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1、ANNUAL REPORT AND ACCOUNTS2022CONTENTS2Company Profile3Principal Financial Data and Indicators7Chairmans Address9Business Review and Prospects16Managements Discussion and Analysis26Corporate Governance48Environment and Social Responsibilities50Significant Events57Connected Transactions59Report of th
2、e Board of Directors68Report of the Board of Supervisors70Changes in Share Capital and Shareholdings of Principal Shareholders72Bond General Information74Principal Wholly-owned and Controlled Subsidiaries75Financial Statements211Corporate Information212Documents for InspectionThis annual report incl
3、udes forward-looking statements.All statements,other than statements of historical facts,that address activities,events or developments that the Company expects or anticipates will or may occur in the future(including but not limited to projections,targets,reserve and other estimates and business pl
4、ans)are forward-looking statements.The Companys actual results or developments may differ materially from those indicated by these forward-looking statements as a result of various factors and uncertainties.The Company makes the forward-looking statements referred to herein as at 24 March 2023 and u
5、nless required by regulatory authorities,the Company undertakes no obligation to update these statements.2CHINA PETROLEUM&CHEMICAL CORPORATIONAnnual Report 2022Company ProfileCOMPANY PROFILEIMPORTANT NOTICE:THE BOARD OF DIRECTORS,THE BOARD OF SUPERVISORS,DIRECTORS,SUPERVISORS AND SENIOR MANAGEMENT O
6、F SINOPEC CORP.WARRANT THAT THERE ARE NO FALSE REPRESENTATIONS,MISLEADING STATEMENTS OR MATERIAL OMISSIONS IN THIS ANNUAL REPORT,AND JOINTLY AND SEVERALLY ACCEPT FULL RESPONSIBILITY FOR THE AUTHENTICITY,ACCURACY AND COMPLETENESS OF THE INFORMATION CONTAINED IN THIS ANNUAL REPORT.THERE IS NO OCCUPANC
7、Y OF NON-OPERATING FUNDS BY THE CONTROLLING SHAREHOLDERS OF SINOPEC CORP.ALL DIRECTORS ATTENDED THE 15TH MEETING OF THE EIGHTH SESSION OF THE BOARD.MR.MA YONGSHENG,CHAIRMAN OF THE BOARD,MR.YU BAOCAI,PRESIDENT,MS.SHOU DONGHUA,CHIEF FINANCIAL OFFICER AND HEAD OF THE FINACIAL DEPARTMENT OF SINOPEC CORP
8、.WARRANT THE AUTHENTICITY AND COMPLETENESS OF THE FINANCIAL STATEMENTS CONTAINED IN THIS ANNUAL REPORT.THE AUDIT COMMITTEE OF SINOPEC CORP.HAS REVIEWED THE ANNUAL REPORT OF SINOPEC CORP.FOR THE YEAR ENDED 31 DECEMBER 2022.THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022 OF THE COMPANY PR
9、EPARED IN ACCORDANCE WITH THE PRC ACCOUNTING STANDARDS FOR BUSINESS ENTERPRISES(CASs)AND INTERNATIONAL FINANCIAL REPORTING STANDARDS(IFRS)HAVE BEEN AUDITED BY KPMG HUAZHEN LLP AND KPMG RESPECTIVELY.BOTH FIRMS HAVE ISSUED STANDARD UNQUALIFIED AUDITORS REPORT.AS APPROVED AT THE 15TH MEETING OF THE EIG
10、HTH SESSION OF THE BOARD OF DIRECTORS OF SINOPEC CORP.,THE BOARD PROPOSED A FINAL CASH DIVIDEND OF RMB0.195(TAX INCLUSIVE)PER SHARE FOR 2022,COMBINING WITH THE INTERIM CASH DIVIDEND OF RMB0.16(TAX INCLUSIVE)PER SHARE,THE TOTAL CASH DIVIDEND FOR 2022 WILL BE RMB0.355(TAX INCLUSIVE)PER SHARE.THE DIVID
11、END PROPOSAL IS SUBJECT TO THE SHAREHOLDERS APPROVAL AT THE ANNUAL GENERAL MEETING FOR THE YEAR 2022.COMPANY PROFILESinopec Corp.s H shares were listed in Hong Kong,New York and London exchanges on 18 and 19 October 2000,respectively,and A shares were listed in the Shanghai Stock Exchange on 8 Augus
12、t 2001.Sinopec Corp.is one of the largest integrated energy and chemical companies in China.Its principal operations include the exploration and production,pipeline transportation and sale of petroleum and natural gas;the production,sale,storage and transportation of refinery products,petrochemical
13、products,coal chemical products,synthetic fibre,and other chemical products;the import and export,including an import and export agency business,of petroleum,natural gas,petroleum products,petrochemical and chemical products,and other commodities and technologies;and research,development and applica
14、tion of technologies and information;hydrogen energy business and related services such as hydrogen production,storage,transportation and sales;battery charging and swapping,solar energy,wind energy and other new energy business and related services.DEFINITIONS:In this report,unless the context othe
15、rwise requires,the following terms shall have the meaning as set out below:Sinopec Corp.:China Petroleum&Chemical CorporationCompany:Sinopec Corp.and its subsidiariesChina Petrochemical Corporation:the controlling shareholder of Sinopec Corp.,China Petrochemical CorporationSinopec Group:China Petroc
16、hemical Corporation and its subsidiariesNDRC:China National Development and Reform CommissionRMC:Oil and Natural Gas Reserves Management Committee of the CompanySinopec Finance Co.:Sinopec Finance Co.,Ltd.Century Bright:Sinopec Century Bright Capital Investment,Ltd.CSRC:China Securities Regulatory C
17、ommission.Hong Kong Stock Exchange:The Stock Exchange of Hong Kong LimitedHong Kong Listing Rules:Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong LimitedCONVERSION:For domestic production of crude oil,1 tonne=7.1 barrels;For overseas production of crude oil:1 tonne=7.26
18、barrels in 2022,1 tonne=7.22 barrels in 2021,1 tonne=7.20 barrels in 2020;For production of natural gas,1 cubic meter=35.31 cubic feet;Refinery throughput is converted at 1 tonne=7.35 barrels.3CHINA PETROLEUM&CHEMICAL CORPORATIONAnnual Report 2022Principal Financial Data and IndicatorsPRINCIPAL FINA
19、NCIAL DATA AND INDICATORS1.FINANCIAL DATA AND INDICATORS PREPARED IN ACCORDANCE WITH CASs(1)Principal financial dataFor the year ended 31 December20222021Change2020ItemsRMB millionRMB million(%)RMB millionOperating income3,318,1682,740,88421.062,104,724Operating profit96,414112,414(14.23)50,803Profi
20、t before taxation94,515108,348(12.77)48,441Net profit attributable to equity shareholders of the Company66,30271,208(6.89)33,271Net profit/(loss)attributable to equity shareholders of the Company excluding extraordinary gains and losses57,18272,220(20.82)(1,565)Net cash flow from operating activitie
21、s116,269225,174(48.36)168,5202022FirstQuarterSecondQuarterThirdQuarterFourthQuarterTotalRMB millionRMB millionRMB millionRMB millionRMB millionOperating income771,386840,740841,196864,8463,318,168Net profit attributable to equity shareholders of the Company22,60520,92513,1309,64266,302Net profit att
22、ributable to equity shareholders of the Company excluding extraordinary gains and losses22,45020,51012,4921,73057,182Net cash flow(used in)/generate from operating activities(46,781)51,72854,29757,025116,269For the year ended 31 December20222021Change2020ItemsRMB millionRMB million(%)RMB millionTota
23、l assets1,948,6401,889,2553.11,738,896Total liabilities1,011,487973,2143.9850,176Total equity attributable to equity shareholders of the Company785,577775,1021.4747,294Total number of shares(1,000 shares)119,896,408121,071,210(1.0)121,071,210(2)Principal financial indicatorsFor the year ended 31 Dec
24、ember20222021Change2020ItemsRMB YuanRMB Yuan(%)RMB YuanBasic earnings per share0.5480.588(6.80)0.275Diluted earnings per share0.5480.588(6.80)0.275Basic earnings per share(excluding extraordinary gains and losses)0.4730.597(20.77)(0.013)Weighted average return on net assets(%)8.509.35(0.85)percentag
25、epoints4.46Weighted average return(excluding extraordinary gains and losses)on net assets(%)7.33 9.49 (2.16)percentagepoints(0.21)Net cash flow from operating activities per share0.9621.860(48.28)1.392For the year ended 31 December20222021Change2020ItemsRMB YuanRMB Yuan(%)RMB YuanNet assets attribut
26、able to equity shareholders of the Company per share6.5526.4022.346.172Liabilities to assets ratio(%)51.91 51.51 0.40percentagepoints48.89 4CHINA PETROLEUM&CHEMICAL CORPORATIONAnnual Report 2022Principal Financial Data and IndicatorsPRINCIPAL FINANCIAL DATA AND INDICATORS(CONTINUED)(3)Extraordinary
27、items and corresponding amountsFor the year ended 31 December(Income)/expenses202220212020ItemsRMB millionRMB millionRMB millionNet(gain)/loss on disposal of non-current assets(672)(665)(973)Donations447165301Government grants(3,826)(3,085)(8,605)Gain on holding and disposal of various investments(1
28、3,902)(259)(37,520)Other non-operating expenses,net2,1784,7202,992Net profit/(loss)acquired through business combination under common control during the reporting period0 101(472)Subtotal(15,775)977(44,277)Tax effect2,304(72)6,736Total(13,471)905(37,541)Attributable to:Equity shareholders of the Com
29、pany(9,120)1,012(34,836)Minority interests(4,351)(107)(2,705)(4)Items measured by fair valuesUnit:RMB millionInfluenceBeginningEndon the profitItemsof the yearof the yearChangesof the yearOther equity instruments investment767730(37)76Receivables financing5,9393,507(2,432)0Derivative financial instr
30、uments1,350(1,838)(3,188)(15,535)Cash flow hedging13,79813,8606212,609Financial assets held for trading02211Total21,85416,261(5,593)(2,839)5CHINA PETROLEUM&CHEMICAL CORPORATIONAnnual Report 2022Principal Financial Data and Indicators(5)Significant changes of items in the financial statementsThe tabl
31、e below sets forth reasons for those changes where the fluctuation was more than 30%during the reporting period:As of 31 DecemberIncrease/(decrease)20222021AmountPercentageItemsRMB millionRMB millionRMB million(%)Reasons for changeCash at bank and on hand 145,052 221,989 (76,937)(34.7)Expanded inves
32、tment scale,increased dividend,and raised occupation of inventory capital resulting from increase of prices of crudes and other commoditiesAccounts receivable 46,364 34,861 11,503 33.0 Increase in the account receivables due to the rising prices of crude oil and refined oil productsReceivables finan
33、cing 3,507 5,939(2,432)(40.9)Improved efficiency in the use of capital and advanced turnover of billsDerivative financial liabilities 7,313 3,223 4,090 126.9 Impact of changes in fair value of commodity-based hedging business including crude oilTaxes payable 28,379 81,267(52,888)(65.1)Impact of defe
34、rred payment of tax happened in the fourth quarter of last yearNon-current liabilities due within one year 62,844 28,651 34,193 119.3 Increase in long-term loans due within one year and debentures payableLong-term loans 94,964 49,341 45,623 92.5 Increase in long-term loans to ensure investment and p
35、roduction and operation capital needsDebentures payable 12,997 42,649(29,652)(69.5)A result of partial amount of bonds payable reclassifying to non-current liabilities due within one yearOther comprehensive income 3,072 (690)3,762 Increase in the translation difference of foreign currency statements
36、 due to the appreciation of US dollar against RMBRefunds of taxes and levies 12,010 4,641 7,369 158.8 VAT credit refund in this year increased significantly year-on-yearOther cash received relating to operating activities269,895158,049111,84670.8Impact of margin change of derivative business Other c
37、ash paid relating to operating activities(312,819)(179,679)(133,140)74.1Cash received from disposal of investments 1,980 9,812(7,832)(79.8)Impact of year-on-year decreased in structured deposits due this yearCash received from returns on investments 13,969 10,134 3,835 37.8 Increase in dividends rec
38、eived from associates and joint venturesNet cash received from disposal of fixed assets,intangible assets and other long-term assets212 1,478(1,266)(85.7)Impact of disposal of fixed assets decreased year on year Net cash received from disposal of subsidiaries and other business entities10,041 5,205
39、4,836 92.9 Mainly due to cash consideration for equity transfer of Shanghai SECCOOther cash received relating to investing activities 103,157 38,208 64,949 170.0 Increased time deposits with maturities of more than three months year-on-yearNet cash paid for the acquisition of subsidiaries and other
40、business entities(7,881)(1,106)(6,775)612.6 Impact of payment on the purchase price of the acquisition happened previous yearOther cash paid relating to investing activities(33,505)(50,923)17,418(34.2)Decrease in time deposits with maturities over more than three months year-on-yearCash received fro
