Financial Performance - Operating revenue for the first half of 2023 was RMB 37,133,528 thousand, representing a 12.0% increase compared to RMB 33,148,652 thousand in the same period of 2022[8]. - Net profit attributable to shareholders for the first half of 2023 was RMB 325,904 thousand, a significant increase of 58.0% from RMB 206,310 thousand in the previous year[8]. - Basic earnings per share for the first half of 2023 was RMB 0.034, up 13.3% from RMB 0.030 in the same period of 2022[7]. - The company reported a total profit of RMB 541,574 thousand for the first half of 2023, which is a 43.5% increase from RMB 377,377 thousand in the same period of 2022[8]. - The company's total comprehensive income for the first half of 2023 is RMB 325,904,000, which includes a special reserve increase of RMB 323,216,000[171]. - The net profit attributable to the parent company for the six months ended June 30, 2023, is RMB 325,904,000, compared to RMB 206,310,000 for the same period in 2022, reflecting a year-over-year increase of approximately 57.7%[171]. Assets and Liabilities - Total assets as of June 30, 2023, reached RMB 72,830,971 thousand, an increase of 2.3% from RMB 71,208,061 thousand as of December 31, 2022[7]. - The total liabilities increased to RMB 64,752,117 thousand, up by RMB 973,790 thousand from the end of 2022, primarily due to an increase in short-term borrowings of RMB 1,745,462 thousand[37]. - The equity attributable to shareholders reached RMB 8,078,854 thousand, reflecting an increase of RMB 649,120 thousand, driven by the net profit for the first half of 2023[37]. - The company's cash and cash equivalents were RMB 1,759,808 thousand, a decrease from RMB 1,801,150 thousand at the end of 2022[71]. - The company's total liabilities for reportable segments were RMB 64,752,117 thousand as of June 30, 2023[89]. Cash Flow - Cash flow from operating activities for the first half of 2023 was RMB 421,612 thousand, a recovery from a negative cash flow of RMB -537,926 thousand in the same period of 2022[8]. - The net cash inflow from operating activities for the first half of 2023 was RMB 421,612 thousand, a year-on-year increase of RMB 959,538 thousand[37]. - Cash flow from financing activities showed a net increase of RMB 1,100,090 thousand, compared to RMB 305,843 thousand in the previous year[167]. Shareholder Information - The company had a total of 113,975 shareholders as of June 30, 2023, with 113,644 being A-share shareholders and 331 being H-share shareholders[13]. - The top ten shareholders held a total of 10,727,896,364 A-shares, representing 56.51% of the total shareholding[14]. - China Petroleum & Chemical Corporation (Sinopec) directly and indirectly holds 13,323,683,351 shares, accounting for 70.18% of the total shares[15]. Revenue Segments - The company's geophysical services achieved a revenue of RMB 2,019,633 thousand in the first half of 2023, a growth of 33.6% compared to RMB 1,512,225 thousand in the same period last year[28]. - The drilling services segment reported a revenue of RMB 18,867,989 thousand, up 13.4% from RMB 16,635,798 thousand year-on-year, with a drilling footage of 5.61 million meters, an increase of 15.2%[29]. - International business revenue reached RMB 7,795,859 thousand, a significant increase of 38.0% from RMB 5,650,053 thousand, accounting for 21.2% of total revenue[33]. Research and Development - Research and development expenses for the period were RMB 815,114 thousand, compared to RMB 666,919 thousand in the same period last year, indicating a focus on innovation[68]. - The company applied for 431 patents in the first half of 2023, including 217 invention patents, enhancing its innovation capabilities[34]. Future Plans and Commitments - The group plans to sign new contracts worth over RMB 246 billion in the second half of 2023, with RMB 177 billion expected from Sinopec Group[43]. - The company plans to invest RMB 3.75 billion in capital expenditures in the second half of 2023, including the purchase of 8 drilling rigs and upgrades to 4 existing rigs[52]. - The company aims to sign new contracts worth RMB 7.6 billion and complete contracts worth RMB 8.5 billion in the engineering construction service sector in the second half of 2023[48]. Related Party Transactions - The company reported significant related party transactions, including RMB 22.57 billion for engineering services provided to Sinopec Group, accounting for 61.5% of similar transactions[55]. - Significant related party transactions with Sinopec Group and its subsidiaries for the six months ended June 30, 2023, include procurement of materials and equipment amounting to RMB 4,834.02 million, compared to RMB 5,183.88 million in 2022[150]. Legal and Compliance - The company has not faced any investigations or legal actions from authorities during the reporting period, ensuring operational stability[66]. - The company has engaged local legal support in Chile to assist with the arbitration proceedings[145]. Operational Efficiency - The company maintained a stable and efficient operation despite a year-on-year decline in international oil prices, demonstrating resilience in its business model[26]. - The company achieved a 100% data qualification rate in logging services, indicating improved service quality and operational efficiency[30].

Financial Performance - The company's operating revenue for Q1 2023 was RMB 17,941,753, an increase of 16.9% compared to RMB 15,347,614 in the same period last year[4] - Net profit attributable to shareholders was RMB 145,114, representing a 95.6% increase from RMB 68,290 year-on-year[4] - The net profit attributable to shareholders after deducting non-recurring gains and losses was RMB 164,011, a significant increase of 198.1% from RMB 49,132 in the previous year[4] - Basic and diluted earnings per share both reached RMB 0.008, doubling from RMB 0.004 in the same quarter last year[6] - In Q1 2023, the company reported a net profit of 145,114 thousand RMB, a significant increase of 95.5% compared to 74,179 thousand RMB in Q1 2022[25] - The total revenue from operating activities reached 18,666,840 thousand RMB, up from 15,035,531 thousand RMB in the same period last year, reflecting a growth of 17.5%[27] - The company generated cash inflows from sales of goods and services amounting to 14,706,422 thousand RMB, compared to 12,354,400 thousand RMB in Q1 2022, marking an increase of 18.9%[27] - The company reported a total comprehensive income of 145,114 thousand RMB, which is the same as the net profit, indicating no other comprehensive income for the period[26] Assets and Liabilities - The total assets at the end of the reporting period were RMB 71,390,840, a slight increase of 0.3% from RMB 71,200,517 at the end of the previous year[6] - The company reported a total asset of RMB 71,390.84 million as of March 31, 2023, slightly up from RMB 71,208.02 million at the end of 2022[23] - The total liabilities of the company were RMB 63,622.04 million, a decrease from RMB 63,778.28 million at the end of 2022[23] - The company’s total equity attributable to shareholders was RMB 7,768.80 million, an increase from RMB 7,429.73 million at the end of 2022[23] Cash Flow - The net cash flow from operating activities was negative at RMB -521,584, an improvement from RMB -902,539 in the same period last year[4] - Cash flow from financing activities showed a net increase of 829,240 thousand RMB, compared to 357,572 thousand RMB in Q1 2022, indicating a growth of 132.5%[28] - The company incurred a total operating expense of 19,188,424 thousand RMB, up from 15,938,070 thousand RMB in Q1 2022, representing a rise of 20.8%[27] - The company’s investment activities resulted in a net cash outflow of 276,188 thousand RMB, compared to a net outflow of 224,681 thousand RMB in Q1 2022[28] Shareholder Information - The total number of ordinary shareholders at the end of the reporting period was 115,391[10] - The largest shareholder, China Petroleum & Chemical Corporation, holds 56.51% of the shares, totaling 10,727,896,364 shares[10] Contracts and Business Operations - The total new contracts signed in Q1 2023 amounted to RMB 31.42 billion, a year-on-year increase of 5.6%[19] - New contracts signed with China Petroleum Group reached RMB 18.1 billion, up 11.0% year-on-year[19] Research and Development - The company’s R&D expenses in Q1 2023 were RMB 210.76 million, down from RMB 310.44 million in Q1 2022[24] Inventory and Cash Equivalents - The company’s inventory increased to RMB 1,868.64 million from RMB 1,116.34 million year-on-year[21] - The company’s cash and cash equivalents stood at RMB 1,837.08 million, showing a slight decrease from RMB 1,838.23 million at the end of 2022[21] - The cash and cash equivalents at the end of Q1 2023 stood at 1,837,084 thousand RMB, an increase from 1,720,871 thousand RMB at the end of Q1 2022[28]

