Home Sinopec Group
About Sinopec
Our Company
Our Business
Subsidiaries
Corporate Governance
Human Resources

Home > About Sinopec > Our Company > Chairman's Address


 Chairman's Address
[Font Size:L M S] Printable Version

Dear Shareholders:

2013 was an extraordinary year for Sinopec Corp. With the help of your trust and support, Sinopec Corp. made significant progress with its corporate reforms and achieved sound operational results. On behalf of the Board, I would like to express to you our sincerest gratitude.

Yet our journey in the past year was not a smooth one. The lessons learned from the Qingdao pipeline accident on 22 November 2013, were both painful and indelible. We have since designated 22 November as our annual Safety Awareness Day so that we might transform our deep condolences for those who suffered loss and our respect for life into a lasting drive to strengthen our management and achieve safety in all of our operations.

Despite the slow recovery of the global economy in 2013, China's economy and domestic demand for petroleum and petrochemical products grew steadily over the past year. Giving full play to our integrated business model, we focused on the quality and efficiency of growth and development. We made steady progress on multiple fronts by deepening reform, restructuring our business model, promoting innovation in our work streams, increasing revenue and controlling costs. Oil and gas production volume showed steady growth as we achieved breakthroughs of strategic significance in the exploration of shale gas in Fuling, which demonstrate how China can accelerate the pace of shale gas development. Overseas upstream assets increased, strengthening the Company's resource base. The refining segment seized the opportunity provided by the modified oil products pricing mechanism. The Company made major advances in this segment by optimising and adjusting the product mix, accelerating quality upgrading of refined oil products and supplying more clean products to the market, which have become new growth drivers for the Company. The marketing and distribution segment improved its operational quality and efficiency by optimising its existing network. In the chemicals segment, the Company focused on adjusting its feedstock and product mix and successfully mitigated the impact of difficult market conditions. We regard technological innovations to be the key driver of future restructuring and transformation of our business growth model.

In 2013, the Company's total revenues and other operating income increased by 3.4% from the previous year to RMB 2,880.3 billion. Profits attributable to shareholders of the Company under International Financial Reporting Standards rose by 3.5% to RMB 66.1 billion. Taking into account the Company's sound operating performance, the Board is more than happy to share with our shareholders the fruits of our work by proposing a final dividend of RMB 0.15 per share, which, combining with the interim dividend of RMB 0.09 per share, brings our total annual dividend to RMB 0.24 per share.

In 2013, Sinopec Corp. continued to improve its corporate governance, strengthen its management of enterprise value and promote specialised and market-oriented business operations. The Board of Directors operated in compliance with all regulations as well as with the amendments to its articles of association, which improved the Company's internal control system and its execution to protect shareholders' rights and enhanced communications with investors. With the support of investors, the Company successfully completed a number of low-cost financing initiatives, which strongly supported the Company's development and growth along with the capital markets.

The Company put more emphasis on investment quality and efficiency in 2013 and continued to adjust and optimise investments according to market conditions. We allocated RMB 168.6 billion to capital expenditures last year, a decrease of 7% from the amount budgeted at the beginning of the year. Expenditures in the upstream segment accounted for 53% of the total, helping us achieve a surplus in our domestic crude oil reserve balances and breakthroughs in shale gas exploration and development in Fuling. Expenditures in refining accounted for 14% of the total, mainly for upgrading the quality of oil products and revamping refining facilities to improve adaptability; 17% of the total went to the marketing and distribution segment for construction of service stations and the logistics network; and 11% went to the chemicals segment for major projects and structural adjustment programs. In addition, the Company successfully completed the acquisition of overseas upstream assets from China Petrochemical Corporation, which added up to our total capital expenditures for the year to RMB 185.1 billion.

In 2013, the Company engaged in numerous activities promoting corporate social responsibility (“CSR”). We established and improved the Regulations and Guidelines on Corporate Social Responsibility, and we fully incorporated CSR management into our daily operations and business. We launched the Clear Water, Blue Sky environmental protection scheme and actively participated in carbon-trading pilot programs to help advance green and low-carbon development. We enhanced talent development and career development channels in line with our people-oriented goals. The Company placed great emphasis on actions that benefited society, promoted the public welfare and fulfilled its social responsibilities, and it supported the joint development of local economies and communities in places where Sinopec Corp. operates. As the leading company in the United Nations Global Compact and a signatory of the Caring for Climate initiative, Sinopec Corp. encouraged Chinese companies to act together and sponsored the signatories of a Proposal to Address Climate Change.

Looking ahead to 2014, we expect the global economy to continue its recovery. China has embarked on a new journey to comprehensively deepen reform in areas including politics, economy, culture, society and ecological civilization. China's economy will become all the more vibrant, as economic reforms allow markets to play a more decisive role in resource allocation. The continuous pursuit of industrialisation and urbanisation will support steady growth in demand for oil and petrochemical products, offering Sinopec Corp. room to grow in these markets. Sinopec Corp. has a strong asset base and competitive capabilities. Our development goals and strategies are very closely aligned with the direction, goals and path of China's reforms. Given such unprecedented opportunity at a time of deepening national reform, the Board looks forward with great confidence to Sinopec Corp.'s future.

In 2014, the Company expects to make significant advances in its development by fully embracing reform, leading to corporate transformation, organisational vigor and stronger corporate values. We have already launched the restructuring of our marketing segment to introduce social and private capital, diversify operational methods, unlock intrinsic values and stimulate corporate vitality to help advance Sinopec Corp.'s development and maximise its value. We will continue to promote transformation and upgrades with a focus on improving development quality and efficiency. We will establish a return-oriented investment management mechanism attuned to both market conditions and the firm's overall development goals. Our planned capital expenditures for 2014 are RMB 161.6 billion. We will strengthen our exploration effort in shale gas resources in Fuling to achieve significant development of China's shale gas industry. We will use our advantages in technology and integration to provide high-quality refined oil and petrochemical products, doing our utmost to create social benefits. The Company will also enhance its refined oil sales network by accelerating the development of non-fuel business. We will optimise our resources by adjusting our feedstock and product structure.

Dear shareholders, it is the mission and responsibility of all Board members to see that Sinopec Corp. makes great strides in its development. With the support of our shareholders and the dedication of our employees, Sinopec Corp. will enhance its progress on all fronts through deepening reform. We hope to move forward in partnership with you, so that together we may realise our efforts to create a brilliant future for Sinopec Corp.


Fu Chengyu
Chairman

Beijing, China
March 21, 2014


 

Logos & Brands
  Our History
  Leadership
Investor Center
  Annual Report 2013
Sinopec Group
  Sinopec News
  Sinopec EC
Download Center