China Petroleum

1
China Petroleum Chemical Corporation2002 First
Half Results Announcement
August 19, 2002 Hong Kong
2
Disclaimer
This presentation and the presentation materials
distributed herewith include forward-looking
statements. All statements, other than
statements of historical facts, that address
activities, events or developments that Sinopec
Corp. expects or anticipates will or may occur in
the future (including but not limited to
projections, targets, estimates and business
plans) are forward-looking statements. Sinopec
Corp.'s actual results or developments may differ
materially from those indicated by these
forward-looking statements as a result of various
factors and uncertainties, including but not
limited to price fluctuations, actual demand,
exchange rate fluctuations, exploration and
development outcomes, estimates of proved
reserves, market shares, competition,
environmental risks, changes in legal, financial
and regulatory frameworks, international economic
and financial market conditions, political risks,
project delay, project approval, cost estimates
and other risks and factors beyond our control.
In addition, Sinopec Corp. makes the
forward-looking statements referred to herein as
of today and undertakes no obligation to update
these statements.
3
Agenda

• Market Overview and Performance Highlights
• Review of Operations
• 2H 2002 Outlook

4
Market Overview and Performance Highlights
5
Market Overview I

• Robust economic growth in China, GDP growth of
  7.8
• Domestic consumption of refined products
  increased by 2.72
• Significant growth in domestic chemicals demand,
  consumption increased by 14.5
• Crude oil, refined product and chemical prices
  have been bottomed out in January and February
  recovery began in March
• WTO crude oil tariff decreased from 16 RMB/ton
  to zero, gasoline tariff decreased from 9 to 5,
  major chemicals tariff decreased by 3.7 on
  average

