China Petroleum & Chemical Corporation

1H 2004 Results Announcement

30 August 2004Hong Kong

230 August 2004

This presentation and the presentation materials distributed herewith include forwar

d-looking statements. All statements, other than statements of historical facts, that addres

s 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 busine

ss 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

proven reserves, market shares, competition, environmental risks, changes in legal, finan

cial and regulatory frameworks, international economic and financial market conditions, p

olitical risks, project delay, project approval, cost estimates and other risks and factors be

yond our control. In addition, Sinopec Corp. makes the forward-looking statements referre

d to herein as of today and undertakes no obligation to update these statements.

Disclaimer

330 August 2004

Agenda

• Performance Highlights

• 1H 2004 Performance Review

• 2H 2004 Business Prospects

Performance Highlights

530 August 2004

27,339

18,569

4122,3242335,850

4,047

1,620222

Profit Kept Growing - Asset Structure Further Optimized

EBIT Analysis

1H2003 1H2004

RefiningProfit Growth

ChemicalsProfit Growth

Impairment Losses

on Fixed Assets

E&P Profit Growth

MarketingProfit Growth

EmployeeReductionExpenses

Corporate& Others

Profit growth in business segments = EBIT of 1H2004 excluding impairment losses of fixed assets and employee reduction expenses – EBIT of 1H2003Note: Data shown in this presentation includes that of Maoming Ethylene, Xi’an Petrochemical and Tahe Petrochemical which were acquired in 2H 2003.

Unit: RMB million

630 August 2004

Profit Kept Growing - Leveraging Integrated Business

EBIT Contribution by Segment

(RMB million ）

Unit: RMB million

Turnover and Other Operating Revenues

EBITDA

EPS (RMB) 50.56

34.14

33.62

Net Profit

0.19

275,442

42,112

16,151

0.12

205,335

31,516

10,727 50.56

-5000

0

5000

10000

15000

20000

25000

30000

1H2002 1H2003 1H2004

E & P RefiningChemical MarketingCorporate & Others

1H 04 1H 03 Change (%)

EBIT 47.2327,339 18,569

730 August 2004

Financial Highlights

Short-term Debt

Long-term Debt

Shareholders’ Fund

Unit: RMB million

Cash flow from Operating Activities

Cash flow from Investing Activities

Cash flow from Financing Activities

14,273

19,291

-30,659

10,421

Debt / Total Capital

EBITDA Interest Coverage

29,079

43,660

167,899

24.08%

17.2x

37,340

49,977

178,409

26.56%

21.2x

28.41

14.47

6.26

248bps

4.0x

Unit: RMB million

Cash & Cash Equivalent - Ending Balance

1H 04 FY 03 Change (%)

1H 04

830 August 2004

Returns and Dividend

7.08%

9.04%

6.17%

0%

2%

4%

6%

8%

10%

2002 2003 1H 2004

0.040.03

0.02

0.06

0.06

0.00

0.02

0.04

0.06

0.08

0.10

2002 2003 2004

Half-year Dividend Year-end Dividend

ROCE Improvement DividendRMB Yuan

930 August 2004

As a Result of Good Market Environment

Oil prices remained high and volatile

Refining margin improved and chemical businesses entered into upturn cycle

Macro economic control measures by the Chinese government have achieved good results; Chinese economy has maintained stable growth momentum

Domestic demand for petroleum and chemical products increased steadily

– Refined oil products consumption increased by 24.6 ％ yoy

– Chemical products (ethylene equivalent) consumption increased by 15.59 ％ yoy

Good market environment for Company’s earnings growth

1030 August 2004

As a Result of Continuous Delivery of Corporate Strategies

Operation volumes expanded as demand grew

– E & P: improved reserve profile and increased production capacity, maintained modest growth in crude and gas production

– Refining and Chemicals: increased capacity and efficiency, improved product quality

– Marketing: enhanced marketing network and improved marketing structure

Continued to rationalize asset structure

Reduced cost and headcounts to improve efficiency

Improved corporate governance

1130 August 2004

Visions

Corporate reform governs business activities to achieve effective growth

Continue to pursue a strategy founded on “resource and market expansion; cost reduction and prudent investment”

Continue to rationalize assets portfolio

Enhance internal control procedures

　

