Unlike China's other big oil companies that have suffered major losses in their refining businesses, China National Offshore Oil Corp. (CNOOC) is happily in the black.

The company disclosed on its website on July 21 that its consolidated net profit was 18.95 billion yuan ($2.77 billion) in the first half of 2008, an increase of 35.2 percent compared with the same period last year. It ranks third among all the 149 central state-owned enterprises (SOEs) in terms of profit, accounting for 9.3 percent of the total.

As one of the three oil giants and the largest offshore oil and gas producer in China, CNOOC is mainly engaged in working with foreign partners in oil and gas exploitation in China's offshore area. For a long while, deep-sea oil exploration has enabled CNOOC to make continuous profits. According to company figures, its total assets surpassed 300 billion yuan ($43.92 billion) in 2007.

CNOOC's two main competitors, China National Petroleum Corp. (CNPC) and China Petrochemical Corp. (Sinopec Group), fell on hard times in the first half of 2008. CNPC said its pre-tax profit dropped 39 percent to 56.4 billion yuan ($8.26 billion) during the first six months of this year, compared with the same period in 2007. Sinopec Group estimated its net profit would decrease by more than 50 percent in the first half over a year ago. CNOOC managed to outshine its rivals because its refining business constitutes a small part of its overall operations.

Chinese refiners are increasingly falling victim to rising international oil prices that hit a record high of $147.27 per barrel on July 11. In light of this, they have seen their profits plunge because of their heavy reliance on imported crude oil.

Although the state has given the refiners large subsidies and raised refined oil prices by a small margin, CNPC and Sinopec Group still lost 5.71 billion yuan ($836.02 million) in the first half this year, according to the China Petroleum and Chemical Industry Association. The losses were 47.9 percent more than the amount sustained by the companies during the same period last year. Although the National Development and Reform Commission raised the price of refined oil by 1,000 yuan ($146.41) per ton on June 20, the adjustment only has clipped the price gap between crude and refined oil and has not been able to prevent huge losses at the refineries.

Because CNOOC has only one refinery in China, it has remained almost unaffected by international crude oil hikes. Calculations based on CNOOC's report indicate that during the past 10 years, the company's output of crude oil has increased at an average annual rate of 8.8 percent, much higher than the 1.5-percent growth of China's total crude oil output.