|   | £ | REGISTRATION      STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT      OF 1934 |
|--------|--------|----------------------------------------------------------------------------------------------------------|
| OR     |
|   | S      | ANNUAL      REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF      1934          |
|   |   |                                                                                                     |
|   |   | FOR      THE FISCAL YEAR ENDED DECEMBER 31, 2007                                                         |
| OR     |
|   | £ | TRANSITION      REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF      1934      |
|   |   |                                                                                                     |
|   |   | FOR      THE TRANSITION PERIOD FROM _______ TO_______                                                    |
| OR     |
|   | £ | SHELL      COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE                                         |
|   |   |                                                                                                     |
|   |   | DATE      OF EVENT REQUIRING THIS SHELL COMPANY REPORT .........                             |
|   |   |                                                                                                     |
|   |   | FOR      THE TRANSACTION PERIOD FORM ____________ TO  __________                                         |

| Title of Each      Class                                                                            | Name      of Each ExchangeOn Which      Registered |
|-----------------------------------------------------------------------------------------------------|----------------------------------------------------|
| American      Depositary Shares, each representing100      H Shares of par value RMB 1.00 per share | New      York Stock Exchange, Inc.                 |
| H      Shares of par value RMB 1.00 per share                                                       | New      York Stock Exchange, Inc.*                |

----

|   | Shares      with selling restriction, par value RMB 1.00 per share | 61,422,922,493 |   |
|--------|--------------------------------------------------------------------|----------------|--------|
|   | H      Shares, par value RMB 1.00 per share                        | 16,780,488,000 |   |
|   | A      Shares, par value RMB 1.00 per share                        | 8,499,028,507  |   |

|   |  U.S.      GAAP ___ |        InternationalFinancial      Reporting Standards as      issued by the International AccountingStandards      Board |       X      |   Other       ___  |   |
|--------|--------------------------|-------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------|----------------------------------------|--------|

----

| ITEM      1.   | IDENTITY      OF DIRECTORS, SENIOR MANAGEMENT AND ADVISORS                       | 6                                                               |
|----------------|----------------------------------------------------------------------------------|-----------------------------------------------------------------|
| ITEM      2.   | OFFER      STATISTICS AND EXPECTED TIMETABLE                                     | 6                                                               |
| ITEM      3.   | KEY      INFORMATION                                                             | 6                                                               |
|           | A.                                                                               | SELECTED      FINANCIAL DATA                                    | 6 |
|           | B.                                                                               | CAPITALIZATION      AND INDEBTEDNESS                            | 8 |
|           | C.                                                                               | REASONS      FOR THE OFFER AND USE OF PROCEEDS                  | 8 |
|           | D.                                                                               | RISK      FACTORS                                               | 8 |
| ITEM      4.   | INFORMATION      ON THE COMPANY                                                  | 13                                                              |
|           | A.                                                                               | HISTORY      AND DEVELOPMENT OF THE COMPANY                     | 13 |
|           | B.                                                                               | BUSINESS      OVERVIEW                                          | 14 |
|           | C.                                                                               | ORGANIZATIONAL      STRUCTURE                                   | 29 |
|           | D.                                                                               | PROPERTY,      PLANT AND EQUIPMENT                              | 29 |
| ITEM      4A.  | UNRESOLVED      STAFF COMMENTS                                                   | 30                                                              |
| ITEM      5.   | OPERATING      AND FINANCIAL REVIEW AND PROSPECTS                                | 30                                                              |
|           | A.                                                                               | GENERAL                                                         | 30 |
|           | B.                                                                               | CONSOLIDATED      RESULTS OF OPERATIONS                         | 33 |
|           | C.                                                                               | DISCUSSIONS      ON RESULTS OF SEGMENT OPERATIONS               | 39 |
|           | D.                                                                               | LIQUIDITY      AND CAPITAL RESOURCES                            | 47 |
|           | E.                                                                               | RECENT      DEVELOPMENTS                                        | 49 |
| ITEM      6.   | DIRECTORS,      SENIOR MANAGEMENT AND EMPLOYEES                                  | 49                                                              |
|           | A.                                                                               | DIRECTORS,      SUPERVISORS AND SENIOR MANAGEMENT               | 49 |
|           | B.                                                                               | COMPENSATION                                                    | 56 |
|           | C.                                                                               | BOARD      PRACTICE                                             | 57 |
|           | D.                                                                               | EMPLOYEES                                                       | 58 |
|           | E.                                                                               | SHARE      OWNERSHIP                                            | 59 |
| ITEM      7.   | MAJOR      SHAREHOLDERS AND RELATED PARTY TRANSACTIONS                           | 59                                                              |
|           | A.                                                                               | MAJOR      SHAREHOLDERS                                         | 59 |
|           | B.                                                                               | RELATED      PARTY TRANSACTIONS                                 | 59 |
|           | C.                                                                               | INTERESTS      OF EXPERTS AND COUNSEL                           | 60 |
| ITEM      8.   | FINANCIAL      INFORMATION                                                       | 60                                                              |
|           | A.                                                                               | CONSOLIDATED      STATEMENTS AND OTHER FINANCIAL INFORMATION    | 60 |
|           | B.                                                                               | SIGNIFICANT      CHANGES                                        | 60 |
| ITEM      9.   | THE      OFFER AND LISTING                                                       | 61                                                              |
|           | A.                                                                               | OFFER      AND LISTING DETAILS                                  | 61 |
| ITEM      10.  | ADDITIONAL      INFORMATION                                                      | 62                                                              |
|           | A.                                                                               | SHARE      CAPITAL                                              | 62 |
|           | B.                                                                               | MEMORANDUM      AND ARTICLES OF ASSOCIATION                     | 62 |
|           | C.                                                                               | MATERIAL      CONTRACTS                                         | 69 |
|           | D.                                                                               | EXCHANGE      CONTROLS                                          | 69 |
|           | E.                                                                               | TAXATION                                                        | 70 |
|           | F.                                                                               | DIVIDENDS      AND PAYING AGENTS                                | 73 |
|           | G.                                                                               | STATEMENT      BY EXPERTS                                       | 73 |
|           | H.                                                                               | DOCUMENTS      ON DISPLAY                                       | 73 |
|           | I.                                                                               | SUBSIDIARY      INFORMATION                                     | 73 |
| ITEM      11.  | QUALITATIVE      AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK                  | 74                                                              |
| ITEM      12.  | DESCRIPTION      OF SECURITIES OTHER THAN EQUITY SECURITIES                      | 79                                                              |
| ITEM      13.  | DEFAULTS,      DIVIDEND ARREARAGES AND DELINQUENCIES                             | 79                                                              |
| ITEM      14.  | MATERIAL      MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USEOF PROCEEDS | 79                                                              |
|           | A.                                                                               | MATERIAL      MODIFICATIONS TO THE RIGHTS TO SECURITIES HOLDERS | 79 |
|           | B.                                                                               | USE      OF PROCEEDS                                            | 79 |
| ITEM      15.  | CONTROLS      AND PROCEDURES                                                     | 79                                                              |
| ITEM      16.  | RESERVED                                                                         | 81                                                              |
| ITEM      16A. | AUDIT      COMMITTEE FINANCIAL EXPERT                                            | 81                                                              |
| ITEM      16B. | CODE      OF ETHICS                                                              | 81                                                              |
| ITEM      16C. | PRINCIPAL      ACCOUNTANT FEES AND SERVICES                                      | 81                                                              |
| ITEM      16D. | EXEMPTIONS      FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES                  | 81                                                              |

----

| ITEM      16E. | PURCHASERS      OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATEDPURCHASERS | 81 |
|----------------|-----------------------------------------------------------------------------|----|
| ITEM      17.  | FINANCIAL      STATEMENTS                                                   | 81 |
| ITEM      18.  | FINANCIAL      STATEMENTS                                                   | 81 |
| ITEM      19.  | EXHIBITS                                                                    | 82 |

----

|   | · | "Sinopec      Corp.", "we", "our" and "us" are to China Petroleum & Chemical      Corporation, a PRC joint stock limited company, and its      subsidiaries;                           |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                       |
|   | · | "Sinopec      Group Company" are to our controlling shareholder, China Petrochemical      Corporation, a PRC limited liability company;                                                    |
|   |   |                                                                                                                                                                                       |
|   | · | "Sinopec      Group" are to the Sinopec Group Company and its subsidiaries other than      Sinopec Corp. and its subsidiaries;                                                             |
|   |   |                                                                                                                                                                                       |
|   | · | "China"      or the "PRC" are to the People's Republic of China, excluding for purposes      of this annual report Hong Kong, Macau and Taiwan;                                            |
|   |   |                                                                                                                                                                                       |
|   | · | "provinces"      are to provinces and to provincial-level autonomous regions and      municipalities in China which are directly under the supervision of the      central PRC government; |
|   |   |                                                                                                                                                                                       |
|   | · | "RMB"      are to Renminbi, the currency of the PRC;                                                                                                                                       |
|   |   |                                                                                                                                                                                       |
|   | · | "HK$"      are to Hong Kong dollar, the currency of the Hong Kong Special      Administrative Region of the PRC; and                                                                       |
|   |   |                                                                                                                                                                                       |
|   | · | "US$"      are to US dollars, the currency of the United States of      America.                                                                                                           |

|   | · | "billion"      are to a thousand million.                                                                                                                                                                                                                                                                                                                                                                                     |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   | · | "BOE"      are to barrels-of-oil equivalent; natural gas is converted at a ratio of      6,000 cubic feet of natural gas to one BOE.                                                                                                                                                                                                                                                                                          |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   | · | "primary      distillation capacity" are to the crude oil throughput capacity of a      refinery's crude oil distillation units, calculated by estimating the      number of days in a year that such crude oil distillation units are      expected to operate, excluding downtime for regular maintenance, and      multiplying that number by the amount equal to the units' optimal daily      crude oil throughput.      |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   | · | "rated      capacity" are to the output capacity of a given production unit or, where      appropriate, the throughput capacity, calculated by estimating the number      of days in a year that such production unit is expected to operate,      excluding downtime for regular maintenance, and multiplying that number by      an amount equal to the unit's optimal daily output or throughput, as the      case may be. |

----

|               |   | Noon      Buying Rate  |   |
|--------------------|--------|------------------------|--------|
| Period             |   | End                    |   |   | Average(1) |   |   | High |   |   | Low |   |
|               |   | (RMB      per US$1.00) |   |
| 2003               |   |                   | 8.2767 |   |   |   | 8.2772 |   |   |   | 8.2800 |   |   |   | 8.2769 |   |
| 2004               |   |                   | 8.2765 |   |   |   | 8.2767 |   |   |   | 8.2774 |   |   |   | 8.2764 |   |
| 2005               |   |                   | 8.0702 |   |   |   | 8.1826 |   |   |   | 8.2765 |   |   |   | 8.0702 |   |
| 2006               |   |                   | 7.8041 |   |   |   | 7.9723 |   |   |   | 8.0702 |   |   |   | 7.9723 |   |
| 2007               |   |                   | 7.2946 |   |   |   | 7.5806 |   |   |   | 7.8127 |   |   |   | 7.2946 |   |
| December      2007 |   |                   | 7.2946 |   |   |   | - |   |   |   | 7.4120 |   |   |   | 7.2946 |   |
| January      2008  |   |                   | 7.1818 |   |   |   | - |   |   |   | 7.2946 |   |   |   | 7.1818 |   |
| February      2008 |   |                   | 7.1115 |   |   |   | - |   |   |   | 7.1973 |   |   |   | 7.1100 |   |
| March      2008    |   |                   | 7.0120 |   |   |   | - |   |   |   | 7.1110 |   |   |   | 7.0105 |   |
| April      2008    |   |                   | 6.9870 |   |   |   | - |   |   |   | 7.0185 |   |   |   | 6.9840 |   |
| May      2008      |   |                   | 6.9400 |   |   |   | - |   |   |   | 7.0000 |   |   |   | 6.9377 |   |

| (1) | Determined      by averaging the rates on the last business day of each month during the      relevant period. |
|-----|----------------------------------------------------------------------------------------------------------------|

----

|   | · | amount      and nature of future exploration and development,                                                                                                                      |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | · | future      prices of and demand for our products,                                                                                                                                 |
|   | · | future      earnings and cash flow,                                                                                                                                                |
|   | · | development      projects and drilling prospects,                                                                                                                                  |
|   | · | future      plans and capital expenditures,                                                                                                                                        |
|   | · | estimates      of proved oil and gas reserves,                                                                                                                                     |
|   | · | exploration      prospects and reserves potential,                                                                                                                                 |
|   | · | expansion      and other development trends of the petroleum and petrochemical      industry,                                                                                      |
|   | · | production      forecasts of oil and gas,                                                                                                                                          |
|   | · | expected      production or processing capacities, including expected rated capacities      and primary distillation capacities, of units or facilities not yet in      operation, |
|   | · | expansion      and growth of our business and operations, and                                                                                                                      |
|   | · | our      prospective operational and financial  information.                                                                                                                       |

|   | · | fluctuations      in crude oil prices,                                        |
|--------|--------|-------------------------------------------------------------------------------|
|   | · | fluctuations      in prices of our products,                                  |
|   | · | failures      or delays in achieving production from development    projects, |
|   | · | potential      acquisitions and other business opportunities,                 |
|   | · | general      economic, market and business conditions, and                    |
|   | · | other      risks and factors beyond ourcontrol.                               |

----

| ITEM 1. | IDENTITY      OF DIRECTORS, SENIOR MANAGEMENT ANDADVISORS |
|---------|-----------------------------------------------------------|

| ITEM 2. | OFFER      STATISTICS AND EXPECTED TIMETABLE |
|---------|----------------------------------------------|

| ITEM 3. | KEY      INFORMATION |
|---------|----------------------|

----

|                                                               |   | Years      Ended December 31,                         |      |
|--------------------------------------------------------------------|--------|-------------------------------------------------------|-----------|
|                                                               |   | 2003                                                  |      |   | 2004 |   |   | 2005 |   |   | 2006 |   |   | 2007 |   |
|                                                               |   | RMB                                                   |      |   | RMB |   |   | RMB |   |   | RMB |   |   | RMB |   |
|                                                               |   | (in      millions, except per share and per ADS data) |      |
| Consolidated      Income Statement Data(1):                        |   |                                                  |      |   |   |   |   |   |   |   |   |   |   |   |   |
|     Operating      revenues                    |   |                                                  | 447,292   |   |   |   | 617,951 |   |   |   | 817,048 |   |   |   | 1,061,741 |   |   |   | 1,204,843 |   |
|     Other      income                          |   |                                                  | -         |   |   |   | - |   |   |   | 9,777 |   |   |   | 5,161 |   |   |   | 4,863 |   |
|     Operating      expenses                    |   |                                                  | (407,779) |   |   |   | (555,003) |   |   |   | (758,848) |   |   |   | (986,270) |   |   |   | (1,123,842) |   |
| Operating      income                                              |   |                                                  | 39,513    |   |   |   | 62,948 |   |   |   | 67,977 |   |   |   | 80,632 |   |   |   | 85,864 |   |
| Income      before income tax                                      |   |                                                  | 35,640    |   |   |   | 59,386 |   |   |   | 64,525 |   |   |   | 78,542 |   |   |   | 83,464 |   |
| Income      tax                                                    |   |                                                  | (10,843)  |   |   |   | (18,096) |   |   |   | (19,872) |   |   |   | (23,504) |   |   |   | (24,721) |   |
| Net      income attributable to equity shareholders of the Company |   |                                                  | 22,648    |   |   |   | 35,289 |   |   |   | 41,354 |   |   |   | 53,603 |   |   |   | 56,533 |   |
| Basic      earnings per share(2)                                   |   |                                                  | 0.26      |   |   |   | 0.41 |   |   |   | 0.48 |   |   |   | 0.62 |   |   |   | 0.65 |   |
| Basic      earnings per ADS(2)                                     |   |                                                  | 26.12     |   |   |   | 40.70 |   |   |   | 47.70 |   |   |   | 61.82 |   |   |   | 65.20 |   |
| Cash      dividends declared per share                             |   |                                                  | 0.09      |   |   |   | 0.10 |   |   |   | 0.12 |   |   |   | 0.13 |   |   |   | 0.16 |   |
|                                                               |   |                                                  |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Segment      results                                               |   |                                                  |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Exploration      and production                                    |   |                                                  | 19,565    |   |   |   | 26,397 |   |   |   | 48,334 |   |   |   | 63,182 |   |   |   | 48,766 |   |
| Refining                                                           |   |                                                  | 6,201     |   |   |   | 4,917 |   |   |   | (3,695) |   |   |   | (25,710) |   |   |   | (10,452) |   |
| Marketing      and distribution                                    |   |                                                  | 11,943    |   |   |   | 14,716 |   |   |   | 10,350 |   |   |   | 30,234 |   |   |   | 35,727 |   |
| Chemicals                                                          |   |                                                  | 3,640     |   |   |   | 18,843 |   |   |   | 14,186 |   |   |   | 14,458 |   |   |   | 13,306 |   |
| Corporate      and others                                          |   |                                                  | (1,836)   |   |   |   | (1,925) |   |   |   | (1,198) |   |   |   | (1,532) |   |   |   | (1,483) |   |
| Operating      income                                              |   |                                                  | 39,513    |   |   |   | 62,948 |   |   |   | 67,977 |   |   |   | 80,632 |   |   |   | 85,864 |   |

|                                                                                                                                                                                                                                                                            |   | As      of December 31, |    |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------|---------|
|                                                                                                                                                                                                                                                                            |   | 2003                    |    |   | 2004 |   |   | 2005 |   |   | 2006 |   |   | 2007 |   |
|                                                                                                                                                                                                                                                                            |   | RMB                     |    |   | RMB |   |   | RMB |   |   | RMB |   |   | RMB |   |
|                                                                                                                                                                                                                                                                            |   | (in      millions)      |    |
| Consolidated      Balance Sheet Data(1):                                                                                                                                                                                                                                        |   |                    |    |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash      and cash equivalents                                                                                                                                                                                                                                                  |   |                    | 17,286  |   |   |   | 18,817 |   |   |   | 15,088 |   |   |   | 7,063 |   |   |   | 7,696 |   |
| Total      current assets                                                                                                                                                                                                                                                       |   |                    | 104,909 |   |   |   | 125,862 |   |   |   | 148,984 |   |   |   | 146,490 |   |   |   | 185,116 |   |
| Total      non-current assets(3)                                                                                                                                                                                                                                                |   |                    | 320,600 |   |   |   | 355,729 |   |   |   | 396,169 |   |   |   | 464,342 |   |   |   | 547,609 |   |
| Total      assets(3)                                                                                                                                                                                                                                                            |   |                    | 425,509 |   |   |   | 481,591 |   |   |   | 545,153 |   |   |   | 610,832 |   |   |   | 732,725 |   |
|   Short-term      debts and loans from Sinopec                 Group Company and its affiliates (including current portion of      long-term debts)                                                            |   |                    | 34,707  |   |   |   | 45,231 |   |   |   | 46,674 |   |   |   | 63,480 |   |   |   | 60,494 |   |
|        Long-term debts and loans from Sinopec           Group      Company and its affiliates            (excluding      current portion of long-term debts) |   |                    | 86,156  |   |   |   | 95,784 |   |   |   | 103,408 |   |   |   | 100,637 |   |   |   | 120,314 |   |
|        Equity attributable to equity shareholders           of      the Company(3)                                                                                                                                  |   |                    | 174,444 |   |   |   | 195,239 |   |   |   | 226,099 |   |   |   | 264,334 |   |   |   | 307,433 |   |
| Capital      employed(4)                                                                                                                                                                                                                                                        |   |                    | 305,269 |   |   |   | 349,909 |   |   |   | 392,267 |   |   |   | 443,711 |   |   |   | 505,870 |   |

|                                                        |   | Years      Ended December 31 |     |
|-------------------------------------------------------------|--------|------------------------------|----------|
|                                                        |   | 2003                         |     |   | 2004 |   |   | 2005 |   |   | 2006 |   |   | 2007 |   |
|                                                        |   | RMB                          |     |   | RMB |   |   | RMB |   |   | RMB |   |   | RMB |   |
|                                                        |   | (in      millions)           |     |
| Other      Financial Data(1):                               |   |                         |     |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      cash from operating activities                     |   |                         | 63,756   |   |   |   | 68,076 |   |   |   | 78,663 |   |   |   | 92,507 |   |   |   | 119,594 |   |
| Net      cash (used in)/generated from financing activities |   |                         | (16,008) |   |   |   | 6,250 |   |   |   | (4,257) |   |   |   | 2,878 |   |   |   | (5,310) |   |

----

| Net      cash used in investing activities |   |   | (50,457) |   |   |   | (72,794) |   |   |   | (78,113) |   |   |   | (103,385) |   |   |   | (113,587) |   |
|--------------------------------------------|--------|--------|----------|--------|--------|--------|----------|--------|--------|--------|----------|--------|--------|--------|-----------|--------|--------|--------|-----------|--------|
| Capital      expenditure                   |   |   |     |   |   |   |     |   |   |   |     |   |   |   |      |   |   |   |      |   |
| Exploration      and production            |   |   | 22,238   |   |   |   | 23,199   |   |   |   | 25,479   |   |   |   | 35,198    |   |   |   | 54,498    |   |
| Refining                                   |   |   | 10,144   |   |   |   | 15,789   |   |   |   | 20,270   |   |   |   | 22,587    |   |   |   | 22,763    |   |
| Marketing      and distribution            |   |   | 6,826    |   |   |   | 16,678   |   |   |   | 10,954   |   |   |   | 11,319    |   |   |   | 12,548    |   |
| Chemicals                                  |   |   | 7,680    |   |   |   | 11,025   |   |   |   | 9,386    |   |   |   | 12,629    |   |   |   | 16,184    |   |
| Corporate      and others                  |   |   | 518      |   |   |   | 1,550    |   |   |   | 1,164    |   |   |   | 2,170     |   |   |   | 3,289     |   |
| Total                                      |   |   | 47,406   |   |   |   | 68,241   |   |   |   | 67,253   |   |   |   | 83,903    |   |   |   | 109,282   |   |

| (1) | The      acquisitions of Sinopec Maoming, Xi’an Petrochemical and Tahe      Petrochemical in 2003, the acquisitions of Petrochemical and Catalyst      Assets in 2004, the acquisitions of equity interests in Sinopec Hainan and      Oil Production Plants in 2006 and the acquisitions of equity interests in      the Refining Plants in 2007 from Sinopec Group Company are treated as      “combination of entities under common control” which are accounted in a      manner similar to a pooling-of-interests.  Accordingly, the      acquired assets and liabilities have been accounted for at historical cost      and the consolidated financial statements for periods prior to the      combinations have been restated to include the financial condition and      results of operation of these acquired companies on a combined      basis.  The considerations for these acquisitions were treated      as equity transactions. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2) | Basic      earnings per share have been computed by dividing net income attributable      to equity shareholders of the Company by the weighted average number of      shares in issue. Basic earnings per ADS have been computed as if all of      our issued and outstanding shares, including domestic shares and H shares,      are represented by ADSs during each of the years presented. Each ADS      represents 100 shares.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| (3) | Properties,      plant and equipment acquired in connection with the acquisitions of      Sinopec Maoming, Xi’an Petrochemical and Tahe Petrochemical in 2003, the      acquisitions of Petrochemical and Catalyst Assets in 2004, the      acquisitions of equity interests in Sinopec Hainan and Oil Production      Plants in 2006 and the acquisitions of equity interests in the Refining      Plants were evaluated by independent appraisers under applicable PRC laws      and regulations at the time of such acquisitions by Sinopec      Corp.                                                                                                                                                                                                                                                                                                                                                                                                                          |
| (4) | Capital      employed is derived by the sum of short-term debts, long-term debts, loans      from Sinopec Group Company and its affiliates and total equity less cash      and cash equivalents.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |

----

|   | · | the      quality and quantity of technical and economic data;         |
|--------|--------|-----------------------------------------------------------------------|
|   |   |                                                                  |
|   | · | the      prevailing oil and gas prices applicable to our  production; |
|   |   |                                                                  |
|   | · | the      production performance of thereservoirs;                     |

----

|   | · | extensive      engineering judgments; and             |
|--------|--------|-------------------------------------------------------|
|   |   |                                                  |
|   | · | consistency      in the PRC government's oilpolicies. |

----

|   | · | licensing      the right to explore and produce crude oil and natural  gas;                                                                  |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                         |
|   | · | publishing      from time to time guidance prices for natural gas and refined petroleum      products such as gasoline, diesel and jet fuel; |
|   |   |                                                                                                                                         |
|   | · | assessing      taxes and fees payable;                                                                                                       |
|   |   |                                                                                                                                         |
|   | · | setting      import and export quotas and procedures for crude oil and refined      petroleum products; and                                  |
|   |   |                                                                                                                                         |
|   | · | setting      safety, environmental and quality standards.                                                                                    |
|   |   |                                                                                                                                         |

|   | · | the      imposition of fees for the discharge of waste  substances;                                                                                                                  |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                 |
|   | · | the      levy of fines and payments for damages for serious environmental offenses;      and                                                                                         |
|   |   |                                                                                                                                                                                 |
|   | · | the      government, at its discretion, to close any facility which fails to comply      with orders and require it to correct or stop operations causing      environmental damage. |

----

|   | · | import      of crude oil and other materials;                                                |
|--------|--------|----------------------------------------------------------------------------------------------|
|   |   |                                                                                         |
|   | · | debt      service on foreign currency-denominated debt;                                      |
|   |   |                                                                                         |
|   | · | purchases      of imported equipment;                                                        |
|   |   |                                                                                         |
|   | · | payment      of the principals and interests of bonds issued overseas;    and                |
|   |   |                                                                                         |
|   | · | payment      of any cash dividends declared in respect of the H shares (including      ADS). |
|   |   |                                                                                         |

----

| ITEM      4. | INFORMATION      ON THE COMPANY |
|--------------|---------------------------------|

|   | · | exploration      for, development, production and marketing of crude oil and natural      gas;                                                                                              |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                        |
|   | · | refining      of crude oil and marketing and distribution of refined petroleum products,      including transportation, storage, trading, import and export of petroleum      products; and |
|   |   |                                                                                                                                                                                        |
|   | · | production      and sales of petrochemicalproducts.                                                                                                                                         |

|   | · | exploring      and developing oil and gas reserves overseas;                                                                  |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                          |
|   | · | operating      certain petrochemical facilities, small capacity refineries and retail      service stations that it retained; |
|   |   |                                                                                                                          |
|   | · | providing      physical geography exploration, and well drilling, survey, logging and      downhole operational services;     |
|   |   |                                                                                                                          |
|   | · | manufacturing      production equipment and providing equipment maintenance      services;                                    |
|   |   |                                                                                                                          |
|   | · | providing      construction services;                                                                                         |
|   |   |                                                                                                                          |
|   | · | providing      utilities, such as electricity and water; and                                                                  |
|   |   |                                                                                                                          |
|   | · | providing      other operational services including transportation    services.                                               |
|   |   |                                                                                                                          |

----

----

|                                                                                           |   | As      of and for the Years Ended December 31, |   |
|------------------------------------------------------------------------------------------------|--------|-------------------------------------------------|--------|
|                                                                                           |   | 2005                                            |   |   | 2006 |   |   | 2007 |   |
| Proved      developed and undeveloped reserves (crude oil)                                     |   | (in      million barrels)                       |   |
| Beginning      of year                                                                         |   |                                            | 3,267  |   |   |   | 3,294 |   |   |   | 3,293 |   |
| Revisions      of previous estimates                                                           |   |                                            | 26     |   |   |   | (10) |   |   |   | (250) |   |
| Improved      recovery                                                                         |   |                                            | 142    |   |   |   | 146 |   |   |   | 125 |   |
| Extensions      and discoveries                                                                |   |                                            | 138    |   |   |   | 148 |   |   |   | 148 |   |
| Production                                                                                     |   |                                            | (279)  |   |   |   | (285) |   |   |   | (292) |   |
| End      of year                                                                               |   |                                            | 3,294  |   |   |   | 3,293 |   |   |   | 3,024 |   |
| Proved      developed reserves (crude oil)                                                     |   | (in      million barrels)                       |   |
| Beginning      of year                                                                         |   |                                            | 2,808  |   |   |   | 2,870 |   |   |   | 2,903 |   |
| End      of year                                                                               |   |                                            | 2,870  |   |   |   | 2,903 |   |   |   | 2,651 |   |
| Proved      developed and undeveloped reserves     (natural      gas) |   | (in      billion cubic feet)                    |   |
| Beginning      of year                                                                         |   |                                            | 3,033  |   |   |   | 2,952 |   |   |   | 2,856 |   |
| Revisions      of previous estimates                                                           |   |                                            | (42)   |   |   |   | (9) |   |   |   | 222 |   |
| Extensions      and discoveries                                                                |   |                                            | 183    |   |   |   | 170 |   |   |   | 3,536 |   |
| Production                                                                                     |   |                                            | (222)  |   |   |   | (257) |   |   |   | (283) |   |
| End      of year                                                                               |   |                                            | 2,952  |   |   |   | 2,856 |   |   |   | 6,331 |   |
| Proved      developed reserves (natural gas)                                                   |   | (in      billion cubic feet)                    |   |
| Beginning      of year                                                                         |   |                                            | 1,398  |   |   |   | 1,557 |   |   |   | 1,472 |   |
| End      of year                                                                               |   |                                            | 1,557  |   |   |   | 1,472 |   |   |   | 1,518 |   |

----

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   | As      of December 31,   |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   | 2005                      |   |   | 2006 |   |   | 2007 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   | (in      million barrels) |   |
| Proved      developed and undeveloped crude oil reserves                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |                      |   |   |   |   |   |   |   |
| Shengli                                                                                   |   |                      | 2,362  |   |   |   | 2,352 |   |   |   | 2,231 |   |
| Zhongyuan                                                                                 |   |                      | 314    |   |   |   | 302 |   |   |   | 235 |   |
| Xibei                                                                                     |   |                      | 238    |   |   |   | 288 |   |   |   | 280 |   |
| Henan                                                                                     |   |                      | 154    |   |   |   | 136 |   |   |   | 96 |   |
| Jiangsu                                                                                   |   |                      | 112    |   |   |   | 91 |   |   |   | 87 |   |
| Others                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |                      | 114    |   |   |   | 124 |   |   |   | 95 |   |
| Total                                                                                     |   |                      | 3,294  |   |   |   | 3,293 |   |   |   | 3,024 |   |

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   | As      of December 31,      |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   | 2005                         |   |   | 2006 |   |   | 2007 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   | (in      billion cubic feet) |   |
| Proved      developed and undeveloped natural gas reserves                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                         |   |   |   |   |   |   |   |
| Shengli                                                                                   |   |                         | 322    |   |   |   | 313 |   |   |   | 328 |   |
| Zhongyuan                                                                                 |   |                         | 383    |   |   |   | 355 |   |   |   | 361 |   |
| Xibei                                                                                     |   |                         | 95     |   |   |   | 147 |   |   |   | 198 |   |
| Jiangsu                                                                                   |   |                         | 9      |   |   |   | 12 |   |   |   | 10 |   |
| Xinan                                                                                     |   |                         | 781    |   |   |   | 807 |   |   |   | 757 |   |
| Huabei                                                                                    |   |                         | 908    |   |   |   | 792 |   |   |   | 781 |   |
| Puguang                                                                                   |   |                         | -      |   |   |   | - |   |   |   | 3,509 |   |
| Others                                                                                    |   |                         | 454    |   |   |   | 430 |   |   |   | 387 |   |
| Total                                                                                     |   |                         | 2,952  |   |   |   | 2,856 |   |   |   | 6,331 |   |

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   | For      the Years Ended December 31, |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   | 2005                                  |   |   | 2006 |   |   | 2007 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   | (in      thousand barrels)            |   |
| Average      daily crude oil production                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |                                  |   |   |   |   |   |   |   |
| Shengli                                                                                              |   |                                  | 524    |   |   |   | 533 |   |   |   | 539 |   |
| Zhongyuan                                                                                            |   |                                  | 62     |   |   |   | 60 |   |   |   | 59 |   |
| Xibei                                                                                                |   |                                  | 82     |   |   |   | 92 |   |   |   | 104 |   |
| Henan                                                                                                |   |                                  | 36     |   |   |   | 35 |   |   |   | 35 |   |
| Jiangsu                                                                                              |   |                                  | 32     |   |   |   | 33 |   |   |   | 33 |   |
| Others                                                                                               |   |                                  | 28     |   |   |   | 28 |   |   |   | 29 |   |
| Total      Production                                                                                |   |                                  | 764    |   |   |   | 781 |   |   |   | 799 |   |

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   | For      the Years Ended December 31, |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   | 2005                                  |   |   | 2006 |   |   | 2007 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   | (in      million cubic feet)          |   |
| Average      daily natural gas production                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |                                  |   |   |   |   |   |   |   |
| Shengli                                                                                  |   |                                  | 85     |   |   |   | 78 |   |   |   | 76 |   |
| Zhongyuan                                                                                |   |                                  | 161    |   |   |   | 159 |   |   |   | 143 |   |
| Xibei                                                                                    |   |                                  | 50     |   |   |   | 84 |   |   |   | 92 |   |
| Henan                                                                                    |   |                                  | 10     |   |   |   | 8 |   |   |   | 7 |   |
| Jiangsu                                                                                  |   |                                  | 6      |   |   |   | 6 |   |   |   | 5 |   |

----

| Xinan                                                                                                |   |   | 203 |   |   |   | 213 |   |   |   | 260 |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|-----|--------|--------|--------|-----|--------|--------|--------|-----|--------|
| Huabei                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |   | 39  |   |   |   | 101 |   |   |   | 140 |   |
| Others                                                                                               |   |   | 55  |   |   |   | 54  |   |   |   | 51  |   |
| Total      Production                                                                                |   |   | 608 |   |   |   | 703 |   |   |   | 774 |   |

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   | Total  |   |   | Shengli |   |   | Others |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|--------|---------|--------|--------|--------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   | (RMB)  |   |   | (RMB)   |   |   | (RMB)  |   |
| For      the year ended December 31, 2007                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |   |   |   |    |   |   |   |   |
| Average      petroleum lifting cost per      BOE                                                                                                              |   |   | 84.62  |   |    |   | 87.23  |   |   |   | 80.78 |   |
| Average      realized sales price                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |   |   |   |    |   |   |   |   |   |   |   |
|    Per      barrel of crude      oil                                                                                                           |   |   | 435.94 |   |    |   | 421.66 |   |   |   | 466.17 |   |
|    Per      thousand cubic meters of natural      gas                                                                                          |   |   | 822.83 |   |    |   | 939.92 |   |   |   | 817.72 |   |
| For      the year ended December 31, 2006                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |   |   |   |    |   |   |   |   |   |   |   |
| Average      petroleum lifting cost per      BOE                                                                                                              |   |   | 73.31  |   |    |   | 77.16  |   |   |   | 67.34 |   |
| Average      realized sales price                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |   |   |   |    |   |   |   |   |   |   |   |
|    Per      barrel of crude      oil                                                                                                           |   |   | 449.93 |   |    |   | 443.66 |   |   |   | 463.70 |   |
|    Per      thousand cubic meters of natural      gas                                                                                          |   |   | 794.28 |   |    |   | 899.76 |   |   |   | 788.02 |   |
| For      the year ended December 31, 2005                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |   |   |   |    |   |   |   |   |   |   |   |
| Average      petroleum lifting cost per      BOE                                                                                                    |   |   | 68.78  |   |    |   | 70.11  |   |   |   | 66.58 |   |
| Average      realized sales price                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |   |   |   |    |   |   |   |   |   |   |   |
|    Per      barrel of crude      oil                                                                                                 |   |   | 375.30 |   |    |   | 379.01 |   |   |   | 366.98 |   |
|    Per      thousand cubic meters of natural      gas                                                                                |   |   | 673.01 |   |    |   | 880.91 |   |   |   | 656.56 |   |

|                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   | Total  |   |   | Shengli |   |   | Xibei  |   |   | Others |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|--------|---------|--------|--------|--------|--------|--------|--------|--------|
| For      the year ended December 31, 2007                                                                                                                                                                                                                                                                                                                                                                                                                 |   |   |   |   |    |   |   |   |   |   |   |   |
| Exploration                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |   |   |   |    |   |   |   |   |   |   |   |
|      —      Successful                                                                     |   |   | 251    |   |    |   | 118    |   |   |   | 16     |   |   |   | 117 |   |
|      —      Dry      holes                                                                 |   |   | 306    |   |    |   | 119    |   |   |   | 24     |   |   |   | 163 |   |
| Development                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |   |   |   |    |   |   |   |   |   |   |   |   |   |   |   |
|      —      Productive                                                                     |   |   | 2,956  |   |    |   | 1,136  |   |   |   | 112    |   |   |   | 1,708 |   |
|      —      Dry      holes                                                                 |   |   | 20     |   |    |   | 2      |   |   |   | 8      |   |   |   | 10 |   |
| For      the year ended December 31, 2006                                                                                                                                                                                                                                                                                                                                                                                                                 |   |   |   |   |    |   |   |   |   |   |   |   |   |   |   |   |
| Exploration                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |   |   |   |    |   |   |   |   |   |   |   |   |   |   |   |
|      —      Successful                                                                     |   |   | 226    |   |    |   | 118    |   |   |   | 20     |   |   |   | 88 |   |
|      —      Dry      holes                                                                 |   |   | 269    |   |    |   | 57     |   |   |   | 19     |   |   |   | 193 |   |
| Development                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |   |   |   |    |   |   |   |   |   |   |   |   |   |   |   |
|      —      Productive                                                                     |   |   | 2,620  |   |    |   | 1,125  |   |   |   | 94     |   |   |   | 1,401 |   |
|      —      Dry      holes                                                                 |   |   | 29     |   |    |   | 4      |   |   |   | 10     |   |   |   | 15 |   |
| For      the year ended December 31, 2005                                                                                                                                                                                                                                                                                                                                                                                                                 |   |   |   |   |    |   |   |   |   |   |   |   |   |   |   |   |
| Exploration                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |   |   |   |    |   |   |   |   |   |   |   |   |   |   |   |
|      —      Successful                                                                     |   |   | 256    |   |    |   | 109    |   |   |   | 14     |   |   |   | 133 |   |
|      —      Dry      holes                                                                 |   |   | 289    |   |    |   | 91     |   |   |   | 16     |   |   |   | 182 |   |
| Development                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |   |   |   |    |   |   |   |   |   |   |   |   |   |   |   |
|      —      Productive                                                                     |   |   | 2,327  |   |    |   | 970    |   |   |   | 82     |   |   |   | 1,275 |   |
|      —      Dry      holes                                                                 |   |   | 21     |   |    |   | 1      |   |   |   | 12     |   |   |   | 8 |   |

----

|                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   | As      of December 31, 2007 |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   | Total                        |   |   | Shengli |   |   | Others |   |
| Crude      oil development wells                                                                                                                                                                                                                                                                                                                                                                                                                      |   |                         |   |   |   |   |   |   |   |
|      —      Total                                                                      |   |                         | 34,520 |   |   |   | 22,886 |   |   |   | 11,634 |   |
|      —      Productive                                                                 |   |                         | 27,561 |   |   |   | 17,814 |   |   |   | 9,747 |   |
| Natural      gas development wells                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                         |   |   |   |   |   |   |   |   |   |   |
|      —      Total                                                                      |   |                         | 2,639  |   |   |   | 371 |   |   |   | 2,268 |   |
|      —      Productive                                                                 |   |                         | 2,627  |   |   |   | 371 |   |   |   | 2,256 |   |

|                                                                                                                                                                                                                                                                                                                                                                                  |   | For      the Years Ended December 31, |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                  |   | 2005                                  |   |   | 2006 |   |   | 2007 |   |
|                                                                                                                                                                                                                                                                                                                                                                                  |   | (in      million tonnes)              |   |
| Gasoline                                                                                      |   |                                  | 23.0   |   |   |   | 23.0 |   |   |   | 24.7 |   |
| Diesel                                                                                        |   |                                  | 54.9   |   |   |   | 57.9 |   |   |   | 60.1 |   |
| Kerosene      including jet      fuel                                                         |   |                                  | 6.6    |   |   |   | 6.4 |   |   |   | 8.3 |   |
| Light      chemical      feedstock                                                            |   |                                  | 21.1   |   |   |   | 22.7 |   |   |   | 23.5 |   |
| Lubricant                                                                                     |   |                                  | 1.3    |   |   |   | 1.1 |   |   |   | 1.3 |   |
| Liquefied      petroleum      gas                                                             |   |                                  | 7.4    |   |   |   | 6.9 |   |   |   | 7.4 |   |
| Fuel      oil                                                                                 |   |                                  | 6.9    |   |   |   | 6.0 |   |   |   | 7.3 |   |

|                                                          |   | As      of and for the Years Ended December 31, |   |
|---------------------------------------------------------------|--------|-------------------------------------------------|--------|
|                                                          |   | 2005                                            |   |   | 2006 |   |   | 2007 |   |
| Primary      distillation capacity (million tonnes per annum) |   |                                            | 160.1  |   |   |   | 176.1 |   |   |   | 181.6 |   |
| Crude      oil throughputs (million tonnes)                   |   |                                            | 139.9  |   |   |   | 146.3 |   |   |   | 155.6 |   |