Realize Sustainable Effective Growth

1H 2004 Performance Review

1330 August 2004

E & P – Oil and Gas Production Continued to Grow

Crude Oil Production (mm bbls)

Natural Gas Production (bcf)

Period-end Proved Oil & Gas Reserves (mm boe)

Lifting Cost (USD/bbl)

Newly Added Proved Oil Reserves (mm bbls)

135.85

100.06

3,855

6.28

124.40

Newly Added Proved Gas Reserves (bcf) 872.74

133.72

90.71

3,887

6.26

115.80

276.80

1.59

10.31

-0.82

0.32

7.43

215.30

1H 04 1H 03 Change (%)

1430 August 2004

E&P – Segment Performance

Crude Oil and Natural GasRealized Price

RMB million

EBIT of E&P Segment

10,298 10,520

0

2,000

4,000

6,000

8,000

10,000

12,000

1H 2003 1H 2004

Crude OilUSD/bbl

Natural GasUSD/mcf

29.6228.9

2.05 2.08

0

4

8

12

16

20

24

28

32

1H 2003 1H 2004

0

1

2

3

Crude Oil Natural Gas

1530 August 2004

Refining – Increased Throughput to Meet Market Demand

Crude Oil Processed (mm tonnes) 64.98

Refining Utilization Rate (%)

Chemical Feedstock Production (mm tonnes)

Refining Yield (%)

Gasoline Production (mm tonnes)

Diesel Production (mm tonnes)

Kerosene Production (mm tonnes)

Light Stream Yield (%)

- Sour Crude Oil Processed (mm tonnes)

91.57

8.92

93.10

11.42

24.72

3.03

74.06

13.39

54.70

83.30

8.23

93.07

10.25

19.89

2.45

73.97

10.64

18.79

827 bps

8.38

3 bps

11.41

24.28

23.67

9 bps

25.85

1H 04 1H 03 Change (%)

1630 August 2004

Refining — Segment Performance

EBIT of Refining Segment

RMB million

Refining Margin / Cash Operating Cost

4.073.96

1.982.02

0.00

1.00

2.00

3.00

4.00

5.00

1H2003 1H2004

1.70

1.80

1.90

2.00

2.10

2.20

Refining Margin Cash Operating Cost

4,251

2,644

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

1H 2003 1H 2004

USD/bbl

1730 August 2004

Marketing — Optimized Marketing Network, Expanded Retail and Distribution

Franchised Gas Stations

Domestic Sales of Refined OilProducts (mm tonnes)

Incl. Retail (mm tonnes)

Distribution (mm tonnes)

Wholesale (mm tonnes)

Owned or Operated Gas Stations

Annual Average Throughput Per Station (tonnes/station)

5,297

10.49

24,128

1,612

1H 04

Marketing Cash Operating Cost (RMB/tonne) 163.2

5,376

10.81

25,306

1,986

1.49

3.05

4.88

23.20

153.4 -6.00

35.24

17.83

6.92

45.49

25.12

9.56

29.09

40.89

38.15

1H 03 Change (%)

1830 August 2004

Marketing – Segment Performance

EBIT of Marketing Segment

5,461

8,569

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

1H 2003 1H 2004

RON #90 Gasoline Guidance Price

2000

3000

4000

Jan Mar May Jul Sep Nov

2002 2003 2004

RMB/Tonne

#0 Diesel Guidance Price

2000

3000

4000

Jan Mar May Jul Sep Nov

2002 2003 2004

RMB/Tonne

RMB million

1930 August 2004

Chemicals — Fully Loaded to Meet Market Demand

Unit: 1,000 tonnes

Ethylene

Synthetic Resins

Synthetic Rubbers

Monomers & Polymers for Synthetic Fibers

Synthetic Fibers

Ratio of Differential Fibers

Ratio of Performance Compound

Ethylene Cash Operating Costs (USD/tonne)

1,863

2,806

297

2,443

641

45.11%

57.11%

143.67

1,724

2,529

261

2,133

598

40.26%

55.43%

147.46

8.06

10.95

13.79

14.53

7.19

485 bps

168 bps

-2.57

1H 04 1H 03 Change (%)

2030 August 2004

Chemicals – Segment Performance

EBIT of Chemicals Segment

4,924

858

0

1,000

2,000

3,000

4,000

5,000

6,000

1H 2003 1H 2004

RMB million

Chemicals Price Spreads (1990 - Jul. 2004)