Financial Performance - The company's operating revenue for Q1 2023 was RMB 17,941,753 thousand, representing a 16.9% increase compared to RMB 15,347,614 thousand in the same period last year[3] - Net profit attributable to shareholders of the listed company was RMB 145,114 thousand, a significant increase of 95.6% from RMB 68,290 thousand year-on-year[3] - The net profit attributable to shareholders after deducting non-recurring gains and losses was RMB 164,011 thousand, reflecting a 198.1% increase from RMB 49,132 thousand in the previous year[4] - Basic and diluted earnings per share both reached RMB 0.008, doubling from RMB 0.004 in the same period last year[4] - Operating profit for Q1 2023 was 275,291 thousand RMB, representing a 111.1% increase compared to 130,165 thousand RMB in Q1 2022[18] - The company reported a total profit of 241,973 thousand RMB for Q1 2023, which is an increase of 89.5% from 127,595 thousand RMB in Q1 2022[18] Cash Flow - The net cash flow from operating activities was RMB -521,584 thousand, an improvement from RMB -902,539 thousand in the previous year[4] - Cash flow from operating activities showed a net outflow of 521,584 thousand RMB in Q1 2023, an improvement from a net outflow of 902,539 thousand RMB in Q1 2022[20] - Cash flow from investing activities resulted in a net outflow of 276,188 thousand RMB in Q1 2023, compared to a net outflow of 224,681 thousand RMB in Q1 2022[21] - Cash flow from financing activities generated a net inflow of 829,240 thousand RMB in Q1 2023, up from 357,572 thousand RMB in Q1 2022[21] Assets and Liabilities - Total assets at the end of the reporting period were RMB 71,390,840 thousand, showing a slight increase of 0.3% from RMB 71,200,517 thousand at the end of the previous year[4] - As of March 31, 2023, total assets were RMB 71.39 billion, slightly up from RMB 71.21 billion at the end of 2022[15][16] - The company's total liabilities as of March 31, 2023, were RMB 63.62 billion, down from RMB 63.78 billion at the end of 2022[16] - Current assets totaled RMB 38.08 billion, an increase from RMB 36.54 billion at the end of 2022[15] - The equity attributable to shareholders was RMB 7.77 billion, an increase from RMB 7.43 billion at the end of 2022[16] Shareholder Information - Shareholders' equity attributable to shareholders of the listed company increased by 4.6% to RMB 7,768,798 thousand from RMB 7,427,319 thousand year-on-year[4] - The total number of ordinary shareholders at the end of the reporting period was 115,391[8] Contracts and Market Performance - The total new contracts signed in Q1 2023 amounted to RMB 31.42 billion, reflecting a year-on-year increase of 5.6%[13] - New contracts signed with China Petroleum Group reached RMB 18.1 billion, up 11.0% year-on-year[13] - New contracts in the domestic external market surged to RMB 7.89 billion, marking a substantial year-on-year increase of 116.2%[13] - New contracts in the overseas market totaled RMB 5.43 billion, showing a year-on-year decline of 44.6%[13] Expenses - Total operating costs for Q1 2023 were 17,681,249 thousand RMB, an increase of 15.5% from 15,250,605 thousand RMB in Q1 2022[18] - Research and development expenses decreased to 210,757 thousand RMB in Q1 2023 from 310,442 thousand RMB in Q1 2022, a reduction of 32.1%[18] Other Financial Aspects - The company reported a loss of RMB 5,402 thousand from the disposal of non-current assets during the period[5] - Government subsidies recognized in the current period amounted to RMB 7,414 thousand, contributing positively to the financial results[5]

Financial Performance - The net profit attributable to shareholders for 2022 was RMB 463,814 thousand according to Chinese accounting standards, and RMB 571,615 thousand according to International Financial Reporting Standards[7]. - The company's operating revenue for 2022 was RMB 73,772.688 million, representing a 6.1% increase compared to RMB 69,533.053 million in 2021[17]. - Net profit attributable to shareholders for 2022 reached RMB 463.814 million, a significant increase of 158.0% from RMB 179.791 million in 2021[17]. - The total assets at the end of 2022 were RMB 71,200.517 million, an increase of 11.2% from RMB 64,052.447 million at the end of 2021[17]. - The company reported a weighted average return on equity of 6.54% for 2022, an increase of 3.90 percentage points from 2.64% in 2021[18]. - The net profit attributable to shareholders under international accounting standards for 2022 was RMB 571.615 million, compared to RMB 140.450 million in the previous year[19]. - The company's equity attributable to shareholders was RMB 7.43 billion, up from RMB 6.86 billion in 2021[24]. - The company reported a total R&D investment of RMB 1,838,968 thousand, accounting for 2.49% of total revenue[51]. - The company’s total liabilities as of December 31, 2022, were RMB 63,773,198 thousand, reflecting an increase of 11.5% from RMB 57,190,930 thousand in 2021[87]. Dividend and Profit Distribution - The company reported a negative retained earnings of RMB -1,946,364 thousand at the end of 2022, leading to a recommendation of no cash dividend distribution for the year[7]. - The board of directors has proposed that the profit distribution plan for 2022 be submitted for shareholder approval due to the negative retained earnings situation[7]. - The company plans to implement a cash dividend policy of at least 40% of the net profit attributable to shareholders, but due to negative retained earnings at the end of 2022, no cash dividends will be distributed for that year[130]. - The company reported a positive profit available for distribution to shareholders but did not propose a cash profit distribution plan, which is not applicable for disclosure[132]. Governance and Compliance - The company has a strong governance structure with a board of directors ensuring the integrity of the annual report[7]. - The company emphasizes that forward-looking statements regarding future plans and strategies involve uncertainties and do not constitute a commitment to investors[7]. - The company has not violated any regulatory decision-making procedures in providing guarantees[7]. - The company has established a comprehensive environmental impact assessment system and did not experience any environmental pollution incidents in 2022[96]. - The company strictly complied with relevant laws and regulations in 2022, with no complaints, fines, or sanctions due to violations[97]. - The board of directors held a total of six meetings in 2022, including four regular meetings, to fulfill its responsibilities[142]. - The company has established a system for providing relevant data to directors to aid in decision-making, ensuring timely access to information[149]. - The company has implemented a robust risk assessment and business process optimization strategy to enhance internal controls[139]. Operational Strategy and Market Presence - The company plans to continue expanding its market presence and investing in new technologies to drive future growth[1]. - The company aims to enhance its research and development capabilities, particularly in low-carbon technologies and new energy sectors, to support sustainable development[28]. - The company is actively participating in emerging markets such as CCUS, geothermal, coalbed methane, and hydrogen energy[28]. - The company aims to enhance its sustainability initiatives, targeting a 20% reduction in carbon emissions by 2025[112]. - The company is focusing on high-quality market segments to support its growth strategy and aims to achieve a higher concentration of its advantageous businesses[28]. Research and Development - The company authorized 787 patents in 2022 and set 579 new construction records[26]. - Research and development expenses rose to RMB 1,838.968 million, a 10.1% increase from RMB 1,669.706 million, reflecting increased investment in key technologies[43]. - The company aims to enhance its R&D capabilities by focusing on high-temperature and high-pressure equipment, with an emphasis on domestic production of advanced tools[79]. Environmental and Social Responsibility - The company invested RMB 115,930.7 million in environmental protection during the reporting period[162]. - The total industrial energy consumption per ten thousand yuan of output was 0.201 tons of standard coal, a year-on-year decrease of 14.1%[163]. - The company has implemented measures to control environmental risks throughout the drilling process, enhancing overall environmental protection levels[164]. - Total charitable contributions amounted to RMB 1.7641 million, benefiting approximately 20,000 people[169]. Related Party Transactions - Related party transactions included procurement of raw materials and equipment totaling RMB 12.18 billion, accounting for 32.3% of similar transactions[182]. - The company engaged in related party transactions with China Petroleum Group and its subsidiaries, ensuring stable supply of raw materials and engineering services, with a total transaction value not exceeding the annual limit approved by independent shareholders[183]. - The company’s independent non-executive directors reviewed the related party transactions and confirmed they were conducted under normal commercial terms and did not adversely affect the company’s independence[183]. Management and Leadership - The company has a structured remuneration decision process based on the responsibilities and performance of its directors, supervisors, and senior management[117]. - The company has maintained a stable management team with no changes in shareholding among directors and supervisors[109]. - The current chairman, Chen Xikun, has held various senior positions within Sinopec, including Chief Accountant and Vice General Manager, since 2003[110]. - The company acknowledges the contributions of retiring executives and expresses gratitude for their service[118]. Future Outlook - The company plans to sign new contracts worth over RMB 78 billion in 2023, focusing on optimizing resource allocation and enhancing project implementation efficiency[28]. - The company aims to complete 5,090 kilometers of 2D seismic acquisition and 16,000 square kilometers of 3D seismic acquisition in 2023[74]. - The company plans to improve fracturing efficiency by 10% and complete 6,070 well operations in 2023, focusing on shale gas development in the Sichuan Basin and tight oil production in the Ordos Basin[77].

