China Petroleum & Chemical Corporation
2013 Annual Results Announcement
March 24, 2014
Hong Kong
2014-3-24 2
Cautionary Statement
This presentation and the presentation materials distributed herein 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, reserves and other 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 proven 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.
2014-3-24 3
Agenda
2013 Performance Highlights
2013 Operational Results by Segments
2014 Operational Plan
Fuling Shale Gas Discovery and Restructuring
of Marketing Segment
2013 Performance Highlights
2014-3-24 5
Market Environment in 2013
Slow recovery of global economy vs. steady growth of Chinese economy with GDP up
7.7% yoy
Strong Domestic gasoline demand albeit weak diesel demand. Domestic consumption of
refined oil products grew by 5.1% yoy
Domestic consumption of ethylene equivalent grew by 6.3% yoy; chemical margin
squeezed due to competition from low-cost imports and addition of domestic capacity
Crude Oil price fluctuated within a wide range at high level
China‟s energy prices became more market-driven due to:
Further enhancement of refined oil products pricing mechanism
Premium pricing for better quality product policy announced
Natural gas price reform announced to gradually pegging to alternative energy price
2014-3-24 6
Highlights
E&P
Refining
Marketing
Chemicals
Breakthrough in shale gas exploration
Domestic crude oil reserve 100% replaced
Steady growth in oil and gas production
Completion of overseas assets acquisition
Turnaround from loss making
Completed gasoline upgrading ahead of schedule
Optimized oil products sales and increased retail
volume
Robust growth of non-fuel business
Announced proposal to introduce non-state capital
Optimized feedstock mix to reduce cost
Optimized product mix to increase high value-added
products ratio
Financial
Management
Completed low cost refinancing in overseas
market to reduce financial cost
2014-3-24 7
2,505.7
2,786.0 2,880.3
2011 2012 2013
Revenue
Profitability
RMB billion
73.2
63.9 66.1
2011 2012 2013
Net Profit
RMB billion
2014-3-24 8
Financial Position
472.3 510.9
568.8
2011 2012 2013
RMB billion
Shareholder‟s Equity
150.6 142.4 151.9
2011 2012 2013
RMB billion
Net Cash Generated from
Operating Activities
56.0% 53.3% 52.5% 51.7% 52.8% 52.9% 53.4% 54.6% 54.5% 54.6% 54.7% 55.7% 56.4% 55.0%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Total liability to total asset ratio
2014-3-24 9
26,01126,615
27,976
2011 2012 2013E
Cash dividend
35.5%
40.8% 42.1%
Payout Ratio
4.68% 4.65%
4.82%
2011 2012 2013
Focus on Shareholder Return
RMB million
Total cash dividend and
payout ratio
Dividend yield*
Note: * Based on the average H-share price of the year;
Final dividend of RMB 0.15 per share, plus the interim dividend of RMB 0.09 per share,
full year dividend amounts to RMB 0.24 per share
Full year dividend payout ratio was 42.1% with a dividend yield of 4.82%
2014-3-24 10
130.2
158.7
181.7
168.6
2011 2012 2013E 2013AE&P Refining
Marketing Chemicals
Corporate and others
Capital Expenditure
E&P: RMB 88.8 billion
Oil and gas development, pipeline
construction and unconventional oil and gas
development
Refining: RMB 26.1 billion
Refinery expansion and quality upgrading
projects
Marketing: RMB 29.5 billion
Construction of service stations and
logistics networks
Chemicals: RMB 19.2 billion
Key projects and optimization of feedstock
Corporate and others: RMB 5.1 billion
R&D facilities and IT system
RMB billion
Disciplined capex focusing on quality and efficiency of investment, the actual capex in
2013 was lowered than budget
With the acquisition of Taihu, Mansarovar Energy and CIR, total capex for the year
amount to RMB 185.1 billion
2014-3-24 11
Research and Development
Actively implemented an innovation-driven development strategy, consistently strengthened
technology research with total R&D expenses of RMB 6.34 billion in 2013
Achieved breakthrough in shale gas technology in Fuling
Successful commissioning of countercurrent moving bed continuous reforming
facility and the application of liquid phase recycling diesel hydrogenation technology