41、m capital contributions 3,946 1,001 2,945 294.2 Increase in capital injection received from minority shareholders year-on-yearCash received from borrowings 564,417 356,459 207,958 58.3 Increase in short-term financing bonds and bank loans year-on-year in order to supply liquidity and project fundsCa
42、sh repayments of borrowings(514,275)(338,232)(176,043)52.0Due to the increase of matured borrowingsCash paid for dividends,profits distribution or interest(71,831)(49,027)(22,804)46.5Increase in dividends year-on-year in return for shareholdersIncluding:Subsidiaries cash payments for distribution of
43、 dividends or profits to minority shareholders(5,249)(8,068)2,819(34.9)Impact of decrease in dividends paid by some subsidiaries year-on-year6CHINA PETROLEUM&CHEMICAL CORPORATIONAnnual Report 2022Principal Financial Data and IndicatorsPRINCIPAL FINANCIAL DATA AND INDICATORS(CONTINUED)2 FINANCIAL INF
44、ORMATION EXTRACTED FROM THE FINANCIAL STATEMENTS PREPARED IN ACCORDANCE WITH IFRSUnit:RMB millionFor the year ended 31 DecemberItems202220218Revenue3,318,1682,740,8842,104,7242,957,8682,879,192Operating profit75,83594,62813,66986,51682,884Profit before taxation94,400109,16948,61590,16199,
45、658Profit attributable to shareholders of the Company66,15371,97533,44357,51761,920Basic earnings per share(RMB)0.5470.5940.2760.4750.511Diluted earnings per share(RMB)0.5470.5940.2760.4750.511Return on capital employed(%)8.6611.296.228.949.21Return on net assets(%)8.439.304.487.738.57Net cash gener
46、ated from operating activities per share(RMB)0.9621.8601.3921.2751.455Unit:RMB millionAs of 31 DecemberItems202220218Non-current assets1,425,5001,331,2311,283,2361,318,2581,097,045Net current liabilities144,24583,25667,335133,16663,514Non-current liabilities345,017332,901328,199303,014170
47、,803Non-controlling interests151,532140,892141,377138,359139,922Total equity attributable to shareholders of the Company784,706774,182746,325743,719722,806Net assets per share(RMB)6.5456.3946.1646.1435.970Adjusted net assets per share(RMB)6.3076.2255.9545.9935.7873 FOR MAJOR DIFFERENCES BETWEEN THE
48、AUDITED FINANCIAL STATEMENTS PREPARED UNDER CASs AND IFRS,PLEASE REFER TO PAGE 204 OF THE REPORT.7CHINA PETROLEUM&CHEMICAL CORPORATIONAnnual Report 2022Chairmans AddressCHAIRMANS ADDRESSDear Shareholders and Friends:First of all,on behalf of the board of directors,management and entire staff,I would
49、 like to express my sincere gratitude to our shareholders and all walks of life in the community for their caring and support for Sinopec Corp.In 2022,the Company encountered complicated,fickle and severe conditions,including global economic slowdown,geopolitical conflicts and weak domestic market d
50、emand.We completely,accurately and comprehensively implemented new development concept,carried out the worlds leading development strategy,and made relentless efforts to stabilize operations and to expand market reach.Remarkable results were achieved in all aspects of work through our initiatives to
51、 drive innovation,business development and reform in conjunction with enhanced management and risk control.In accordance with IFRS,the Companys turnover for the year was RMB3.32 trillion.Profit attributable to equity shareholders of the Company was RMB66.2 billion.The liability-to-asset ratio as of
52、the end of the year was 51.95%.In view of the Companys profitability,shareholder returns and sustainable development in the future,the board of directors recommended the distribution of a final dividend of RMB0.195 per share(tax included).Taking into account the interim dividend of RMB0.16 per share
53、(tax included),the total dividend for the year was RMB0.355 per share(tax included),which,together with the amount of share repurchase during the year,resulted in a dividend payout ratio of 71%for 2022.Over the past year,the Companys corporate governance were further enhanced.With an aim of strength
54、ening strategic planning,the board of directors reviewed and approved of the Companys medium and long-term development plan.Our ADR were delisted in an orderly manner.Our debut share buyback program since our listing was well implemented to repurchase our A-shares and H-shares in order to advocate t
55、he Companys fair valuation.All independent directors executed their duties and reviewed all resolutions with diligence.They carried out thematic site surveys on technology innovation and offered valuable suggestions for our reform and development.The Company revised a number of governance rules to r
56、einforce the corporate governance.As the internal control system was further improved,its implementation turned more effective.Meanwhile,the Company maintained sound information disclosure and investor relations management.As a result,we have been awarded Grade A rating of information disclosure by
57、the Shanghai Stock Exchange for nine consecutive years.We attached great importance to the incorporation of Party building into the corporate development,resulting in effective implementation of the decisions and strategies made by the board of directors.Over the past year,significant progress was m
58、ade in the Companys high-quality development.As for the upstream business,we vigorously expanded the resource base and proactively increased our reserves and output.Major breakthroughs were made in the exploration of shale oil fields in East China and ultra-deep fields in West China.The domestic oil
59、 and gas reserve replacement ratio reached 165%.As for refining operation,we stepped up efforts in the development of competitive production facilities,steadily promoted adjustment to increase the yield of chemical feedstock and refining specialties.Development of the Zhenhai refining project,the Ha
60、inan ethylene project and the Gulei refining and chemical integrated complex progressed smoothly.The sales network of refined oil products was further optimized.We accelerated the transformation towards an integrated energy service provider of“petrol,gas,hydrogen,power and services”.New progress was
61、 made in the development of“Industrial Internet+”and the digital and smart transformation.At the same time,the Company promoted the development of hydrogen energy,photovoltaics,and battery charging and swapping businesses.The first CCUS project with capacity of 1 million tonnes in China was complete
62、d and put into operation.Sinopec Carbon Industry Technology Co.,Ltd.,the first company in China with complete value chain for carbon industry was established.Positive results were achieved in the promotion of transition to low-carbon energy development.8CHINA PETROLEUM&CHEMICAL CORPORATIONAnnual Rep
63、ort 2022Chairmans AddressCHAIRMANS ADDRESS(CONTINUED)Over the past year,the Companys production and operation were further improved.In the face of weak demand,the downward cycle of the chemical industry and dramatic fluctuations in product prices,we adhered to efficiency-centered,market-oriented app
64、roach and continuously improved the business operations.As for the upstream business,the Company strengthened cost control,and domestic oil and gas production hit a record high,achieving the best profit level since 2016.Regarding the refining business,we focused on trade,storage and transportation,a
65、nd production coordination,closely monitored the market development to better coordinate resources,optimized operations,and reinforced the competitive edge of our industrial chain.As for the chemicals business,we optimized the structure of feedstocks,plants and products slates,promoting the integrat
66、ion of production,marketing,as well as research and application.The proportion of three high value-added synthetic material products steadily increased.Meanwhile,the quality and efficiency of the coal chemical operations were further improved.We gave full play to the integration advantages of refine
67、d oil marketing business,expanded the market reach with high-quality services.Non-fuel business maintained steady growth and its overall profitability realized a stable growth.Over the past year,the Companys science and technology innovation competitiveness continued to improve.We deepened the refor
68、m of science and technology mechanism to motivate the R&D team,stepped up the investment on R&D,pushed for breakthroughs in core technology development,and enhanced the frontier fundamental research.Significant achievements were made in technology innovation,along with new progress in the developmen
69、t of core technologies relating to the exploration and development of ultra-deep oil and gas reservoir,the geology and engineering integration of shale oil and gas fields,as well as specialty rubber products.In addition,major breakthroughs were made in a number of key technologies such as high-isota
70、ctic polybutene-1.The number of patents authorized both at home and abroad reached a new high during the year.The Companys comprehensive patent advantages continued to rank at the forefront of state-owned enterprises.Our competence to support and lead scientific and technological innovation continue
71、d to improve.Over the past year,our ESG efforts achieved solid results.The board of directors attached great importance to ESG,focused on incorporating ESG into strategic management,strengthened top-level design and the foundation of management,enhanced ESG communication and disclosure.As a result,t
72、he Companys ESG performance has been acknowledged by the capital market.We actively responded to global climate change initiative by implementing the plan to achieve carbon peak by 2030,launched the campaign to prevent and control pollution,vigorously developed clean energy,and contributed our effor
73、ts to the construction of ecological civilization.Relentless efforts were made to safeguard the energy supply and to maintain the stability of the industrial and supply chains.The Company actively explored the model of assisting in rural revitalization,such as driving industrial development through
74、sales,revitalized rural areas through industrial development,and promoted growth through education.We offered full-fledged support to Beijing Winter Olympics and the Winter Paralympics,pushed forward our charity programs such as the“Spring Blossom Filling Station Project”,and continued to promote th
75、e coordinated local development of economy,environment and the society in China and overseas so that the development results benefit more people.At present,the instability and uncertainty of global environment are increasing significantly,leading to intensified market competition in the energy and c
76、hemical industry.But the fundamentals of the Chinese economy,characterized by strong resilience,enormous and long-term potential,sustainability,remain unchanged.The government prioritizes the task to resume and expand domestic consumption.Therefore,the Company is poised to benefit from valuable stra
77、tegic opportunities for high-quality development.Setting off from a new development stage,Sinopec Corp.will initiate the high-quality development plan driven by the strategy of building a world-class enterprise,focusing on“excellent products,outstanding brands,leading innovation capability and advan
78、ced governance”.We will steadily promote the corporate upgrading from size expansion to strong competitiveness and then ascending to excellence,striving to achieve better quality,higher efficiency,greater competitiveness and influence.In 2023,we will seize the favorable opportunity arising from stea
79、dy development of domestic economy and the recovery of demand for petroleum and petrochemical products,insist on driving growth in a stable manner,and strive to achieve effective quality improvement in different businesses and reasonable volume growth.At the same time,we will accelerate the process
80、of building ourselves towards a world-class enterprise,whereby leading the Company to a new stage of high-quality development.We will pay more attention to bringing the benefits of our integrated operation into full play,improving the business operations,and enhancing the synergies and efficiency re