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Financial Performance - The net profit attributable to shareholders for 2022 was RMB 463,814 thousand according to Chinese accounting standards, and RMB 571,615 thousand according to International Financial Reporting Standards[2]. - The company's operating revenue for 2022 was RMB 73,772,688 thousand, representing a 6.1% increase from RMB 69,533,053 thousand in 2021[12]. - The net profit attributable to shareholders for 2022 was RMB 463,814 thousand, a significant increase of 158.0% compared to RMB 179,791 thousand in 2021[12]. - The company's total assets at the end of 2022 reached RMB 71,200,517 thousand, an 11.2% increase from RMB 64,052,447 thousand at the end of 2021[12]. - The basic earnings per share for 2022 was RMB 0.024, up 166.7% from RMB 0.009 in 2021[13]. - The net cash flow from operating activities for 2022 was RMB 4,197,869 thousand, a decrease of 32.4% from RMB 6,206,909 thousand in 2021[12]. - The company's net assets attributable to shareholders increased by 8.2% to RMB 7,427,319 thousand at the end of 2022 from RMB 6,861,517 thousand at the end of 2021[12]. - The weighted average return on equity for 2022 was 6.54%, an increase of 3.90 percentage points from 2.64% in 2021[13]. - The company reported a total liability of RMB 63,773,198 thousand in 2022, compared to RMB 57,190,930 thousand in 2021[19]. - The net profit after deducting non-recurring gains and losses for 2022 was RMB 377,363 thousand, compared to a loss of RMB 100,263 thousand in 2021[12]. Dividend and Profit Distribution - The company's undistributed profits at the end of 2022 amounted to RMB 1,946,364 thousand, leading to a recommendation of no cash dividend distribution for the year[2]. - The board of directors has approved the profit distribution plan, which is subject to shareholder meeting approval[2]. - The company has a cash dividend policy that mandates a minimum of 40% of the net profit attributable to shareholders of the parent company for cash dividends, but no dividends will be distributed for 2022 due to negative retained earnings[130]. - The current cash dividend policy will be strictly followed once the company is able to distribute dividends, ensuring the protection of minority shareholders' rights[130]. Corporate Governance - The annual report has been audited by Lixin Certified Public Accountants and received standard unqualified opinions[2]. - The company emphasizes that forward-looking statements regarding future plans and strategies involve uncertainties and do not constitute substantive commitments to investors[2]. - The report indicates that there are no instances of more than half of the directors being unable to ensure the authenticity, accuracy, and completeness of the annual report[2]. - The company is committed to maintaining the integrity and accuracy of the financial report as stated by the management team[2]. - The company has maintained compliance with corporate governance regulations and improved its governance structure, including the establishment of a nomination committee[97]. - The company has not faced any penalties from securities regulatory agencies in the past three years[117]. - The company has not reported any insider trading incidents during the reporting period, indicating effective management of insider information[97]. - The company has established a remuneration decision-making process based on performance and responsibilities of directors and senior management[114]. - The board consists of nine members, with independent non-executive directors making up one-third of the board[144]. - The company has implemented a risk management and internal control system to mitigate operational, financial, and compliance risks, with annual assessments conducted[153]. Market and Business Development - The total new contract value signed in 2022 reached RMB 81 billion, a 14.2% increase year-on-year, with significant contributions from various markets: RMB 50.4 billion from Sinopec Group, RMB 15 billion from domestic external markets, and RMB 15.6 billion from overseas markets[26]. - For 2023, the company plans to sign new contracts worth over RMB 78 billion, focusing on high-quality market segments and optimizing resource allocation[23]. - The company aims to enhance its research and development efforts, particularly in core technologies, to support advancements in deep earth and deep sea engineering[23]. - The company is actively pursuing low-carbon technology development and has established a new energy research center to explore emerging markets such as CCUS and geothermal energy[22]. - The company aims to become a world-class technology-leading oil service company, focusing on professional, market-oriented, international, high-end, and specialized development strategies[39]. Research and Development - The company authorized 787 patents in 2022 and set 579 new construction records, showcasing its commitment to technological innovation and efficiency[22]. - The company’s R&D expenditure for 2022 was RMB 1,838,968 thousand, representing a 10.1% increase from RMB 1,669,706 thousand in the previous year[51]. - The company is investing $200 million in R&D for new technologies aimed at enhancing operational efficiency[109]. - The company will increase R&D investment and focus on high-temperature and high-angle rotary steering technology, aiming for domestic production of high-end equipment[76]. Environmental and Social Responsibility - The company has established a comprehensive environmental impact assessment system, with no environmental pollution incidents reported in 2022[164]. - The company invested RMB 115,930.7 million in environmental protection during the reporting period[168]. - The comprehensive energy consumption per RMB 10,000 of industrial output decreased by 14.1% year-on-year, reaching 0.201 tons of standard coal[169]. - The company reduced carbon emissions by 1.1 million tons through various measures, including the use of electric fracturing equipment[171]. - A total of 1,090 wells were drilled using electric drilling rigs, achieving a total footage of 4.771 million meters[172]. - The company donated RMB 176.41 million to public welfare projects, benefiting approximately 20,000 people[174]. Risk Management - The company faced significant market competition risks due to geopolitical conflicts and an oversupply in the oilfield services market[80]. - The company is encouraged to monitor foreign exchange risks and utilize financial derivatives to mitigate currency fluctuation risks[124]. - The company has established a risk management system to ensure effective internal controls and compliance[157]. Related Party Transactions - The company engaged in significant related party transactions, with procurement of raw materials and equipment from Sinopec Group amounting to RMB 12,181.32 million, representing 32.3% of similar transactions[190]. - The company provided engineering services to Sinopec Group totaling RMB 46,775.85 million, accounting for 64.6% of similar transactions[190]. - The company has maintained a stable relationship with its controlling shareholder, Sinopec Group, ensuring a steady supply of materials and services[192]. - The company’s independent non-executive directors have reviewed related party transactions and confirmed their compliance with fair market practices[193]. Employee and Management Structure - The total number of employees in the company is 66,792, with 126 in the parent company and 66,666 in major subsidiaries[125]. - The employee composition includes 36,293 production personnel, 20,589 technical personnel, and 3,406 research personnel[126]. - The company has implemented a differentiated compensation incentive plan based on employee categories and job levels, linking compensation to performance evaluations[127]. - The company emphasizes employee training with a structured management system to enhance job performance and personal growth[128]. - The company’s management team includes experienced professionals with backgrounds in engineering and finance, contributing to strategic decision-making[103]. Future Outlook - The company provided a future outlook, projecting a revenue growth of 10% for the next quarter, aiming for $5.7 billion[107]. - New product launches are expected to contribute an additional $300 million in revenue over the next fiscal year[108]. - Market expansion plans include entering three new international markets by Q3 2024, targeting a 5% increase in market share[106].

