SNP.L Regulatory News (SNP)

Progress Update Announcement

This announcement is made by China Petroleum & Chemical Corporation (the "Company", together with its subsidiaries, the "Group") on voluntary basis pursuant to the Inside Information Provisions under Part XIVA of the Securities and Futures Ordinance (Cap. 571, Laws of Hong Kong) and Rule 13.09 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited.

References are made to the voluntary announcements of the Company dated 27 December 2018 in relation to the unusual price movement and the Progress Update Announcement dated 4 January 2019.

China International United Petroleum and Chemical Company Limited (the "Unipec") is a wholly owned subsidiary of the Company. Unipec is mainly engaged in crude oil and petrochemical products trading business and procurement of imported crude oil for the refineries of the Group. The Company discovered in its regular supervision that there were unusual financial data in the hedging business of Unipec. Further investigations have indicated that the misjudgment about the global crude oil price trend and inappropriate hedging techniques applied for certain parts of hedging positions, resulted in a loss from some futures leg of the exchange hedging business for crude oil during the period of the crude oil price decline. In 2018, Unipec had an operating loss of approximately RMB 4.65 billion; during the same period, Unipec had also saved the cost of physical crude oil import for the refineries of the Group by approximately RMB 6.4 billion, compared with global crude oil price benchmarks. 

As at the date of this announcement, the Company and Unipec are under normal production and operation.

The shareholders of the Company and potential investors should exercise caution when investing in or dealing in the securities of the Company.

Beijing, the PRC,

25 January 2019

As of the date of this announcement, directors of the Company are: Dai Houliang*, Li Yunpeng*, Yu Baocai*, Ma Yongsheng#, Ling Yiqun# , Liu Zhongyun# , Li Yong*, Tang Min+ , Fan Gang+, Cai Hongbin+, Ng, Kar Ling Johnny+

# Executive Director

* Non-executive Director

+ Independent Non-executive Director