81、sulted from our complete industrial chain.We will attach greater importance to business transition and upgrading,the promotion of digital transformation and intelligentization,strive to build green and low-carbon competitiveness,step up efforts to drive science and technology innovation and inspire
82、the creativity from innovation,and accelerate the breakthroughs in core technologies in exploration and development,specialty oil products,chemical materials and new energy and other fields to enhance the driving force of science and technology innovation.We will pay more attention to the incorporat
83、ion of ESG into our development strategy,deepen reform and improve governance,unleash the dynamism of our system and mechanism,consolidate our foundation,keep the risks under control and further enhance our corporate governance to a new level.For the upstream business,we will focus on consolidating
84、the resource base,make every effort to increase the reserves,stabilize oil output,boost gas production and reduce costs,and promote profitable exploration of crude oil and profitable production of natural gas,shift the refined oil products to chemical feedstock and refining specialities,expedite the
85、 production facility structure adjustments and the development of competitive production capacities.As for the chemicals business,we will adhere to the“basic+high-end”approach,strengthen the integrated management of production,marketing,research and application for high value-added products to enhan
86、ce the product competitiveness,and cultivate the new advantage of high-quality development.For the marketing business,we will promote innovative business model,develop new energy terminals,and strive for new achievements in developing ourselves as a“petrol,gas,hydrogen,power and services”provider.Th
87、e Company will continue to maintain a solid financial position,strengthen cash flow management,continuously optimize the capital structure,and improve the efficiency of capital fund utilization.In 2023,the Companys planned capital expenditure will be RMB165.8 billion.In the new year,we will strive f
88、or excellence and spare no effort to forge ourselves towards a world class enterprise.Relentless efforts will be made to write a new chapter of Sinopecs high-quality development,whereby creating greater value for shareholders and the society.Ma YongshengChairmanBeijing,China24 March 20239CHINA PETRO
89、LEUM&CHEMICAL CORPORATIONAnnual Report 2022Business Review and ProspectsBUSINESS REVIEW AND PROSPECTSMovement of International Crude Oil PricesUSD/Barrel4080120160WTI-NYMEXBRENT ICEBRENT DTDDUBAI0Jan-21Apr-21Jul-21Oct-21Jan-22Apr-22Jul-22Oct-22Jan-23BUSINESS REVIEWIn 2022,global economy recorded slo
90、w growth and China registered a GDP growth of 3.0%year-on-year.International oil prices fluctuated widely,with a sharp rise in the first half and a remarkable drop in the second half.Affected by various factors,the domestic demand for natural gas,petrochemical products and oil products was weak.Conf
91、ronted with the severe and complex operating environment,the Company fully leveraged its integration advantages in coordinating all aspects of work,pressing ahead to stabilize operation,explore the market,develop through innovation,promote reform,strengthen management prevent risks and hold the bott
92、om line,which helped yield high quality operating results.(2)Refined Oil ProductsIn 2022,the domestic demand for refined oil products was weak.According to statistics released by NDRC,the domestic apparent consumption of refined oil products(including gasoline,diesel and kerosene)up by 0.9%from the
93、previous year,with diesel up by 11.8%,gasoline down by 4.6%and kerosene down by 32.4%.Prices for domestic refined oil products were adjusted 23 times throughout the year with 13 increases and 10 decreases.(3)Chemical ProductsThere was a contraction of domestic demand for chemicals in 2022.Based on o
94、ur statistics,the domestic consumption of ethylene equivalent was down by 2.5%from the previous year,and the apparent consumption of synthetic fibre and synthetic rubber dropped by 2.8%and 3.2%respectively while that of synthetic resin kept flat.Domestic chemical product prices levelled off year on
95、year.1 MARKET REVIEW(1)Crude Oil&Natural GasIn 2022,international crude oil prices fluctuated in a wide range,witnessing steep rise in the first half and sharp decline in the second half.The spot price of Platts Brent for the year averaged USD101.2 per barrel,up by 43.1%year on year.Based on the sta
96、tistics of NDRC,the domestic apparent consumption of natural gas reached 366.3 billion cubic meters,down by 1.7%year on year.10CHINA PETROLEUM&CHEMICAL CORPORATIONAnnual Report 2022Business Review and ProspectsBUSINESS REVIEW AND PROSPECTS(CONTINUED)2 PRODUCTION&OPERATIONS REVIEW(1)Exploration and P
97、roductionIn 2022,the Company seized the favorable opportunity of high oil price,intensified efforts in high quality exploration and expanded the scale of profitable production capacity.Domestic oil and gas reserve replacement ratio amounted to 165%with domestic oil and gas equivalent production regi
98、stering historical new high and profit reaching the best level in a decade.In terms of exploration,we focused on expanding resources,increasing reserve and obtaining more exploration licenses,launched the“Deep Earth”project,strengthened risk exploration and trap pre-exploration in new regions and ar
99、eas,and achieved a number of oil and gas discoveries,including breakthroughs in Shunbei oil and gas in Tarim Basin,shale oil in Bohai Bay Basin and Subei Basin and shale gas in West and Southeast Sichuan.The Shengli Jiyang Shale Oil National Demonstration Zone progressed efficiently.In crude oil dev
100、elopment,we accelerated the capacity building of major oilfields,such as Shunbei and Tahe,and strengthened fine-tuned development of mature oil fields.In natural gas development,we actively promoted the capacity building of key natural gas blocks in Shunbei Zone Two and continental facies gas in Wes
101、t Sichuan,scaled up mid-term and long-term LNG contracts,upgraded resources security and enhanced optimization,the profitability of whole natural gas business chain recorded a continuous growth.The Companys production of oil and gas equivalent in 2022 was 488.99 million barrels,up by 1.9%,among whic
102、h,domestic crude oil production totaled 250.79 million barrels,up by 0.5%and natural gas production reached 1,248.8 billion cubic feet,up by 4.1%.Summary of Operations for the Exploration and Production SegmentChange from2022202120202021 to 2022(%)Oil and gas production(mmboe)488.99479.74459.021.9Cr
103、ude oil production(mmbbls)280.86279.76280.220.4China250.79249.60249.520.5Overseas30.0730.1630.70(0.3)Natural gas production(bcf)1,248.751,199.441,072.334.1Summary of Reserves of Crude Oil and Natural GasCrude oil reserves(mmbbls)Items31 December 202231 December 2021Proved reserves1,9621,749Proved de
104、veloped reserves1,7661,578China1,4891,291Consolidated companies1,4891,291Shengli1,105961Others384330Overseas277287Consolidated companies1724Equity accounted entities260263Proved undeveloped reserves196171China153125Consolidated companies153125Shengli4117Others112108Overseas4346Consolidated companies
105、00Equity accounted entities434611CHINA PETROLEUM&CHEMICAL CORPORATIONAnnual Report 2022Business Review and ProspectsNatural gas reserves(bcf)Items31 December 202231 December 2021Proved reserves8,8068,456Proved developed reserves7,1386,740China7,1356,734Consolidated companies7,1356,734Puguang1,4171,5
106、82Fuling1,6321,529Others4,0863,623Overseas36Consolidated companies00Equity accounted entities36Proved undeveloped reserves1,6681,716China1,6671,715Consolidated companies1,6671,715Fuling9999Others1,5681,616Overseas11Consolidated companies00Equity accounted entities11Exploration and Production Activit
107、iesWells drilled(as of 31 December)20222021ExploratoryDevelopmentExploratoryDevelopmentProductiveDryProductiveDryProductiveDryProductiveDryChina3641111,95833631291,8284Consolidated companies3641111,95833631291,8284Shengli159481,0292170589442Others205639291193718842Overseas5Consolidated co
108、mpanies00000020Equity accounted entities5Total3691301,9424Wells drilling(as of 31 December)20222021GrossNetGrossNetExploratory DevelopmentExploratory DevelopmentExploratoryDevelopmentExploratoryDevelopmentChina71Consolidated companies71082011082
109、01Shengli29655Others744675146Overseas02010123062Consolidated companies00000301Equity accounted entities02010120061Total83Oil productive wells(as of 31 December)20222021GrossNetGrossNetChina54,08954,08953,85153,851Consolidated companies54,08954,08953,85153,
110、851Shengli35,17135,17134,99134,991Others18,91818,91818,86018,860Overseas5,4602,3135,5342,372Consolidated companies30113011Equity accounted entities5,4302,3025,5042,361Total59,54956,40259,38556,22312CHINA PETROLEUM&CHEMICAL CORPORATIONAnnual Report 2022Business Review and ProspectsBUSINESS REVIEW AND
111、 PROSPECTS(CONTINUED)Natural gas productive wells(as of 31 December)20222021RegionGrossNetGrossNetChina7,7797,7197,5397,489Consolidated companies7,7797,7197,5397,489Puguang82827979Fuling886886779779Others6,8116,7516,6816,631Total7,7797,7197,5397,489Unit:Square kilometersArea under license(as of 31 D
112、ecember)20222021Acreage with exploration licenses372,078390,023China372,078390,023Acreage with development licenses44,61742,391China38,93736,480Overseas5,6805,911(2)RefiningIn 2022,the Company actively addressed the challenges brought by the volatile fluctuation of crude oil price and slack market d
113、emand,strengthened coordination among procurement,storage and transportation as well as production,and focused on optimisation and integration of production and marketing.We enhanced global resources allocation and inventory management to reduce procurement cost.Closely following the market demand,w
114、e flexibly adjusted the utilisation rate,product mix and exports of refined oil products.Efforts were made to carry forward the adjustment to increase the yield of chemical feedstock and refining specialties,and to increase production of marketable products such as low-sulfur bunker fuel,base oil an
115、d needle coke etc.We accelerated the construction of world-class refining bases and advanced with structural adjustment projects in an orderly manner.We continued to increase high-purity hydrogen production capacity and have built up 9 hydrogen supply centers for hydrogen fuel cells.In 2022,the Comp
116、any processed 242 million tonnes of crude oil and produced 140 million tonnes of refined oil products with diesel output up by 5.4%year on year.Summary of Operations for the Refining Segment Unit:million tonnesChange from2022202120202021 to 2022(%)Refinery throughput242.27255.28236.91(5.1)Gasoline,d
117、iesel and kerosene production140.15146.21141.50(4.1)Gasoline59.0565.2157.91(9.4)Diesel63.0959.8563.215.4Kerosene18.0121.1520.38(14.8)Light chemical feedstock production42.6545.4140.22(6.1)Light product yield(%)74.0673.8374.340.23 percentage pointsRefinery yield(%)94.9694.6594.770.31 percentage point
118、sNote:Includes 100%of the production from domestic joint ventures.(3)Marketing and DistributionIn 2022,facing the sluggish demand for refined oil products,the Company brought advantages in integrated business and distribution network into full play and expanded the market through high quality servic
119、e.We reinforced market analysis and forecast,strengthened resources coordination and implemented targeted differentiation strategy.The sales volume of diesel rose by 8.6%and the retail volume of vehicle LNG up by 9.7%year on year.We vigorously expanded the low-sulfur bunker fuel market and further c
120、onsolidated our market position.We rapidly developed online business and client satisfaction upgraded significantly.The quality and profitability for the non-fuel business were further boosted.We optimised the allocation of service stations and stepped up the construction of new energy service netwo