----

|                                                                                                           |   | As      of and for the Years Ended December 31, |   |
|----------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------|--------|
|                                                                                                           |   | 2005                                            |   |   | 2006 |   |   | 2007 |   |
| Refinery                                                                                                       |   | PrimaryDistillationCapacity                     |   |   | RefineryThroughput |   |   | PrimaryDistillationCapacity |   |   | RefineryThroughput |   |   | PrimaryDistillationCapacity |   |   | RefineryThroughput |   |
|                                                                                                           |   | (in      million tonnes)                        |   |
|                                                                                                           |   |                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Zhenhai                   |   |                                            | 20.0   |   |   |   | 17.1 |   |   |   | 20.0 |   |   |   | 17.7 |   |   |   | 20.0 |   |   |   | 18.6 |   |
| Shanghai                  |   |                                            | 14.0   |   |   |   | 9.5 |   |   |   | 14.0 |   |   |   | 9.1 |   |   |   | 14.0 |   |   |   | 8.9 |   |
| Maoming                   |   |                                            | 13.5   |   |   |   | 12.7 |   |   |   | 13.5 |   |   |   | 14.0 |   |   |   | 13.5 |   |   |   | 13.1 |   |
| Guangzhou                                                                                                      |   |                                            | 7.7    |   |   |   | 6.7 |   |   |   | 13.2 |   |   |   | 7.4 |   |   |   | 13.2 |   |   |   | 10.4 |   |
| Jinling                   |   |                                            | 13.0   |   |   |   | 10.7 |   |   |   | 13.0 |   |   |   | 10.8 |   |   |   | 13.0 |   |   |   | 11.5 |   |
| Gaoqiao                   |   |                                            | 11.0   |   |   |   | 10.1 |   |   |   | 11.0 |   |   |   | 9.3 |   |   |   | 11.0 |   |   |   | 8.1 |   |
| Qilu                      |   |                                            | 10.5   |   |   |   | 10.0 |   |   |   | 10.5 |   |   |   | 10.5 |   |   |   | 10.5 |   |   |   | 10.6 |   |
| Yanshan                   |   |                                            | 8.0    |   |   |   | 8.0 |   |   |   | 8.0 |   |   |   | 8.0 |   |   |   | 13.0 |   |   |   | 8.6 |   |
| Yangzi                    |   |                                            | 8.0    |   |   |   | 7.8 |   |   |   | 8.0 |   |   |   | 7.9 |   |   |   | 8.0 |   |   |   | 8.2 |   |
| Hainan                    |   |                                            | -      |   |   |   | - |   |   |   | 8.0 |   |   |   | 2.2 |   |   |   | 8.0 |   |   |   | 8.0 |   |

|                         |   | For      the Years ended December 31, |   |
|------------------------------|--------|---------------------------------------|--------|
|                         |   | 2005                                  |   |   | 2006 |   |   | 2007 |   |
| Source      of Supply        |   | (in      million tonnes)              |   |
| Self-supply                  |   |                                  | 28.62  |   |   |   | 29.62 |   |   |   | 29.72 |   |
| PetroChina      Company Ltd. |   |                                  | 8.75   |   |   |   | 8.81 |   |   |   | 6.89 |   |
| CNOOC      Ltd.              |   |                                  | 5.05   |   |   |   | 4.93 |   |   |   | 6.43 |   |
| Import                       |   |                                  | 99.13  |   |   |   | 101.47 |   |   |   | 113.08 |   |
| Total                        |   |                                  | 141.55 |   |   |   | 144.83 |   |   |   | 156.12 |   |

----

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   | For      the Years Ended December 31, |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   | 2005                                  |   |   | 2006 |   |   | 2007 |   |
| Sales      volume of refined petroleum products(in      million      tonnes)                                                                                                    |   |                                  | 104.56 |   |   |   | 111.68 |   |   |   | 119.39 |   |
| Of      which:      Retail                                                                                                                                                      |   |                                  | 63.52  |   |   |   | 72.16 |   |   |   | 76.62 |   |
|                  Direct      Sales                                                         |   |                                  | 20.38  |   |   |   | 18.95 |   |   |   | 20.17 |   |
|                  Wholesale                                                                 |   |                                  | 20.66  |   |   |   | 20.57 |   |   |   | 22.60 |   |
| Average annual throughput of      service stations (tonnes per station)                                                                                                                                                                                                                                                                                                                                                                                                 |   |                                  | 2,321  |   |   |   | 2,577 |   |   |   | 2,697 |   |
| Total      number of service stations under Sinopec brand                                                                                                                                                                                                                                                                                                                                                                                                          |   |                                  | 29,647 |   |   |   | 28,801 |   |   |   | 29,062 |   |
| Of      which: Self-operated service stations                                                                                                                                                                                                                                                                                                                                                                                                                           |   |                                  | 27,367 |   |   |   | 28,001 |   |   |   | 28,405 |   |
|                   Franchised      service stations                                                                                                                                                                                                                                                                                                                            |   |                                  | 2,280  |   |   |   | 800 |   |   |   | 657 |   |
| Percentage      of retail volume in total sales(%)                                                                                                                              |   |                                  | 60.7   |   |   |   | 64.6 |   |   |   | 64.2 |   |

----

|        | Our      RatedCapacity           |   | OurProduction          |   |  Major      Plants of Production                                                                                                         |
|-------------|----------------------------------|--------|------------------------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------|
|        | (thousand      tonnes per annum) |   | (thousand      tonnes) |   |                                                                                                                                          |
| Ethylene    | 6,145                            |   | 6,534                  |   | Yanshan,      Shanghai, Yangzi, Qilu, Maoming, Guangzhou, Tianjin, Zhongyuan, SECCO and      BASF-YPC                                         |
|        |                             |   |                   |   |                                                                                                                                          |
| Propylene   | 4,854                            |   | 5,696                  |   | Yanshan,      Shanghai, Yangzi, Qilu, Maoming, Guangzhou, Tianjin, Zhongyuan, SECCO,      BASF-YPC, Gaoqiao, Anqing, Jinan, Jingmen and Wuhan |
|        |                             |   |                   |   |                                                                                                                                          |
| Benzene     | 2,497                            |   | 2,438                  |   | Yanshan,      Shanghai, Yangzi, Qilu, Guangzhou, Zhenhai, Tianjin, Luoyang, SECCO and      BASF-YPC                                           |
|        |                             |   |                   |   |                                                                                                                                          |
| Styrene     | 964                              |   | 1,022                  |   | Yanshan,      Qilu, Guangzhou, Maoming and SECCO                                                                                              |
|        |                             |   |                   |   |                                                                                                                                          |
| Para-xylene | 2,768                            |   | 2,373                  |   | Shanghai,      Yangzi, Qilu, Tianjin and Luoyang                                                                                              |
|        |                             |   |                   |   |                                                                                                                                          |
| Phenol      | 350                              |   | 390                    |   | Yanshan      and Gaoqiao                                                                                                                      |

----

|                                 | Our      RatedCapacity               |   | OurProduction          |   | Major      Plants of Production                                                                                                |
|--------------------------------------|--------------------------------------|--------|------------------------|--------|--------------------------------------------------------------------------------------------------------------------------------|
|                                 | (thousand      tonnesper      annum) |   | (thousand      tonnes) |   |                                                                                                                           |
| Polyethylene                         | 4,323                                |   | 4,479                  |   | Yanshan,      Shanghai, Yangzi, Qilu, Maoming, Guangzhou, Tianjin, Zhongyuan, SECCO and      BASF-YPC                          |
| Polypropylene                        | 3,455                                |   | 3,874                  |   | Yanshan,      Shanghai, Yangzi, Qilu, Guangzhou, Maoming, Tianjing, Zhongyuan, SECCO,      Wuhan Fenghuang, Jingmen and Fujian |
| Polyvinyl      chloride              | 600                                  |   | 585                    |   | Qilu                                                                                                                           |
| Polystyrene                          | 536                                  |   | 411                    |   | Yanshan,      Qilu, Maoming, Guangzhou and SECCO                                                                               |
| Acrylonitrile      butadiene styrene | 200                                  |   | 134                    |   | Gaoqiao                                                                                                                        |

|                                                                                                                                                                                                                                    | Our      RatedCapacity           |   | OurProduction          |   | Major      Plants of Production                                |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------|--------|------------------------|--------|----------------------------------------------------------------|
|                                                                                                                                                                                                                                    | (thousand      tonnes per annum) |   | (thousand      tonnes) |   |                                                           |
| Purified      teraphthalic acid                                                                                                                                                                                                    | 3,034                            |   | 3,335                  |   | Shanghai,      Yangzi, Yizheng, Tianjin and Luoyang            |
| Ethylene      glycol                                                                                                                                                                                                                    | 1,413                            |   | 1,100                  |   | Yanshan,      Shanghai, Yangzi, Tianjing, Maoming and BASF-YPC |
| Acrylonitrile                                                                                                                                                                                                                           | 510                              |   | 543                    |   | Shanghai,      Anqing, Qilu and SECCO                          |
| Caprolactam                                                                                                                                                                                                                             | 210                              |   | 183                    |   | Shijiazhuang      and Baling                                   |
| Polyester                                      | 2,766                            |   | 2,741                  |   | Shanghai,      Yizheng, Tianjin and Luoyang                    |

----

|                                                                                                                                                                                                                                               |   | Our      RatedCapacity           |   |   | OurProduction    |   | Major      Plants of Production |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------|--------|--------|------------------|--------|---------------------------------|
|                                                                                                                                                                                                                                               |   | (thousand      tonnes per annum) |   |   | (thousandtonnes) |   |                            |
| Polyester      fiber                                      |   |                             | 1,416  |   |             |   | 1,060                           |   | Yizheng,      Shanghai, Tianjin and Luoyang |
| Acrylic      fiber                                        |   |                             | 315    |   |             |   | 357                             |   | Shanghai,      Anqing and Qilu |

|                                                    |   | Our      RatedCapacity               |   |   | OurProduction    |   | Major      Plants of Production |
|---------------------------------------------------------|--------|--------------------------------------|--------|--------|------------------|--------|---------------------------------|
|                                                    |   | (thousand      tonnesper      annum) |   |   | (thousandtonnes) |   |                            |
| Cis-polybutadiene      rubber                           |   |                                 | 276    |   |             |   | 294                             |   | Yanshan,      Qilu, Maoming and Gaoqiao |
| Styrene      butadiene rubber                           |   |                                 | 395    |   |             |   | 306                             |   | Yanshan,      Qilu, Maoming and Gaoqiao and Yangzi |
| Styrene-butadiene-styrene      thermoplastic elastomers |   |                                 | 100    |   |             |   | 163                             |   | Yanshan      and Maoming |
| Isobulylene      isoprene rubber                        |   |                                 | 30     |   |             |   | 37                              |   | Yanshan |

|                                                                                                                                                                                                                      |   | Our      RatedCapacity               |   |   | Our      Production    |   | Major      Plants of Production |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------|--------|--------|------------------------|--------|---------------------------------|
|                                                                                                                                                                                                                      |   | (thousand      tonnesper      annum) |   |   | (thousand      tonnes) |   |                            |
| Ammonia                                    |   |                                 | 1,935  |   |                   |   | 975                             |   | Zhenhai,      Jinling, Anqing, Jiujiang, Qilu, Hubei and Baling |
| Urea                                       |   |                                 | 3,130  |   |                   |   | 1,565                           |   | Zhenhai,      Jinling, Anqing, Jiujiang, Qilu, Hubei and  Baling |

----

----

|   | · | Formulating      guidance plan for annual production, import and export amount of crude      oil, natural gas and gasoline nationwide based on its forecast on macro      economic conditions in China;                   |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                      |
|   | · | Publishing      guidance prices for certain refined petroleum products, including      gasoline, diesel and jet fuel;                                                                                                     |
|   |   |                                                                                                                                                                                                                      |
|   | · | Approving      certain domestic and overseas resource investment projects which are      subject to NDRC’s approval as required by the Catalogue of Investment      Projects Approved by the Government (2004); and |
|   |   |                                                                                                                                                                                                                      |
|   | · | Approving      foreign investment projects that are in excess of certain investment      limits.                                                                                                                          |
|   |   |                                                                                                                                                                                                                      |

----

|   | · | ex-factory      price; and       |
|--------|--------|----------------------------------|
|   |   |                             |
|   | · | pipeline      transportation fee |
|   |   |                             |

----

| Tax      Item                    | Tax      Base       | Tax      Rate                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|----------------------------------|---------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  Enterprise      income tax | Taxable      income | 25%      starting from January 1, 2008.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|                             |                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| Value-added      tax             | Revenue             | 13%      for liquefied petroleum gas, natural gas, and low density polyethylene for      production of agricultural film and fertilizers and 17% for other items.      We generally charge value-added tax to our customers at the time of      settlement on top of the selling prices of our products on behalf of the      taxation authority. We may directly claim refund from the value-added tax      collected from our customers of any value-added tax that we paid for (i)      purchasing materials consumed during the production process; (ii) charges      paid for drilling and other |

----

|                                        |                                                                                                                                    | engineering      services; and (iii) labor consumed during the production      process.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|---------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                        |                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| Business      tax                           | Revenue      from pipeline transportation services                                                                                      | 3%.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|                                        |                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| Consumption      tax                        | Aggregate      volume sold or self-consumed                                                                                             | RMB      277.6 per tonne for gasoline, RMB 117.6 per tonne for diesel, RMB 277 per      tonne for naphtha, RMB 256.4 per tonne for solvent oil, RMB 225.2 per      tonne for lubricant, RMB 101.5 per tonne for fuel oil, and RMB 124.6 per      tonne for jet fuel, payable by producer. In 2007, the actual applicable      rates for naphtha, solvent oil, lubricant and fuel oil is 30% of their      respective tax rates listed above, and the actual applicable rate for      kerosene including jet fuel is zero for the time being. From January 1,      2008, solvent oil and lubricant are charged at a full rate of RMB 0.2 per      liter, and fuel oil is charged at a full rate of RMB 0.1 per liter. Each      of the (1) imported naphtha and (2) naphtha procured from domestic sources      for the production of ethylene and aromatic hydrocarbon will remain      tax-free till December 31, 2010. |
|                                        |                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| Import      tariff                          | CIF      China price                                                                                                                    | 5%      for gasoline, 6% for diesel and 5% for jet fuel. The actual applicable tax      rate in 2007 for gasoline, diesel and jet fuel is 1%.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|                                        |                                                                                                                                    |
|                                        |                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| Resource      tax                           | Aggregate      volume sold or self-consumed                                                                                             | RMB      14 to RMB 30 per tonne for crude oil. RMB 7 to RMB 15 per thousand cubic      meters for natural gas.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|                                        |                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| Compensatory      fee for mineral resources | Revenue      of crude oil and natural gas                                                                                               | 1%                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|                                        |                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| Exploration      license fee                | Area                                                                                                                                    | RMB      100 to 500 per square kilometer per annum.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|                                        |                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| Production      license fee                 | Area                                                                                                                                    | RMB      1,000 per square kilometer per annum.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|                                        |                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| Royalty      fee(1)                         | Production      volume                                                                                                                  | Progressive      rate of 0-12.5% for crude oil and 0-3% for natural gas.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|                                        |                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| City      construction tax                  | Total      amount of value-added tax, consumption tax and businesstax                                                                   | 1%      to 7%.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|                                        |                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| Education      Surcharge                    | Total      amount of value-added tax, consumption tax and businesstax                                                                   | 3%.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|                                        |                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| Special      Oil Income Levy                | Any      revenue derived from sale of domestically produced crude oil when the      realized crude oil price exceeds US$ 40 per barrel. | Progressive      rate of 20% to 40% for revenue derived from crude oil with realized price      in excess of US$ 40 per barrel, i.e. 20% for the portion in excess of US$      40 per barrel up to US$ 45 per barrel (inclusive); 25% for the portion in      excess of US$ 45 per barrel up to US$ 50 per barrel (inclusive); 30% for      the portion  in excess of US$ 50 per barrel to US$ 55 per barrel      (inclusive); 35% for the portion in excess of US$ 55 per barrel to US$ 60      per barrel (inclusive); and 40% for the portion in excess of US$ 60 per      barrel.                                                                                                                                                                                                                                                                                                                          |

| (1) | Payable      only by Sino-foreign oil and gas exploration and development cooperative      projects, and the project companies of those cooperative projects are not      subject to any other resource taxes orfees. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

| ITEM      4A. | UNRESOLVED      STAFF COMMENTS |
|---------------|--------------------------------|

| ITEM      5. | OPERATING      AND FINANCIAL REVIEW AND PROSPECTS |
|--------------|---------------------------------------------------|

----

----

|                            |   | Years      ended December 31, |    |
|---------------------------------|--------|-------------------------------|---------|
|                            |   | 2005                          |    |   | 2006 |   |   | 2007 |   |
|                            |   | RMB                           |    |   | RMB |   |   | RMB |   |
|                            |   |                          |    |   |   |   |   |   |   |
| Exploration      and production |   |                          | 60      |   |   |   | 552 |   |   |   | 481 |   |
| Refining                        |   |                          | — |   |   |   | — |   |   |   | 1,070 |   |
| Marketing      and distribution |   |                          | 366     |   |   |   | 23 |   |   |   | 1,237 |   |
| Chemicals                       |   |                          | 1,425   |   |   |   | 250 |   |   |   | 318 |   |
| Total                           |   |                          | 1,851   |   |   |   | 825 |   |   |   | 3,106 |   |

|                                           |   | Years ended December 31, |   |
|------------------------------------------------|--------|--------------------------|--------|
|                                           |   | 2005                     |   |   | 2006 |   |   | 2007 |   |
|                                           |   | RMB                      |   |   | RMB |   |   | RMB |   |
|                                           |   |                     |   |   |   |   |   |   |   |
| Balance      as of January 1                   |   |                     | 3,682  |   |   |   | 3,151 |   |   |   | 3,345 |   |
| Impairment      losses recognized for the year |   |                     | 328    |   |   |   | 438 |   |   |   | 295 |   |
| Reversal      of impairment losses             |   |                     | (503)  |   |   |   | (153) |   |   |   | (204) |   |
| Written      off                               |   |                     | (356)  |   |   |   | (91) |   |   |   | (554 |   |
| Balance      as of December 31                 |   |                     | 3,151  |   |   |   | 3,345 |   |   |   | 2,882) |   |

|                                   |   | Years      ended December 31, |   |
|----------------------------------------|--------|-------------------------------|--------|
|                                   |   | 2005                          |   |   | 2006 |   |   | 2007 |   |
|                                   |   | RMB                           |   |   | RMB |   |   | RMB |   |
| Balance      as of January 1           |   |                          | 911    |   |   |   | 897 |   |   |   | 871 |   |
| Allowance      for the year            |   |                          | 262    |   |   |   | 419 |   |   |   | 3,962 |   |
| Reversal      of allowance on disposal |   |                          | (180)  |   |   |   | (317) |   |   |   | (131) |   |
| Written      off                       |   |                          | (96)   |   |   |   | (128) |   |   |   | (130) |   |
| Balance      as of December 31         |   |                          | 897    |   |   |   | 871 |   |   |   | 4,572 |   |

----

|   | · | Exploration and Production      Segment, which consists of our activities related to exploring for      and developing, producing and selling crude oil and natural      gas;                                                                                                                                                            |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                     |
|   | · | Refining Segment, which      consists of purchasing crude oil from our exploration and production      segment and from third parties, processing of crude oil into refined      petroleum products, selling refined petroleum products principally to our      marketing and distribution segment;                                      |
|   |   |                                                                                                                                                                                                                                                                                                                                     |
|   | · | Marketing and Distribution      Segment, which consists of purchasing refined petroleum products      from our refining segment and third parties, and marketing, selling and      distributing refined petroleum products by wholesale to large customers      and independent distributors and retail through our retail      network; |
|   |   |                                                                                                                                                                                                                                                                                                                                     |
|   | · | Chemicals Segment,      which consists of purchasing chemical feedstock principally from the      refining segment and producing, marketing, selling and distributing      chemical products; and                                                                                                                                        |
|   |   |                                                                                                                                                                                                                                                                                                                                     |
|   | · | Corporate and Others      Segment, which consists principally of trading activities of the      import and export subsidiaries and our research and development      activities.                                                                                                                                                         |
|   |   |                                                                                                                                                                                                                                                                                                                                     |

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   | Years      Ended December 31, |    |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------|---------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   | 2005                          |    |   | 2006 |   |   | 2007 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   | RMB                           |    |   | RMB |   |   | RMB |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   | (in      billions)            |    |
| Operating      revenues                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                          |    |   |   |   |   |   |   |
|    Sales      of      goods                                                                                          |   |                          | 793.0   |   |   |   | 1,034.9 |   |   |   | 1,173.9 |   |
|    Other      operating      revenues                                                                                |   |                          | 24.0    |   |   |   | 26.8 |   |   |   | 30.9 |   |
|      Total      operating      revenues                                                                    |   |                          | 817.0   |   |   |   | 1,061.7 |   |   |   | 1,204.8 |   |
| Other      income                                                                                                                   |   |                          | 9.8     |   |   |   | 5.2 |   |   |   | 4.9 |   |
| Operating      expenses                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                          |    |   |   |   |   |   |   |   |   |   |
|         Purchased      crude oil, products andoperating supplies and      expenses                                                                                                                                                                                                                                                                                                                                                         |   |                          | (645.6) |   |   |   | (854.2) |   |   |   | (970.9) |   |
| Selling, general and      administrative expenses                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |                          | (33.5)  |   |   |   | (37.5) |   |   |   | (37.9) |   |
| Depreciation, depletion and      amortization                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |                          | (31.1)  |   |   |   | (33.6) |   |   |   | (43.3) |   |
| Exploration expenses, including      dry holes                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                          | (6.4)   |   |   |   | (8.0) |   |   |   | (11.1) |   |
| Personnel      expenses                                                                                                                                      |   |                          | (19.7)  |   |   |   | (21.0) |   |   |   | (22.7) |   |
| Employee reduction      expenses                                                                                                                             |   |                          | (0.4)   |   |   |   | (0.2) |   |   |   | (0.4) |   |
| Taxes other than income      tax                                                                                                                             |   |                          | (17.8)  |   |   |   | (29.3) |   |   |   | (34.3) |   |
| Other operating expenses,      net                                                                                                                           |   |                          | (4.3)   |   |   |   | (2.5) |   |   |   | (3.2) |   |
|      Total      operating      expenses                                                                    |   |                          | (758.8) |   |   |   | (986.3) |   |   |   | (1,123.8) |   |
| Operating      income                                                                                                               |   |                          | 68.0    |   |   |   | 80.6 |   |   |   | 85.9 |   |
| Net      finance      costs                                                                                                         |   |                          | (4.5)   |   |   |   | (5.8) |   |   |   | (8.1) |   |
| Income      from      investments                                                                                                   |   |                          | 1.0     |   |   |   | 3.7 |   |   |   | 5.7 |   |
| Income      before income      tax                                                                                                  |   |                          | 64.5    |   |   |   | 78.5 |   |   |   | 83.5 |   |
| Income      tax                                                                                                                     |   |                          | (19.8)  |   |   |   | (23.5) |   |   |   | (24.8) |   |
| Net      income                                                                                                                     |   |                          | 44.7    |   |   |   | 55.0 |   |   |   | 58.7 |   |
| Attributable      to:                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                          |    |   |   |   |   |   |   |   |   |   |
| Equity      shareholders of the      Company                                                                                                       |   |                          | 41.4    |   |   |   | 53.6 |   |   |   | 56.5 |   |

| Minority      interests                                                                 |   |   | 3.3  |   |   |   | 1.4  |   |   |   | 2.2  |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|------|--------|--------|--------|------|--------|--------|--------|------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   | 44.7 |   |   |   | 55.0 |   |   |   | 58.7 |   |

----

|                                                                                           |   | Average      Realized Price |      |   | Rate      of Change from |   |      | Sales      Volume |   |   | Rate      of Change from |   |
|------------------------------------------------------------------------------------------------|--------|-----------------------------|-----------|--------|--------------------------|--------|-----------|-------------------|--------|--------|--------------------------|--------|
|                                                                                           |   | 2006                        |      |   | 2007                     |   |      | 2006      to 2007 |   |   | 2006                     |   |   | 2007 |   |   | 2006      to 2007 |   |
|                                                                                           |   | (RMB)                       |      |   | (RMB)                    |   |      | (%)               |   |   |                     |   |   |   |   |   | (%) |   |
|                                                                                           |   |                        |      |   |                     |   |      |              |   |   |                     |   |   |   |   |   |   |   |
| Crude      Oil                                                                                 |   |                        | 3,210(1)  |   |                     |   | 3,110(1)  |              |   |   | (3.1)                    |   |   |   | 4.03(2) |   |   |   | 4.43(2) |   |   |   | 10.0 |   |
| Natural      Gas                                                                               |   |                        | 789(3)    |   |                     |   | 811(3)    |              |   |   | 2.8                      |   |   |   | 5.37(4) |   |   |   | 5.82(4) |   |   |   | 8.4 |   |
| Gasoline                                                                                       |   |                        | 5,224(1)  |   |                     |   | 5,408(1)  |              |   |   | 3.5                      |   |   |   | 32.66(2) |   |   |   | 35.18(2) |   |   |   | 7.7 |   |
| Diesel                                                                                         |   |                        | 4,469(1)  |   |                     |   | 4,724(1)  |              |   |   | 5.7                      |   |   |   | 72.96(2) |   |   |   | 76.92(2) |   |   |   | 5.4 |   |
| Kerosene                                                                                       |   |                        | 4,525(1)  |   |                     |   | 4,728(1)  |              |   |   | 4.5                      |   |   |   | 5.46(2) |   |   |   | 7.05(2) |   |   |   | 29.0 |   |
| Selected      Chemical Products:                                                               |   |                        |      |   |                     |   |      |              |   |   |                     |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     Basic      chemical       feedstock |   |                        | 5,831(1)  |   |                     |   | 6,200(1)  |              |   |   | 6.3                      |   |   |   | 9.69(2) |   |   |   | 10.23(2) |   |   |   | 5.5 |   |
| Synthetic Resin                                                                                |   |                        | 9,897(1)  |   |                     |   | 10,203(1) |              |   |   | 3.1                      |   |   |   | 7.14(2) |   |   |   | 7.86(2) |   |   |   | 10.2 |   |
| Synthetic Fiber                                                                                |   |                        | 11,389(1) |   |                     |   | 11,605(1) |              |   |   | 1.9                      |   |   |   | 1.61(2) |   |   |   | 1.50(2) |   |   |   | (6.9) |   |
| Synthetic Rubber                                                                               |   |                        | 13,928(1) |   |                     |   | 13,738(1) |              |   |   | (1.4)                    |   |   |   | 0.80(2) |   |   |   | 0.96(2) |   |   |   | 19.8 |   |
| Synthetic      Fiber Monomer and Polymer                                                       |   |                        | 8,821(1)  |   |                     |   | 9,109(1)  |              |   |   | 3.3                      |   |   |   | 3.68(2) |   |   |   | 4.05(2) |   |   |   | 10.0 |   |
| Chemical      fertilizer                                                                       |   |                        | 1,650(1)  |   |                     |   | 1,659(1)  |              |   |   | 0.5                      |   |   |   | 1.65(2) |   |   |   | 1.57(2) |   |   |   | (4.7) |   |

| (1) | per      tonne                 |
|-----|--------------------------------|
| (2) | million      tonnes            |
| (3) | per      thousand cubic meters |
| (4) | billion      cubic meters      |

----

----

----

|                                                                                           |   | Average      External Sales Price |      |   | Rate      of Change from |   |      | Sales      Volume |   |   | Rate      of Change from |   |
|------------------------------------------------------------------------------------------------|--------|-----------------------------------|-----------|--------|--------------------------|--------|-----------|-------------------|--------|--------|--------------------------|--------|
|                                                                                           |   | 2005                              |      |   | 2006                     |   |      | 2005      to 2006 |   |   | 2005                     |   |   | 2006 |   |   | 2005      to 2006 |   |
|                                                                                           |   | (RMB)                             |      |   | (RMB)                    |   |      | (%)               |   |   |                     |   |   |   |   |   | (%) |   |
|                                                                                           |   |                              |      |   |                     |   |      |              |   |   |                     |   |   |   |   |   |   |   |
| Crude      Oil                                                                                 |   |                              | 2,757(1)  |   |                     |   | 3,210(1)  |              |   |   | 16.4                     |   |   |   | 4.31(2) |   |   |   | 4.03(2) |   |   |   | (6.5) |   |
| Natural      Gas                                                                               |   |                              | 673(3)    |   |                     |   | 789(3)    |              |   |   | 17.2                     |   |   |   | 4.36(4) |   |   |   | 5.37(4) |   |   |   | 23.2 |   |
| Gasoline                                                                                       |   |                              | 4,431(1)  |   |                     |   | 5,224(1)  |              |   |   | 17.9                     |   |   |   | 30.25(2) |   |   |   | 32.66(2) |   |   |   | 8.0 |   |
| Diesel                                                                                         |   |                              | 3,772(1)  |   |                     |   | 4,469(1)  |              |   |   | 18.5                     |   |   |   | 67.28(2) |   |   |   | 72.96(2) |   |   |   | 8.4 |   |
| Kerosene                                                                                       |   |                              | 3,710(1)  |   |                     |   | 4,525(1)  |              |   |   | 22.0                     |   |   |   | 6.00(2) |   |   |   | 5.46(2) |   |   |   | (9.0) |   |
| Selected      Chemical Products:                                                               |   |                              |      |   |                     |   |      |              |   |   |                     |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     Basic      chemical       feedstock |   |                              | 4,839(1)  |   |                     |   | 5,831(1)  |              |   |   | 20.5                     |   |   |   | 7.93(2) |   |   |   | 9.69(2) |   |   |   | 22.3 |   |
| Synthetic Resin                                                                                |   |                              | 9,016(1)  |   |                     |   | 9,897(1)  |              |   |   | 9.8                      |   |   |   | 5.95(2) |   |   |   | 7.14(2) |   |   |   | 20.1 |   |
| Synthetic Fiber                                                                                |   |                              | 11,123(1) |   |                     |   | 11,389(1) |              |   |   | 2.4                      |   |   |   | 1.59(2) |   |   |   | 1.61(2) |   |   |   | 1.8 |   |
| Synthetic Rubber                                                                               |   |                              | 13,040(1) |   |                     |   | 13,928(1) |              |   |   | 6.8                      |   |   |   | 0.68(2) |   |   |   | 0.80(2) |   |   |   | 18.0 |   |
| Synthetic      Fiber Monomer and Polymer                                                       |   |                              | 8,877(1)  |   |                     |   | 8,821(1)  |              |   |   | (0.6)                    |   |   |   | 2.96(2) |   |   |   | 3.68(2) |   |   |   | 24.7 |   |
| Chemical      fertilizer                                                                       |   |                              | 1,539(1)  |   |                     |   | 1,650(1)  |              |   |   | 7.2                      |   |   |   | 1.82(2) |   |   |   | 1.65(2) |   |   |   | (9.4) |   |

| (1) | per      tonne                 |
|-----|--------------------------------|
| (2) | million      tonnes            |
| (3) | per      thousand cubic meters |
| (4) | billion      cubic meters      |

----

----

----

|                                                                          |  Years      Ended December 31, |        |        As      a Percentage ofConsolidated      OperatingRevenues      BeforeEliminationof      Inter-segment Sales |   | As      a Percentage ofConsolidatedOperating      RevenuesAfter      Elimination ofInter-segment      Sales |
|-------------------------------------------------------------------------------|-------------------------------------|--------|--------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------------------------------------------------------------|
|                                                                          | 2005                                |   | 2006                                                                                                                     |   | 2007                                                                                                        |   | 2006 |   | 2007 |   | 2006 |   | 2007 |
|                                                                          | RMB                                 |   | RMB                                                                                                                      |   | RMB                                                                                                         |   | (%) |   | (%) |   | (%) |   | (%) |
|                                                                          | (in      billions)                  |   |                                                                                                                     |   |                                                                                                        |
|                                                                          |                                |   |                                                                                                                     |   |                                                                                                        |   |
|                                                                          |                                |   |                                                                                                                     |   |                                                                                                        |   |
| Exploration      and Production                                               |                                |   |                                                                                                                     |   |                                                                                                        |   |   |
| External      sales(1)                                                        | 27.6                                |   | 34.1                                                                                                                     |   | 38.2                                                                                                        |   | 1.9 |   | 1.8 |   | 3.2 |   | 3.2 |
| Inter-segment      sales                                                      | 87.6                                |   | 109.1                                                                                                                    |   | 107.5                                                                                                       |   | 6.0 |   | 5.0 |   |   |   |   |
| Total      operating revenue                                                  | 115.2                               |   | 143.2                                                                                                                    |   | 145.7                                                                                                       |   | 7.9 |   | 6.8 |   |   |   |   |
| Refining                                                                      |                                |   |                                                                                                                     |   |                                                                                                        |   |   |   |   |   |   |   |   |
| External      sales(1)                                                        | 99.2                                |   | 119.5                                                                                                                    |   | 122.2                                                                                                       |   | 6.6 |   | 5.7 |   | 11.3 |   | 10.1 |
| Inter-segment      sales                                                      | 392.1                               |   | 477.8                                                                                                                    |   | 534.7                                                                                                       |   | 26.4 |   | 24.7 |   |   |   |   |
| Total      operating revenue                                                  | 491.3                               |   | 597.3                                                                                                                    |   | 656.9                                                                                                       |   | 33.0 |   | 30.4 |   |   |   |   |
| Marketing      and distribution                                               |                                |   |                                                                                                                     |   |                                                                                                        |   |   |   |   |   |   |   |   |
| External      sales(1)                                                        | 460.4                               |   | 588.7                                                                                                                    |   | 660.0                                                                                                       |   | 32.5 |   | 30.5 |   | 55.4 |   | 54.8 |
| Inter-segment      sales                                                      | 3.4                                 |   | 4.8                                                                                                                      |   | 2.8                                                                                                         |   | 0.3 |   | 0.1 |   |   |   |   |
| Total      operating revenue                                                  | 463.8                               |   | 593.5                                                                                                                    |   | 662.8                                                                                                       |   | 32.8 |   | 30.6 |   |   |   |   |
| Chemicals                                                                     |                                |   |                                                                                                                     |   |                                                                                                        |   |   |   |   |   |   |   |   |
| External      sales(1)                                                        | 159.1                               |   | 202.6                                                                                                                    |   | 224.7                                                                                                       |   | 11.2 |   | 10.4 |   | 19.1 |   | 18.7 |
| Inter-segment      sales                                                      | 12.2                                |   | 12.3                                                                                                                     |   | 16.0                                                                                                        |   | 0.7 |   | 0.7 |   |   |   |   |
| Total      operating revenue                                                  | 171.3                               |   | 214.9                                                                                                                    |   | 240.7                                                                                                       |   | 11.9 |   | 11.1 |   |   |   |   |
| Corporate      and others                                                     |                                |   |                                                                                                                     |   |                                                                                                        |   |   |   |   |   |   |   |   |
| External      sales(1)                                                        | 70.7                                |   | 116.8                                                                                                                    |   | 159.7                                                                                                       |   | 6.4 |   | 7.4 |   | 11.0 |   | 13.2 |
| Inter-segment      sales                                                      | 51.2                                |   | 145.3                                                                                                                    |   | 297.1                                                                                                       |   | 8.0 |   | 13.7 |   |   |   |   |
| Total      operating revenue                                                  | 121.9                               |   | 262.1                                                                                                                    |   | 456.8                                                                                                       |   | 14.4 |   | 21.1 |   |   |   |   |
| Total      operating revenue before      inter-segment eliminations | 1,363.5                             |   | 1,811.0                                                                                                                  |   | 2,162.9                                                                                                     |   | 100.0 |   | 100.0 |   |   |   |   |
| Elimination      of inter-segment sales                                  | (546.5)                             |   | (749.3)                                                                                                                  |   | (958.1)                                                                                                     |   |   |   |   |   |   |   |   |
| Consolidated      operating revenues                                     | 817.0                               |   | 1,061.7                                                                                                                  |   | 1,204.8                                                                                                     |   |   |   |   |   | 100.0 |   | 100.0 |

| (1) | include      other operating revenues.  See Note 33 to the consolidated      financial statements for other operating revenues of each of our operating      segments. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Years      Ended December 31, | Rate      of Change      from      2006 to      2007 |
|--------|-------------------------------|------------------------------------------------------|
|   | 2005                          | 2006                                                 | 2007 |   |
|   | (RMB      in billions)        | (%)                                                  |

| Exploration      and Production |   |   |    |   |   |   |    |   |   |   |    |   |
|---------------------------------|--------|--------|---------|--------|--------|--------|---------|--------|--------|--------|---------|--------|
| Total operating      revenues   |   |   | 115.2   |   |   |   | 143.2   |   |   |   | 145.7   |   |   |   | 1.7 |   |
| Total operating      expenses   |   |   | (66.9)  |   |   |   | (80.0)  |   |   |   | (96.9)  |   |   |   | 21.1 |   |
| Total operating      income     |   |   | 48.3    |   |   |   | 63.2    |   |   |   | 48.8    |   |   |   | (22.8) |   |
| Refining                        |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |
| Total operating      revenues   |   |   | 491.3   |   |   |   | 597.3   |   |   |   | 656.9   |   |   |   | 10.0 |   |
| Other income                    |   |   | 9.8     |   |   |   | 5.2     |   |   |   | 1.9     |   |   |   | (63.5) |   |
| Total operating      expenses   |   |   | (504.8) |   |   |   | (576.8) |   |   |   | (669.3) |   |   |   | 16.0 |   |
| Total operating    loss         |   |   | (3.7)   |   |   |   | (25.7)  |   |   |   | (10.5)  |   |   |   | (59.1) |   |
| Marketing      and distribution |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |

----

| Total operating      revenues |   |   | 463.8   |   |   |   | 593.5   |   |   |   | 662.8   |   |   |   | 11.7   |   |
|-------------------------------|--------|--------|---------|--------|--------|--------|---------|--------|--------|--------|---------|--------|--------|--------|--------|--------|
| Other income                  |   |   | -       |   |   |   | -       |   |   |   | 2.9     |   |   |   | -      |   |
| Total operating      expenses |   |   | (453.4) |   |   |   | (563.3) |   |   |   | (630.0) |   |   |   | 11.8   |   |
| Total operating      income   |   |   | 10.4    |   |   |   | 30.2    |   |   |   | 35.7    |   |   |   | 18.2   |   |
| Chemicals                     |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |
| Total operating      revenues |   |   | 171.3   |   |   |   | 214.9   |   |   |   | 240.7   |   |   |   | 12.0   |   |
| Total operating      expenses |   |   | (157.1) |   |   |   | (200.5) |   |   |   | (227.4) |   |   |   | 13.4   |   |
| Total operating      income   |   |   | 14.2    |   |   |   | 14.4    |   |   |   | 13.3    |   |   |   | (7.6)  |   |
| Corporate      and others     |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |
| Total operating      revenues |   |   | 121.9   |   |   |   | 262.1   |   |   |   | 456.8   |   |   |   | 74.3   |   |
| Total operating      expenses |   |   | (123.1) |   |   |   | (263.6) |   |   |   | (458.4) |   |   |   | 73.9   |   |
| Total operating    loss       |   |   | (1.2)   |   |   |   | (1.5)   |   |   |   | (1.4)   |   |   |   | (6.7)  |   |

|   | · | The      exploration expense (including dry hole cost) increased by RMB 3.1 billion      over 2006. The increase was mainly attributable to the increased efforts      on exploration and forward looking study in the Southern marine facies      blocks in the northeast and the west of Sichuan  Province. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                          |
|   | · | The      increase of RMB 5.3 billion in depreciation, depletion and amortization,      which was mainly due to the increase in depreciation and depletion of the      oil and gas assets.                                                                                                                     |
|   |   |                                                                                                                                                                                                                                                                                                          |
|   | · | Special      levy on crude oil income increased by RMB 2.5 billion over      2006.                                                                                                                                                                                                                            |
|   |   |                                                                                                                                                                                                                                                                                                          |
|   | · | Other      operating expenses increased by RMB 3.6 billion over 2006. The increase      was mainly due to the increase in cost of materials as a result of the      increase in sales of these materials.                                                                                                     |
|   |   |                                                                                                                                                                                                                                                                                                          |

----

|   | · | An      increase of RMB 9.4 billion in taxes other than income tax, which mainly      consist of the special oil income levy and the mining resource      compensation charge;                                      |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                |
|   | · | An      increase of RMB 1.6 billion in exploration expenses (including day hole      costs) as a result of our enhanced exploration efforts in the Southern      marine bed and the new areas in Western China; and |
|   |   |                                                                                                                                                                                                                |
|   | · | An      increase of RMB 1.8 billion in depreciation, depletion and amortization as      a result of our continuous investments in property, plant and      equipment.                                               |
|   |   |                                                                                                                                                                                                                |

|                                  |   | Sales      volume     |   |   | Rate      of changefrom |   |   | Average      realized prices |   |   | Rate      of changefrom |   |
|---------------------------------------|--------|-----------------------|--------|--------|-------------------------|--------|--------|------------------------------|--------|--------|-------------------------|--------|
|                                  |   | 2006                  |   |   | 2007                    |   |   | 2006 to 2007                 |   |   | 2006                    |   |   | 2007 |   |   | 2006 to 2007 |   |
|                                  |   | (million      tonnes) |   |   | (%)                     |   |   | (RMB      per tonne)         |   |   | (%)                     |   |
| Gasoline                              |   |                  | 22.94  |   |                    |   | 23.97  |                         |   |   | 4.5                     |   |   |   | 4,499 |   |   |   | 4,641 |   |   |   | 3.2 |   |
| Diesel                                |   |                  | 59.71  |   |                    |   | 61.54  |                         |   |   | 3.1                     |   |   |   | 3,873 |   |   |   | 4,057 |   |   |   | 4.8 |   |
| Light      Chemical feedstock         |   |                  | 25.40  |   |                    |   | 25.51  |                         |   |   | 0.4                     |   |   |   | 4,395 |   |   |   | 4,985 |   |   |   | 13.4 |   |
| Other      refined petroleum products |   |                  | 39.68  |   |                    |   | 42.20  |                         |   |   | 6.4                     |   |   |   | 3,690 |   |   |   | 3,884 |   |   |   | 5.3 |   |

----

|                                  |   | Sales      volume     |   |   | Rate      of changefrom |   |   | Average      realized prices |   |   | Rate      of changefrom |   |
|---------------------------------------|--------|-----------------------|--------|--------|-------------------------|--------|--------|------------------------------|--------|--------|-------------------------|--------|
|                                  |   | 2005                  |   |   | 2006                    |   |   | 2005 to 2006                 |   |   | 2005                    |   |   | 2006 |   |   | 2005 to 2006 |   |
|                                  |   | (million      tonnes) |   |   | (%)                     |   |   | (RMB      per tonne)         |   |   | (%)                     |   |
| Gasoline                              |   |                  | 22.57  |   |                    |   | 22.94  |                         |   |   | 1.6                     |   |   |   | 3,772 |   |   |   | 4,499 |   |   |   | 19.3 |   |
| Diesel                                |   |                  | 56.00  |   |                    |   | 59.71  |                         |   |   | 6.6                     |   |   |   | 3,470 |   |   |   | 3,873 |   |   |   | 11.6 |   |
| Light      Chemical feedstock         |   |                  | 24.36  |   |                    |   | 25.40  |                         |   |   | 4.3                     |   |   |   | 3,559 |   |   |   | 4,395 |   |   |   | 23.5 |   |
| Other      refined petroleum products |   |                  | 36.28  |   |                    |   | 39.68  |                         |   |   | 6.3                     |   |   |   | 3,229 |   |   |   | 3,690 |   |   |   | 15.1 |   |

