Message from
the President
The year 2023 was full of difficulties and challenges, with weak global economic recovery, intensified geopolitical tensions, fluctuating international oil prices, and slack demand in the chemical market. Unstable, uncertain, and unpredictable factors were on the rise. In the face of such complicated environment, we followed the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era and carried out in-depth studies on the guiding principles of the 20th CPC National Congress and the important instructions given by General Secretary Xi Jinping during his inspection tours to Shengli Oilfield and Jiujiang Petrochemical. We fully implemented high-quality development actions, optimized production and operation in all aspects, and made every effort to boost development quality and profitability so as to ensure stable growth. After restoring policy-related extra-budgetary factors, the Company recorded an annual operating revenue of 3.25 trillion yuan, a total profit of 117.07 billion yuan, and a net profit of 96.63 billion yuan. We successfully met the "One Profit and Five Rates" targets set by SASAC and our operating performance stayed ahead among the central SOEs.
We kept improving operation with greater results achieved in production and operation. We pressed ahead with the seven-year E&P campaign for domestic upstream. Major breakthroughs were made in the exploration of the Shunbei New Zone of the Tarim Basin and the deep coalbed methane in the Ordos Basin. Progress was obtained in promoting "Deep Earth Engineering" projects and Shengli Jiyang shale oil national demonstration area effectively. The net profit and cash flow of overseas upstream both reached 10 billion yuan, and a batch of non-performing assets was divested. In refining, we followed dynamic resource coordination, completed the supply guarantee task under ultra-low inventory, optimized the operation of the industrial chain in line with market conditions, and set a historical high in refining throughput for the year. In chemicals, we adhered to an integrated operation approach to generate profit, calculated marginal benefits on "one subsidiary, one policy", optimized utilization rate and further increased proportion of three major synthetic materials and high value-added fine chemical products. In marketing, we spared no efforts to secure our market position and explore new market space. The marketing segment coordinated with refineries to determine production and marketing volume for consolidating market share in fierce competition. Favorable operating results were achieved in refining sales, chemical sales, catalysts, oilfield service, refining and petrochemical engineering etc.
We promoted two-way development with all-around acceleration in transformation and upgrading. We vigorously transformed and upgraded traditional business, strengthened cooperation with resource-rich provinces (regions), and took effective measures to protect and expand mining rights. We continuously improved the natural gas production, supply, storage and sales system, and completed and put into operation key projects such as the Wen24 gas storage facility and Shandong LNG Phase III. Projects including Anqing refining to chemical structural adjustment, Hainan ethylene, and relocation and upgrading for caprolactam industry chain were completed and put into operation. Mechanical completion was accomplished for Tianjin Nangang Ethylene project. The construction of Zhenhai Phase II and Yizheng PTA was accelerated. The number of ethylene project enlisted into the national petrochemical industrial plan reached a record high. We fully implemented the three-year action plan for development charging network, and steadily increased the number of charging and swapping stations and charging terminals. We expedited the development of strategic and new industries with wind, solar, geothermal, and hydrogen energies enlisted to the Company's main businesses to be cultivated. The completed Kuqa Green Hydrogen Project in Xinjiang began to produce hydrogen. The "Demonstration Project of Hydrogen Transmission Pipeline from Ulanqab to Beijing-Tianjin-Hebei Region" was incorporated into the national network, and the "Source, Network, Load, Hydrogen, Storage" integrated project was included in the third batch of national wind and solar power bases. We built and put into operation China's first megaton carbon dioxide long-distance pipeline. The newly added installed capacity of wind and solar power exceeded 1000 megawatts, and the newly added geothermal heating capacity exceeded 12 million square meters. The 7th World Geothermal Congress we held received high recognition from all parties.
We strived for self-reliance, self-improvement, and indigenous innovation with the vitality of R&D further unleased. We actively integrated into the national scientific and technological innovation system, led the establishment of four national key laboratories and participated in the set-up of two national key laboratories, ranking among the top in the energy and chemical industry in terms of quantity. We brought forward national strategic scientific and technological tasks with high quality and made phased results in creating original technology sources. We made fruitful achievements in tackling key and core technologies. The key technologies of ultra-deep well drilling and completion engineering saw more breakthroughs, and the electric fracturing equipment with the world's largest unit power was successfully developed. The world's first 3 mtpa heavy oil catalytic cracking unit was put into operation. The high-performance liquid rubber industrial unit was domestically produced for the first time, and PVA optical films arrived on the market for the first time. We improved the mechanism for tackling new technological challenges, and continuously provided support for the "Seedling Plan", "Open Competition Mechanism", "Youth Doctoral Support Plan" and "Special Funds for Key Pilot Projects". We solidly promoted more than 10 national pilot demonstration projects, such as artificial intelligence and "Industrial Internet+". The Company became the "chain leader" of software value chain for the petrochemical industry.
We took multiple measures to carry out reform with the effectiveness of corporate management released continuously. We consolidated and enhanced the effectiveness of the threeyear action plan for deepening reform, continued to launch the reform deepening and upgrading actions, coordinated and optimized the headquarters structure and functional settings, and vigorously implemented strategic restructuring. We improved the organization and institutional system of the "Three Basics" work, and continuously enhanced the standardization level of grassroots management. The Company was included into SASAC's list of world-leading demonstration companies. Our total cost of major segments achieved a "double decrease" when comparing to the budget and the same period of last year. We met the goal of basically eliminating loss-making subsidiaries. We worked on normalized market value management mechanism, orderly implemented the stock increase for Sinopec Group and share repurchase of the Sinopec Corp. 9 controlling listed companies made full ESG performance disclosure for the first time, significantly raising the quality of our listed companies. We strengthened risk control and internal control management and the Company was rated A-level in terms of the effectiveness of the internal control system during the spot check by SASAC. We ensured the rule of law and compliance management and completed the appointment of chief compliance officers in 38 directly affiliated subsidiaries. We efficiently coordinated and carried out audit supervision, with audit quality evaluation ranking first in the A-level of central SOEs. We carried forward the annual action plan to strengthen safety management and fought the battle against pollution, and the level of HSE management continued to improve.
The new era carries new hope, and the new journey calls for new responsibilities. We will follow the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, study and implement the guiding principles of the 20th CPC National Congress and the important instructions given by General Secretary Xi Jinping during his visits to Shengli Oilfield and Jiujiang Petrochemical. We will make solid steps to reach our goals, shoulder responsibilities, and strive for better operating performance. We will march towards high-quality development, build a world-leading company and celebrate the 75th anniversary of the founding of the PRC with outstanding achievements.
