China Petroleum & Chemical Corporation Recorded a Surge in Operating Results During the First Half of 2013, Net Profit Increased

 China Petroleum & Chemical Corporation Recorded a Surge in Operating Results
   During the First Half of 2013, Net Profit Increased by 24% Year-on-Year

PR Newswire

BEIJING, Aug. 25, 2013

BEIJING, Aug. 25,2013 /PRNewswire/ -- China Petroleum & Chemical Corporation
("Sinopec" or "the Company") (HKEX:386; CH:600028; NYSE: SNP) today announced
its interim results for the six months ended 30 June 2013.

Financial Highlights:

  oIn accordance with International Financial Reporting Standards ("IFRS"),
    the Company's turnover, other operating revenues and other income was
    RMB1,415.244 billion, up 5.0% year-on-year. Operating profit was RMB46.741
    billion, an increase of 16.6% year-on-year. Net profit attributable to
    owners of the Company was RMB30.281 billion, a 23.6% increase
    year-on-year. Earnings per share was RMB0.262, up 20.7% over the same
    period last year.
  oIn accordance with the PRC Accounting Standards for Business Enterprises
    ("ASBE"), the Company's operating income was RMB1,415.244 billion, up 5.0%
    year-on-year. Operating profit was RMB43.693 billion, an increase of
    30.4%. Net profit attributable to equity shareholders of the Company was
    RMB29.417 billion, a 24.1% increase year-on-year. Earnings per share was
    RMB0.254, an increase of 21.0% year-on-year.
  oThe Board of Directors approved an interim dividend of RMB0.09 per share,
    representing a 20.9% increase in cash dividend over the same period last
    year.

In the first half of 2013, global economic recovery remained weak, while
China's economy grew steadily with 7.6% GDP growth over the same period last
year. Domestic demand for oil products and chemical products continued to
grow. Prices of chemical products dropped due to an increase in imported
products. The Chinese government further improved the pricing mechanism for
oil products and announced an adjustment to the price of natural gas.

BUSINESS REVIEW

Exploration and Production Business

In the first half of 2013, international oil prices hit an early high and then
eased, fluctuating at a high range for the period. Brent spot price for crude
oil averaged USD107.50 per barrel, down by 5.15% compared with the
corresponding period in 2012. Domestic oil prices moved in line with the
international market.

The Company achieved excellent results in oil and gas exploration through
domestic growth in five key areas, which include Tarim Basin, the western rims
of the Junngar Basin, the Ordos Basin, the Sichuan Basin and the Xihu
depression. In exploration, the Company made major breakthroughs in new blocks
such as the Tarim Basin, and discoveries in new locations, strata and types.
The Company also made progress in exploration evaluation in key areas. In oil
and gas development, the Company maintained a highly efficient level of
production, achieving domestic production of 153.66 million barrels of crude
oil, up by 1.1% compared with the corresponding period in 2012, and 324.14
billion cubic feet of natural gas, up by 11.8% compared with the corresponding
period in 2012. The Company also made major progress in the Fuling shale gas
project and launched development of coal-bed methane in South Yanchuan. In the
first half of 2013, the overseas equity oil production of the Company reached
11.78 million barrels, an increase of 5.8% compared with the corresponding
period in 2012.

In the first half of 2013, the operating revenues of this segment were
RMB117.2 billion, representing a decrease of 7.0 % over the same period in
2012. The Exploration and Production Segment operates fairly smoothly.
However, due to the fall in oil prices, the segment realised RMB30.9 billion
of operating profit in the first half of 2013, down by 23.5% on a year-on-year
basis.

Summary of Operations for the Exploration and Production Segment

                                 Six-month period
                                                                Changes
                                 ended 30 June
                                 2013            2012           %
Oil and gas production (mmboe)   219.46          211.42         3.80
Crude oil production (mmbbls)^1  165.44          163.09         1.44
 China                     153.66          151.96         1.12
 Overseas                  11.78           11.13          5.84
Natural gas production (bcf)^2   324.14          289.93         11.8
1: For domestic production of crude oil, 1 tonne = 7.1 barrels; for overseas
production, 1 tonne = 7.27 barrels.
2: For production of natural gas, 1 cubic meter = 35.31 cubic feet.

Refining Business

In the first half of 2013, the Company adjusted its product mix in response to
changes in domestic market demand, producing more gasoline, jet fuel and other
high-value-added products that sold well in the market and increasing the
export volume of its products. Sinopec upgraded fuel quality and considerably
increased the production of gasoline and diesel above GB IV standards. The
Company optimised the marketing of LPG, asphalt and paraffin by taking
advantage of its strengths in specialisation.

