Sinopec Corp. Reports Unaudited Results for the First Quarter Ended March 31, 2003.Business Editors BEIJING--(BUSINESS WIRE)--April 28, 2003 China Petroleum & Chemical Corporation (NYSE NYSE See: New York Stock Exchange :SNP SNP Scottish National Party Noun 1. SNP - (genetics) genetic variation in a DNA sequence that occurs when a single nucleotide in a genome is altered; SNPs are usually considered to be point mutations that have been evolutionarily ) Sinopec Corp. Sees YoY Results Surge Due to Higher Realized Crude Oil Price, Effective Cost Reduction Measures and Improved Market Conditions -- Revenue increased 55.6% to RMB RMB Right Mouse Button RMB Regional Management Board (USACE) RMB Rolf Maier Bode (musician, band) RMB Ren Min Bi (currency of People's Republic of China) 102.72 billion -- EBIT EBIT See: Earnings Before Interest and Taxes EBIT See earnings before interest and taxes (EBIT). reached RMB10.97 billion, an increase of 580.3% -- Net profit surged by 1,084.5% to RMB6.42 billion -- EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. grew by 1,084.5% to RMB0.07 China Petroleum & Chemical Corporation ("Sinopec Corp." or "the Company") (HKEX:386; NYSE:SNP; LSE LSE - Language Sensitive Editor :SNP; CH:600028) today announced its unaudited financial results for the three months ended March 31, 2003. "During the first quarter of 2003, the Chinese economy grew at a 9.9% GDP GDP (guanosine diphosphate): see guanine. rate, showing particularly strong demand for petroleum and petrochemical petrochemical, any one of a large group of chemicals derived from a component of petroleum or natural gas. The cracking processes for manufacturing gasoline produce vast quantities of gaseous hydrocarbons. products," commented Zhang Jiaren, Sinopec Corp. Senior Vice President and Chief Financial Officer. "Influenced by the global market, prices of crude oil and refined oil products remained relatively high, while prices of chemical products also increased on a year-over-year basis. The domestic market condition for refined oil products also improved further compared with last year. The Company capitalized on these opportunities and is happy to report the second consecutive quarter of improving financial and operating results." Under International Financial Reporting Standards International Financial Reporting Standards (IFRS) are standards and interpretations adopted by the International Accounting Standards Board (IASB). Many of the standards forming part of IFRS are known by the older name of International Accounting Standards (IAS). (IFRS IFRS International Financial Reporting Standard(s) IFRS Inter Frame Relay Service IFRS Indiana Facilities Registry System ), revenue for the first quarter of 2003 was RMB 102.72 billion (US$12.41 billion), an increase of 55.6% over the same period in 2002. Operating profit Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. was RMB 10.97 billion (US$1.32 billion), which represents a YoY increase of 580.3%. Profit attributable to shareholders reached RMB 6.42 billion (US$775 million), an increase of RMB 5.88 billion (US$710 million) over the same period in 2002. Earnings per share amounted to RMB 0.07 (US$0.008), an increase of 1,084.5% over the same period in 2002. Operating Highlights Financial Highlights
3 months ended March 31
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2003 2002
RMB millions RMB millions Change (%)
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Turnover and other operating
revenue 102,719 66,003 55.63
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Operating Expenses (91,753) (64,391) 42.49
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Expenses for purchasing crude
oil, products and operating
supplies (72,309) (47,183) 53.25
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Selling, general and
Administrative expenses (5,533) (4,598) 20.33
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Depreciation, depletion
and amortization (6,098) (5,904) 3.29
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Exploration expenses,
including dry holes (1,211) (990) 22.32
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Personnel expenses (3,203) (2,902) 10.37
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Taxes other than income tax (3,161) (2,701) 17.03
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Other operating expenses, net (238) (113) 110.62
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Operating profit 10,966 1,612 580.27
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Profit attributable to
shareholders 6,420 542 1,084.50
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Net assets 160,905 154,485 4.16
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Net assets per share (RMB) 1.856 1.782 4.16
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Adjusted net assets per share
(RMB) 1.842 1.768 4.19
