Sinopec Shengli Oilfield Co, a subsidiary of oil giant China Petroleum and Chemical Corp (Sinopec), will shut down four of its 70 oil fields this year, domestic media reported on Wednesday, as it grapples with heavy losses incurred by the oil price plunge.
The four oil fields under Shengli Oilfield - Xiaoying, Yihezhuang, Taoerhe and Qiaozhuang in East China's Shandong Province - will be shut down this year, the Shengli Daily reported on Wednesday, citing a technology meeting the company held on Tuesday.
It will be the company's first such shutdown in five decades, the report said, citing anonymous insiders.
The decision was prompted by low oil prices, which have plagued the once-profitable company over the past year.
In 2015, Shengli Oilfield lost more than 9.2 -billion yuan ($1.41 billion), its first annual loss ever, according to the report.
Last month, international crude prices fell below $30 per barrel for the first time since April 2004. As a result, Shengli Oilfield lost 2.9 billion yuan in the first month of 2016 alone.
As oil prices remain low, the report said, Shengli Oilfield must emphasize profits, leading to the shutdown of all unprofitable fields.
The closure of the four fields is expected to save 130 million yuan for the company, reducing its losses by 200 million yuan this year.
Shengli Oilfield is one of many Chinese oil producers struggling with the impact of low crude oil prices.
For example, on January 19, CNOOC, China's major energy company, announced in a filing it sent to the Hong Kong stock exchange that it will cut its oil and gas output target for 2016 to a range of 470 million barrels of oil equivalent (BOE) to 485 million BOE, lower than the target of 509 million BOE the company set previously at the beginning of 2015.