Financial Performance - The company's total revenue for 2022 was RMB 73,772,688, representing a 6.1% increase from RMB 69,533,053 in 2021[9]. - The net profit attributable to shareholders for 2022 was RMB 463,814, showing a significant increase of 158.0% compared to RMB 179,791 in 2021[9]. - The basic earnings per share for 2022 was RMB 0.024, a 166.7% increase from RMB 0.009 in 2021[10]. - The operating profit for 2022 was RMB 732,392, which is a 110.7% increase from RMB 347,678 in 2021[9]. - The return on equity for 2022 was 6.54%, an increase of 3.90 percentage points from 2.64% in 2021[10]. - The overall gross profit margin for 2022 was 7.3%, with a year-on-year increase of 0.7 percentage points[55]. - The net profit attributable to shareholders for the year ended December 31, 2022, was RMB 463,814,000, compared to RMB 179,791,000 for the year ended December 31, 2021, representing an increase of 158.5%[13]. - The net profit attributable to shareholders for 2022 was RMB 463,814 thousand, compared to RMB 179,791 thousand in 2021, indicating a significant increase of approximately 158.5%[154]. Assets and Liabilities - The company's total assets as of December 31, 2022, reached RMB 71,200,517, an 11.2% increase from RMB 64,052,447 in 2021[9]. - The total liabilities increased to RMB 63,773,198 thousand in 2022 from RMB 57,190,930 thousand in 2021, marking a rise of 11.4%[139]. - The net current liability was approximately RMB 25,932,076,000 as of December 31, 2022, indicating a need for careful liquidity management[96]. - The total current liabilities for 2022 were RMB 62,444,998 thousand, up from RMB 54,991,996 thousand in 2021, which is an increase of 13.5%[139]. - The company's total liabilities amounted to RMB 63,773,198 thousand, up by RMB 6,582,268 thousand from the end of 2021, with current liabilities increasing by RMB 7,498,772 thousand[49]. Shareholder Information - The total number of shareholders as of December 31, 2022, was 117,845, with 117,511 being domestic A-share shareholders and 334 being overseas H-share shareholders[16]. - The top ten shareholders held a total of 13,323,683,351 shares, accounting for 70.18% of the total shares, with China Petroleum & Chemical Corporation holding 10,727,896,364 shares (56.51%) and Hong Kong Central Clearing Limited holding 5,402,084,694 shares (28.46%)[18]. - The company’s minimum public float requirement has been met according to the Hong Kong Stock Exchange Listing Rules[16]. - The total equity attributable to shareholders at the end of 2022 was RMB 7,427,319 thousand, an increase from RMB 6,861,517 thousand in 2021, representing a growth of approximately 8.2%[154]. Operational Highlights - The company plans to continue expanding its market presence and investing in new technologies to enhance operational efficiency[2]. - The total new contracts signed amounted to RMB 81 billion, a year-on-year increase of 14.2%, the highest level since the 13th Five-Year Plan[39]. - The company continues to provide various services including drilling, logging, and engineering construction[23]. - The drilling services segment achieved a revenue of RMB 36.81 billion in 2022, an increase of 11.3% compared to RMB 33.08 billion in the previous year, with a total drilling footage of 9.98 million meters, up 9.1% year-on-year[41]. - The engineering construction services segment achieved revenue of RMB 17.44 billion, a 4.3% increase from RMB 16.71 billion, with new contracts signed totaling RMB 25.30 billion, up 42.1% year-on-year[44]. Research and Development - Research and development expenses for 2022 were RMB 1,838,968,000, an increase from RMB 1,669,706,000 in 2021, indicating a commitment to innovation[90]. - The company applied for 979 patents and was granted 787 patents in 2022, both setting new historical highs, with significant breakthroughs in key technologies[46]. - The company will enhance its research and development of key equipment for geophysical services in 2023[60]. Cash Flow and Financing - The company reported a net cash flow from operating activities of RMB 4,197,869, a decrease of 32.4% compared to RMB 6,206,909 in 2021[9]. - The net cash flow from investing activities was RMB -3,951,162 thousand, worsening from RMB -3,253,443 thousand in 2021[146]. - The company has secured a credit facility of RMB 22 billion and USD 510 million from subsidiaries of China Petroleum & Chemical Corporation, enhancing its financial support[97]. - The company plans to broaden financing channels and develop relationships with listed and state-owned financial institutions for better credit access[98]. Related Party Transactions - The company engaged in related party transactions with China Petroleum Group, with procurement of raw materials and equipment amounting to RMB 12,181,320 thousand, accounting for 32.3% of similar transactions[73]. - The company’s independent non-executive directors reviewed the related party transactions and confirmed they were conducted at market prices and in compliance with regulations[75]. - The company’s independent auditor issued an unqualified opinion regarding the disclosed related party transactions during the reporting period[75]. Governance and Compliance - The company maintained compliance with the Corporate Governance Code and Standard Code throughout the reporting period[156]. - The company has not experienced any changes in its controlling shareholder during the reporting period[23]. - The company did not declare any dividends for the year ended December 31, 2022, consistent with 2021[131].

