China Oil Giant Plans Record Spending, Bolstering Energy Security Push

China Petroleum and Chemical Corp. (Sinopec) will spend record amount this year to increase its oil and gas drilling as China aims to bolster its energy security to isolate itself from volatile global commodity markets.

It will increase its capital expenditure by 18% to 198 billion yuan ($31 billion), including a 22% boost in drilling, according to its annual report on Sunday.

Shares rose as much as 4.9% in Hong Kong on Monday, extending a rebound from a bottom earlier this month to more than 16%.

“The company will redouble its efforts in exploration, especially in shale oil and shale gas,” Sinopec said in the report.

The announced increase comes just weeks after China’s leaders made it clear the nation’s top energy priority this year is securing fuel supplies. The world’s biggest energy importer is trying to prevent soaring costs of oil, gas and coal from derailing efforts to keep its economy on a stable footing.

China’s economy saw greater challenges this year so far and oil processing has decline on concerns of lower demand as the country’s copes with fresh new wave of COVID-19 cases.