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Net cash flow from operating
activities 12.366 N/A N/A
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Earnings per share (RMB) 0.074 0.006 1,133
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Return on net assets (%) 3.624
percentage
3.990 0.366 points
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EBIT Overview by Segment
3 months ended March 31
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2003 2002
RMB millions RMB millions Change (%)
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Exploration and production 5,617 2,030 176.69
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Refining 1,195 (412) 390.05
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Marketing and distribution 3,816 754 406.10
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Chemicals 667 (691) 196.53
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Exploration & Production During the first quarter of 2003, in the eastern regions of China, breakthroughs in exploration were made in the Yangxin depression areas within Shengli Oilfield. Additionally, many test wells in the eastern region of Wangzhuang have started to generate a stream of industrial oil and the exploration of a few key wells in the Zhuanghai region have proven to be a success. In the newly developed western regions of China, two oil wells in Tahe Oilfield have generated high-yield oil streams. In the Tabamiao region, the Ordos Ordos (ôr`dōs), Mandarin Erdesi, sandy desert plateau region, c.35,000 sq mi (90,650 sq km), Inner Mongolian Autonomous Region, N China; almost encircled by the great northern bend of the Huang He. Basin has generated a high-yield gas stream. The No.1 central well in the Tazhong region of the Tarim Basin and the No. 1 Peacock peacock or peafowl, large bird of the genus Pavo, in the pheasant family, native to E Asia. There are two main species, the common (Pavo cristatus), and the Javanese (P. well in the southern region of the Tarim River Tarim River Chinese Talimu He or T'a-li-mu Ho Chief river of Xinjiang autonomous region, China. Formed by the confluence of two rivers in the far west, it follows an undefined riverbed for much of its course, flowing along the northern edge of the have both generated industrial gas streams. In the southern regions of China, the No. 1 well in the Maoba region of the Sichuan Province has generated a high-yield stream of natural gas. In terms of development, newly added production capacity of crude oil and natural gas amounted to approximately 0.83 million tonnes per year (5.9 million barrels) and 94 million cubic meters Noun 1. cubic meter - a metric unit of volume or capacity equal to 1000 liters cubic metre, kiloliter, kilolitre metric capacity unit - a capacity unit defined in metric terms (3.3 billion cubic feet) respectively. Summary of the Exploration and Production Segment
January - March January- March
2003 2002 Change (%)
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Crude oil production
(ten thousand tonnes) 928.72 928.26 0.05
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Natural gas production
(billion cubic meters) 1.26 1.18 6.78
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Realized price of crude oil
(RMB/tonne) 1,762 1,010 74.46
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Realized price of natural gas
(RMB/thousand cubic meters) 619 610 1.48
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Note: The production volume of crude oil and natural gas is converted at 1 tonne tonne measure of weight or mass; 1 tonne=1000 kg. See also ton. = 7.1 barrels and 1 cubic meter = 35.31 cubic feet respectively. Refining refining, any of various processes for separating impurities from crude or semifinished materials. It includes the finer processes of metallurgy, the fractional distillation of petroleum into its commercial products, and the purifying of cane, beet, and maple sugar In the first quarter of 2003, prices of domestic refined oil products increased, trailing the upward trend of the prices in the international market. Sinopec Corp. adjusted crude oil production in an effort to keep in line with demand, optimized the Company's product mix and increased the production of petrochemical light oil in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with the market environment. With the Company's strong commitment to science and technology, major technical indicators technical indicator A variable used when technically analyzing the market to determine when to invest and which stocks to select. Technical indicators include chart formations, volume, and odd-lot sales. such as light product yield and composite commercial yield increased significantly. Refining margins increased by 17.1% to US$3.76/barrel on a year-over-year basis. Operating Summary of the Refining Segment
January - March January - March
2003 2002 Change (%)
