Key facts
- Sinopec Chairman Hou Qijun is implementing a major overhaul of the world's largest oil refiner.
- The company is shifting focus from declining fuel sales to new energy and chemicals.
- Sinopec reported a 19% rise in net profit for the first half of 2026.
- Annual investment in new energy and materials is planned to exceed 30 billion yuan ($4.46 billion) from 2026 to 2030.
- The company aims to complete over 30 new energy and materials projects by 2030.
Sinopec Chairman Hou Qijun is implementing a significant overhaul of the world's largest oil refiner to address declining domestic fuel demand, petrochemical overcapacity, and market share challenges. Despite a 19% increase in net profit for the first half of 2026, the company's domestic fuel sales have been declining for two years, impacted by high oil prices and the accelerated substitution by new energy sources. Gasoline and diesel sales have seen significant decreases, while jet fuel consumption rose slightly. Demand for major chemical products also weakened.
To navigate these challenges, Sinopec plans to allocate approximately 20% of its capital spending, exceeding 30 billion yuan ($4.46 billion) annually, to new energy and new materials between 2026 and 2030. Hou Qijun, who was appointed a year ago, aims to develop shale oil fields, sustainable aviation fuels, and reduce refining costs. The company is restructuring into four profit centers to improve its response to market changes and overcome "big company syndrome."