----

|                             |   | Sales      Volume     |   |   | Rate      of Change from |   |   | Average Realized      Prices |   |   | Rate      of Change from |   |
|----------------------------------|--------|-----------------------|--------|--------|--------------------------|--------|--------|-----------------------------------|--------|--------|--------------------------|--------|
|                             |   | 2006                  |   |   | 2007                     |   |   | 2006 to 2007                      |   |   | 2006                     |   |   | 2007 |   |   | 2006 to 2007 |   |
|                             |   | (million      tonnes) |   |   | (%)                      |   |   | (RMB      per tonne)              |   |   | (%)                      |   |
| Gasoline                         |   |                  | 32.72  |   |                     |   | 35.12  |                              |   |   | 7.4                      |   |   |   | 5,224 |   |   |   | 5,410 |   |   |   | 3.6 |   |
| Retail      sale                 |   |                  | 23.89  |   |                     |   | 26.73  |                              |   |   | 11.9                     |   |   |   | 5,350 |   |   |   | 5,542 |   |   |   | 3.6 |   |
| Direct      sale                 |   |                  | 2.81   |   |                     |   | 2.61   |                              |   |   | (7.1)                    |   |   |   | 4,922 |   |   |   | 5,036 |   |   |   | 2.3 |   |
| Wholesale                        |   |                  | 6.02   |   |                     |   | 5.79   |                              |   |   | (3.9)                    |   |   |   | 4,867 |   |   |   | 4,967 |   |   |   | 2.1 |   |
| Diesel                           |   |                  | 73.69  |   |                     |   | 77.29  |                              |   |   | 4.9                      |   |   |   | 4,466 |   |   |   | 4,723 |   |   |   | 5.8 |   |
| Retail      sale                 |   |                  | 43.53  |   |                     |   | 44.99  |                              |   |   | 3.4                      |   |   |   | 4,527 |   |   |   | 4,832 |   |   |   | 6.7 |   |
| Direct      sale                 |   |                  | 15.31  |   |                     |   | 17.03  |                              |   |   | 11.3                     |   |   |   | 4,599 |   |   |   | 4,742 |   |   |   | 3.1 |   |
| Wholesale                        |   |                  | 14.86  |   |                     |   | 15.26  |                              |   |   | 2.7                      |   |   |   | 4,152 |   |   |   | 4,381 |   |   |   | 5.5 |   |
| Kerosene      including jet fuel |   |                  | 5.40   |   |                     |   | 7.01   |                              |   |   | 29.8                     |   |   |   | 4,524 |   |   |   | 4,729 |   |   |   | 4.5 |   |
| Fuel      Oil                    |   |                  | 15.07  |   |                     |   | 13.16  |                              |   |   | (12.7)                   |   |   |   | 2,989 |   |   |   | 2,923 |   |   |   | (2.2) |   |

----

|                             |   | Sales      Volume     |   |   | Rate      of Change |   |   | Average Realized      Prices |   |   | Rate      of Change |   |
|----------------------------------|--------|-----------------------|--------|--------|---------------------|--------|--------|-----------------------------------|--------|--------|---------------------|--------|
|                             |   | 2005                  |   |   | 2006                |   |   |  from 2005 to 2006           |   |   | 2005                |   |   | 2006 |   |   | from 2005 to 2006 |   |
|                             |   | (million      tonnes) |   |   | (%)                 |   |   | (RMB      per tonne)              |   |   | (%)                 |   |
| Gasoline                         |   |                  | 30.32  |   |                |   | 32.72  |                              |   |   | 7.9                 |   |   |   | 4,430 |   |   |   | 5,224 |   |   |   | 17.9 |   |
| Retail      sale                 |   |                  | 21.63  |   |                |   | 23.89  |                              |   |   | 10.4                |   |   |   | 4,562 |   |   |   | 5,350 |   |   |   | 17.3 |   |
| Direct      sale                 |   |                  | 2.84   |   |                |   | 2.81   |                              |   |   | (1.0)               |   |   |   | 4,206 |   |   |   | 4,922 |   |   |   | 17.0 |   |
| Wholesale                        |   |                  | 5.85   |   |                |   | 6.02   |                              |   |   | 2.9                 |   |   |   | 4,050 |   |   |   | 4,867 |   |   |   | 20.2 |   |
| Diesel                           |   |                  | 67.93  |   |                |   | 73.69  |                              |   |   | 8.5                 |   |   |   | 3,767 |   |   |   | 4,466 |   |   |   | 18.6 |   |
| Retail      sale                 |   |                  | 36.90  |   |                |   | 43.53  |                              |   |   | 18.0                |   |   |   | 3,885 |   |   |   | 4,527 |   |   |   | 16.5 |   |
| Direct      sale                 |   |                  | 15.91  |   |                |   | 15.31  |                              |   |   | (3.8)               |   |   |   | 3,786 |   |   |   | 4,599 |   |   |   | 21.5 |   |
| Wholesale                        |   |                  | 15.12  |   |                |   | 14.86  |                              |   |   | (1.7)               |   |   |   | 3,458 |   |   |   | 4,152 |   |   |   | 20.1 |   |
| Kerosene      including jet fuel |   |                  | 5.96   |   |                |   | 5.40   |                              |   |   | (9.4)               |   |   |   | 3,710 |   |   |   | 4,524 |   |   |   | 21.9 |   |
| Fuel      Oil                    |   |                  | 13.33  |   |                |   | 15.07  |                              |   |   | 13.0)               |   |   |   | 2,374 |   |   |   | 2,989 |   |   |   | 25.9 |   |

|                                                                                                                                                                                                                                                                                                                                                                   | Sales      Volumes    | Rate      of Changefrom 2006 to      2007 | Average Realized      Prices | Rate      of Change from      2006 to 2007 |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------|-------------------------------------------|-----------------------------------|--------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                   | 2006                  | 2007                                      | 2006                              | 2007                                       |
|                                                                                                                                                                                                                                                                                                                                                                   | (million      tonnes) | (%)                                       | (RMB      per tonne)              | (%)                                        |
| Basic      organic      chemicals                                                                                                | 11.57                 | 12.89                                     | 11.4                              | 5,649                                      | 5,870 | 3.9 |
| Synthetic      resins                                                                                                            | 7.25                  | 7.96                                      | 9.8                               | 9,842                                      | 10,163 | 3.3 |
| Synthetic      rubber                                                                                                            | 0.83                  | 0.98                                      | 17.3                              | 13,885                                     | 13,721 | (1.2) |
| Synthetic      fiber                                                                                                             | 1.61                  | 1.50                                      | (7.0)                             | 11,390                                     | 11,605 | 1.9 |
| Synthetic      fiber monomers      and      polymers                                               | 3.71                  | 4.09                                      | 10.2                              | 8,814                                      | 9,116 | 3.4 |
| Chemical      fertilizer                                                                                                         | 1.65                  | 1.60                                      | (3.3)                             | 1,660                                      | 1,657 | (0.2) |

----

|                                                                                                                                                                                                                                                                                                                                                                   | Sales      Volumes    | Rate      of Changefrom 2005 to      2006 | Average Realized      Prices | Rate      of Change from 2005 to      2006 |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------|-------------------------------------------|-----------------------------------|--------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                   | 2005                  | 2006                                      | 2005                              | 2006                                       |
|                                                                                                                                                                                                                                                                                                                                                                   | (million      tonnes) | (%)                                       | (RMB      per tonne)              | (%)                                        |
| Basic      organic      chemicals                                                                                                | 8.75                  | 11.57                                     | 32.3                              | 4,808                                      | 5,649 | 17.5 |
| Synthetic      resins                                                                                                            | 5.97                  | 7.25                                      | 21.5                              | 9,017                                      | 9,842 | 9.1 |
| Synthetic      rubber                                                                                                            | 0.70                  | 0.83                                      | 18.5                              | 13,000                                     | 13,885 | 6.8 |
| Synthetic      fiber                                                                                                             | 1.59                  | 1.61                                      | 1.8                               | 11,123                                     | 11,390 | 2.4 |
| Synthetic      fiber monomers      and      polymers                                               | 2.96                  | 3.71                                      | 25.3                              | 8,872                                      | 8,814 | (0.7) |
| Chemical      fertilizer                                                                                                         | 1.82                  | 1.65                                      | (9.3)                             | 1,539                                      | 1,660 | 7.9 |

----

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   | For      the Years Ended December 31, |    |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------|---------|
| Cash      flow data                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   | 2006                                  |    |   | 2007 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   | (in RMB billions)                     |    |
| Net      cash from operating      activities                                                                                           |   |                                  | 92.5    |   |   |   | 119.6 |   |
| Net      cash used in investing      activities                                                                                        |   |                                  | (103.4) |   |   |   | (113.6) |   |
| Net      cash from/(used in) financing      activities                                                                                 |   |                                  | 2.9     |   |   |   | (5.3 |   |
| Net      (decrease) / increase in cash and cash equivalents                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                                  | (8.0)   |   |   |   | 0.7 |   |

|                                                                                                                                                                                                                                                                                                                                          |   |   |    |   | As      of December 31, 2007 |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|---------|--------|------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                          |   |   |    |   | Payment      due by period   |   |
|                                                                                                                                                                                                                                                                                                                                          |   | Total  |    |   | less      than1 year         |   |   | 1-3 years |   |   | 4-5 years |   |   | After      5 years |   |
|                                                                                                                                                                                                                                                                                                                                          |   |   |    |   | (RMB      millions)          |   |
| Contractual      obligations(1)                                                                                                                                                                                                                                                                                                               |   |   |    |   |                         |   |   |   |   |   |   |   |   |   |   |
| Short-term      debt                                                                     |   |   | 48,258  |   |                         |   | 48,258 |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Long-term      debt                                                                      |   |   | 153,291 |   |                         |   | 18,002 |   |   |   | 36,890 |   |   |   | 19,208 |   |   |   | 79,191 |   |
|                                                                                                                                                                                                                                                                                                                                          |   |   |    |   |                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total      contractual      obligations                                                  |   |   | 201,549 |   |                         |   | 66,260 |   |   |   | 36,890 |   |   |   | 19,208 |   |   |   | 79,191 |   |

----

|                                                                                                                                                                                                                                                                                                                                        |   |   |    |   |   |   |   |   |   |   |    |   |   |   |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|---------|--------|--------|--------|--------|--------|--------|--------|---------|--------|--------|--------|--------|
| Other      commercial commitments                                                                                                                                                                                                                                                                                                           |   |   |    |   |   |   |   |   |   |   |    |   |   |   |   |
| Operating      lease      commitments                                                  |   |   | 142,192 |   |   |   | 4,620  |   |   |   | 8,974   |   |   |   | 8,872  |   |   |   | 119,726 |   |
| Capital      commitments                                                               |   |   | 245,670 |   |   |   | 25,766 |   |   |   | 219,904 |   |   |   |   |   |   |   |   |   |
| Exploration      and production licenses                                                                                                                                                                                                                                                                                                    |   |   | 1,129   |   |   |   | 218    |   |   |   | 216     |   |   |   | 39     |   |   |   | 656 |   |
| Guarantees(2)                                                                          |   |   | 9,812   |   |   |   | 9,812  |   |   |   | -       |   |   |   | -      |   |   |   | - |   |
|                                                                                                                                                                                                                                                                                                                                        |   |   |    |   |   |   |   |   |   |   |    |   |   |   |   |   |   |   |   |   |
| Total      commercial commitments                                                                                                                                                                                                                                                                                                           |   |   | 398,803 |   |   |   | 40,416 |   |   |   | 229,094 |   |   |   | 8,911  |   |   |   | 120,382 |   |

| (1) | Contractual      obligations include the contractual obligations relating to interest      payments.                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2) | Guarantee      is not limited by time, therefore specific payment due period is not      applicable. As of December 31, 2007, we have not entered into any      off-balance sheet arrangements other than guarantees given to banks in      respect of banking facilities granted to certain parties. As of December      31, 2007, the maximum amount of potential future payments under the      guarantees was RMB 9,812 million.  See Note 30 to the      consolidated financial statements for further information of the      guarantees. |

|                                  | 2005                                       |   | 2006    |   | 2007 |   | Total   |
|---------------------------------------|--------------------------------------------|--------|---------|--------|------|--------|---------|
|                                  | RMB                                        |   | Percent |   | RMB  |   | Percent |   | RMB |   | Percent |   | RMB |   | Percent |
|                                  | (in      billions, except percentage data) |
| Exploration      and production  | 25.4                                       |   | 38      |   | 35.2 |   | 42      |   | 54.5 |   | 50 |   | 115.1 |   | 44 |
| Refining                         | 20.3                                       |   | 30      |   | 22.6 |   | 27      |   | 22.8 |   | 21 |   | 65.7 |   | 25 |
| Marketing      and distribution  | 11.0                                       |   | 16      |   | 11.3 |   | 13      |   | 12.5 |   | 11 |   | 34.8 |   | 13 |
| Chemicals                        | 9.4                                        |   | 14      |   | 12.6 |   | 15      |   | 16.2 |   | 15 |   | 38.2 |   | 15 |
| Corporate                        | 1.2                                        |   | 2       |   | 2.2  |   | 3       |   | 3.3 |   | 3 |   | 6.7 |   | 3 |
| Total                            | 67.3                                       |   | 100     |   | 83.9 |   | 100     |   | 109.3 |   | 100 |   | 260.5 |   | 10 |

|   | · | The      capital expenditure for our exploration and production segment was RMB      54.50 billion, resulting in discoveries of oil and gas reserves in the      northeast of Sichuan Province, aiding block in Tahe field, Dongpu trough,      the subtle reservoir in the east of China, the deep layers in the west of      Sichuan province and in Songnan block. Also, the construction of      Sichuan-East China Gas project has commenced. During 2007, the capacity of      newly built crude oil and natural gas production was 6.05 million tonnes      and 1.66 billion cubic meters per annum respectively. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   | · | The      capital expenditure for our refining segment was RMB 22.76 billion, which      was used for major projects such as the Qingdao Refinery Construction      Project and certain projects for upgrading the quality of refined oil      products. The upgrading project at Yanshan Petrochemical Company has been      completed.                                                                                                                                                                                                                                                                                  |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   | · | The      capital expenditure for our marketing and distribution segment was RMB      12.55 billion. With this investment, we have further improved our refined      oil products network through construction, acquisition and renovation of      service stations and oil storage. Thereby, our leading role in the      strategic market was consolidated, and 753 self-operated service stations      were added.                                                                                                                                                                                                     |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   | · | The      capital expenditure for our chemicals segment was RMB 16.18 billion, which      was used for certain large scale integrated refinery and chemical projects      in Fujian and Tianjin, and ethylene project in Zhenhai.                                                                                                                                                                                                                                                                                                                                                                                         |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   | · | The      capital expenditure for corporate and others was RMB 3.29 billion, which      was mainly used for the information systemconstruction.                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |

----

|   | · | From April 1, 2008, the central      finance authority has started to provide appropriate subsidy to compensate      the losses arising from the processing of imported crude oil. The subsidy will be distributed in      advance and settled on a monthlybasis. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | During      the second quarter of 2008, value-added tax imposed on refined oil imports      that have been paid in advance will be refunded in  full. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------|

| ITEM 6. | DIRECTORS,      SENIOR MANAGEMENT AND EMPLOYEES |
|---------|-------------------------------------------------|

| Name               | Age    | Positions with Sinopec      Corp.    |
|--------------------|--------|--------------------------------------|
|               |   |                                 |
| Su      Shulin     | 46     | Chairman                             |
| Zhou      Yuan     | 60     | Vice      Chairman                   |
| Wang      Tianpu   | 45     | Director,      President             |
| Zhang      Jianhua | 43     | Director,      Senior Vice President |
| Wang      Zhigang  | 50     | Director,      Senior Vice President |

----

| Dai      Houliang | 44 | Director,      Senior Vice President, CFO |
|-------------------|----|-------------------------------------------|
| Liu      Zhongli  | 73 | Independent      Non-executive Director   |
| Shi      Wanpeng  | 70 | Independent      Non-executive Director   |
| Li      Deshui    | 63 | Independent      Non-executive Director   |
| Yao      Zhongmin | 55 | Director                                  |
| Fan      Yifei    | 44 | Director                                  |

----

----

----

| Name                | Age    | Position with the      Company        |
|---------------------|--------|--------------------------------------------|
|                |   |                                       |
| Wang      Zuoran    | 57     | Chairman      of the Board of Supervisors  |
| Zhang      Youcai   | 66     | Vice      Chairman, Independent Supervisor |
| Kang      Xianzhang | 59     | Supervisor                                 |
| Zou      Huiping    | 47     | Supervisor                                 |
| Li      Yonggui     | 67     | Independent      Supervisor                |
| Su      Wensheng    | 51     | Employee      Representative Supervisor    |
| Zhang      Jitian   | 60     | Employee      Representative Supervisor    |
| Cui      Guoqi      | 54     | Employee      Representative Supervisor    |
| Li      Zhonghua    | 56     | Employee      Representative Supervisor    |

----

----

| Name                | Age    | Positions with Sinopec      Corp.        |
|---------------------|--------|------------------------------------------|
|                |   |                                     |
| Cai      Xiyou      | 46     | Senior      Vice President               |
| Zhang      Kehua    | 54     | Vice      President                      |
| Zhang      Haichao  | 50     | Vice      President                      |
| Jiao      Fangzheng | 45     | Vice      President                      |
| Chen      Ge        | 45     | Secretary      of the Board of Directors |

----

----

| Name                          |   | Position      with the Company             |   | Remuneration      paid by the Company in 2007 |
|-------------------------------|--------|--------------------------------------------|--------|-----------------------------------------------|
|                          |   |                                       |   | (RMB      thousand)                           |
| Directors                     |   |                                       |   |                                          |
| Su      Shulin                |   |                                       |   | ─                                       |
| Zhou      Yuan                |   | Vice      Chairman                         |   | ─                                       |
| Wang      Tianpu              |   | Director,      President                   |   | 825                                           |
| Zhang      Jianhua            |   | Director,      Senior Vice President       |   | 789                                           |
| Wang      Zhigang             |   | Director,      Senior Vice President       |   | 789                                           |
| Dai      Houliang             |   | Director,      Senior Vice President, CFO  |   | 691                                           |
| Liu      Zhongli              |   | Independent      Non-executive Director    |   | 240                                           |
| Shi      Wanpeng              |   | Independent      Non-executive Director    |   | 240                                           |
| Li      Deshui                |   | Independent      Non-executive Director    |   | 240                                           |
| Yao      Zhongmin             |   | Director                                   |   | 65                                            |
| Fan      Yifei                |   | Director                                   |   | 65                                            |
|                          |   |                                       |   |                                          |
| Supervisors                   |   |                                       |   |                                          |
| Wang      Zuoran              |   | Chairman      of Supervisory Committee     |   | ─                                       |
| Zhang      Youcai             |   | Vice      Chairman, Independent Supervisor |   | 240                                           |
| Kang      Xianzhang           |   | Supervisor                                 |   | ─                                       |
| Zou      Huiping              |   | Supervisor                                 |   | 296                                           |
| Li      Yonggui               |   | Independent      Supervisor                |   | 240                                           |
| Su      Wensheng              |   | Employee      Representative Supervisor    |   | 378                                           |
| Zhang      Jitian             |   | Employee      Representative Supervisor    |   | 296                                           |
| Cui      Guoqi                |   | Employee      Representative Supervisor    |   | 387                                           |
| Li      Zhonghua              |   | Employee      Representative Supervisor    |   | 297                                           |
|                          |   |                                       |   |                                          |
| Other      Executive officers |   |                                       |   |                                          |
| Cao      Xiyou                |   | Senior      Vice President                 |   | 789                                           |
| Zhang      Kehua              |   | Vice      President                        |   | 361                                           |
| Zhang      Haichao            |   | Vice      President                        |   | 457                                           |
| Jiao      Fangzheng           |   | Vice      President                        |   | 259                                           |
| Chen      Ge                  |   | Secretary      to the Board of Directors   |   | 378                                           |

----

|   | · | to      propose the appointment or replacement of the independent      auditor;                                 |
|--------|--------|-----------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                            |
|   | · | to      oversee the internal auditing system and its    implementation;                                         |
|   |   |                                                                                                            |
|   | · | to      coordinate the communication between the internal auditing department and      the independent auditor; |
|   |   |                                                                                                            |
|   | · | to      examine and approve financial information and it disclosure;      and                                   |
|   |   |                                                                                                            |
|   | · | to      examine the internal control system.                                                                    |
|   |   |                                                                                                            |

|   | · | to      research on evaluation criteria for directors and the president, to      conduct their evaluations and make necessary suggestions;    and                                                                          |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                       |
|   | · | to      research on and review the policies and proposals in respect of the      remuneration of directors, supervisors, president, vice-president, Chief      Financial Officer and secretary of the board of  directors. |
|   |   |                                                                                                                                                                                                                       |

| By      Segment                       | Number      of Employees |   | Percentage of Total Number of      Employees      (%) |
|---------------------------------------|--------------------------|--------|-------------------------------------------------------|
| Exploration      and Production  | 116,799                  |   | 34.9                                                  |
| Refining                         | 79,395                   |   | 23.7                                                  |
| Marketing      and Distribution  | 58,788                   |   | 17.6                                                  |
| Chemicals                        | 70,712                   |   | 21.2                                                  |
| Corporate      and Others        | 8,683                    |   | 2.6                                                   |
| Total                                 | 334,337                  |   | 100.0                                                 |

| By      Employee's Scope of Work                                                                                                                                                                                                                                                                               | Number of      Employees |   | Percentage of Total Number of Employees      (%) |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------|--------|--------------------------------------------------|
| Production                                                     | 171,914                  |   | 51.4                                             |
| Sales                                                          | 58,428                   |   | 17.5                                             |
| Technical                                                      | 44,498                   |   | 13.3                                             |
| Finance                                                        | 9,877                    |   | 2.9                                              |
| Administration                                                 | 26,750                   |   | 8.0                                              |
| Others                                                         | 22,910                   |   | 6.9                                              |
| Total                                                          | 334,337                  |   | 100.0                                            |

----

| By      Education                                                                                                                                                                                                                                                                                                                   | Number of      Employees |   | Percentage of Total      Number of Employees (%) |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------|--------|--------------------------------------------------|
| Master's      degree and      above                                                 | 5,285                    |   | 1.6                                              |
| University                                                                          | 60,407                   |   | 18.1                                             |
| Tertiary      education                                                             | 72,542                   |   | 21.7                                             |
| Technical/polytechnic      school                                                                                                                                                                                                                                                                                                   | 31,743                   |   | 9.5                                              |
| Secondary,      technical/polytechnic school or below                                                                                                                                                                                                                                                                               | 164,400                  |   | 49.1                                             |
| Total                                                                               | 334,337                  |   | 100.0                                            |

| ITEM 7. | MAJOR      SHAREHOLDERS AND RELATED PARTYTRANSACTIONS |
|---------|-------------------------------------------------------|

| Shareholder                | Number      ofShares      Owned(in      millions) | Percentage      of Ownership (%)   |
|----------------------------|---------------------------------------------------|----------------------------------------------|
| Sinopec      Group Company | 65,758.04                                         | 75.84                                        |

----

| ITEM 8. | FINANCIAL      INFORMATION |
|---------|----------------------------|

----

| ITEM      9. | THE      OFFER AND LISTING |
|--------------|----------------------------|

|                |   | The Stock Exchange      ofHong      Kong | The New      YorkStock      Exchange | The Shanghai      Stock Exchange                                                           |
|---------------------|--------|------------------------------------------|--------------------------------------|-------------------------------------------------------------------------------------------------|
| Period              |   | High                                     |                                 | Low                                                                                             | High |   | Low | High |   | Low |
| Past      6 months  |   | (HK      dollar per H share)             | (US      dollar per ADS)             | (RMB      per A share)                                                                          |
|                |   | May      (up to May 20)                  |                                 |                     8.71  |   | 7.26 |   112.56 |   | 91.43 | 13.17 |   | 11.41 |
|                |   | April                                    |                                 |                8.43  |   | 6.78 |                   107.63 |   | 86.65 | 12.99 |   | 9.91 |
|                |   | March                                    |                                 |                     8.50  |   | 6.14 |              109.3 |   | 81.43 | 17.32 |   | 11.38 |
|                |   | February                                 |                                 |                     9.59  |   | 8.34 |                   120.34 |   | 108.56 | 18.76 |   | 16.19 |
| 2008                |   | January                                  |                                 |                   11.66             |   | 7.65 |              146.28 |   | 107.63 | 24.38 |   | 16.96 |
|                |   | December                                 |                                 |                   12.62             |   | 10.66 |                   166.85 |   | 133.55 | 24.01 |   | 20.99 |
| 2007                |   | November                                 |                                 |                   12.76             |   | 10.04 |              159.29 |   | 125.06 | 28.49 |   | 20.08 |
|                |   |                                     |                                 |                                                                                            |   |   |   |   |   |
| Quarterly      Data |   |                                     |                                 |                                                                                            |   |   |   |
| 2008                |   | First      Quarter                       |                                 |                   11.66             |   | 6.14 |                   146.28 |   | 81.43 | 24.38 |   | 11.38 |
| 2007                |   | Fourth      Quarter                      |                                 |                   12.96             |   | 9.18 |                   178.83 |   | 118.19 | 28.49 |   | 19.23 |
|                |   | Third      Quarter                       |                                 |                     9.71  |   | 6.93 |              124.90 |   | 90.00 | 18.99 |   | 12.33 |
|                |   | Second      Quarter                      |                                 |                     9.18  |   | 6.63 |                   117.44 |   | 85.78 | 15.20 |   | 10.04 |
|                |   | First      Quarter                       |                                 |                     7.32  |   | 5.67 |                     92.23 |   | 72.92 | 11.20 |   | 8.37 |
| 2006                |   | Fourth      Quarter                      |                                 |                     7.20  |   | 4.67 |                     92.64 |   | 60.64 | 9.15 |   | 5.30 |
|                |   | Third      Quarter                       |                                 |               4.92        |   | 4.15 |                     63.12 |   | 53.17 | 6.80 |   | 5.67 |
|                |   | Second      Quarter                      |                                 |                    5.50        |   | 3.775 |                71.94 |   | 47.40 | 7.24 |   | 5.09 |
|                |   | First      Quarter                       |                                 |                    5.00        |   | 3.875 |                     63.73 |   | 50.29 | 5.39 |   | 4.58 |
|                |   |                                     |                                 |                                                                                            |   |   |   |   |   |
| Annual      Data    |   |                                     |                                 |                                                                                            |   |   |   |
| 2007                |   |                                     |                                 |                   12.96             |   | 5.67 |                   178.83 |   | 72.92 | 28.49 |   | 8.37 |
| 2006                |   |                                     |                                 |                     7.20  |   | 3.775 |                     92.64 |   | 47.40 | 9.15 |   | 4.58 |
| 2005                |   |                                     |                                 |                     3.90  |   | 2.75 |                     50.58 |   | 35.55 | 4.66 |   | 3.25 |
| 2004                |   |                                     |                                 |                3.85  |   | 2.475 |                     49.90 |   | 32.08 | 5.77 |   | 4.26 |
| 2003                |   |                                     |                                 |                3.475 |   | 1.24 |                     44.41 |   | 17.30 | 5.06 |   | 2.94 |

----

| ITEM      10. | ADDITIONAL      INFORMATION |
|---------------|-----------------------------|

----

|   | · | recovery      of losses, if any;                                                               |
|--------|--------|------------------------------------------------------------------------------------------------|
|   |   |                                                                                           |
|   | · | allocations      to the statutory surplus  reserve fund; and                         |
|   |   |                                                                                           |
|   | · | allocations      to a discretionary surplus reserve fund if approved by the      shareholders. |
|   |   |                                                                                           |

|   | · | where      the number of directors is less than the number stipulated in the PRC      Company Law or two-thirds of the number specified in our articles of      association; |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                         |
|   | · | where      our unrecovered losses reach one-third of the total amount of our share      capital;                                                                             |
|   |   |                                                                                                                                                                         |
|   | · | where      shareholder(s) holding 10% or more of our issued and outstanding voting      shares request(s) in writing the convening of an extraordinary general      meeting; |
|   |   |                                                                                                                                                                         |
|   | · | whenever      our board deems necessary or our board of supervisors so requests;      or                                                                                     |
|   |   |                                                                                                                                                                         |
|   | · | circumstances      provided in the articles of association.                                                                                                                  |
|   |   |                                                                                                                                                                         |

----

|   | · | an      increase or reduction of our share capital or the issue of shares,      including stock distributions, of any class, warrants and other similar      securities;                                                                                      |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                          |
|   | · | issuance      of debentures;                                                                                                                                                                                                                                  |
|   |   |                                                                                                                                                                                                                                                          |
|   | · | our      division, merger, dissolution and liquidation; (Shareholders who object to      a proposed division or merger are entitled to demand that either we or the      shareholders who approved the merger purchase their shares at a fair      price.)    |
|   |   |                                                                                                                                                                                                                                                          |
|   | · | repurchase      of shares;                                                                                                                                                                                                                                    |
|   |   |                                                                                                                                                                                                                                                          |
|   | · | amendments      to our articles of association; and                                                                                                                                                                                                           |
|   |   |                                                                                                                                                                                                                                                          |
|   | · | any      other matters considered by the shareholders in a general meeting and      which they have resolved by way of an ordinary resolution to be of a      nature which may have a material impact on us and should be adopted by      special resolution. |
|   |   |                                                                                                                                                                                                                                                          |

----

|   | · | varying      the rights of existing classes of shares; |
|--------|--------|--------------------------------------------------------|
|   |   |                                                   |
|   | · | voting      rights;                                    |
|   |   |                                                   |
|   | · | our      power to purchase our own shares;             |
|   |   |                                                   |
|   | · | rights      of minority shareholders; and              |
|   |   |                                                   |
|   | · | procedure      on liquidation.                         |
|   |   |                                                   |

|   | · | we      issue domestic ordinary shares and/or H shares, either separately or      concurrently, in numbers not exceeding 20% of the number of domestic      ordinary shares and H shares then in issue, respectively, in any 12-month      period, as approved by a special resolution of the shareholders;      or |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                |
|   | · | if      our plans for issuing domestic ordinary shares and H shares upon its      establishment are implemented within fifteen months of the date of      approval by the China Securities Regulatory Commission.                                                                                                   |
|   |   |                                                                                                                                                                                                                                                                                                                |

----

|   | · | to      relieve a director or supervisor from his or her duty to act honestly in      our best interests;                                                                                                                                                                                                                                                                                                                                                           |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   | · | to      approve the expropriation by a director or supervisor (for his or her own      benefit or for the benefit of another person) of our assets in any way,      including, without limitation, opportunities which may benefit us;      or                                                                                                                                                                                                                      |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   | · | to      approve the expropriation by a director or supervisor (for his or her own      benefit or for the benefit of another person) of the individual rights of      other shareholders, including, without limitation, rights to distributions      and voting rights (save according to a restructuring of our company which      has been submitted for approval by the shareholders in a general meeting      in accordance with our articles of association). |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                |

|   | · | is      in a position to elect more than one-half of the board of      directors;                     |
|--------|--------|-------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                  |
|   | · | has      the power to exercise, or to control the exercise of, 30% or more of our      voting rights; |
|   |   |                                                                                                  |
|   | · | holds      30% or more of our issued and outstanding shares; or                                       |
|   |   |                                                                                                  |
|   | · | has      de facto control of us in any other way.                                                     |
|   |   |                                                                                                  |

|   | · | is      necessary to enable them and the public to appraise the position of us and      our subsidiaries;       |
|--------|--------|-----------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                            |
|   | · | is      necessary to avoid the establishment of a false market in its securities;      and                      |
|   |   |                                                                                                            |
|   | · | might      be reasonably expected materially to affect market activity in and the      price of its securities. |
|   |   |                                                                                                            |

----

|   | · | Shareholders      holding 10 percent or more of the shares of the company are entitled to      petition the court to dissolve the company if (i) the company is in      serious operational difficulties; (ii) its continuing existence will      seriously prejudice the interests of the shareholders; and (iii) such      difficulties cannot be resolved through any othermeans;                                                                                                                                                                                                                                                                                                                                                    |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   | · | Shareholders      holding 1 percent or more of the shares of the company for more than 180      consecutive days are entitled to request the board of supervisors (in      terms of directors and senior management) or the board of directors (in      terms of supervisors) to bring legal proceedings, or bring legal      proceedings in their own name on behalf of the company where it is in      emergency and the company will be subject to irreparable loss if not to do      so, against directors, supervisors or senior management who fail to comply      with the laws and regulations or the company’s articles of association in      the course of performing their duties and cause loss to the      company; |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   | · | Shareholders      who oppose the company’s decision on merger or separation are entitled to      request the company to repurchase their shares; and                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   | · | Shareholders      holding 10 percent or more of the voting rights of the company are      entitled to convene a shareholders’ meeting.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |

----

|   | · | between      a holder of H shares and us;                                                                                                                                                                                                                                                                   |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                        |
|   | · | between      a holder of H shares and any of our directors, supervisors, general      managers, deputy general managers or other senior officers;    or                                                                                                                                                     |
|   |   |                                                                                                                                                                                                                                                                                                        |
|   | · | between      a holder of H shares and a holder of domestic ordinary shares, arising      from any provision of our articles of association, any right or obligation      conferred or imposed by the PRC Company Law or any other relevant law or      administrative regulation which concerns our affairs |
|   |   |                                                                                                                                                                                                                                                                                                        |

----

|   | · | any      relevant transfer fee is paid;                                                                                                                                                                                           |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                              |
|   | · | the      instrument of transfer is only related to H shares listed in Hong      Kong;                                                                                                                                             |
|   |   |                                                                                                                                                                                                                              |
|   | · | the      instrument of transfer is accompanied by the share certificates to which      it relates, or such other evidence is given as may be reasonably necessary      to show the right of the transferor to make the  transfer; |
|   |   |                                                                                                                                                                                                                              |
|   | · | the      stamp duty which is chargeable on the instrument of transfer has already      been paid;                                                                                                                                 |
|   |   |                                                                                                                                                                                                                              |
|   | · | if      it is intended that the shares be transferred to joint owners, the maximum      number of joint owners shall not be more than four (4);  and                                                                              |
|   |   |                                                                                                                                                                                                                              |
|   | · | the      Company does not have any lien on the relevant shares.                                                                                                                                                                   |
|   |   |                                                                                                                                                                                                                              |

----

----

|   | · | an      individual who is a citizen or resident of the United    States;                                                                                                                                                                            |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                |
|   | · | a      corporation created in or organized under the laws of, the United States      or any State or political subdivision thereof;                                                                                                                 |
|   |   |                                                                                                                                                                                                                                                |
|   | · | an      estate the income of which is includible in gross income for United States      federal income tax purposes regardless of its source;                                                                                                       |
|   |   |                                                                                                                                                                                                                                                |
|   | · | a      trust the administration of which is subject to the primary supervision of      a United States court and which has one or more United States persons who      have the authority to control all substantial decisions of the trust;      or |
|   |   |                                                                                                                                                                                                                                                |
|   | · | a      trust that has elected to be treated as a United States person under the      Code.                                                                                                                                                          |

----

----

----

| ITEM 11. |  QUALITATIVE AND QUANTITATIVE      DISCLOSURES ABOUT MARKETRISK |
|----------|----------------------------------------------------------------------|

----

|                                                               |                                                                                                                             |   | Expected      maturity                                   |   |   |   |   |   |   |   |
|--------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|
|                                                               |                                                                                                                             |   | 2008                                                     |   |   | 2009   |   |   | 2010   |   |   | 2011 |   |   | 2012 |   |   | thereafter |   |   | Total |   |   | Fair value |   |
|                                                               |                                                                                                                             |   | (RMB equivalent in millions,      except interest rates) |   |   |   |   |   |   |   |
|                                                               |                                                                                                                             |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Assets                                                             |                                                                                                                             |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                               |                                                                                                                             |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash and cash      equivalents                                     |                                                                                                                             |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|       In United States      dollar   |                                                                                                                             |   | 754                                                      |   |   |   | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 754 |   |   |   | 754 |   |
|       In Hong Kong    dollar         |                                                                                                                             |   | 302                                                      |   |   |   | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 302 |   |   |   | 302 |   |
|            In Japanese yen                |                                                                                                                             |   | 11                                                       |   |   |   | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 11 |   |   |   | 11 |   |
|            In Euro                        |                                                                                                                             |   | 5                                                        |   |   |   | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 5 |   |   |   | 5 |   |
|                                                               |                                                                                                                             |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Liabilities                                                        |                                                                                                                             |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                               |                                                                                                                             |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Debts in United States      dollar                                 |                                                                                                                             |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|       Fixed rate                     |                                                                                                                             |   | 7,960                                                    |   |   |   | 179    |   |   |   | 188 |   |   |   | 125 |   |   |   | 63 |   |   |   | 420 |   |   |   | 8,935 |   |   |   | 8,877 |   |
|       Average interest    rate       |                                                                                                                             |   | 5.2                                                      | %      |   |   | 3.1    | %      |   |   | 2.8 | % |   |   | 2.3 | % |   |   | 2.0 | % |   |   | 2.0 | % |   |   |   |   |   |   |   |   |
|            Variable rate                  |                                                                                                                             |   | 1,518                                                    |   |   |   | 7      |   |   |   | 3 |   |   |   | 3 |   |   |   | 4 |   |   |   | 11 |   |   |   | 1,546 |   |   |   | 1,546 |   |
|     Average interest rate      (1)             |                                                                                                                             |   | 5.0                                                      | %      |   |   | 7.3    | %      |   |   | 7.4 | % |   |   | 7.2 | % |   |   | 7.0 | % |   |   | 6.7 | % |   |   |   |   |   |   |   |   |
|                                                               |                                                                                                                             |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Debts in Japanese      yen                                         |                                                                                                                             |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|            Fixed rate                     |                                                                                                                             |   | 94                                                       |   |   |   | 93     |   |   |   | 92 |   |   |   | 67 |   |   |   | 67 |   |   |   | 689 |   |   |   | 1,102 |   |   |   | 1,206 |   |
|            Average interest    rate       |                                                                                                                             |   | 2.6                                                      | %      |   |   | 2.6    | %      |   |   | 2.6 | % |   |   | 2.6 | % |   |   | 2.6 | % |   |   | 2.6 | % |   |   |   |   |   |   |   |   |
|            Variable rate                  |                                                                                                                             |   | 262                                                      |   |   |   | 255    |   |   |   | 176 |   |   |   | 176 |   |   |   | 176 |   |   |   | - |   |   |   | 1,045 |   |   |   | 1,045 |   |
|            Average interest rate      (1) |                                                                                                                             |   | 2.7                                                      | %      |   |   | 2.8    | %      |   |   | 2.9 | % |   |   | 2.9 | % |   |   | 2.9 | % |   |   | - |   |   |   |   |   |   |   |   |   |
|                                                               |                                                                                                                             |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Debts in Hong Kong      dollar                                     |                                                                                                                             |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|            Fixed rate                     |                                                                                                                             |   | 25                                                       |   |   |   | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 14,106 |   |   |   | 14,131 |   |   |   | 14,131 |   |
|            Average interest    rate       |                                                                                                                             |   | 5.5                                                      | %      |   |   | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 4.2 | % |   |   |   |   |   |   |   |   |
|            Variable rate                  |                                                                                                                             |   | 347                                                      |   |   |   | 375    |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 722 |   |   |   | 722 |   |
|            Average interest rate      (1) |                                                                                                                             |   | 3.9                                                      | %      |   |   | 4.0    | %      |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   |   |   |   |   |   |   |
|                                                               |                                                                                                                             |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Debts in    Euro                                                   |                                                                                                                             |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|            Fixed rate                     |                                                                                                                             |   | 26                                                       |   |   |   | 26     |   |   |   | 26 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 78 |   |   |   | 81 |   |
|            Average interest    rate       |                                                                                                                             |   | 6.7                                                      | %      |   |   | 6.7    | %      |   |   | 6.7 | % |   |   | - |   |   |   | - |   |   |   | - |   |   |   |   |   |   |   |   |   |
|                                                               |                                                                                                                             |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                               |                                                                                                                             |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                               |                                                                                                                             |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| (1)                                                                | The average interest rates for      variable rate loans are calculated based on the rates reported as of      December 31, 2007. |   |