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Crude oil throughput
(ten thousand tonnes) 2,754 2,394 15.0
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Gasoline, diesel and
kerosene production
(ten thousand tonnes) 1,640 1,410 16.3
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Of which: Gasoline
(ten thousand tonnes) 512 424 20.8
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Diesel
(ten thousand tonnes) 987 883 11.8
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Kerosene
(million tonnes) 141 103 36.9
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Petrochemical light oil
production (ten thousand
tonnes) 420 347 21.2
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Light product yield (%) 1.64
percentage
74.30 72.66 points
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Composite commerical yield 0.85
(%) percentage
92.64 91.79 point
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Refining margin (USD/bbl) 3.76 3.21 17.1
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Marketing and Distribution Prices of domestic refined oil products remained stable in the first quarter of 2003. The Company showed continued increases in retail sales, reduced inventory to optimum levels and proactively promoted sales of environmentally friendly Environmentally friendly, also referred to as nature friendly, is a term used to refer to goods and services considered to inflict minimal harm on the environment.[1] gasoline gasoline or petrol, light, volatile mixture of hydrocarbons for use in the internal-combustion engine and as an organic solvent, obtained primarily by fractional distillation and "cracking" of petroleum, but also obtained from natural gas, by while continuing to increase the total sales of domestic refined oil products. During the period under review, sales of environmentally friendly gasoline totaled 1.68 million tonnes, an increase of seven (7) percentage points; and 1.59 million tonnes of export volume of the refined oil products, an increase of 124% over the same period of last year. Summary of Marketing and Distribution Segment
January - March January - March
2003 2002 Change (%)
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Total domestic sales of
refined oil products (ten
thousand tones) 1,781 1,734 2.7
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Of which: Retail volume
(ten thousand tonnes) 895 794 12.7
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Distribution volume
(ten thousand tonnes) 328 338 -3.0
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Wholesale volume
(ten thousand tonnes) 558 601 -7.2
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Total number of petrol
stations under Sinopec
Corp. brand (1) 28,894 28,127 2.7
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Of which: Self-operated
petrol stations 24,065 24,000 0.3
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Franchised petrol
stations 4,829 4,127 17.0
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Throughput per station
(tonne/station) (2) 1,628 1,560 4.4
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1. The 2003 figure is the total number of petrol petrol: see gasoline. stations as of the reporting period end. The 2002 figure is as of the year-end period. 2. Throughput per petrol station in 2003 was converted to an annual average, and that of 2002 was an annual average. Chemicals In the first quarter of 2003, prices of major chemicals increased at different levels. With full utilization of major petrochemical facilities, production of synthetic resin Noun 1. synthetic resin - a resin having a polymeric structure; especially a resin in the raw state; used chiefly in plastics acrylate resin, acrylic resin, acrylic - a glassy thermoplastic; can be cast and molded or used in coatings and adhesives , synthetic rubber synthetic rubber: see rubber. , monomers and polymers for synthetic and synthetic fiber Noun 1. synthetic fiber - fiber created from natural materials or by chemical processes man-made fiber fiber, fibre - a slender and greatly elongated substance capable of being spun into yarn acrylic, acrylic fiber - polymerized from acrylonitrile recorded significant increases. Meanwhile, the Company continued to improve the product mix and increase product quality, resulting in a 32.0% increase in performance compound resins resins, n.pl complex, insoluble, sticky substances secreted by plants. Used as astringents, antimicrobials, and antiinflammatories, and are burned as incense. Can cause oral ulcers and epidermal irritations. and a 29.1% increase in differential fiber production over the same period in 2002. Production of Major Chemicals (Unit: ten thousand tonnes)
January -- March January - March
2003 2002 Change (%)
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Ethylene 76.46 58.26 31.24
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Synthetic resins 113.46 88.15 28.71
