1 Important notice

1.1 The Board of Directors, the Board of Supervisors of China Petroleum & Chemical Corporation ("Sinopec Corp." or "the Company") and its directors, supervisors and senior management warrant that there are no false representations, misleading statements or material omissions contained in this report and severally and jointly accept full responsibility for the authenticity, accuracy and completeness of the information contained in this report.

1.2 The first quarterly report for 2021 was approved at the 22^th meeting of the Seventh Session of the Board of Directors of Sinopec Corp. All directors attended this meeting.

1.3 Mr. Zhang Yuzhuo, Chairman, Mr. Ma Yongsheng, President, Ms. Shou Donghua, Chief Financial Officer and Head of the Financial Department of Sinopec Corp. warrant the authenticity, accuracy and completeness of the financial statements contained in this quarterly report.

1.4 The financial statements in this quarterly report were not audited.

2 Basic information of Sinopec Corp.

2.1 Principal financial data and indicators

2.1.1 Principal financial data and indicators prepared in accordance with China Accounting Standards for Business Enterprises (CASs)

Note: The Company has completed the formation of Sinopec Baling Petrochemical Co. Ltd in 2020. The transaction described above has been accounted as business combination under common control, thus, the Company retroactively adjusted the relevant financial data of the first quarter of 2020.

2.1.2 Principal financial data and indicators prepared in accordance with International Financial Reporting Standards (IFRS)

RMB: million

Note: The Company has completed the formation of Sinopec Baling Petrochemical Co. Ltd in 2020. The transaction described above has been accounted as business combination under common control, thus, the Company retroactively adjusted the relevant financial data of the first quarter of 2020.

2.2 Total number of shareholders and top ten shareholders at the end of the reporting period

Note   Sinopec Century Bright Capital Investment Limited, overseas wholly-owned subsidiary of China Petrochemical Corporation, holds 553,150,000 H shares, which is included in the total number of the shares held by HKSCC (Nominees) Limited.

Statement on the connected relationship or acting in concert among the aforementioned shareholders:

Apart from中国人寿保险股份有限公司－分红－个人分红－005L-CT001沪 and 中国人寿保险股份有限公司－传统－普通保险产品－005L-FH002沪 which were both administrated by 中国人寿保险股份有限公司, Sinopec Corp. is not aware of any connected relationship or acting in concert among or between the above-mentioned shareholders.

2.3　Review of operating results

In the first quarter of 2021, the effects of global epidemic prevention and control have gradually emerged and China's economy maintained recovery growth with gross domestic product (GDP) up by 18.3%. The spot price of Platt's Brent for the first quarter averaged USD 60.9 per barrel, up by 21.2% year on year. The domestic demand for refined oil products recovered steadily and demand for natural gas and chemical products maintained rapid growth.

The company expedited to implement new development concepts and world-leading development strategies and implement the "One Foundation of energy and resources, Two wings of clean fuels and advanced chemicals and Three Growth Engines in new energy, new materials and new economy" industrial deployment pattern. To promote the efficiency and profitability of the whole industrial chain and comprehensively promote high-quality development, the Company actively responded to market changes and optimized production and operations arrangements and achieved good performance.

In accordance with China Accounting Standards for Business Enterprises, net profit attributable to equity shareholders of the Company was RMB 17.929 billion with a basic earnings of RMB 0.148 per share. In accordance with IFRS, net profit attributable to equity shareholders of the Company was RMB 18.543 billion with a basic earnings of RMB 0.153 per share, achieving a turnaround from loss to profit as compared with the same period in 2020, and better than that of the same period in 2019.

Exploration and Production: The Company continuously pressed ahead with high-efficiency exploration and profit-oriented development, accelerated systematic construction of natural gas production, supply, storage and marketing and achieved tangible results in maintaining oil production, increasing gas output and cutting cost. In exploration, we continued to strengthen risk exploration in strategic areas, oil and gas rich zones and shale resources, which led to significant breakthrough of oil and gas explorations in Shunbei, Sichuan basin and etc. In crude oil development, we efficiently proceeded with the capacity building of Shunbei, west rim of Jungar oilfields and other oilfields and strengthened fine development in mature fields and intensified EOR technology application to consolidate the basis for steady production. In natural gas development, we constantly pushed forward capacity building in West Sichuan, Weirong and Dongsheng gas fields and expanded the market and sales with the sales volume for the first quarter up by 37% year on year. In the first quarter, the Company's production of oil and gas reached 117.03 million barrels of oil equivalent, up by 4.2% year on year, with natural gas production reaching 291.60 billion cubic feet, up by 16.8% year on year. The exploration and production segment realised an earnings before interest and taxes (EBIT) of RMB 3.072 billion in the first quarter, up by 54.1%.

Conversion: For domestic production of crude oil, 1 tonne = 7.10 barrels. For overseas production of crude oil,

1 tonne = 7.21 barrels. For production of natural gas, 1 cubic meter = 35.31 cubic feet.

