Annual Report 2012

Sinopec Corp.’s development accelerated in
2012, with particular progress in implementing
structural adjustments across the Company and
great emphasis in carrying out green and low-
carbon initiatives. Capital expenditures for the
year reached RMB 169.0 billion. Among which,
expenditures for the upstream accounts for
47%, with a target to expand its oil and gas
reserves and production, expenditures for the
refining accounts for 19%, which was spent in
capacity expansion and upgrading the quality
of oil products, expenditures for the chemical
segment accounts for 14%, predominantly
for investments in product differentiation and
expenditures for marketing and distribution
accounts for 19%, principally for further
improvements in the sales network for refined
oil products.
Sinopec Corp. played an active role in corporate
social responsibility, paying close attention to
sustainable development of the industry, society
and the environment. By implementing a green
and low-carbon strategy, Sinopec Corp. is
following a new path for corporate development
coupling industrialization with the construction
of resource-saving and environmentally friendly
enterprises. Despite expanding the scale of its
production, Sinopec Corp. has been able to lower
its energy consumption and reduce the discharge
of major pollutants. We have also continuously
participated in activities that advance our
corporate social responsibility, including poverty
alleviation, educational sponsorship and Sinopec
Corp.’s Lifeline Express, while also taking care
of our own employees and providing support
for development of their careers. Sinopec
respects the rights of its stakeholders, such as
communities, consumers, clients and suppliers,
and seeks to foster harmonious developments
of the entire society. During the past year,
we joined the United Nations Global Compact
LEAD and became one of the signatories of the
UN’s Caring for Climate. In June 2012, Sinopec
made 10 voluntary commitments, including a
strategy for sustainable development, during
the United Nations Conference on Sustainable
Development, also known as Rio+20. Sinopec
takes various initiatives to deliver this pledge,
and we announced our commitments in
our Environmental Protection Report on 29
November 2012.
These successful developments can be
attributed to the steady growth of the Chinese
economy, yet is not possible without the interest
and support of each and every shareholder
and of the public and the unrivalled efforts
of the Board of Directors, the Supervisory
Committee, our management team and all
Sinopec Corp.’s employees. The results further
substantiate the Company’s strategy to use
its resources, marketing, integration, global
reach, differentiation and green and low-carbon
initiatives to build Sinopec into a leading energy
and chemicals company.
With a 30-year history of reforming, restructuring
and developing, Sinopec’s integrated model has
given it a clear industry advantage in operational
scale and competitiveness and has created the
conditions for future growth. Looking ahead,
we see the simultaneous progress of China in
industrialization, informatization, urbanization
and agricultural modernization as providing
market opportunities for Sinopec, along with
sustained growth in demand for energy and
chemical products. We recognize that the slow
recovery of the world economy, the increase
in energy production and consumption and
the fiercer competition in the petrochemicals
market all pose new challenges for Sinopec and
make its development as a leading enterprise
more urgent. To maximize corporate value,
the Board of Directors will continue to support
the implementation of the existing corporate
strategy to make quality and efficiency the
priorities for development, with an accelerated
shift to an operational focus on low-carbon
development.
In 2013, Sinopec Corp. will implement initiatives
across the Company to enhance the quality
and efficiency of its traditional businesses while
growing and developing new businesses. We will
work to target areas that need reform and use
our resources to resolve organizational issues
that might hinder the Company’s future growth.
Sinopec Corp. will endeavor to improve its
management capabilities, focusing on strategic
planning and value-based management. We
place great importance on our green and lowcarbon
strategy across the entirety of Sinopec
Corp’s operations, and we will increase our
efforts to develop these initiatives and ensure
that we are contributing to an ecologically
conscious civilization. Sinopec will remain
focused on achieving favorable returns for
shareholders, engaging in activities to advance
corporate social responsibility and promote
sustainable economic development of the
Company and of society.
Based on market conditions and to meet
Sinopec Corp.’s development objectives, we have
allocated RMB 181.7 billion for CAPEX in 2013.
The quality and efficiency of Sinopec Corp.’s
growth forms the core of its investment thesis
and dictates its investment principles—acquiring
resources, ensuring supplies, supporting the
major businesses, adjusting product structure,
optimizing projects and increasing returns, all to
promote rapid development of the business.
With the support of our shareholders and the
dedication of our employees, the Board of
Directors strongly believes that Sinopec Corp.
will make sustained progress throughout the
business and continue toward its goal of
building a leading enterprise. By maintaining
its superior performance and continuing with
its controlled expansion, Sinopec will repay its
shareholders, contribute to society and help its
employees prosper.
We are fully prepared for the challenges ahead.
It takes time to build a strong corporation,
and with your support, we will strive to create
a bright future for Sinopec Corp. and its
shareholders.
Fu Chengyu
Chairman
Beijing, China
22 March 2013
CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2012
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Chairman’s Statement