BEIJING - China Petroleum Chemical Corp (Sinopec), Asia's biggest oil refiner by capacity, aims to produce 45.59 million tons of crude oil in 2011.

That's amid an expansion of exploration in western China and overseas as rising oil prices continues to erode profit margins at the company's refining division.

Sinopec's profit rose 12.8 percent year-on-year to 70.7 billion yuan ($10.77 billion) in 2010, according to its annual report released on Sunday. That's compared with a profit growth of 35.6 percent at PetroChina Company Ltd and the upstream-focused China National Offshore Oil Corporation (CNOOC) Ltd's 84.5 percent jump in profit.

Sinopec said that its future sustainable development will depend partly on further discoveries or acquisitions of oil and natural gas resources.

The company will invest 54 billion yuan in the exploration and development sector in 2011, accounting for 43.8 percent of its total capital expenditure.

The surge in crude prices last year cast a shadow over Sinopec's refining division, which saw operating profit fall 42.2 percent from the previous year to 15.85 billion yuan, while the exploration and productions unit surged 97.3 percent in the same period to 47.15 billion yuan.

The annual Platts global spot price for Brent crude averaged $79.47 a barrel in 2010, up 29.2 percent from a year earlier.

"Sinopec's gross margins in the refining sector were largely squeezed by rising crude oil prices and the country's controls on fuel prices. We're also not optimistic about its earnings this year," said He Wei, an analyst at BOCOM International Holdings Co.

Fuel production and sales generate 62 percent of Sinopec's revenue, said Bloomberg.