Company Announcements

Important notice

l 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 the authenticity, accuracy and completeness of the information contained in this report and there are no false representations, misleading statements or material omissions and severally and jointly accept full responsibility.

l The third quarterly report for 2022 was approved at the 13^th meeting of the 8^th Session of the Board of Directors of Sinopec Corp. All directors attended this meeting.

l Mr. Ma Yongsheng, Chairman, Mr. Yu Baocai, President, Ms. Shou Donghua, Chief Financial Officer and Head of the Financial Department of Sinopec Corp. warrant the authenticity, accuracy and completeness of the financial statements contained in this quarterly report.

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

1. Principal financial data

1.1 Principal financial data and indicators

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

Note: The Company has completed the purchase of non-equity assets and liabilities of Sinopec Group Asset Management Co., Ltd. and Sinopec Beijing Yanshan Petrochemical Co., Ltd. on 1 December 2021. Sinopec Yizheng Chemical Fibre Company Limited, a subsidiary of Sinopec Corp., has completed the purchase of non-equity assets and liabilities of Sinopec Group Asset Management Co., Ltd. on 1 December 2021. The transactions described above have been accounted as business combination under common control, thus, the Company retroactively adjusted the relevant financial data.

1.1.2 Extraordinary items

1.1.3 Principal financial data and indicators prepared in accordance with International Financial Reporting Standards (IFRS)

Note: The Company has completed the purchase of non-equity assets and liabilities of Sinopec Group Asset Management Co., Ltd. and Sinopec Beijing Yanshan Petrochemical Co., Ltd. on 1 December 2021. Sinopec Yizheng Chemical Fibre Company Limited, a subsidiary of Sinopec Corp., has completed the purchase of non-equity assets and liabilities of Sinopec Group Asset Management Co., Ltd. on 1 December 2021. The transactions described above have been accounted as business combination under common control, thus, the Company retroactively adjusted the relevant financial data.

1.2 Significant changes in major items contained in the consolidated financial statements prepared in accordance with CASs.

2. Shareholders information

Total 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 767,916,000 H shares, accounting for 0.6343% of the total issued share capital of Sinopec Corp. Those shareholdings were included in the total number of the shares held by HKSCC Nominees Limited.

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

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 2022, the world economic growth slowed down. China effectively coordinated pandemic prevention and control with economic and social development and the overall economic operations recovered in an upward trend in the third quarter with the GDP growth of 3.9% year-on-year. The international crude oil prices rose sharply and fluctuated in the first half and dropped in the third quarter. The average spot price of Platts Brent was USD102.5 per barrel, up by 50.8% year-on-year. Domestic demand for natural gas kept stable. Based on the statistics of the Company, domestic demand for refined oil products shrank for the first half of the year and recovered with an increase of 1.5% year-on-year in the third quarter. The demand for major chemical products was weak due to the high crude oil price and the pandemic, with the ethylene equivalent consumption decreased by 1.0% year-on-year.

Confronted with severe and complex environment of production and operation, the Company gave full play to its integration advantages, actively responded to market changes, carried out in-depth optimization of the whole industrial chain, enhanced production and marketing coordination and achieved high-quality results. In accordance with CASs, net profit attributable to equity shareholders of the Company was RMB 56.660 billion, down by 5.6% year-on-year. In accordance with IFRS, net profit attributable to equity shareholders of the Company was RMB 57.284 billion, down by 5.9% year-on-year.

Exploration and Production: The Company seized the favourable opportunity of high oil prices, intensified efforts in exploration and development, consolidated the foundation of resources, improved operational performance, and realised growth in production and profit. In terms of exploration, we strengthened risk exploration and trap pre-exploration in new regions and areas, and achieved a number of oil and gas discoveries, including breakthroughs in Shunbei oil and gas fields and Tarim Basin, shale oilfield in Bohai Bay basin and Subei basin, deep exploration of natural gas in Sichuan basin. In terms of development, we accelerated capacity building of major oilfields, such as Shunbei, Tahe and offshore blocks, strengthened efficiency adjustment and fine-tuned development of mature oil fields. We also actively promoted the capacity building of key natural gas blocks in Shunbei and Sichuan basin, and enhanced optimization and profitability improvement of the whole natural gas business chain. In the first three quarters of 2022, the Company's production of oil and gas reached 363.18 million barrels of oil equivalent, up by 2.3% year-on-year, with crude oil production reaching 210.82 million barrels, up by 1.0% year-on-year and natural gas production reaching 913.8 billion cubic feet, up by 4.1% year-on-year. The exploration and production segment realised earnings before interest and tax (EBIT) of RMB 46.245 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 = 7.05 barrels. For production of natural gas, 1 cubic meter = 35.31 cubic feet.

Refining: The Company actively responded to challenges brought by high crude oil price and the pandemic, insisted on optimization and integration of production and marketing, leveraged the adaptability of facilities and maintained stable operation. We flexibly adjusted the utilization rate, product slate and export pace closely in line with market and reduced the inventory scale. We optimized the crude oil procurement and resources allocation to reduce procurement costs. We continuously promoted to increase the yield of chemical feedstock and refining specialities, accelerated construction of advanced capacity, promoted structural adjustment projects in an orderly manner and expedited the hydrogen supply projects. In the first three quarters of 2022, the Company processed 180 million tonnes crude oil, down by 5.6% year-on-year, yielding 103 million tonnes of refined oil products, among which diesel output increased by 4.7% year-on-year. The refining segment realised EBIT of RMB 20.645 billion in the first three quarters. 