121、rk.Our battery swapping stations,carbon-neutral service stations and oil product depots were put into operations,and the number of hydrogen refueling stations ranked No.1 in the world,making continuous efforts for the transition to an integrated energy service provider of petrol,gas,hydrogen,power a
122、nd services.Total sales volume of refined oil products for the year was 207 million tonnes,of which domestic sales volume accounted for 163 million tonnes.13CHINA PETROLEUM&CHEMICAL CORPORATIONAnnual Report 2022Business Review and ProspectsSummary of Operations for the Marketing and Distribution Seg
123、mentChange from2022202120202021 to 2022(%)Total sales volume of oil products(million tonnes)*206.74220.79217.91(6.4)Total domestic sales volume of oil products(million tonnes)162.55171.31167.99(5.1)Retail sales(million tonnes)106.91114.30113.19(6.5)Direct sales and distribution(million tonnes)55.655
124、7.0154.80(2.4)Annual average throughput per station(tonne/station)3,4703,7203,686(6.7)31 December202231 December202131 December2020Change fromthe end of theprevious year tothe end of thereporting period(%)Total number of service stations under the Sinopec brand30,80830,72530,7130.3Number of company-
125、operated stations30,80830,72530,7070.3Note:The total sales volume of refined oil products includes the amount of refined oil marketing and trading sales volume.(4)ChemicalsIn 2022,in the face of the downward business cycle and high costs for feedstock,the Company closely followed the market demand,o
126、ptimised the structure of feedstock,facilities and products with a profit-driven orientation,maintained high utilisation rate in profitable facilities,and reduced products with no marginal contribution.We sped up construction of advantageous and advanced production capacities and shutting down of no
127、ne competitive capacities.Integration of production,marketing,research and application was further cemented to develop high-end products and new materials and to increase production of high value-added products such as PV-grade EVA,metallocene polyolefin and polybutadiene rubber.The coal chemical bu
128、siness also witnessed improvement in both quality and efficiency.Annual ethylene production was 13.44 million tonnes.By strengthening strategic customer cooperation and tailor-made product service,the total chemical sales volume reached 81.65 million tonnes with all products sold,up by 0.1%.Summary
129、of Operations for the Chemicals Segment Unit:thousand tonnesChange from2022202120202021 to 2022(%)Ethylene13,43713,38012,0600.4Synthetic resin18,54418,99917,370(2.4)Synthetic rubber1,2841,2521,0672.6Synthetic fiber monomer and polymer8,8869,2019,057(3.4)Synthetic fiber1,1121,3571,313(18.1)Note:Inclu
130、des 100%of the production of domestic joint ventures.(5)Science and Technology InnovationIn 2022,the Company continued increasing input in science and technology innovation,sought breakthroughs in key and core technologies,beefed up front-end basic research and further deepened the reform of the sci
131、ence and technology system and mechanism to enhance innovation in supporting and leading the business growth.In upstream,breakthroughs were made in the exploration and development theory for deep and ultra-deep oil and gas as well as shale oil and gas.In refining,we realized scaled-up test productio
132、n and application for bio-jet fuel.In chemicals,the scaled-up production of large tow carbon fibre was achieved,and POE and polybutene-1 pilot units were commissioned in one shot with on-spec products.In addition,the wet oxidation process for sulfur-containing waste alkali fluid for mega ethylene cr
133、ackers was industrialized.The complete set of software for online real-time optimization(RTO)of S-Zorb unit was put into operation successfully.In 2022,the Company filed 8,687 patent applications at home and abroad with 6,289 granted.The Company also won one gold award,one silver award and four exce
134、llent awards in China for patents.14CHINA PETROLEUM&CHEMICAL CORPORATIONAnnual Report 2022Business Review and ProspectsBUSINESS REVIEW AND PROSPECTS(CONTINUED)(6)Health and SafetyIn 2022,the Company spared no effort to promote the HSE management system with professional management further strengthen
135、ed.The Company enhanced the employee health and public safety and security management,improved operation conditions and enhanced the safety equipment allocation,thus the occupational,physical and psychological health of employees were safeguarded both at home and abroad.We implemented the all-staff
136、safety production responsibility mechanism and further advanced the three-year safety production harnessing campaign.Specific measures were taken to tackle safety risk especially for hazardous chemicals,outdated production units and oil&gas storage facilities.(7)Capital ExpendituresIn 2022,focusing
137、on quality and return of investment,the Company continuously optimised its investment projects,with total capital expenditures of RMB189.1 billion.Capital expenditure for the exploration and production segment was RMB83.3 billion,mainly for crude oil production capacity construction of Shunbei,Tahe
138、and Shengli offshore,natural gas capacity build-up of West Sichuan,Fuling and Weirong,the development and test of Shengli Jiyang National Demonstration Zone and the construction of oil and gas storage and transportation facilities.Capital expenditure for the refining segment was RMB22.9 billion,main
139、ly for expansion of Zhenhai Refining and Chemical project,refining structural adjustment projects in Anqing and Yangzi and the construction of hydrogen supply centers.RMB19.1 billion was spent in the marketing and distribution segment,mainly for the development of integrated energy station network c
140、overing petrol,gas,hydrogen,power and service,renovation of the existing stations and non-fuel business.The chemical segment saw a capital expenditure of RMB58.6 billion,mainly for ethylene projects in Zhenhai,Sinopec-SK,Hainan,and Tianjin Nangang,aromatics projects in Jiujiang and Zhenhai,large tow
141、 carbon fibre project in Shanghai,PTA project in Yizheng,and caprolactam relocation project in Baling,etc.Capital expenditure for the corporate and others segment was RMB5.2 billion,mainly for R&D facilities and information technology application projects.BUSINESS OUTLOOK1 Market OutlookLooking ahea
142、d to 2023,China is expected to achieve an overall upturn in economic performance.Domestic demand for natural gas,refined products and chemicals is expected to grow rapidly.International crude oil price is expected to fluctuate at medium and high price level due to the impacts of changes in global su
143、pply and demand,geopolitics and inventory.2 Production and OperationIn 2023,guided by the strategy of building a world-class enterprise,the Company will proactively lead the industry transition and development,enhance science and technology innovation,improve production and operation,deepen reform,p
144、olish the governance and corporate image,consolidate the foundation of safety,and put focuses on the following work.E&P:The Company will strengthen exploration in strategic areas,and increase high-quality reserves;strengthen efficient development and stabilize oil production while increasing gas pro
145、duction and reducing costs.In crude development,we will focus on production capacity increase,depletion control,recoverable reserves addition and costs reduction,accelerate the building of production capacity in Jiyang and Tahe,and strengthen the fine-tuned development of mature fields.In natural ga
146、s development,we will accelerate the building of production capacity of marine-face gas fields in west Sichuan and the northern part of Hubei,and improve natural gas production efficiency and profitability;diversify natural gas sourcing channels,cultivate high-loyalty customers,and continue to upgra
147、de the natural gas production,supply,storage and marketing system.The planned annual production of crude oil is 280.23 million barrels,of which 29.03 million barrels from overseas.Planned natural gas production is 1,291.8 billion cubic feet.15CHINA PETROLEUM&CHEMICAL CORPORATIONAnnual Report 2022Bus
148、iness Review and ProspectsRefining:Oriented by efficiency and profitability,the Company will coordinate production and marketing,and accelerate the optimization and upgrading of the business.We will deepen the implementation of differentiated procurement strategies,dynamically optimize the allocatio
149、n of crude oil resources and reduce procurement costs;improve facility utilization,flexibly adjust the yield of refined oil products and the diesel-to-gasoline ratio;carry forward the adjustment to increase the yield of chemical feedstock in an orderly and cost effective manner,promote the shifting
150、from refined products to specialty products,such as lube oil and grease,needle coke and other special products,and enhance overall profitability;optimize the structure and volume of export products.For the whole year,the Company plans to process 250 million tonnes of crude oil and produce 146 millio
151、n tonnes of refined oil products.Marketing:The Company will give full play to its advantages in integrated business,strengthen digital empowerment and expand market share.We will improve the market monitoring system,dynamically optimize the pricing strategy,and continuously improve the retail volume
152、 and profits;accurately make plans for incremental network layout,enhance the network integrity and stability;consolidate and enhance the marketing advantages of the low-sulphur bunker fuel,and accelerate the expansion of overseas markets and end-user retail;strengthen the development of Sinopec-bra
153、nd products,improve the non-fuel business in both operation and profitability;innovate the business model,accelerate the development of new energy stations,and strive to make greater breakthroughs in building the company into an integrated energy service provider with business covering“petrol,gas,hy
154、drogen,power and non-fuel services”.The annual domestic sales volume of refined oil products is planned to be 175 million tonnes.Chemicals:The Company will take active response to the trough of the chemical business cycle,press ahead with the“basic+high-end”strategy and cultivate new advantages of“c
155、ost+value-added+green and low-carbon”.We will continue to diversify feedstocks and enhance cost advantages;adjust the facility utilization and product slate in a timely manner with market demand as our guide;continue to increase efforts in developing new materials and high value-added products to en
156、hance profitability;accelerate the layout and development of large ethylene projects and the upgrading of the aromatics chain to continuously enhance market competitiveness.At the same time,the Company will optimize its marketing strategy based on demand,vigorously promote market development and enh
157、ance product value by providing customers with integrated solutions.The annual ethylene production plan is 14 million tonnes.Science and Technology Development:The Company will firmly implement the innovation-driven strategy,make every effort to make breakthroughs in core technologies and promote th
158、e reform of the science and technology system to accelerate its progress towards becoming a world-leading clean energy and chemical company.Specific focuses include technology breakthroughs in oil and gas exploration and production with the emphases on oil and gas reserves increase,oil production st
159、abilization,gas production increase,cost reduction,and efficiency improvement;coordinated development of integration of refining and chemical technologies,refined oil products structure optimization,clean,efficient and low-carbon utilization of resources;key technology development and application fo
160、r the adjustment to increase the yield of chemical feedstock and refining specialties and hydrogen energy.We will accelerate the core technological breakthroughs for chemical and material upgrading,as well as those for diverse and clean-process basic chemicals and high value-added synthetic material
