Company Announcements

Important notice

1.1  The Board of Directors, the Board of Supervisors of China Petroleum & Chemical Corporation ("Sinopec Corp." or "the Company") and its directors, supervisors and senior management warrant that there are no false representations, misleading statements or material omissions contained in this report and severally and jointly accept full responsibility for the authenticity, accuracy and completeness of the information contained in this report.

1.2  The third quarterly report for 2021 was approved at the third meeting of the Eighth Session of the Board of Directors of Sinopec Corp. All directors attended this meeting.

1.3  Mr. Ma Yongsheng, Director and President and Ms. Shou Donghua, Chief Financial Officer and Head of Corporate Accounting Department of Sinopec Corp. warrant the authenticity, accuracy and completeness of the financial statements contained in this quarterly report. 

1.4  The financial statements in this quarterly report were not audited.

1 Principal financial data

1.1 Principal financial data and indicators prepared in accordance with China Accounting Standards for Business Enterprises (CASs)

                                                                                                                                                          RMB million

RMB million

Note: The Company has completed the formation of Sinopec Baling Petrochemical Co. Ltd on 1 November 2020, and has completed the purchase of non-equity assets of Beihai Petrochemical Limited Liability Company of Sinopec Group, Cangzhou branch of Sinopec Group Asset Management Co., Ltd and Beijing Orient Petrochemical Industry Co., Ltd on 1 July 2021. The business reorganisation and transactions have been accounted as business combination under common control. Accordingly, the Company has retrospectively adjusted the relevant financial data.

 RMB million

1.2 Principal financial data and indicators prepared in accordance with International Financial Reporting Standards (IFRs)

RMB million

RMB million

Note: The Company has completed the formation of Sinopec Baling Petrochemical Co. Ltd on 1 November 2020, and has completed the purchase of non-equity assets of Beihai Petrochemical Limited Liability Company of Sinopec Group, Cangzhou branch of Sinopec Group Asset Management Co., Ltd and Beijing Orient Petrochemical Industry Co., Ltd on 1 July 2021. The business reorganisation and transactions have been accounted as business combination under common control. Accordingly, the Company has retrospectively adjusted the relevant financial data.

1.3 Significant changes in major items contained in the consolidated financial statements prepared in accordance with CASs and the reasons for such changes.

2 Shareholders information

2.1Total number of shareholders and top ten shareholders at the end of the reporting period

Note   Sinopec Century Bright Capital Investment Limited, overseas wholly-owned subsidiary of China Petrochemical Corporation, holds 553,150,000 H shares, accounting for 0.46% of the total share capital of Sinopec Corp. Such shareholdings are included in the total number of shares held by HKSCC (Nominees) Limited.

Statement on the connected relationship or acting in concert among the aforementioned shareholders:

Apart from中国人寿保险股份有限公司－传统－普通保险产品－005L－CT001沪 and 中国人寿保险股份有限公司－分红－个人分红－005L－FH002沪 which were both administrated by 中国人寿保险股份有限公司, Sinopec Corp. is not aware of any connected relationship or acting in concert among or between the above-mentioned shareholders.

3 Review of operating results

In the first three quarters of 2021, as the world economy gradually picked up, China's economy kept a sustainable and steady recovery, registering a GDP growth of 9.8% year-on-year among which up by 4.9% in the third quarter. In the first three quarters, the average spot price of Platts Brent was USD67.73 per barrel, up by 65.9% year-on-year. Domestic demand for natural gas continued to grow rapidly, with an apparent consumption up by 16.6% year-on-year. Domestic demand for refined oil products recovered steadily and demand for major chemicals kept stable.

Confronted with the environment where the international oil price went up and the demand for petrochemical products recovered steadily, the Company stressed on improving our systems, expanding markets, and controlling costs, thus realising outstanding operation results.

In accordance with CASs, net profit attributable to equity shareholders of the Company was RMB 59.892 billion, up by 154.9% year-on-year. In accordance with IFRS, net profit attributable to equity shareholders of the Company was RMB 60.755 billion, up by 148.5% year-on-year.

Exploration and Production: The Company seized the favourable opportunity of rising oil prices, pressed ahead with high-quality exploration and profit-oriented development, strengthened the foundation of resources. In terms of exploration, we strengthened risk exploration in new regions and new sectors, which led to new discoveries in Tarim Basin, Sichuan Basin, and Erdos Basin, and major breakthroughs in continental facies shale oilfields of Bohai Bay Basin, Sichuan Basin, and North Jiangsu Basin. In terms of production, we efficiently proceeded with the capacity building of major natural gas and crude oil projects, and the natural gas production increased by 13.7% year-on-year and the crude oil production kept stable. The exploration and production segment realised earnings before interest and taxes (EBIT) of RMB 10.904 billion in the first three quarters. 

Conversion: For domestic production of crude oil, 1 tonne = 7.10 barrels. For overseas production of crude oil,

1 tonne = 7.21 barrels. For production of natural gas, 1 cubic meter = 35.31 cubic feet.

