situation of (the) international crude oil market, the oil price is expected to fluctuate at a low level,” Wang said.

Separately, China’s main offshore oil and gas producer, CNOOC, reported a 56.1 percent year on year plunge in net profit to 14.73 billion yuan in the first half, the company said in a statement to the Hong Kong stock exchange late Wednesday.

“Economic growth in China stabilised from slowing down and saw signs of bottoming out, while international oil prices continued to hover at low levels,” CNOOC chairman Yang Hua said in the statement.

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Its revenue also fell sharply by 35.5 percent year-on-year to 89.59 billion yuan in the first half, according to the statement.

CNOOC warned there was little to hope for in the second half.

“There is little optimism in the world’s macro economic environment; international oil prices are expected to remain at a low level,” Yang said.

But investors ignored the results. Sinopec gained 1.75 percent in Shanghai and rose 1.41 percent in Hong Kong by midday, while CNOOC jumped 14.52 percent in Hong Kong.

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