----

|                               |                                                                                                                             |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |       |   |   |   |   |   |       |   |
|------------------------------------|----------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|------------|--------|--------|--------|--------|--------|------------|--------|
|                               |                                                                                                                             |   | Expected      maturity                                   |   |   |   |   |   |   |   |
|                               |                                                                                                                             |   | 2007                                                     |   |   | 2008   |   |   | 2009   |   |   | 2010   |   |   | 2011   |   |   | thereafter |   |   | Total  |   |   | Fair value |   |
|                               |                                                                                                                             |   | (RMB equivalent in millions,      except interest rates) |   |   |   |   |   |   |   |
|                               |                                                                                                                             |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |       |   |   |   |   |   |       |   |
| Assets                             |                                                                                                                             |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |       |   |   |   |   |   |       |
|                               |                                                                                                                             |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |       |   |   |   |   |   |       |   |
| Cash and cash      equivalents     |                                                                                                                             |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |       |   |   |   |   |   |       |
|                               | In United States      dollar                                                                                                     |   |                                                     | 721    |   |   |   | -      |   |   |   | -      |   |   |   | -      |   |       |   | -      |   |   |   | -          |   |   |   | 721 |   |   |   | 721 |   |
|                               | In Hong Kong      dollar                                                                                                         |   |                                                     | 27     |   |   |   | -      |   |   |   | -      |   |   |   | -      |   |       |   | -      |   |   |   | -          |   |   |   | 27 |   |   |   | 27 |   |
|                               | In Japanese    yen                                                                                                               |   |                                                     | 17     |   |   |   | -      |   |   |   | -      |   |   |   | -      |   |       |   | -      |   |   |   | -          |   |   |   | 17 |   |   |   | 17 |   |
|                               | In Euro                                                                                                                          |   |                                                     | 23     |   |   |   | -      |   |   |   | -      |   |   |   | -      |   |       |   | -      |   |   |   | -          |   |   |   | 23 |   |   |   | 23 |   |
|                               |                                                                                                                             |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |       |   |   |   |   |   |       |   |   |   |   |   |   |   |   |   |
| Liabilities                        |                                                                                                                             |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |       |   |   |   |   |   |       |   |   |   |   |   |   |   |   |
|                               |                                                                                                                             |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |       |   |   |   |   |   |       |   |   |   |   |   |   |   |   |   |
| Debts in United States      dollar |                                                                                                                             |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |       |   |   |   |   |   |       |   |   |   |   |   |   |   |   |
|                               | Fixed rate                                                                                                                       |   |                                                     | 7,837  |   |   |   | 220    |   |   |   | 196    |   |   |   | 195    |   |       |   | 113    |   |   |   | 519        |   |   |   | 9,080 |   |   |   | 8,963 |   |
|                               | Average interest      rate                                                                                                       |   |                                                     | 5.6    | %      |   |   | 3.3    | %      |   |   | 3.1    | %      |   |   | 2.7    | %      |       |   | 2.2    | %      |   |   | 2.0        | %      |   |   |   |   |   |   |   |   |
|                               | Variable    rate                                                                                                                 |   |                                                     | 3,596  |   |   |   | 13     |   |   |   | 9      |   |   |   | 3      |   |       |   | 3      |   |   |   | 15         |   |   |   | 3,639 |   |   |   | 3,639 |   |
|                               | Average interest rate      (1)                                                                                                   |   |                                                     | 5.9    | %      |   |   | 6.7    | %      |   |   | 7.2    | %      |   |   | 7.7    | %      |       |   | 7.6    | %      |   |   | 7.5        | %      |   |   |   |   |   |   |   |   |
|                               |                                                                                                                             |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |       |   |   |   |   |   |       |   |   |   |   |   |   |   |   |   |
| Debts in Japanese      yen         |                                                                                                                             |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |       |   |   |   |   |   |       |   |   |   |   |   |   |   |   |
|                               | Fixed rate                                                                                                                       |   |                                                     | 165    |   |   |   | 95     |   |   |   | 95     |   |   |   | 95     |   |       |   | 68     |   |   |   | 775        |   |   |   | 1,293 |   |   |   | 1,478 |   |
|                               | Average interest      rate                                                                                                       |   |                                                     | 2.8    | %      |   |   | 2.6    | %      |   |   | 2.6    | %      |   |   | 2.6    | %      |       |   | 2.6    | %      |   |   | 2.6        | %      |   |   |   |   |   |   |   |   |
|                               | Variable    rate                                                                                                                 |   |                                                     | 361    |   |   |   | 260    |   |   |   | 256    |   |   |   | 180    |   |       |   | 180    |   |   |   | 183        |   |   |   | 1,420 |   |   |   | 1,420 |   |
|                               | Average interest rate      (1)                                                                                                   |   |                                                     | 3.2    | %      |   |   | 3.2    | %      |   |   | 3.1    | %      |   |   | 3.0    | %      |       |   | 3.0    | %      |   |   | 3.0        | %      |   |   |   |   |   |   |   |   |
|                               |                                                                                                                             |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |       |   |   |   |   |   |       |   |   |   |   |   |   |   |   |   |
| Debts in Hong Kong      dollar     |                                                                                                                             |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |       |   |   |   |   |   |       |   |   |   |   |   |   |   |   |
|                               | Fixed rate                                                                                                                       |   |                                                     | 50     |   |   |   | -      |   |   |   | -      |   |   |   | -      |   |       |   | -      |   |   |   | -          |   |   |   | 50 |   |   |   | 50 |   |
|                               | Average interest      rate                                                                                                       |   |                                                     | 4.7    | %      |   |   | -      |   |   |   | -      |   |   |   | -      |   |       |   | -      |   |   |   | -          |   |   |   |   |   |   |   |   |   |
|                               | Variable    rate                                                                                                                 |   |                                                     | 8,213  |   |   |   | -      |   |   |   | -      |   |   |   | -      |   |       |   | -      |   |   |   | -          |   |   |   | 8,213 |   |   |   | 8,213 |   |
|                               | Average interest rate      (1)                                                                                                   |   |                                                     | 4.5    | %      |   |   | -      |   |   |   | -      |   |   |   | -      |   |       |   | -      |   |   |   | -          |   |   |   |   |   |   |   |   |   |
|                               |                                                                                                                             |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |       |   |   |   |   |   |       |   |   |   |   |   |   |   |   |   |
| Debts in    Euro                   |                                                                                                                             |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |       |   |   |   |   |   |       |   |   |   |   |   |   |   |   |
|                               | Fixed rate                                                                                                                       |   |                                                     | 25     |   |   |   | 25     |   |   |   | 25     |   |   |   | 26     |   |       |   | -      |   |   |   | -          |   |   |   | 101 |   |   |   | 106 |   |
|                               | Average interest      rate                                                                                                       |   |                                                     | 6.7    | %      |   |   | 6.7    | %      |   |   | 6.7    | %      |   |   | 6.7    | %      |       |   | -      |   |   |   | -          |   |   |   |   |   |   |   |   |   |
|                               |                                                                                                                             |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |       |   |   |   |   |   |       |   |   |   |   |   |   |   |   |   |
|                               |                                                                                                                             |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |       |   |   |   |   |   |       |   |   |   |   |   |   |   |   |   |
|                               |                                                                                                                             |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |       |   |   |   |   |   |       |   |   |   |   |   |   |   |   |   |
| (1)                                | The average interest rates for      variable rate loans are calculated based on the rates reported as of      December 31, 2006. |   |

----

|                                           |                                                                                                                                                                                                                                                                  |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |       |   |   |   |   |   |       |   |   |   |
|------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|------------|--------|--------|--------|--------|--------|------------|--------|--------|--------|
|                                           |                                                                                                                                                                                                                                                                  |   | Expected      maturity                                   |   |   |   |   |   |   |   |   |   |
|                                           |                                                                                                                                                                                                                                                                  |   | 2008                                                     |   |   | 2009   |   |   | 2010   |   |   | 2011   |   |   | 2012   |   |   | thereafter |   |   | Total  |   |   | Fair value |   |   |   |
|                                           |                                                                                                                                                                                                                                                                  |   | (RMB equivalent in millions,      except interest rates) |   |   |   |   |   |   |   |   |   |
|                                           |                                                                                                                                                                                                                                                                  |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |       |   |   |   |   |   |       |   |   |   |
| Assets                                         |                                                                                                                                                                                                                                                                  |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |       |   |   |   |   |   |       |   |   |
|                                           |                                                                                                                                                                                                                                                                  |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |       |   |   |   |   |   |       |   |   |   |
| Cash and cash      equivalents                 |                                                                                                                                                                                                                                                                  |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |       |   |   |   |   |   |       |   |   |
|                                           | In Renminbi                                                                                                                                                                                                                                                           |   |                                                     | 6,624  |   |   |   | -      |   |   |   | -      |   |   |   | -      |   |       |   | -      |   |   |   | -          |   |   |   | 6,624 |   |   |   | 6,624 |   |   |   |
|                                           | In United States      dollar                                                                                                                                                                                                                                          |   |                                                     | 754    |   |   |   | -      |   |   |   | -      |   |   |   | -      |   |       |   | -      |   |   |   | -          |   |   |   | 754 |   |   |   | 754 |   |   |   |
|                                           | In Hong Kong      dollar                                                                                                                                                                                                                                              |   |                                                     | 302    |   |   |   | -      |   |   |   | -      |   |   |   | -      |   |       |   | -      |   |   |   | -          |   |   |   | 302 |   |   |   | 302 |   |   |   |
|                                           | In Japanese    yen                                                                                                                                                                                                                                                    |   |                                                     | 11     |   |   |   | -      |   |   |   | -      |   |   |   | -      |   |       |   | -      |   |   |   | -          |   |   |   | 11 |   |   |   | 11 |   |   |   |
|                                           | In Euro                                                                                                                                                                                                                                                               |   |                                                     | 5      |   |   |   | -      |   |   |   | -      |   |   |   | -      |   |       |   | -      |   |   |   | -          |   |   |   | 5 |   |   |   | 5 |   |   |   |
|                                           |                                                                                                                                                                                                                                                                  |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |       |   |   |   |   |   |       |   |   |   |   |   |   |   |   |   |   |   |
| Time deposits with financial      institutions |                                                                                                                                                                                                                                                                  |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |       |   |   |   |   |   |       |   |   |   |
|                                           | In Renminbi                                                                                                                                                                                                                                                           |   |                                                     | 668    |   |   |   | -      |   |   |   | -      |   |   |   | -      |   |       |   | -      |   |   |   | -          |   |   |   | 668 |   |   |   | 668 |   |   |   |
|                                           |                                                                                                                                                                                                                                                                  |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |       |   |   |   |   |   |       |   |   |   |   |   |   |   |   |   |   |   |
| Liabilities                                    |                                                                                                                                                                                                                                                                  |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |       |   |   |   |   |   |       |   |   |   |   |   |   |   |   |   |   |
|                                           |                                                                                                                                                                                                                                                                  |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |       |   |   |   |   |   |       |   |   |   |   |   |   |   |   |   |   |   |
| Debts in      Renminbi                         |                                                                                                                                                                                                                                                                  |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |       |   |   |   |   |   |       |   |   |   |   |   |   |   |   |   |   |
|                                           | Fixed rate                                                                                                                                                                                                                                                            |   |                                                     | 49,399 |   |   |   | 7,554  |   |   |   | 3,661  |   |   |   | 82     |   |       |   | 8,580  |   |   |   | 55,915     |   |   |   | 125,191 |   |   |   | 124,322 |  (1) |   |   |
|                                           | Average interest      rate                                                                                                                                                                                                                                            |   |                                                     | 5.4    | %      |   |   | 5.2    | %      |   |   | 5.0    | %      |   |   | 4.9    | %      |       |   | 4.9    | %      |   |   | 0.4        | %      |   |   |   |   |   |   |   |   |   |   |
|                                           | Variable    rate                                                                                                                                                                                                                                                      |   |                                                     | 863    |   |   |   | 11,115 |   |   |   | 7,201  |   |   |   | 4,001  |   |       |   | 2,101  |   |   |   | 2,777      |   |   |   | 28,058 |   |   |   | 28,058 |   |   |   |
|                                           | Average interest rate      (2)                                                                                                                                                                                                                                        |   |                                                     | 6.5    | %      |   |   | 6.5    | %      |   |   | 6.8    | %      |   |   | 6.9    | %      |       |   | 7.0    | %      |   |   | 7.0        | %      |   |   |   |   |   |   |   |   |   |   |
|                                           |                                                                                                                                                                                                                                                                  |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |       |   |   |   |   |   |       |   |   |   |   |   |   |   |   |   |   |   |
| Debts in United States      dollar             |                                                                                                                                                                                                                                                                  |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |       |   |   |   |   |   |       |   |   |   |   |   |   |   |   |   |   |
|                                           | Fixed rate                                                                                                                                                                                                                                                            |   |                                                     | 7,960  |   |   |   | 179    |   |   |   | 188    |   |   |   | 125    |   |       |   | 63     |   |   |   | 420        |   |   |   | 8,935 |   |   |   | 8,877 |   |   |   |
|                                           | Average interest      rate                                                                                                                                                                                                                                            |   |                                                     | 5.2    | %      |   |   | 3.1    | %      |   |   | 2.8    | %      |   |   | 2.3    | %      |       |   | 2.0    | %      |   |   | 2.0        | %      |   |   |   |   |   |   |   |   |   |   |
|                                           | Variable    rate                                                                                                                                                                                                                                                      |   |                                                     | 1,518  |   |   |   | 7      |   |   |   | 3      |   |   |   | 3      |   |       |   | 4      |   |   |   | 11         |   |   |   | 1,546 |   |   |   | 1,546 |   |   |   |
|                                           | Average interest rate      (2)                                                                                                                                                                                                                                        |   |                                                     | 5.0    | %      |   |   | 7.3    | %      |   |   | 7.4    | %      |   |   | 7.2    | %      |       |   | 7.0    | %      |   |   | 6.7        | %      |   |   |   |   |   |   |   |   |   |   |
|                                           |                                                                                                                                                                                                                                                                  |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |       |   |   |   |   |   |       |   |   |   |   |   |   |   |   |   |   |   |
| Debts in Japanese      yen                     |                                                                                                                                                                                                                                                                  |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |       |   |   |   |   |   |       |   |   |   |   |   |   |   |   |   |   |
|                                           | Fixed rate                                                                                                                                                                                                                                                            |   |                                                     | 94     |   |   |   | 93     |   |   |   | 92     |   |   |   | 67     |   |       |   | 67     |   |   |   | 689        |   |   |   | 1,102 |   |   |   | 1,206 |   |   |   |
|                                           | Average interest      rate                                                                                                                                                                                                                                            |   |                                                     | 2.6    | %      |   |   | 2.6    | %      |   |   | 2.6    | %      |   |   | 2.6    | %      |       |   | 2.6    | %      |   |   | 2.6        | %      |   |   |   |   |   |   |   |   |   |   |
|                                           | Variable    rate                                                                                                                                                                                                                                                      |   |                                                     | 262    |   |   |   | 255    |   |   |   | 176    |   |   |   | 176    |   |       |   | 176    |   |   |   | -          |   |   |   | 1,045 |   |   |   | 1,045 |   |   |   |
|                                           | Average interest rate      (2)                                                                                                                                                                                                                                        |   |                                                     | 2.7    | %      |   |   | 2.8    | %      |   |   | 2.9    | %      |   |   | 2.9    | %      |       |   | 2.9    | %      |   |   | -          |   |   |   |   |   |   |   |   |   |   |   |
|                                           |                                                                                                                                                                                                                                                                  |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |       |   |   |   |   |   |       |   |   |   |   |   |   |   |   |   |   |   |
| Debts in Hong Kong      dollar                 |                                                                                                                                                                                                                                                                  |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |       |   |   |   |   |   |       |   |   |   |   |   |   |   |   |   |   |
|                                           | Fixed rate                                                                                                                                                                                                                                                            |   |                                                     | 25     |   |   |   | -      |   |   |   | -      |   |   |   | -      |   |       |   | -      |   |   |   | 14,106     |   |   |   | 14,131 |   |   |   | 14,131 |   |   |   |
|                                           | Average interest      rate                                                                                                                                                                                                                                            |   |                                                     | 5.5    | %      |   |   | -      |   |   |   | -      |   |   |   | -      |   |       |   | -      |   |   |   | 4.2        | %      |   |   |   |   |   |   |   |   |   |   |
|                                           | Variable    rate                                                                                                                                                                                                                                                      |   |                                                     | 347    |   |   |   | 375    |   |   |   | -      |   |   |   | -      |   |       |   | -      |   |   |   | -          |   |   |   | 722 |   |   |   | 722 |   |   |   |
|                                           | Average interest rate      (2)                                                                                                                                                                                                                                        |   |                                                     | 3.9    | %      |   |   | 4.0    | %      |   |   |   |   |   |   |   |   |       |   |   |   |   |   |       |   |   |   |   |   |   |   |   |   |   |   |
|                                           |                                                                                                                                                                                                                                                                  |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |       |   |   |   |   |   |       |   |   |   |   |   |   |   |   |   |   |   |
| Debts in    Euro                               |                                                                                                                                                                                                                                                                  |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |       |   |   |   |   |   |       |   |   |   |   |   |   |   |   |   |   |
|                                           | Fixed rate                                                                                                                                                                                                                                                            |   |                                                     | 26     |   |   |   | 26     |   |   |   | 26     |   |   |   | -      |   |       |   | -      |   |   |   | -          |   |   |   | 78 |   |   |   | 81 |   |   |   |
|                                           | Average interest      rate                                                                                                                                                                                                                                            |   |                                                     | 6.7    | %      |   |   | 6.7    | %      |   |   | 6.7    | %      |   |   | -      |   |       |   | -      |   |   |   | -          |   |   |   |   |   |   |   |   |   |   |   |
|                                           |                                                                                                                                                                                                                                                                  |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |       |   |   |   |   |   |       |   |   |   |   |   |   |   |   |   |   |   |
|                                           |                                                                                                                                                                                                                                                                  |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |       |   |   |   |   |   |       |   |   |   |   |   |   |   |   |   |   |   |
|                                           |                                                                                                                                                                                                                                                                  |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |       |   |   |   |   |   |       |   |   |   |   |   |   |   |   |   |   |   |
| (1)                                            | Carrying amounts are used for      loans from Sinopec Group Company and its affiliates as it is not      practicable to estimate their fair values because the cost of obtaining      discount and borrowing rates for comparable borrowings would be      excessive. |
|                                           |                                                                                                                                                                                                                                                                  |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |       |   |   |   |   |   |       |   |   |   |   |   |   |   |   |   |   |   |
| (2)                                            | The average interest rates for      variable rate loans are calculated based on the rates reported as of      December 31, 2007.                                                                                                                                      |

----

|                                           |                                                                                                                                                                                                                                                                  |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |       |   |   |   |   |   |       |   |   |   |    |
|------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|------------|--------|--------|--------|--------|--------|------------|--------|--------|--------|---------|
|                                           |                                                                                                                                                                                                                                                                  |   | Expected      maturity                                   |   |   |   |   |   |   |   |   |   |   |
|                                           |                                                                                                                                                                                                                                                                  |   | 2007                                                     |   |   | 2008   |   |   | 2009   |   |   | 2010   |   |   | 2011   |   |   | thereafter |   |   | Total  |   |   | Fair value |   |   |   |    |
|                                           |                                                                                                                                                                                                                                                                  |   | (RMB equivalent in millions,      except interest rates) |   |   |   |   |   |   |   |   |   |   |
|                                           |                                                                                                                                                                                                                                                                  |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |       |   |   |   |   |   |       |   |   |   |    |
| Assets                                         |                                                                                                                                                                                                                                                                  |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |       |   |   |   |   |   |       |   |   |   |
|                                           |                                                                                                                                                                                                                                                                  |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |       |   |   |   |   |   |       |   |   |   |    |
| Cash and cash      equivalents                 |                                                                                                                                                                                                                                                                  |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |       |   |   |   |   |   |       |   |   |   |
|                                           | In Renminbi                                                                                                                                                                                                                                                           |   |                                                     | 6,275  |   |   |   | -      |   |   |   | -      |   |   |   | -      |   |       |   | -      |   |   |   | -          |   |   |   | 6,275   |   |   |   | 6,275 |   |   |   |   |
|                                           | In United States      dollar                                                                                                                                                                                                                                          |   |                                                     | 721    |   |   |   | -      |   |   |   | -      |   |   |   | -      |   |       |   | -      |   |   |   | -          |   |   |   | 721     |   |   |   | 721 |   |   |   |   |
|                                           | In Hong Kong      dollar                                                                                                                                                                                                                                              |   |                                                     | 27     |   |   |   | -      |   |   |   | -      |   |   |   | -      |   |       |   | -      |   |   |   | -          |   |   |   | 27      |   |   |   | 27 |   |   |   |   |
|                                           | In Japanese    yen                                                                                                                                                                                                                                                    |   |                                                     | 17     |   |   |   | -      |   |   |   | -      |   |   |   | -      |   |       |   | -      |   |   |   | -          |   |   |   | 17      |   |   |   | 17 |   |   |   |   |
|                                           | In Euro                                                                                                                                                                                                                                                               |   |                                                     | 23     |   |   |   | -      |   |   |   | -      |   |   |   | -      |   |       |   | -      |   |   |   | -          |   |   |   | 23      |   |   |   | 23 |   |   |   |   |
|                                           |                                                                                                                                                                                                                                                                  |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |       |   |   |   |   |   |       |   |   |   |    |   |   |   |   |   |   |   |   |
| Time deposits with financial      institutions |                                                                                                                                                                                                                                                                  |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |       |   |   |   |   |   |       |   |   |   |    |
|                                           | In Renminbi                                                                                                                                                                                                                                                           |   |                                                     | 635    |   |   |   | -      |   |   |   | -      |   |   |   | -      |   |       |   | -      |   |   |   | -          |   |   |   | 635     |   |   |   | 635 |   |   |   |   |
|                                           |                                                                                                                                                                                                                                                                  |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |       |   |   |   |   |   |       |   |   |   |    |   |   |   |   |   |   |   |   |
| Liabilities                                    |                                                                                                                                                                                                                                                                  |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |       |   |   |   |   |   |       |   |   |   |    |   |   |   |   |   |   |   |
|                                           |                                                                                                                                                                                                                                                                  |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |       |   |   |   |   |   |       |   |   |   |    |   |   |   |   |   |   |   |   |
| Debts in      Renminbi                         |                                                                                                                                                                                                                                                                  |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |       |   |   |   |   |   |       |   |   |   |    |   |   |   |   |   |   |   |
|                                           | Fixed rate                                                                                                                                                                                                                                                            |   |                                                     | 41,807 |   |   |   | 24,030 |   |   |   | 7,930  |   |   |   | 2,351  |   |       |   | 132    |   |   |   | 39,547     |   |   |   | 115,797 |   |   |   | 115,374 |  (1) |   |   |  |   |
|                                           | Average interest      rate                                                                                                                                                                                                                                            |   |                                                     | 4.7    | %      |   |   | 5.2    | %      |   |   | 5.0    | %      |   |   | 4.7    | %      |       |   | 4.5    | %      |   |   | 0.4        | %      |   |   |    |   |   |   |   |   |   |   |   |   |
|                                           | Variable    rate                                                                                                                                                                                                                                                      |   |                                                     | 1,428  |   |   |   | 1,103  |   |   |   | 10,716 |   |   |   | 7,130  |   |       |   | 3,930  |   |   |   | 217        |   |   |   | 24,524  |   |   |   | 24,524 |   |   |   |   |   |
|                                           | Average interest rate      (2)                                                                                                                                                                                                                                        |   |                                                     | 5.5    | %      |   |   | 5.5    | %      |   |   | 5.5    | %      |   |   | 5.8    | %      |       |   | 5.9    | %      |   |   | 5.9        | %      |   |   |    |   |   |   |   |   |   |   |   |   |
|                                           |                                                                                                                                                                                                                                                                  |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |       |   |   |   |   |   |       |   |   |   |    |   |   |   |   |   |   |   |   |   |
| Debts in United States      dollar             |                                                                                                                                                                                                                                                                  |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |       |   |   |   |   |   |       |   |   |   |    |   |   |   |   |   |   |   |   |
|                                           | Fixed rate                                                                                                                                                                                                                                                            |   |                                                     | 7,837  |   |   |   | 220    |   |   |   | 196    |   |   |   | 195    |   |       |   | 113    |   |   |   | 519        |   |   |   | 9,080   |   |   |   | 8,963 |   |   |   |   |   |
|                                           | Average interest      rate                                                                                                                                                                                                                                            |   |                                                     | 5.6    | %      |   |   | 3.3    | %      |   |   | 3.1    | %      |   |   | 2.7    | %      |       |   | 2.2    | %      |   |   | 2.0        | %      |   |   |    |   |   |   |   |   |   |   |   |   |
|                                           | Variable    rate                                                                                                                                                                                                                                                      |   |                                                     | 3,596  |   |   |   | 13     |   |   |   | 9      |   |   |   | 3      |   |       |   | 3      |   |   |   | 15         |   |   |   | 3,639   |   |   |   | 3,639 |   |   |   |   |   |
|                                           | Average interest rate      (2)                                                                                                                                                                                                                                        |   |                                                     | 5.9    | %      |   |   | 6.7    | %      |   |   | 7.2    | %      |   |   | 7.7    | %      |       |   | 7.6    | %      |   |   | 7.5        | %      |   |   |    |   |   |   |   |   |   |   |   |   |
|                                           |                                                                                                                                                                                                                                                                  |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |       |   |   |   |   |   |       |   |   |   |    |   |   |   |   |   |   |   |   |   |
| Debts in Japanese      yen                     |                                                                                                                                                                                                                                                                  |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |       |   |   |   |   |   |       |   |   |   |    |   |   |   |   |   |   |   |   |
|                                           | Fixed rate                                                                                                                                                                                                                                                            |   |                                                     | 165    |   |   |   | 95     |   |   |   | 95     |   |   |   | 95     |   |       |   | 68     |   |   |   | 775        |   |   |   | 1,293   |   |   |   | 1,478 |   |   |   |   |   |
|                                           | Average interest      rate                                                                                                                                                                                                                                            |   |                                                     | 2.8    | %      |   |   | 2.6    | %      |   |   | 2.6    | %      |   |   | 2.6    | %      |       |   | 2.6    | %      |   |   | 2.6        | %      |   |   |    |   |   |   |   |   |   |   |   |   |
|                                           | Variable    rate                                                                                                                                                                                                                                                      |   |                                                     | 361    |   |   |   | 260    |   |   |   | 256    |   |   |   | 180    |   |       |   | 180    |   |   |   | 183        |   |   |   | 1,420   |   |   |   | 1,420 |   |   |   |   |   |
|                                           | Average interest rate      (2)                                                                                                                                                                                                                                        |   |                                                     | 3.2    | %      |   |   | 3.2    | %      |   |   | 3.1    | %      |   |   | 3.0    | %      |       |   | 3.0    | %      |   |   | 3.0        | %      |   |   |    |   |   |   |   |   |   |   |   |   |
|                                           |                                                                                                                                                                                                                                                                  |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |       |   |   |   |   |   |       |   |   |   |    |   |   |   |   |   |   |   |   |   |
| Debts in Hong Kong      dollar                 |                                                                                                                                                                                                                                                                  |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |       |   |   |   |   |   |       |   |   |   |    |   |   |   |   |   |   |   |   |
|                                           | Fixed rate                                                                                                                                                                                                                                                            |   |                                                     | 50     |   |   |   | -      |   |   |   | -      |   |   |   | -      |   |       |   | -      |   |   |   | -          |   |   |   | 50      |   |   |   | 50 |   |   |   |   |   |
|                                           | Average interest      rate                                                                                                                                                                                                                                            |   |                                                     | 4.7    | %      |   |   | -      |   |   |   | -      |   |   |   | -      |   |       |   | -      |   |   |   | -          |   |   |   |    |   |   |   |   |   |   |   |   |   |
|                                           | Variable    rate                                                                                                                                                                                                                                                      |   |                                                     | 8,213  |   |   |   | -      |   |   |   | -      |   |   |   | -      |   |       |   | -      |   |   |   | -          |   |   |   | 8,213   |   |   |   | 8,213 |   |   |   |   |   |
|                                           | Average interest rate      (2)                                                                                                                                                                                                                                        |   |                                                     | 4.5    | %      |   |   | -      |   |   |   | -      |   |   |   | -      |   |       |   | -      |   |   |   | -          |   |   |   |    |   |   |   |   |   |   |   |   |   |
|                                           |                                                                                                                                                                                                                                                                  |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |       |   |   |   |   |   |       |   |   |   |    |   |   |   |   |   |   |   |   |   |
| Debts in    Euro                               |                                                                                                                                                                                                                                                                  |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |       |   |   |   |   |   |       |   |   |   |    |   |   |   |   |   |   |   |   |
|                                           | Fixed rate                                                                                                                                                                                                                                                            |   |                                                     | 25     |   |   |   | 25     |   |   |   | 25     |   |   |   | 26     |   |       |   | -      |   |   |   | -          |   |   |   | 101     |   |   |   | 106 |   |   |   |   |   |
|                                           | Average interest      rate                                                                                                                                                                                                                                            |   |                                                     | 6.7    | %      |   |   | 6.7    | %      |   |   | 6.7    | %      |   |   | 6.7    | %      |       |   | -      |   |   |   | -          |   |   |   |    |   |   |   |   |   |   |   |   |   |
|                                           |                                                                                                                                                                                                                                                                  |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |       |   |   |   |   |   |       |   |   |   |    |   |   |   |   |   |   |   |   |   |
|                                           |                                                                                                                                                                                                                                                                  |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |       |   |   |   |   |   |       |   |   |   |    |   |   |   |   |   |   |   |   |   |
|                                           |                                                                                                                                                                                                                                                                  |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |       |   |   |   |   |   |       |   |   |   |    |   |   |   |   |   |   |   |   |   |
| (1)                                            | Carrying amounts are used for      loans from Sinopec Group Company and its affiliates as it is not      practicable to estimate their fair values because the cost of obtaining      discount and borrowing rates for comparable borrowings would be      excessive. |   |
|                                           |                                                                                                                                                                                                                                                                  |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |       |   |   |   |   |   |       |   |   |   |    |   |   |   |   |   |   |   |   |   |
| (2)                                            | The average interest rates for      variable rate loans are calculated based on the rates reported as of      December 31, 2006.                                                                                                                                      |   |

----

| ITEM 12. | DESCRIPTION      OF SECURITIES OTHER THAN EQUITYSECURITIES |
|----------|------------------------------------------------------------|

| ITEM 13. | DEFAULTS,      DIVIDEND ARREARAGES ANDDELINQUENCIES |
|----------|-----------------------------------------------------|

| ITEM 14. | MATERIAL      MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF      PROCEEDS |
|----------|----------------------------------------------------------------------------------------|

| ITEM 15. | CONTROLS      AND PROCEDURES |
|----------|------------------------------|

----

----

| ITEM 16. | RESERVED |
|----------|----------|

| ITEM 16A. | AUDIT      COMMITTEE FINANCIAL EXPERT |
|-----------|---------------------------------------|

| ITEM 16B. | CODE      OF ETHICS |
|-----------|---------------------|

|        ITEM 16C. | PRINCIPAL      ACCOUNTANT FEES AND SERVICES |
|-----------------------|---------------------------------------------|

|   | Audit      Fees          |   | Audit-Related      Fees |    |   | Tax      Fees |   |    | Other      Fees |   |
|--------|--------------------------|--------|-------------------------|---------|--------|---------------|--------|---------|-----------------|--------|
| 2006   | RMB      82 million |   |                    | — |   |          |   | — |            |   |   | — |   |
| 2007   | RMB      85 million      |   |                    | — |   |          |   | — |            |   |   | — |   |

| ITEM 16D. | EXEMPTIONS      FROM THE LISTING STANDARDS FOR AUDITCOMMITTEES |
|-----------|----------------------------------------------------------------|

| ITEM 16E. | PURCHASERS      OF EQUITY SECURITIES BY THE      ISSUER AND AFFILIATED PURCHASERS |
|-----------|----------------------------------------------------------------------------------------|

| ITEM 17. | FINANCIAL      STATEMENTS |
|----------|---------------------------|

| ITEM 18. | FINANCIAL      STATEMENTS |
|----------|---------------------------|

----

| ITEM 19. | EXHIBITS |
|----------|----------|

| 1      ** | Articles      of Association of the Registrant, amended and adopted by the shareholders'      meeting on May 24, 2006 (English translation), incorporated by reference      to Exhibit 1 to our Annual Report on Form 20-F filed with the Securities      and Exchange Commission on April 13, 2007 (File Number:      001-15138). |
|-----------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.1** | Forms      of Director Service Contracts dated May 24, 2006 (English translation)      incorporated by reference to Exhibit 4.1 to our Annual Report on Form 20-F      filed with the Securities and Exchange Commission on April 13,      2007 (File Number: 001-15138). |
|-------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.2** | Forms      of Supervisor Service Contracts dated May 24, 2006 (English translation)      incorporated by reference to Exhibit 4.2 to our Annual Report on Form      20-F filed with the Securities and Exchange Commission on April 13,      2007 (File Number: 001-15138). |
|-------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.3** | Reorganization      Agreement between China Petrochemical Corporation and China Petroleum      & Chemical Corporation dated June 3, 2000 (including English      translation), incorporated by reference to Exhibit 10.1 to our      Registration Statement on Form F-1 filed with the Securities and Exchange      Commission on October 10, 2000 (File Number:  333-12502). |
|-------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.4** | Agreement      for Mutual Provision of Products and Ancillary Services between China      Petrochemical Corporation and China Petroleum & Chemical Corporation      dated June 3, 2000 (including English translation), incorporated by      reference to Exhibit 10.3 to our Registration Statement on Form F-1 filed      with the Securities and Exchange Commission on October 10, 2000 (File      Number: 333-12502). |
|-------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.5** | Agreement      for Provision of Cultural, Educational, Hygiene and Community Services      between China Petrochemical Corporation and China Petroleum & Chemical      Corporation dated June 3, 2000 (including English translation),      incorporated by reference to Exhibit 10.4 to our Registration Statement on      Form F-1 filed with the Securities and Exchange Commission on October 10,      2000 (File Number: 333-12502). |
|-------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.6** | Trademark      License Agreement between China Petrochemical Corporation and China      Petroleum & Chemical Corporation dated June 3, 2000 (including English      translation), incorporated by reference to Exhibit 10.6 to our      Registration Statement on Form F-1 filed with the Securities and Exchange      Commission on October 10, 2000 (File Number:  333-12502). |
|-------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.7** | Patents      and Proprietary Technology License Contract between China Petrochemical      Corporation and China Petroleum & Chemical Corporation dated June 3,      2000 (including English translation), incorporated by reference to Exhibit      10.7 to our Registration Statement on Form F-1 filed with the Securities      and Exchange Commission on October 10, 2000 (File Number:      333-12502). |
|-------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.8** | Computer      Software License Contract between China Petrochemical Corporation and      China Petroleum & Chemical Corporation dated June 3, 2000 (including      English translation), incorporated by reference to Exhibit 10.8 to our      Registration Statement on Form F-1 filed with the Securities and Exchange      Commission on October 10, 2000 (File Number:  333-12502). |
|-------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.9** | Assets      Swap Contract between China Petrochemical Corporation and China Petroleum      & Chemical Corporation dated June 3, 2000 (including English      translation), incorporated by reference to Exhibit 10.9 to our      Registration Statement on Form F-1 filed with the Securities and Exchange      Commission on October 10, 2000 (File Number:  333-12502). |
|-------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.10** | Land      Use Rights Leasing Contract between China Petrochemical Corporation and      China Petroleum & Chemical Corporation dated June 3, 2000 (including      English translation), incorporated by reference to Exhibit 10.10 to our      Registration Statement on Form F-1 filed with the Securities and Exchange      Commission on October 10, 2000 (File Number:  333-12502). |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.12** | Property      Leasing Contract between China Petrochemical Corporation and China      Petroleum & Chemical Corporation dated June 3, 2000 (including English      translation), incorporated by reference to Exhibit 10.11 to our      Registration Statement on Form F-1 filed with the Securities and Exchange      Commission on October 10, 2000 (File Number:  333-12502). |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.13** | Accounts      Collectable Contract between China Petrochemical Corporation and China      Petroleum & Chemical Corporation dated August 16, 2000 (including      English translation), incorporated by reference to Exhibit 10.17 to our      Registration Statement on Form F-1 filed with the Securities and Exchange      Commission on October 10, 2000 (File Number:  333-12502). |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| 4.14** | Loan      Transfer and Adjustment Contract between China Petrochemical Corporation      and China Petroleum & Chemical Corporation dated August 16, 2000      (including English translation), incorporated by reference to Exhibit      10.18 to our Registration Statement on Form F-1 filed with the Securities      and Exchange Commission on October 10, 2000 (File Number:      333-12502). |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.15**    | Agreement      on Adjustment to Related Party Transactions between China Petrochemical      Corporation and China Petroleum & Chemical Corporation dated June 11,      2001 (English translation) incorporated by reference to Exhibit 4.15 to      our Annual Report on Form 20-F filed with the Securities and Exchange      Commission on April 13, 2007 (File Number:  001-15138). |
|--------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.16** | Land      Use Right Leasing Agreement between China Petrochemical Corporation and      China Petroleum & Chemical Corporation dated August 22, 2003 (English      translation) incorporated by reference to Exhibit 4.16 to our Annual      Report on Form 20-F filed with the Securities and Exchange Commission      on April 13, 2007 (File Number:001-15138). |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.17** | 2004      Agreement on Adjustment to Related Party Transactions between China      Petrochemical Corporation and China Petroleum & Chemical Corporation      dated October 31, 2004 (English translation) incorporated by reference to      Exhibit 4.17 to our Annual Report on Form 20-F filed with the Securities      and Exchange Commission on April 13, 2007 (File Number:      001-15138). |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.18** | Memorandum      on Adjustment of Rent of Land Use Rights between China Petrochemical      Corporation and China Petroleum & Chemical Corporation dated March 31,      2006 (English translation) incorporated by reference to Exhibit 4.18      to our Annual Report on Form 20-F filed with the Securities      and Exchange Commission on April 13, 2007 (File Number:      001-15138). |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.19** | Supplemental      Agreement on  Related Party Transactions between China      Petrochemical Corporation and China Petroleum & Chemical Corporation      dated March 31, 2006 (English translation) incorporated by reference      to Exhibit 4.19 to our Annual Report on Form 20-F filed with the      Securities and Exchange Commission on April 13, 2007 (File      Number: 001-15138). |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 8* | A      list of the Registrant'ssubsidiaries. |
|----|----------------------------------------------|

| 12.1* | Certification      of Chairman pursuant to Rule13a-14(a). |
|-------|-----------------------------------------------------------|

| 12.2* | Certification      of President pursuant to Rule13a-14(a). |
|-------|------------------------------------------------------------|

| 12.3* | Certification      of CFO pursuant to Rule 13a-14(a). |
|-------|-------------------------------------------------------|

| 13* | Certification      of CEO and CFO pursuant to 18 U.S.C. §1350, and Rule      13a-14(b). |
|-----|----------------------------------------------------------------------------------------------|

----

|                                                                                                 | Page             |
|------------------------------------------------------------------------------------------------------|------------------|
|                                                                                                 |             |
| Report      of independent registered public accounting firm                                         | F-2              |
|                                                                                                 |             |
|                                                                                                 |             |
| Consolidated      statements of income for the years ended December 31, 2005, 2006 and      2007     | F-3              |
|                                                                                                 |             |
|                                                                                                 |             |
| Consolidated      balance sheets as of December 31, 2006 and 2007                                    | F-4              |
|                                                                                                 |             |
|                                                                                                 |             |
| Consolidated      statements of equity for the years ended December 31, 2005, 2006 and      2007     | F-5              |
|                                                                                                 |             |
|                                                                                                 |             |
| Consolidated      statements of cash flows for the years ended December 31, 2005, 2006 and      2007 | F-8              |
|                                                                                                 |             |
|                                                                                                 |             |
| Notes      to consolidated financial statements                                                      | F-10             |
|                                                                                                 |             |
|                                                                                                 |             |
| Supplemental      information on oil and gas producing activities(unaudited)                         |   F-65 |
|                                                                                                 |             |
|                                                                                                 |             |

----

----

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |   |   |   | Years ended December 31, |    |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|--------|--------------------------|---------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   | Note   |   |   | 2005                     |    |   | 2006 |   |   | 2007 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |   |   |   | RMB                      |    |   | RMB |   |   | RMB |   |
| Operating      revenues                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |   |   |   |                     |    |   |   |   |   |   |   |
| Sales of      goods                                                                                                                                                               |   |   |   |   |                     | 793,006 |   |   |   | 1,034,888 |   |   |   | 1,173,869 |   |
| Other operating      revenues                                                                                                                                                     |   |   | 3      |   |                     |    | 24,042 |   |   |   | 26,853 |   |   |   | 30,974 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |   |   |   |                     |    | 817,048 |   |   |   | 1,061,741 |   |   |   | 1,204,843 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |   |   |   |                     |    |   |   |   |   |   |   |   |   |   |   |
| Other      income                                                                                                                                   |   |   | 4      |   |                     |    | 9,777 |   |   |   | 5,161 |   |   |   | 4,863 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |   |   |   |                     |    |   |   |   |   |   |   |   |   |   |   |
| Operating      expenses                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |   |   |   |                     |    |   |   |   |   |   |   |   |   |   |   |
| Purchased crude oil, products and      operating suppliesand      expenses                                                                                                                       |   |   |   |   |                     |    | (645,654 | ) |   |   | (854,236 | ) |   |   | (970,929 | ) |
| Selling, general and      administrative expenses                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |   | 5      |   |                     |    | (33,567 | ) |   |   | (37,514 | ) |   |   | (37,843 | ) |
| Depreciation, depletion and      amortization                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |   |   |   |                     |    | (31,147 | ) |   |   | (33,554 | ) |   |   | (43,315 | ) |
| Exploration expenses, including      dry holes                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   |   |   |                     |    | (6,411 | ) |   |   | (7,983 | ) |   |   | (11,105 | ) |
| Personnel      expenses                                                                                                                                                           |   |   | 6      |   |                     |    | (19,667 | ) |   |   | (20,956 | ) |   |   | (22,745 | ) |
| Employee reduction      expenses                                                                                                                                                  |   |   | 7      |   |                     |    | (369 | ) |   |   | (236 | ) |   |   | (399 | ) |
| Taxes other than income      tax                                                                                                                                                  |   |   | 8      |   |                     |    | (17,769 | ) |   |   | (29,330 | ) |   |   | (34,304 | ) |
| Other operating expenses,      net                                                                                                                                                |   |   | 9      |   |                     |    | (4,264 | ) |   |   | (2,461 | ) |   |   | (3,202 | ) |
| Total operating      expenses                                                                                                                                                                                   |   |   |   |   |                     |    | (758,848 | ) |   |   | (986,270 | ) |   |   | (1,123,842 | ) |
| Operating      income                                                                                                                               |   |   |   |   |                     |    | 67,977 |   |   |   | 80,632 |   |   |   | 85,864 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |   |   |   |                     |    |   |   |   |   |   |   |   |   |   |   |
| Finance      costs                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |   |   |   |                     |    |   |   |   |   |   |   |   |   |   |   |
| Interest      expense                                                                                                                                                             |   |   | 10     |   |                     |    | (5,725 | ) |   |   | (7,101 | ) |   |   | (7,314 | ) |
| Interest      income                                                                                                                                                              |   |   |   |   |                     |    | 398 |   |   |   | 538 |   |   |   | 405 |   |
| Unrealized      loss on embedded derivative componentof      convertible      bonds                                                                                                              |   |   | 24     | (f)    |                     |    | — |   |   |   | — |   |   |   | (3,211 | ) |
| Foreign exchange      loss                                                                                                                                                        |   |   |   |   |                     |    | (67 | ) |   |   | (140 | ) |   |   | (311 | ) |
| Foreign exchange      gain                                                                                                                                                        |   |   |   |   |                     |    | 931 |   |   |   | 890 |   |   |   | 2,330 |   |
| Net finance      costs                                                                                                                                                                                          |   |   |   |   |                     |    | (4,463 | ) |   |   | (5,813 | ) |   |   | (8,101 | ) |
| Investment      income                                                                                                                              |   |   |   |   |                     |    | 217 |   |   |   | 289 |   |   |   | 1,657 |   |
| Income      from associates and jointly controlled entities                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |   |   |   |                     |    | 794 |   |   |   | 3,434 |   |   |   | 4,044 |   |
| Income      before income      tax                                                                                                                  |   |   |   |   |                     |    | 64,525 |   |   |   | 78,542 |   |   |   | 83,464 |   |
| Income      tax                                                                                                                                     |   |   | 11     |   |                     |    | (19,872 | ) |   |   | (23,504 | ) |   |   | (24,721 | ) |
| Net      income                                                                                                                                     |   |   |   |   |                     |    | 44,653 |   |   |   | 55,038 |   |   |   | 58,743 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |   |   |   |                     |    |   |   |   |   |   |   |   |   |   |   |
| Attributable      to:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |   |   |   |                     |    |   |   |   |   |   |   |   |   |   |   |
|          Equity      shareholders of the Company                                                                                                                                                                                                                                                                                                                                                                                                                     |   |   |   |   |                     |    | 41,354 |   |   |   | 53,603 |   |   |   | 56,533 |   |
|          Minority      interests                                                                       |   |   |   |   |                     |    | 3,299 |   |   |   | 1,435 |   |   |   | 2,210 |   |
| Net      income                                                                                                                                     |   |   |   |   |                     |    | 44,653 |   |   |   | 55,038 |   |   |   | 58,743 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |   |   |   |                     |    |   |   |   |   |   |   |   |   |   |   |
| Basic      and diluted earnings per      share                                                                                                      |   |   | 12     |   |                     |    | 0.48 |   |   |   | 0.62 |   |   |   | 0.65 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |   |   |   |                     |    |   |   |   |   |   |   |   |   |   |   |
| Weighted      average number of      shares                                                                                                         |   |   | 12     |   |                     |    | 86,702 |   |   |   | 86,702 |   |   |   | 86,702 |   |