USD/tonne

0

200

400

600

800

1000

1200

90-1

-1

91-1

-1

92-1

-1

93-1

-1

94-1

-1

95-1

-1

96-1

-1

97-1

-1

98-1

-1

99-1

-1

00-1

-1

01-1

-1

02-1

-1

03-1

-1

04-1

-1

LDPE-Naphtha PP-Naphtha

2130 August 2004

Cost Reduction

Cost Reduction in 1H 2004 was RMB1.43 bn

• Optimized resource allocation and logistics to reduce transportation costs

• Further increased sour crude throughput to reduce crude oil procurement costs

• Optimized operation of facilities to reduce energy and material consumption

RMB million

0

500

1000

1500

2000

2500

3000

2004 Plan 1H 2004 Actual

E & P RefiningChemicals Marketing

In addition, headcount reduction in 1H 2004 was about 8,000

2230 August 2004

Capital Expenditure

1H 2004 Capex: RMB25.82 bn

• E & P –10.07 bn, improved reserve profile and increased production capacity of oil and gas

• Refining – 4.10 bn, Ningbo-Shanghai-Nanjing pipeline was put into operation, and a number of revamping projects are progressing smoothly

• Chemicals – 2.94 bn, revamping of Qilu ethylene expected to complete in 2H 2004

• Marketing – 8.61 bn, smooth progress in south-west pipeline, good results from construction and acquisition of petrol stations

1H 2004 Capex Breakdown

39.01%

15.89%11.38%

33.35%

0.36%

E & P RefiningChemicals MarketingCorporate & Others

In addition RMB3.37 bn invested in Secco and other JV projects

2H 2004 Business Prospects

2430 August 2004

Market Environment in 2H 2004

Global economy expected to keep its recovery momentum

Global oil demand continue to grow

Refining margin is to remain at relatively good level, and

chemical businesses continue upturn cycle

Chinese economic growth expected to maintain relative

fast pace, resulting in increasing demand for petroleum

and chemical products

2530 August 2004

E & P

Pursue expand resource strategy and speed up exploration and development

Accelerate construction of production capacities

Enhance production management to reduce cost

2H 2004 Production Projection

Crude Oil 19.466 mm tonnes

Natural Gas 2.966 bn cubic meters

2630 August 2004

Optimize resources and reduce crude oil procurement cost

Optimize crude oil transportation to reduce cost

Adjust product mix according to market demand

Implement reform of marketing system for products other than gasoline, diesel and jet fuel

Refining

2H 2004 Production Projection

Refining Throughput 67.46 mm tonnes

2730 August 2004

Accelerate expansion of marketing network for refined oil products

Promote reform of marketing system for refined oil products

Improve quality of service and increase sales volume

Marketing

2H 2004 Production Projection

Total domestic sales volume 45.50 mm tonnes

Incl.: Retail Volume 25.37 mm tonnes

Direct Sales Volume 9.50 mm tonnes

2830 August 2004

Chemicals

2H 2004 Production Projection

Ethylene 1.70 mm tonnes

Maintain a stable full-load operation at major facilities and ensure smooth progress of revamping projects

Optimize allocation of raw material and resources

Increase production of high value-added products

Continue reform of marketing system for chemical products

2930 August 2004

0

10

20

30

40

50

60

Original Plan After Adjustment

E & P RefiningChemicals MarketingCorporate & Others

Seize Market Opportunities to Accelerate Development

E&P-Added 1.24 bn to construct natural gas and oil pipelines

Refining – Added RMB1.68 bn to speed up revamping of a number of projects

Chemicals – Added RMB1.15 bn to revamp petrochemical facilities

Marketing – Added RMB1.95 bn to acquire, construct and revamp petrol stations and terminals, speed up construction of south-west pipeline

2004 Capex Plan Adjustment

RMB billion

2004 Capex

50.256.3

3030 August 2004

Adhere to key operating guidance featuring “reform, rationalization, innovation and development”

Seize market opportunities and adopt flexible operating tactics to increase production volumes

Conclusion

Maintain Sound Operating Results

3130 August 2004

http://www.sinopec.com.cn

For Further Information

Investor Relations

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