Commercialized the loop reactor process for Polypropylene production and
technology for rare-earth isoprene rubber
Successful trial of self-developed bio jet fuel in commercial flights
4,442 patent application at home and abroad, of which 2,388 were granted
No. of granted domestic patents ranked No.2 among domestic enterprises
3,732 3,8934,442
2011 2012 2013
No. patent application
1,290 1,451
2,388
2011 2012 2013
No. of patents granted
2014-3-24 12
“11.22” Accident – Significantly Enhanced
Safety Awareness
November 22nd has been designated as the Company‟s “Safety Awareness Day”
Adhering to the fundamental principle that development shall not be achieved at the
cost of human life, a comprehensive accountability system has been strictly
implemented to ensure safe operation at all production facilities
Risk management awareness have been improved to promote production safety across
all production process
Conduct comprehensive safety checks
Revised safety production emergency response plan
2014-3-24 1313
Sustainable Development, Energy
Conservation and Emission Reduction
Actively advocated green and low carbon development
Proposed and signed the “Proposal to Address Climate Change” with 60 other Chinese
enterprises
Adhered to a modern industrialization path to promote the construction of an ecological
civilization and a “beautiful China”
Launched the “Clean Water, Blue Sky” initiative with total investment of RMB 1.78 billion
Actively participated in carbon trading pilot program, and promoted contract-based energy
management
Strengthened efforts in energy conservation and emission reduction, with continued
improvement in key indicators
2013 Operational Results
by Segments
2014-3-24 15
Upstream - Domestic Crude Reserve 100%
Replaced
2011 2012 201313-12
Change%
Oil and gas production (mmboe) 407.91 427.95 442.84 3.48
Crude oil production (mmbbls) 321.73 328.28 332.54 1.30
China 303.37 306.60 310.84 1.38
Overseas 18.36 21.68 21.70 0.09
Natural gas production (bcf) 517.07 598.01 660.18 10.40
Lifting cost (USD/boe) 16.08 17.51 18.18 3.8
As of Dec.
31, 2011
As of Dec.
31, 2012
As of Dec.
31, 2013
Proved reserves of oil and gas(mmboe) 3,966 3,964 4,217
Proved reserves of crude oil(mmbbls) 2,848 2,843 3,130
China 2,769 2,771 2,773
Proved reserves of natural gas(bcf) 6,709 6,730 6,520
Note: 1. 1 ton=7.1 barrels for crude oil production in China, 1 m3=35.31 c.f. for natural gas production in China, 1 ton=7.28 barrels
for overseas crude oil production;
2. Proved reserves of gas and oil include the equity reserves of newly acquired overseas assets
2014-3-24 16
71,631 70,054
54,793
2011 2012 2013
Upstream - Performance
16
RMB million
Operating Profit of E&P Segment
5.635.79
6.22
2011 2012 2013
98.70100.20
95.41
2011 2012 2013
USD/bbl
USD/'000 cubic feet
Realized Price of Crude Oil
Realized Price of Natural Gas
2014-3-24 17
Refining -
Structural Adjustment, Quality Upgrading
2011 2012 201313-12
Change %
Refinery throughput (mm tonnes) 217.37 221.31 231.95 4.81
Gasoline, diesel and kerosene production
(mm tonnes)128.00 132.96 140.40 5.59
Gasoline production(mm tonnes) 37.10 40.55 45.56 12.36
Diesel production(mm tonnes) 77.17 77.39 77.40 0.02
Kerosene production(mm tonnes) 13.73 15.01 17.43 16.15
Light chemical feedstock production
(mm tonnes)37.38 36.33 37.97 4.52
Light yield (%) 76.08 76.75 76.19 (56)bps
Refining yield (%) 95.09 95.15 94.82 (33)bps
Note:1. Refinery throughput is calculated based on 1 tonne= 7.35 bbls;
2. 100% production of joint ventures included
2014-3-24 18
-35,780
-11,444
8,599
2011 2012 20132013
Refining - Performance
18
RMB million
Operating Profit of Refining Segment
0.73
3.37
5.74
2011 2012 2013
3.153.39
3.70
2011 2012 2013
USD/bbl
USD/bbl
Refining Margin
Operating Cost
2014-3-24 19
Marketing - Expanding Retail Volume
(mm tonnes) 2011 2012 201313-12
Change %
Total sales of refined oil products 162.32 173.15 179.99 3.95
Domestic sales of refined oil products 151.16 158.99 165.42 4.04
Retail 100.24 107.85 113.73 5.45
Distribution 33.22 33.25 33.49 0.71
Wholesale 17.70 17.89 18.20 1.73
Annualized average throughput of self-
operated stations (tonnes/station)3,330 3,498 3,707 5.97
As of Dec.
