China Oilfield Services Limited (600871.SH): "14th Five-Year Plan" Successfully Concluded with Improved Quality and Efficiency; Anchoring "15th Five-Year Plan" to Usher in New Phase of High-Quality Development

On March 17, Sinopec Oilfield Service Corporation (hereinafter referred to as “Sinopec Oilfield,” 600871.SH) disclosed its 2025 annual performance. As the final year of the 14th Five-Year Plan, the company maintained steady operations amid oil price fluctuations and industry cycle volatility, adhering to the national energy security strategy, continuously advancing technological innovation, market expansion, and cost reduction and efficiency improvements, resulting in a steady enhancement of operational quality.

The annual report shows that in 2025, the company achieved operating revenue of 80.71 billion yuan, with net profit attributable to shareholders of the parent company of 660 million yuan, a year-on-year increase of 4.3%. The gross profit margin was 8.1%, up 0.3 percentage points year-on-year. The net cash flow from operating activities reached 6.65 billion yuan, a net inflow increase of 3.55 billion yuan compared to the previous year, indicating continuous improvement in profitability and cash flow.

In the context of a complex and changing industry environment, the company maintained stable revenue and improved profitability against the trend, delivering a solid performance for the conclusion of the 14th Five-Year Plan.

Deepening core business to enhance quality and efficiency; continuous improvement in engineering service capabilities

In recent years, China has continuously strengthened its energy security strategy. The 2024 Central Economic Work Conference explicitly called for “enhancing energy resource security guarantees” and promoting the construction of a new energy system. The national oil and gas reserve increase and production “Seven-Year Action Plan” is also approaching its final stage in 2025. Investment in oil and gas exploration and development remains stable, providing important development opportunities for the oilfield services industry.

As a leading integrated oil and gas engineering technology service provider in China, Sinopec Oilfield has continuously strengthened its technological capabilities and engineering efficiency, with five major business segments working synergistically.

In core engineering services, drilling operations maintained stable growth. In 2025, the company completed 11.15 million meters of drilling footage, a 1.6% increase year-on-year. The average drilling cycle was shortened by 10%, and the response time for complex faults decreased by 11.3%, setting multiple records in Sinopec construction projects.

The logging and measurement business continued its growth trend, achieving revenue of 3.8 billion yuan, up 5.8% year-on-year. The self-supply rate of high-end instruments such as rotary steerable tools increased to 80%, and the success rate of logging on the first attempt remained above 97%, providing key technical support for accurate evaluation of oil and gas reservoirs.

In the field of downhole special operations, the company completed 5,981 well operations, a 4.5% increase year-on-year. Fracturing efficiency improved by 8.4%, providing vital engineering support for unconventional resource development such as shale oil and gas.

Meanwhile, the engineering construction segment became an important driver of business growth. In 2025, this segment achieved revenue of 20.64 billion yuan, a 15.9% increase. Major national projects such as the West-to-East Gas Transmission Line Four and the middle section of the West-to-East Gas Transmission Line Three were successfully put into operation. The company also entered the domestic large-diameter pipeline construction market for the first time, maintaining a leading position in the long-distance pipeline construction market.

Order volume hits a new high; international expansion continues to deepen

Against the backdrop of stable global oil and gas development investment, Chinese oilfield service companies are accelerating their internationalization. Sinopec Oilfield Service has continued to deepen its overseas market layout, with international business becoming a key growth engine.

In 2025, the company signed new contracts worth 95.6 billion yuan, a 4.8% increase, setting a record high. Among these, contracts within Sinopec Group’s internal market totaled 50.3 billion yuan, up 7.0%; overseas contracts reached 26.7 billion yuan, up 9.9%.

International revenue for the year reached 20.01 billion yuan, a 10.5% increase, accounting for 25.2% of the main business revenue, an increase of 2.6 percentage points year-on-year.

In overseas markets, the company continued to consolidate its traditional advantages in the Middle East and actively explored emerging markets. In 2025, contracts for drilling projects in Saudi Arabia, Kuwait, and other markets totaled 18.2 billion yuan. The company also won the EPC contract for the second phase of the Dodaq oilfield in Iraq, extending its business from pipeline engineering to surface engineering of oilfields.

With excellent project execution capabilities, the company’s international brand influence continues to grow. The MGS project in Saudi Arabia received the “Best EPC Contractor Award” and the “Project Management Innovation Award,” while Sinopec Team 1503 was recognized as the world’s best onshore drilling team by Total.

Continuous breakthroughs in technological innovation and digital transformation

As oil and gas development extends into deep, deep-sea, and unconventional fields, the complexity of engineering technology continues to increase. Digitalization and intelligence are becoming key development directions for the oilfield services industry.

Sinopec Oilfield Service has continuously promoted technological innovation and industrialization. In 2025, the company received 14 provincial and ministerial science and technology awards and applied for 1,088 patents domestically and internationally. Its independently developed “Idrilling (Yinglong) Scientific Drilling System” has been applied to 526 wells, upgrading drilling operations from experience-driven to data-driven.

Additionally, the company’s 260°C/206 MPa ultra-high-temperature and high-pressure logging instrument was selected as a major technical equipment in the national energy sector, marking a significant step in domestic technological equipment localization.

In terms of industrialization, the four industrial bases for machinery equipment, tools and instruments, chemical agents, and engineering construction achieved a total output value of 2.06 billion yuan in 2025, with continuous enhancement of technological transformation capabilities.

Deepening reforms to improve efficiency; focusing on the new development cycle of the 14th Five-Year Plan

The global energy landscape is accelerating its evolution. While energy security strategies are being reinforced, digitalization, intelligence, and green low-carbon transformation are profoundly changing the development mode of the oil and gas industry. As exploration and development extend into deep, deep-sea, and unconventional fields, oil and gas engineering services are shifting from traditional experience-driven to data-driven and intelligent decision-making. Meanwhile, the expansion into emerging fields such as CCUS, hydrogen energy, and new energy projects is also driving the industry toward integrated energy engineering services.

Looking ahead to the 14th Five-Year Plan, Sinopec Oilfield Service will focus on high-quality development through a “second entrepreneurship,” emphasizing effective qualitative improvement and reasonable quantitative growth. The company will systematically strengthen technology, equipment, management, and team building, ensuring the safeguarding of national energy security and supporting the core responsibilities of oil and gas exploration and development. It will focus on three transformation areas: high-end, intelligent, and green, implementing six strategies: innovation-driven, talent-strong enterprise, value-led, market expansion, industry renewal, and green low-carbon development, accelerating the creation of a world-class, technology-leading oilfield service company.