BEIJING (Reuters) – China Petroleum (NYSE:) & Chemical Corp, better known as Sinopec (NYSE:), is planning its highest capital investment in history for 2022 after recording its best profit in a decade, echoing Beijing’s call for energy companies to raise production.

A company statement submitted to Shanghai Stocks Exchange Sunday stated that Sinopec anticipates spending 198 billion Yuan ($31.10 Billion) in 2022. That’s an increase of 18% over the prior record of 181.7billion yuan in 2013.

It intends to invest 81.5 million yuan into upstream exploration, including the bases in Shunbei & Tahe fields and Sichuan province’s fields in the Inner Mongolia area.

The statement from Sinopec read, “Looking ahead to 2022, market demand for refined oils will continue recovering, while demand for natural gas, petrochemicals and other products will continue growing.”

The firm also warned about the potential impact of volatile oil prices and geopolitical issues on overseas investment. The firm didn’t name any particular project.

Reuters reports that Sinopec Group has suspended negotiations for a large petrochemical investment in Russia and a Russian gas marketing venture, following a call from the government for greater caution due to sanctions mounting over Ukraine’s invasion.

The Russian invasion of Ukraine has fueled fears that there will be disruption to supply, which have led prices to rise 52% in this year’s first quarter. They reached as high as $139 per barrel by March 1.

Sinopec made its largest profit in 10 years in 2021 due to recovery in energy demand, oil price rises in post-COVID age and net earnings of 71.21 Billion Yuan.

In 2022, it plans to produce 281.2 Million barrels crude oil and 12,567 Bcf of natural gas. That’s up from 279.76 M barrels and 1,199 Bcf in 2021.

Beijing wants to increase energy security in China amid increasing geopolitical risk. The Chinese government wants to maintain a 200mt annual crude oil production and increase natural gas production by more than 230bcm (bcm), in 2025, from the 205bcm of 2021.

Sinopec is expected to maintain the level of crude throughput in 2022 at 258million tonnes per year and produce refined oil products at 147million tonnes each, as compared with a previous year.

China has a low demand for fuel and diesel. This is because more than 2,000 daily COVID cases are reported to the authorities. As a result, local authorities have placed strict restrictions on travel while manufacturing companies were forced to suspend their operations as a result of supply chain problems.

($1 = 6.3658 renminbi)