31, 2011
As of Dec.
31, 2012
As of Dec.
31, 2013
Total number of Sinopec-branded service stations 30,121 30,836 30,536
Company-operated stations 30,106 30,823 30,523
2014-3-24 20
44,69642,652
35,143
2011 2012 2013
Marketing - Performance
RMB million
Operating Profit of Marketing Segment
8,260
11,000
13,350
2011 2012 2013
销售板块经营收益Revenue from Non-fuel Business
RMB million
2014-3-24 21
Chemicals-
Optimized feedstock & Products Mix
‟000 tonnes 2011 2012 201313-12
Change %
Ethylene 9,894 9,452 9,980 5.58
Synthetic resins 13,652 13,343 13,726 2.87
Synthetic rubbers 990 936 960 2.59
Monomers & polymers for synthetic fibers 9,380 8,950 9,227 3.10
Synthetic fibers 1,388 1,339 1,392 3.99
Note: 100% production of joint ventures included
2014-3-24 22
26,732
1,178 868
2011 2012 2013
22
Chemicals - Performance
RMB million
Operating Profit of Chemicals Segment
Source: Sinopec
0
50
100
150
200
250
300
Index Difference CPPI Naphtha Price Index
Chemical Products Price Index
2014 Operational Plan
2014-3-24 24
2014 Market Outlook
Global economy is expected to show slow recovery
China‟s economic growth will remain stable as China continues to implement reforms
Global supply and demand of crude will be relatively stable, while crude oil price is
expected to fluctuate within a small range, at high levels
Domestic demand for refined oil and chemical products is expected to maintain
steady growth
2014-3-24 25
2014 Production Estimates
Note: * 100% production of joint ventures included
165 169
2013 2014E
mm tonnes9,980 10,580
2013 2014E
333364
2013 2014E
Crude Oil Production
660706
2013 2014E
232244
2013 2014E
Natural Gas Production
Refinery Throughput * Total Domestic Sales of
Refined Oil Products
Ethylene Production *
mm bbls bcf
mm tonnes „000 tonnes
443481
2013 2014E
Oil and Gas Production
mmboe
2014-3-24 26
181.7
168.6 161.6
2013E 2013A* 2014E
E&P Refining
Marketing Chemicals
Corporate & others
2014 Capex Plan
RMB billion E&P: RMB 87.9 billion
Pilot projects of shale gas and coal-bed
methane; oil and gas capacity construction, LNG
and natural gas pipeline construction, and
overseas projects
Refining: RMB 25.5 billion
Upgrading and revamping of refining facilities
Marketing: RMB 24.1 billion
Construction and revamping of service stations
and oil product pipelines, optimization of storage
location
Chemicals: RMB 17.6 billion
Completion of propylene oxide project in
Jinling, acrylonitrile project in Shandong and
Ningdong coal to chemical project etc.
