The domestic and international situation in 2022 underwent unexpected changes, leading to a decline in global economic growth momentum. We witnessed intensified geopolitical volatility, wide fluctuations in oil and gas prices, and a sharp decrease in market demand, all bringing unprecedented challenges to the Company’s production and operation. In the face of severe and complex situations, we followed the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era and focused on the thematic action of “Bearing in mind the Instructions, Striving for New Achievements, and Celebrating the 20th National Congress of the CPC”. All-out efforts were made to stabilize the operation, expand the market, seek innovation, pursue development, promote reform, strengthen management, and prevent risks. In 2022, the Company recorded an annual operating revenue of 3.37 trillion yuan, an increase of 20.7% year-on-year (the same below), a total profit of 120.47 billion yuan, an increase of 3.34%, and a net profit of 95.24 billion yuan, an increase of 8.19%. We successfully met the “Two Profits and Four Rates” targets set by SASAC and recorded the best operating performance in history, staying ahead among the central SOEs.

We spared no effort to ensure operation, and the quality of production and operation was greatly enhanced.  Under the seven-year E&P campaign domestically, the Company’s proven oil reserve stood at more than 200 million tonnes and oil and gas production reached a historic high. The net profit and cash flow of the overseas upstream business both achieved the 20 billion target with the operating performance reaching the best level in recent years. In refining, we coordinated trade, storage and transportation as well and production, closely followed the market to optimize integrated operation, and fully demonstrated the resilience of the industrial chain. In chemicals, we optimized the structures of feedstock, unit and product. The proportion of three major synthetic materials and high value-added products of fine chemicals continued to increase, and the coal chemical business hosed a good momentum for better quality and profit. In marketing, we effectively responded to the pressure of a significant decline in market consumption, undertook all the allocated resources, and increased the proportion of centralized procurement, thus stabilizing the operation of the industrial chain and securing share. Favorable operating performances were obtained in refining products, chemicals, catalysts, oil field engineering and refining and chemical engineering.

We raced to cultivate opportunities and the pace for the adjustment of industrial structure was accelerated.  We pressed ahead with key oil and gas production capacity construction projects. The Dongying crude oil depot was successfully relocated and put into operation, the megaton-scale CCUS project was commercialized and the construction of LNG terminals and gas storage facilities were progressing steadily. Zhenhai Base Phase I and Jiujiang Aromatics projects were put into operation. Hainan Ethylene project achieved mechanical completion and Gulei Refining and Chemical Integration Project was commercialized. We pushed up the progress of a batch of industrial chain extension and new chemical materials projects. The main part of the Xinjiang Kuqa Green Hydrogen Demonstration Project was completed, making Sinopec rank world’s No. 1 in terms of the number of hydrogen refueling stations under construction and operation. Wind power, photovoltaic, geothermal, and other new energy businesses were gaining good momentum. We successfully established Sinopec Carbon Industry Technology Co., Ltd., China’s first company with complete value chain for carbon industry. We sealed a 27-year LNG long-term agreement with Qatar, which was part of the achievements of the China-Arab States Summit, signed a package of cooperation agreements with INEOS, and successfully entered the oil product retail market of Thailand.

We strived for self-reliance and innovation, and the scientific and technological breakthroughs were constantly emerging.  We promoted the national strategic scientific and technological tasks with high quality. We built China’s first localized 10000-tonne-scale 48K large tow carbon fiber production line and put it into operation. Our independently-developed rotary geo-steering drilling system reached the world’s advanced level. We made significant breakthroughs in bottleneck technologies such as POE, PVA optical film, high-grade polybutene-1, helium extraction, and high-temperature heat transfer oil. We recorded progress in tackling core and key technologies in the exploration, development and engineering of ultra deep oil and gas, oil recovery enhancement of mature oilfields, integration of shale oil and gas geo-engineering, large-scale green hydrogen from green power, and direct cracking of crude oil to ethylene. We strengthened efforts in cut-through innovation mechanism from basic research to industrial application and became among the first batch of SOEs to develop original technology as well as the leader of the hydrogen industrial chain entrusted by SASAC. We actively promoted the implementation of dedicated action plan for digital transformation and took the lead in the industry’s digital and intelligent development with more than 10 national pilot demonstration projects such as “Industrial Internet+” and artificial intelligence.

We took multiple measures to push forward reform, and the effectiveness of management continued to be demonstrated.  We comprehensively completed the three-year action of deepening reform, and achieved remarkable results in key reform tasks. Sinopec EasyJoy Company, Sinopec Zhenhai Refining & Chemical Company, and Sinopec Oilfield Equipment Corporation were awarded as “Excellent Double Hundred Enterprises ” and Sinopec Catalyst Company was awarded the benchmark of “Science and Technology Reform Demonstration Enterprise” for three consecutive years. We strived to ensure the set-up of the board of directors for all subsidiaries. The tenure system of management members and contractual management were fully implemented, with 30 subsidiaries establishing a professional manager system. We accomplished the promotion campaign of benchmarking against world-leading peers, released the action plan for accelerating the building of a world-leading company, made substantial progress in constructing a strategic and intensive financial management and control system, and continuously deepened the reform of the auditing mechanism. All these efforts have effectively enhanced the management and governance of the Company. We cautiously responded to the impact of the Ukraine crisis, the recurrence of the pandemic, global inflation, oil price fluctuations, and other factors. We safeguarded the bottom line of avoiding systemic risks, and significantly improved our compliance management capabilities.

A new year unlocks new hope, and a new journey bears new dreams. We will adhere to the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, and thoroughly study and implement the guiding principles of the 20th CPC National Congress as well as the important instructions given by General Secretary Xi Jinping during his inspection tour to Shengli Oilfield. We will seize opportunities, forge ahead with vitality and strive for being a world-leading company. We will successfully accomplish the annual targets and tasks, make efforts for better business performance, and get ready to celebrate 40th anniversary of Sinopec with excellent results!