Note : Including 100% production of domestic joint ventures.

Marketing and Distribution: Facing the unfavourable situation of sporadic COVID-19 outbreaks in different regions, the Company strengthened the integration of production and marketing, scientifically adjusted business strategy and optimized the resources allocation. Especially, we seized the favorable opportunity of the gradual recovery of demand and continuous standardization of market orderliness in the third quarter and spared no effort to expand sales and increase profitability. We actively expanded low-sulphur bunker fuel market and further consolidated our market position. We expanded business scope, promoted branding building and improved the quality and profitability of non-fuel business. Efforts were made to accelerate sales network development, digitisation and transformation to an integrated energy service provider of petrol, gas, hydrogen, power and services. In the first three quarters, domestic sales volume of refined oil products was 121.99 million tonnes, among which the sales volume for the third quarter was 43.53 million tonnes, up by 16.4% quarter-on-quarter. The marketing and distribution segment realised EBIT of RMB 23.154 billion in the first three quarters.

Chemicals: Facing difficulty situation of high cost, high inventory and low margin in domestic chemical industrial chain, the Company closely responded to market change, dynamically optimized the structure of feedstocks and products, optimized utilization rate according to profitability, maintained high utilization rate in profitable facilities, increased the production of EVA and BR and increased production and profits in coal chemical business. We comprehensively promoted the construction of capacity in Zhenhai, Tianjin Nangang, Hainan and Jiujiang. In the first three quarters, ethylene production reached 10 million tonnes, up by 2.6% year-on-year. We made full efforts to ensure sufficient supply to our strategic customers, actively increased export, and vigorously expanded high-end markets. In the first three quarters, the total sales volume of chemical products was 60.40 million tonnes, with a slight decrease year-on-year. Due to the sharp decline of gross margin of chemical products, the chemicals segment realised EBIT of RMB -1.061 billion in the first three quarters.

Note : Including 100% production of domestic joint ventures.

Capital expenditures:

Capital expenditures in the first three quarters was RMB 104.0 billion, of which RMB 51.6 billion was spent in E&P segment, mainly for the crude oil capacity building in Shunbei and Tahe, natural gas capacity building in Chuanxi and Dongsheng, and the construction of storage and transportation facilities such as the relocation of Dongying crude oil depot and Longkou LNG projects; RMB 13.6 billion was spent in refining segment, mainly for Anqing and Yangzi refining upgrading projects and phase two of Zhenhai refining and chemical projects; RMB 6.5 billion was spent in marketing and distribution segment, mainly for the upgrading of existing stations and construction of integrated energy stations covering gasoline, gas, hydrogen, power and service, as well as logistics facilities; RMB 29.5 billion was spent in chemicals segment, mainly for Hainan and Tianjin Nangang ethylene projects, Jiujiang aromatics project, Zhenhai refining and chemical project phase II and Yizheng PTA project; RMB 2.8 billion was spent in corporate and others, mainly for construction of science and technology research and IT projects.

4. Other significant events

The progress of share repurchase

On 18 May 2022, the Annual General Meeting for 2021, the First A Shareholders Class Meeting for 2022 and the First H Shareholders Class Meeting for 2022 of Sinopec Corp. considered and approved the Resolution to Grant to the Board a Mandate to Buy Back Domestic Shares and/or Overseas-listed Foreign Shares of Sinopec Corp., and authorized the Board (or the director authorised by the Board) to buy back A Shares or H Shares not exceeding 10% of the number of A Shares or H Shares of the Company in issue.

On 26 August 2022, the twelfth meeting of the eighth session of the Board considered and approved the Plan on Repurchasing the Company's Shares by Centralized Bidding Transactions. For details, please refer to the Company's announcements disclosed on the website of the Shanghai Stock Exchange on 29 August 2022 and 20 September 2022.

On 21 September 2022, the Company implemented the repurchase of A shares and H shares. As of 30 September 2022, the Company has repurchased 48 million A shares, accounting for 0.04% of the Company's total issued share capital on 30 September 2022, and the total amount paid was RMB 203,905,495.60 (exclusive of transaction fees). For details, please refer to the Progress Announcement on the Repurchase of A Shares by Centralized Bidding Transactions disclosed by the Company on the website of the Shanghai Stock Exchange on 10 October 2022; the Company has repurchased 54.414 million H Shares, accounting for approximately 0.04% of the Company's total issued share capital on 30 September 2022, and the total amount paid was HK$188,781,540.60 (exclusive of transaction fees).

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.

5 Appendix

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

Consolidated Balance Sheet

As at 30 September 2022

Prepared by: China Petroleum & Chemical Corporation

Units: million Currency: RMB Type: unaudited

Consolidated Balance Sheet (Continued)

                 Ma Yongsheng         Yu Baocai           Shou Donghua

                 Chairman               President            Chief Financial Officer

                (Legal representative)

Balance Sheet

As at 30 September 2022

Prepared by: China Petroleum & Chemical Corporation

Units: million Currency: RMB Type: unaudited

Balance Sheet (Continued)

                Ma Yongsheng           Yu Baocai            Shou Donghua

                 Chairman                President             Chief Financial Officer

                (Legal representative)

Consolidated Income Statement

For the nine-month period ended 30 September 2022

Prepared by: China Petroleum & Chemical Corporation

Units: million Currency: RMB Type: unaudited

               Ma Yongsheng            Yu Baocai             Shou Donghua

                Chairman                 President              Chief Financial Officer

               (Legal representative)