In the first half of 2013, refinery throughput was 115 million tonnes,
representing a growth of 5.17% over the same period last year. Oil product
output was 69.75 million tonnes, rose by 5.76% compared with the corresponding
period in 2012. The growth of gasoline and kerosene production was 16.01% and
15.31% respectively.

In the first half of 2013, the operating revenues of this segment totaled
RMB644.2 billion, representing an increase of 0.9% over the same period of
2012. This was mainly attributable to the increased sales volume. In the first
half of 2013, the improved domestic refined oil product pricing mechanism was
in effect. The refining margin of the Company was RMB209.5 per tonne, a
significant increase over the same period in 2012. The segment turned into
profit, with an operating profit of RMB0.2 billion in the first half of 2013.

Summary of Operations for the Refining Segment

Unit: million tonnes
                                 Six-month period
                                                          Changes
                                 ended 30 June
                                 2013         2012        (%)
Refinery throughput              115.44       109.76      5.17
Gasoline, diesel and kerosene    69.75        65.95       5.76
production
 Gasoline                  22.75        19.61       16.01
 Diesel                    38.64        39.10       (1.18)
 Kerosene                  8.36         7.25        15.31
Light chemical feedstock         18.82        18.53       1.57
production
                                                          (1.0)
Light yield (%)                  76.20        77.20
                                                          percentage points
                                                          (0.8)
Refining yield (%)               94.61        95.41
                                                          percentage points
Note: Refinery throughput is converted at 1 tonne = 7.35 barrels; Includes
100% of production of joint ventures.

Marketing and Distribution Business

In the first half of 2013, in response to changes in supply and demand in the
domestic market and the implementation of the newly-announced oil products
pricing mechanism, the Company adjusted its marketing strategies by adopting
differentiated marketing, thus maximising its profitability. While increasing
sales volume, Sinopec focused on the retail market and expanded its size by
offering distinctive services. The Company strengthened its quality management
to ensure excellent oil products quality. The Company also vigorously promoted
growth in new businesses and in its non-fuel businesses, with the aim of
providing one-stop service to its customers. In the first half of 2013, total
sales volume of oil products increased to 88.05 million tonnes, up by 6.51%
over the same period last year. Total domestic sales volume reached 80.75
million tonnes, an increase of 4.83%, and sales of non-fuel businesses reached
RMB6.58 billion, an increase of 20.5% compared with the corresponding period
in 2012.

In the first half of 2013, the operating revenue of this segment was RMB732.8
billion, an increase of 3.2% over the same period in 2012, which was mainly
attributed to the increased oil products sales volume. In the first half of
2013, the sales revenue of gasoline totaled RMB246.8 billion, representing an
increase of 10.5% over the same period in 2012; and the sales revenue of
diesel and kerosene totaled RMB344.7 billion and RMB60.6 billion, a decrease
of 2.3% and an increase of 3.9% respectively over the same period in 2012. In
the first half of 2013, the segment's operating profit was RMB16.9 billion,
representing a decrease of 16.8% over the same period in 2012.

Summary of Operations for Marketing and Distribution Segment

Unit: million tonnes
                                           Six-month period
                                                                  Changes
                                           ended 30 June
                                           2013          2012     %
Total sales volume of oil products         88.05         82.67    6.51
Total domestic sales volume of oil         80.75         77.03    4.83
products
 Retail                              55.52         53.15    4.46
 Direct sales                        16.07         15.68    2.49
 Wholesale                           9.16          8.20     11.71
Annualised average throughput per station  3,620         3,487    3.81
(tonne/station)
                                                                  Change
                                                         As of 31
                                           As of 30 June December from the end
                                           2013          2012
                                                                  of last year
                                                                  (%)
Total number of Sinopec-branded service    30,682        30,836   (0.50)
stations
 Company-operated                    30,669        30,823   (0.50)

Chemicals Business

In the first half of the year, the Company further optimised its feedstock
structure and cut feedstock costs by using more light feedstock. The Company
sharpened its market analysis; strengthened the integration of R&D, production
and marketing; optimised operations and utilisation of facilities; and
introduced new products to improve its product mix. The Company improved its
marketing tactics and customer service. The Company reinforced its
supply-chain management and operated with low inventory level. Ethylene
production was 4.84 million tonnes, an increase of 0.64% compared with the
corresponding period in 2012. Chemicals sales volume reached 28.06 million
tonnes, up by 7.30% compared with the corresponding period in 2012.