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Of which: Performance
compound resins 51.18 38.77 32.01
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Synthetic rubbers 11.71 10.97 6.75
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Monomers/polymers for
synthetic fibers 100.52 92.91 8.19
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Synthetic fibers 29.91 27.51 8.72
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Of which: Differential
fibers 11.50 8.91 29.07
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Urea 39.03 72.81 -46.39
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Capital Expenditures During the period under review, CAPEX was RMB 9.36 billion (US$1.13 billion). The exploration and production segment utilized RMB4.82 billion (US$580 million) for 1) developing oil fields This list of oil fields includes major fields of the past and present. The list is incomplete; there are more than 40,000 oil and gas fields of all sizes in the world[1]. in the eastern regions that have shown some of the significant breakthroughs that were mentioned earlier; 2) developing some exploratory wells in the western regions that have generated high-yield industrial gas streams or other similar discoveries; and 3) the No. 1 well in the Maoba region of the Sichuan Province that has generated streams of high-yield natural gas. The newly added production capacity of crude oil and natural gas amounted to 0.83 million tonnes and 94 million cubic meters respectively. The refining segment utilized RMB1.22 billion (US$150 million) for 1) capacity expansion and technological renovation for projects that were subject to test runs and then put into operation; and 2) the Ningbo-Shanghai-Nanjing pipeline for crude oil import, which has progressed smoothly. The chemical segment utilized RMB2.85 billion (US$340 million) for 1) revamping Sinopec Guangzhou ethylene ethylene (ĕth`əlēn') or ethene (ĕth`ēn), H2C=CH2, a gaseous unsaturated hydrocarbon. It is the simplest alkene. facilities; 2) the PTA PTA or parent-teacher association: see parent education. project in Yizheng Chemical Fiber which will be put into trial run; 3) the cyano ethylene facilities in Shanghai Petrochemical Shanghai Petrochemical (SEHK: 338),(SSE: B>600688) (Traditional Chinese:上海石化, Simplified Chinese:上海石化), full name Sinopec Shanghai Petrochemical Company Limited that have been successfully put into trial run; 4) the second round of revamping the paraxylene facilities in Zhenhai Refining; 5) revamping the Sinopec Qilu ethylene facilities; and 6) constructing the Yangzi BASF BASF Bar Association of San Francisco (since 1872; San Francisco, California) BASF Badische Anilin und Soda Fabrik (German chemical products company) BASF Builders Association of South Florida integration project and the Shanghai Secco ethylene facility. The marketing and distribution segment utilized RMB470 million (US$60 million) for the scheduled construction and revamping of petrol stations. Outlook for the Second Quarter of 2003 The Company will experience certain operating challenges as a result of uncertainties of the US-Iraq War influence and the global economy. The following summarizes the Company's outlook for the second quarter of 2003: -- China will continue to enjoy high domestic demand for refined oil and chemical products, which will create a favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. market environment for the Company. -- With the Iraq War Iraq War: see under Persian Gulf Wars. Iraq War or Second Persian Gulf War Brief conflict in 2003 between Iraq and a combined force of troops largely from the U.S. and Great Britain; and a subsequent U.S. close to an end, prices of international crude oil, refined oil and chemical products are expected to fall; however, prices of crude oil and refined oil products are likely to remain at relatively high levels during the second quarter of 2003. -- Chemical products will continue to experience cyclical cyclical Of or relating to a variable, such as housing starts, car sales, or the price of a certain stock, that is subject to regular or irregular up-and-down movements. recovery. To maximize shareholder return, Sinopec Corp. will continue to use flexible operating strategies to take advantage of opportunities in the market and the Company will also continue its strategy of "expanding resources and markets, reducing costs and disciplining investments". Operations: During the second quarter of 2003, the Company will focus on the following targets: Exploration and Production: The Company will continue its efforts to stabilize stabilize See peg. and increase production of crude oil and natural gas while seeking replacement resources and expanding production capacity. The target production for crude oil and natural gas is 9.51 million tonnes and 1.39 billion cubic meters respectively. Refining: The Company will adjust its product mix and crude oil throughput to be in line with the market demand as well as increase production of petrochemical feedstock feed·stock n. Raw material required for an industrial process. Noun 1. feedstock - the raw material that is required for some industrial process raw material, staple - material suitable for manufacture or use or finishing and high value-added products. The processing target for crude oil is 27.79 million tonnes. Marketing and distribution: The Company will further enhance its sales network for refined oil products and increase both retail and distribution sales. The annual sales target for refined products is 17.6 million tonnes, including 8.7 million tonnes of retail sales and 3.3 million tonnes for distribution. Chemicals: The Company will maintain a full load at major chemical facilities and boost production of both major and high value-added chemicals. The target for ethylene production is 750,000 tonnes. Notice: Sinopec Corp. will announce its 1Q2003 results on its website at www.sinopec.com on Tuesday, 29 April 2003, Hong Kong Time Hong Kong Time (abbreviation: HKT ; Traditional Chinese: 香港時間) is the time in Hong Kong. The time is UTC+8 all year round. . The Company will also host a teleconference to discuss the Company's results. The call will take place on Tuesday, April 29, 2003, at 4:00 p.m. Hong Kong Time (9:00 a.m. GMT (Greenwich Mean Time) See UTC. GMT - Universal Time 1 and 4:00 a.m. U.S. EST EST electroshock therapy. EST abbr. electroshock therapy .) About Sinopec Corp.: Sinopec Corp. is the first Chinese company that has been listed in Hong Kong Hong Kong (hŏng kŏng), Mandarin Xianggang, special administrative region of China, formerly a British crown colony (2005 est. pop. 6,899,000), land area 422 sq mi (1,092 sq km), adjacent to Guangdong prov. , New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of , London and Shanghai. The Company is an integrated energy and chemical company with upstream, midstream mid·stream n. 1. The middle part of a stream. 2. The part of a course that is neither at the beginning nor at the end: the midstream of life. Noun 1. and downstream operations. The principal operations of Sinopec Corp. and its subsidiaries include: exploring, developing, producing and trading crude oil and natural gas; processing crude oil into refined oil products; producing, trading, transporting, distributing and marketing refined oil products; and producing and distributing chemical products. Based on 2002 turnover, Sinopec Corp. is the largest listed company listed company n → compañía cotizable listed company n → société cotée en Bourse listed company list n → in China. The Company is one of the largest crude oil and petrochemical companies in China and Asia. It is also one of the largest gasoline, diesel and jet fuel and other major chemical products producers and distributors in China and Asia. For additional information about the Company, please visit the Company's website at www.sinopec.com Disclaimer (networking) disclaimer - Statement ritually appended to many Usenet postings (sometimes automatically, by the posting software) reiterating the fact (which should be obvious, but is easily forgotten) that the article reflects its author's opinions and not necessarily those of the : This presentation and the presentation materials distributed herewith here·with adv. 1. Along with this. 2. By this means; hereby. herewith Adverb Formal together with this: include forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. . All statements, other than statements of historical facts, that address activities, events or developments that Sinopec Corp. expects or anticipates will or may occur in the future (including but not limited to projections, targets, estimates and business plans) are forward-looking statements. Sinopec Corp.'s actual results or development may differ materially from those indicated by these forward-looking statements as a results of various factors and uncertainties, including but not limited to price fluctuations, actual demand, exchange rate fluctuations, exploration and development outcomes, estimates of proved reserves proved reserves The quantity of minerals expected to be recoverable under current economic and operating conditions. The amount of proved reserves is important in valuing the stock of a company with significant holdings in natural resources. , market shares, competition, environmental risks, changes in legal, financial and regulatory frameworks, international economic and financial market conditions, political risks, project delay, product approval, cost estimates and other risks and factors beyond our control. In addition, Sinopec Corp. makes the forward-looking statements referred to herein as of today and undertakes no obligation to update these statements. |
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