161、s production.Capex:The capital expenditure plan for 2023 is RMB165.8 billion,of which RMB74.4 billion will be spent in the E&P segment,mainly on the crude production capacity building in Jiyang and Tahe,natural gas production capacity building in west Sichuan and oil and gas storage and transportati
162、on facilities;RMB22.7 billion will be spent in the refining segment,mainly on the Yangzi refining restructuring and the Zhenhai expansion project;RMB16.6 billion will be spent in the marketing and distribution segment,mainly for the development of the integrated energy station network,the renovation
163、 of the existing stations and non-fuel business;RMB46.6 billion will be spent in the chemical segment,mainly for the ethylene projects in Zhenhai,Hainan,Tianjin Nangang and Maoming,PTA project in Yizheng and the relocation of CPL project in Baling;RMB5.5 billion will be spent in corporate and others
164、,mainly for R&D and IT.16CHINA PETROLEUM&CHEMICAL CORPORATIONAnnual Report 2022Managements Discussionand AnalysisMANAGEMENTS DISCUSSION AND ANALYSISTHE FOLLOWING DISCUSSION AND ANALYSIS SHOULD BE READ IN CONJUNCTION WITH THE COMPANYS AUDITED FINANCIAL STATEMENTS AND THE ACCOMPANYING NOTES.PARTS OF T
165、HE FOLLOWING FINANCIAL DATA WERE ABSTRACTED FROM THE COMPANYS AUDITED FINANCIAL STATEMENTS THAT HAVE BEEN PREPARED ACCORDING TO THE IFRS.THE PRICES IN THE FOLLOWING DISCUSSION DO NOT INCLUDE VALUE-ADDED TAX.1 CONSOLIDATED RESULTS OF OPERATIONSIn 2022,the Companys revenue was RMB3,318.2 billion,incre
166、ased by 21.1%compared with that of 2021.That was mainly due to increased prices of petroleum and petrochemical products resulting from increase of international crude oil prices.The Company actively deepened optimisation of production,stabilised operation,expanded market,enhanced adjustment of feeds
167、tocks,products and facilities to actively respond to unfavorable factors of weak demand,and realised RMB75.8 billion operating profit,down by 19.9%year on year.The following table sets forth the main revenue and expenses from the Companys consolidated financial statements:Year ended 31 December20222
168、021Change(%)RMB millionRMB millionRevenue3,318,1682,740,88421.1Revenue from primary business3,257,3562,679,50021.6Other operating revenues60,81261,384(0.9)Operating expenses(3,242,333)(2,646,256)22.5Purchased crude oil,products and operating supplies and expenses(2,684,756)(2,076,665)29.3Selling,gen
169、eral and administrative expenses(55,809)(54,978)1.5Depreciation,depletion and amortisation(109,906)(115,680)(5.0)Exploration expenses,including dry holes(10,591)(12,382)(14.5)Personnel expenses(103,585)(103,492)0.1Taxes other than income tax(263,991)(259,032)1.9Impairment reversals/(losses)on trade
170、and other receivables1,084(2,311)Other operating income/(expenses),net(14,779)(21,716)(31.9)Operating profit75,83594,628(19.9)Net finance costs(9,974)(9,010)10.7Investment income and share of profits less losses from associates and joint ventures28,53923,55121.2Profit before taxation94,400109,169(13
171、.5)Income tax expense(18,757)(23,318)(19.6)Profit for the year75,64385,851(11.9)Attributable to:Shareholders of the Company66,15371,975(8.1)Non-controlling interests9,49013,876(31.6)(1)RevenueIn 2022,the Companys revenue from primary business was RMB3,257.4 billion,representing an increase of 21.6%o
172、ver 2021.This was mainly due to the increased price in petroleum and petrochemical products.The following table sets forth the external sales volume,average realised prices and respective rates of change of the Companys major products in 2022 and 2021:Average realised priceSales volume(thousand tonn
173、es)(RMB/tonne,RMB/thousand cubic meters)Year ended 31 DecemberChange(%)Year ended 31 DecemberChange(%)2022202120222021Crude oil8,1717,16214.14,4493,04945.9Natural gas(million cubic meters)30,84529,9533.01,8081,60612.6Gasoline80,88490,836(11.0)9,3197,73120.5Diesel81,65778,3354.27,7385,89131.4Kerosene
174、17,36121,270(18.4)6,5453,77273.5Basic chemical feedstock36,05336,173(0.3)6,2045,48613.1Monomer and polymer for synthetic fibre7,4126,9556.66,1166,537(6.4)Synthetic resin17,47117,923(2.5)8,2728,325(0.6)Synthetic fibre1,1931,457(18.1)8,1197,5218.0Synthetic rubber1,3641,2866.111,36311,0992.4Chemical fe
175、rtiliser779976(20.2)3,0152,8077.417CHINA PETROLEUM&CHEMICAL CORPORATIONAnnual Report 2022Managements Discussionand AnalysisMost crude oil and a small portion of natural gas produced by the Company were internally used for refining and chemical production,with the remaining sold to external customers
176、.In 2022,the turnover from crude oil,natural gas and other upstream products sold externally amounted to RMB192.3 billion,representing an increase of 23.3%over 2021.The change was mainly due to increases in crude oil and natural gas prices and sales volume.In 2022,petroleum products(mainly consistin
177、g of refined oil products and other refined petroleum products)sold by Refining Segment and Marketing and Distribution Segment achieved external sales revenues of RMB1,855.8 billion(accounting for 55.9%of the Companys revenue),representing an increase of 20.9%over 2021,mainly due to the increase in
178、prices of refined oil products,which effectively offset the impact of decrease in sales volume.The sales revenue of gasoline,diesel and kerosene was RMB1,499.3 billion,representing an increase of 20.5%over 2021,and accounting for 80.8%of the total sales revenue of petroleum products.Sales revenue of
179、 other refined petroleum products was RMB356.5 billion,representing an increase of 22.3%compared with that of 2021,accounting for 19.2%of the total sales revenue of petroleum products.The Companys external sales revenue of chemical products was RMB449.9 billion,representing an increase of 5.9%over 2
180、021,accounting for 13.6%of the Companys total revenue.This was mainly due to the increase in price of certain chemical products.(2)Operating expensesIn 2022,the Companys operating expenses was RMB3,242.3 billion,increased by 22.5%compared with that of 2021.The operating expenses mainly consisted of
181、the following:Purchased crude oil,products and operating supplies and expenses was RMB2,684.8 billion,representing an increase of 29.3%over the same period of 2021,accounting for 82.8%of the total operating expenses,of which:Crude oil purchasing expenses was RMB999.7 billion,representing an increase
182、 of 45.0%over the same period of 2021.Crude oil purchased externally used for processing in 2022 was 201.98 million tonnes(excluding the volume processed for third parties),representing a decrease of 5.0%over the same period of 2021.The average cost of processing crude oil purchased externally was R
183、MB4,950 per tonne,representing an increase by 52.6%over 2021.The Companys other purchasing expenses was RMB1,685.0 billion,representing an increase of 21.5%over the same period of 2021.This was mainly attributable to the increased prices in naphtha and other feedstocks and traded crude oil and refin
184、ed oil products.Selling,general and administrative expenses was RMB55.8 billion,representing an increase of 1.5%over 2021.Depreciation,depletion and amortisation was RMB109.9 billion,representing a decrease of 5.0%over the same period of 2021.That was mainly because that the proved reserve increased
185、 resulting from the increase of international crude oil prices in 2021,thus the depletion ratio of oil and gas assets decreased,which led to the depreciation and depletion decreased by RMB7.6 billion.Exploration expenses was RMB10.6 billion,representing a decrease of 14.5%compared with 2021.That was
186、 mainly due to optimised drilling in shale gas and other unconventional resources,improved exploration success rate to effectively decrease the expenses in dry holes.Personnel expenses was RMB103.6 billion,representing an increase of 0.1%over 2021.Taxes other than income tax was RMB264.0 billion,rep
187、resenting an increase of 1.9%over the same period of 2021.That was mainly because that the special oil gain levy increased by RMB12.3 billion resulting from the increased crude oil price,and the consumption tax decreased by RMB7.1 billion resulting from the decreased sales volume of domestic refined
188、 oil products in the refining segment.Impairment reversals on trade and other receivables was RMB1.1 billion.The impairment losses on trade and other receivables decreased by RMB3.4 billion over the same period of 2021,which was mainly due to the reversed provision in the impairment of entrusted loa
189、ns in 2022.Other operating expenses,net was RMB14.8 billion,representing a decrease of 31.9%over the same period of 2021.That was mainly due to the decrease of impairment in long-term assets.(3)Operating profit was RMB75.8 billion,representing a decrease of 19.9%over the same period of 2021.That was
190、 mainly due to weak domestic demand of domestic petroleum and petrochemical products,and decreased operating margin for domestic refining and chemicals under high crude oil price circumstance.(4)Profit before taxation was RMB94.4 billion,representing a decrease of 13.5%compared with 2021.(5)Income t
191、ax expense was RMB18.8 billion,representing a decrease of 19.6%year on year.That was mainly because the profit in 2022 decreased year on year.(6)Profit attributable to non-controlling shareholders was RMB9.5 billion,representing a decrease of RMB4.4 billion and 31.6%over the same period of 2021.(7)P
192、rofit attributable to shareholders of the Company was RMB66.2 billion,representing a year-on-year decrease of 8.1%.18CHINA PETROLEUM&CHEMICAL CORPORATIONAnnual Report 2022Managements Discussionand AnalysisMANAGEMENTS DISCUSSION AND ANALYSIS(CONTINUED)2 RESULTS OF SEGMENT OPERATIONSThe Company manage
193、s its operations through four business segments,namely exploration and production segment,refining segment,marketing and distribution segment and chemicals segment,and corporate and others.Unless otherwise specified,the inter-segment transactions have not been eliminated from financial data discusse
194、d in this section.In addition,the operating revenue data of each segment include other operating revenues.The following table shows the operating revenues by each segment,the contribution of external sales and inter-segment sales as a percentage of operating revenues before elimination of inter-segm
195、ent sales,and the contribution of external sales as a percentage of consolidated operating revenues(i.e.after elimination of inter-segment sales)for the periods indicated.Operating revenuesYear ended 31 DecemberAs a percentage ofconsolidated operatingrevenue before eliminationof inter-segment salesY
196、ear ended 31 DecemberAs a percentage ofconsolidated operatingrevenue after eliminationof inter-segment salesYear ended 31 December2022202222021RMB millionRMB million(%)(%)(%)(%)Exploration and Production Segment External sales*197,499162,7003.33.46.05.9Inter-segment sales121,91287,2982.11
197、.8 Operating revenues319,411249,9985.45.2 Refining Segment External sales*198,714173,1093.33.66.06.3Inter-segment sales1,376,4251,212,45523.324.9 Operating revenues1,575,1391,385,56426.628.5 Marketing and Distribution Segment External sales*1,700,4531,404,46928.629.051.251.2Inter-segment sales13,421
198、7,0750.20.1 Operating revenues1,713,8741,411,54428.829.1 Chemicals Segment External sales*459,824435,2617.79.013.816.0Inter-segment sales80,32870,2421.41.4 Operating revenues540,152505,5039.110.4 Corporate and Others External sales*761,678565,34512.811.723.020.6Inter-segment sales1,028,800732,35617.
199、315.1 Operating revenues1,790,4781,297,70130.126.8 Operating revenue before elimination of inter-segment sales5,939,0544,850,310100.0100.0 Elimination of inter-segment sales(2,620,886)(2,109,426)Revenue3,318,1682,740,884 100.0100.0*Other operating revenues are included.19CHINA PETROLEUM&CHEMICAL COR
200、PORATIONAnnual Report 2022Managements Discussionand AnalysisThe following table sets forth the operating revenues,operating expenses and operating profit by each segment before elimination of the inter-segment transactions for the periods indicated,and the percentage change of 2022 compared to 2021.