----

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |   |   |   | December 31, |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|--------|--------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   | Note   |   |   | 2006         |   |   | 2007 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |   |   |   | RMB          |   |   | RMB |   |
| ASSETS                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   |   |   |         |   |   |   |   |
| Current      assets                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |   |   |   |         |   |   |   |   |
| Cash and cash      equivalents                                                                                        |   |   |   |   |         | 7,063  |   |   |   | 7,696 |   |
| Time deposits with financial      institutions                                                                        |   |   |   |   |         | 635    |   |   |   | 668 |   |
| Trade accounts receivable,      net                                                                                   |   |   | 13     |   |         |   | 15,144 |   |   |   | 22,947 |   |
| Bills      receivable                                                                                                 |   |   |   |   |         |   | 8,462 |   |   |   | 12,851 |   |
| Inventories                                                                                                           |   |   | 14     |   |         |   | 94,894 |   |   |   | 116,032 |   |
| Prepaid expenses and other      current assets                                                                                                                                                                                                                                                                                                                                                                                                                            |   |   | 15     |   |         |   | 20,292 |   |   |   | 24,922 |   |
| Total current      assets                                                                                                                           |   |   |   |   |         |   | 146,490 |   |   |   | 185,116 |   |
| Non-current      assets                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |   |   |   |         |   |   |   |   |   |   |   |
| Property, plant and      equipment                                                                                    |   |   | 16     |   |         |   | 355,757 |   |   |   | 375,142 |   |
| Construction in      progress                                                                                         |   |   | 17     |   |         |   | 52,871 |   |   |   | 95,408 |   |
| Goodwill                                                                                                              |   |   | 18     |   |         |   | 14,325 |   |   |   | 15,490 |   |
| Interest in      associates                                                                                           |   |   | 19     |   |         |   | 11,898 |   |   |   | 16,865 |   |
| Interest      in jointly controlled      entities                                                                     |   |   | 20     |   |         |   | 9,236 |   |   |   | 12,723 |   |
| Investments                                                                                                           |   |   | 21     |   |         |   | 2,926 |   |   |   | 3,194 |   |
| Deferred tax      assets                                                                                              |   |   | 23     |   |         |   | 7,182 |   |   |   | 10,439 |   |
| Lease      prepayments                                                                                                |   |   |   |   |         |   | 2,574 |   |   |   | 8,224 |   |
| Long-term prepayments and other      assets                                                                           |   |   | 22     |   |         |   | 7,573 |   |   |   | 10,124 |   |
| Total non-current      assets                                                                                                                       |   |   |   |   |         |   | 464,342 |   |   |   | 547,609 |   |
| Total      assets                                                                                                                                   |   |   |   |   |         |   | 610,832 |   |   |   | 732,725 |   |
| LIABILITIES      AND EQUITY                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |   |   |   |         |   |   |   |   |   |   |   |
| Current      liabilities                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |   |   |   |         |   |   |   |   |   |   |   |
| Short-term      debts                                                                                                 |   |   | 24     |   |         |   | 56,467 |   |   |   | 44,654 |   |
| Loans from Sinopec Group Company      and its affiliates                                                                                                                                                                                                                                                                                                                                                                                                                  |   |   | 24     |   |         |   | 7,013 |   |   |   | 15,840 |   |
| Trade accounts      payable                                                                                           |   |   | 25     |   |         |   | 52,767 |   |   |   | 93,049 |   |
| Bills      payable                                                                                                    |   |   | 25     |   |         |   | 21,714 |   |   |   | 12,162 |   |
| Accrued expenses and other      payables                                                                              |   |   | 26     |   |         |   | 69,200 |   |   |   | 89,171 |   |
| Income tax      payable                                                                                               |   |   |   |   |         |   | 9,211 |   |   |   | 10,479 |   |
| Total current      liabilities                                                                                                                      |   |   |   |   |         |   | 216,372 |   |   |   | 265,355 |   |
| Non-current      liabilities                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |   |   |   |         |   |   |   |   |   |   |   |
| Long-term      debts                                                                                                  |   |   | 24     |   |         |   | 61,617 |   |   |   | 83,134 |   |
| Loans from Sinopec Group Company      and its affiliates                                                                                                                                                                                                                                                                                                                                                                                                                  |   |   | 24     |   |         |   | 39,020 |   |   |   | 37,180 |   |
| Deferred tax      liabilities                                                                                         |   |   | 23     |   |         |   | 6,339 |   |   |   | 5,636 |   |
| Other      liabilities                                                                                                |   |   | 27     |   |         |   | 827 |   |   |   | 8,662 |   |
| Total non-current      liabilities                                                                                                                  |   |   |   |   |         |   | 107,803 |   |   |   | 134,612 |   |
| Total      liabilities                                                                                                                              |   |   |   |   |         |   | 324,175 |   |   |   | 399,967 |   |
| Equity                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   |   |   |         |   |   |   |   |   |   |   |
| Share      capital                                                                                                    |   |   | 28     |   |         |   | 86,702 |   |   |   | 86,702 |   |
| Reserves                                                                                                              |   |   | 29     |   |         |   | 177,632 |   |   |   | 220,731 |   |
| Total equity attributable to      equity shareholders of theCompany                                                                                                                                                                                                                                                                                                                                                                                                       |   |   |   |   |         |   | 264,334 |   |   |   | 307,433 |   |
| Minority      interests                                                                                               |   |   |   |   |         |   | 22,323 |   |   |   | 25,325 |   |
| Total      equity                                                                                                                                   |   |   |   |   |         |   | 286,657 |   |   |   | 332,758 |   |
| Total liabilities and      equity                                                                                                                   |   |   |   |   |         |   | 610,832 |   |   |   | 732,725 |   |

----

|                                                                        |   | Sharecapital |    |   | Capitalreserve |   |    | Sharepremium |   |   | Re-valuationreserve |   |   | Statutorysurplusreserve |    |   | Statutorypublicwelfarefund |   |    | Dis-cretionarysurplusreserve |   |   | Otherreserves |   |   | Retainedearnings |    |   | Total      equity attributableto      equity shareholders ofthe      Company |   |    |  Minority      interests |   |   | Total      equity |   |
|-----------------------------------------------------------------------------|--------|--------------|---------|--------|----------------|--------|---------|--------------|--------|--------|---------------------|--------|--------|-------------------------|---------|--------|----------------------------|--------|---------|------------------------------|--------|--------|---------------|--------|--------|------------------|---------|--------|------------------------------------------------------------------------------|--------|---------|-------------------------------|--------|--------|-------------------|--------|
|                                                                        |   | RMB          |    |   | RMB            |   |    | RMB          |   |   | RMB                 |   |   | RMB                     |    |   | RMB                        |   |    | RMB                          |   |   | RMB           |   |   | RMB              |    |   | RMB                                                                          |   |    | RMB                           |   |   | RMB               |   |
|        Balance as of January 1, 2005, as previously reported           |   |         | 86,702  |   |           |   | (19,217 | )            |   |   | 18,072              |   |   |                    | 27,998  |   |                       |   | 9,558   |                         |   |   | 9,558         |   |   |             | 7,000   |   |                                                                         |   | 547     |                          |   |   | 53,122            |   |   |   | 193,340 |   |   |   | 31,955 |   |   |   | 225,295 |   |
|        Adjusted for the acquisition of the Refinery Plants             |   |         | — |   |           |   | — |         |   |   | —             |   |   |                    | — |   |                       |   | — |                         |   |   | —       |   |   |             | — |   |                                                                         |   | 1,899   |                          |   |   | —           |   |   |   | 1,899 |   |   |   | 517 |   |   |   | 2,416 |   |
|        Balance as of January 1, 2005, as adjusted                      |   |         | 86,702  |   |           |   | (19,217 | )            |   |   | 18,072              |   |   |                    | 27,998  |   |                       |   | 9,558   |                         |   |   | 9,558         |   |   |             | 7,000   |   |                                                                         |   | 2,446   |                          |   |   | 53,122            |   |   |   | 195,239 |   |   |   | 32,472 |   |   |   | 227,711 |   |
|        Net income / total recognized income for  the year         |   |         | — |   |           |   | — |         |   |   | —             |   |   |                    | — |   |                       |   | — |                         |   |   | —       |   |   |             | — |   |                                                                         |   | — |                          |   |   | 41,354            |   |   |   | 41,354 |   |   |   | 3,299 |   |   |   | 44,653 |   |
|        Final dividend for 2004                                         |   |         | — |   |           |   | — |         |   |   | —             |   |   |                    | — |   |                       |   | — |                         |   |   | —       |   |   |             | — |   |                                                                         |   | — |                          |   |   | (6,936            | )      |   |   | (6,936 | ) |   |   | — |   |   |   | (6,936 | ) |
|        Interim dividend for 2005                                       |   |         | — |   |           |   | — |         |   |   | —             |   |   |                    | — |   |                       |   | — |                         |   |   | —       |   |   |             | — |   |                                                                         |   | — |                          |   |   | (3,468            | )      |   |   | (3,468 | ) |   |   | — |   |   |   | (3,468 | ) |
|        Appropriation (Note 29 (c) and (d))                             |   |         | — |   |           |   | — |         |   |   | —             |   |   |                    | — |   |                       |   | 3,956   |                         |   |   | 3,956         |   |   |             | — |   |                                                                         |   | — |                          |   |   | (7,912            | )      |   |   | — |   |   |   | — |   |   |   | — |   |
|        Revaluation surplus realized                                    |   |         | — |   |           |   | — |         |   |   | —             |   |   |                    | (1,656  | )      |                       |   | — |                         |   |   | —       |   |   |             | — |   |                                                                         |   | — |                          |   |   | 1,656             |   |   |   | — |   |   |   | — |   |   |   | — |   |
|        Realization of deferred tax on lease      prepayments |   |         | — |   |           |   | — |         |   |   | —             |   |   |                    | — |   |                       |   | — |                         |   |   | —       |   |   |             | — |   |                                                                         |   | (5      | )                             |   |   | 5                 |   |   |   | — |   |   |   | — |   |   |   | — |   |
|        Transfer from retained earnings to other reserves               |   |         | — |   |           |   | — |         |   |   | —             |   |   |                    | — |   |                       |   | — |                         |   |   | —       |   |   |             | — |   |                                                                         |   | 434     |                          |   |   | (434              | )      |   |   | — |   |   |   | — |   |   |   | — |   |
|        Distribution to Sinopec Group Company (Note 29 (f))             |   |         | — |   |           |   | — |         |   |   | —             |   |   |                    | — |   |                       |   | — |                         |   |   | —       |   |   |             | — |   |                                                                         |   | (90     | )                             |   |   | —           |   |   |   | (90 | ) |   |   | — |   |   |   | (90 | ) |
|        Acquisitions of minority interests in subsidiaries              |   |         | — |   |           |   | — |         |   |   | —             |   |   |                    | — |   |                       |   | — |                         |   |   | —       |   |   |             | — |   |                                                                         |   | — |                          |   |   | —           |   |   |   | — |   |   |   | (2,957 | ) |   |   | (2,957 | ) |
|   Distributions      to minority interests net of contributions   |   |         | — |   |           |   | — |         |   |   | —             |   |   |                    | — |   |                       |   | — |                         |   |   | —       |   |   |             | — |   |                                                                         |   | — |                          |   |   | —           |   |   |   | — |   |   |   | (1,640 | ) |   |   | (1,640 | ) |
|        Balance as of December 31, 2005                                 |   |         | 86,702  |   |           |   | (19,217 | )            |   |   | 18,072              |   |   |                    | 26,342  |   |                       |   | 13,514  |                         |   |   | 13,514        |   |   |             | 7,000   |   |                                                                         |   | 2,785   |                          |   |   | 77,387            |   |   |   | 226,099 |   |   |   | 31,174 |   |   |   | 257,273 |   |

----

|                                                                                                                                                                  |   | Sharecapital |    |   | Capitalreserve |   |    | Sharepremium |   |   | Re-valuationreserve |   |   | Statutorysurplusreserve |    |   | Statutorypublicwelfarefund |   |    | Dis-cretionarysurplusreserve |   |   | Otherreserves |   |   | Retainedearnings |    |   | Total      equity attributableto      equity shareholders ofthe      Company |   |    |  Minority      interests |   |   | Total      equity |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------|---------|--------|----------------|--------|---------|--------------|--------|--------|---------------------|--------|--------|-------------------------|---------|--------|----------------------------|--------|---------|------------------------------|--------|--------|---------------|--------|--------|------------------|---------|--------|------------------------------------------------------------------------------|--------|---------|-------------------------------|--------|--------|-------------------|--------|
|                                                                                                                                                                  |   | RMB          |    |   | RMB            |   |    | RMB          |   |   | RMB                 |   |   | RMB                     |    |   | RMB                        |   |    | RMB                          |   |   | RMB           |   |   | RMB              |    |   | RMB                                                                          |   |    | RMB                           |   |   | RMB               |   |
|        Balance as of January 1, 2006                                                                                                                             |   |         | 86,702  |   |           |   | (19,217 | )            |   |   | 18,072              |   |   |                    | 26,342  |   |                       |   | 13,514  |                         |   |   | 13,514        |   |   |             | 7,000   |   |                                                                         |   | 2,785   |                          |   |   | 77,387            |   |   |   | 226,099 |   |   |   | 31,174 |   |   |   | 257,273 |   |
|        Net income recognized directly in equity:                                                                                                                 |   |         |    |   |           |   |    |         |   |   |                |   |   |                    |    |   |                       |   |    |                         |   |   |          |   |   |             |    |   |                                                                         |   |    |                          |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Unrealized      gain for the change in fair value of available-for-sale financial assets,      net of deferred tax                                                    |   |         | — |   |           |   | — |         |   |   | —             |   |   |                    | — |   |                       |   | — |                         |   |   | —       |   |   |             | — |   |                                                                         |   | 34      |                          |   |   | —           |   |   |   | 34 |   |   |   | — |   |   |   | 34 |   |
| Net      income                          |   |         | — |   |           |   | — |         |   |   | —             |   |   |                    | — |   |                       |   | — |                         |   |   | —       |   |   |             | — |   |                                                                         |   | — |                          |   |   | 53,603            |   |   |   | 53,603 |   |   |   | 1,435 |   |   |   | 55,038 |   |
|        Total recognized income for the year                                                                                                                      |   |         | — |   |           |   | — |         |   |   | —             |   |   |                    | — |   |                       |   | — |                         |   |   | —       |   |   |             | — |   |                                                                         |   | 34      |                          |   |   | 53,603            |   |   |   | 53,637 |   |   |   | 1,435 |   |   |   | 55,072 |   |
|        Final dividend for 2005                                                                                                                                   |   |         | — |   |           |   | — |         |   |   | —             |   |   |                    | — |   |                       |   | — |                         |   |   | —       |   |   |             | — |   |                                                                         |   | — |                          |   |   | (7,803            | )      |   |   | (7,803 | ) |   |   | — |   |   |   | (7,803 | ) |
|        Interim dividend for 2006                                                                                                                                 |   |         | — |   |           |   | — |         |   |   | —             |   |   |                    | — |   |                       |   | — |                         |   |   | —       |   |   |             | — |   |                                                                         |   | — |                          |   |   | (3,468            | )      |   |   | (3,468 | ) |   |   | — |   |   |   | (3,468 | ) |
|        Appropriation (Note 29 (c) and (e))                                                                                                                       |   |         | — |   |           |   | — |         |   |   | —             |   |   |                    | — |   |                       |   | 5,066   |                         |   |   | —       |   |   |             | 20,000  |   |                                                                         |   | — |                          |   |   | (25,066           | )      |   |   | — |   |   |   | — |   |   |   | — |   |
|        Statutory public welfare fund transferred to statutory surplus reserve      (Note 29 (d))                                                                 |   |         | — |   |           |   | — |         |   |   | —             |   |   |                    | — |   |                       |   | 13,514  |                         |   |   | (13,514       | )      |   |             | — |   |                                                                         |   | — |                          |   |   | —           |   |   |   | — |   |   |   | — |   |   |   | — |   |
|   Revaluation      surplus realized                                                                                                                         |   |         | — |   |           |   | — |         |   |   | —             |   |   |                    | (1,590  | )      |                       |   | — |                         |   |   | —       |   |   |             | — |   |                                                                         |   | — |                          |   |   | 1,590             |   |   |   | — |   |   |   | — |   |   |   | — |   |
|        Realization of deferred tax on lease prepayments                                                                                                          |   |         | — |   |           |   | — |         |   |   | —             |   |   |                    | — |   |                       |   | — |                         |   |   | —       |   |   |             | — |   |                                                                         |   | (7      | )                             |   |   | 7                 |   |   |   | — |   |   |   | — |   |   |   | — |   |
|        Transfer from retained earnings to other reserves                                                                                                         |   |         | — |   |           |   | — |         |   |   | —             |   |   |                    | — |   |                       |   | — |                         |   |   | —       |   |   |             | — |   |                                                                         |   | 704     |                          |   |   | (704              | )      |   |   | — |   |   |   | — |   |   |   | — |   |
|        Transfer from other reserves to capital reserve                                                                                                           |   |         | — |   |           |   | (2,373  | )            |   |   | —             |   |   |                    | — |   |                       |   | — |                         |   |   | —       |   |   |             | — |   |                                                                         |   | 2,373   |                          |   |   | —           |   |   |   | — |   |   |   | — |   |   |   | — |   |
|        Distribution to Sinopec Group Company (Note 29 (f))                                                                                                       |   |         | — |   |           |   | — |         |   |   | —             |   |   |                    | — |   |                       |   | — |                         |   |   | —       |   |   |             | — |   |                                                                         |   | (631    | )                             |   |   | —           |   |   |   | (631 | ) |   |   | — |   |   |   | (631 | ) |
|        Consideration for the Acquisition of Oil Production Plants (Note      1)                                                                                  |   |         | — |   |           |   | — |         |   |   | —             |   |   |                    | — |   |                       |   | — |                         |   |   | —       |   |   |             | — |   |                                                                         |   | (3,500  | )                             |   |   | —           |   |   |   | (3,500 | ) |   |   | — |   |   |   | (3,500 | ) |
|        Acquisitions of minority interests in subsidiaries                                                                                                        |   |         | — |   |           |   | — |         |   |   | —             |   |   |                    | — |   |                       |   | — |                         |   |   | —       |   |   |             | — |   |                                                                         |   | — |                          |   |   | —           |   |   |   | — |   |   |   | (9,730 | ) |   |   | (9,730 | ) |
|   Contributions      from minority interests net of  distributions                                                                                |   |         | — |   |           |   | — |         |   |   | —             |   |   |                    | — |   |                       |   | — |                         |   |   | —       |   |   |             | — |   |                                                                         |   | — |                          |   |   | —           |   |   |   | — |   |   |   | 187 |   |   |   | 187 |   |
| Disposal      of a subsidiary                                                                                                                                         |   |         | — |   |           |   | — |         |   |   | —             |   |   |                    | — |   |                       |   | — |                         |   |   | —       |   |   |             | — |   |                                                                         |   | — |                          |   |   | —           |   |   |   | — |   |   |   | (743 | ) |   |   | (743 | ) |
|        Balance as of December 31, 2006                                                                                                                           |   |         | 86,702  |   |           |   | (21,590 | )            |   |   | 18,072              |   |   |                    | 24,752  |   |                       |   | 32,094  |                         |   |   | —       |   |   |             | 27,000  |   |                                                                         |   | 1,758   |                          |   |   | 95,546            |   |   |   | 264,334 |   |   |   | 22,323 |   |   |   | 286,657 |   |

----

|                                                                                                                                                                                   |   | Sharecapital |    |   | Capitalreserve |   |    | Sharepremium |   |   | Re-valuationreserve |   |   | Statutorysurplusreserve |    |   | Dis-cretionarysurplusreserve |   |    | Otherreserves |   |   | Retainedearnings |   |   | Total      equity attributableto      equity shareholders of the      Company |    |   |  Minority      interests |   |    | Total      equity |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------|---------|--------|----------------|--------|---------|--------------|--------|--------|---------------------|--------|--------|-------------------------|---------|--------|------------------------------|--------|---------|---------------|--------|--------|------------------|--------|--------|------------------------------------------------------------------------------------|---------|--------|-------------------------------|--------|---------|-------------------|--------|
|                                                                                                                                                                                   |   | RMB          |    |   | RMB            |   |    | RMB          |   |   | RMB                 |   |   | RMB                     |    |   | RMB                          |   |    | RMB           |   |   | RMB              |   |   | RMB                                                                                |    |   | RMB                           |   |    | RMB               |   |
| Balance      as of January 1, 2007                                                                                                                                                |   |         | 86,702  |   |           |   | (21,590 | )            |   |   | 18,072              |   |   |                    | 24,752  |   |                         |   | 32,094  |          |   |   | 27,000           |   |   |                                                                               | 1,758   |   |                          |   | 95,546  |              |   |   | 264,334 |   |   |   | 22,323 |   |   |   | 286,657 |   |
| Net      income recognized directly      in equity:                                                                                                                               |   |         |    |   |           |   |    |         |   |   |                |   |   |                    |    |   |                         |   |    |          |   |   |             |   |   |                                                                               |    |   |                          |   |    |              |   |   |   |   |   |   |   |   |   |   |   |   |
| Unrealized      gain for the change      in fair value of     available-for-sale financial      assets, net of     deferred      tax |   |         | — |   |           |   | — |         |   |   | —             |   |   |                    | — |   |                         |   | — |          |   |   | —          |   |   |                                                                               | 2,892   |   |                          |   | — |              |   |   | 2,892 |   |   |   | 145 |   |   |   | 3,037 |   |
| Effect      of change in tax      rate (Note 23(ii))                                                                                                                              |   |         | — |   |           |   | — |         |   |   | —             |   |   |                    | — |   |                         |   | — |          |   |   | —          |   |   |                                                                               | (54     | )      |                          |   | — |              |   |   | (54 | ) |   |   | 17 |   |   |   | (37 | ) |
|         Net income                                                                                                                                                           |   |         | — |   |           |   | — |         |   |   | —             |   |   |                    | — |   |                         |   | — |          |   |   | —          |   |   |                                                                               | — |   |                          |   | 56,533  |              |   |   | 56,533 |   |   |   | 2,210 |   |   |   | 58,743 |   |
| Total      recognized income for the      year                                                                                                                                    |   |         | — |   |           |   | — |         |   |   | —             |   |   |                    | — |   |                         |   | — |          |   |   | —          |   |   |                                                                               | 2,838   |   |                          |   | 56,533  |              |   |   | 59,371 |   |   |   | 2,372 |   |   |   | 61,743 |   |
| Final      dividend for 2006                                                                                                                                                           |   |         | — |   |           |   | — |         |   |   | —             |   |   |                    | — |   |                         |   | — |          |   |   | —          |   |   |                                                                               | — |   |                          |   | (9,537  | )                 |   |   | (9,537 | ) |   |   | — |   |   |   | (9,537 | ) |
| Interim      dividend for 2007                                                                                                                                                         |   |         | — |   |           |   | — |         |   |   | —             |   |   |                    | — |   |                         |   | — |          |   |   | —          |   |   |                                                                               | — |   |                          |   | (4,335  | )                 |   |   | (4,335 | ) |   |   | — |   |   |   | (4,335 | ) |
| Adjustment      to statutory surplus      reserve (Note     29      (c))                                                                                 |   |         | — |   |           |   | — |         |   |   | —             |   |   |                    | — |   |                         |   | 235     |          |   |   | —          |   |   |                                                                               | — |   |                          |   | (235    | )                 |   |   | — |   |   |   | — |   |   |   | — |   |
| Appropriation      (Note 29 (c))                                                                                                                                                       |   |         | — |   |           |   | — |         |   |   | —             |   |   |                    | — |   |                         |   | 5,468   |          |   |   | —          |   |   |                                                                               | — |   |                          |   | (5,468  | )                 |   |   | — |   |   |   | — |   |   |   | — |   |
| Revaluation      surplus realized                                                                                                                                                      |   |         | — |   |           |   | — |         |   |   | —             |   |   |                    | (638    | )      |                         |   | — |          |   |   | —          |   |   |                                                                               | — |   |                          |   | 638     |              |   |   | — |   |   |   | — |   |   |   | — |   |
| Realization      of deferred tax on      lease prepayments                                                                                                                        |   |         | — |   |           |   | — |         |   |   | —             |   |   |                    | — |   |                         |   | — |          |   |   | —          |   |   |                                                                               | (7      | )      |                          |   | 7       |              |   |   | — |   |   |   | — |   |   |   | — |   |
| Transfer      from retained earnings      to other reserves                                                                                                                  |   |         | — |   |           |   | — |         |   |   | —             |   |   |                    | — |   |                         |   | — |          |   |   | —          |   |   |                                                                               | (151    | )      |                          |   | 151     |              |   |   | — |   |   |   | — |   |   |   | — |   |
| Transfer      from other reserves      to capital reserve                                                                                                                    |   |         | — |   |           |   | (1,062  | )            |   |   | —             |   |   |                    | — |   |                         |   | — |          |   |   | —          |   |   |                                                                               | 1,062   |   |                          |   | — |              |   |   | — |   |   |   | — |   |   |   | — |   |
| Contribution      from Sinopec Group      Company (Note     29      (f))                                                                                      |   |         | — |   |           |   | — |         |   |   | —             |   |   |                    | — |   |                         |   | — |          |   |   | —          |   |   |                                                                               | 68      |   |                          |   | — |              |   |   | 68 |   |   |   | — |   |   |   | 68 |   |
| Consideration      for the Acquisition      of     Refinery      Plants (Note      1)                                                                    |   |         | — |   |           |   | — |         |   |   | —             |   |   |                    | — |   |                         |   | — |          |   |   | —          |   |   |                                                                               | (2,468  | )      |                          |   | — |              |   |   | (2,468 | ) |   |   | — |   |   |   | (2,468 | ) |
| Contributions      from minority interests      net     of  distributions                                                                      |   |         | — |   |           |   | — |         |   |   | —             |   |   |                    | — |   |                         |   | — |          |   |   | —          |   |   |                                                                               | — |   |                          |   | — |              |   |   | — |   |   |   | 630 |   |   |   | 630 |   |
| Balance      as of December 31, 2007                                                                                                                                              |   |         | 86,702  |   |           |   | (22,652 | )            |   |   | 18,072              |   |   |                    | 24,114  |   |                         |   | 37,797  |          |   |   | 27,000           |   |   |                                                                               | 3,100   |   |                          |   | 133,300 |              |   |   | 307,433 |   |   |   | 25,325 |   |   |   | 332,758 |   |

----

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |   | Years ended December 31, |     |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------------------------|----------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | Note   |   | 2005                     |     |   | 2006 |   |   | 2007 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |   | RMB                      |     |   | RMB |   |   | RMB |   |
| Net      cash generated from operating      activities                                                                                 | (a)    |   |                     | 78,663   |   |   |   | 92,507 |   |   |   | 119,594 |   |
| Investing      activities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |   |                     |     |   |   |   |   |   |   |   |   |   |
| Capital      expenditure                                                                                                                                             |   |   |                     | (66,510  | ) |   |   | (71,278 | ) |   |   | (99,946 | ) |
| Exploratory wells      expenditure                                                                                                                                   |   |   |                     | (5,810   | ) |   |   | (7,985 | ) |   |   | (9,913 | ) |
| Purchase of investments and      investments in associates                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |   |                     | (4,197   | ) |   |   | (3,763 | ) |   |   | (1,581 | ) |
| Purchase      of subsidiaries, net of cash acquired                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   |                     | —  |   |   |   | (1,361 | ) |   |   | (3,968 | ) |
| Proceeds from disposal of      investments and investments inassociates                                                                                                             |   |   |                     | 1,264    |   |   |   | 776 |   |   |   | 1,441 |   |
| Proceeds from disposal of      property, plant and equipment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |   |                     | 566      |   |   |   | 415 |   |   |   | 413 |   |
| Acquisitions of minority      interests in subsidiaries                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |   |                     | (4,324   | ) |   |   | (20,610 | ) |   |   | — |   |
| Purchase of time deposits with      financial institutions                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |   |                     | (565     | ) |   |   | (916 | ) |   |   | (3,373 | ) |
| Proceeds from maturity of time      deposits with financial institutions                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |   |                     | 1,463    |   |   |   | 1,337 |   |   |   | 3,340 |   |
| Net cash used in investing      activities                                                                                                                                                         |   |   |                     | (78,113  | ) |   |   | (103,385 | ) |   |   | (113,587 | ) |
| Financing      activities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |   |                     |     |   |   |   |   |   |   |   |   |   |
| Proceeds of issuance of      convertible bonds, net of issuing expenses                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |   |                     | —  |   |   |   | — |   |   |   | 11,368 |   |
| Proceeds of issuance of corporate      bonds, net of issuing expenses                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |   |                     | 9,875    |   |   |   | 22,689 |   |   |   | 35,000 |   |
| Proceeds      from bank and other loans                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |   |                     | 565,222  |   |   |   | 773,842 |   |   |   | 768,039 |   |
| Repayments      of corporate      bonds                                                                                                                              |   |   |                     | —  |   |   |   | (21,000 | ) |   |   | (12,000 | ) |
| Repayment of bank and other      loans                                                                                                                               |   |   |                     | (564,179 | ) |   |   | (761,569 | ) |   |   | (788,793 | ) |
| Distributions to minority      interests                                                                                                                             |   |   |                     | (1,682   | ) |   |   | (852 | ) |   |   | (593 | ) |
| Contributions from minority      interests                                                                                                                           |   |   |                     | 129      |   |   |   | 1,255 |   |   |   | 1,223 |   |
| Dividend      paid                                                                                                                                              |   |   |                     | (10,404  | ) |   |   | (11,271 | ) |   |   | (13,872 | ) |
| Distributions      to Sinopec Group      Company                                                                                                                     |   |   |                     | (3,218   | ) |   |   | (216 | ) |   |   | (5,682 | ) |
| Net cash (used in)/generated from      financing activities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |   |                     | (4,257   | ) |   |   | 2,878 |   |   |   | (5,310 | ) |
| Net      (decrease)/increase in cash and cash equivalents                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |   |                     | (3,707   | ) |   |   | (8,000 | ) |   |   | 697 |   |
| Cash      and cash equivalents as of January      1                                                                                    |   |   |                     | 18,817   |   |   |   | 15,088 |   |   |   | 7,063 |   |
| Effect      of foreign exchange rate      changes                                                                                      |   |   |                     | (22      | ) |   |   | (25 | ) |   |   | (64 | ) |
| Cash      and cash equivalents as of December 31                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |   |                     | 15,088   |   |   |   | 7,063 |   |   |   | 7,696 |   |

----

|   | (a)   Reconciliation      of income before income tax to net cash generated from operating      activities |
|--------|---------------------------------------------------------------------------------------------------------------------------|

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   | Years ended December 31, |    |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------|---------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   | 2005                     |    |   | 2006 |   |   | 2007 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   | RMB                      |    |   | RMB |   |   | RMB |   |
| Operating      activities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                     |    |   |   |   |   |   |   |
| Income      before income      tax                                                                                                             |   |                     | 64,525  |   |   |   | 78,542 |   |   |   | 83,464 |   |
| Adjustment for:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |                     |    |   |   |   |   |   |   |   |   |   |
| Depreciation, depletion and      amortization                                                                                                                                |   |                     | 31,147  |   |   |   | 33,554 |   |   |   | 43,315 |   |
| Dry hole      costs                                                                                                                                                          |   |                     | 2,992   |   |   |   | 3,960 |   |   |   | 6,060 |   |
| Income      from associates and jointly controlled entities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                     | (794    | ) |   |   | (3,434 | ) |   |   | (4,044 | ) |
| Investment      income                                                                                                                                                       |   |                     | (217    | ) |   |   | (289 | ) |   |   | (1,657 | ) |
| Interest      income                                                                                                                                                         |   |                     | (398    | ) |   |   | (538 | ) |   |   | (405 | ) |
| Interest      expense                                                                                                                                                        |   |                     | 5,725   |   |   |   | 7,101 |   |   |   | 7,314 |   |
| Unrealized foreign exchange      gain                                                                                                                                        |   |                     | (852    | ) |   |   | (657 | ) |   |   | (1,463 | ) |
| Loss on disposal of property,      plant and equipment, net                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                     | 2,098   |   |   |   | 1,647 |   |   |   | 549 |   |
| Impairment losses on long-lived      assets                                                                                                                                  |   |                     | 1,851   |   |   |   | 825 |   |   |   | 3,106 |   |
| Gain      on non-monetary contribution to a jointly controlledentity                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                     | — |   |   |   | — |   |   |   | (1,315 | ) |
| Unrealized      loss on embedded derivative component of convertible bonds                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                     | — |   |   |   | — |   |   |   | 3,211 |   |
| Operating      income before changes in working capital                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                     | 106,077 |   |   |   | 120,711 |   |   |   | 138,135 |   |
| Increase in trade accounts      receivable                                                                                                                                   |   |                     | (3,342  | ) |   |   | (2,187 | ) |   |   | (6,613 | ) |
| Decrease/(increase) in bills      receivable                                                                                                                                 |   |                     | 1,026   |   |   |   | (1,729 | ) |   |   | (4,130 | ) |
| Increase in      inventories                                                                                                                                                 |   |                     | (25,969 | ) |   |   | (2,901 | ) |   |   | (20,493 | ) |
| Decrease/(increase) in prepaid      expenses and other current assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |                     | 1,306   |   |   |   | 583 |   |   |   | (2,536 | ) |
| Increase in lease      prepayments                                                                                                                                           |   |                     | (690    | ) |   |   | (577 | ) |   |   | (4,128 | ) |
| (Increase)/decrease in long-term      prepayments and other assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                     | (1,526  | ) |   |   | (1,111 | ) |   |   | 3,288 |   |
| Increase/(decrease) in trade      accounts      payable                                                                                                                      |   |                     | 29,152  |   |   |   | (1,278 | ) |   |   | 39,176 |   |
| Decrease in bills      payable                                                                                                                                               |   |                     | (7,158  | ) |   |   | (1,511 | ) |   |   | (9,710 | ) |
| Increase in accrued expenses and      other      payables                                                                                                                    |   |                     | 7,258   |   |   |   | 10,148 |   |   |   | 18,396 |   |
| (Decrease)/increase in other      liabilities                                                                                                                                |   |                     | (233    | ) |   |   |  36 |   |   |   | (207 | ) |
| Cash      generated from      operations                                                                                                       |   |                     | 105,901 |   |   |   | 120,184 |   |   |   | 151,178 |   |
| Interest      received                                                                                                                                                       |   |                     | 402     |   |   |   | 541 |   |   |   | 404 |   |
| Interest      paid                                                                                                                                                           |   |                     | (6,688  | ) |   |   | (8,525 | ) |   |   | (6,971 | ) |
| Investment and dividend income      received                                                                                                                                 |   |                     | 668     |   |   |   | 649 |   |   |   | 2,657 |   |
| Income tax      paid                                                                                                                                                         |   |                     | (21,620 | ) |   |   | (20,342 | ) |   |   | (27,674 | ) |
| Net      cash generated from operating      activities                                                                                         |   |                     | 78,663  |   |   |   | 92,507 |   |   |   | 119,594 |   |

----

| 1 | PRINCIPAL      ACTIVITIES, ORGANIZATION AND BASIS OF  PRESENTATION |
|---|--------------------------------------------------------------------|

----

|                                                                                                                                                 |   |                                  | The      Group, as previously reported |    |    |      Refinery Plants  |   |      | Effect      of accounting      for investments      in jointly      controlled entities      under equity method |   | The      Group,as restated |
|------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------|----------------------------------------|---------|---------|-----------------------------------------------------|--------|-----------|------------------------------------------------------------------------------------------------------------------|--------|----------------------------|
|                                                                                                                                                 |   | RMB                                   |                                   | RMB     |    | RMB                                                 |   | RMB       |
| 2005                                                                                                                                                 |   |                                  |                                   |    |    |                                                |   |      |
|                                                                                                                                                 |   |                                  |                                   |    |    |                                                |   |      |
| Results      of operation:                                                                                                                           |   |                                  |                                   |    |    |                                                |   |      |
|     Operating      revenue                                                                                                       |   | 823,272                               |                                   | (4,375) | *  | (1,849)                                             |   | 817,048   |
|     Income      from associates and jointly controlled         entities             |   | 857                                   |                                   | 91      |    | (154)                                               |   | 794       |
|     Net      income attributable to the equity shareholders          of the      Company |   | 41,455                                |                                   | (101)   |    | —                                             |   | 41,354    |
|     Basic      and diluted earnings per share                                                                                    |   | 0.48                                  |                                   | — |    | —                                             |   | 0.48      |
|                                                                                                                                                 |   |                                  |                                   |    |    |                                                |   |      |
| 2006                                                                                                                                                 |   |                                  |                                   |    |    |                                                |   |      |
|                                                                                                                                                 |   |                                  |                                   |    |    |                                                |   |      |
| Results      of operation:                                                                                                                           |   |                                  |                                   |    |    |                                                |   |      |
|     Operating      revenue                                                                                                       |   | 1,071,402                             |                                   | (4,986) | *  | (4,675)                                             |   | 1,061,741 |
|     Income      from associates and jointly controlled         entities                  |   |   947                       |                                   | 90      |    | 2,397                                               |   | 3,434     |
|     Net      income attributable to the equity shareholders         of the      Company  |   |   53,912                    |                                   | (309)   |    | —                                             |   | 53,603    |
|     Basic      and diluted earnings per share                                                                                    |   |  0.62                            |                                   | — |    | —                                             |   | 0.62      |
|                                                                                                                                                 |   |                                  |                                   |    |    |                                                |   |      |
| Financial      condition:                                                                                                                            |   |                                  |                                   |    |    |                                                |   |      |
|     Current      assets                                                                                                          |   | 145,467                               |                                   | 4,060   |    | (3,037)                                             |   | 146,490   |
|     Interest in      jointly controlled entities                                                                                 |   |  —                         |                                   | — |    |  9,236                                         |   | 9,236     |
|     Total      assets                                                                                                            |   | 611,790                               |                                   | 7,755   |    | (8,713)                                             |   | 610,832   |
|     Current      liabilities                                                                                                     |   | 210,802                               |                                   | 5,855   |    | (285)                                               |   | 216,372   |
|     Total      liabilities                                                                                                       |   | 327,001                               |                                   | 5,887   |    | (8,713)                                             |   | 324,175   |
|     Total      equity attributable to equity shareholders       of the      Company           |   |    262,845   |                                   | 1,489   |    |  —                        |   | 264,334   |

----

|   | * | Refinery      Plants sold its petroleum products primarily to the Group as well as      purchasing crude oil primarily from the Group. These transactions between      the Group and Refinery Plants have been eliminated on combination,      resulting in a reduction in the operating revenue.  All other      significant balances and transactions between the Group and Refinery      Plants have been eliminated oncombination. |
|--------|---|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |  (i) | IFRS      7, Financial instruments: Disclosures, requires expanded disclosures about      the significance of the Group’s financial instruments and the nature and      extent of risks arising from those instruments, compared with the      information previously required to be disclosed by IAS 32, Financial      instruments: Disclosure and presentation. These additional disclosures are      provided primarily in Note 35. |
|--------|-----------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |  (ii) | The      Amendment to IAS 1, Presentation of financial statements: Capital      disclosures, introduces additional disclosure requirements to provide      information about the level of capital and the Group’s objectives,      policies and processes for managing capital. These new disclosures are set      out in Note 28. |
|--------|------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (i) | Subsidiaries |
|-----|--------------|

| (ii) | Associates      and jointly controlled entities |
|------|-------------------------------------------------|