Financial Performance - The company's operating revenue for Q3 2022 was RMB 17,806,415, an increase of 17.6% compared to the same period last year[4]. - The net profit attributable to shareholders for Q3 2022 was RMB 76,106, a decrease of 13.7% year-to-date[4]. - The basic earnings per share for Q3 2022 was RMB 0.004, down 11.8% compared to the previous year[5]. - Total operating revenue for the first three quarters of 2022 reached RMB 50,955,067 thousand, an increase of 9.6% compared to RMB 46,713,891 thousand in the same period of 2021[17]. - Net profit for the third quarter of 2022 was RMB 276,374 thousand, a decrease of 13.7% from RMB 320,341 thousand in the same quarter of 2021[18]. - Basic earnings per share for the third quarter of 2022 were RMB 0.015, down from RMB 0.017 in the same quarter of 2021[18]. Assets and Liabilities - The total assets at the end of the reporting period were RMB 68,027,044, representing a 6.2% increase from the end of the previous year[5]. - The company's total assets as of September 30, 2022, were RMB 68,027,044 thousand, compared to RMB 64,052,447 thousand at the end of 2021, indicating a growth of 6.2%[15]. - Total liabilities increased to RMB 60,400,760 thousand as of September 30, 2022, from RMB 57,190,930 thousand at the end of 2021, representing a rise of 3.8%[15]. - The company's short-term borrowings rose to RMB 19,694,940 thousand, compared to RMB 17,520,091 thousand at the end of 2021, an increase of 12.4%[15]. Cash Flow - The net cash flow from operating activities year-to-date was RMB -973,896, indicating a significant cash outflow[4]. - Operating cash inflow for the first three quarters of 2022 was CNY 50,181,516 thousand, an increase of 11.5% compared to CNY 44,889,319 thousand in the same period of 2021[20]. - Net cash flow from operating activities was -CNY 973,896 thousand, worsening from -CNY 186,766 thousand year-over-year[20]. - Total cash outflow from operating activities was CNY 51,155,412 thousand, an increase of 13.5% from CNY 45,076,085 thousand in the previous year[20]. - Cash inflow from operating activities included CNY 40,726,843 thousand from sales of goods and services, a 11.3% increase from CNY 36,671,744 thousand in 2021[20]. - Cash inflow from financing activities totaled CNY 38,179,500 thousand, down 14.1% from CNY 44,444,242 thousand in the previous year[21]. - Net cash flow from financing activities improved to CNY 1,094,042 thousand, compared to CNY 676,230 thousand in the same period last year[21]. - The company reported a cash outflow of CNY 36,317,762 thousand for debt repayment, a decrease from CNY 42,965,924 thousand in the same period last year[21]. Equity and Shareholder Information - The total equity attributable to shareholders increased to RMB 7,626,284, an increase of 11.1% from the previous year[5]. - The total number of ordinary shareholders at the end of the reporting period was 127,659[10]. Research and Development - Research and development expenses for the first three quarters of 2022 amounted to RMB 1,076,878 thousand, significantly higher than RMB 578,756 thousand in the same period of 2021, marking an increase of 86.3%[17]. Inventory and Cash Management - Cash and cash equivalents decreased to RMB 1,718,559 thousand from RMB 2,508,224 thousand, a decline of 31.5% year-over-year[14]. - The company's inventory as of September 30, 2022, was RMB 2,077,717 thousand, up from RMB 1,088,304 thousand, reflecting an increase of 91.1%[14]. - Cash and cash equivalents at the end of the period were CNY 1,718,559 thousand, up from CNY 1,350,538 thousand year-over-year[21].

[Cover and Important Notice](index=1&type=section&id=封面及重要提示) [Important Notice](index=2&type=section&id=重要提示) The company's board of directors, supervisory board, and senior management ensure the truthfulness, accuracy, and completeness of this semi-annual report, free from false statements or material omissions, with no interim cash dividends or capital reserve conversions to share capital resolved for the reporting period - Company management guarantees the truthfulness, accuracy, and completeness of this semi-annual report and assumes corresponding legal responsibilities[4](index=4&type=chunk) - The Board of Directors resolved not to distribute interim cash dividends for the year ended December 31, 2022, nor to convert capital reserves into share capital[4](index=4&type=chunk) - Financial reports prepared under China Accounting Standards for Business Enterprises are unaudited, while those prepared under International Financial Reporting Standards have been reviewed by BDO Limited, Hong Kong[4](index=4&type=chunk) [Definitions](index=4&type=section&id=第一節%20釋義) - This section defines specific terms used in the report, such as company abbreviations, controlling shareholders, business terms (e.g., drilling, completion, CCUS), and regulatory bodies, providing a foundation for understanding the report's content[14](index=14&type=chunk) [Company Profile and Key Financial Indicators](index=5&type=section&id=第二節%20公司簡介和主要財務指標) [Company Information](index=5&type=section&id=公司信息) Sinopec Oilfield Service Corporation ("Sinopec Oilfield Service") is a company listed on the Shanghai Stock Exchange (A-share: 600871) and the Hong Kong Stock Exchange (H-share: 1033), with Mr Chen Xikun as its legal representative - The company is an A+H share listed company, with A-share abbreviation “Sinopec Oilfield Service” and H-share abbreviation “Sinopec Oilfield Service”[15](index=15&type=chunk)[17](index=17&type=chunk) [Key Financial Indicators](index=6&type=section&id=主要財務指標) In the first half of 2022, the company's operating revenue increased by 5.0% year-on-year, but net profit attributable to shareholders significantly decreased by 45.7% primarily due to a 91.1% increase in R&D expenses, while net cash flow from operating activities turned negative, decreasing by 249.9%, with total assets and net assets showing slight growth compared to the end of last year Key Accounting Data (Under China Accounting Standards for Business Enterprises) | Indicator | Current Period (RMB thousand yuan) | Prior Period (RMB thousand yuan) | Year-on-year Change (%) | | :--- | :--- | :--- | :--- | | Operating Revenue | 33,148,652 | 31,570,061 | 5.0% | | Net Profit Attributable to Listed Company Shareholders | 200,268 | 368,558 | -45.7% | | Net Cash Flow from Operating Activities | -537,926 | 358,861 | -249.9% | | Basic Earnings Per Share (RMB/share) | 0.011 | 0.019 | -42.1% | | Weighted Average Return on Net Assets | 2.88% | 5.34% | Decrease 2.46 percentage points | Key Accounting Data (Under International Financial Reporting Standards) | Indicator | Current Period (RMB thousand yuan) | Prior Period (RMB thousand yuan) | Year-on-year Change (%) | | :--- | :--- | :--- | :--- | | Profit Attributable to Equity Holders of the Company | 555,642 | 694,246 | -20.0% | | Net Cash Flow from Operating Activities | -537,926 | 358,861 | -249.9% | | Basic and Diluted Earnings Per Share (RMB) | 0.029 | 0.037 | -19.9% | - The difference in net profit calculated under China Accounting Standards for Business Enterprises and International Financial Reporting Standards primarily stems from different accounting treatments for safety production fees (special reserves); under international standards, net profit for the first half of 2022 was **RMB 556 million**, higher than the **RMB 200 million** under China standards[22](index=22&type=chunk)[23](index=23&type=chunk) [Management Discussion and Analysis](index=9&type=section&id=第三節%20管理層討論與分析) [Operating Performance and Business Review](index=9&type=section&id=經營業績與業務回顧) In the first half of 2022, the company capitalized on rising oil prices, achieving a 5.0% year-on-year increase in operating revenue to **RMB 33.15 billion**, but net profit attributable to shareholders declined by 45.7% to **RMB 200 million** due to a 91.1% increase in R&D expenses from intensified key technology research, while new contract value reached **RMB 52.9 billion**, up 20.8% year-on-year, marking the best performance since the "13th Five-Year Plan" period, with particularly strong growth in domestic external and overseas markets 2022 H1 Performance Overview (Under China Accounting Standards for Business Enterprises) | Indicator | Amount (RMB thousand yuan) | Year-on-year Growth Rate (%) | | :--- | :--- | :--- | | Operating Revenue | 33,148,652 | 5.0% | | Net Profit Attributable to Parent Company | 200,268 | -45.7% | | Net Cash Flow from Operating Activities | -537,926 | -249.9% | - The decline in net profit was primarily due to the company's focus on technological leadership and increased R&D investment, with R&D expenses growing by **91.1%** year-on-year in the first half[30](index=30&type=chunk) 2022 H1 New Contract Value | Market Category | New Contract Value (RMB billion yuan) | Year-on-year Growth Rate (%) | | :--- | :--- | :--- | | **Total** | **52.9** | **20.8%** | | Sinopec Group Market | 31.63 | 16.5% | | Domestic External Market | 9.45 | 21.5% | | Overseas Market | 11.82 | 33.3% | [Geophysical Services](index=10&type=section&id=物探服務) - Geophysical services main business revenue was **RMB 1.51 billion**, a year-on-year decrease of **16.0%**[32](index=32&type=chunk) [Drilling Services](index=10&type=section&id=鑽井服務) - Drilling services main business revenue was **RMB 16.64 billion**, a year-on-year increase of **5.9%**, with the average utilization rate of drilling rigs increasing by **6.5 percentage points** to **90.1%** year-on-year[33](index=33&type=chunk) [Logging Services](index=10&type=section&id=測錄井服務) - Logging services main business revenue was **RMB 1.20 billion**, a year-on-year increase of **4.5%**[34](index=34&type=chunk) [Downhole Special Operations Services](index=10&type=section&id=井下特種作業服務) - Downhole special operations services main business revenue was **RMB 4.29 billion**, a year-on-year increase of **8.9%**[34](index=34&type=chunk) [Engineering Construction Services](index=11&type=section&id=工程建設服務) - Engineering construction services main business revenue was **RMB 8.33 billion**, a year-on-year increase of **5.8%**, with new contract value significantly growing by **60.2%** to **RMB 23.16 billion** year-on-year[36](index=36&type=chunk) [International Business](index=11&type=section&id=國際業務) - International business main revenue was **RMB 5.65 billion**, a year-on-year increase of **29.7%**, accounting for **17.3%** of total main business revenue[37](index=37&type=chunk) [Technology R&D, Internal Reform, and Capital Expenditure](index=11&type=section&id=技術研發、內部改革與資本支出) - Technology R&D: In the first half, **300 new construction records** were set, progress was made in key technology research such as the Type I rotary steerable system, and the commercialization of scientific and technological achievements reached **RMB 1.39 billion**[38](index=38&type=chunk) - Internal Reform: Promoted integrated resource optimization, established project management departments for the Southwest region, and accelerated the construction of a project-based management system[39](index=39&type=chunk) - Capital Expenditure: Capital expenditure in the first half was **RMB 1.01 billion**, a year-on-year increase of **RMB 590 million**, primarily for updating and purchasing equipment such as drilling rigs, fracturing skids, and rotary steerable instruments[40](index=40&type=chunk) [Financial Position Analysis](index=12&type=section&id=財務狀況分析) The company provided a detailed analysis of its key operating data, asset and liability status, and segment performance for the first half of 2022, noting significant increases in management and R&D expenses by 35.8% and 91.1% respectively, a 30.9% decrease in financial expenses due to reduced exchange losses, growth in contract assets and prepayments, and increases in short-term borrowings and notes payable, with overseas business revenue growing by 29.7%, significantly outpacing domestic growth of 1.1% [Analysis of Key Operating Data Changes](index=12&type=section&id=主要經營數據變動分析) Changes and Reasons for Key Operating Data | Item | Current Period (RMB thousand yuan) | Prior Period (RMB thousand yuan) | Change Rate (%) | Reason for Change | | :--- | :--- | :--- | :--- | :--- | | Operating Revenue | 33,148,652 | 31,570,061 | 5.0% | Increase in workload | | Operating Cost | 30,727,547 | 29,584,206 | 3.9% | Costs increased proportionally with revenue | | Administrative Expenses | 1,092,018 | 803,949 | 35.8% | Strengthened budget control and balanced labor costs | | Financial Expenses | 281,888 | 408,182 | -30.9% | Decrease in net exchange losses | | R&D Expenses | 666,919 | 349,034 | 91.1% | Increased investment in key technology research | | Net Cash Flow from Operating Activities | -537,926 | 358,861 | -249.9% | Increased payments to suppliers | [Analysis of Assets and Liabilities](index=13&type=section&id=資產與負債狀況分析) - As of the end of the reporting period, the company's total assets were **RMB 65.67 billion**, and total liabilities were **RMB 58.25 billion**, with major asset changes including a **20.6%** increase in contract assets and a **107.8%** increase in prepayments, while major liability changes included a **46.9%** increase in lease liabilities[44](index=44&type=chunk) - Overseas assets reached **RMB 18.30 billion**, accounting for **27.9%** of total assets, generating **RMB 5.71 billion** in operating revenue and **RMB 260 million** in net profit in the first half[46](index=46&type=chunk) [Analysis of Major Holding and Participating Companies](index=14&type=section&id=主要控股參股公司分析) Operating Performance of Major Subsidiaries (RMB thousand yuan) | Company Name | Operating Revenue | Operating Profit | Net Profit | | :--- | :--- | :--- | :--- | | Sinopec Petroleum Engineering Construction Co, Ltd | 8,561,630 | 126,304 | 120,384 | | Sinopec Shengli Petroleum Engineering Co, Ltd | 6,572,566 | 67,375 | 40,583 | | Sinopec Zhongyuan Petroleum Engineering Co, Ltd | 4,979,161 | 47,418 | 5,766 | | Sinopec Geophysics Co, Ltd | 2,332,234 | 178,771 | 132,581 | | Sinopec Petroleum Engineering Geophysical Co, Ltd | 1,464,049 | -78,267 | -89,081 | [Analysis of Main Business Segments](index=15&type=section&id=主營業務分部分析) Main Business by Industry (2022 H1) | Industry Segment | Main Business Revenue (RMB thousand yuan) | Gross Profit Margin (%) | Revenue Year-on-year Change (%) | | :--- | :--- | :--- | :--- | | Drilling | 16,635,798 | 7.1% | 5.9% | | Engineering Construction | 8,326,149 | 7.6% | 5.8% | | Downhole Special Operations | 4,292,870 | 6.5% | 8.9% | | Geophysics | 1,512,225 | 0.6% | -16.0% | | Logging | 1,202,466 | 18.7% | 4.5% | Main Business by Region (2022 H1) | Region | Operating Revenue (RMB thousand yuan) | Revenue Year-on-year Change (%) | | :--- | :--- | :--- | | Mainland China | 27,076,511 | 1.1% | | Hong Kong, Macao, Taiwan & Overseas | 5,650,053 | 29.7% | [H2 Outlook and Operating Plan](index=16&type=section&id=2022年下半年市場預測及工作安排) The company anticipates a continued recovery in the oilfield services industry in the second half of 2022, despite persistent market competition, with domestic and international oil and gas exploration and development investment expected to rebound driven by high oil prices and national energy security strategies, planning **RMB 21.1 billion** in new contracts for H2, targeting **RMB 74 billion** for the full year, while continuing to focus on market expansion, technological innovation, internal reform, and cost management, alongside **RMB 3.49 billion** in capital expenditure to enhance service capabilities - Market Outlook: The oilfield services industry is expected to continue its recovery in the second half, but faces challenges such as the global pandemic, uncertain economic prospects, and stricter demands from oil companies regarding costs, technology, safety, and environmental protection[51](index=51&type=chunk) - Operating Plan: New contract value for the second half is planned at **RMB 21.1 billion**, including **RMB 