Year 2009 witnessed corporate progress and advancement in all-round work. Confronting the international financial crisis and serious market situation, all staff united as one with progressive status, innovative spirit and practical style to courageously brave difficulties. Sales revenue in this year totaled RMB 1.35 trillion, down by 6.9% year on year (hereinafter the same shall apply unless otherwise stipulated). Net profit attributable to shareholders of the Company reached RMB 61.29 billion, up by 115.5%. RMB 3.225 billion profits were realized by reducing cost and increasing efficiency.

Oilfield segment implemented resource strategy and optimized E&P arrangement, which led to a stable growth in oil and gas reserve and production. Incremental crude reserves reached 39.44 million tons. Incremental gas reserves reached 2.22 billion cubic meters. Production of oil and gas amounted to 42.42 million tons and 8.47 billion cubic meters respectively, up by 1.5% and 2.0%.

Refining segment organized high-load production, optimized crude procurement, adjusted product structure, strengthened marketing efforts, and committed to increasing output and improving efficiency. The Company accumulatively processed 183 million tons of crude, up by 6.7%. The output of gasoline, diesel and kerosene totaled 114 million tons, up by 5.9%. Light yield was 75.54%, up by 0.79 percentage point.

Chemical segment adhered to be market-oriented and profit-centered, strengthened combination of production, sales and research, optimized production arrangement, consolidated marketing organization, improved services and tirelessly explore the market. The Company produced 6.71 million tons of ethylene, up by 6.7%. The yield of ethylene was 31.5%, up by 0.28 percentage point. Overall sales volume of self-produced chemical products reached 23.23 million tons.

Refined oil products segment gave continuous consideration to both volume and price, timely adjusted marketing policies, promoted integrating marketing, proactively extended volume and market while operation and profit-making ability were further strengthened. In 2009, the Company sold a total of 129.32 million tons of refined oil products, up by 1.8%. In total, 5.3 million tons were sold in Hong Kong, up by 33%.
We implemented “i-safe” activity, enforced safety supervisory, and maintained a general safe production under the complicated circumstances. Energy-saving and emission-reduction work smoothly stepped forward. The comprehensive energy consumption per 10,000 Yuan of industrial output value decreased 1.1%. The rate of the reuse of industrial water stood at 95%. COD in wastewater discharge fell 3.6%, and SO2 emission dropped by 13.9%.

We promoted fine management and fulfilled increasing production, optimizing and reducing cost to enhance efficiency, which led to a continuous cost reduction in key links, such as production, logistics and supply. We optimized financing and fund usage, improved centralized fund management, and saved financial expenditure. We carried out IT application with the core of ERP in an in-depth manner, which resulted in a more regular and fine management.

We optimized investment plan, intensified investment control, and gave priorities to projects that can obtain resources, seize market, and guarantee operation. Exploration in middle-shallow layer of Northeast Sichuan Gasfield had a breakthrough. Natural Gas Transmission from Sichuan to East China Project was commissioning. Songnan Gasfield was finished construction and put into operation. A series of refined oil products upgrading and revamping projects timely started up. Secco ethylene expansion project, Fujian integrated refining and ethylene project and Tianjin ethylene project were successfully put into operation. Zhenhai ethylene project and Wuhan ethylene project were stepping forward as scheduled. Refined oil pipelines like the west line of Lu-Wan Phase II, commercial crude storage in Zhenhai and Baisha Bay began to play their roles. New-developed service stations amounted to 1229.

We stably promoted innovation in mechanisms and systems so as to foster a more vigorous corporate. Thanks to the attention we paid upon tackling key scientific and technical problems and commercializing the fruits, science and technology innovation were made full use as an “accelerator” to our core businesses. We totally applied for 1570 patents, of which 605 patents were granted. In total, 135 were overseas patents and 37 were granted.

In 2010, under the spreading impact of international financial crisis, production and operation situation will be more complex and serious to us. We will further implement the scientific outlook on development, unit together and spare no efforts to realize a sound and fast development of the company.