----

| Buildings                                                              | 15      to 45 years |
|------------------------------------------------------------------------|---------------------|
| Plant, machinery, equipment, oil      depots, storage tanks and others | 4      to 18 years  |
| Service stations                                                       | 25      years       |

----

| (j) | Goodwill |
|-----|----------|

----

----

----

----

----

----

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   | Years ended December 31, |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   | 2005                     |   |   | 2006 |   |   | 2007 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   | RMB                      |   |   | RMB |   |   | RMB |   |
| Sale      of materials, service and      others                                                                               |   |                     | 23,648 |   |   |   | 26,469 |   |   |   | 30,604 |   |
| Rental      income                                                                                                            |   |                     | 394    |   |   |   | 384 |   |   |   | 370 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                     | 24,042 |   |   |   | 26,853 |   |   |   | 30,974 |   |

|        5.   | SELLING,      GENERAL AND ADMINISTRATIVE EXPENSES |
|----------------------------|---------------------------------------------------|

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   | Years ended December 31, |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   | 2005                     |   |   | 2006 |   |   | 2007 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   | RMB                      |   |   | RMB |   |   | RMB |   |
| Operating      lease      charges                                                                               |   |                     | 5,507  |   |   |   | 6,116 |   |   |   | 5,897 |   |
| Impairment      losses                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                     |   |   |   |   |   |   |   |   |   |   |
| - trade accounts      receivable                                                                                               |   |                     | 328    |   |   |   | 438 |   |   |   | 295 |   |
| - other      receivables                                                                                                       |   |                     | 454    |   |   |   | 107 |   |   |   | 143 |   |

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   | Years ended December 31, |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   | 2005                     |   |   | 2006 |   |   | 2007 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   | RMB                      |   |   | RMB |   |   | RMB |   |
| Wages      and      salaries                                                                                                         |   |                     | 14,522 |   |   |   | 15,679 |   |   |   | 17,763 |   |
| Staff      welfare                                                                                                                   |   |                     | 1,878  |   |   |   | 2,012 |   |   |   | 885 |   |
| Contributions      to retirement schemes (Note      32)                                                                              |   |                     | 2,383  |   |   |   | 2,394 |   |   |   | 2,806 |   |
| Social      security      contributions                                                                                              |   |                     | 884    |   |   |   | 871 |   |   |   | 1,291 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |                     | 19,667 |   |   |   | 20,956 |   |   |   | 22,745 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |                     |   |   |   |   |   |   |   |   |   |   |

----

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   | Years ended December 31, |    |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------|---------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   | 2005                     |    |   | 2006 |   |   | 2007 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   | RMB                      |    |   | RMB |   |   | RMB |   |
| Consumption      tax                                                                                           |   |                     | 12,943  |   |   |   | 14,718 |   |   |   | 16,324 |   |
| Special      oil income      levy                                                                              |   |                     | — |   |   |   | 8,747 |   |   |   | 11,208 |   |
| City      construction      tax                                                                                |   |                     | 2,636   |   |   |   | 3,096 |   |   |   | 3,670 |   |
| Education      surcharge                                                                                       |   |                     | 1,335   |   |   |   | 1,651 |   |   |   | 1,922 |   |
| Resources      tax                                                                                             |   |                     | 642     |   |   |   | 854 |   |   |   | 882 |   |
| Business      tax                                                                                              |   |                     | 213     |   |   |   | 264 |   |   |   | 298 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                     | 17,769  |   |   |   | 29,330 |   |   |   | 34,304 |   |

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   | Years ended December 31, |    |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------|---------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   | 2005                     |    |   | 2006 |   |   | 2007 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   | RMB                      |    |   | RMB |   |   | RMB |   |
| Fines,      penalties and      compensations                                                                                      |   |                     | 158     |   |   |   | 65 |   |   |   | 73 |   |
| Donations                                                                                                                         |   |                     | 203     |   |   |   | 98 |   |   |   | 158 |   |
| Loss      on disposal of property, plant and equipment, net                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |                     | 2,123   |   |   |   | 1,647 |   |   |   | 549 |   |
| Impairment      losses on long-lived assets      (i)                                                                              |   |                     | 1,851   |   |   |   | 825 |   |   |   | 3,106 |   |
| Gain      on non-monetary contribution to a jointly controlledentity      (ii)                                                                             |   |                     | — |   |   |   | — |   |   |   | (1,315 | ) |
| Gain      from debt extinguishment      (iii)                                                                                     |   |                     | — |   |   |   | (486 | ) |   |   | — |   |
| Others                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                     | (71     | ) |   |   | 312 |   |   |   | 631 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |                     | 4,264   |   |   |   | 2,461 |   |   |   | 3,202 |   |

| (i) | The      factors resulting in the exploration and production (“E&P”) segment      impairment losses of RMB 60, RMB 552 and RMB 481 for the years ended      December 31, 2005, 2006 and 2007, respectively, were unsuccessful      development drilling and high operating and development costs for certain      small oil fields. The carrying values of these E&P properties were      written down to a recoverable amount which was determined based on the      present values of the expected future cash flows of the assets. The oil      and gas pricing was a factor used in the determination of the present      values of the expected future cash flows of the assets and had an impact      on the recognition of the assetimpairment. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (ii) | During      the year ended December 31, 2007, the Group contributed certain property,      plant and equipment and construction in progress with carrying amounts of      RMB 1,239 and RMB 601, respectively, in exchange for a 50% equity interest      in a newly set up jointly controlled entity and recognized a gain of RMB      1,315, representing the portion of the difference between the carrying      amount of these assets and their fair value attributable to the equity      interests of the other venturer.  The other venturer contributed      the other 50% equity interest in cash representing the fair values of the      property, plant and equipment and construction in progress as determined      by a valuation performed by an independent  valuer. |
|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (iii) | During      the year ended December 31, 2006, a subsidiary of the Group reached an      agreement with a bank to waive loan principal balance and related interest      payable totaling RMB 486. |
|-------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   | Years ended December 31,  |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   | 2005                      |   |   | 2006  |   |   | 2007  |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   | RMB                            |   |   | RMB |   |   | RMB |   |
| Interest      expense      incurred                                                                                                                              |   |                           | 7,032  |   |   |   | 8,595 |   |   |   | 8,280 |   |
| Less:      Interest expense capitalized*                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                           | (1,307 | ) |   |   | (1,494 | ) |   |   | (966 | ) |
| Interest      expense                                                                                                                                            |   |                           | 5,725  |   |   |   | 7,101 |   |   |   | 7,314 |   |
| *      Interest rates per annum at which borrowing costs werecapitalized for construction in      progress                                                                      |   | 3.3% to 6.6%                   |   |   | 3.6% to 6.1% |   |   | 3.6% to 7.1% |   |

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   | Years ended December 31, |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   | 2005                |   |   | 2006  |   |   | 2007  |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   | RMB                      |   |   | RMB |   |   | RMB |   |
| Current      tax                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |                     |   |   |   |   |   |   |   |
| - Provision for the      year                                                                                                                          |   |                     | 20,667 |   |   |   | 23,980 |   |   |   | 28,628 |   |
| - Under-provision in prior      years                                                                                                                  |   |                     | 477    |   |   |   | 260 |   |   |   | 249 |   |
| Deferred      taxation (Note      23)                                                                                         |   |                     | (1,272 | ) |   |   | (736 | ) |   |   | (4,156 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |                     | 19,872 |   |   |   | 23,504 |   |   |   | 24,721 |   |

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   | Years ended December 31, |    |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------|---------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   | 2005                |    |   | 2006  |   |   | 2007  |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   | RMB                      |    |   | RMB |   |   | RMB |   |
| Income      before income      tax                                                                                                                  |   |                     | 64,525  |   |   |   | 78,542 |   |   |   | 83,464 |   |
| Expected      PRC income tax expense at a statutory tax rate of 33%                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |                     | 21,293  |   |   |   | 25,919 |   |   |   | 27,543 |   |
| Tax      effect of non-deductible      expenses                                                                                                     |   |                     | 468     |   |   |   | 535 |   |   |   | 1,400 |   |
| Tax      effect of non-taxable      income                                                                                                          |   |                     | (630    | ) |   |   | (1,438 | ) |   |   | (3,767 | ) |
| Tax      effect of differential tax rate      (i)                                                                                                   |   |                     | (1,954  | ) |   |   | (2,047 | ) |   |   | (1,959 | ) |
| Tax      effect of tax losses not      recognized                                                                                                   |   |                     | 426     |   |   |   | 324 |   |   |   | 103 |   |
| Under-provision      in prior      years                                                                                                            |   |                     | 477     |   |   |   | 260 |   |   |   | 249 |   |
| Tax      credit for domestic equipment      purchases                                                                                               |   |                     | (208    | ) |   |   | (49 | ) |   |   | (500 | ) |
| Effect      of change in tax rate on deferred tax      (ii)                                                                                         |   |                     | — |   |   |   | — |   |   |   | 1,652 |   |
| Actual      tax expense                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                     | 19,872  |   |   |   | 23,504 |   |   |   | 24,721 |   |

----

| (i) | The      provision for PRC current income tax is based on a statutory income tax      rate of 33% of the assessable income of the Group as determined in      accordance with the relevant income tax rules and regulations of the PRC,      except for certain entities of the Group, which are taxed at a      preferential rate of 15%. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (ii)   | On      March 16, 2007, the Fifth Plenary Session of the Tenth National People’s      Congress passed the Corporate Income Tax Law of the People’s Republic of      China (“new tax law”), which takes effect on January 1, 2008. According to      the new tax law, a unified corporate income tax rate of 25% is applied to      PRC entities; however certain entities previously taxed at a preferential      rate are subject to a transition period during which their tax rate will      gradually be increased to the unified rate of 25% over a five year period      starting from January 1, 2008.                                                                                                                                                                                                                              |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   | Based      on the new tax law, the income tax rate applicable to the Group, except      for certain entities of the Group, is reduced from 33% to 25% from January      1, 2008. Based on a tax notice issued by the State Council on December 26,      2007, the applicable tax rates for entities operating in special economic      zones, which were previously taxed at the preferential rate of 15%, are      18%, 20%, 22%, 24% and 25% for the years ending December 31, 2008, 2009,      2010, 2011 and 2012, respectively. According to the same notice, the      applicable tax rate for entities operating in the western region of the      PRC which were granted a preferential tax rate of 15% from 2004 to 2010,      remains at 15% for the years ending December 31, 2008, 2009 and 2010 and      will be increased to 25% from January 1,2011. |

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   | December 31, |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   | 2006    |   |   | 2007  |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   | RMB          |   |   | RMB |   |
| Amounts      due from third      parties                                                                                                                                   |   |         | 14,515 |   |   |   | 21,839 |   |
| Amounts      due from Sinopec Group Company and its affiliates                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |         | 2,572  |   |   |   | 2,240 |   |
| Amounts      due from associates and jointly controlled      entities                                                                                                      |   |         | 1,402  |   |   |   | 1,750 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |         | 18,489 |   |   |   | 25,829 |   |
| Less:      Impairment losses for bad and doubtful      debts                                                                                                               |   |         | (3,345 | ) |   |   | (2,882 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |         | 15,144 |   |   |   | 22,947 |   |

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   | 2005  |   |   | 2006  |   |   | 2007  |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------|--------|--------|------------|--------|--------|------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   | RMB        |   |   | RMB        |   |   | RMB        |   |
| Balance      as of January      1                                                                                                           |   |       | 3,682  |   |       |   | 3,151  |       |   |   | 3,345 |   |
| Impairment      losses recognized for the      year                                                                                         |   |       | 328    |   |       |   | 438    |       |   |   | 295 |   |
| Reversal      of impairment      losses                                                                                                     |   |       | (503   | )      |       |   | (153   | )          |   |   | (204 | ) |
| Written      off                                                                                                                            |   |       | (356   | )      |       |   | (91    | )          |   |   | (554 | ) |
| Balance      as of December      31                                                                                                         |   |       | 3,151  |   |       |   | 3,345  |       |   |   | 2,882 |   |

----

----

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   | December 31, |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   | 2006    |   |   | 2007  |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   | RMB          |   |   | RMB |   |
| Crude      oil and other raw      materials                                                                                                                           |   |         | 56,037 |   |   |   | 70,739 |   |
| Work      in      progress                                                                                                                                            |   |         | 9,853  |   |   |   | 11,823 |   |
| Finished      goods                                                                                                                                                   |   |         | 25,716 |   |   |   | 35,040 |   |
| Spare      parts and      consumables                                                                                                                                 |   |         | 4,159  |   |   |   | 3,002 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |         | 95,765 |   |   |   | 120,604 |   |
| Less:      Allowance for diminution in value of      inventories                                                                                                      |   |         | (871   | ) |   |   | (4,572 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |         | 94,894 |   |   |   | 116,032 |   |

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   | 2005  |   |   | 2006  |   |   | 2007  |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------|--------|--------|------------|--------|--------|------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   | RMB        |   |   | RMB        |   |   | RMB        |   |
| Balance      as of January      1                                                                                                   |   |       | 911    |   |       |   | 897    |       |   |   | 871 |   |
| Allowance      for the      year                                                                                                    |   |       | 262    |   |       |   | 419    |       |   |   | 3,962 |   |
| Reversal      of allowance on      disposal                                                                                         |   |       | (180   | )      |       |   | (317   | )          |   |   | (131 | ) |
| Written      off                                                                                                                    |   |       | (96    | )      |       |   | (128   | )          |   |   | (130 | ) |
| Balance      as of December      31                                                                                                 |   |       | 897    |   |       |   | 871    |       |   |   | 4,572 |   |

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   | December 31, |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   | 2006    |   |   | 2007  |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   | RMB          |   |   | RMB |   |
| Advances      to third      parties                                                                                                                                        |   |         | 1,818  |   |   |   | 1,418 |   |
| Amounts      due from Sinopec Group Company and its affiliates                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |         | 3,361  |   |   |   | 6,719 |   |
| Other      receivables                                                                                                                                                     |   |         | 2,347  |   |   |   | 1,597 |   |
| Purchase      deposits                                                                                                                                                     |   |         | 2,959  |   |   |   | 3,817 |   |
| Prepayments      in connection with construction work and equipment    purchases                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |         | 4,658  |   |   |   | 4,683 |   |
| Prepaid      value-added tax and customs      duty                                                                                                                         |   |         | 4,815  |   |   |   | 6,325 |   |
| Amounts      due from associates and jointly controlled      entities                                                                                                      |   |         | 334    |   |   |   | 363 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |         | 20,292 |   |   |   | 24,922 |   |

----

|                                                                                                                                                                                                                                                                                                                                                                                      |   | Explorationandproduction |    |   |  Refining |   |    | Marketinganddistribution |   |   |  Chemicals |   |   | Corporateandothers |    |   |  Total |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------|---------|--------|----------------|--------|---------|--------------------------|--------|--------|-----------------|--------|--------|--------------------|---------|--------|-------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                      |   | RMB                      |    |   | RMB            |   |    | RMB                      |   |   | RMB             |   |   | RMB                |    |   | RMB         |   |
| Cost/valuation:                                                                                                                                                                                                                                                                                                                                                                           |   |                     |    |   |           |   |    |                     |   |   |            |   |   |               |    |   |        |   |
|  Balance      as of January 1,      2006                                                                                   |   |                     | 215,041 |   |           |   | 126,484 |                     |   |   | 77,021          |   |   |               | 164,615 |   |        |   | 4,474 |   |   |   | 587,635 |   |
|  Additions                                                                                             |   |                     | 1,175   |   |           |   | 298     |                     |   |   | 1,280           |   |   |               | 268     |   |        |   | 456 |   |   |   | 3,477 |   |
|  Transferred      from construction in progress                                                                                                                                                                                                                                                                                                                                      |   |                     | 28,695  |   |           |   | 27,368  |                     |   |   | 10,087          |   |   |               | 15,394  |   |        |   | 161 |   |   |   | 81,705 |   |
|  Acquisition      of a subsidiary      (ii)                                                            |   |                     | 2,071   |   |           |   | — |                     |   |   | —         |   |   |               | — |   |        |   | — |   |   |   | 2,071 |   |
|  Reclassification                                                                                                                                                                                                                                                                                                                                                                    |   |                     | (56     | )      |           |   | (600    | )                        |   |   | —         |   |   |               | 725     |   |        |   | (69 | ) |   |   | — |   |
|        Disposals                                                                                       |   |                     | (5,562  | )      |           |   | (1,594  | )                        |   |   | (2,280          | )      |   |               | (4,285  | )      |        |   | (153 | ) |   |   | (13,874 | ) |
|        Balance as of December 31,      2006                                                            |   |                     | 241,364 |   |           |   | 151,956 |                     |   |   | 86,108          |   |   |               | 176,717 |   |        |   | 4,869 |   |   |   | 661,014 |   |
|                                                                                                                                                                                                                                                                                                                                                                                      |   |                     |    |   |           |   |    |                     |   |   |            |   |   |               |    |   |        |   |   |   |   |   |   |   |
| Balance      as of January 1,      2007                                                                     |   |                     | 241,364 |   |           |   | 151,956 |                     |   |   | 86,108          |   |   |               | 176,717 |   |        |   | 4,869 |   |   |   | 661,014 |   |
| Additions                                                                                                   |   |                     | 7,367   |   |           |   | 506     |                     |   |   | 289             |   |   |               | 269     |   |        |   | 247 |   |   |   | 8,678 |   |
| Transferred      from construction in progress                                                                                                                                                                                                                                                                                                                                            |   |                     | 35,851  |   |           |   | 10,768  |                     |   |   | 5,726           |   |   |               | 6,244   |   |        |   | 1,316 |   |   |   | 59,905 |   |
| Acquisition      of subsidiaries      (iii)                                                                 |   |                     | — |   |           |   | — |                     |   |   | 2,474           |   |   |               | — |   |        |   | — |   |   |   | 2,474 |   |
| Reclassification                                                                                            |   |                     | (7      | )      |           |   | (78     | )                        |   |   | 94              |   |   |               | (9      | )      |        |   | — |   |   |   | — |   |
| Contributed      to a jointly controlledentity      (Note      9)                                                          |   |                     | — |   |           |   | (4,317  | )                        |   |   | —         |   |   |               | — |   |        |   | — |   |   |   | (4,317 | ) |
| Reclassification      to lease prepayments and other assets                                                                |   |                     | — |   |           |   | (322    | )                        |   |   | (1,345          | )      |   |               | (672    | )      |        |   | (27 | ) |   |   | (2,366 | ) |
| Disposals                                                                                                   |   |                     | (392    | )      |           |   | (1,027  | )                        |   |   | (2,191          | )      |   |               | (1,425  | )      |        |   | (207 | ) |   |   | (5,242 | ) |
| Balance      as of December 31,      2007                                                                   |   |                     | 284,183 |   |           |   | 157,486 |                     |   |   | 91,155          |   |   |               | 181,124 |   |        |   | 6,198 |   |   |   | 720,146 |   |
|                                                                                                                                                                                                                                                                                                                                                                                      |   |                     |    |   |           |   |    |                     |   |   |            |   |   |               |    |   |        |   |   |   |   |   |   |   |
| Accumulated      depreciation:                                                                                                                                                                                                                                                                                                                                                            |   |                     |    |   |           |   |    |                     |   |   |            |   |   |               |    |   |        |   |   |   |   |   |   |   |
| Balance      as of January 1,      2006                                                                     |   |                     | 103,343 |   |           |   | 62,911  |                     |   |   | 14,812          |   |   |               | 99,435  |   |        |   | 1,549 |   |   |   | 282,050 |   |
| Depreciation      charge for the      year                                                                  |   |                     | 12,839  |   |           |   | 8,096   |                     |   |   | 3,422           |   |   |               | 8,317   |   |        |   | 401 |   |   |   | 33,075 |   |
| Acquisition      of a subsidiary      (ii)                                                                  |   |                     | 592     |   |           |   | — |                     |   |   | —         |   |   |               | — |   |        |   | — |   |   |   | 592 |   |
| Impairment      losses for the      year                                                                    |   |                     | 552     |   |           |   | — |                     |   |   | 23              |   |   |               | 250     |   |        |   | — |   |   |   | 825 |   |
| Reclassification                                                                                            |   |                     | (23     | )      |           |   | (392    | )                        |   |   | —         |   |   |               | 420     |   |        |   | (5 | ) |   |   | — |   |
| Written      back on      disposals                                                                         |   |                     | (5,253  | )      |           |   | (1,358  | )                        |   |   | (1,103          | )      |   |               | (3,463  | )      |        |   | (108 | ) |   |   | (11,285 | ) |
| Balance      as of December 31,      2006                                                                   |   |                     | 112,050 |   |           |   | 69,257  |                     |   |   | 17,154          |   |   |               | 104,959 |   |        |   | 1,837 |   |   |   | 305,257 |   |
|                                                                                                                                                                                                                                                                                                                                                                                      |   |                     |    |   |           |   |    |                     |   |   |            |   |   |               |    |   |        |   |   |   |   |   |   |   |
| Balance      as of January 1,      2007                                                                     |   |                     | 112,050 |   |           |   | 69,257  |                     |   |   | 17,154          |   |   |               | 104,959 |   |        |   | 1,837 |   |   |   | 305,257 |   |
| Depreciation      charge for the      year                                                                  |   |                     | 18,161  |   |           |   | 8,899   |                     |   |   | 5,788           |   |   |               | 8,734   |   |        |   | 634 |   |   |   | 42,216 |   |
| Acquisition      of subsidiaries      (iii)                                                                 |   |                     | — |   |           |   | — |                     |   |   | 916             |   |   |               | — |   |        |   | — |   |   |   | 916 |   |
| Impairment      losses for the      year                                                                    |   |                     | 481     |   |           |   | 916     |                     |   |   | 1,194           |   |   |               | 318     |   |        |   | — |   |   |   | 2,909 |   |
| Reclassification                                                                                            |   |                     | 131     |   |           |   | (204    | )                        |   |   | 82              |   |   |               | (9      | )      |        |   | — |   |   |   | — |   |
| Contributed      to a jointly controlled entity      (Note      9)                                                    |   |                     | — |   |           |   | (3,078  | )                        |   |   | —         |   |   |               | — |   |        |   | — |   |   |   | (3,078 | ) |
| Reclassification      to lease prepayments and otherassets                                                                 |   |                     | — |   |           |   | — |                     |   |   | (190            | )      |   |               | (56     | )      |        |   | — |   |   |   | (246 | ) |
| Written      back on      disposals                                                                         |   |                     | (140    | )      |           |   | (431    | )                        |   |   | (1,142          | )      |   |               | (1,164  | )      |        |   | (93 | ) |   |   | (2,970 | ) |
| Balance      as of December 31,      2007                                                                   |   |                     | 130,683 |   |           |   | 75,359  |                     |   |   | 23,802          |   |   |               | 112,782 |   |        |   | 2,378 |   |   |   | 345,004 |   |
|                                                                                                                                                                                                                                                                                                                                                                                      |   |                     |    |   |           |   |    |                     |   |   |            |   |   |               |    |   |        |   |   |   |   |   |   |   |
| Net      book value:                                                                                                                                                                                                                                                                                                                                                                      |   |                     |    |   |           |   |    |                     |   |   |            |   |   |               |    |   |        |   |   |   |   |   |   |   |
| Balance      as of January 1,      2006                                                                     |   |                     | 111,698 |   |           |   | 63,573  |                     |   |   | 62,209          |   |   |               | 65,180  |   |        |   | 2,925 |   |   |   | 305,585 |   |
| Balance      as of December 31,      2006                                                                   |   |                     | 129,314 |   |           |   | 82,699  |                     |   |   | 68,954          |   |   |               | 71,758  |   |        |   | 3,032 |   |   |   | 355,757 |   |
| Balance      as of December 31,      2007                                                                   |   |                     | 153,500 |   |           |   | 82,127  |                     |   |   | 67,353          |   |   |               | 68,342  |   |        |   | 3,820 |   |   |   | 375,142 |   |

----

|                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |  Buildings |   |   |  Oil      and gasproperties |   |    | Oil      depots,storage      tanksand      servicestations |   |   | Plant,machinery,equipmentand others |   |   |   Total |    |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------|--------|--------|----------------------------------|--------|---------|------------------------------------------------------------|--------|--------|-------------------------------------|--------|--------|-------------------|---------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                            |   | RMB             |   |   | RMB                              |   |    | RMB                                                        |   |   | RMB                                 |   |   | RMB               |    |
| Cost/valuation:                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |            |   |   |                             |   |    |                                                       |   |   |                                |   |   |              |    |
| Balance      as of January 1,      2006                                                                              |   |            | 46,219 |   |                             |   | 195,280 |                                                       |   |   | 73,117                              |   |   |              | 273,019 |   |   |   | 587,635 |   |
| Additions                                                                                                            |   |            | 752    |   |                             |   | 777     |                                                       |   |   | 1,071                               |   |   |              | 877     |   |   |   | 3,477 |   |
| Transferred      from construction in      progress                                                                  |   |            | 2,797  |   |                             |   | 26,579  |                                                       |   |   | 14,549                              |   |   |              | 37,780  |   |   |   | 81,705 |   |
| Acquisition      of a subsidiary      (ii)                                                                           |   |            | 519    |   |                             |   | 1,313   |                                                       |   |   | —                             |   |   |              | 239     |   |   |   | 2,071 |   |
| Reclassification                                                                                                     |   |            | (2,157 | )      |                             |   | 10      |                                                       |   |   | 3,170                               |   |   |              | (1,023  | ) |   |   | — |   |
| Disposals                                                                                                            |   |            | (751   | )      |                             |   | (5,266  | )                                                          |   |   | (1,658                              | )      |   |              | (6,199  | ) |   |   | (13,874 | ) |
| Balance      as of December 31,      2006                                                                            |   |            | 47,379 |   |                             |   | 218,693 |                                                       |   |   | 90,249                              |   |   |              | 304,693 |   |   |   | 661,014 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |            |   |   |                             |   |    |                                                       |   |   |                                |   |   |              |    |   |   |   |   |   |
| Balance      as of January 1,      2007                                                                              |   |            | 47,379 |   |                             |   | 218,693 |                                                       |   |   | 90,249                              |   |   |              | 304,693 |   |   |   | 661,014 |   |
| Additions                                                                                                            |   |            | 199    |   |                             |   | 7,264   |                                                       |   |   | 370                                 |   |   |              | 845     |   |   |   | 8,678 |   |
| Transferred      from construction in      progress                                                                  |   |            | 684    |   |                             |   | 33,423  |                                                       |   |   | 7,289                               |   |   |              | 18,509  |   |   |   | 59,905 |   |
| Acquisition      of subsidiaries      (iii)                                                                          |   |            | 1,423  |   |                             |   | — |                                                       |   |   | 949                                 |   |   |              | 102     |   |   |   | 2,474 |   |
| Reclassification                                                                                                     |   |            | 349    |   |                             |   | (7      | )                                                          |   |   | (446                                | )      |   |              | 104     |   |   |   | — |   |
| Contributed      to a jointly controlledentity      (Note      9)                                                              |   |            | (749   | )      |                             |   | — |                                                       |   |   | —                             |   |   |              | (3,568  | ) |   |   | (4,317 | ) |
| Reclassification      to lease prepayments and otherassets                                                                     |   |            | (1,941 | )      |                             |   | — |                                                       |   |   | —                             |   |   |              | (425    | ) |   |   | (2,366 | ) |
| Disposals                                                                                                            |   |            | (1,044 | )      |                             |   | — |                                                       |   |   | (1,411                              | )      |   |              | (2,787  | ) |   |   | (5,242 | ) |
| Balance      as of December 31,      2007                                                                            |   |            | 46,300 |   |                             |   | 259,373 |                                                       |   |   | 97,000                              |   |   |              | 317,473 |   |   |   | 720,146 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |            |   |   |                             |   |    |                                                       |   |   |                                |   |   |              |    |   |   |   |   |   |
| Accumulated      depreciation:                                                                                                                                                                                                                                                                                                                                                                                                                  |   |            |   |   |                             |   |    |                                                       |   |   |                                |   |   |              |    |   |   |   |   |   |
| Balance      as of January 1,      2006                                                                              |   |            | 21,636 |   |                             |   | 94,374  |                                                       |   |   | 13,730                              |   |   |              | 152,310 |   |   |   | 282,050 |   |
| Depreciation      charge for the      year                                                                           |   |            | 1,742  |   |                             |   | 12,126  |                                                       |   |   | 3,728                               |   |   |              | 15,479  |   |   |   | 33,075 |   |
| Acquisition      of a subsidiary      (ii)                                                                           |   |            | 49     |   |                             |   | 468     |                                                       |   |   | —                             |   |   |              | 75      |   |   |   | 592 |   |
| Impairment      losses for the      year                                                                             |   |            | 118    |   |                             |   | 532     |                                                       |   |   | 23                                  |   |   |              | 152     |   |   |   | 825 |   |
| Reclassification                                                                                                     |   |            | (379   | )      |                             |   | (45     | )                                                          |   |   | 1,221                               |   |   |              | (797    | ) |   |   | — |   |
| Written      back on      disposals                                                                                  |   |            | (438   | )      |                             |   | (5,073  | )                                                          |   |   | (834                                | )      |   |              | (4,940  | ) |   |   | (11,285 | ) |
| Balance      as of December 31,      2006                                                                            |   |            | 22,728 |   |                             |   | 102,382 |                                                       |   |   | 17,868                              |   |   |              | 162,279 |   |   |   | 305,257 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |            |   |   |                             |   |    |                                                       |   |   |                                |   |   |              |    |   |   |   |   |   |
| Balance      as of January 1,      2007                                                                              |   |            | 22,728 |   |                             |   | 102,382 |                                                       |   |   | 17,868                              |   |   |              | 162,279 |   |   |   | 305,257 |   |
| Depreciation      charge for the      year                                                                           |   |            | 1,740  |   |                             |   | 16,304  |                                                       |   |   | 4,409                               |   |   |              | 19,763  |   |   |   | 42,216 |   |
| Acquisition      of subsidiaries      (iii)                                                                          |   |            | 472    |   |                             |   | — |                                                       |   |   | 350                                 |   |   |              | 94      |   |   |   | 916 |   |
| Impairment      losses for the      year                                                                             |   |            | 337    |   |                             |   | 437     |                                                       |   |   | 961                                 |   |   |              | 1,174   |   |   |   | 2,909 |   |
| Reclassification                                                                                                     |   |            | 736    |   |                             |   | (66     | )                                                          |   |   | 471                                 |   |   |              | (1,141  | ) |   |   | — |   |
| Contributed      to a jointly controlledentity      (Note      9)                                                              |   |            | (448   | )      |                             |   | — |                                                       |   |   | —                             |   |   |              | (2,630  | ) |   |   | (3,078 | ) |
| Reclassification      to lease prepayments and otherassets                                                                     |   |            | (245   | )      |                             |   | — |                                                       |   |   | —                             |   |   |              | (1      | ) |   |   | (246 | ) |
| Written      back on      disposals                                                                                  |   |            | (333   | )      |                             |   | — |                                                       |   |   | (756                                | )      |   |              | (1,881  | ) |   |   | (2,970 | ) |
| Balance      as of December 31,      2007                                                                            |   |            | 24,987 |   |                             |   | 119,057 |                                                       |   |   | 23,303                              |   |   |              | 177,657 |   |   |   | 345,004 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |            |   |   |                             |   |    |                                                       |   |   |                                |   |   |              |    |   |   |   |   |   |
| Net      book value:                                                                                                                                                                                                                                                                                                                                                                                                                            |   |            |   |   |                             |   |    |                                                       |   |   |                                |   |   |              |    |   |   |   |   |   |
| Balance      as of  January 1,      2006                                                                   |   |            | 24,583 |   |                             |   | 100,906 |                                                       |   |   | 59,387                              |   |   |              | 120,709 |   |   |   | 305,585 |   |
| Balance      as of December 31,      2006                                                                            |   |            | 24,651 |   |                             |   | 116,311 |                                                       |   |   | 72,381                              |   |   |              | 142,414 |   |   |   | 355,757 |   |
| Balance      as of December 31,      2007                                                                            |   |            | 21,313 |   |                             |   | 140,316 |                                                       |   |   | 73,697                              |   |   |              | 139,816 |   |   |   | 375,142 |   |

| (i) | The      additions in the exploration and production segment and oil and gas      properties of the Group for the year ended December 31, 2007 included RMB      7,211 relating to the estimated dismantlement costs for site restoration      recognized during the year. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (ii) | During      the year ended December 31, 2006, the Group acquired an additional 71.4%      in Shengli Oil Field Dynamic Company Limited (Note  18). |
|------|----------------------------------------------------------------------------------------------------------------------------------------------------|

| (iii) | During      the year ended December 31, 2007, the Group acquired the entire equity      interests of certain gas stations companies incorporated in Hong Kong      (“Hong Kong gas stations”) (Note18). |
|-------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                                                                                                                                                                                                                                                                                                                                                                        |   | Exploration andproduction |    |   |   Refining |   |    | Marketing anddistribution |   |   |  Chemicals |   |   | Corporate and      others |    |   |  Total |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------|---------|--------|----------------------|--------|---------|--------------------------------|--------|--------|-----------------|--------|--------|--------------------------------|---------|--------|-------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                        |   | RMB                            |    |   | RMB                  |   |    | RMB                            |   |   | RMB             |   |   | RMB                            |    |   | RMB         |   |
| Balance      as of January 1,      2006                                                              |   |                           | 11,003  |   |                 |   | 20,518  |                           |   |   | 10,336          |   |   |                           | 10,058  |   |        |   | 2,146 |   |   |   | 54,061 |   |
| Additions                                                                                            |   |                           | 37,983  |   |                 |   | 22,289  |                           |   |   | 10,039          |   |   |                           | 12,361  |   |        |   | 1,714 |   |   |   | 84,386 |   |
| Acquisition      of a      subsidiary                                                                |   |                           | 89      |   |                 |   | — |                           |   |   | —         |   |   |                           | — |   |        |   | — |   |   |   | 89 |   |
| Dry      hole costs written      off                                                                 |   |                           | (3,960  | )      |                 |   | — |                           |   |   | —         |   |   |                           | — |   |        |   | — |   |   |   | (3,960 | ) |
| Transferred      to property, plant and equipment                                                                                                                                                                                                                                                                                                                                                           |   |                           | (28,695 | )      |                 |   | (27,368 | )                              |   |   | (10,087         | )      |   |                           | (15,394 | )      |        |   | (161 | ) |   |   | (81,705 | ) |
| Balance      as of December 31,      2006                                                            |   |                           | 16,420  |   |                 |   | 15,439  |                           |   |   | 10,288          |   |   |                           | 7,025   |   |        |   | 3,699 |   |   |   | 52,871 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                        |   |                           |    |   |                 |   |    |                           |   |   |            |   |   |                           |    |   |        |   |   |   |   |   |   |   |
| Balance      as of January 1,      2007                                                              |   |                           | 16,420  |   |                 |   | 15,439  |                           |   |   | 10,288          |   |   |                           | 7,025   |   |        |   | 3,699 |   |   |   | 52,871 |   |
| Additions                                                                                            |   |                           | 60,135  |   |                 |   | 22,209  |                           |   |   | 10,448          |   |   |                           | 16,025  |   |        |   | 2,873 |   |   |   | 111,690 |   |
| Dry      hole costs written      off                                                                 |   |                           | (6,060  | )      |                 |   | — |                           |   |   | —         |   |   |                           | — |   |        |   | — |   |   |   | (6,060 | ) |
| Transferred      to property, plant and equipment                                                                                                                                                                                                                                                                                                                                                           |   |                           | (35,851 | )      |                 |   | (10,768 | )                              |   |   | (5,726          | )      |   |                           | (6,244  | )      |        |   | (1,316 | ) |   |   | (59,905 | ) |
| Reclassification      to lease prepayments and other assets                                                                                                                                                                                                                                                                                                                                                 |   |                           | (203    | )      |                 |   | (144    | )                              |   |   | (1,969          | )      |   |                           | (54     | )      |        |   | (20 | ) |   |   | (2,390 | ) |
| Impairment      losses for the year                                                                                                                                                                                                                                                                                                                                                                         |   |                           | — |   |                 |   | (154    | )                              |   |   | (43             | )      |   |                           | — |   |        |   | — |   |   |   | (197 | ) |
| Contributed      to a jointly controlled entity (Note 9)                                                                                                                                                                                                                                                                                                                                                    |   |                           | — |   |                 |   | (601    | )                              |   |   | —         |   |   |                           | — |   |        |   | — |   |   |   | (601 | ) |
| Balance      as of December 31,      2007                                                            |   |                           | 34,441  |   |                 |   | 25,981  |                           |   |   | 12,998          |   |   |                           | 16,752  |   |        |   | 5,236 |   |   |   | 95,408 |   |

|                                                                                                                                                              |   | December 31, |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------|--------|
|                                                                                                                                                              |   | 2005         |   |   | 2006 |   |   | 2007 |   |
|                                                                                                                                                              |   | RMB          |   |   | RMB |   |   | RMB |   |
|         At beginning of year                                                                                                                       |   |         | 2,898  |   |   |   | 3,573 |   |   |   | 4,771 |   |
|         Additions, net of amount that were capitalized and subsequently expensed      in the same year, pending the determination of proved    reserves |   |         | 2,554  |   |   |   | 3,241 |   |   |   | 4,874 |   |
|         Transferred to oil and gas properties based on the determination      of       proved      reserves          |   |         | (671   | ) |   |   | (305 | ) |   |   | (568 | ) |
|         Dry hole costs written off                                                                                                                      |   |         | (1,208 | ) |   |   | (1,738 | ) |   |   | (2,783 | ) |
|  At      end of year                                                                                                                                         |   |         | 3,573  |   |   |   | 4,771 |   |   |   | 6,294 |   |

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   | December 31, |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   | 2005         |   |   | 2006 |   |   | 2007 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   | RMB          |   |   | RMB |   |   | RMB |   |
| One      year or      less                                                                                       |   |         | 3,277  |   |   |   | 4,393 |   |   |   | 5,701 |   |
|        Over one year                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |         | 296    |   |   |   | 378 |   |   |   | 593 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |         | 3,573  |   |   |   | 4,771 |   |   |   | 6,294 |   |

----

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   | 2006  |    |   | 2007  |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------|---------|--------|------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   | RMB        |    |   | RMB        |   |
| Cost:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |       |    |   |       |   |
| Balance      as of January      1                                                                                                                      |   |       | 2,203   |   |       |   | 14,325 |   |
| Additions                                                                                                                                              |   |       | 12,122  |   |       |   | 1,328 |   |
| Disposals                                                                                                                                              |   |       | — |   |       |   | (163 | ) |
| Balance      as of December      31                                                                                                                    |   |       | 14,325  |   |       |   | 15,490 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |       |    |   |       |   |   |   |
| Accumulated      impairment losses:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |       |    |   |       |   |   |   |
| Balance      as of January 1 and December      31                                                                                                      |   |       | — |   |       |   | — |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |       |    |   |       |   |   |   |
| Net      book      value                                                                                                                               |   |       |    |   |       |   |   |   |
| Balance      as of January      1                                                                                                                      |   |       | 2,203   |   |       |   | 14,325 |   |
| Balance      as of December      31                                                                                                                    |   |       | 14,325  |   |       |   | 15,490 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |       |    |   |       |   |   |   |

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   | December 31, ­­ |    |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------|---------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   | 2006                      |    |   | 2007  |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   | RMB                            |    |   | RMB |   |
| Sinopec      Beijing Yanshan Branch (“Sinopec      Yanshan”)                                                                                                         |   |                           | 1,157   |   |   |   | 1,157 |   |
| Sinopec      Zhenhai Refining and Chemical Branch (“Sinopec Zhenhai”)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |                           | 3,952   |   |   |   | 3,952 |   |
| Sinopec      Qilu Branch (“Sinopec      Qilu”)                                                                                                                       |   |                           | 2,159   |   |   |   | 2,159 |   |
| Sinopec      Yangzi Petrochemical Company Limited (“Sinopec Yangzi”)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |                           | 2,737   |   |   |   | 2,737 |   |
| Sinopec      Zhongyuan Petroleum Company Limited (“Sinopec Zhongyuan”)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |                           | 1,391   |   |   |   | 1,391 |   |
| Shengli      Oil Field Dynamic Company Limited      (“Dynamic”)                                                                                                      |   |                           | 1,361   |   |   |   | 1,361 |   |
| Hong      Kong gas      stations                                                                                                                                                 |   |                           | — |   |   |   | 1,004 |   |
| Multiple      units without individually significant      goodwill                                                                                                               |   |                           | 1,568   |   |   |   | 1,729 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |                           | 14,325  |   |   |   | 15,490 |   |

----

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   | December 31, ­­ |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   | 2006                      |   |   | 2007  |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   | RMB                            |   |   | RMB |   |
| Share      of net      assets                                                                                                      |   |                           | 11,898 |   |   |   | 16,865 |   |

| Name of      company                                             | Form      of businessstructure | Particulars      of issuedand paid up      capital  | Percentage of      equity held by the Company | Percentage      of equity      held by the      Company’s      subsidiaries | Principal      activities                                                                        |
|------------------------------------------------------------------|--------------------------------|-----------------------------------------------------|----------------------------------------------------|-----------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------|
|                                                             |                           |                                                | %                                                  | %                                                                                 |                                                                                             |
| Sinopec      Shandong Taishan Petroleum Company Limited          | Incorporated                   | 480,793,320      ordinary shares of RMB 1.00 each   | 24.57                                              | ___                                                                               | Sale      of petroleum products and decoration of service gas    stations                        |
|                                                             |                           |                                                |                                               |                                                                              |                                                                                             |
| Sinopec      Finance Company Limited                             | Incorporated                   | Registered      capital RMB      6,000,000,000 | 49.00                                              | ___                                                                               | Provision      of non-banking financial services                                                 |
|                                                             |                           |                                                |                                               |                                                                              |                                                                                             |
| Shanghai      Petroleum National GasCorporation                  | Incorporated                   | Registered      capitalRMB      900,000,000         | 30.00                                              | ___                                                                               | Exploration      and production of crude oil and natural gas                                     |
|                                                             |                           |                                                |                                               |                                                                              |                                                                                             |
| Shanghai      Chemical Industry Park Development Company Limited | Incorporated                   | Registered      capitalRMB      2,372,439,000       | ___                                                | 38.26                                                                             | Planning,      development and operation of the Chemical Industry Park in Shanghai, the      PRC |
|                                                             |                           |                                                |                                               |                                                                              |                                                                                             |
| China      Shipping & Sinopec SuppliersCompany Limited       | Incorporated                   | Registered      capitalRMB      876,660,000         | ___                                                | 50.00                                                                             | Transportation      of petroleum products                                                        |
|                                                             |                           |                                                |                                               |                                                                              |                                                                                             |
| China      Aviation Oil Supply Company Limited                   | Incorporated                   | Registered      capital RMB      3,800,000,000 | —                                            | 29.00                                                                             | Marketing      and distribution of refined petroleumproducts                                     |

