China Petroleum

1
China Petroleum Chemical Corporation Results
for the Year Ended December 31, 2004
March 29, 2005 Hong Kong
2
Forward Looking Statement
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

• 2004 Performance Highlights and Achievements
• 2004 Operating Results
• 2005 Outlook

4
2004 Performance Highlights and Achievements
5
Significant Profit Growth
EBIT Analysis
RMB billion
Total EBIT 63.07
Corporate Others EBIT Growth
Asset Disposal
SeveranceCost
Impairment Losses of Fixed Assets
Total EBIT 38.88
Chemicals EBIT Growth
Refining EBIT Growth
Marketing EBIT Growth
EP EBIT Growth
EBIT Growth in Business Segments
Reduction in EBIT
2003
2004
EBIT Growth in business segments EBIT of 2004
before deducting asset disposal, impairment
losses of fixed assets and severance cost EBIT
of 2003.
Note Unless otherwise specified, all the
financial data in the presentation are pro-forma
data in accordance with IFRS.
6
Solid Financial Performance
2004
2003
Change
Debt / Total Capital and EBITDA / Interest
Coverage
EBITDA Interest Coverage (X)
Debt /Total Capital
7
Stable Growth in Dividend Payout
RMB billion
RMB cents / Share
8
Further Internal Reforms

• Further management restructuring and headcount
  reduction
• Flattened managerial hierarchies and streamlined
  management structure
• Improved efficiency through net headcount
  reduction of 11,000 in 2004
• Internal consolidation to create enterprise value
  
• Redemption of Maolian Convertible Bond
• Privatisation of Beijing Yanhua
• Specialisation reform in marketing system
• Established specialised product divisions
  including asphalt and catalyst companies
  following successful operation of acrylic fibre
  and lubricant companies

9
Restructuring and Optimizing Asset Structure

• Focus on core business through investment
  allocation
• Timely optimised and adjusted capex to strengthen
  refining and marketing business
• Asset swap to optimise asset structure
• Acquired chemical assets, catalyst assets and
  petrol stations from parent company divested
  down hole operation assets
• Disposal of under-performing assets
• Disposed of and made provisions for impairment of
  RMB5.6 billion assets in 2004 to improve asset
  quality

10
Improved Corporate Governance

• Articles of Association and other documents were
  amended to meet newly promulgated regulatory
  standards and mitigate operational risks
• Internal control system was approved by the Board
  and became effective in 2005 after one-year trial
  period
• Transparency continued to improve through fair,
  timely, and accurate disclosure
• Euro-money Best Petrochemical Company in Asia
• Institutional Investors Best IR in oil and gas
  sector and Best IR in China (incl. Hong Kong)
  in sell-side view

11
Committed to Social Responsibility and
Contribution to a Harmonious Society

• Committed to social responsibility
• Implemented HSE system initiatives
• Prepared to meet new specifications for gasoline
  and diesel quality
• Sponsored educational programs and supported
  re-building in poverty and disaster-stricken
  areas
• Promoted corporate image
• F1 Sinopec Chinese Grand Prix
• Partnership with Beijing 2008 Olympic Games
• Set up long-term incentive mechanism to motivate
  employees energy, creativity, and loyalty to the
  company

12
Vision

• Develop the Company in a practical and scientific
  approach
• Proactively and steadily deepen reform to
  accelerate asset optimization
• Generate long-term, sustainable growth for
  shareholders, employees, customers and society

13
2004 Operating Results
14
2004 Market Environment

• Continued robust economic growth in China
• Nominal domestic consumption of refined oil
  products increased by 19.0
• Nominal domestic consumption of three major
  synthetic materials increased by 11, and
  ethylene-equivalent consumption grew by 5.8
• International crude oil price fluctuated at high
  level
• Chemical business was in upward cycle

15
EP Growth in Production and Reserves
2002
2003
04/03 Change()
2004
16
EP Segment Performance
International Crude Oil Price
EBIT of EP Segment
USD/bbl
RMB million
Crude Oil and Natural Gas Realized Price
17
Refining Safe Operation at High Utilization Rate
2002
2003
04/03 Change()
2004
18
Refining Segment Performance
Refining Margin / Cash Operating Cost
Refining Segment EBIT
USD/bbl
RMB million
19
Marketing Expanded Sales Network, Retail and
Distribution
2002
2003
04/03 Change()
2004
20
Marketing Segment Performance
Marketing Segment EBIT
RON 90 Gasoline Guidance Price
RMB million
RMB/Tonne
0 Diesel Guidance Price
RMB/Tonne
RMB/Tonne
21
Chemicals Full Capacity to Meet Market Demand
2002
2003
04/03 Change()
2004
Operation data for 2003 in the above table dont
include production from Maoming ethylene. Those
for 2004 include production from Maoming
ethylene, but dont include chemical assets
acquired from Sinopec group at the end of 2004.
22
Chemicals Segment Performance
Chemicals Segment EBIT
Ethylene Cash Operating Costs
RMB million
USD/tonne
Chemicals Price Spread (1990 Feb.2005)
USD/tonne
23
Cost Reduction
(RMB million)
24
Optimized Investment Focus and Accelerated Asset
Restructuring
2004 Capex RMB64.75 bn
Capex in the Past 4 Years