3.6 billion** from domestic external markets and **RMB 3.2 billion** from overseas markets, with a full-year target of **RMB 74 billion**[52](index=52&type=chunk) - Technology R&D: In the second half, the company will accelerate research on key technologies for deep and ultra-deep oil and gas engineering and shale oil and gas development, aiming to finalize the design and achieve mass production of the Type I rotary steerable system as soon as possible[60](index=60&type=chunk) - Capital Expenditure: Capital expenditure for the second half is planned at **RMB 3.49 billion**, primarily to ensure urgent production needs, enhance technical service capabilities, and upgrade equipment with safety and environmental risks[62](index=62&type=chunk) [Risk Analysis](index=17&type=section&id=可能面對的風險) The company faces key risks including market competition due to persistent oversupply and increased energy market volatility, health, safety, and environmental (HSE) risks inherent in oilfield operations and stricter environmental regulations, overseas operational risks involving geopolitical, economic, regulatory, and pandemic uncertainties, and exchange rate risks from US dollar-denominated debt and multi-currency transactions - Market Competition Risk: The oilfield services market faces oversupply, severe energy market fluctuations, and stricter demands from oil and gas companies regarding costs, technology, safety, and environmental protection[64](index=64&type=chunk) - Health, Safety, and Environmental (HSE) Risk: Oilfield service operations may lead to casualties, property damage, and environmental harm, with environmental regulations becoming increasingly stringent[65](index=65&type=chunk) - Overseas Operational Risk: Faces multiple risks including geopolitical, economic, policy and regulatory changes, contract breaches, and pandemics[66](index=66&type=chunk) - Exchange Rate Risk: Due to holding US dollar-denominated debt and multi-currency transactions, fluctuations in the RMB exchange rate may impact the company's operating costs[67](index=67&type=chunk) [Liquidity and Capital Resources (Based on IFRS)](index=18&type=section&id=財務狀況及現金流量分析) As of June 30, 2022, under International Financial Reporting Standards, the company's total assets increased by 2.5% from the beginning of the year to **RMB 65.67 billion**, total liabilities increased by 1.9% to **RMB 58.25 billion**, and the asset-liability ratio slightly decreased from 89.3% to 88.7%, while cash flow from operating activities shifted from a net inflow of **RMB 360 million** in the prior period to a net outflow of **RMB 540 million**, primarily due to increased payments to suppliers, and net cash inflow from financing activities significantly increased due to higher loan volumes Changes in Financial Position (RMB thousand yuan) | Item | June 30, 2022 | December 31, 2021 | Change Amount | | :--- | :--- | :--- | :--- | | Total Assets | 65,671,526 | 64,052,447 | 1,619,079 | | Total Liabilities | 58,254,367 | 57,190,930 | 1,063,437 | | Total Equity Attributable to Shareholders | 7,417,159 | 6,861,517 | 555,642 | | Asset-Liability Ratio | 88.7% | 89.3% | -0.6 ppt | Key Cash Flow Statement Items (RMB thousand yuan) | Item | 2022 H1 | 2021 H1 | | :--- | :--- | :--- | | Net Cash from Operating Activities | (537,926) | 358,861 | | Net Cash Used in Investing Activities | (492,591) | (390,632) | | Net Cash from Financing Activities | 305,843 | 9,267 | - As of June 30, 2022, the Group's total borrowings were **RMB 19.99 billion**, with short-term borrowings accounting for **RMB 18.44 billion**, and the capital-to-debt ratio slightly increased to **72.1%** from **71.6%** at the beginning of the year[71](index=71&type=chunk)[72](index=72&type=chunk) [Corporate Governance](index=20&type=section&id=第四節%20公司治理) [Overview of Corporate Governance](index=20&type=section&id=公司治理概況) During the reporting period, the company continuously improved its corporate governance structure, complied with domestic and international regulatory requirements, and ensured the standardized operation of its general meeting of shareholders, board of directors, and supervisory board, establishing a new Board Nomination Committee and revising multiple internal governance policies in accordance with the latest regulatory requirements, holding 3 general meetings, 3 board meetings, and 3 supervisory board meetings, with its corporate governance practices conforming to CSRC requirements and complying with the HKEX Corporate Governance Code - During the reporting period, the company's corporate governance structure was improved, a new Board Nomination Committee was established, and multiple policies such as the "Nomination Committee Work Rules" and "General Manager Work Rules" were revised[73](index=73&type=chunk) - The company complied with Appendix 14 "Corporate Governance Code" and Appendix 10 "Model Code" of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited[80](index=80&type=chunk)[81](index=81&type=chunk) [Changes in Directors, Supervisors, and Senior Management](index=21&type=section&id=董事、監事、高級管理人員變動) During the reporting period, Mr Ma Xiang resigned as Chairman of the Supervisory Board due to age, Mr Wang Jun was elected as Supervisor and Chairman of the Supervisory Board by the general meeting of shareholders and supervisory board, and Mr Zhang Jiankuo resigned as Deputy General Manager due to work relocation Changes in Senior Management | Name | Position Held | Change Type | Reason for Change | | :--- | :--- | :--- | :--- | | Ma Xiang | Chairman of Supervisory Board, Supervisor | Resignation | Personal age reason | | Wang Jun | Supervisor, Chairman of Supervisory Board | Election | Election by General Meeting of Shareholders and Supervisory Board | | Zhang Jiankuo | Deputy General Manager | Resignation | Personal work relocation | [Environmental and Social Responsibility](index=22&type=section&id=第五節%20環境與社會責任) [Environmental Protection and Carbon Reduction](index=22&type=section&id=環境保護與碳減排) The company adheres to a green and low-carbon development philosophy, effectively operates its HSE management system, strictly enforces environmental regulations, ensures compliant disposal of pollutants such as exhaust gas, wastewater, and solid waste, and strengthens energy efficiency management, while actively promoting the application of clean energy like electricity and natural gas for carbon reduction, with grid-powered drilling rigs completing 51% of domestic total footage in the first half, replacing **150,000 tons of diesel**, and enhancing monthly inventory management of greenhouse gas emissions - The company effectively operates its HSE management system, entrusting qualified service providers with the disposal of hazardous waste; as of June 30, 2022, **969,000 tons** of general solid waste and **571 cubic meters** of hazardous waste were compliantly disposed of[83](index=83&type=chunk)[84](index=84&type=chunk) - The company strengthened energy efficiency management, with comprehensive energy consumption per **RMB 10,000** of industrial output value decreasing by **12.78%** year-on-year as of June 30, 2022[84](index=84&type=chunk) - In terms of carbon reduction, the company vigorously promoted the application of clean energy; in the first half, drilling footage completed by grid-powered drilling rigs accounted for **51%** of total domestic footage, replacing **150,000 tons of diesel** and saving **156,000 tons of standard coal**[86](index=86&type=chunk) [Significant Matters](index=24&type=section&id=第六節%20重要事項) [Commitments and Litigation/Arbitration](index=24&type=section&id=承諾事項與訴訟仲裁) During the reporting period, controlling shareholder Sinopec Group strictly fulfilled its commitments regarding avoiding horizontal competition, regulating related party transactions, and maintaining the listed company's independence, with no significant new lawsuits for the company, but two important arbitration cases are ongoing: the judicial reorganization of an