----

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   | December 31, ­­ |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   | 2006                      |   |   | 2007  |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   | RMB                            |   |   | RMB |   |
| Share      of net      assets                                                                                                      |   |                           | 9,236  |   |   |   | 12,723 |   |

| Name of      company                                              | Form      of business      structure | Particulars      of issued and paid up      capital | Percentage of      equity held      by the Company | Percentage      of equity      held by      the Company’s      subsidiaries | Principal      activities                                     |
|-------------------------------------------------------------------|--------------------------------------|-----------------------------------------------------|---------------------------------------------------------|-----------------------------------------------------------------------------------|---------------------------------------------------------------|
|                                                              |                                 |                                                | %                                                       | %                                                                                 |                                                          |
| Shanghai      Secco Petrochemical Company Limited                 | Incorporated                         | Registered      capitalUSD      901,440,964         | 30.00                                                   | 20.00                                                                             | Manufacturing      and distribution of petrochemical products |
| BASF-YPC      Company Limited                                     | Incorporated                         | Registered      capitalRMB      8,793,000,000       | 30.00                                                   | 10.00                                                                             | Manufacturing      and distribution of petrochemical products |
| Yueyang      Sinopec and Shell Coal Gasification Company Limited  | Incorporated                         | Registered      capitalUSD      45,588,700          | 50.00                                                   | —                                                                           | Manufacturing      and distribution of industrial gas         |
| Fujian      Refining and Petrochemical  Company Limited | Incorporated                         |  Registered      capitalUSD      1,654,000,000 | 50.00                                                   | —                                                                           | Manufacturing      and distribution of petrochemicalproducts  |

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   | Years ended December 31,    ­ |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   | 2005                               |   |   | 2006 |   |   | 2007 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   | RMB                                |   |   | RMB |   |   | RMB |   |
| Results      of operation:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                               |   |   |   |   |   |   |   |
| Operating      revenue                                                                                                |   |                               | 9,360  |   |   |   | 17,323 |   |   |   | 23,085 |   |
| Expenses                                                                                                              |   |                               | (9,476 | ) |   |   | (14,927 | ) |   |   | (20,378 | ) |
| Net      (loss) /      income                                                                                         |   |                               | (116   | ) |   |   | 2,396 |   |   |   | 2,707 |   |

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   | December      31, ­­­ |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   | 2006                                      |   |   | 2007 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   | RMB                                       |   |   | RMB |   |
| Financial      condition:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                                      |   |   |   |   |
| Current      assets                                                                                                           |   |                                      | 4,716  |   |   |   | 6,736 |   |
| Non-current      assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                                      | 15,211 |   |   |   | 22,229 |   |
| Current      liabilities                                                                                                      |   |                                      | (1,964 | ) |   |   | (5,313 | ) |
| Non-current      liabilities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |                                      | (8,727 | ) |   |   | (10,929 | ) |
| Net      assets                                                                                                               |   |                                      | 9,236  |   |   |   | 12,723 |   |

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   | Years ended December 31, |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   | 2005                     |   |   | 2006 |   |   | 2007 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   | RMB                      |   |   | RMB |   |   | RMB |   |
| Cash      flows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                     |   |   |   |   |   |   |   |
| Net      cash (used in) / generated from operating activities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                     | (1,434 | ) |   |   | 2,452 |   |   |   | 5,079 |   |
| Net      cash used in investing      activities                                                                                         |   |                     | (2,474 | ) |   |   | (382 | ) |   |   | (13,238 | ) |
| Net      cash generated from / (used in) financing activities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                     | 4,011  |   |   |   | (939 | ) |   |   | 7,143 |   |

----

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   | December31, ­­ |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   | 2006                     |   |   | 2007  |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   | RMB                           |   |   | RMB |   |
| Available-for-sale      equity securities, listed and at quoted market price                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |                          | 157    |   |   |   | 653 |   |
| Other      investments in equity securities, unlisted and at      cost                                                                                                      |   |                          | 3,085  |   |   |   | 2,846 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                          | 3,242  |   |   |   | 3,499 |   |
| Less:      Impairment losses for      investments                                                                                                                           |   |                          | (316   | ) |   |   | (305 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                          | 2,926  |   |   |   | 3,194 |   |

|                                                                                                                                                                                                                                                                                                                                                                                            |   | Assets                        |    |   | Liabilities                   |   |    | Net balance                   |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------|---------|--------|-------------------------------|--------|---------|-------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                            |   | December31, ­­ |    |   | December31, ­­ |   |    | December31, ­­ |   |
|                                                                                                                                                                                                                                                                                                                                                                                            |   | 2006                          |    |   | 2007                          |   |    | 2006                          |   |   | 2007 |   |   | 2006 |   |   | 2007 |   |
|                                                                                                                                                                                                                                                                                                                                                                                            |   | RMB                           |    |   | RMB                           |   |    | RMB                           |   |   | RMB |   |   | RMB |   |   | RMB |   |
| Current                                                                                                                                                                                                                                                                                                                                                                                         |   |                          |    |   |                          |   |    |                          |   |   |   |   |   |   |   |   |   |   |
| Receivables      and      inventories                                                                             |   |                          | 3,532   |   |                          |   | 3,841   |                          |   |   | — |   |   |   | — |   |   |   | 3,532 |   |   |   | 3,841 |   |
| Accruals                                                                                                          |   |                          | 865     |   |                          |   | 2,613   |                          |   |   | — |   |   |   | — |   |   |   | 865 |   |   |   | 2,613 |   |
| Non-current                                                                                                                                                                                                                                                                                                                                                                                     |   |                          |    |   |                          |   |    |                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Property,      plant and      equipment                                                                           |   |                          | 2,279   |   |                          |   | 2,641   |                          |   |   | (1,678 | ) |   |   | (1,376 | ) |   |   | 601 |   |   |   | 1,265 |   |
| Accelerated      depreciation                                                                                     |   |                          | — |   |                          |   | — |                          |   |   | (4,657 | ) |   |   | (4,144 | ) |   |   | (4,657 | ) |   |   | (4,144 | ) |
| Tax      value of losses carried forward                                                                                                                                                                                                                                                                                                                                                        |   |                          | 105     |   |                          |   | 176     |                          |   |   | — |   |   |   | — |   |   |   | 105 |   |   |   | 176 |   |
| Lease      prepayments                                                                                            |   |                          | 351     |   |                          |   | 306     |                          |   |   | — |   |   |   | — |   |   |   | 351 |   |   |   | 306 |   |
| Available-for-sale      financial assets (i)                                                                                                                                                                                                                                                                                                                                                    |   |                          | — |   |                          |   | — |                          |   |   | (4 | ) |   |   | (116 | ) |   |   | (4 | ) |   |   | (116 | ) |
| Embedded      derivative component ofconvertible      bonds                                                       |   |                          | — |   |                          |   | 803     |                          |   |   | — |   |   |   | — |   |   |   | — |   |   |   | 803 |   |
| Others                                                                                                            |   |                          | 50      |   |                          |   | 59      |                          |   |   | — |   |   |   | — |   |   |   | 50 |   |   |   | 59 |   |
| Deferred      tax      assets/(liabilities)                                                                       |   |                          | 7,182   |   |                          |   | 10,439  |                          |   |   | (6,339 | ) |   |   | (5,636 | ) |   |   | 843 |   |   |   | 4,803 |   |

----

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   | Balance      as ofJanuary      1,2005 |   |   | Recognized      inconsolidatedstatements      of income |   |   | Balance      as ofDecember      31,2005 |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------|--------|--------|---------------------------------------------------------|--------|--------|-----------------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   | RMB                                   |   |   | RMB                                                     |   |   | RMB                                     |   |
| Current                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |                                  |   |   |                                                    |   |   |                                    |   |
| Receivables      and      inventories                                                                                        |   |                                  | 2,231  |   |                                                    |   | 1,217  |                                    |   |   | 3,448 |   |
| Accruals                                                                                                                     |   |                                  | 269    |   |                                                    |   | 188    |                                    |   |   | 457 |   |
| Non-current                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                                  |   |   |                                                    |   |   |                                    |   |   |   |   |
| Property,      plant and      equipment                                                                                      |   |                                  | (143   | )      |                                                    |   | 161    |                                    |   |   | 18 |   |
| Accelerated      depreciation                                                                                                |   |                                  | (4,000 | )      |                                                    |   | (290   | )                                       |   |   | (4,290 | ) |
| Tax      value of losses carried      forward                                                                                |   |                                  | 68     |   |                                                    |   | 62     |                                    |   |   | 130 |   |
| Lease      prepayments                                                                                                       |   |                                  | 382    |   |                                                    |   | (7     | )                                       |   |   | 375 |   |
| Others                                                                                                                       |   |                                  | 32     |   |                                                    |   | (59    | )                                       |   |   | (27 | ) |
| Net      deferred tax      (liabilities)/assets                                                                              |   |                                  | (1,161 | )      |                                                    |   | 1,272  |                                    |   |   | 111 |   |

|                                                                                                                                                                                                                                                                                                                                                                                                                                |   | Balance      as ofJanuary      1,2006 |    |   | Recognized      inconsolidatedstatements      of income |   |    | Recognized      inotherreserve |   |   | Balance      as ofDecember      31,2006 |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------|---------|--------|---------------------------------------------------------|--------|---------|--------------------------------|--------|--------|-----------------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                |   | RMB                                   |    |   | RMB                                                     |   |    | RMB                            |   |   | RMB                                     |   |
| Current                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                                  |    |   |                                                    |   |    |                           |   |   |                                    |   |
| Receivables      and      inventories                                                                         |   |                                  | 3,448   |   |                                                    |   | 84      |                           |   |   | —                                 |   |   |   | 3,532 |   |
| Accruals                                                                                                      |   |                                  | 457     |   |                                                    |   | 408     |                           |   |   | —                                 |   |   |   | 865 |   |
| Non-current                                                                                                                                                                                                                                                                                                                                                                                                                         |   |                                  |    |   |                                                    |   |    |                           |   |   |                                    |   |   |   |   |   |
| Property,      plant and      equipment                                                                       |   |                                  | 18      |   |                                                    |   | 583     |                           |   |   | —                                 |   |   |   | 601 |   |
| Accelerated      depreciation                                                                                 |   |                                  | (4,290  | )      |                                                    |   | (367    | )                              |   |   | —                                 |   |   |   | (4,657 | ) |
| Tax      value of losses carried      forward                                                                 |   |                                  | 130     |   |                                                    |   | (25     | )                              |   |   | —                                 |   |   |   | 105 |   |
| Lease      prepayments                                                                                        |   |                                  | 375     |   |                                                    |   | (24     | )                              |   |   | —                                 |   |   |   | 351 |   |
| Available-for-sale      financial assets (i)                                                                                                                                                                                                                                                                                                                                                                                        |   |                                  | — |   |                                                    |   | — |                           |   |   | (4                                      | )      |   |   | (4 | ) |
| Others                                                                                                        |   |                                  | (27     | )      |                                                    |   | 77      |                           |   |   | —                                 |   |   |   | 50 |   |
| Net      deferred tax      assets/(liabilities)                                                               |   |                                  | 111     |   |                                                    |   | 736     |                           |   |   | (4                                      | )      |   |   | 843 |   |

----

|                                                                                                                                                                                                                                                                                                                                            |   | Balance      as ofJanuary      1, 2007 |    |   | Recognized      inconsolidatedstatements      of income |   |    | Acquisitionsofsubsidiaries |   |   | Recognized      inother reserve |   |   | Balance      as ofDecember      31, 2007 |    |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------|---------|--------|---------------------------------------------------------|--------|---------|----------------------------|--------|--------|--------------------------------------|--------|--------|-----------------------------------------------|---------|
|                                                                                                                                                                                                                                                                                                                                            |   | RMB                                         |    |   | RMB                                                     |   |    | RMB                        |   |   | RMB                                  |   |   | RMB                                           |    |
| Current                                                                                                                                                                                                                                                                                                                                         |   |                                        |    |   |                                                    |   |    |                       |   |   |                                 |   |   |                                          |    |
| Receivables      and      inventories                                                           |   |                                        | 3,532   |   |                                                    |   | 309     |                       |   |   | —                              |   |   |                                          | — |   |   |   | 3,841 |   |
| Accruals                                                                                        |   |                                        | 865     |   |                                                    |   | 1,748   |                       |   |   | —                              |   |   |                                          | — |   |   |   | 2,613 |   |
| Non-current                                                                                                                                                                                                                                                                                                                                     |   |                                        |    |   |                                                    |   |    |                       |   |   |                                 |   |   |                                          |    |   |   |   |   |   |
| Property,      plant and equipment                                                                                                                                                                                                                                                                                                              |   |                                        | 601     |   |                                                    |   | 711     |                       |   |   | (47                                  | )      |   |                                          | — |   |   |   | 1,265 |   |
| Accelerated      depreciation                                                                   |   |                                        | (4,657  | )      |                                                    |   | 513     |                       |   |   | —                              |   |   |                                          | — |   |   |   | (4,144 | ) |
| Tax      value of losses carried forward                                                                                                                                                                                                                                                                                                        |   |                                        | 105     |   |                                                    |   | 71      |                       |   |   | —                              |   |   |                                          | — |   |   |   | 176 |   |
| Lease      prepayments      (ii)                                                                |   |                                        | 351     |   |                                                    |   | (8      | )                          |   |   | —                              |   |   |                                          | (37     | ) |   |   | 306 |   |
| Available-for-sale      financial assets (i)                                                                                                                                                                                                                                                                                                    |   |                                        | (4      | )      |                                                    |   | — |                       |   |   | —                              |   |   |                                          | (112    | ) |   |   | (116 | ) |
| Embedded      derivative component ofconvertible      bonds                                               |   |                                        | — |   |                                                    |   | 803     |                       |   |   | —                              |   |   |                                          | — |   |   |   | 803 |   |
| Others                                                                                          |   |                                        | 50      |   |                                                    |   | 9       |                       |   |   | —                              |   |   |                                          | — |   |   |   | 59 |   |
| Net      deferred tax assets/(liabilities)                                                                                                                                                                                                                                                                                                      |   |                                        | 843     |   |                                                    |   | 4,156   |                       |   |   | (47                                  | )      |   |                                          | (149    | ) |   |   | 4,803 |   |

|   | (i) | The      amount recognized in equity represents the deferred tax effect of change      in fair value of available-for-sale financial assets, which was recognized      directly in equity. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (ii) | The      amount recognized in equity represents the effect of change in tax rate on      deferred tax assets previously recognized directly in equity as a result      of the new tax law. |
|--------|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 24.   SHORT-TERM      AND LONG-TERM DEBTS AND LOANS FROM SINOPEC GROUP COMPANY AND ITS      AFFILIATES |
|--------|-----------------------------------------------------------------------------------------------------------------------|

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   | December 31, |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   | 2006    |   |   | 2007  |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   | RMB          |   |   | RMB |   |
| Third      parties’ debts                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |         |   |   |   |   |
| Short-term      bank      loans                                                                                                                       |   |         | 29,264 |   |   |   | 21,294 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |         |   |   |   |   |   |   |
| Current      portion of long-term bank      loans                                                                                                     |   |         | 15,291 |   |   |   | 12,259 |   |
| Current      portion of long-term other      loans                                                                                                    |   |         | 27     |   |   |   | 1,027 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |         | 15,318 |   |   |   | 13,286 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |         |   |   |   |   |   |   |
| Corporate      bonds      (a)                                                                                                                         |   |         | 11,885 |   |   |   | 10,074 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |         | 56,467 |   |   |   | 44,654 |   |
| Loans      from Sinopec Group Company and its affiliates                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |         |   |   |   |   |   |   |
| Short-term      loans                                                                                                                                 |   |         | 6,461  |   |   |   | 15,660 |   |
| Current      portion of long-term      loans                                                                                                          |   |         | 552    |   |   |   | 180 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |         | 7,013  |   |   |   | 15,840 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |         | 63,480 |   |   |   | 60,494 |   |

----

|                                   |   | Interest rate and final      maturity                                                                                              |   | December 31,                                      |
|----------------------------------------|--------|------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------|
|                                   |   |                                                                                                                               |   | 2006                                              |   | 2007 |
|                                   |   |                                                                                                                               |   | RMB                                               |   | RMB |
| Third      parties’ debts        |   |                                                                                                                               |   |                                              |   |   |
|                                   |   |                                                                                                                               |   |                                              |   |   |
| Long-term      bank loans              |   |                                                                                                                               |   |                                              |   |   |
|                                   |   |                                                                                                                               |   |                                              |   |   |
| Renminbi      denominated              |   | Interest      rates ranging from interest free to 8.3% per annum as of December 31, 2007      with maturities through 2017         |   | 65,398                                            |   | 46,912 |
|                                   |   |                                                                                                                               |   |                                              |   |   |
| Japanese      Yen denominated          |   | Interest      rates ranging from 2.6% to 3.0% per annum as of December 31, 2007 with      maturities through 2024                  |   | 2,713                                             |   | 2,147 |
|                                   |   |                                                                                                                               |   |                                              |   |   |
| US      Dollar denominated             |   | Interest      rates ranging from interest free to 7.4% per annum as of December 31, 2007      with maturities through 2031         |   | 2,081                                             |   | 1,189 |
|                                   |   |                                                                                                                               |   |                                              |   |   |
| Euro      denominated                  |   | Fixed      interest rate at 6.7% per annum as of December 31, 2007 with maturities      through 2010                               |   | 101                                               |   |       78 |
|                                   |   |                                                                                                                               |   |                                              |   |   |
| Hong      Kong Dollar denominated |   | Floating      rate at Hong Kong Interbank Offer Rate plus 0.5% per annum as of December      31, 2007 with maturities through 2009 |   |        — |   |      375 |
|                                   |   |                                                                                                                               |   |                                              |   |   |
|                                   |   |                                                                                                                               |   | 70,293                                            |   | 50,701 |
|                                   |   |                                                                                                                               |   |                                              |   |   |
| Long-term      other loans             |   |                                                                                                                               |   |                                              |   |   |
|                                   |   |                                                                                                                               |   |                                              |   |   |
| Renminbi      denominated              |   | Interest      rates ranging from interest free to 5.2% per annum as of December 31, 2007      with maturities through 2009         |   | 3,098                                             |   | 3,075 |
|                                   |   |                                                                                                                               |   |                                              |   |   |
| US      Dollar denominated             |   | Interest      rates ranging from interest free to 2.0% per annum as of December 31, 2007      with maturities through 2015         |   |       44            |   |         38 |
|                                   |   |                                                                                                                               |   |                                              |   |   |
|                                   |   |                                                                                                                               |   | 3,142                                             |   |    3,113 |

----

|                                                               |              Interest      rate and final      maturity              |   | December 31, |          |
|--------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------|---------------|
|                                                               |                                                                                                                                                                                                   |   | 2006    |          |   | 2007  |   |
|                                                               |                                                                                                                                                                                                   |   | RMB          |          |   | RMB |   |
| Corporate      bonds                                               |                                                                                                                                                                                                   |   |         |          |   |   |   |
|                                                               |                                                                                                                                                                                                   |   |         |          |   |   |   |
| Renminbi      denominated                                          | Fixed      interest rate at 4.61% per annum as of December 31, 2007 with maturity in      February 2014 (b)                                                                                            |   |         | 3,500         |   |   |   | 3,500 |   |
|                                                               |                                                                                                                                                                                                   |   |         |          |   |   |   |   |   |
|                                                               | Fixed      interest rate at 4.20% per annum as of December 31, 2007 with maturity in      May 2017 (c)                                                                                                 |   |         | —       |   |   |   | 5,000 |   |
|                                                               |                                                                                                                                                                                                   |   |         |          |   |   |   |   |   |
|                                                               | Fixed      interest rate at 5.40% per annum as of December 31, 2007 with maturity in      November 2012 (d)                                                                                            |   |         | —       |   |   |   | 8,500 |   |
|                                                               |                                                                                                                                                                                                   |   |         |          |   |   |   |   |   |
|                                                               | Fixed      interest rate at 5.68% per annum as of December, 31, 2007 with maturity in      November 2017 (e)                                                                                           |   |         |  — |   |   |   | 11,500 |   |
|                                                               |                                                                                                                                                                                                   |   |         | 3,500         |   |   |   | 28,500 |   |
|                                                               |                                                                                                                                                                                                   |   |         |          |   |   |   |   |   |
|                                                               |                                                                                                                                                                                                   |   |         |          |   |   |   |   |   |
| Convertible      bonds                                             |                                                                                                                                                                                                   |   |         |          |   |   |   |   |   |
| Hong      Kong Dollar denominated                                  | Zero      coupon convertible bonds with maturity in April 2014 (f)                                                                                                                                     |   |         |  — |   |   |   | 14,106 |   |
|                                                               |                                                                                                                                                                                                   |   |         |          |   |   |   |   |   |
| Total      third parties’ long-term debts                    |                                                                                                                                                                                                   |   | 76,935       |          |   |   | 96,420 |   |
|                                                               |                                                                                                                                                                                                   |   |         |          |   |   |   |   |   |
| Less:      Current portion                                         |                                                                                                                                                                                                   |   |         | (15,318       | ) |   |   | (13,286 | ) |
|                                                               |                                                                                                                                                                                                   |   |         | 61,617        |   |   |   | 83,134 |   |
| Long-term      loans from Sinopec Group Company and its affiliates |                                                                                                                                                                                                   |
|                                                               |                                                                                                                                                                                                   |   |         |          |   |   |   |   |   |
| Renminbi      denominated                                          | Interest      rates ranging from interest free to 7.3% per annum as of December 31, 2007      with maturities through 2020                                                                             |   |         |   39,572 |   |   |   | 37,360 |   |
|                                                               |                                                                                                                                                                                                   |   |         |          |   |   |   |   |   |
| Less:      Current portion                                         |                                                                                                                                                                                                   |   |         | (552          | ) |   |   | (180 | ) |
|                                                               |                                                                                                                                                                                                   |   |         | 39,020        |   |   |   | 37,180 |   |
|                                                               |                                                                                                                                                                                                   |   |         | 100,637       |   |   |   | 120,314 |   |

|   | Notes: |
|--------|--------|

| (a) | The      Company issued 182-day corporate bonds of face value at RMB 10,000 to      corporate investors in the PRC debenture market on November 13, 2006 at a      discounted value of RMB 98.43 per RMB 100 par value. The effective yield      of the 182-day corporate bond is 3.20% per annum.  The Company      redeemed the corporate bonds in May2007. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b) | The      Company issued ten-year corporate bonds of RMB 3,500 to PRC citizens as      well as PRC legal and non-legal persons on February 24, 2004. The ten-year      corporate bond bears a fixed interest rate of 4.61% per annum and interest      is paid annually. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (c) | The      Company issued ten-year corporate bonds of RMB 5,000 to corporate      investors in the PRC debenture market on May 10, 2007. The ten-year      corporate bond bears a fixed interest rate of 4.20% per annum and interest      is paid annually. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (d) | The      Company issued five-year corporate bonds of RMB 8,500 to corporate      investors in the PRC debenture market on November 13, 2007. The five-year      corporate bond bears a fixed interest rate of 5.40% per annum and interest      is paid annually. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (e) | The      Company issued ten-year corporate bonds of RMB 11,500 to corporate      investors in the PRC debenture market on November 13, 2007. The ten-year      corporate bond bears a fixed interest rate of 5.68% per annum and interest      is paid annually. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (f) | On      April 24, 2007, the Company issued zero coupon convertible bonds due 2014      with an aggregate principal amount of HK$11,700 (the “Convertible      Bonds”).  The Convertible Bonds are convertible into shares of      the Company from June 4, 2007 onwards at a price of HK$10.76 per share,      subject to adjustment for, amongst other things, subdivision or      consolidation of shares, bonus issues, rights issues, capital      distribution, change of control and other events, which have a dilutive      effect on the issued share capital of the Company.  Unless      previously redeemed, converted or purchased and cancelled, the Convertible      Bonds will be redeemed on the maturity date at 121.069% of the principal      amount.  The Company has an early redemption option at any time      after April 24, 2011 (subject to certain criteria) and a cash settlement      option when the holders exercise their conversion right.  The      holders also have an early redemption option to require the Company to      redeem all or some of the Convertible Bonds on April 24, 2011 at an early      redemption amount of 111.544% of the principal  amount. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   | April      17, 2007 | December      31,2007 |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------|-----------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                |                  |
|   | Stock      price of underlying      shares                                                                              |   | HKD      7.17       | HKD      11.78        |
|   | Conversion      price                                                                                                   |   | HKD      10.76      | HKD      10.76        |
|   | Volatility                                                                                                              |   | 30%                 | 46%                   |
|   | Average      risk free      rate                                                                                        |   |   4.47%   | 3.60%                 |
|   | Average      expected      life                                                                                         |   | 5.5      years      | 4.8      years        |

----

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   | December 31, |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   | 2006    |   |   | 2007  |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   | RMB          |   |   | RMB |   |
| Amounts      due to third      parties                                                                                                                                 |   |         | 49,217 |   |   |   | 87,577 |   |
| Amounts      due to Sinopec Group Company and its      affiliates                                                                                                      |   |         | 2,272  |   |   |   | 3,522 |   |
| Amounts      due to associates and jointly controlled      entities                                                                                                    |   |         | 1,278  |   |   |   | 1,950 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |         | 52,767 |   |   |   | 93,049 |   |
| Bills      payables                                                                                                                                                    |   |         | 21,714 |   |   |   | 12,162 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |         | 74,481 |   |   |   | 105,211 |   |

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   | December 31, |    |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------|---------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   | 2006    |    |   | 2007  |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   | RMB          |    |   | RMB |   |
| Amounts      due to Sinopec Group Company and its affiliates                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |         | 12,554  |   |   |   | 12,907 |   |
| Accrued      expenditures                                                                                                                |   |         | 23,199  |   |   |   | 29,260 |   |
| Provision      for onerous contracts for purchases of crude oil (i)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |         | — |   |   |   | 6,700 |   |
| Taxes      other than income      tax                                                                                                    |   |         | 6,555   |   |   |   | 8,836 |   |
| Receipts      in      advance                                                                                                            |   |         | 18,340  |   |   |   | 23,551 |   |
| Advances      from third      parties                                                                                                    |   |         | 1,356   |   |   |   | 1,103 |   |
| Others                                                                                                                                   |   |         | 7,196   |   |   |   | 6,814 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |         | 69,200  |   |   |   | 89,171 |   |

| (i) | As      of December 31, 2007, the Group has entered into certain non-cancellable      purchase commitment contracts of crude oil for delivery in      2008.  Due to the distortion of the correlation of domestic      refined petroleum product prices and the crude oil prices, the Group has      determined that the economic benefits to be derived from processing the      crude oil under these purchase contracts would be lower than the      unavoidable cost of meeting the Group’s obligations under these purchase      contracts.  Consequently, a provision for onerous contracts of      RMB 6,700 was recognized in accordance with the policy set out in Note      2(p). |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   | December 31, |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   | 2006         |   |   | 2007 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   | RMB          |   |   | RMB |   |
| Registered,      issued and fully paid                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |         |   |   |   |   |
| 69,921,951,000      domestic listed A shares of RMB 1.00      each                                                                                                    |   |         | 69,922 |   |   |   | 69,922 |   |
| 16,780,488,000      overseas listed H shares of RMB 1.00      each                                                                                                    |   |         | 16,780 |   |   |   | 16,780 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |         | 86,702 |   |   |   | 86,702 |   |

----

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   | 2006             |    |   |  2007  |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------|---------|--------|------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |  RMB             |    |   |  RMB        |   |
| Capital      reserve (Note (a))                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |                  |    |   |             |   |
| Balance      as of January      1                                                                                                                                       |   |                  | (19,217 | )      |             |   | (21,590 | ) |
| Transfer      from other reserves to capital      reserve                                                                                                               |   |                  | (2,373  | )      |             |   | (1,062 | ) |
| Balance      as of December      31                                                                                                                                     |   |                  | (21,590 | )      |             |   | (22,652 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                  |    |   |             |   |   |   |
| Share      premium (Note (b))                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |                  |    |   |             |   |   |   |
| Balance      as of January 1 / December      31                                                                                                                         |   |                  | 18,072  |   |             |   | 18,072 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                  |    |   |             |   |   |   |
| Revaluation      reserve                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                  |    |   |             |   |   |   |
| Balance      as of January      1                                                                                                                                  |   |                  | 26,342  |   |             |   | 24,752 |   |
| Revaluation      surplus      realized                                                                                                                                  |   |                  | (1,590  | )      |             |   | (638 | ) |
| Balance      as of December      31                                                                                                                                     |   |                  | 24,752  |   |             |   | 24,114 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                  |    |   |             |   |   |   |
| Statutory      surplus reserve (Note (c))                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |                  |    |   |             |   |   |   |
| Balance      as of January      1                                                                                                                                       |   |                  | 13,514  |   |             |   | 32,094 |   |
| Appropriation                                                                                                                                                           |   |                  | 5,066   |   |             |   | 5,468 |   |
| Statutory      public welfare fund transferred to statutory surplus    reserve                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |                  | 13,514  |   |             | ___    |   |
| Adjustment      of statutory surplus      reserve                                                                                                                       |   | ___                   |    |   |             | 235    |   |
| Balance      as of December      31                                                                                                                                     |   |                  | 32,094  |   |             |   | 37,797 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                  |    |   |             |   |   |   |
| Statutory      public welfare fund (Note (d))                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |                  |    |   |             |   |   |   |
| Balance      as of January      1                                                                                                                                       |   |                  | 13,514  |   |             | ___    |   |
| Statutory      public welfare fund transferred to statutory surplus    reserve                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |                  | (13,514 | )      |             | ___    |   |
| Balance      as of December      31                                                                                                                                     |   | ___                   |    |   | ___              |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                  |    |   |             |   |   |   |
| Discretionary      surplus reserve (Note (e))                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |                  |    |   |             |   |   |   |
| Balance      as of January      1                                                                                                                                       |   |                  | 7,000   |   |             |   | 27,000 |   |
| Appropriation                                                                                                                                                           |   |                  | 20,000  |   |             | ___    |   |
| Balance      as of December      31                                                                                                                                     |   |                  | 27,000  |   |             |   | 27,000 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                  |    |   |             |   |   |   |
| Other      reserves                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                  |    |   |             |   |   |   |
| Balance      as of January 1, as      adjusted                                                                                                                          |   |                  | 2,785   |   |             |   | 1,758 |   |
| Change      in fair value of available-for-sale financial assets, net of deferred      tax                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                  | 34      |   |             |   | 2,892 |   |
| Realization      of deferred tax on lease      prepayments                                                                                                              |   |                  | (7      | )      |             |   | (7 | ) |
| Effect      of change in tax      rate                                                                                                                                  |   |                  | — |   |             |   | (54 | ) |
| Transfer      from retained earnings to other      reserves                                                                                                             |   |                  | 704     |   |             |   | (151 | ) |
| Transfer      from other reserves to capital      reserve                                                                                                               |   |                  | 2,373   |   |             |   | 1,062 |   |
| (Distribution      to)/contribution from Sinopec Group Company (Note    (f))                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                  | (631    | )      |             |   | 68  |      |
| Consideration      for Acquisition of Oil Production Plants / Refinery Plants (Note      1)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                  | (3,500  | )      |             |   | (2,468 | ) |
| Balance      as of December      31                                                                                                                                     |   |                  | 1,758   |   |             |   | 3,100 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                  |    |   |             |   |   |   |
| Retained      earnings (Note (g))                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |                  |    |   |             |   |   |   |
| Balance      as of January      1                                                                                                                                       |   |                  | 77,387  |   |             |   | 95,546 |   |
| Net      income attributable to equity shareholders of the      Company                                                                                                 |   |                  | 53,603  |   |             |   | 56,533 |   |
| Final      dividend in respect of the previous year, approved and paid during the      year (Note (h))                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |                  | (7,803  | )      |             |   | (9,537 | ) |
| Interim      dividend (Note      (i))                                                                                                                                   |   |                  | (3,468  | )      |             |   | (4,335 | ) |
| Adjustment      to statutory surplus      reserve                                                                                                                       |   | ––– |    |   |             | (235   | ) |
| Appropriation                                                                                                                                                           |   |                  | (25,066 | )      |             |   | (5,468 | ) |
| Revaluation      surplus      realized                                                                                                                                  |   |                  | 1,590   |   |             |   | 638 |   |
| Realization      of deferred tax on lease      prepayments                                                                                                              |   |                  | 7       |   |             |   | 7 |   |
| Transfer      from retained earnings to other      reserves                                                                                                             |   |                  | (704    | )      |             |   | 151 |   |
| Balance      as of December      31                                                                                                                                     |   |                  | 95,546  |   |             |   | 133,300 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                  | 177,632 |   |             |   | 220,731 |   |

----

| (a) | The      capital reserve represents (i) the difference between the total amount of      the par value of shares issued and the amount of the net assets      transferred from Sinopec Group Company in connection with the      Reorganization and (ii) the difference between the considerations paid      over the amount of the net assets of certain entities and related      operations acquired from Sinopec GroupCompany. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b) | The      application of the share premium account is governed by Sections 168 and      169 of the PRC Company Law. |
|-----|--------------------------------------------------------------------------------------------------------------------|

| (c) | According      to the Company’s Articles of Association, the Company is required to      transfer 10% of its net income to statutory surplus reserve until the      reserve balance reaches 50% of the registered capital. Before January 1,      2007, the net income for this purpose was determined in accordance with      the PRC Accounting Rules and Regulations, and RMB 3,956 and RMB 5,066 were      transferred to this reserve for the year ended December 31, 2005 and 2006,      respectively. On January 1, 2007, the Group adopted the PRC Accounting      Standards for Business Enterprises (“ASBE”) issued by the Ministry of      Finance of the PRC (the “MOF”) on February 15, 2006, which resulted in      certain PRC accounting policies being changed and applied retrospectively.      The statutory surplus reserve, amounting to RMB 235, has been adjusted      accordingly. The adjustment to the statutory surplus reserve was reflected      as a movement in the current year. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | During      the year ended December 31, 2007, the Company transferred RMB 5,468, being      10% of the current year’s net income determined in accordance with ASBE,      to this reserve. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | The      transfer to this reserve must be made before distribution of a dividend to      shareholders. Statutory surplus reserve can be used to offset previous      years’ losses, if any, and may be converted into share capital by the      issue of new shares to shareholders in proportion to their existing      shareholdings or by increasing the par value of the shares currently held      by them, provided that the balance after such issue is not less than 25%      of the registered capital. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (d) | Before      January 1, 2006, according to the Company’s Articles of Association, the      Company was required to transfer 5% to 10% of its net income, as      determined in accordance with the PRC Accounting Rules and Regulations, to      the statutory public welfare fund. This fund could only be utilized on      capital items for the collective benefits of the Company’s employees such      as the construction of dormitories, canteen and other staff welfare      facilities. The transfer to this fund must be made before distribution of      a dividend to shareholders. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (e) | The      directors authorized the transfer of RMB 20,000, which was approved by the      shareholders at Annual General Meeting on May 29, 2007, to discretionary      surplus reserve for the year ended December 31, 2006.  The usage      of the discretionary surplus reserve is similar to that of statutory      surplus reserve. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (f) | These      represent net assets distributed to / contributed from Sinopec Group      Company for no monetaryconsideration. |
|-----|----------------------------------------------------------------------------------------------------------------------------|

----

| (g) | According      to the Company’s Articles of Association, the amount of retained earnings      available for distribution to equity shareholders of the Company is the      lower of the amount determined in accordance with ASBE and the amount      determined in accordance with International Financial Reporting Standards      (“IFRS”). As of December 31, 2006 and 2007, the amount of retained      earnings available for distribution was RMB 33,415 and RMB 68,758,      respectively, being the amount determined in accordance with ASBE. Final      dividend for the year ended December 31, 2007 of RMB 9,971 proposed after      the balance sheet date has not been recognized as a liability as of the      balance sheet date. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (h) | Pursuant      to the shareholders’ approval at the Annual General Meeting on May 24,      2006, a final dividend of RMB 0.09 per share totaling RMB 7,803 in respect      of the year ended December 31, 2005 was declared and paid on June 30,      2006. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (i) | Pursuant      to the Company’s Articles of Association and a resolution passed at the      Director’s meeting on August 25, 2006, the directors authorized to declare      an interim dividend for the year ended December 31, 2006 of RMB 0.04 per      share totaling RMB 3,468, which was paid on September 28,      2006. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Pursuant      to the Company’s Articles of Association and a resolution passed at the      Director’s meeting on August 24, 2007, the directors authorized to declare      an interim dividend for the year ended December 31, 2007 of RMB 0.05 per      share totaling RMB 4,335, which was paid on September 28,      2007. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|        30.   |  COMMITMENTS      AND CONTINGENT LIABILITIES |
|-----------------------------|---------------------------------------------------|

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   | December 31, |    |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------|---------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   | 2006    |    |   | 2007  |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   | RMB          |    |   | RMB |   |
| Within      one      year                                                                                                              |   |         | 4,703   |   |   |   | 4,620 |   |
| Between      one and two      years                                                                                                    |   |         | 4,565   |   |   |   | 4,497 |   |
| Between      two and three      years                                                                                                  |   |         | 4,529   |   |   |   | 4,477 |   |
| Between      three and four      years                                                                                                 |   |         | 4,505   |   |   |   | 4,407 |   |
| Between      four and five      years                                                                                                  |   |         | 4,450   |   |   |   | 4,465 |   |
| Thereafter                                                                                                                             |   |         | 122,406 |   |   |   | 119,726 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |         | 145,158 |   |   |   | 142,192 |   |

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   | December 31, |    |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------|---------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   | 2006    |    |   | 2007  |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   | RMB          |    |   | RMB |   |
| Authorized      and contracted      for                                                                                                     |   |         | 113,265 |   |   |   | 130,816 |   |
| Authorized      but not contracted      for                                                                                                 |   |         | 166,072 |   |   |   | 114,854 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |         | 279,337 |   |   |   | 245,670 |   |

----

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   | December 31, |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   | 2006         |   |   | 2007 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   | RMB          |   |   | RMB |   |
| Within      one      year                                                                                                                 |   |         | 156    |   |   |   | 218 |   |
| Between      one and two      years                                                                                                       |   |         | 147    |   |   |   | 150 |   |
| Between      two and three      years                                                                                                     |   |         | 67     |   |   |   | 66 |   |
| Between      three and four      years                                                                                                    |   |         | 57     |   |   |   | 20 |   |
| Between      four and five      years                                                                                                     |   |         | 10     |   |   |   | 19 |   |
| Thereafter                                                                                                                                |   |         | 226    |   |   |   | 656 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |         | 663    |   |   |   | 1,129 |   |

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   | December 31, |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   | 2006         |   |   | 2007 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   | RMB          |   |   | RMB |   |
| Associates      and jointly controlled      entities                                                                                                    |   |         | 11,957 |   |   |   | 9,812 |   |

----

----

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |       |   |  Years ended December    31, |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|--------|-----------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |  Note |   | 2005                         |   |   | 2006  |   |   | 2007  |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |       |   | RMB                               |   |   | RMB |   |   | RMB |   |
| Sales      of      goods                                                                                                       | (i)        |   |                              | 88,150 |   |   |   | 138,670 |   |   |   | 144,581 |   |
| Purchases                                                                                                                      | (ii)       |   |                              | 44,531 |   |   |   | 50,360 |   |   |   | 64,440 |   |
| Transportation      and      storage                                                                                           | (iii)      |   |                              | 1,950  |   |   |   | 1,587 |   |   |   | 1,141 |   |
| Exploration      and development      services                                                                                 | (iv)       |   |                              | 16,995 |   |   |   | 22,048 |   |   |   | 32,121 |   |
| Production      related      services                                                                                          | (v)        |   |                              | 10,659 |   |   |   | 12,508 |   |   |   | 19,238 |   |
| Ancillary      and social      services                                                                                        | (vi)       |   |                              | 1,754  |   |   |   | 1,710 |   |   |   | 1,621 |   |
| Operating      lease      charges                                                                                              | (vii)      |   |                              | 3,213  |   |   |   | 3,826 |   |   |   | 3,967 |   |
| Agency      commission      income                                                                                             | (viii)     |   |                              | 48     |   |   |   | 60 |   |   |   | 60 |   |
| Intellectual      property license fee paid                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | (ix)       |   |                              | 9      |   |   |   | - |   |   |   | - |   |
| Interest      received                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | (x)        |   |                              | 56     |   |   |   | 56 |   |   |   | 34 |   |
| Interest      paid                                                                                                             | (xi)       |   |                              | 1,012  |   |   |   | 1,302 |   |   |   | 789 |   |
| Net      deposits withdrawn from related parties                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | (xii)      |   |                              | 473    |   |   |   | 4,777 |   |   |   | 356 |   |
| Net      loans (repaid to)/obtained from related parties                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | (xiii)     |   |                              | (3,360 | ) |   |   | 2,291 |   |   |   | 6,987 |   |

