China Petroleum & Chemical Corp., Asia’s biggest refiner, will cut costs and accelerate its expansion overseas as government controls prevent the company from passing on higher crude-oil prices to customers.

Profit rose 14 percent to a record 71.8 billion yuan ($11 billion) last year, the company known as Sinopec said Sunday. Net income missed analysts’ estimates and trailed Cnooc Ltd.’s 85 percent growth and PetroChina’s 35 percent increase.

Refining profit fell 13 percent last year as Sinopec paid 51 percent more to buy crude. The Beijing-based refiner, which bought its first overseas oilfield stake in 2010, said it plans to expand globally in the next 5 years to reduce dependence on domestic fuel sales.

“Sinopec underperformed among its domestic peers because of its bigger exposure to the refining business whose margins are controlled by the state,” Shi Yan, an analyst at UOB-Kay Hian Ltd., said by phone from Shanghai. “Sinopec may want to expand its upstream exploration segments, including the development and acquisition of oilfields overseas, to counter the negative impact of high crude oil costs.” 

(Bloomberg)