In the first half of 2013, operating revenue of the chemicals segment was
RMB211.5 billion, representing an increase of 5.4% over the same period in
2012, which was mainly due to the increase in the sales volume of chemical
products. In the first half of 2013, the segment suffered an operating loss of
RMB0.4 billion, a decrease in losses of RMB0.8 billion.

Summary of Operations, Chemicals Segment

Unit: thousand tonnes
                                    Six-month period ended 30 June Changes
                                    2013            2012           (%)
Ethylene                            4,841           4,810          0.64
Synthetic resin                     6,730           6,701          0.43
Synthetic fiber monomer and polymer 4,539           4,580          (0.90)
Synthetic fiber                     699             674            3.71
Synthetic rubber                    457             475            (3.79)
Note: Includes 100% of production of joint ventures.

Health, Safety and the Environment and Low-Carbon Growth

The Company strictly implemented an HSE accountability system, promoted OSHA
management standards, enhanced operation hazard prevention and maintained
safety in production. The Company increased its emphasis on environmental
protection, energy conservation and emission reduction as well as on green and
low-carbon growth. The Company established a dedicated department in the head
office to coordinate planning and management of these activities, to promote
energy performance contracting and the development of an energy management
system. The Company also launched the Blue Skies, Clean Water initiative. In
the first half of 2013, the Company's energy intensity dropped by 3.24%
compared with the corresponding period in 2012. Chemical Oxygen Demand (COD)
in discharged wastewater fell by 4.15% compared with the corresponding period
in 2012, and SO2 emissions fell by 4.54% as compared with the corresponding
period in 2012.

Capital Expenditures

The Company has focused on improving the quality and efficiency of development
and has made progress in a number of key projects. The Company's capital
expenditures were RMB51.975 billion in the first half of 2013. Capital
expenditures for E&P were RMB24.996 billion, mainly for tight oil in south
Hubei, shallow heavy oil in west Shengli, new blocks in the Tahe Oilfield,
Yuanba and the Daniudi gas fields, and the Shandong LNG project. Capital
expenditures for the Refining Segment were RMB7.710 billion, mainly for
upgrading oil product quality and the revamping project for processing
lower-quality crude oil. In the Chemicals segment, RMB5.283 billion were used
for the construction of the Wuhan 800,000-tpa ethylene project, the Hubei
syngas-to-MEG project and the Hainan aromatics project. Capital expenditures
for the Marketing and Distribution segment were RMB11.612 billion, mainly for
building and acquiring service stations along expressways and in major cities
and for the construction of refined oil product pipelines and depots. The
Company added 501 new service stations during the period, of which 100 were
gas stations. RMB2.374 billion was used for the Corporate and Others, mainly
for R&D facilities and IT projects construction.

Mr. Fu Chengyu, Chairman of Sinopec said: "We saw a challenging and complex
global economy and energy market in the first half of 2013. In response to
market changes, Sinopec worked hard to expand sales, adjust raw material and
feed stock mix, as well as product mix to achieve the resulting good
performance. Sinopec has been focusing on shareholder returns and long term
value for investors; our interim cash dividend announced represented a 20.9%
increase over the same period last year. As we develop the business, we will
continue to improve on quality and profitability, leveraging the strengths of
our integrated business model. We will strengthen our green and low-carbon
strategy and undertake corporate social responsibility so to achieve
sustainable growth."

BUSINESS PROSPECTS

In the second half of the year, the global economic recovery will continue to
be weak. The Chinese government will accelerate structural adjustments and
upgrades to maintain stable economic growth. In the second half of the year,
the Company expect balanced supply and demand fundamentals in the global oil
market and a steady growth in domestic demand for refined oil products and
chemicals. Given current circumstances, the Company will focus on improving
the quality and efficiency of development, always oriented toward the market
and centered on profitability, while ensuring safety and protection of the
environment. The Company will redouble its efforts to expand its markets,
optimise operations, unlock its potential, increase its efficiency, improve
the capacity of sustainable development, reinforce safe production practices
and achieve sound operating results.