6
Market Overview II
International Crude Oil Prices
(US / bbl)
SE Asia Chemical Product Prices
Gasoline 90, Diesel 0 - Ex-Refinery Prices
(RMB / tonne)
(US / tonne)
7
Operating Performance Maintain
StrongProfitability Amid Adverse Market
Environment
EBIT Analysis (RMB Bn)
16.46
Tariff reduction
10.71
1.3
Q2
Decline in Crude Price
0.47
Others
CompressedRefining Margin
No Employee Reduction Expenses
CostReduction
Q2
Increasein High Value-added Products
Decline in Chemical Price
Improved Market Environment
Expansionin Retailand Direct Sale
Increase in DDA, Social Welfare, etc
Q1
Q1
1H2001
1H2002
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Operating Performance Grow Volume
Crude Oil Production (MM bbls)
131.73
132.43
0.53
65.91
66.56
Natural Gas Production (bcf)
71.1
87.8
23.5
41.8
46.0
Crude Oil Processed (MM tonnes)
51.94
-1.9
50.94
23.94
27.00
Refining Utilization Rate ()
80.4
-100bps
79.4
74.5
82.9
33.67
1.2
34.07
17.34
16.73
Domestic Sales of Refined Products (MM tonnes)
14.23
18.5
16.86
7.94
8.92
Including Retail (MM tonnes)
1,146
8.7
1,245
583
662
Ethylene Production (1,000 tonnes)
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Operating Performance Financial Highlights
(RMB Bn)
Revenue
66.00
80.20
-11.8
165.82
146.20
EBITDA
7.52
14.53
-18.0
26.90
22.05
EBIT
1.61
9.10
-35.0
16.46
10.71
Net Profits
0.54
4.89
-45.6
9.98
5.43
EPS (RMB)
0.006
0.057
-47.1
0.119
0.063
DPS (RMB)
NA
NA
NA
NA
0.02
10
Operating Performance Capitalization and
Cashflow
(RMB Bn)
45.35
37.45
-17.4
Short-term Debts
30.88
33.24
7.6
Long-term Debts
147.67
145.57
-1.4
Shareholders Equity
28.06
27.25
-81bps
Debt-to-Capital Ratio ()
9.1
9.7
0.6x
EBITDA / Interest Coverage (x)
6.58
18.50
181.27
Net Cash from Operating Activities
-12.46
-16.31
30.93
Net Cash used in Investing Activities
15.31
-4.08
-126.62
Net Cash from Financing Activities
29.04
19.14
-34
Net Cash Cash Equivalents - Ending Balance
Notes 1H 2001 Decreased by 8.9 from 2001
year-end
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Review of Operations
12
EP Continued Production Growth in Oil Gas
New Proved Oil Gas Reserves (MM boe)
217.23
213.57
-1.68
3,844
3,877
0.86
Period End Proved Oil Gas Reserves (MM boe)
New Crude Oil Production Capacity (MM boe)
8.66
21.66
150
3.53
12.36
250
New Natural Gas Production Capacity (bcf)
Crude Oil Production (MM bbls)
131.73
132.43
0.53
71.10
87.80
23.50
Natural Gas Production (bcf)
Cash Operating Cost (US / bbl)
6.19
6.00
-3.07
13
EP Segment Performance
Crude Oil and Natural Gas Realized Price
EP Segment EBIT
(RMB MM)
Crude oil price(US / bbl)
Natural gas price(US / 000 cf.)
14
Refining Production Adjustments in Line with
Market
Crude Oil Processed (1,000 bbl / day)
-1.9
2,109
2,069
Refining Utilization Rate ()
-100bps
80.4
79.4
Gasoline Production (MM tonnes)
-5.2
9.7
9.2
Diesel Production (MM tonnes)
1.1
18.6
18.8
Kerosene Production (MM tonnes)
2.7
2.26
2.32
Chemical Feedstock Production (MM tonnes)
14.4
6.7
7.6
Light Stream Yield ()
70.58
73.11
253bps
Refining Yield ()
58bps
91.70
92.28
Cash Operating Cost (US / bbl)
-2.4
2.07
2.02
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Refining Segment Performance
Refining Segment EBIT
Refining Margins / Cash Operating Cost
(RMB MM)
(US / bbl)
16
Marketing Expanding Marketing Network and
Retail Volume
Domestic Sales of Refined Products (MM tonnes)
33.68
34.07
1.2
Retail (MM tonnes)
14.23
16.86
18.5
Distribution (MM tonnes)
5.48
6.18
12.8
Share in Principal Retail Markets ()
63
67
400bps
Owned or Operated Gas Stations (Unit)
23,565
24,256
2.9
Franchised Gas Stations (Unit)
4,184
3,233
-22.7
Annual Throughput Per Station (tonne / station)
1,394
1,506
8.0
Cash Operating Cost (RMB / tonne)
166
161
-3.0
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Marketing Segment Performance
Gasoline 90 Retail Guidance Price (RMB / tonne)
Marketing Segment EBIT Analysis(RMB MM)
Diesel 0 Retail Guidance Price (RMB / tonne)
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Chemicals Production Adjustments in Line with
Market
(1,000 tonne)
Ethylene
1,146
1,245
8.7
Synthetic Resins
1,678
1,838
9.5
201
217
7.9
Synthetic Rubbers
1,844
1,895
2.8
Monomers Polymers for Synthetic Fibers
493
568
15.2
Synthetic Fibers
41
47
600bps
of Performance Compound in Synthetic Resins
33
34
100 bps
of Differential Fibers in Synthetic Fibers
B-2-B Sales (RMB Bn)
7.40
8.21
10.9
Ethylene Cash Operating Cost (US / tonne)
159.9
147.7
-7.6
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Chemicals Segment Performance
Domestic Chemical Prices
Chemicals Segment EBIT
(RMB / tonne)
(RMB MM)
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Cost Cutting
2002 Interim Actual Cost Cutting RMB 1,259MM
(RMB MM)

• Cost cutting in raw material procurement e.g.
  crude oil
• Reduce energy and material consumption
• Optimize resources allocation and logistics
• Efficiency gained from headcount reduction last
  year

