Privatization of Beijing Yanhua bySinopec Corp. through Beijing Feitian

China Petroleum & Chemical Corporation

30 December 2004

2

Disclaimer

This presentation and the presentation materials distributed herewith include forward-looking

statements. All statements, other than statements of historical facts, that address activities, events or

developments that Sinopec Corp. expects or anticipates will or may occur in the future (including but

not limited to projections, targets, estimates and business plans) are forward-looking statements. Sino

pec Corp.'s actual results or developments may differ materially from those indicated by these forward

-looking statements as a result of various factors and uncertainties, including but not limited to price fl

uctuations, actual demand, exchange rate fluctuations, exploration and development outcomes, estim

ates of proven reserves, market shares, competition, environmental risks, changes in legal, financial a

nd regulatory frameworks, international economic and financial market conditions, political risks, proj

ect delay, project approval, cost estimates and other risks and factors beyond our control. In addition,

Sinopec Corp. makes the forward-looking statements referred to herein as of today and undertakes no

obligation to update these statements. Financial figures in this presentation are based on International

Financial Reporting Standards.

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Transaction Overview

Proposed TransactionPrivatization of Beijing Yanhua by Sinopec Corp. through its wholly owned subsidiary Beijing Feitian

Financial Advisers to Sinopec Corp.

China International Capital Corporation (Hong Kong) LimitedMorgan Stanley Dean Witter Asia Limited

Cancellation Price and Form of

Payment

HKD3.80 per H share of Beijing Yanhua. Total consideration for the H shares approximates RMB4.076bn and will be paid in cash

Independent Financial Adviser to Beijing Yanhua

Lehman Brothers Asia Investment Limited

Effective Date The date of completing deregistration of Beijing Yanhua, after fulfillment of all precedent conditions

Conditions Precedent

Include but not limited to:• Approvals by shareholders and independent shareholders of Beijing Yanhua (tent

atively scheduled on 1 March 2005) and approval by shareholders of Beijing Feitian

• Approvals by relevant regulatory authorities

Financial Adviser toBeijing Yanhua

Bear Stearns Asia Limited

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Turnover by Products (2003)

Business Overview of Beijing Yanhua

Beijing Yanhua’s major products：- Synthetic resins and plastics

- Synthetic rubber

- Basic organic chemical products

Beijing Yanyua’s major manufacturing faci

lities：- 710,000 ton/year ethylene cracker facility

- 380,000 ton/year LDPE facility

- 360,000 ton/year polypropylene facility

- 160,000 ton/year HDPE facility

- 240,000 ton/year phenol-acetone facility

- 80,000 ton/year cis-polybutadiens rubber fac

ility

- 30,000 ton/year butyl rubber facility, etc.Source: Beijing Yanhua

(Total Turnover RMB11.47Bn)

6.3355.2%

1.9216.7%

2.723.5%

0.524.5%

Synthetic Resins and Plastics

Synthetic Rubber

Basic Organic Chemical ProductsOther

RMB, bn

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Financial Summary of Beijing Yanhua

RMB Billion

5.49

0.38

0.19

0.06

7.67

1.57

1.03

0.31

39.7

313.2

442.1

416.7

Turnover

EBIT

Net Profit

EPS (RMB/Share)

Cash flow from operations

Debt/Capital

EBITDA/Interest Expense

0.83

37.6%

9.6

1.53

20.8%

41.0

84.3

-1680bps

+31.4x

EBITDA 0.83 2.03 144.6

11.47

1.01

0.63

0.19

1.61

33.0%

13.4

1.91

Note： In accordance with International Financial Reporting Standards; 2003 interim results and 2004 interim results are unaudited

Total Assets

Total Liabilities

Net Asset

9.58

4.37

5.21

9.20

2.68

6.52

- 4.1

- 38.7

25.1

9.55

3.89

5.66

9.44

0.53

0.21

0.06

1.04

45.4%

6.8

1.33

10.26

5.24

5.02

2002 1H20032003 1H2004 Change(%)

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Strategic Rationale for Sinopec Corp.

