Dear shareholders:

First of all, on behalf of the Board of Directors of Sinopec Corp., I would like to express our sincere gratitude to all shareholders as well as the public for your care and support.

In 2008, international oil prices experienced drastic increase and sharp fall, while domestic prices for refined oil products were under tight control. Demand for refined oil products plunged after experienced a high growth level, and both the demand and prices of petrochemical products plummeted harshly. Since July 2008, the international financial crisis has extended quickly to the real economy. Challenged by the unpreceding changes, Sinopec Corp. proactively adjusted its business strategies and capitalised on its strengths in exploration and production, its competitive positioning in refining, chemicals business and sales, and its advantageous position in its international trading business to secure and optimise resources. Sinopec Corp. has benefited from the parent company’s complementary strengths in petroleum and petrochemical engineering services, and its international strategy to “go global”. This has allowed the Company to make solid advances through precision management, capturing potential and improving efficiency, promoting technology renovation, strengthening workplace safety, saving energy and reducing emissions. The output of oil and natural gas is on steady rise, and profit increases significantly. The Company promptly adjusted its refining and chemical production in line with the shifting market demand. Because of the strict control on the refined oil products prices, refining business suffered huge losses. Chemical business also recorded red in the fourth quarter due to the falling demand and prices of chemical products in the international market. However, I am glad to see that, with years of dedication on improving the marketing network, the sales volume of refined oil products rises steadily, marketing structure is fine-tuned, and the profit marks constant growth. The strategy of centralised marketing of petrochemical products, after several years of reform, has begun to take effects and strengthen our capability to defend market risks. In the first three quarters of last year, the Company actively responded to a domestic shortage of oil products and tightening controls over price by the government by safeguarding supplies, especially during periods of disaster relief, busy farming season, and the Beijing Olympic Games, and, as a result, benefitted the consumers and made significant contribution to sustain the steady and rapid social and economic development in China. Supported by management and employees, in the year of 2008, the Company accumulated valuable experience for future business operations and development by actively responding to severe market challenges.

In 2008, under the PRC Accounting Standards for Business Enterprises (“ASBE”), our operating income amounted to RMB 1.4521 trillion, representing an increase of 20.5% over 2007. Net profit attributed to equity shareholders of the Company was RMB 29.69 billion, representing a decrease by 47.5% over previous year. Under International Financial Reporting Standards (“IFRS”), profit for the period attributed to equity shareholders of the Company was RMB 29.77 billion, down by 47.3% compared to 2007. Considering the Company’s earnings level, future development, and shareholders’ interests, the Board of Directors has recommended a full year dividend of RMB0.12 per share for the year of 2008. Excluding the interim dividend of RMB 0.03 per share, the final dividend for 2008 is RMB 0.09 per share.

In respect of the past three years , China’s economy has maintained rapid growth and the demand for energy and petrochemical products has increased signifcantly, which provided a favorable environment for the Company’s development. However, because international crude oil prices rose significantly and the control over domestic oil products prices were tightened, the refining business suffered huge losses for a long period. Facing both opportunities and challenges, the Board of Directors adhered to the scientific approach of development, adopted the guidelines of reform, adjustment, management, innovation, and development, and consistently implemented the strategies of integrating and globalising resources and markets. At the same time, we carefully carried out government’s pricing mechanism on refined oil products, attached great importance to the corporate social responsibilities, and made all efforts to ensure the oil products supply. The Board of Directors of this term also actively communicated with relevant government authorities to win the policy support that helped improve the Company’s operational performance. Over the past three years, we have made remarkable advances on corporate governance, development, reforms and adjustments as well as scientific and technological innovations.

Sinopec Corp. is committed to improving corporate governance. We have completed the A share reform to conform the interests of all shareholders. To meet regulatory requirements and the Company’s development, we performed a series of specific activities to enhance corporate governance. We implemented and improved the system of independent directors and specialised committees, which provided support for scientific decision making by the Board of Directors. This term of Board of Directors continued to strengthen our internal control through annual review and enhanced risk control and improved management level. With efforts on strengthening precision management and enhancing comprehensive budget control, the Company has build up an integrated fund management system, improved management efficiency in production organisation, product sales and material procurement. In addition, Sinopec Corp. has been continuously enhancing its disclosure and engagement with investors to ensure effective and timely communications.