Refining: The Company actively responded to market changes, strengthened integration of refining and marketing, raised processing volume, kept high utilisation rate, actively adjusted product slate and maximised profits along the industrial chain. We optimised crude oil allocation and cut procurement costs. We insisted on the strategy of shifting from oil to chemicals, lowered refined oil products yield, and increased production of readily marketable products like gasoline and light chemical feedstock. We increased production of high value-added products and specialty products, built 6 sets of hydrogen purification units, developed high-end needle-shaped coke products and domestic market share of low-sulphur bunker fuel ranked the first. We expedited advanced capacity building and pushed ahead with restructuring projects. In the first three quarters of 2021, the Company processed 191 million tonnes of crude oil, up by 9.3% year-on-year, and produced 109 million tonnes of refined oil products, up by 3.2% year-on-year. The refining segment realised EBIT of RMB 54.268 billion in the first three quarters.

Marketing and Distribution: The Company leveraged our advantages of integration of refining and marketing to expand markets and adopted targeted marketing strategy, resulting in an elevation of scale. We consolidated our resources of customers and marketing throughout the country, and continuously improved the quality of our services. We optimised the network layout to reach end users, accelerated the construction of integrated energy service stations offering petrol, gas, hydrogen, power, and non-fuel services, and put our first carbon-neutral station and BIPV (building integrated photo-voltaic) station into operation. In the first three quarters, total sales volume of refined oil products was 166.59 million tonnes, among which total domestic sales volume of refined oil products was 127.88 million tonnes, up by 3.8% year-on-year. The Company strengthened the development and marketing of company-owned brands, actively explored emerging business models such as car services, fast food, and advertising, and speed up the development of non-fuel businesses. The marketing and distribution segment realised EBIT of RMB 24.316 billion in the first three quarters.

Chemicals: By adhering to "following the market and centering on profits", the Company sped up the advanced capacity building and structural adjustment. We fine-tuned chemical feedstock to reduce costs; we adjusted the structure of the facilities and optimised maintenance schedule to raise the utilisation of profitable facilities; we enhanced integration of production, marketing and research and continuously increased the ratio of high value-added products, raising the ratio of synthetic resin, synthetic rubber, and synthetic fibre by 1.4, 3.7 and 1.6 percentage points respectively year-on-year. In the first three quarters, ethylene production reached 9.75 million tonnes, up by 10.2% year-on-year. Meanwhile, we scored achievements in key clients management, scaled up profit generation through exports, and launched self-marketing products on e-commerce. The total sales volume of chemical products for the first three quarters was 60.77 million tonnes. The chemicals segment realised EBIT of RMB 23.064 billion in the first three quarters.

Note : Including 100% production of domestic joint ventures.

Capital expenditures:

Focusing on investment quality and profitability, the Company optimised its investment management system, with total capital expenditures of RMB89.7 billion in the first three quarters of 2021. The capital expenditure for exploration and production segment was RMB38.6 billion, mainly for the capacity building of Shunbei oilfield, Weirong, Fuling, and Western Sichuan natural gas projects, and the construction of storage and transportation facilities for phase II of Tianjin LNG project, etc. The capital expenditure for the refining segment was RMB10.6 billion, mainly for the refining structural upgrading projects in Zhenhai and Anqing, and construction of hydrogen purification project, etc. The capital expenditure for the marketing and distribution segment was RMB9.9 billion, mainly for building oil (gas) stations, integrated energy service stations offering petrol, gas, hydrogen, power, and services and logistics facilities, etc. The capital expenditure for the chemicals segment was RMB29.7 billion, mainly for Zhenhai, Sino-Korea, Hainan and Tianjin ethylene projects, the overseas AGCC project, Jiujiang Aromatics project, Yizheng PTA project, etc. The capital expenditure for corporate and others was RMB900 million, mainly for R&D facilities and information technology projects, etc.

This quarterly results announcement is published in both Chinese and English languages. In the event of any inconsistency between the two versions, the Chinese version shall prevail.

4 Appendix

4.1 Quarterly financial statements prepared under China Accounting Standards for Business Enterprises (CASs)

Consolidated Balance Sheet

As at 30 September 2021

Prepared by: China Petroleum & Chemical Corporation

Units: million Currency:  RMB Type: unaudited

Consolidated Balance Sheet (Continued)

                   Ma Yongsheng                  Shou Donghua

                   Director, President               Chief Financial Officer

Balance Sheet

As at 30 September 2021

Prepared by: China Petroleum & Chemical Corporation

Units: million Currency: RMB Type: unaudited

Company Balance Sheet (Continued)

                   Ma Yongsheng                  Shou Donghua

                   Director, President               Chief Financial Officer

Consolidated Income Statement

For the nine-month period ended 30 September 2021

Prepared by: China Petroleum & Chemical Corporation

Units: million Currency: RMB Type: unaudited

                   Ma Yongsheng                  Shou Donghua

                   Director, President               Chief Financial Officer