----

| (i) | Sales      of goods represent the sale of crude oil, intermediate petrochemical      products, petroleum products and ancillary  materials. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------|

| (ii) | Purchases      represent the purchase of materials and utility supplies directly related      to the Group’s operations such as the procurement of raw and ancillary      materials and related services, supply of water, electricity and      gas. |
|------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (iii) | Transportation      and storage represent the cost for the use of railway, road and marine      transportation services, pipelines, loading, unloading and storage      facilities. |
|-------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (iv) | Exploration      and development services comprise direct costs incurred in the exploration      and development such as geophysical, drilling, well testing and well      measurement services. |
|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (v) | Production      related services represent ancillary services rendered in relation to the      Group’s operations such as equipment repair and general maintenance,      insurance premium, technical research, communications, fire fighting,      security, product quality testing and analysis, information technology,      design and engineering, construction which includes the construction of      oilfield ground facilities, refineries and chemical plants, manufacture of      replacement parts and machinery, installation, project management and      environmental protection. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (vi) | Ancillary      and social services represent expenditures for social welfare and support      services such as educational facilities, media communication services,      sanitation, accommodation, canteens, property maintenance and management      services. |
|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (vii) | Operating      lease charges represent the rental paid to Sinopec Group Company for      operating leases in respect of land, buildings and    equipment. |
|-------|-----------------------------------------------------------------------------------------------------------------------------------------------------------|

| (viii) | Agency      commission income represents commission earned for acting as an agent in      respect of sales of products and purchase of materials for certain      entities owned by Sinopec GroupCompany. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (ix) | Intellectual      property license fee represents reimbursement paid to Sinopec Group      Company for fees required to maintain the validity of certain licenses for      trademarks, patents, technology and computer  software. |
|------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (x) | Interest      received represents interest received from deposits placed with Sinopec      Finance Company Limited, a finance company controlled by Sinopec Group      Company. The applicable interest rate is determined in accordance with the      prevailing saving deposit rate. The balance of deposits as of December 31,      2006 and 2007 were RMB 694 and RMB 338,  respectively. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (xi) | Interest      paid represents interest charges on the loans and advances obtained from      Sinopec Group Company and Sinopec Finance Company  Limited. |
|------|---------------------------------------------------------------------------------------------------------------------------------------------------------|

| (xii) | Deposits      withdrawn from related parties represent net deposits withdrawn from      Sinopec Finance Company Limited. |
|-------|--------------------------------------------------------------------------------------------------------------------------|

| (xiii) | The      Group obtained loans from/repaid loans to Sinopec Group Company and      Sinopec Finance Company Limited. |
|--------|--------------------------------------------------------------------------------------------------------------------|

----

| (a) | The      Company has entered into a non-exclusive Agreement for Mutual Provision of      Products and Ancillary Services (“Mutual Provision Agreement”) with      Sinopec Group Company effective from January 1, 2000 in which Sinopec      Group Company has agreed to provide the Group with certain ancillary      production services, construction services, information advisory services,      supply services and other services and products. While each of Sinopec      Group Company and the Company is permitted to terminate the Mutual      Provision Agreement upon at least six months notice, Sinopec Group Company      has agreed not to terminate the agreement if the Group is unable to obtain      comparable services from a third party. The pricing policy for these      services and products provided by Sinopec Group Company to the Group is as      follows: |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Ÿ | the      government-prescribed price;                                                                                |
|--------|--------|----------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                 |
|   | Ÿ | where      there is no government-prescribed price, the government-guidance      price;                              |
|   |   |                                                                                                                 |
|   | Ÿ | where      there is neither a government-prescribed price nor a government-guidance      price, the market price; or |

|   | Ÿ | where      none of the above is applicable, the price to be agreed between the      parties, which shall be based on a reasonable cost incurred in providing      such services plus a profit margin not exceeding  6%. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b) | The      Company has entered into a non-exclusive Agreement for Provision of      Cultural and Educational, Health Care and Community Services with Sinopec      Group Company effective from January 1, 2000 in which Sinopec Group      Company has agreed to provide the Group with certain cultural,      educational, health care and community services on the same pricing terms      and termination conditions as agreed to in the above Mutual Provision      Agreement. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (c) | The      Company has entered into a series of lease agreements with Sinopec Group      Company to lease certain land and buildings at a rental of approximately      RMB 3,234 and RMB 568, respectively, per annum. The Company and Sinopec      Group Company can renegotiate the rental amount every three years for land      and every year for buildings, however such amount cannot exceed the market      price as determined by an independent third party. The Group has the      option to terminate these leases upon six months notice to Sinopec Group      Company. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (d) | The      Company has entered into agreements with Sinopec Group Company effective      from January 1, 2000 under which the Group has been granted the right to      use certain trademarks, patents, technology and computer software      developed by Sinopec Group Company. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (e) | The      Company has entered into a service stations franchise agreement with      Sinopec Group Company effective from January 1, 2000 under which its      service stations and retail stores would exclusively sell the refined      products supplied by the Group. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   | December 31, |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   | 2006    |   |   | 2007  |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   | RMB          |   |   | RMB |   |
| Trade      accounts      receivable                                                                                                                                                                       |   |         | 3,974  |   |   |   | 3,990 |   |
| Prepaid      expenses and other current      assets                                                                                                                                                                 |   |         | 3,695  |   |   |   | 7,082 |   |
|   Total      amounts due from Sinopec Group Company and its affiliates,associates      and jointly controlled      entities                                                                                              |   |         | 7,669  |   |   |   | 11,072 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |         |   |   |   |   |   |   |
| Trade      accounts      payable                                                                                                                                                                                    |   |         | 3,550  |   |   |   | 5,472 |   |
| Accrued      expenses and other      payables                                                                                                                                                                       |   |         | 12,554 |   |   |   | 12,907 |   |
|         Short-term loans and current portion of long-term loans from Sinopec Group      Company and its affiliates                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |         | 7,013  |   |   |   | 15,840 |   |
|         Long-term loans excluding current portion from Sinopec Group Company and      its affiliates                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |         | 39,020 |   |   |   | 37,180 |   |
|        Total amounts due to Sinopec Group Company and itsaffiliates,   associates      and jointly controlled entities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |         | 62,137 |   |   |   | 71,399 |   |

----

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   | Years ended December      31, ­­­­­ |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   | 2005                                                         |   |   | 2006  |   |   | 2007  |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   | RMB’000                                                     |   |   | RMB’000 |   |   | RMB’000 |   |
| Short-term      employee benefits      (i)                                                                              |   |                                                              | 2,868  |   |   |   | 4,571 |   |   |   | 5,896 |   |
| Retirement      scheme      contributions                                                                               |   |                                                              | 115    |   |   |   | 184 |   |   |   | 184 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                                                              | 2,983  |   |   |   | 4,755 |   |   |   | 6,080 |   |

|   | (i) | The      bonuses amounting to RMB 3,785 paid to executive directors, supervisors      and other key management personnel in relation to their performance were      not included in the short-term employee  benefits. |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | sales      and purchase of goods and ancillarymaterials; |
|--------|----------------------------------------------------------|

| · | rendering      and receiving services; |
|--------|----------------------------------------|

| · | lease      of assets; |
|--------|-----------------------|

| · | depositing      and borrowing money; and |
|--------|------------------------------------------|

| · | use      of public utilities. |
|--------|-------------------------------|

----

|                                                   |   | December      31, |   |
|--------------------------------------------------------|--------|-------------------|--------|
|                                                   |   | 2006              |   |   | 2007 |   |
|                                                   |   | RMB               |   |   | RMB |   |
| Trade      accounts receivable                         |   |              | 111    |   |   |   | 326 |   |
| Prepaid      expenses and other current assets         |   |              | 167    |   |   |   | 934 |   |
| Total      amounts due from CNPC Group and CNOOC Group |   |              | 278    |   |   |   | 1,260 |   |
|                                                   |   |              |   |   |   |   |   |   |
| Trade      accounts payable                            |   |              | 1,238  |   |   |   | 3,494 |   |
| Accrued      expenses and other payables               |   |              | 7      |   |   |   | 371 |   |
| Total      amounts due to CNPC Group and CNOOC Group   |   |              | 1,245  |   |   |   | 3,865 |   |

|   |  Years ended December      31, |
|--------|-------------------------------------|

|                  |   | 2005   |   |   | 2006   |   |   | 2007   |
|-----------------------|--------|--------|--------|--------|--------|--------|--------|--------|
|                  |   | RMB    |   |   | RMB    |   |   | RMB    |
| Interest      income  |   |   | 336    |   |   |   | 466    |   |   |   | 225 |   |
| Interest      expense |   |   | 5,025  |   |   |   | 5,682  |   |   |   | 5,264 |   |

|                                                              |   | December      31, |   |
|-------------------------------------------------------------------|--------|-------------------|--------|
|                                                              |   | 2006              |   |   | 2007 |   |
|                                                              |   | RMB               |   |   | RMB |   |
| Cash      and cash equivalents                                    |   |              | 6,329  |   |   |   | 6,522 |   |
| Time      deposits with financial institutions                    |   |              | 615    |   |   |   | 647 |   |
| Total      deposits at state-controlled banks in the PRC          |   |              | 6,944  |   |   |   | 7,169 |   |
|                                                              |   |              |   |   |   |   |   |   |
| Short-term      loans and current portion of long-term loans      |   |              | 37,937 |   |   |   | 27,813 |   |
| Long-term      loans excluding current portion of long-term loans |   |              | 54,648 |   |   |   | 37,338 |   |
| Total      loans from state-controlled banks in the PRC           |   |              | 92,585 |   |   |   | 65,151 |   |

----

|   | (i) | Exploration      and production, which explores and develops oil fields, produces crude oil      and natural gas and sells such products to the refining segment of the      Group and external customers. |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (ii) | Refining,      which processes and purifies crude oil, that is sourced from the      exploration and production segment of the Group and external suppliers,      and manufactures and sells petroleum products to the chemicals and      marketing and distribution segments of the Group and external      customers. |
|--------|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (iii) | Marketing      and distribution, which owns and operates oil depots and service stations      in the PRC, and distributes and sells refined petroleum products (mainly      gasoline and diesel) in the PRC through wholesale and retail sales      networks. |
|--------|-------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (iv) | Chemicals,      which manufactures and sells petrochemical products, derivative      petrochemical products and other chemical products mainly to external      customers. |
|--------|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (v) | Corporate      and others, which largely comprise the trading activities of the import      and export companies of the Group and research and development undertaken      by other subsidiaries. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                                           |   | Years      ended December 31, |     |
|----------------------------------------------------------------|--------|-------------------------------|----------|
|                                                           |   | 2005                          |     |   | 2006 |   |   | 2007 |   |
|                                                           |   | RMB                           |     |   | RMB |   |   | RMB |   |
| Sales      of goods                                            |   |                          |     |   |   |   |   |   |   |
| Exploration      and production                                |   |                          |     |   |   |   |   |   |   |
| External sales                                                 |   |                          | 16,848   |   |   |   | 19,936 |   |   |   | 20,437 |   |
| Inter-segment    sales                                         |   |                          | 87,581   |   |   |   | 109,075 |   |   |   | 107,473 |   |
|                                                           |   |                          | 104,429  |   |   |   | 129,011 |   |   |   | 127,910 |   |
| Refining                                                       |   |                          |     |   |   |   |   |   |   |   |   |   |
| External      sales                                            |   |                          | 93,678   |   |   |   | 114,725 |   |   |   | 117,256 |   |
| Inter-segment    sales                                         |   |                          | 392,141  |   |   |   | 477,766 |   |   |   | 534,671 |   |
|                                                           |   |                          | 485,819  |   |   |   | 592,491 |   |   |   | 651,927 |   |
| Marketing      and distribution                                |   |                          |     |   |   |   |   |   |   |   |   |   |
| External      sales                                            |   |                          | 459,047  |   |   |   | 588,022 |   |   |   | 659,552 |   |
| Inter-segment    sales                                         |   |                          | 3,417    |   |   |   | 4,849 |   |   |   | 2,841 |   |
|                                                           |   |                          | 462,464  |   |   |   | 592,871 |   |   |   | 662,393 |   |
| Chemicals                                                      |   |                          |     |   |   |   |   |   |   |   |   |   |
| External sales                                                 |   |                          | 153,308  |   |   |   | 196,024 |   |   |   | 217,452 |   |
| Inter-segment    sales                                         |   |                          | 12,199   |   |   |   | 12,299 |   |   |   | 15,990 |   |
|                                                           |   |                          | 165,507  |   |   |   | 208,323 |   |   |   | 233,442 |   |
| Corporate      and others                                      |   |                          |     |   |   |   |   |   |   |   |   |   |
| External sales                                                 |   |                          | 70,125   |   |   |   | 116,181 |   |   |   | 159,172 |   |
| Inter-segment    sales                                         |   |                          | 51,140   |   |   |   | 145,287 |   |   |   | 297,145 |   |
|                                                           |   |                          | 121,265  |   |   |   | 261,468 |   |   |   | 456,317 |   |
| Elimination      of inter-segment sales                        |   |                          | (546,478 | ) |   |   | (749,276 | ) |   |   | (958,120 | ) |
| Sales      of goods                                            |   |                          | 793,006  |   |   |   | 1,034,888 |   |   |   | 1,173,869 |   |
|                                                           |   |                          |     |   |   |   |   |   |   |   |   |   |
| Other      operating revenues                                  |   |                          |     |   |   |   |   |   |   |   |   |   |
| Exploration      and production                                |   |                          | 10,756   |   |   |   | 14,155 |   |   |   | 17,757 |   |
| Refining                                                       |   |                          | 5,501    |   |   |   | 4,750 |   |   |   | 4,996 |   |
| Marketing      and distribution                                |   |                          | 1,358    |   |   |   | 687 |   |   |   | 461 |   |
| Chemicals                                                      |   |                          | 5,790    |   |   |   | 6,604 |   |   |   | 7,247 |   |
| Corporate      and others                                      |   |                          | 637      |   |   |   | 657 |   |   |   | 513 |   |
| Other      operating revenues                                  |   |                          | 24,042   |   |   |   | 26,853 |   |   |   | 30,974 |   |
|                                                           |   |                          |     |   |   |   |   |   |   |   |   |   |
| Other      income                                              |   |                          |     |   |   |   |   |   |   |   |   |   |
| Refining                                                       |   |                          | 9,777    |   |   |   | 5,161 |   |   |   | 1,926 |   |
| Marketing      and distribution                                |   |                          | -        |   |   |   | — |   |   |   | 2,937 |   |
| Total      other income                                        |   |                          | 9,777    |   |   |   | 5,161 |   |   |   | 4,863 |   |
|                                                           |   |                          |     |   |   |   |   |   |   |   |   |   |
|                                                           |   |                          |     |   |   |   |   |   |   |   |   |   |
| Sales      of goods, other operating revenues and other income |   |                          | 826,825  |   |   |   | 1,066,902 |   |   |   | 1,209,706 |   |

----

|                                                                       |   | Years      ended December 31, |    |
|----------------------------------------------------------------------------|--------|-------------------------------|---------|
|                                                                       |   | 2005                          |    |   | 2006 |   |   | 2007 |   |
|                                                                       |   | RMB                           |    |   | RMB |   |   | RMB |   |
| Result                                                                     |   |                          |    |   |   |   |   |   |   |
| Operating      income                                                      |   |                          |    |   |   |   |   |   |   |
| By      segment                                                            |   |                          |    |   |   |   |   |   |   |
| - Exploration and      production                                          |   |                          | 48,334  |   |   |   | 63,182 |   |   |   | 48,766 |   |
| - Refining                                                                 |   |                          | (3,695  | ) |   |   | (25,710 | ) |   |   | (10,452 | ) |
| - Marketing and      distribution                                          |   |                          | 10,350  |   |   |   | 30,234 |   |   |   | 35,727 |   |
| - Chemicals                                                                |   |                          | 14,186  |   |   |   | 14,458 |   |   |   | 13,306 |   |
| - Corporate and      others                                                |   |                          | (1,198  | ) |   |   | (1,532 | ) |   |   | (1,483 | ) |
| Total      operating income                                                |   |                          | 67,977  |   |   |   | 80,632 |   |   |   | 85,864 |   |
| Income/(loss)      from associates and jointly controlled entities         |   |                          |    |   |   |   |   |   |   |   |   |   |
| - Exploration and      production                                          |   |                          | 326     |   |   |   | 233 |   |   |   | 164 |   |
| - Refining                                                                 |   |                          | 114     |   |   |   | 149 |   |   |   | (114 | ) |
| - Marketing and      distribution                                          |   |                          | 241     |   |   |   | 404 |   |   |   | 519 |   |
| - Chemicals                                                                |   |                          | (153    | ) |   |   | 2,416 |   |   |   | 2,959 |   |
| - Corporate and      others                                                |   |                          | 266     |   |   |   | 232 |   |   |   | 516 |   |
| Aggregate      income from associates and jointly controlled entities      |   |                          | 794     |   |   |   | 3,434 |   |   |   | 4,044 |   |
| Finance      costs                                                         |   |                          |    |   |   |   |   |   |   |   |   |   |
| Interest expense                                                           |   |                          | (5,725  | ) |   |   | (7,101 | ) |   |   | (7,314 | ) |
| Interest income                                                            |   |                          | 398     |   |   |   | 538 |   |   |   | 405 |   |
| Unrealized      loss on embedded derivative component of convertible bonds |   |                          | — |   |   |   | — |   |   |   | (3,211 | ) |
| Foreign exchange    loss                                                   |   |                          | (67     | ) |   |   | (140 | ) |   |   | (311 | ) |
| Foreign exchange    gain                                                   |   |                          | 931     |   |   |   | 890 |   |   |   | 2,330 |   |
| Net      finance costs                                                     |   |                          | (4,463  | ) |   |   | (5,813 | ) |   |   | (8,101 | ) |
| Investment      income                                                     |   |                          | 217     |   |   |   | 289 |   |   |   | 1,657 |   |
| Income      before income tax                                              |   |                          | 64,525  |   |   |   | 78,542 |   |   |   | 83,464 |   |
| Income      tax                                                            |   |                          | (19,872 | ) |   |   | (23,504 | ) |   |   | (24,721 | ) |
| Net      income                                                            |   |                          | 44,653  |   |   |   | 55,038 |   |   |   | 58,743 |   |

----

|                                                                  |   | December      31, |    |
|-----------------------------------------------------------------------|--------|-------------------|---------|
|                                                                  |   | 2005              |    |   | 2006 |   |   | 2007 |   |
|                                                                  |   | RMB               |    |   | RMB |   |   | RMB |   |
| Assets                                                                |   |              |    |   |   |   |   |   |   |
| Segment      assets                                                   |   |              |    |   |   |   |   |   |   |
| - Exploration and      production                                     |   |              | 127,471 |   |   |   | 155,043 |   |   |   | 198,945 |   |
| - Refining                                                            |   |              | 148,364 |   |   |   | 170,888 |   |   |   | 193,956 |   |
| - Marketing and      distribution                                     |   |              | 102,935 |   |   |   | 108,053 |   |   |   | 127,047 |   |
| - Chemicals                                                           |   |              | 98,511  |   |   |   | 108,597 |   |   |   | 120,988 |   |
| - Corporate and      others                                           |   |              | 20,570  |   |   |   | 22,641 |   |   |   | 34,285 |   |
| Total      segment assets                                             |   |              | 497,851 |   |   |   | 565,222 |   |   |   | 675,221 |   |
| Interest      in associates and jointly controlled entities           |   |              |    |   |   |   |   |   |   |   |   |   |
| - Exploration and      production                                     |   |              | 1,494   |   |   |   | 1,063 |   |   |   | 1,080 |   |
| - Refining                                                            |   |              | 813     |   |   |   | 1,398 |   |   |   | 3,915 |   |
| - Marketing and      distribution                                     |   |              | 4,298   |   |   |   | 4,692 |   |   |   | 5,355 |   |
| - Chemicals                                                           |   |              | 7,756   |   |   |   | 10,481 |   |   |   | 12,176 |   |
| - Corporate and      others                                           |   |              | 1,812   |   |   |   | 3,500 |   |   |   | 7,062 |   |
| Aggregate      interest in associates and jointly controlled entities |   |              | 16,173  |   |   |   | 21,134 |   |   |   | 29,588 |   |
| Unallocated      assets                                               |   |              | 31,129  |   |   |   | 24,476 |   |   |   | 27,916 |   |
| Total      assets                                                     |   |              | 545,153 |   |   |   | 610,832 |   |   |   | 732,725 |   |
| Liabilities                                                           |   |              |    |   |   |   |   |   |   |   |   |   |
| Segment      liabilities                                              |   |              |    |   |   |   |   |   |   |   |   |   |
| - Exploration and      production                                     |   |              | 20,262  |   |   |   | 30,082 |   |   |   | 45,185 |   |
| - Refining                                                            |   |              | 27,577  |   |   |   | 31,454 |   |   |   | 46,017 |   |
| - Marketing and      distribution                                     |   |              | 23,713  |   |   |   | 27,090 |   |   |   | 31,118 |   |
| - Chemicals                                                           |   |              | 18,396  |   |   |   | 19,142 |   |   |   | 20,786 |   |
| - Corporate and      others                                           |   |              | 35,855  |   |   |   | 35,913 |   |   |   | 51,804 |   |
| Total      segment liabilities                                        |   |              | 125,803 |   |   |   | 143,681 |   |   |   | 194,910 |   |
| Unallocated      liabilities                                          |   |              | 162,077 |   |   |   | 180,494 |   |   |   | 205,057 |   |
| Total      liabilities                                                |   |              | 287,880 |   |   |   | 324,175 |   |   |   | 399,967 |   |
|                                                                  |   |              |    |   |   |   |   |   |   |   |   |   |
|                                                                  |   |              |    |   |   |   |   |   |   |   |   |   |

----

|                                          |   | Years      ended December 31, |   |
|-----------------------------------------------|--------|-------------------------------|--------|
|                                          |   | 2005                          |   |   | 2006 |   |   | 2007 |   |
|                                          |   | RMB                           |   |   | RMB |   |   | RMB |   |
| Capital      expenditure                      |   |                          |   |   |   |   |   |   |   |
| Exploration      and production               |   |                          | 25,479 |   |   |   | 35,198 |   |   |   | 54,498 |   |
| Refining                                      |   |                          | 20,270 |   |   |   | 22,587 |   |   |   | 22,763 |   |
| Marketing      and distribution               |   |                          | 10,954 |   |   |   | 11,319 |   |   |   | 12,548 |   |
| Chemicals                                     |   |                          | 9,386  |   |   |   | 12,629 |   |   |   | 16,184 |   |
| Corporate      and others                     |   |                          | 1,164  |   |   |   | 2,170 |   |   |   | 3,289 |   |
|                                          |   |                          | 67,253 |   |   |   | 83,903 |   |   |   | 109,282 |   |
| Depreciation,      depletion and amortization |   |                          |   |   |   |   |   |   |   |   |   |   |
| Exploration      and production               |   |                          | 11,118 |   |   |   | 12,945 |   |   |   | 18,216 |   |
| Refining                                      |   |                          | 7,476  |   |   |   | 8,212 |   |   |   | 9,020 |   |
| Marketing      and distribution               |   |                          | 3,026  |   |   |   | 3,452 |   |   |   | 6,032 |   |
| Chemicals                                     |   |                          | 8,805  |   |   |   | 8,537 |   |   |   | 8,977 |   |
| Corporate      and others                     |   |                          | 722    |   |   |   | 408 |   |   |   | 1,070 |   |
|                                          |   |                          | 31,147 |   |   |   | 33,554 |   |   |   | 43,315 |   |
| Impairment      losses on long-lived assets   |   |                          |   |   |   |   |   |   |   |   |   |   |
| Exploration      and production               |   |                          | 60     |   |   |   | 552 |   |   |   | 481 |   |
| Refining                                      |   | ___                           |   |   |   | — |   |   |   | 1,070 |   |
| Marketing      and distribution               |   |                          | 366    |   |   |   | 23 |   |   |   | 1,237 |   |
| Chemicals                                     |   |                          | 1,425  |   |   |   | 250 |   |   |   | 318 |   |
|                                          |   |                          | 1,851  |   |   |   | 825 |   |   |   | 3,106 |   |
|                                          |   |                          |   |   |   |   |   |   |   |   |   |   |

----

| Name      of company                                                  | Particulars      of issued capital | Type      oflegal      entity | Percentage      of equity | Principal      activities                                                                                                   |
|-----------------------------------------------------------------------|-----------------------------------------|-------------------------------|---------------------------|-----------------------------------------------------------------------------------------------------------------------------|
|                                                                  |                                    |                          | %                         |                                                                                                                        |
| China      Petrochemical International Company Limited                | RMB      1,663                          | Limited      company          | 100.00                    | Trading      of petrochemical products                                                                                      |
|                                                                  |                                    |                          |                      |                                                                                                                        |
| Sinopec      Sales Company Limited                                    | RMB      1,700                          | Limited      company          | 100.00                    | Marketing      and distribution of refined petroleum products                                                               |
|                                                                  |                                    |                          |                      |                                                                                                                        |
| Sinopec      Yangzi Petrochemical Company Limited                     | RMB      16,337                         | Limited      company          | 100.00                    | Manufacturing      of intermediate petrochemical products and petroleum    products                                         |
|                                                                  |                                    |                          |                      |                                                                                                                        |
| Sinopec      Zhongyuan Petroleum Company Limited                      | RMB      875                            | Limited      company          | 100.00                    | Exploration      and production of crude oil and natural gas                                                                |
|                                                                  |                                    |                          |                      |                                                                                                                        |
| Sinopec      Shengli Oil Field Dynamic Company Limited                | RMB      364                            | Limited      company          | 100.00                    | Exploration      and production of crude oil and distribution of petrochemical      products                                |
|                                                                  |                                    |                          |                      |                                                                                                                        |
| Sinopec      Fujian Petrochemical CompanyLimited (i)                  | RMB      2,253                          | Limited      company          | 50.00                     | Manufacturing      of plastics, intermediate petrochemical products and petroleum      products                             |
|                                                                  |                                    |                          |                      |                                                                                                                        |
| Sinopec      Shanghai PetrochemicalCompany      Limited               | RMB      7,200                          | Limited      company          | 55.56                     | Manufacturing      of synthetic fibres, resin and plastics, intermediate petrochemical      products and petroleum products |
|                                                                  |                                    |                          |                      |                                                                                                                        |
| Sinopec      Kantons Holdings Limited                                 | HKD      104                            | Limited      company          | 72.34                     | Trading      of crude oil and petroleum products                                                                            |
|                                                                  |                                    |                          |                      |                                                                                                                        |
| Sinopec      Wuhan Petroleum GroupCompany      Limited (i)            | RMB      147                            | Limited      company          | 46.25                     | Marketing      and distribution of refined petroleum products                                                               |
|                                                                  |                                    |                          |                      |                                                                                                                        |
| Sinopec      Yizheng Chemical Fibre Company Limited (i)               | RMB      4,000                          | Limited      company          | 42.00                     | Production      and sale of polyester chips and polyester fibres                                                            |
|                                                                  |                                    |                          |                      |                                                                                                                        |
| Sinopec      Zhongyuan Petrochemical Company Limited                  | RMB      2,400                          | Limited      company          | 93.51                     | Manufacturing      of chemical products                                                                                     |
|                                                                  |                                    |                          |                      |                                                                                                                        |
| Sinopec      Shell (Jiangsu) Petroleum Marketing Company Limited      | RMB      830                            | Limited      company          | 60.00                     | Marketing      and distribution of refined petroleum products                                                               |
|                                                                  |                                    |                          |                      |                                                                                                                        |
| BP      Sinopec (Zhejiang) Petroleum Company Limited                  | RMB      800                            | Limited      company          | 60.00                     | Marketing      and distribution of refined petroleum products                                                               |
|                                                                  |                                    |                          |                      |                                                                                                                        |
| Sinopec      Qingdao Refining and Chemical Company Limited            | RMB      800                            | Limited      company          | 85.00                     | Manufacturing      of intermediate petrochemical products and petroleum    products                                         |
|                                                                  |                                    |                          |                      |                                                                                                                        |
| China      International United Petroleum and Chemical CompanyLimited | RMB      223                            | Limited      company          | 100.00                    | Trading      of crude oil and petrochemical products                                                                        |
|                                                                  |                                    |                          |                      |                                                                                                                        |
| Sinopec      Hainan Refining and Chemical Company Limited             | RMB      3,986                          | Limited      company          | 75.00                     | Manufacturing      of intermediate petrochemical products and petroleum    products                                         |
|                                                                  |                                    |                          |                      |                                                                                                                        |
| Sinopec      (Hong Kong) Limited                                      | HKD      5,477                          | Limited      company          | 100.00                    | Trading      of crude oil and petrochemical products                                                                        |
| Sinopec      Senmei (Fujian) Petroleum Ltd.                           | RMB      1,840                          | Limited      company          | 55.00                     | Marketing      and distribution of refined petroleum products                                                               |
|                                                                  |                                    |                          |                      |                                                                                                                        |

| (i) | The      Group consolidated the results of the entity because the Group controlled      the board of this entity and had the power to govern its financial and      operating policies. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | ● | credit      risk;       |   |   |
|--------|---------|-------------------------|--------|--------|
|   | ● | liquidity      risk;    |   |   |
|   | ● | market      risk; and   |   |   |
|        | ● | equity      price risk. |   |   |

----

|                                                     |   |                   |                                          |                            |                                        |                                         |                   |
|----------------------------------------------------------|--------|------------------------|-----------------------------------------------|---------------------------------|---------------------------------------------|----------------------------------------------|------------------------|
|                                                     |   | December      31, 2006 |
|                                                     |   | Carrying      amount   | Total      contractual undiscounted cash flow | Within      1 year or on demand | More      than 1 year but less than 2 years | More      than 2 years but less than 5 years | More      than 5 years |
|                                                     |   | RMB                    | RMB                                           | RMB                             | RMB                                         | RMB                                          | RMB                    |
| Short-term      debts                                    |   | 56,467                 | 58,385                                        | 58,385                          | —                                     | —                                      | —                |
| Long-term      debts                                     |   | 61,617                 | 72,274                                        | 3,840                           | 26,756                                      | 35,753                                       | 5,925                  |
| Loans      from Sinopec Group Company and its affiliates |   | 46,033                 | 46,845                                        | 7,529                           | 2,360                                       | 1,395                                        | 35,561                 |
| Trade      accounts payable                              |   | 52,767                 | 52,767                                        | 52,767                          | —                                     | —                                      | —                |
| Bills      payable                                       |   | 21,714                 | 21,805                                        | 21,805                          | —                                     | —                                      | —                |
| Accrued      expenses and other payables                 |   | 69,200                 | 69,200                                        | 69,200                          | —                                     | —                                      | —                |
|                                                     |   | 307,798                | 321,276                                       | 213,526                         | 29,116                                      | 37,148                                       | 41,486                 |

|                                                     |   |                   |                                          |                            |                                        |                                         |                   |
|----------------------------------------------------------|--------|------------------------|-----------------------------------------------|---------------------------------|---------------------------------------------|----------------------------------------------|------------------------|
|                                                     |   | December      31, 2007 |
|                                                     |   | Carrying      amount   | Total      contractual undiscounted cash flow | Within      1 year or on demand | More      than 1 year but less than 2 years | More      than 2 years but less than 5 years | More      than 5 years |
|                                                     |   | RMB                    | RMB                                           | RMB                             | RMB                                         | RMB                                          | RMB                    |
| Short-term      debts                                    |   | 44,654                 | 45,869                                        | 45,869                          | —                                     | —                                      | —                |
| Long-term      debts                                     |   | 83,134                 | 101,887                                       | 3,906                           | 22,708                                      | 31,643                                       | 43,630                 |
| Loans      from Sinopec Group Company and its affiliates |   | 53,020                 | 53,793                                        | 16,485                          | 327                                         | 1,420                                        | 35,561                 |
| Trade      accounts payable                              |   | 93,049                 | 93,049                                        | 93,049                          | —                                     | —                                      | —                |
| Bills      payable                                       |   | 12,162                 | 12,233                                        | 12,233                          | —                                     | —                                      | —                |
| Accrued      expenses and other payables                 |   | 89,171                 | 89,171                                        | 89,171                          | —                                     | —                                      | —                |
|                                                     |   | 375,190                | 396,002                                       | 260,713                         | 23,035                                      | 33,063                                       | 79,191                 |

----

|                   | December      31, |
|------------------------|-------------------|
|                   | 2006              |   | 2007 |
| US      Dollars        | USD      967      | USD      780 |
| Japanese      Yen      | JPY      41,350   | JPY      33,494 |
| Euro                   | EUR      10       | EUR      7 |
| Hong      Kong Dollars | HKD      7,789    | HKD      15,135 |

|                   | December      31, |
|------------------------|-------------------|
|                   | 2006              | 2007 |
| US      Dollars        | 378               | 285 |
| Japanese      Yen      | 136               | 107 |
| Hong      Kong Dollars | 391               | 709 |

----

|                 | December      31, |
|----------------------|-------------------|
|                 | 2006              | 2007 |
|                 | RMB               | RMB |
| Carrying      amount | 76,935            | 96,420 |
| Fair      value      | 76,585            | 95,600 |

----

----

| 37. | POSSIBLE      IMPACT OF AMENDMENTS, NEW STANDARDS AND INTERPRETATIONS ISSUED BUT NOT YET      EFFECTIVE FOR THE ANNUAL ACCOUNTING PERIOD ENDED DECEMBER 31,      2007 |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

|                                                                                  |   | Years      ended December 31, |     |
|---------------------------------------------------------------------------------------|--------|-------------------------------|----------|
|                                                                                  |   | 2005                          |     |   | 2006 |   |   | 2007 |   |
|                                                                                  |   | RMB                           |     |   | RMB |   |   | RMB |   |
|                                                                                  |   |                          |     |   |   |   |   |   |   |
| Property      cost                                                                    |   | ___                           |     |   | ___ |   |   | ___ |   |
| Wells      and related equipment and facilities                                       |   |                          | 195,280  |   |   |   | 218,693 |   |   |   | 259,373 |   |
| Supporting      equipment and facilities                                              |   |                          | 19,761   |   |   |   | 22,671 |   |   |   | 25,145 |   |
| Uncompleted      wells, equipment and facilities                                      |   |                          | 11,003   |   |   |   | 16,420 |   |   |   | 34,441 |   |
| Total      capitalized costs                                                          |   |                          | 226,044  |   |   |   | 257,784 |   |   |   | 318,959 |   |
| Accumulated      depreciation, depletion, amortization and impairment      allowances |   |                          | (103,343 | ) |   |   | (112,050 | ) |   |   | (130,837 | ) |
| Net      capitalized costs                                                            |   |                          | 122,701  |   |   |   | 145,734 |   |   |   | 188,122 |   |

|                     |   | Years      ended December 31, |   |
|--------------------------|--------|-------------------------------|--------|
|                     |   | 2005                          |   |   | 2006 |   |   | 2007 |   |
|                     |   | RMB                           |   |   | RMB |   |   | RMB |   |
|                     |   |                          |   |   |   |   |   |   |   |
| Exploration              |   |                          | 9,086  |   |   |   | 11,127 |   |   |   | 15,774 |   |
| Development              |   |                          | 22,804 |   |   |   | 32,054 |   |   |   | 49,829 |   |
| Total      cost incurred |   |                          | 31,890 |   |   |   | 43,181 |   |   |   | 65,603 |   |

|                                                                 |   | Years      ended December 31, |    |
|----------------------------------------------------------------------|--------|-------------------------------|---------|
|                                                                 |   | 2005                          |    |   | 2006 |   |   | 2007 |   |
|                                                                 |   | RMB                           |    |   | RMB |   |   | RMB |   |
| Revenues                                                             |   |                          |    |   |   |   |   |   |   |
| Sales                                                                |   |                          | 16,796  |   |   |   | 21,683 |   |   |   | 20,092 |   |
| Transfers                                                            |   |                          | 84,423  |   |   |   | 105,656 |   |   |   | 107,473 |   |
|                                                                 |   |                          | 101,219 |   |   |   | 127,339 |   |   |   | 127,565 |   |
| Production      costs excluding taxes                                |   |                          | (21,722 | ) |   |   | (24,040 | ) |   |   | (28,855 | ) |
| Exploration      expenses                                            |   |                          | (6,411  | ) |   |   | (7,983 | ) |   |   | (11,105 | ) |
| Depreciation,      depletion, amortization and impairment provisions |   |                          | (11,178 | ) |   |   | (13,497 | ) |   |   | (18,697 | ) |
| Taxes      other than income tax                                     |   |                          | (1,687  | ) |   |   | (10,784 | ) |   |   | (13,604 | ) |
| Income      before income tax                                        |   |                          | 60,221  |   |   |   | 71,035 |   |   |   | 55,304 |   |
| Income      tax expense                                              |   |                          | (19,873 | ) |   |   | (23,442 | ) |   |   | (18,250 | ) |
| Results      of operations from producing activities                 |   |                          | 40,348  |   |   |   | 47,593 |   |   |   | 37,054 |   |

----

|                                                                         |   | Years      ended December 31, |   |
|------------------------------------------------------------------------------|--------|-------------------------------|--------|
|                                                                         |   | 2005                          |   |   | 2006 |   |   | 2007 |   |
| Proved      developed and undeveloped reserves (oil) (million barrels)       |   |                          |   |   |   |   |   |   |   |
| Beginning      of year                                                       |   |                          | 3,267  |   |   |   | 3,294 |   |   |   | 3,293 |   |
| Revisions      of previous estimates                                         |   |                          | 26     |   |   |   | (10 | ) |   |   | (250 | ) |
| Improved      recovery                                                       |   |                          | 142    |   |   |   | 146 |   |   |   | 125 |   |
| Extensions      and discoveries                                              |   |                          | 138    |   |   |   | 148 |   |   |   | 148 |   |
| Production                                                                   |   |                          | (279   | ) |   |   | (285 | ) |   |   | (292 | ) |
| End      of year                                                             |   |                          | 3,294  |   |   |   | 3,293 |   |   |   | 3,024 |   |
| Proved      developed reserves                                               |   |                          |   |   |   |   |   |   |   |   |   |   |
| Beginning      of year                                                       |   |                          | 2,808  |   |   |   | 2,870 |   |   |   | 2,903 |   |
| End      of year                                                             |   |                          | 2,870  |   |   |   | 2,903 |   |   |   | 2,651 |   |
| Proved      developed and undeveloped reserves (gas) (billion cubic    feet) |   |                          |   |   |   |   |   |   |   |   |   |   |
| Beginning      of year                                                       |   |                          | 3,033  |   |   |   | 2,952 |   |   |   | 2,856 |   |
| Revisions      of previous estimates                                         |   |                          | (42    | ) |   |   | (9 | ) |   |   | 222 |   |
| Extensions      and discoveries                                              |   |                          | 183    |   |   |   | 170 |   |   |   | 3,536 |   |
| Production                                                                   |   |                          | (222   | ) |   |   | (257 | ) |   |   | (283 | ) |
| End      of year                                                             |   |                          | 2,952  |   |   |   | 2,856 |   |   |   | 6,331 |   |
| Proved      developed reserves                                               |   |                          |   |   |   |   |   |   |   |   |   |   |
| Beginning      of year                                                       |   |                          | 1,398  |   |   |   | 1,557 |   |   |   | 1,472 |   |
| End      of year                                                             |   |                          | 1,557  |   |   |   | 1,472 |   |   |   | 1,518 |   |

----

|                                                          |   | Years      ended December 31, |      |
|---------------------------------------------------------------|--------|-------------------------------|-----------|
|                                                          |   | 2005                          |      |   | 2006 |   |   | 2007 |   |
|                                                          |   |                          |      |   |   |   |   |   |   |
| Future      cash flows                                        |   |                          | 1,401,283 |   |   |   | 1,235,524 |   |   |   | 1,835,471 |   |
| Future      production costs                                  |   |                          | (440,743  | ) |   |   | (487,895 | ) |   |   | (799,408 | ) |
| Future      development costs                                 |   |                          | (26,994   | ) |   |   | (33,523 | ) |   |   | (68,970 | ) |
| Future      income tax expenses                               |   |                          | (270,607  | ) |   |   | (189,465 | ) |   |   | (196,103 | ) |
| Undiscounted      future net cash flows                       |   |                          | 662,939   |   |   |   | 524,641 |   |   |   | 770,990 |   |
| 10%      annual discount for estimated timing of cash flows   |   |                          | (304,893  | ) |   |   | (241,180 | ) |   |   | (349,987 | ) |
| Standardized      measure of discounted future net cash flows |   |                          | 358,046   |   |   |   | 283,461 |   |   |   | 421,003 |   |
|                                                          |   |                          |      |   |   |   |   |   |   |   |   |   |

|                                                                         |   | Years      ended December 31, |    |
|------------------------------------------------------------------------------|--------|-------------------------------|---------|
|                                                                         |   | 2005                          |    |   | 2006 |   |   | 2007 |   |
|                                                                         |   |                          |    |   |   |   |   |   |   |
| Sales      and transfers of oil and gas produced, net of production    costs |   |                          | (61,346 | ) |   |   | (92,849 | ) |   |   | (77,522 | ) |
| Net      changes in prices and production costs                              |   |                          | 130,221 |   |   |   | (114,796 | ) |   |   | 165,191 |   |
| Net      change due to extensions, discoveries and improved    recoveries    |   |                          | 56,131  |   |   |   | 51,445 |   |   |   | 68,788 |   |
| Revisions      of previous quantity estimates                                |   |                          | 3,964   |   |   |   | (1,207 | ) |   |   | (46,980 | ) |
| Previously      estimated development costs incurred during the year         |   |                          | 8,134   |   |   |   | 8,516 |   |   |   | 8,783 |   |
| Accretion      of discount                                                   |   |                          | 21,352  |   |   |   | 30,190 |   |   |   | 23,726 |   |
| Net      change in income taxes                                              |   |                          | (50,397 | ) |   |   | 43,784 |   |   |   | (4,716 | ) |
| Others                                                                       |   |                          | 308     |   |   |   | 332 |   |   |   | 272 |   |
| Net      change for the year                                                 |   |                          | 108,367 |   |   |   | (74,585 | ) |   |   | 137,542 |   |

----

|                               | China      Petroleum & Chemical Corporation |   |
|------------------------------------|-------------------------------------------------|--------|
|                               |                                            |   |
|                               | By /s/ Chen      Ge                             |   |
|                               | Name:      Chen Ge                              |   |
|                               | Title:      Secretary to the Board of Directors |   |
|                               |                                            |   |
| Date:  June      2, 2008 |                                            |   |