201、Year ended 31 December20222021ChangeRMB millionRMB million(%)Exploration and Production Segment Operating revenues319,411249,99827.8Operating expenses265,695245,3138.3Operating profit53,7164,6851,046.6Refining Segment Operating revenues1,575,1391,385,56413.7Operating expenses1,562,9281,320,28518.4Op
202、erating profit12,21165,279(81.3)Marketing and Distribution Segment Operating revenues1,713,8741,411,54421.4Operating expenses1,689,3371,390,34021.5Operating profit24,53721,20415.7Chemicals Segment Operating revenues540,152505,5036.9Operating expenses554,279494,39712.1Operating(loss)/profit(14,127)11
203、,106Corporate and Others Operating revenues1,790,4781,297,70138.0Operating expenses1,789,1601,300,92637.5Operating profit/(loss)1,318(3,225)Elimination of inter-segment profit/(loss)(1,820)(4,421)(1)Exploration and Production SegmentMost crude oil and a small portion of the natural gas produced by t
204、he exploration and production segment were used for the Companys refining and chemical production.Most of the natural gas and a small portion of crude oil were sold externally to other customers.In 2022,the operating revenues of this segment was RMB319.4 billion,representing an increase of 27.8%over
205、 2021.This was mainly attributed to the increase of both realised price and the sales volume of crude oil and natural gas.In 2022,the segment sold 34.28 million tonnes of crude oil,representing an increase of 0.6%over 2021.Natural gas sales volume was 31.9 billion cubic meters(bcm),representing an i
206、ncrease of 3.3%over 2021.Regasified LNG sales volume was 21.5 bcm,representing an increase of 12.5%over 2021.LNG sales volume was 1.42 million tonnes,representing a decrease of 77.0%over 2021,as a result of flexible adjustment of sales strategy and structure based on purchase prices and market condi
207、tions to reduce sales volume of products with lower margin.Average realised prices of crude oil,natural gas,regasified LNG,and LNG were RMB4,312 per tonne,RMB1,816 per thousand cubic meters,RMB3,535 per thousand cubic meters,and RMB5,710 per tonne,respectively,representing an increase of 47.1%,13.1%
208、,66.8%,and 46.1%respectively over 2021.In 2022,the operating expenses of this segment was RMB265.7 billion,representing an increase of 8.3%over 2021.That was mainly due to the reasons that:special oil income levy and resource tax increased by RMB15.3 billion year on year;Procurement cost of LNG incr
209、eased by RMB12.3 billion year on year;Depreciation,depletion and amortisation decreased by RMB7.6 billion year on year,as a result of the decrease of depletion ratio;Exploration expense decreased by RMB1.8 billion year on year.In 2022,the oil and gas lifting cost was RMB773.1 per tonne,representing
210、a year on year decrease of 0.5%.In 2022,the operating profit of the exploration and production segment was RMB53.7 billion,representing an increase of RMB49.0 billion and 1,046.6%over the same period of 2021,which was mainly attributable to the fact that the segment seized the opportunity of high cr
211、ude oil prices,improved proved reserve and production volume of oil and gas,enhanced cost control,optimized the operation of natural gas value chain,and realised in a significant rise in profitability.(2)Refining SegmentBusiness activities of the refining segment include purchasing crude oil from th
212、ird parties and the exploration and production segment of the Company,as well as processing crude oil into refined petroleum products.Gasoline,diesel and kerosene were sold internally to the marketing and distribution segment of the Company;part of the chemical feedstock was sold internally to the c
213、hemicals segment of the Company;and other refined petroleum products were sold externally to both domestic and overseas customers.20CHINA PETROLEUM&CHEMICAL CORPORATIONAnnual Report 2022Managements Discussionand AnalysisMANAGEMENTS DISCUSSION AND ANALYSIS(CONTINUED)In 2022,the operating revenues of
214、this segment was RMB1,575.1 billion,representing an increase of 13.7%over 2021.This was mainly attributed to the increases in prices of gasoline,diesel,kerosene,naphtha,and refining by-products.The following table sets forth the sales volumes,average realised prices and the respective changes of the
215、 Companys major refined oil productsof the segment in 2022 and 2021.Sales Volume(thousand tonnes)Average realised price(RMB/tonne)Year ended 31 DecemberYear ended 31 December20222021Change(%)20222021Change(%)Gasoline57,56263,827(9.8)8,9677,20824.4Diesel61,16958,8074.07,3765,56332.6Kerosene14,78217,3
216、13(14.6)6,4683,73473.2Chemical feedstock41,47045,234(8.3)5,0163,98925.8Other refined petroleum products65,94568,783(4.1)4,5535,061(10.0)In 2022,sales revenue of gasoline was RMB516.2 billion,representing an increase of 12.2%over 2021.The sales revenue of diesel was RMB451.2 billion,representing an i
217、ncrease of 37.9%over 2021.The sales revenue of kerosene was RMB95.6 billion,representing an increase of 47.9%over 2021.The sales revenue of chemical feedstock was RMB208.0 billion,representing an increase of 15.3%over 2021.The sales revenue of refined petroleum products other than gasoline,diesel,ke
218、rosene and chemical feedstock was RMB300.2 billion,representing a decrease of 13.8%over 2021.In 2022,the segments operating expenses was RMB1,562.9 billion,representing an increase of 18.4%over 2021.This was mainly due to the rising procurement cost resulting from the international crude oil prices
219、increase year on year.In 2022,the average processing cost for crude oil was RMB4,962 per tonne,representing an increase of 49.0%over 2021.Total crude oil and other feedstock processed was 247.57 million tonnes(excluding volume processed for third parties),representing a decrease of 6.2%over 2021.The
220、 total cost of crude oil processed was RMB1,228.3 billion,representing an increase of 39.8%over 2021.In 2022,refining margin was RMB344 per tonne,representing a decrease of RMB188 per tonne compared with that of the same period of 2021.This was mainly attributed to the decrease in domestic gasoline
221、and diesel processing margin under high crude oil prices circumstance,and the significant increase in spread of imported crude and overseas freight and insurance cost year-on-year.In 2022,the refining unit cash operating cost(defined as operating expenses less the processing cost of crude oil and re
222、fining feedstock,depreciation and amortisation,taxes other than income tax and other operating expenses,then divided by the throughput of crude oil and refining feedstock)was RMB223 per tonne,representing an increase of 4.6%over 2021,which was mainly attributed to the increase of unit fixed cost res
223、ulting from significant increase in the prices of fuels,as well as the decrease of processing volume.In 2022,the operating profit of the segment totalled RMB12.2 billion,representing a decrease of RMB53.1 billion and 81.3%compared with that of 2021.This is mainly due to the sharp decrease in refinin
224、g margin resulting from rising crude procurement cost,weak domestic oil products demand and decreased domestic gross margin of gasoline and diesel under high crude price circumstance.(3)Marketing and Distribution SegmentThe business activities of the marketing and distribution segment include purcha
225、sing refined oil products from the refining segment and the third parties,conducting direct sales and wholesale to domestic customers and retailing,distributing oil products through the segments retail and distribution network as well as providing related services.In 2022,the operating revenues of t
226、his segment was RMB1,713.9 billion,up by 21.4%year-on-year.This was mainly attributed to the increase in the sales prices of refined oil products.The sales revenues of gasoline totalled RMB754.4 billion,up by 7.4%year-on-year;the sales revenues of diesel were RMB633.9 billion,up by 37.0%year-on-year
227、;the sales revenues of kerosene were RMB114.4 billion,up by 42.4%year-on-year.The following table sets forth the sales volumes,average realised prices and respective percentage changes of the segments four major refined oil products in 2022 and 2021,including detailed information about retail,direct
228、 sales and distribution of gasoline and diesel:Sales volume(thousand tonnes)Average realised price(RMB/tonne)Year ended 31 DecemberYear ended 31 December20222021Change(%)20222021Change(%)Gasoline80,95790,873(10.9)9,3187,73020.5Retail56,98964,325(11.4)9,9388,22320.9Direct sales and distribution23,968
229、26,548(9.7)7,8456,53720.0Diesel81,93278,5664.37,7375,89031.4Retail34,48133,6442.58,1766,53725.1Direct sales and distribution47,45144,9235.67,4195,40637.2Kerosene17,47421,296(17.9)6,5463,77273.5Fuel oil26,16225,8471.24,8173,43740.121CHINA PETROLEUM&CHEMICAL CORPORATIONAnnual Report 2022Managements Di
230、scussionand AnalysisIn 2022,the operating expenses of the segment were RMB1,689.3 billion,up by RMB299.0 billion and 21.5%year-on-year.This was mainly due to the rising oil products procurement costs resulting from the increase of crude price.In 2022,the segments marketing expense(defined as the ope
231、rating expenses less the purchase costs,taxes other than income tax,depreciation and amortization,divided by sales volume)was RMB208.6 per tonne,up by 5.5%year on year.This was mainly due to the increase of unit fixed cost resulting from the weak demand in domestic refined oil products and decreased
232、 operating volume.In 2022,the operating revenues of non-fuel business was RMB38.1 billion,up by RMB2.7 billion year-on-year and the profit of non-fuel business was RMB4.3 billion,up by RMB0.2 billion.In 2022,facing the challenge of weak domestic demand in the refined oil market,the segment brought i
233、ntegrated and network advantages into full play,coordinated internal and external resources,enhanced the effort in expanding market,and realised an operating profit of RMB24.5 billion,representing an increase of 15.7%year on year.(4)Chemicals segmentThe business activities of the chemicals segment i
234、nclude purchasing chemical feedstock from the refining segment and the third parties and producing,marketing and distributing petrochemical and inorganic chemical products.In 2022,the operating revenues of this segment was RMB540.2 billion,up by 6.9%year-on-year.This was mainly due to the increase i
235、n prices of basic organic chemicals,synthetic fibers,synthetic rubber year on year.In 2022,the sales revenue generated by the segments six major categories of chemical products(namely basic organic chemicals,synthetic resin,synthetic fiber monomer and polymer,synthetic fibre,synthetic rubber,and che
236、mical fertiliser)was RMB509.1 billion,up by 6.4%year-on-year,accounting for 94.2%of the operating revenues of the segment.The following table sets forth the sales volume,average realised prices and respective changes of each of the segments six categories of chemical products in 2022 and 2021.Sales
237、Volume(Thousand tonnes)Average realised price(RMB/tonne)Year ended 31 DecemberYear ended 31 December20222021Change(%)20222021Change(%)Basic organic chemicals46,97248,059(2.3)6,1925,31116.6Synthetic fibre monomer and polymer7,4967,0106.96,1406,580(6.7)Synthetic resin17,47517,924(2.5)8,2728,325(0.6)Sy
238、nthetic fibre1,1931,457(18.1)8,1227,5218.0Synthetic rubber1,3671,2896.011,36911,1042.4Chemical fertiliser812981(17.2)2,9882,7976.9In 2022,the operating expenses of the chemicals segment was RMB554.3 billion,representing an increase of 12.1%over 2021,mainly because of the price increase of naphtha an
239、d other chemical feedstock and fuels.In 2022,impacted by weak demand in chemical products and increased feedstock prices,chemical margin slumped.The operating loss of this segment was RMB14.1 billion,representing a decrease of profit of RMB25.2 billion over 2021.(5)Corporate and OthersThe business a
240、ctivities of corporate and others mainly consist of import and export business activities of the Companys subsidiaries,R&D activities of the Company,and managerial activities of headquarters.In 2022,the operating revenue generated from corporate and others was approximately RMB1,790.5 billion,repres
241、enting an increase of 38.0%over 2021.This was mainly attributed to the great increase in the trading prices of crude oil and refined oil products.In 2022,the operating expenses of corporate and others was RMB1,789.2 billion,representing an increase of 37.5%over 2021.In 2022,the operating profit from
242、 corporate and others was RMB1.3 billion,representing an increase of RMB4.5 billion over the same period of 2021.This was mainly due to the provision for bad debts made in 2021,which was partially reversed in 2022,as well as profit of the trading company increased resulting from its optimised procur
243、ement rhythm.22CHINA PETROLEUM&CHEMICAL CORPORATIONAnnual Report 2022Managements Discussionand AnalysisMANAGEMENTS DISCUSSION AND ANALYSIS(CONTINUED)3 ASSETS,LIABILITIES,EQUITY AND CASH FLOWSThe major funding sources of the Company are its operating activities and short-term and long-term loans.The
244、major use of funds includes operating expenses,capital expenditures,and repayment of the short-term and long-term debts.(1)Assets,liabilities and equityUnit:RMB millionAs of31 December2022As of31 December2021ChangeTotal assets1,948,6401,889,25559,385Current assets523,140558,024(34,884)Non-current as
245、sets1,425,5001,331,23194,269Total liabilities1,012,402974,18138,221Current liabilities667,385641,28026,105Non-current liabilities345,017332,90112,116Total equity attributable to shareholders of the Company784,706774,18210,524Share capital119,896121,071(1,175)Reserves664,810653,11111,699Non-controlli
246、ng interests151,532140,89210,640Total equity936,238915,07421,164As of 31 December 2022,the Companys total assets was RMB1,948.6 billion,representing an increase of RMB59.4 billion compared with that of the end of 2021,of which:Current assets were RMB523.1 billion,representing a decrease of RMB34.9 b
247、illion compared with that of the end of 2021,mainly because the cash and deposit decreased by RMB76.9 billion,and crude oil and refined oil product inventories increased by RMB36.8 billion as a result of international crude oil price increase.The Company increased investment in transition,the constr
248、uction in progress increased by RMB40.1 billion,and the net value of property plant and equipment increased by RMB31.8 billion;equity of associates and joint ventures increased by RMB24.8 billion due to the adjustment of Shanghai SECCO as a joint venture after the completion of its equity transactio
249、n.The Companys total liabilities were RMB1,012.4 billion,representing an increase of RMB38.2 billion compared with that of the end of 2021,of which:Current liabilities were RMB667.4 billion,representing an increase of RMB26.1 billion as compared with that of the end of 2021.This was mainly because f
250、acing the increased capital occupation resulting from weak demand of domestic petroleum and petrochemical products,and high crude oil price in 2022,the Company increased short-term debt to improve short-term liquidity.Non-current liabilities were RMB345.0 billion,representing an increase of RMB12.1
