China Petroleum and Chemical Corporation (Sinopec), Asia's largest refinery by output, expected its net profit to drop more than 50 percent in 2008 from a year earlier because of a heavy refining loss, the company said in a notice to Shanghai Stock Exchange on Thursday.

The company attributed the sharp decline to a huge refining loss caused by the widening gap between the state-set refined oil prices on the domestic market and surging crude oil prices on the global market in the first half of last year.

In addition, the declining prices and market demand of petrochemical products in the second half also contributed to the net profit drop, the company said.

Sinopec's net profit hit 54.95 billion yuan (US$8 billion) in 2007, or 0.634 yuan per share.

Its share prices rose 1.8 percent to 7.91 yuan on the Shanghai bourse and edged up 0.95 percent to 4.25 HK dollars on the Hong Kong bourse.

(Xinhua News Agency January 23, 2009)