August 28, 2001Hong Kong

China Petroleum & Chemical Corporation2001 Interim Results Announcement

2

Agenda

Market Overview and Summary of Results

Review of Operations

Review of Financial Performance

2H2001 Outlook

Market Overview and Summary of Results

4

Consistent growth in Chinese Economy

Domestic consumption of refined products increased by 3.59%

Robust growth in domestic chemicals demand, Chemicals consumption(ethylene equivalent) increased by 7.2%

Relatively high crude oil price

Asian refining margins remain low

Chemicals price under pressure globally

Market Overview

5

Utilization rate of refineries (%)

Oil & gas production (MM boe) 129.69 130.62

80.0 80.4

0.72%

0.4

Ethylene production (10,000 MT) 107.8 114.6 6.31%

Including: Retail (10,000 MT)

1H 2000 1H 2001 Change

Gross sales of refined oil (10,000 MT)

1,423980 45.20%

3,3673,248 3.66%

Crude oil processed (10,000 bbl/day) 209.40 210.90 0.72%

Summary of Operations

Note: Crude oil and natural gas production do not include production from National Star

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1H 2000 1H 2001 Change

Operating Expenses 134,748 148,448 10.17%

EBITDA 25,89624,228 6.9%

Operating Revenues 149,367 164,307 10.0%

EBIT 14,619 15,859 8.5%

Net Profit 7,513 9,580 27.5%

(RMB MM)

Summary of Financial Performance

Review of Operations

8

New proved crude reserves (MMbbls)

Consolidated lapse rate (%)

Production of crude oil (MMbbls)

Production of natural gas (bcf)

122.92 123.23

40.6 44.4

0.25%

9.36%

136.0 142.6 4.85%

3.52 3.33 -0.19

1H 2000 1H 2001 Change

E & P

Note: Crude oil and natural gas production exclude production from National Star

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Refining

Crude oil processed (10,000 bbl/day) 209.40 210.90 0.72%

Including: Sour crude processed(10,000 bbl/day)

28.35 39.67 39.93%

Capacity utilization (%) 80.0 80.4 0.4

Yield for light stream (%) 70.1 70.58 0.48

Refining yield (%) 91.7091.99 -0.29

Refining margins (US$/bbl) 2.63 3.67 1.04

1H 2000 1H 2001 Change

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1H 2000 1H 2001 Change

Gross sales of refined products 3,3673,248 3.66%

(10,000 MT)

Marketing – Expanding Retail Network

- Retail 1,423980 45.2%

- Wholesale 1,3962,268 -38.45%

- Distribution 548N/A N/A

Total Amount of gas stations 20,527

17,537

27,749

23,565

35.2%

34.4%

- Franchised 2,990 4,184 39.9%

Retail market share in principal market 66%56% 10 pnt.

- Owned or operated

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Differential Fiber (10,000 MT)Performance Synthetic Resin (10,000 MT)

Ethylene production 107.83 114.60 6.3%

Synthetic resin 146.01 167.77 14.9%

Synthetic rubber 15.06 20.07 33.3%

Synthetic monomers & polymers 193.72 184.35 -4.8%

N/A

-2%

5%

-11%

Synthetic fiber 52.45 49.31 -6.0% -7%

68.161.5

1H2000 1H2001

16.315.8

1H2000 1H2001

10.7%2.6%

(10,000 MT)

Chemicals - Responding to Market

1H 2000 1H 2001 Change Price

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Cost Reduction & Efficiency Improvement

Crude oil lifting cost (US$/bbl) 6.63

Refining cash operating cost (US$/bbl) 2.07

Marketing cash operating cost (RMB/ton) 166

Ethylene cash operating cost (US$/ton) 159.8

0.63

0.19

8.0

23.4*

7.26

2.26

174

-

1H 2000

6.63

2.14

181

183.2

2000 1H 2001 Reduce

* : Change in Ethylene cash operating cost compared with FY2000 figure

Cost cutting 2001E

1H 2001 actual

Chemical

522

490

Marketing

285

610

Total

1382

2190

E & P

190

450

Refining

385

640

Million RMB

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Capital Discipline

2001 Capex Plan

Oil Field31%

Marketing26%

Chemicals26%

Refining17% Marketing

Chemicals

Total

E&P

Refining

1H2001 Actual Capex

7,900

4,200

20,700

5,600

2,800

RMB 40.76 billion

(RMB MM)