251、billion compared with that of the end of 2021.This was mainly due to an increase in long-term bank loans.Total equity attributable to owners of the Company was RMB784.7 billion,representing an increase of RMB10.5 billion compared with that of the end of 2021.(2)Cash FlowThe following table sets fort
252、h the major items in the consolidated cash flow statements for 2022 and 2021.23CHINA PETROLEUM&CHEMICAL CORPORATIONAnnual Report 2022Managements Discussionand AnalysisUnit:RMB millionYear ended 31 DecemberMajor items of cash flows20222021Net cash generated from operating activities116,269225,174Net
253、cash used in investing activities(95,010)(145,198)Net cash used in financing activities(39,699)(57,942)In 2022,the net cash generated from operating activities of the Company was RMB116.3 billion,representing a decrease of RMB108.9 billion over 2021.This was mainly due to the payment of taxes deferr
254、ed from the fourth quarter of 2021,and the decrease in operating profit.In 2022,the Companys net cash used in investing activities was RMB95.0 billion,representing a decrease of cash outflow of RMB50.2 billion year-on-year.This was mainly due to a RMB59.2 billion year-on-year raise of withdrawals at
255、 maturity in time deposits with maturities over three months,an increase of RMB25.8 billion in capital expenditures,and a RMB19.2 billion year-on-year decline of increase in time deposits with maturities over three months.In 2022,the Companys net cash used in financing activities was RMB39.7 billion
256、,representing a decrease of cash outflow of RMB18.2 billion year-on-year.This was mainly due to a year-on-year increase of RMB44.9 billion in net interest-bearing debt,and an increase of RMB21.8 billion in cash dividends distribution.At the end of 2022,the cash and cash equivalents were RMB93.4 bill
257、ion.(3)Contingent LiabilitiesPlease refer to“Material Guarantee Contracts and Their Performance”in the“Significant Events”section of this report(4)Capital ExpenditurePlease refer to“Capital Expenditures”in the“Business Review and Prospects”section of this report.(5)Research&Development and Environme
258、ntal ExpendituresR&D expenditures include expenses and capitalised cost occurred in the period.In 2022 the expenditures for R&D were RMB22.510 billion,of which expense was RMB12.773 billion,and capitalised cost was RMB9.737 billion.Environmental expenditures refer to the normal routine pollutant dis
259、charge fees paid by the Company,excluding capitalised cost of pollutant treatment properties.In 2022,the Company paid environmental expenditures of RMB16.823 billion.(6)Measurement of fair values of derivatives and relevant systemThe Company has established sound decision-making mechanism,business p
260、rocess and internal control systems relevant to financial instrument accounting and information disclosure.24CHINA PETROLEUM&CHEMICAL CORPORATIONAnnual Report 2022Managements Discussionand AnalysisMANAGEMENTS DISCUSSION AND ANALYSIS(CONTINUED)Items relevant to measurement of main fair values Unit:RM
261、B millionItemsBeginningof the yearEnd ofthe yearProfits and losses from variation of fair values in the current yearAccumulatedvariation offair valuesrecordedas equityImpairmentlossprovisionof thecurrent yearFundingsourcePurchase amount in the current yearSell and redemption amount in the current ye
262、arOther changesFinancial assets held for trading21,228(1,226)Fund2222(220)Derivative financial instruments1,350(1,838)(15,535)12,347Cash flow hedges13,79813,860(255)6,667(6,030)(320)Receivables financing5,9393,50732,546(34,978)Other equity instrument investments767730(79)148(151)45Total21,85416,261(
263、15,790)6,58833,922(30,038)(275)Derivatives investment:In 2022,the Company traded in commodity and currency derivatives according to the Annual Business Plan for Financial Derivatives approved by the Board.Such business met the regulatory requirements of financial derivatives,operated in a standardiz
264、ed manner,and achieved the goals of suppressing price fluctuation,stabilising operating profit,and preventing market risks.4 ANALYSIS OF FINANCIAL STATEMENTS PREPARED UNDER CASSThe major differences between the Companys financial statements prepared under CASs and IFRS are set out in Section C of th
265、e financial statements of the Company on page 204 of this report.(1)Under CASs,the operating income and operating profit or loss by reportable segments were as follows:For the year ended 31 December20222021RMB millionRMB millionOperating income Exploration and Production Segment319,411249,998Refinin
266、g Segment1,575,1391,385,564Marketing and Distribution Segment1,713,8741,411,544Chemicals Segment540,152505,503Corporate and Others1,790,4781,297,701Elimination of inter-segment sales(2,620,886)(2,109,426)Consolidated operating income3,318,1682,740,884Operating profit/(loss)Exploration and Production
267、 Segment48,538613Refining Segment11,61165,360Marketing and Distribution Segment25,19723,102Chemicals Segment(14,256)11,361Corporate and Others15,4809,521Elimination(1,820)(4,421)Financial expenses,investment income and losses/gains from changes in fair value11,6646,878Consolidated operating profit96
268、,414112,414Net profit attributable to equity shareholders of the Company66,30271,208Operating profit:In 2022,the operating profit of the Company was RMB96.4 billion,representing a decrease of RMB16.0 billion as compared with that of 2021.Net profit:In 2022,the net profit attributable to the equity s
269、hareholders of the Company was RMB66.3 billion,representing a decrease of RMB4.9 billion or 6.9%compared with 2021.25CHINA PETROLEUM&CHEMICAL CORPORATIONAnnual Report 2022Managements Discussionand Analysis(2)Financial data prepared under CASsAs of 31December 2022As of 31December 2021ChangeRMB millio
270、nRMB millionTotal assets1,948,6401,889,25559,385Non-current liabilities344,102331,93412,168Shareholders equity937,153916,04121,112Change analysis:At the end of 2022,the Companys total assets were RMB1,948.6 billion,representing an increase of RMB59.4 billion compared with that of the end of 2021.Thi
271、s was mainly due to the increased investment in transformation and upgrading,resulting in the construction in progress increased by RMB40.1 billion,fixed asset increased by RMB31.8 billion,and long-term equity investment increased by RMB24.8 billion.Inventory increased by RMB36.8 billion as a result
272、 of the crude and refined oil prices increase,and cash at bank and on hand decreased by RMB76.9 billion.At the end of 2022,the Companys non-current liabilities was RMB344.1 billion,representing an increase of RMB12.2 billion compared with that of the end of 2021.This was mainly due to an increase of
273、 RMB45.6 billion in the long-term loans to ensure the fund demand of investment projects,and bills payable decreased by RMB29.7 billion.At the end of 2022,total shareholders equity of the Company was RMB937.2 billion,representing an increase of RMB21.1 billion compared with that of the end of 2021.(
274、3)The results of the principal operations by segmentsSegmentsOperationincomeRMB millionOperationcostRMB millionGross profit margin*(%)Increase of operation income on a year-on-year basis(%)Increase ofoperation cost on a year-on-year basis(%)Increase/(decrease)of gross profit margin on a year-on-year
275、basis(%)Exploration and Production319,411214,83424.427.84.111.5Refining1,575,1391,317,8461.713.724.1(4.3)Marketing and Distribution1,713,8741,618,9735.421.422.8(1.0)Chemicals540,152529,2411.26.913.3(5.7)Corporate and Others1,790,4781,757,5351.838.038.5(0.4)Elimination of inter-segment sales(2,620,88
276、6)(2,619,066)N/AN/AN/AN/ATotal3,318,1682,819,3637.121.127.2(2.6)*:Gross profit margin=(operation income operation cost,tax and surcharges)/operation income.5 THE CAUSE AND IMPACT OF THE CHANGE IN THE COMPANYS ACCOUNTING POLICY,ACCOUNTING ESTIMATES AND ACCOUNTING METHODSFor details,please refer to No
277、te 3(26)to the financial statements prepared in accordance with CASs and Note 1 to the financial statement prepared in accordance with IFRS.26CHINA PETROLEUM&CHEMICAL CORPORATIONAnnual Report 2022Corporate GovernanceCORPORATE GOVERNANCE1 IMPROVEMENTS IN CORPORATE GOVERNANCE DURING THE REPORTING PERI
278、ODDuring the reporting period,the Company complied with the Articles of Association as well as domestic and overseas laws and regulations,adhered to the standard operation,continuously improved the level of corporate governance.The Board of Directors strengthened strategic planning,scientifically fo
279、rmulated development strategy and approved the medium-term and long-term development planning of the Company.The Independent Non-executive Directors conscientiously fulfilled their duties,actively attended the board meetings and meetings of special committees of the Board,reviewed proposals with due
280、 care,conducted research on scientific and technological innovation,and offered advice and suggestions on Companys reforms and development.The Company followed the latest regulatory requirements,and revised governance rules and regulations of the Company,such as Rules on Information Disclosure Manag
281、ement,Terms of Reference of the Independent Non-Executive Directors,Terms of Reference of the Secretary to the Board,and Rules on Insider Registration and Management etc.,to strengthen the corporate governance basis.It enhanced the construction of internal control system to promote the effectiveness
282、 of the implementation of internal control system continuously.It also improved the Companys transparency by focusing on high-quality information disclosure and investor relations management,and paying more attention to the communication and disclosure on ESG issues.As a result,the Company continuou
283、sly obtained A-level rating of Shanghai Stock Exchange in the assessment of information disclosure.The Company bought back shares for the first time since listing synchronously in both domestic and overseas markets to maintain the Companys value.It boosted the staff morale and enhanced the disciplin
284、e inspection and supervision through continuously improving the quality of Party building,which contributed to the effective implementation of the Board resolutions and the high-quality development of the Company.During the reporting period,there was no material inconsistency between Sinopec Corp.s
285、corporate governance and the requirements of the PRC Company Law and relevant regulations of the CSRC.The Board of Supervisors of Sinopec Corp.had no objection to any of the supervised matters.None of Sinopec Corp.,the Board,the Directors,the Supervisors,the Senior Management,the controlling shareho
286、lders or de facto controllers of Sinopec Corp.were under the investigation by the CSRC or received any regulatory sanction or was criticised publicly by the CSRC,the Hong Kong Securities and Futures Commission,the Securities and Exchange Commission of the United States,or received any public censure
287、 from Shanghai Stock Exchange,Hong Kong Stock Exchange,New York Stock Exchange or London Stock Exchange.2 GENERAL MEETINGSDuring the reporting period,Sinopec Corp.convened 2021 Annual General Meeting,First A Shareholders Class Meeting for 2022,and First H Shareholders Class Meeting for 2022 on 18 Ma
288、y 2022,in accordance with the required procedures of noticing,convening and holding the general meetings pursuant to the relevant laws and regulations and the Articles of Association.For details of the meetings,please refer to the poll results announcements published on 19 May 2022 on China Securiti
289、es Journal,Shanghai Securities News,Securities Times and the website of Shanghai Stock Exchange,as well as those published on 18 May 2022 on the website of Hong Kong Stock Exchange.3 EQUITY INTERESTS HELD BY DIRECTORS,SUPERVISORS AND OTHER SENIOR MANAGEMENTAs of 31 December 2022,Mr.Ling Yiqun,Direct
290、or,Senior Vice President,held 13,000 A shares of Sinopec Corp.Save as disclosed in this report,during the reporting period,none of the Directors,Supervisors or Senior Management of Sinopec Corp.and their associates had any interests or short positions(including any interest or short position that is
291、 regarded or treated as being held in accordance with the Securities and Futures Ordinance(SFO)in the shares,debentures and underlying shares of Sinopec Corp.or any associated corporations(as defined in Part XV of SFO)would fall to be disclosed to the Sinopec Corp.and the Hong Kong Stock Exchange un
292、der the Division 7 and 8 of Part XV of SFO,or which was recorded in the register required to be kept under section 352 of SFO,or otherwise should notified Sinopec Corp.,or the Hong Kong Stock Exchange pursuant to the Model Code for Securities Transactions by Directors of Listed Company under the Hon
293、g Kong Listing Rules.4 COMPANYS INDEPENDENCE FROM CONTROLLING SHAREHOLDERThe Company is independent from its controlling shareholder in terms of,among other matters,business,assets and finances.The controlling shareholder of the Company exercised shareholders rights through the general meeting accor
294、ding to applicable laws and didnt overstep the authority of the general meeting or directly or indirectly interfere with the Companys operating decisions and operating activities.The Company has a well-integrated independent business and independent operating capabilities.During the reporting period
295、,the Company did not identify the controlling shareholder taking advantage of its special position to misappropriate and damage the interests of the Company or the other shareholders.27CHINA PETROLEUM&CHEMICAL CORPORATIONAnnual Report 2022Corporate Governance5 COMPETITION BETWEEN SINOPEC CORP.AND IT
296、S CONTROLLING SHAREHOLDERPlease refer to“Performance of the Undertaking by China Petrochemical Corporation”under the section“Significant Events”in this annual report for details.6 IMPROVEMENT AND IMPLEMENTATION OF THE INTERNAL CONTROL SYSTEMFor details of internal control self-assessment and interna
297、l control auditing,please refer to the internal control assessment report and the internal control auditing report disclosed by the Company on the same date of this annual report.7 MANAGEMENT CONTROL OF SUBSIDIARIESThe Company implements standardized control over different types of subsidiaries in a
298、ccordance with laws and regulations,the Articles of Association and the internal control system.During the reporting period,the Company did not purchase any subsidiaries that met material criteria.8 SENIOR MANAGEMENT APPRAISAL AND INCENTIVE SCHEMESSinopec Corp.has established and is continuously imp
299、roving the fairness and transparency of its performance appraisal standards,incentive and restrictive mechanisms for Directors,Supervisors and other Senior Management.Sinopec Corp.has implemented incentive policies including the Measures of Sinopec Corp.for the Management of Performance Evaluations.