• EP RMB21.234 bn to improve reserves profile,
  and increase proved reserve and production
• Refining RMB14.272 bn, newly added primary
  refining capacity of 8.3 MMt/y further improved
  conversion capacity Zhejiang-Shanghai-Nanjing
  crude oil pipeline put into operation
• Chemicals RMB11.025 bn, newly added ethylene
  capacity 270 Mt/y revamping projects of some
  chemical facilities progressed smoothly
• Marketing RMB16.678 bn, construction of refined
  oil pipeline progressed smoothly 2,075 gas
  stations added
• Corporate and others RMB1.55 bn for information
  system, etc

(RMB bn)
25
New Achievements in RD and IT Application

• New Achievements in core technology and
  proprietary technology
• 639 domestic patents and 48 foreign patents were
  granted
• Breakthrough in natural gas exploration in marine
  phase sedimentary structure in southern China
• Successfully developed a number of EP, refining
  and chemical technologies
• Scope of IT applications continue to expand
• Comprehensive EP business management system and
  Ningbo-Shanghai-Nanjing pipeline information
  system successfully launched
• Promote application of petrol IC card

26
Smooth Progress in JV Projects

• Major JV projects progressed smoothly
• Successful commissioning of Ethylene projects
  with BP in Shanghai
• Ethylene project with BASF is in test run stage
• The coal gasification project with Shell in Hunan
  is expected to be completed at the end of 2005
• Fujian integrated petrochemical project was in
  preliminary engineering stage
• Retail JVs with Shell and BP started operations

27
2005 Outlook
28
2005 Market Analysis

• Global economy is expected to experience stable
  growth
• Crude oil price is expected to fluctuate at high
  levels
• Chemical business is still in the up-cycle
• Chinese economy is expected to maintain rapid
  growth, leading to higher consumption of refined
  oil products and chemicals
• Market competition will intensify with opening of
  retail market and reduction in chemical import
  tariffs

29
2005 Production Plan
2004
05/04 Change()
2005
Operation data for 2004 include production from
chemical assets acquired from Sinopec Group at
the end of 2004. Production plan for 2005 include
production estimates for Shanghai Secco and
BASF-YPC
30
2005 Capex Plan

• E P expand high-quality resources improve
  reserves profile and increase production
• Refining priority will be given to construction
  of crude pipeline along Yangzi River and 2nd
  phase of Ningbo-Shanghai-Nanjing pipeline
  Accelerate upgrading and expansion of refineries
  along coastal areas and start construction of
  Qingdao Refinery
• Chemical focus on re-vamping and construction of
  large-scale ethylene, aromatic and PTA facilities
• Marketing further improve sales network develop
  pipelines optimize storage facilities layout
  accelerate construction of southwest refined oil
  products pipeline and install petrol IC card
  instrument

2005 Capex Plan RMB 62.0 billion
RMB billion
Pave the way for commercial operation of Shanghai
Secco and BASF-YPC and expedite the progress of
Fujian refining-chemical integrated project
31
2005 Cost Reduction Plan
Total RMB 2.5 bn
RMB million
Additional 15,000 headcount reduction is expected
this year.
32
Conclusion

• Seize opportunities to develop businesses in a
  practical and scientific approach
• Priority will be given to safe operations to
  maintain sound operational momentum and strive
  for volume growth
• Continue to deepen reforms
• Continue structure adjustment, focus on asset
  quality, efficiency and returns

Achieve sustainable and effective development
33
For Further Information
http//www.sinopec.com
Investor Inquiries Beijing Tel [phone]
Fax [phone] Email ir_at_sinopec.com.cn Hon
g Kong Tel [phone] Fax (852)
28243669 Email ir_at_sinopechk.com New York Tel
[phone] Fax [phone] Email
fangzq_at_sinopecusa.com
Media Inquires Tel [phone] Fax (8610)
64990093 Email media_at_sinopec.com.cn