Refining: The Company brought the advantages of integrated refining and marketing into full play, actively responded to market change, optimized production operation, dynamically adjusted export scale and kept stable operation and high utilization rate with a significant increase of crude oil  throughput. With a market oriented approach, we intensified product slate adjustment and increased output of marketable and high-profit products such as gasoline, jet-fuel, light chemical feedstock, asphalt, lubricants and etc. We optimized crude oil resources allocation and coordinated the whole process management of crude oil supply to lower procurement cost and also increased production of low-sulfur bunker fuel with an output of first quarter up by 187% and market share improving continuously. In the first quarter, the Company processed 62.52 million tonnes of crude oil, up by 16.3%. The refining segment realised EBIT of RMB 19.885 billion, achieving a turnaround from loss to profit as compared with the same period in 2020, and also better than that of the same period in 2019.

Note: Including 100% production of domestic joint ventures.

Marketing and Distribution: The Company brought the advantages of marketing network into full play, continuously improved marketing strategy and expanded market and increased sales with a significant increase of sales volume of refined oil products. With focus on customer needs, we vigorously adopted a differentiated marketing strategy to continuously improve retail volume. We constantly optimized the network layout to reach end users, and improved the network integrity, stability and competitiveness. We deepened non-fuel business reform and improved membership system. New model of "internet+service station+convenience store+third party operation" was promoted and more hydrogen stations were constructed with conventional service stations or alone to establish a new model of comprehensive energy supply and services, providing refined oil products, gas, hydrogen, power and services. In the first quarter, domestic sales volume of refined oil products was 40.03 million tonnes. The marketing and distribution segment realised EBIT of RMB 8.550 billion, achieving a turnaround from loss to profit as compared with the same period in 2020, and also better than that of same period in 2019.

Note: The total sales volume of refined oil products includes the amount of trading volume.

Chemicals: The company strengthened research on market needs, dynamically optimized facilities and product chain, optimized maintenance schedule, and realised an optimal operation of producing units and utilization rate. We integrated production with marketing, further fine-tuned chemical feedstock mix and product slate, increased production of acrylonitrile, BDO and other high profitable products, and continuously increased the ratio of high value-added and high-end products with the ratio of high value-added products of synthetic fiber reaching 33.6%, up by 0.6 percentage point, the ratio of high value-added products of synthetic rubber reaching 35.5%, up by 5.2 percentage points and the ratio of high value-added products of synthetic resin reaching 67.8%, up by 1.7 percentage points. We innovated marketing model, deepened fine marketing strategy, targeted our tailored service, and further expanded the market with a significant increase in sales volume of major chemical products. In the first quarter, the ethylene production was 3.380 million tonnes, up by 11.7% year on year, and the total chemical sales volume was 19.84 million tonnes, up by 10.53%. The chemicals segment realised EBIT of RMB 8.933 billion, achieving a turnaround from loss to profit as compared with the same period of 2020, and also better than that of the same period of 2019.  

Note: Including 100% production of domestic joint ventures.

Capital expenditure: In the first quarter, focusing on quality and profitability of investment, the Company continuously optimized investment projects, with total capital expenditures of RMB 23.0 billion. Capital expenditure for the exploration and production segment was RMB 9.0 billion, mainly for Fuling and Weirong natrual gas capacity building projects, Shunbei, Jiyang crude oil capacity building projects and phase II of Tianjin LNG project and phase II of Shangdong LNG project. Capital expenditure for the refining segment was RMB 7.6 billion, mainly for structural adjustment of Anqing project as well as the expansion of Zhenhai. Capital expenditure for the marketing and distribution segment was RMB 2.9 billion, mainly for construction of service stations, gas stations, comprehensive energy supply stations, refined oil products depots and non-fuel businesses. Capital expenditure for the chemicals segment was RMB 1.8 billion, mainly for construction of Zhenhai, Tianjin, Amur ethylene projects and Shanghai large-tow carbon fiber and Yizheng PTA projects. Capital expenditure for corporate and others was RMB 1.7 billion, mainly for R&D facilities and information technology projects.

3 Significant events

3.1 Significant changes in major items contained in the consolidated financial statements prepared in accordance with CASs and the reasons for such changes.

3.2 This quarterly results announcement is published in both Chinese and English languages. In the event of any inconsistency between the two versions, the Chinese version shall prevail.

By Order of the Board

Chairman

Zhang Yuzhuo 

28 April 2021

4 Appendix

4.1 Quarterly financial statements prepared under China Accounting Standards for Business Enterprises (CASs)

Consolidated Balance Sheet

As at 31 March 2021

Prepared by: China Petroleum & Chemical Corporation

Units: million Currency:  RMB Type: unaudited

Consolidated Balance Sheet (Continued)

Zhang Yuzhuo                    Ma Yongsheng                  Shou Donghua

Chairman                         President                      Chief Financial Officer

Balance Sheet

As at 31 March 2021

Prepared by: China Petroleum & Chemical Corporation

Units: million Currency: RMB Type: unaudited

Company Balance Sheet (Continued)

Zhang Yuzhuo                    Ma Yongsheng                  Shou Donghua

Chairman                         President                      Chief Financial Officer

Consolidated Income Statement

For the three-month period ended 31 March 2021

Prepared by: China Petroleum & Chemical Corporation

Units: million Currency: RMB Type: unaudited

Consolidated Income Statement (Continued)

Zhang Yuzhuo                    Ma Yongsheng                  Shou Donghua

Chairman                         President                      Chief Financial Officer