Sinopec: A profile of the world’s largest chemical producer
Sinopec, formally known as China Petroleum & Chemical Corporation, is a vertically integrated energy and chemical powerhouse headquartered in Beijing. As a majority state-owned enterprise, it serves as a critical pillar of China’s national energy security while simultaneously operating as the world’s largest oil refining group by capacity.
1. Executive summary
Sinopec is one of the “big three” national oil companies in China, alongside CNPC (PetroChina) and CNOOC. While its peers often focus more heavily on upstream exploration (CNPC) or offshore assets (CNOOC), Sinopec is traditionally recognized for its dominant downstream presence—refining, chemicals, and retail.
In 2024, the company reported an operating revenue of 3.07 trillion yuan (~$420.5 billion), maintaining its position as one of the highest-revenue companies globally. Facing a rapidly evolving energy landscape, Sinopec is currently transitioning from a traditional oil and gas provider to an “integrated energy service provider,” investing heavily in hydrogen, solar, and electric vehicle (EV) infrastructure.
2. Company profile & history
Sinopec’s origins date back to the early 1980s, but its modern corporate form emerged from a major state-led restructuring in the late 1990s.
- Establishment (1983–1998): Originally founded as the China Petrochemical Corporation in 1983 to manage the nation’s refining and chemical assets.
- Restructuring (2000): The current joint-stock entity, China Petroleum & Chemical Corporation, was established in February 2000. It was subsequently listed on the Hong Kong, New York, London, and Shanghai stock exchanges.
- Ownership: It is a subsidiary of the Sinopec Group, which is supervised by the State-owned Assets Supervision and Administration Commission (SASAC) of the State Council of China.
3. Core business segments
Sinopec operates across four primary segments that cover the entire petroleum value chain:
3.1. Exploration and production (Upstream)
Although smaller than PetroChina’s upstream division, Sinopec has significantly expanded its domestic presence. It focuses on:
- Shale gas: Major breakthroughs in the Sichuan Basin.
- Deep drilling: Initiatives like “Project Deep Earth” in Xinjiang, which includes some of the deepest wells in Asia (over 9,000 meters).
3.2. Refining (Midstream)
Sinopec is the global leader in oil refining capacity. It processes crude oil into gasoline, diesel, and jet fuel. In 2024, it processed approximately 252 million tons of crude oil.
3.3. Marketing and distribution (Downstream)
With a retail network of over 30,000 service stations, Sinopec holds the largest petrol station network in China. This infrastructure is the frontline of its transition into a multi-energy provider.
3.4. Chemicals
The company is China’s largest producer of petrochemicals and the world’s second-largest for ethylene capacity. Its products range from synthetic resins and rubbers to advanced new materials for the medical and tech sectors.
4. Financial Performance & Market Position
Sinopec’s market position underwent a significant shift in late 2025, reflecting its continued expansion in the global petrochemical sector despite macroeconomic headwinds.
World’s largest chemical company: As of September 2025, Sinopec officially claimed the #1 spot in the ICIS Top 100 Chemical Companies list. This milestone marked the first time the company surpassed Germany’s BASF in chemical sales, driven by sustained capacity expansion in China and resilient sales growth in specialty segments.
International growth: In November 2025, the company demonstrated its aggressive global strategy by securing a $437 million contract with Algeria’s national oil company, Sonatrach. The project involves building a heavy naphtha hydrotreating unit at the Arzew refinery, designed to double Algeria’s gasoline output—signaling Sinopec’s pivot toward high-value engineering and construction services abroad.
2025 interim results (H1): The company reported an operating income of 1.4 trillion yuan (~$195 billion) for the first half of 2025. While profit margins faced pressure from lower global crude prices and increased competition from electric vehicles, the company maintained a high dividend payout ratio (approx. 50%), emphasizing its commitment to shareholder returns during the energy transition.
5. Research, development & innovation
In late 2025, Sinopec transitioned its R&D focus toward “digital intelligence,” launching a high-profile initiative to integrate artificial intelligence into heavy industry.
In November 2025, the company unveiled this new strategic theme during the 8th China International Import Expo (CIIE). This roadmap prioritizes the use of artificial intelligence and big data to optimize its complex, Verbund-style integrated chemical plants, aiming for higher resource efficiency and predictive maintenance.
A core component of this strategy is the rollout of “digital twin” technology across its largest refining hubs. These AI-driven models simulate production in real-time to reduce energy consumption and carbon intensity.
The company continues to focus on high-end carbon fibers and specialty materials. In 2025, it expanded its research into materials specifically designed for the hydrogen economy, including high-pressure storage tanks and fuel cell components.
6. Sustainability and energy transition
Sinopec has committed to a “Dual Carbon” goal: peaking carbon emissions by 2030 and achieving carbon neutrality by 2050.
6.1. The integrated energy service station
A core part of Sinopec’s strategy is transforming traditional gas stations into “Five-in-One” hubs.
6.2. Key environmental initiatives:
- CCUS: Operating one of China’s largest Carbon Capture, Utilization, and Storage (CCUS) projects in the Qilu-Shengli oilfield.
- EV infrastructure: Deployment of over 10,000 charging and battery-swapping stations across its retail network.
- Methane recovery: Increasing recovery rates of methane to reduce its greenhouse gas footprint.
7. Strategic Outlook
As of 2025, Sinopec is navigating a “dual transition.” It must continue to provide reliable oil and gas to support China’s massive industrial base while aggressively pivoting to avoid obsolescence in a decarbonizing world.
Future priorities:
- Natural gas growth: Pivoting upstream focus from oil to natural gas to serve as a “bridge fuel.”
- Global expansion: Strategic investments in refining complexes in Sri Lanka and Saudi Arabia to secure international market share.
- Efficiency: Tightening capital expenditure (CAPEX) to focus on high-yield, low-carbon projects.
References
http://www.sinopec.com/listco/en/000/000/041/41662.shtml
http://en.sasac.gov.cn/2025/03/26/c_19088.htm
https://www.globaldata.com/company-profile/china-petroleum-chemical-corp/
https://pestel-analysis.com/blogs/brief-history/sinopecgroup
https://pitchbook.com/profiles/company/42750-10#overview
https://en.wikipedia.org/wiki/Sinopec
https://www.swotandpestle.com/sinopec-corp-competitors-analysis
https://vizologi.com/business-strategy-canvas/sinopec-group-business-model-canvas
https://matrixbcg.com/blogs/how-it-works/sinopecgroup
https://enkiai.com/sinopec-hydrogen-initiatives-for-2025-key-projects-strategies-and-partnerships