Corporate and others: RMB 6.5 billion
RMB 9.1 billion for “Clean Water, Blue Sky” scheme
included in the above capex plan
More disciplined capex focusing on returns
* Acquisition capex not included
Fuling Shale Gas Discovery and
Restructuring of Marketing Segment
2014-3-24 28
Fuling Shale Gas – Significant Breakthrough
0
10
20
30
9/30 10/10 10/20 10/30 11/9 11/19 11/29 12/9 12/19 12/29 1/8 1/18 1/28 2/7 2/17 2/27 3/9
井口
压力
(MPa)
日期
0
150000
300000
450000
气产
量(m3)
0
10
20
30
9/30 10/10 10/20 10/30 11/9 11/19 11/29 12/9 12/19 12/29 1/8 1/18 1/28 2/7 2/17 2/27 3/9
井口
压力
(MPa)
日期
0
150000
300000
450000
气产
量(m3)
10
15
20
25
30
11/28 12/28 1/28 2/28 3/31 4/30 5/31 6/30 7/31 8/31 9/30 10/31 11/30 12/31 1/31 2/28井
口压
力(MPa)
日期
套压
0
50000
100000
150000
200000
气产
量(m3)
10
15
20
25
30
11/28 12/28 1/28 2/28 3/31 4/30 5/31 6/30 7/31 8/31 9/30 10/31 11/30 12/31 1/31 2/28
井口
压力
(MPa)
日期
套压
0
50000
100000
150000
200000
气产
量(m3)
Date
Date
Well Jiaoye 1HF: Pilot Production Curve
Well Jiaoye 6-2HF: Pilot Production Curve
Ga
s P
rod
uc
tio
n
(m3)
Ga
s P
rod
uc
tio
n (
m3)
The first large scale and commercialized
shale gas field in China
Favourable area(depth less than 4,500m) is
around 4000 km2 with 2.1 tcm gas in place
Good quality shale formation - big thickness
and high richness
600 million m3 capacity already built
Completed 21 wells in pilot area
High and stable single well production
Formed unique evaluation criteria system
Resource evaluation system
Engineering system
Frac-equipment R&D and manufacturing
2014-3-24 29
Fuling Shale Gas - Development Plan
Overall deployment and step by step development
10 billion m3 production capacity target by 2017
5 billion m3 production capacity target in Phase 1 by
2015
1.8 billion m3 production capacity target in the
North Block of Phase 1 by 2014
The third phase development plan will set out end of 2014
Fuling
Northern Block
Central Block
Southern Block
Pilot Well Area(2013)
Phase I Project Blueprint, Jiaoshiba
Area, Fuling Shale Gas Field
Map of Sinopec‟s shale gas exploration area
in southeast Sichuan
2014-3-24 30
Restructuring of Marketing Business –
Unlock the Value
The Company owns the most extensive oil products distribution network in China
More than 30,000 service stations nationwide
Around 23,000 convenience stores
80 million members
Serve for 20 million consumers every day
Introduce non-state capital to unlock value
Introduce a modern concept on corporate governance structure and management
Promote transformation and upgrading of the Company‟s traditional business
Bring in complimentary expertise, new market opportunities and value-added business.
Image
Logistics
Retail
Service
Network
Financial
2014-3-24 31
Roadmap
Innovative
developmentIntroduce
strategic
investors
Establishment
of limited
company
Auditing
and
evaluation
Proposal
Project
kick-off
On 19 February 2014
On 31 March 2014
2014-3-24 32
Q&A
http://www.sinopec.com
Investor Relations
Beijing: Tel: (8610) 59960028 Fax: (8610) 59960386
Email: [email protected]
Hong Kong: Tel: (852) 28242638 Fax: (852) 28243669
Email: [email protected]
New York: Tel: (212) 759 5085 Fax: (212) 759 6882
Email: [email protected]