August 28, 2001 Hong Kong China Petroleum & Chemical Corporation 2001 Interim Results Announcement

2 Agenda  Market Overview and Summary of Results  Review of Operations  Review of Financial Performance  2H2001 Outlook

Market Overview and Summary of Results

4  Consistent growth in Chinese Economy  Domestic consumption of refined products increased by 3.59%  Robust growth in domestic chemicals demand, Chemicals consumption(ethylene equivalent) increased by 7.2%  Relatively high crude oil price  Asian refining margins remain low  Chemicals price under pressure globally Market Overview

5 Utilization rate of refineries (%) Oil & gas production (MM boe) % 0.4 Ethylene production (10,000 MT) % Including: Retail (10,000 MT) 1H 20001H 2001Change Gross sales of refined oil (10,000 MT) 1, % 3,3673, % Crude oil processed (10,000 bbl/day) % Summary of Operations Note: Crude oil and natural gas production do not include production from National Star

6 1H 20001H 2001Change Operating Expenses134,748148, % EBITDA25,89624,2286.9% Operating Revenues 149,367164, % EBIT 14,61915,8598.5% Net Profit 7,5139, % (RMB MM) Summary of Financial Performance

Review of Operations

8 New proved crude reserves (MMbbls) Consolidated lapse rate (%) Production of crude oil (MMbbls) Production of natural gas (bcf) % 9.36% % H 20001H 2001Change E & P Note: Crude oil and natural gas production exclude production from National Star

9 Refining Crude oil processed (10,000 bbl/day) % Including: Sour crude processed (10,000 bbl/day) % Capacity utilization (%) Yield for light stream (%) Refining yield (%) Refining margins (US$/bbl) H 20001H 2001Change

10 1H 20001H 2001Change Gross sales of refined products3,3673, % (10,000 MT) Marketing – Expanding Retail Network - Retail1, % - Wholesale 1,3962, % - Distribution 548N/A Total Amount of gas stations 20,527 17,537 27,749 23, % 34.4% - Franchised 2,9904, % Retail market share in principal market66%56%10 pnt. - Owned or operated

11 Differential Fiber (10,000 MT) Performance Synthetic Resin (10,000 MT) Ethylene production % Synthetic resin % Synthetic rubber % Synthetic monomers & polymers % N/A -2% 5% -11% Synthetic fiber %-7% 10.7% 2.6% (10,000 MT) Chemicals - Responding to Market 1H 20001H 2001Change Price 

12 Cost Reduction & Efficiency Improvement Crude oil lifting cost (US$/bbl) 6.63 Refining cash operating cost (US$/bbl) 2.07 Marketing cash operating cost (RMB/ton) 166 Ethylene cash operating cost (US$/ton) * H H 2001Reduce * : Change in Ethylene cash operating cost compared with FY2000 figure Cost cutting 2001E 1H 2001 actual Chemical Marketing Total E & P Refining Million RMB

13 Capital Discipline 2001 Capex Plan Oil Field 31% Marketing 26% Chemicals 26% Refining 17% Marketing Chemicals Total E&P Refining 1H2001 Actual Capex 7,900 4,200 20,700 5,600 2,800 RMB billion (RMB MM) Others 200

14  On August 8, 2001, Sinopec commenced trading in the Shanghai Stock Exchange Size: 2,800,000,000 shares Offering Price: RMB 4.22 per share  Use of Proceeds ： Acquire National Star to strengthen upstream operations Invest in Southwest refined products pipeline and Ningbo- Shanghai-Nanjing crude oil pipeline to reduce logistics costs and expand market share Successful A Share Offering Fund raised: RMB Bn

Review of Financial Performance

16 Earnings Continue to Grow (RMB MM) 1H 20001H 2001Change EBITDA 24,22825,8966.9% EBIT 14,61915,8598.5% Net Profit 7,5139, % EPS % Revenue and other operating income 149,367164, %

17 Stable Cash Flow (RMBMM ) 1H '001H '01 Net cashflow from operating activities 6,61210,509 Change -3,897 Net cashflow from investment activities -12,286-14,6202,334 Cash & cash equivalents – net change 9,2254,2554,970 Net cashflow from financing activities 14,8998,3666,533 Cash, cash equivalents and time deposit 41,13439,959-1,175 Note: Before proceeds from A-share listing Change

18 Healthy Balance Sheet (RMB MM) 1H 20001H 2001 Total Capitalization 280,191298,006 Debt to equity ratio 32.75%35.78% Change 17,815 3 pnt. Total Assets 347,409373,78626, % Total Debt 91,777106,66214,885

19 Strength of Integration (RMB MM) Operating Profits Marketing Chemicals Total E&P Refining Corporate & others ,938 3,155 14,619 11,055 -1, H ,859 11,570 2, H2001 EBIT (RMB MM)ROCE Note: ROCE = 1H ATOI / Total Capital Employed %

2H 2001 Outlook

21  Staggering global economy while stable growth in Chinese economy  Chinese government continues to improve market order  Since May 2001, new gas stations can only be built by either Sinopec or PetroChina  The two Companies will coordinate to maintain market equilibrium, and ensure stable oil price  International crude oil price stays at relatively high level  Low refining margin in Asian market, inverted prices in Singapore from June to early August  Chemical industry still in cycle low Market Environment - Analysis & Comments

22  Increase crude oil production appropriately to take advantage of the high oil price window  Annual planned production of MM bbl of crude oil and bcf of gas (incl. National Star), 8.2% and 85.8% increase respectively.  Add RMB1.5 bn to E & P and explore replacement resources  Lower operating costs by applying new technologies E & P

E Lifting Cost2001E Reserves 2001E Crude Oil Production (MM bbl) (bcf) Acquisition of National Star 2001E Gas Production (mm boe)(US$/boe) -4.4% +51 % +8.6 % +24.2%

24  Optimize production to meet market demand, annual crude oil processing volume roughly remains 2000 level  Optimize the material flow of the crude resources, reduce the purchase cost and lower the crude inventory level.  Further reduce the material and energy consumption. Target annual refining yield at 92.3%, light yield at 71.6%, and 2H 2001 diesel/gasoline ratio at 2.13 Refining

25  Enhance network infrastructure, expand the market share  Increase retail and distribution volume. Projected annual sales of 70 MM MT incl. 30 MM MT of retail and 10 MM MT of distribution  Lower inventory level to 5.5 MM MT at year end.  Reduce cost  Optimize resource allocation to reduce distribution cost  Flatten managerial hierarchy to lower management and administrative costs  Regulate the market order Marketing

26  Ensure high utilization of efficient production facilities, 2.2 MM MT of ethylene production  Yanhua Ethylene plants commence production in Oct.  Enhance product quality, increase the ratio of high value added products, percentage of performance compound at 45%, differential fiber at 30%.  Forge marketing, direct sales account for 58%. Develop B2B e- commerce and ensure the E-trading volume of RMB 15 bn  Strengthen management to reduce cost and enhance competitiveness. Reduce Ethylene cash operating cost to USD155/tone Chemicals

27 Conclusion  Improving market order  Promote rationalization in pricing mechanism  Stable growth in oil & gas production  Operating strategies in line with market conditions  Reduce costs  Increase sales volume  Lower inventory level Generate Attractive Return to Investors

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