Rationalize managerial system, reinforce and centralize internal

management

Streamline Beijing Yanhua’s business value chain

Integrate resources and realize consolidation synergies

Effectively eliminate intra-group competition

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Transaction Procedures

• Sinopec Corp., Beijing Feitian and Beijing Yanhua held separate board meetings or independent board meetings

• Joint announcement by Sinopec Corp. and Beijing Yanhua

• Shareholders’ meeting of Feitian and Shareholders’ and independent shareholders’ meetings of Beijing Yanhua to approve the merger

• After applications to relevant authorities are approved, Beijing Yanhua will apply for delisting and deregistration, and notify creditors of Beijing Yanhua

• Beijing Feitian will pay the cancellation price to Beijing Yanhua H shareholders and issue new registered capital to Sinopec Corp; Beijing Yanhuan will be deregistered after which the transaction will be completed

• Beijing Feitian deregisters when appropriate, Beijing Yanhua’s operation will be merged into Sinopec Corp.

29.99％

70.01％

Sinopec Corp.

Merged into

Issue New Registered Capital

Cash CancellationPrice

100％

Merger

Cash / new registered capital flow

Beijing Feitian(Wholly-owned subsidiary)

H Shareholders

Beijing Yanhua

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Pricing Principles and Methodologies

Applied various commonly adopted valuation methods in the

equity marketsMethodologies

Based on opinions from financial advisors and independent advisor,

pricing principles, methodologies and cancellation price were subst

antially discussed and negotiated at arm’s length between both parti

es before final agreement was reached

Procedures

Based on fair and reasonable principles for a win-win transaction

To ensure shareholders interests of Sinopec Corp. and achieve EPS accreti

on

To offer reasonable return to Beijing Yanhua’s H shareholders

Principles

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Cancellation Price

Cancellation Price to Beijing Yanhua H Shares at HKD3.80 per Share

Note: All periods stated above refer to the period including and up to 21 December 2004

P / E

（ 2004E）EV / EBITDA

（ 2004E）

Sinopec Corp. 8.2x 4.8x

Implied Beijing Yanhua Multiple at the Cancellation Price

5.9x 3.3x

(HK/Share) 1 Day Prior to Trading

Suspension

Average Last5 Days

Average Last1 Month

Average Last 6 Months

Average Last 12 Months

Highest Last 6 Months

Highest Last 12 Months

Closing Price 3.425 3.280 3.097 2.870 2.820 3.425 3.700

Premium 10.9% 15.9％ 22.7％ 32.4％ 34.8％ 10.9% 2.7%

Reasonable to both parties according to comparable company analysis

Premium offered is reasonable compared the proposed cancellation price and historical trading prices of Beijing Yanhua H shares

Source： I/B/E/S Estimates (as of 21 December 2004)

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Potential Impact on Sinopec Corp.

The following is based on consolidated financial results for the six months ended 30 J

une 2004:

Impact on consolidated liabilities and shareholders’ fund

-Liabilities increases by RMB 4.076bn

-Minority interests decreases by RMB 1.955bn

-Sinopec Corp.’s debt/capital ratio slightly increases

-Existing shareholders’ fund remains unchanged

Impact on revenue and expense

-Consolidated sales revenue remains unchanged

-Interest expense slightly increases

-Administration expense moderately decreases

Moderate proforma accretion on earnings per share

In the long run, this transaction should have positive impact on Sinopec Corp.’s overal

l profitability

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Conclusion

This transaction would contribute to the continual development of Sinopec Corp. It is also another demonstration of the efforts of Sinopec Corp.’s management to deliver their IPO promises

A fair and reasonable transaction to both parties at a cancellation price of HKD3.80 for each Beijing Yanhua H Share:

- In the long run, this transaction should enhance Sinopec Corp.’s ability to generate profit and hence increase its shareholders’ value

- A reasonable cash offer price at a premium to Beijing Yanhua’s H shareholders

Upon completion of the Merger, Sinopec Corp. will aim to realize synergies in investment, management and resource allocation, as well as enhance overall operating efficiency

Transaction Aligns with Sinopec Corp.’s Shareholders’ Interest

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http://www.sinopec.com

For Further Information

Investor Relations

Beijing: Tel: (8610) 64990060 Fax: (8610) 64990489Email: ir@sinopec.com

Hong Kong: Tel: (852) 28242638 Fax: (852) 28243669Email: ir@sinopechk.com

New York: Tel: (212) 759 5085 Fax: (212) 759 6882Email: fangzq@sinopecusa.com

Media Relations

Tel: (8610) 64990092Fax: (8610) 64990093Email: media@sinopec.com