In exploration and production, Sinopec will focus its exploration efforts on
commercial discoveries in key areas. In development, the Company will
strengthen development of mature oilfields, develop tight-oil resources
effectively and accelerate development in other key areas. The Company will
increase its activities in geological surveys and evaluation of potential
areas for development to achieve capacity replacement. In natural gas, the
Company will accelerate development in Yuanba, the medium and shallow
formations of west Sichuan and the Daniudi gas field. In unconventional
resources, the Company will conduct further evaluations of marine-facies shale
gas resources in the Sichuan basin and the surrounding areas. The Company will
also increase the pace of activity in the Fuling marine-facies shale gas zone
and launch the pilot development program on stream, along with the coal-bed
methane project in South Yanchuan. In the second half of the year, the Company
expect to produce 23.29 million tonnes of crude oil and 9.2 billion cubic
meters of natural gas.

In refining, with efficiency as Sinopec's top priority, the Company will
optimise crude procurement and allocation and reduce crude purchasing costs.
The Company will promote oil products upgrading, and supply the market with
clean fuels. The Company will also reinforce coordination between production
and marketing, adjust its product mix and utilisation rate, increase domestic
output of gasoline, jet fuel and other products with high value add, and
expand export volume. In the second half of the year, the Company plan to
process 120 million tonnes of crude oil.

In marketing and distribution, the Company will continue to be market based,
strengthen resource planning, expand retail and direct sales volume, and
enhance operational quality and efficiency. The Company will promote one-stop
service for its customers, develop new product features and accelerate
development of its non-fuel businesses. In the second half of the year, the
Company plan to sell 84.25 million tonnes of oil products in the domestic
market.

In chemicals, the Company will continue to adjust facility utilisation and
production plans based on demand, modify the Company's product mix through
better integration of production, marketing and R&D, optimise the structure of
its feedstock to achieve lower costs, maintain operations with low inventory
level, implement differentiated marketing, develop new and specialty products,
and increase production of high-value-added products. In the second half of
the year, the Company plan to produce 5.05 million tonnes of ethylene.

APPENDIX

FINANCIAL DATA AND INDICATORS PREPARED IN ACCORDANCE WITH CHINA ACCOUNTING
STANDARDS FOR BUSINESS ENTERPRISES ("ASBE")
                                                             Changes
                          Six-month periods ended 30 June
                                                             overthesame

                                                             period of the
                          2013              2012
                                                             preceding year
Items                     RMBmillion     RMB million    (%)
Operating income          1,415,244         1,348,072        5.0
Net profit attributable
to equity shareholders of 29,417            23,697           24.1
the Company
Net profit attributable
to equity shareholders of
the Company
                          29,196            23,259           25.5
 after deducting
extraordinary gain/loss
items
Net cash flows from       32,903            20,554           60.1
operating activities
                                                             Changes
                          At 30 June      At 31
                          2013            December       from the end
                                            2012
                                                             of last year
                          RMB million     RMB million   (%)
Total equity attributable
to equity shareholders of 546,386           513,374          6.4
the Company
Total assets              1,274,233         1,238,522        2.9
                                                             Changes

                                                             over the same
                          Six-month periods ended 30 June
                                                             period of the

                                                             preceding year
                          2013              2012
Items^Note                RMB million     RMB million    (%)
Basic earnings per share  0.254             0.210            21.0
(RMB)
Diluted earnings per      0.239             0.202            18.3
share (RMB)
Basic earnings per share
after deducting
extraordinary             0.252             0.206            22.3

 gain/loss items (RMB)
Weighted average return                                      0.6
on net assets (%)         5.49              4.89
                                                             percentage points
Weighted average return
on net assets after                                          0.65
deducting                 5.45              4.80
                                                             percentage
 extraordinary gain/loss                                     points
items (%)
Net assets per share
attributable to equity
shareholders              4.687             4.548            3.1

 of the Company (RMB)
(fully diluted)
Note: Total share capital of Sinopec Corp. for the six-month period ended 30
June 2013 has increased as a result of H share issuances, bonus issues of
shares and conversion of capital reserves to all shareholders and conversion
of the A share Convertible Bonds. The data of 2012 have been retrospectively
adjusted in accordance with ASBE.

FINANCIAL INFORMATION EXTRACTED FROM THE FINANCIAL STATEMENTS PREPARED IN
ACCORDANCE WITH INTERNATIONAL FINANCIAL REPORTING STANDARDS ("IFRS")
                                                            Changes
                          Six-month periods ended 30 June
                                                            over the same
                          2013              2012
                                                            period of the
Items                     RMB million       RMB million
                                                            preceding year(%)
Operating profit          46,741            40,083          16.6
Net profit attributable   30,281            24,503          23.6
to owners of the Company
Net cash generated from   32,903            20,322          61.9
operating activities
                                                            Changes
                                            As of 31
                          Asof30June     December        from the end

