SHANGHAI (AFP) — Asia's top oil refiner Sinopec said Monday it will be forced to cut spending and delay some projects in the second half because of cash flow constraints.
"Sinopec Group will further slash this year's capital expenditure and cut the scale of investment in order to reduce capital and investment risks to the greatest degree," a company statement said.
The budget for this year and the next will be focused on "key projects," the statement said, quoting Wang Tianpu, president of the group's Hong Kong-listed Sinopec Corp. It did not give further details.
"In the coming months, the international oil prices will remain high and the petrochemical industry is getting more competitive. Sinopec group is undergoing greater pressure to boost profits and cash flow," Wang said.
Projects that have already been postponed will be suspended completely, while the pace of other investments will be carefully adjusted, the statement said.
Hong Kong-listed Sinopec Corporation reported a 77 percent decline in first-half profits from a year earlier due to soaring oil prices and tight price control on domestic oil products.
State media reported earlier that Sinopec will trim its 2008 capital expenditure by 8.2 billion yuan (1.2 billion dollars) because of a cash flow squeeze.
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