EP 287
Refining 399
Chemicals 242
Marketing 331
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Prudent Investment to Enhance Return
1H 2002 Capex Allocation

• E P RMB 9,502MM,increase new reserves and
  production
• Refining RMB 2,660MM,improve quality of
  refined product
• Marketing RMB 3,477MM, new-build and upgrade
  existing retail stations, storage and transport
  facilities
• Chemicals RMB 4,016MM, additional production
  capacity, e.g. ethylene expansion

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Smooth Progress on JV Projects
Retail JVs on track
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Information Technology
ContinuousEnhancement
Comprehensive Enterprise Resources Planning
System
Apply Modern IT System to Enhance Performance
of Traditional Businesses
Financial Mgmt.System
Materials ProcurementB-2-B
Refined Products Sales System
Chemicals Marketing B-2-B
CoreDevelopmentProjects
Cost ControlSystem
Database
PerformanceReview System
OngoingDevelopment
Optimizations
Crude Oil
Refining
Products Flow
ERP
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2H 2002 Outlook
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2002 Market Outlook

• Global economic outlook remains uncertain, but
  Chinas economy will maintain strong growth
  momentum
• International crude oil price remains at a
  relatively high level
• Refining margin remains stable at current level
• Chemical prices rebound in second half as the
  industry has bottomed out in the chemical cycle
• Government continues to promote healthy
  competition in refined products market leading to
  a better operational environment
• Chinas accession to WTO will create new
  competitive pressure in the short term

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EP

• 2H 02 Plan
• Crude Oil Production
• 136MM bbl
• Natural gas production
• 88.3bcf

Growth from 1H () 1.6 0.6
Zhongyuan Oil Field
Jungel Basin
Ordos Basin
ShengliOil Field
Tarim Basin
East China Sea Oil Gas Field
Sichuan Basin
South China Sea
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Refining

• Optimize resources and reduce crude procurement
  cost
• Optimize products slate, increase chemical
  feedstock products
• Improve refining utilization rate through
  increasing external raw materials processing and
  expanding refining products export
• Increase light stream and refining yield
• Strengthening marketing efforts on other refined
  products
• Accelerate construction of Ningbo-Shanghai-Nanjing
  crude pipeline facilities
• 2H 02 Plan
• Crude oil processing 53.1MM tonnes
• Light stream yield 73.5
• Refining yield 92.5

• Growth from 1H 02 ()
• 4.2
• 40bps
• 20bps

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Marketing

• Improve coordination and cooperation with market
  players to create a healthy market and stabilize
  product prices
• Increase market share by optimizing sales
  structure and expanding market
• Develop network in highways, marine and rural
  areas
• JV with Shell, bp, ExxonMobil in gas stations
• 2H 02 Plan
• Domestic Sales of Refined Products 35 MM tonnes
• - retail 17.5MM tonnes
• - distribution 6.6MM tonnes
• Throughput Per Station 1,530 tonnes / year

• Growth from 1H 02 ()
• 2.7
• 3.8
• 6.8
• 1.6

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Chemicals
(Unit 1,000 tonnes)
1,335
Ethylene
7.2
1,245
2,122
Synthetic Resins
15.5
1,838
233
217
Synthetic Rubbers
7.4
1,915
Monomers Polymers for Synthetic Fibers
1.1
1,895
Synthetic Fibers
569
0.2
568
Sales-to-Production Ratio
100.0
40bps
99.6
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Conclusion

• Robust economic growth in China rationalize
  environment in refined products market, improve
  operating environment
• Grow production volume in oil and gas, refining
  and chemical products
• Flexible operating strategies to reduce cost and
  improve efficiency
• Prudent investment - adjust investment structure
  and improve return maintain a healthy financial
  structure
• Strengthen corporate governance maintain a
  relatively stable dividends payout

Generate Attractive Investor Return
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