                          2013              2012            of last year

                          RMB million       RMB million     (%)
Equity attributable to    543,717           510,914         6.4
owners of the Company
Total assets              1,273,688         1,257,944       1.3
                                                            Changes

                                                            over the same
                          Six-month periods ended 30 June
                                                            period of the
                          2013              2012
                                                            preceding year
Items^1                   RMB million       RMB million
                                                            (%)
Basic earnings per share  0.262             0.217           20.7
(RMB)
Diluted earnings per      0.246             0.209           17.7
share (RMB)
Net assets per share      4.664             4.527           3.0
(RMB)
Return on capital                                           0.23
employed (%) ^ 2          3.88              3.65
                                                            percentage points
Note 1: Total share capital of Sinopec Corp. as of 30 June 2013 has increased
as a result of issuance of H share, bonus issues of shares and capitalisation
of share premium to all shareholders and conversion of the A share Convertible
Bonds during the first half of 2013. The data of 2012 have been
retrospectively adjusted in accordance with IFRS.
Note 2: Return on capital employed=operating profit×(1-income tax
rate)/capital employed



THE FOLLOWING TABLE SETS FORTH THE OPERATING REVENUES, OPERATING EXPENSES AND
OPERATING PROFIT/(LOSS) BY EACH SEGMENT BEFORE ELIMINATION OF THE
INTER-SEGMENT TRANSACTIONS FOR THE PERIODS INDICATED, AND THE CHANGES BETWEEN
THE FIRST HALF OF 2013 AND THE FIRST HALF OF 2012.
                                    Six-month periods ended 30
                                    June
                                    2013            2012            Change
                                    RMB million   RMB million   (%)
Exploration on and Production
Segment
         Operating revenues         117,242         126,117         (7.0)
         Operating expenses         86,293          85,654          0.7
         Operating profit           30,949          40,463          (23.5)
Refining Segment
         Operating revenues         644,246         638,573         0.9
         Operating expenses         644,033         657,074         (2.0)
         Operating profit/(loss)    213             (18,501)        -
Marketing and Distribution Segment
         Operating revenues         732,752         709,953         3.2
         Operating expenses         715,900         689,701         3.8
         Operating profit           16,852          20,252          (16.8)
Chemicals Segment
         Operating revenues         211,521         200,769         5.4
         Operating expenses         211,930         202,020         4.9
         Operating loss             (409)           (1,251)         -
Corporate and others
         Operating revenues         681,911         654,279         4.2
         Operating expenses         682,925         654,635         4.3
         Operating loss             (1,014)         (356)           -
Elimination of inter-segment profit 150             (524)           -

About Sinopec

Sinopec is one of the largest integrated energy and chemical companies with
upstream, midstream and downstream operations in China. Its principal
operations include: the exploration and production, pipeline transportation
and sales of petroleum and natural gas; the sales, storage and transportation
of petroleum products, petrochemical products, synthetic fiber, fertilizer and
other chemical products; import & export, as well as import and export agency
business of oil, natural gas, petroleum products, petrochemical and chemical
products, and other commodities and technologies; and research, development
and application of technologies and information.

Adhering to its corporate mission of "Enterprise development, Contribution to
the Country, Shareholder value creation, Social responsibility and Employee
wellbeing", Sinopec implements strategies of resources, markets, integration,
internationalization, differentiation and green low-carbon development with a
view to realize its vision of building a world first class energy and chemical
company.

Disclaimer

This press release includes "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, reserve volume,
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 the price fluctuation,
possible changes in actual demand, foreign exchange rate, results of oil
exploration, estimates of oil and gas reserves, market shares, competition,
environmental risks, possible changes to laws, finance and regulations,
conditions of the global economy and financial markets, political risks,
possible delay of projects, government approval of projects, cost estimates
and other factors beyond Sinopec Corp.'s control. In addition, Sinopec Corp.
makes the forward-looking statements referred to herein as of today and
undertakes no obligation to update these statements.

Investor Inquiries:           Media Inquiries:
Beijing
Tel:      (8610) 5996 0028    Tel:   (8610) 5996 0028
Fax:      (8610) 5996 0386    Fax:   (8610) 5996 0386
Email:    ir@sinopec.com      Email: media@sinopec.com
Hong Kong
Tel:      (852) 2824 2638     Tel:   (852) 3512 5000
Fax:      (852) 2824 3669     Fax:   (852) 2259 9008
Email:    ir@sinopechk.com  Email: sinopec@brunswickgroup.com 



SOURCE China Petroleum & Chemical Corporation