In line with development plan from 2006 to 2008, the Company took full advantage of its existing advantages, brought up the strengths to make up for the weaknesses, and accelerated its development. Capital expenditure in the past three years totaled RMB 300.5 billion. In upstream, the Company increased the input of exploration and development on oil and gas fields to build up more capacity. A number of projects, such as the Sichuan-to-East China Gas Project, has been proceeding smoothly, which strengthened its upstream business and provided a unique advantage to the Company. By keeping close to the market and upstream resources, the Company continues to configure its refinery business and fine-tune its structure. It has built and upgraded a number of major projects, including the Qingdao refinery project and Maoming ethylene project where adaptability to crude resources have become more flexible. Furthermore, the Fujian refinery and ethylene project, the Tianjin refinery and ethylene project, and the Zhenhai ethylene project are all on schedule. Refining and chemical industry clusters are also taking shape in the areas along the Yangtze Delta, Pearl River Delta and Bohai Bay. With a comprehensive sales network for oil products, Sinopec Corp. is increasingly dominant in the market, and continuously improving the service quality, brand image and corporate reputation. The Company constructed new oil storage and transmission facilities and revamped existing ones such as Caofeidian crude oil dock with an aim to build up a modern logistics system. The Zhenhai-Shanghai-Nanjing oil pipeline has been completed and put into operation. The total length of gas transmission pipeline constructed is 705 kilometers and the refined oil products pipeline, include the one around Beijing city, exceeds 6,000 kilometers. 79% of our crude oil and 34% of refined oil products are transmissed through pipeline. In the past three years, the Company’s newly added reserves of crude oil amounted to 520 million tonnes and natural gas to 369.7 billion cubic meters The output of crude oil and natural gas increased by 4.1% and 14.3% respectively. The Company’s comprehensive refining capacity rose by 20.7%, and the sales volume of refined oil products surged by 17.6%, with the proportion of end sales grew by 7.6 percentage points. The output of ethylene jumped by 18.2%.

During the current term of the Board of Directors, the Company continued to fortify core business devleopment and focus on fine-tuning respective business streams. We further consolidated the sales, operations of chemical products with the establishment of an integrated sales unit responsible for such products, significantly benefiting from the advantage of sales centralisation. We acquired from China Petrochemical Corp. part of its crude oil production, refinery and service station assets as well as pipelines for oil products transmission. We also completed the merger of some of our subsidiaries. All of these initiatives have allowed for greater concentration on core business, better managerial mechanism and a gradual decrease of connected transactions. During the year, the company leveraged favorable market conditions to successfully launch the issurance of zero-coupon convertible bonds, detachable convertible bonds and corporate bonds in both domestic and overseas markets. This lifted the percentage of direct financing by the Company to 34.2% as at the end of 2008 from 9% at the end of 2005, up by 25 percentage points, which helped optimise its debt structure and lower its financing cost to a great extent to provide support for seamless execution of the Company’s development strategy.

Closely adhering to the Company’s principles of focusing on core business development, fostering technological improvement, Sinopec reaped in fruitful results during this session of Board of Directors. With the forward-looking marine-facies research going on smoothly, the exploratory technologies for further development in Puguang Gas Field and carbonates reservoir have basically come into shape. This extends not only our arena of oil and gas exploration scope but also our exploratory capability and standard in this respect. Whilst the proportion of processing substandard crude oil is on a steady rise, we realised commercialisation of production technologies for refined oil products par with EU IV standard on the back of proprietary technologies. We also brought to fruition an industrial application of our proprietary technologies in full in the areas of single-stage recycle hydro-cracking with a capacity of 1.5 million tonnes per year and production of polypropylene with a capacity of 0.3 million tonnes per year. At present, we are equipped with the capacity to construct 10-million–tonne oil refineries and one-million-tonne of ethylene plants on an independent basis. We enhanced researches on new and alternative energies. Breakthrough has also been made on the technology of producing synthetic oil with synthesis gas. During the year, we developed and manufactured an array of new products—the Great Wall special lubricant was employed by Chang’e-1 Lunar Probe and Shenzhou-7 Spaceship; and Donghai-brand modified asphalt and special compound of polypropylene were used in the construction of gyms for the Beijing Olympic Games. The application of ERP information technology was in full swing. The technology team represented by Mr. Min Enze, an academician of Chinese Academy of Engineering, made great contribution to the Company’s scientific and technological advancements. Over the past three years, we have been awarded 2671 patents out of 3680 patent applications.

The Board of Directors values human resources and attaches great importance to every single staff member in the Company. The Company has approved and applied the Employee Guidelines with an aim to discipline employees’ conduct and promote corporate culture. We have spared no efforts to strengthen the building of teams of operatonal management, professional and technical talents; created a sound environment for career development for our staff at different levels; and encouraged the cultivation of self-motivation and creativity among all staff. The Company’s management cares about every staff member, taking proactive measures to improve workplace environment,strengthens the supervision of occupational healthiness and raises the level of labour protection. Over the year, the launch of activities evolving around the theme of “engaging with the masses and promoting harmony, making concerted efforts to promote development”, greatly narrowed the gap between the management and staff members, which is condusive to the steadibility of our workforce as a whole. The morale and cohensiveness of the team is further enhanced.