Others 200

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On August 8, 2001, Sinopec commenced trading in the Shang

hai Stock Exchange

• Size: 2,800,000,000 shares

• Offering Price: RMB 4.22 per share

Use of Proceeds：

• Acquire National Star to strengthen upstream operations

• Invest in Southwest refined products pipeline and Ningbo-

Shanghai-Nanjing crude oil pipeline to reduce logistics cos

ts and expand market share

Successful A Share Offering

Fund raised:RMB 11.816 Bn

Review of Financial Performance

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Earnings Continue to Grow

(RMB MM)1H 2000 1H 2001 Change

EBITDA 24,228 25,896 6.9%

EBIT 14,619 15,859 8.5%

Net Profit 7,513 9,580 27.5%

EPS 0.11 0.11 0.0%

Revenue and other operating income 149,367 164,307 10.0%

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Stable Cash Flow

(RMBMM ) 1H '00 1H '01

Net cashflow from operating activities 6,61210,509

Change

-3,897

Net cashflow from investment activities -12,286-14,620 2,334

Cash & cash equivalents – net change 9,2254,255 4,970

Net cashflow from financing activities 14,8998,366 6,533

Cash, cash equivalents and time deposit 41,134 39,959 -1,175

Note: Before proceeds from A-share listing

2000-12-31 2001-6-30 Change

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Healthy Balance Sheet

(RMB MM)1H 2000 1H 2001

Total Capitalization 280,191 298,006

Debt to equity ratio 32.75% 35.78%

Change

17,815

3 pnt.

Total Assets 347,409 373,786 26,377

+25%

Total Debt 91,777 106,662 14,885

7.2

9.0

1H '00 1H '01

EBITDA/Interest Expense

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Strength of Integration

(RMB MM)

Operating Profits

11,57011,055

3,750

1,584

186

1,93842

353

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

1H2000 1H2001

E&P Refining and Marketing

Chemicals Corporate & Others

Marketing

Chemicals

Total

E&P

Refining

Corporate & others

1.96

0.20

4.44

10.54

2.87

-

1,938

3,155

14,619

11,055

-1,571

42

1H2000

974

186

15,859

11,570

2,776

353

1H2001

EBIT (RMB MM) ROCE

Note: ROCE = 1H ATOI / Total Capital Employed

%

2H 2001 Outlook

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Staggering global economy while stable growth in Chinese economy

Chinese government continues to improve market order

Since May 2001, new gas stations can only be built by either Sinopec or PetroChina

The two Companies will coordinate to maintain market equilibrium, and ensure stable oil price

International crude oil price stays at relatively high level

Low refining margin in Asian market, inverted prices in Singapore from June to early August

Chemical industry still in cycle low

Market Environment - Analysis & Comments

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Increase crude oil production appropriately to take advant

age of the high oil price window

Annual planned production of 267.7 MM bbl of crude oil

and 148.3 bcf of gas (incl. National Star), 8.2% and 85.8

% increase respectively.

Add RMB1.5 bn to E & P and explore replacement resourc

es

Lower operating costs by applying new technologies

E & P

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2001E Lifting Cost2001E Reserves

2001E Crude Oil Production(MM bbl) (bcf)

Acquisition of National Star

2001E Gas Production

(mm boe) (US$/boe)

6.54 6.25

2.20

0.00

2.00

4.00

6.00

8.00

National Star Listco Total

-4.4%39343168

766

0

1000

2000

3000

4000

5000

National Star Listco Total

267.67246.37

21.30

050

100150200250300

National Star Listco Total

148.30

98.2

50.1

0

50

100

150

200

National Star Listco Total

+51 %+8.6 %

+24.2%

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Optimize production to meet market demand, annual

crude oil processing volume roughly remains 2000 level

Optimize the material flow of the crude resources, reduce

the purchase cost and lower the crude inventory level.

Further reduce the material and energy consumption.

Target annual refining yield at 92.3%, light yield at 71.6%,

and 2H 2001 diesel/gasoline ratio at 2.13

Refining

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Enhance network infrastructure, expand the market share

Increase retail and distribution volume. Projected annual sales

of 70 MM MT incl. 30 MM MT of retail and 10 MM MT of

distribution

Lower inventory level to 5.5 MM MT at year end.

Reduce cost

Optimize resource allocation to reduce distribution cost

Flatten managerial hierarchy to lower management and

administrative costs

Regulate the market order

Marketing

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Ensure high utilization of efficient production facilities, 2.2 MM MT of eth

ylene production

Yanhua Ethylene plants commence production in Oct.

Enhance product quality, increase the ratio of high value added product

s, percentage of performance compound at 45%, differential fiber at 30%.

Forge marketing, direct sales account for 58%. Develop B2B e-commerc

e and ensure the E-trading volume of RMB 15 bn

Strengthen management to reduce cost and enhance competitiveness.

Reduce Ethylene cash operating cost to USD155/tone

Chemicals

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Conclusion

Improving market order

Promote rationalization in pricing mechanism

Stable growth in oil & gas production

Operating strategies in line with market conditions

Reduce costs

Increase sales volume

Lower inventory level

Generate Attractive Return to Investors

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Investor RelationsTel: (8610) 64990060Fax: (8610) 64990067

Email: ir@Sinopec.com

Media InquiriesTel: (8610) 64990064Fax: (8610) 64990093

Email: media@Sinopec.com

http://www.Sinopec.com

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