300、9 CORPORATE GOVERNANCE REPORT(IN ACCORDANCE WITH HONG KONG LISTING RULES)(1)Compliance with the Corporate Governance CodeDuring the reporting period,Sinopec Cplied with all code provisions of the Corporate Governance Code set out in Appendix 14 of the Hong Kong Listing Rules.A CORPORATE PURPOSE,STRA
301、TEGY AND GOVERNANCEA.1 Corporate strategy,business model and culturea.The Outline of the 14th Five-Year Plan(2021-2025)and Vision 2035 of Sinopec Corp.has been approved by the Board on 25 March 2022,defining the medium-term and long-term development strategy and the long-range objectives through the
302、 year 2035 of the Company.The Company has always adhered to the underlying principle of pursuing progress while ensuring stability,applied the new development philosophy fully,accurately and comprehensively,actively promoted the high-quality development,and continuously created value for the country
303、,the society and the shareholders.b.Sinopec Corp.attaches great importance to the construction of corporate culture.In the long process of reform and development,the Company has cultivated and formed its corporate culture,comprising the enterprise spirit of“loving China,strengthening the petrochemic
304、al industry”,as well as such fine traditions as being hard-working,meticulous and rigorous.The Company strives to provide cutting-edge technologies,premium products and quality services.The relevant content is published on Sinopec Corp.s website at http:/.A.2 Corporate Governance Functionsa.The Boar
305、d of Sinopec Corp.is responsible for performing duties of corporate governance,formulating and approving related corporate governance rules,adhering to the standard operation,improving the corporate governance,ensuring that the Company complies domestic and overseas laws and regulations,and disclosi
306、ng the Companys compliance with the Code of Corporate Governance in the Corporate Governance Report.b.The Board arranged training sessions for Directors,Supervisors and Senior Management,and made relevant records.During the reporting period,the Directors,Supervisors and Senior Management actively pa
307、rticipated in the trainings and attached great importance to continuing professional development to ensure that their contribution to the Sinopec Corp.remains informed and relevant.The Directors attendance to the trainings is as follows:Laws and regulations updateAccounting/finance/operational manag
308、ementNamePositionsReading materialsTraining and lecturesReading materialsResearchMa YongshengChairman,Non-executive DirectorZhao DongNon-executive DirectorYu BaocaiExecutive Director,PresidentLing YiqunExecutive Director,Senior Vice PresidentLi YonglinExecutive Director,Senior Vice PresidentLiu Hong
309、binExecutive Director,Senior Vice PresidentCai HongbinIndependent Non-executive DirectorNg,Kar Ling JohnnyIndependent Non-executive DirectorShi DanIndependent Non-executive DirectorBi MingjianIndependent Non-executive Director28CHINA PETROLEUM&CHEMICAL CORPORATIONAnnual Report 2022Corporate Governan
310、ceCORPORATE GOVERNANCE(CONTINUED)B BOARD COMPOSITION AND NOMINATIONB.1 Board composition,succession and evaluationa.The Board is the decision-making body of Sinopec Corp.and abides by good corporate governance practices and procedures.All decisions made by the Board are implemented by the Management
311、 of Sinopec Corp.b.The Board of Directors currently consists of ten members,among whom are four Executive Directors and six Non-executive Directors.Among the Non-executive Directors,there are four Independent Non-executive Directors,accounting for two-fifths of the total number of Directors.For deta
312、ils,please refer to the section“Introduction of Directors,Supervisors,and Other Senior Management”of this annual report.c.Sinopec Corp.has received from each of the Independent Non-executive Directors a letter of confirmation for 2023 regarding their compliance with relevant independence requirement
313、s set out in Rule 3.13 of the Hong Kong Listing Rules.Sinopec Corp.considers that each of the Independent Non-executive Directors is independent.The composition and operational mechanism of the Board ensure that independent and objective views and input are available to the Board of Sinopec Corp.For
314、 instance,matters such as connected transactions,profit distribution,appointment of director,etc.,are required to obtain prior approval or independent opinions from Independent Non-executive Directors.The Board reviews and evaluates the effectiveness of such operational mechanism on an annual basis.
315、d.The Board established the Board Diversity Policy which stipulates that the members of the Board shall be nominated and appointed based on the skills and experience for the overall optimum operation of the Board,while taking into account the targets and requirements of the board diversity.When deci
316、ding the composition of the Board,Sinopec Corp.shall consider factors in relation to the diversity of the Board,including but not limited to professional experience,skills,knowledge,term of office,regions,culture and educational backgrounds,gender,and age.The provisions of the Articles of Associatio
317、n concerning the term of office of directors help to ensure that the Board has a proper balance between continuous experience and new thinking,and enhance the level of diversity.Sinopec Corp.focuses on and annually evaluates the implementation of the Board Diversity Policy.Currently,the Board has ac
318、hieved diversity in terms of gender,culture,educational backgrounds,professional specialties,etc.Female Director accounts for 10%of the Board members.The Directors come from different industries domestically and abroad with rich working experience.Professional backgrounds of Directors include petrol
319、eum and petrochemical corporate management,as well as economics,accounting,finance,and industry and energy economy,which are conductive to strategic planning and scientific decision-making.In terms of the candidates of Directors,the Board and the Nomination Committee will,as and when necessary,look
320、for potential female director candidates through self-regulatory organizations,professional recommendation and other channels to achieve gender diversity of the Board.Sinopec Corp.has always devoted to establishing a workplace with diversity and equal opportunities,recruited female employees activel
321、y to increase the diversity of the team,and provided equal employment opportunities and environment for all employees,so as to offer them career development spaces to give full play to their personal characteristics and values.In 2022,female employees in the Company account for 31.0%of the total sta
322、ff number.The Company adhered to the doctrine of gender equality,ensuring female employees have equal labor and social security rights as the males.For details,please refer to the Report of Sustainable Development of Sinopec Corp.for the year 2022.B.2 Appointment,re-election and removala.The term of
323、 office for each Director is three years,and the consecutive terms of office of any Independent Non-executive Director cannot exceed six years.During the reporting period,there was no new director nominated by the Board of Directors based on the actual situation of the Company,nor re-election or rem
324、oval of Directors.For details about the tenure of each Director,please refer to the item 11 under this section.b.All Directors of Sinopec Corp.must be elected at the general meeting of shareholders.The Board has no power to appoint temporary Directors.c.Each of the Directors was able to devote suffi
325、cient time and efforts to handling the affairs of Sinopec Corp.B.3 Nomination Committeea.The Board of Directors established the Nomination Committee,consisting of the Independent Non-executive Director,Ms.Shi Dan,who serves as the chairman,and the Chairman of the Board,Mr.Ma Yongsheng,and the Indepe
326、ndent Non-executive Director,Mr.Ng,Kar Ling Johnny,who serve as members.The principal responsibilities of the Nomination Committee are to provide suggestions to the Board on Boards size and composition,the selecting standards and procedures,and candidates for Directors and Senior Management.When rec
327、ommending candidates for Directors,the Nomination Committee mainly considers the skills,knowledge,experience and qualifications of the candidates,and also evaluates the time and energy they can devote as well as the Board Diversity Policy.Procedures to Propose a Person for Election as a Director of
328、Sinopec Corp.and Terms of Reference of the Nomination Committee are published on Sinopec Corp.s website at http:/.b.The members of the Nomination Committee can engage professionals when performing their duties.Reasonable costs arising from such consultations are borne by Sinopec Corp.In the meantime
329、,the Nomination Committee has also appointed consultant members and can require such member to provide advice.The working expenses of the Nomination Committee are included in the budget of Sinopec Corp.c.During the reporting period,the Nomination Committee held one meeting(please refer to“The Board
330、Committees Meetings and Directors Attendance”under the section“Report of the Board of Directors”in this annual report).C DIRECTORS RESPONSIBILITIES,DELEGATION AND BOARD PROCEEDINGSC.1 Responsibility of Directorsa.Sinopec Corp.engages professional consultants to prepare detailed materials for newly e
331、lected Directors,to notify them of the regulations of each listing place of Sinopec Corp.and to remind them of their rights,responsibilities,and obligations as Directors.Sinopec Corp.has purchased liability insurance for all Directors to minimize the potential risks that might arise from the adequat
332、e performance of their duties.b.All Non-executive Directors have the same duties and powers as the 29CHINA PETROLEUM&CHEMICAL CORPORATIONAnnual Report 2022Corporate GovernanceExecutive Directors.In addition,the Independent Non-executive Directors are entitled to certain specific powers.The Articles
333、of Association and the Rules of Procedure of Board Meetings clearly prescribe the duties and powers of Directors,and Non-executive Directors including Independent Non-executive Directors,which are published on the Sinopec Corp.s website at http:/.c.Each of the Directors confirmed that he/she has complied with the Model Code for Securities Transactions by Directors of Listed Issuers(Model Code)duri