Sinopec Corp. carried out its social responsibilities and pushed forward harmonious development, We abided by the ten principles of the UN Global Compact by focusing on sustainable development, implementing HSE management systems and subsequently reported the Company’s sustainability to stakeholders. We devised and strictly executed Guidance for Safe Production, promoted energy conservation and emission reduction, supplied the high-quality clean fuel, and achieved significant results on all these fronts. In the past three years, the energy intensity, industrial water consumption and COD in discharged waste water decreased by 14.1%, 12.2% and 13.2%, respectively. The Company has actively engaged in the philanthropic events. In 2008, South China experienced a natural disaster caused by low-temperature sleet and frost. Furthermore, the Wenchuan earthquake shocked people across the globe. The company reacted quickly to organise and participate in rescue and relief efforts. The Company and employees donated money and materials worth RMB 300 million to the earthquake-stricken area. As a partner of the 2008 Beijing Olympic Games, we provided quality oil and petrochemical products and services. Over the past years, the philanthropic events we supported, such as Health Express, Chun Lei Program, Poverty Relief and Tibet-aid program etc, have achieved excellent results.

Through years of reform, restructuring, strengthened management and innovation, the Company realised rapid development. Compared with 2005, the company’s scale of operations expanded steadily. Under IFRS, turnover, other operating revenue and other income increased by 81.7%. The asset structure and its quality remarkably improved. Total assets increased by 40.8% and the shareholders’ equity increased by 45.4%. The distributed dividend in the past three years amounted to RMB 37.7 billion, a relatively good reward for our shareholders. China Petrochemical Corporation with Sinopec Corp. as its core asset, ranked 16th in the 2008 Fortune 500 companies.

The achievements mentioned above were realised not only with the support of our shareholders and other stakeholders, but also with the diligence of Board of Directors, management, and our employees. Before Directors of the Board step down as their term expires, I, on behalf of the Board, would like to express our sincere thanks to our shareholders and those who supported us. We would also like to express our gratitude to supervisors, management, and employees for their continued commitment and cooperation.

In May 2009, due to the regulatory requirements and job movement, the Directors of Zhou Yuan, Shi Wanpeng, Yao Zhongmin and Fan Yifei, Supervisors of Kang Xianzhang, Zhang Jitian, Cui Guoqi and Li Zhonghua will step down. During tenure, they dutifully carried out responsibilities and worked hard for the Board’s scientific decision making and the Company’s development. Therefore, I would like to extend my appreciation for their continuous efforts and remarkable contribution.

Looking forward to 2009, as the global economy complicates and the financial crisis spreads, the demand for oil and petrochemical products will slow down thereby intensifying market competition. The Company will face a lot of challenges. However, the Chinese government has announced a series of measures aimed at stimulating domestic demand and driving economic growth and has implemented some stimulus plans for relevant industries including the petrochemical industry, which will provide opportunities for the Company to expand its operations. At the end of December 2008, China implemented the new refined oil products pricing mechanism and we foresee our refining business turn from loss making as we suffered in previous years into profit making. These factors will provide new opportunities for the Company’s sustainable development.

In 2009, the Company will proactively respond to the influence of international financial crisis, take the market opportunity and adjust its operation strategies to expand resources, expand market, improve management, and reduce cost, in order to fulfill the full year targets. In line with the market condition and the Company’s overall development objectives, the Board of Directors plans capital expenditure at RMB 111.8 billion. The capital expenditure will be used to increase upstream investment, expedite the construction of projects like Sichuan-East China Gas Project, optimise the layout of refining and chemical plants, adjust product mix and increase the production of high value added products, improve the modern logistics system and support rapid development of the marketing and distribution of refined oil and chemical products. In addition, from view of strategy, Sinopec is studying the market opportunity of directly acquiring international oil and gas assets to enhance its upstream resource basis.

The Board of Directors has nominated candidates to the new Board. These candidates are experts in macro-economy, finance, corporate management, and/or in oil and petrochemical industry. I believe their rich professional backgrounds and work experience will enrich and energise the Board of Directors and strengthen the Board’s decision-making capability and inherit and develop the Company’s strategies. I hope the in-coming Board of Directors and the management continue to strengthen the layout of the Company’s integrated operations, accelerate its upstream exploration and development to expand its resource base; to concentrate its refining and chemical business, with concerted efforts from production, sales and R&D, to increase the production of products well-received by the market and high-value-added products, to enhance its competitiveness. The Company will continue to strengthen precision management, promote technological advance to expedite the development and application of proprietary core technologies, in order to provide support for the Company’s development.

I believe that in 2009, under the leadership of the existing and in-coming Board of Directors, supported by management and employees, Sinopec Corp. will adhere to the scientific approach of development and take on the challenges we may face. We are confident we can achieve greater progress and become a competitive international energy and chemical company. We will reward our shareholders and employees and contribute to the society with our remarkable performance and development.

Su Shulin The Board Chairman Beijing, China March 27, 2009