indirectly controlled Brazilian subsidiary is still in progress, and while an indirectly wholly-owned subsidiary received a favorable ruling in the Ecuador I-L-Y oilfield project arbitration for approximately **USD 64 million** plus interest, the counterparty has filed an application for annulment, creating uncertainty regarding enforcement - Controlling shareholder Sinopec Group did not breach its commitments made during the major asset restructuring regarding avoiding horizontal competition, regulating related party transactions, and maintaining the listed company's independence during the reporting period[88](index=88&type=chunk) - The judicial reorganization of the Brazilian subsidiary is still ongoing, with some labor and supplier lawsuits remaining unresolved due to the COVID-19 pandemic, leading to automatic procedural extensions[92](index=92&type=chunk) - The Ecuador I-L-Y oilfield project arbitration resulted in a favorable ruling, requiring the counterparty to pay approximately **USD 64 million** plus interest, but the counterparty has applied to the Chilean court to annul the arbitration award, creating uncertainty regarding enforcement[94](index=94&type=chunk) [Significant Related Party Transactions](index=27&type=section&id=重大關聯交易) The company's daily operations involve substantial related party transactions with controlling shareholder Sinopec Group and its associates, with purchases of raw materials and equipment totaling **RMB 5.29 billion** in the first half of 2022, accounting for **45.0%** of similar transactions, and provision of engineering services generating **RMB 20.76 billion** in revenue, representing **63.6%** of similar transactions, while also maintaining close financial ties with related parties, with total funds obtained from related parties amounting to **RMB 24.11 billion** at period-end Major Daily Operating Related Party Transactions (2022 H1) | Related Party Transaction Content | Related Party | Transaction Amount (RMB thousand yuan) | % of Similar Transactions | | :--- | :--- | :--- | :--- | | Purchase of Raw Materials, Equipment | Sinopec Group and its Associates | 5,291,028 | 45.0% | | Provision of Engineering Services | Sinopec Group and its Associates | 20,762,266 | 63.6% | | Obtaining Loans | Sinopec Group and its Subsidiaries | 12,154,500 | 100.0% | | Repayment of Loans | Sinopec Group and its Subsidiaries | 11,380,482 | 99.7% | - At period-end, the company's receivables from related parties (Sinopec Group and its subsidiaries) totaled approximately **RMB 10.03 billion**, and payables to related parties (including borrowings) totaled approximately **RMB 24.11 billion**, indicating a strong financial reliance on the controlling shareholder[99](index=99&type=chunk) [Significant Contracts and Guarantees](index=29&type=section&id=重大合同與擔保) During the reporting period, the company provided guarantees for its wholly-owned subsidiaries and joint ventures to meet international market expansion and daily operational needs, with total guarantees amounting to **RMB 29.83 billion** as of the end of the reporting period, representing **402.2%** of the company's net assets, including a performance guarantee of up to **USD 275 million** for its joint venture, DS Company in Mexico Summary of External Guarantees | Item | Amount (RMB thousand yuan) | | :--- | :--- | | Total Guarantee Balance for Subsidiaries at Period-end (B) | 27,989,017 | | Total Guarantees (A+B) | 29,834,316 | | Total Guarantees as % of Company's Net Assets | 402.2% | - The company provided a performance guarantee for its joint venture, DS Company in Mexico, regarding the "Production Sharing Contract," with a maximum joint and several liability not exceeding **USD 275 million**[104](index=104&type=chunk) [Share Changes and Shareholder Information](index=31&type=section&id=第七節%20普通股股份變動及股東情況) [Share Capital Structure and Shareholder Information](index=31&type=section&id=股本結構與股東情況) During the reporting period, the company's total share capital and share capital structure remained unchanged, with a total of **133,672 shareholders** as of June 30, 2022, and controlling shareholder Sinopec Group directly and indirectly holding a combined **70.18%** of the company's shares, while the top ten shareholders also included HKSCC Nominees Limited (holding **28.46%** of H-shares) and CITIC Limited (holding **3.25%** of A-shares) - As of June 30, 2022, the company had a total of **133,672 shareholders**, including **133,336 A-share shareholders** and **336 H-share registered shareholders**[107](index=107&type=chunk) Top Three Shareholders' Shareholding | Shareholder Name | Shareholding Percentage (%) | Share Type | | :--- | :--- | :--- | | Sinopec Group (Direct and Indirect) | 70.18% | A-share + H-share | | HKSCC Nominees Limited | 28.46% | H-share | | CITIC Limited | 3.25% | A-share | [Shareholding of Directors, Supervisors, and Senior Management](index=33&type=section&id=董事、監事和高級管理人員持股情況) As of the end of the reporting period, among the company's directors, supervisors, and senior management, only Deputy General Manager Mr Sun Bingxiang directly held **50,300 A-shares**, while some current and former directors, supervisors, and senior management indirectly held company shares through the "Qixin Co-win Plan," which held **11,574,427 A-shares** at the end of the reporting period - Except for Deputy General Manager Mr Sun Bingxiang, who holds **50,300 A-shares**, other directors, supervisors, and senior management do not directly hold company shares[114](index=114&type=chunk) - Some of the company's directors, supervisors, and core management personnel hold company shares through the "Qixin Co-win Plan," which was unlocked in January 2021, and as of the end of the reporting period, half of the shares had been reduced, with **11,574,427 A-shares** remaining[115](index=115&type=chunk) [Financial Report](index=35&type=section&id=第八節%20財務報告) [Financial Report under China Accounting Standards for Business Enterprises](index=35&type=section&id=按照中國企業會計準則編製之半年度財務報告) This section contains the company's unaudited semi-annual consolidated and parent company financial statements for 2022, prepared under China Accounting Standards for Business Enterprises, including the balance sheet, income statement, cash flow statement, statement of changes in owners' equity, and detailed notes to the financial statements, showing total assets of **RMB 65.67 billion**, total liabilities of **RMB 58.25 billion**, and total owners' equity attributable to the parent company of **RMB 7.42 billion** as of June 30, 2022 Consolidated Balance Sheet Summary (June 30, 2022) | Item | Amount (RMB thousand yuan) | | :--- | :--- | | Total Assets | 65,671,526 | | Total Liabilities | 58,254,367 | | Total Equity Attributable to Parent Company Owners | 7,417,159 | Consolidated Income Statement Summary (Jan-Jun 2022) | Item | Amount (RMB thousand yuan) | | :--- | :--- | | Total Operating Revenue | 33,148,652 | | Total Operating Costs | 32,917,223 | | Total Profit | 377,377 | | Net Profit | 200,268 | [Financial Report under International Financial Reporting Standards](index=128&type=section&id=按照國際財務報告準則編製之半年度財務報告) This section presents the condensed consolidated interim financial information reviewed by BDO Limited, Hong Kong, prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting," with the review conclusion indicating no material aspects were found not to be prepared in accordance with the standard, and the statements show a profit before tax of **RMB 733 million** and profit for the period of **RMB 556 million** for the six months ended June 30, 2022 - This interim financial information has been reviewed by BDO Limited, Hong Kong, in accordance with International Standard on Review Engagements 2410, with the review conclusion indicating no material issues were found[430](index=430&type=chunk)[431](index=431&type=chunk) Condensed Consolidated Statement of Profit or Loss Summary (Jan-Jun 2022) | Item | Amount (RMB thousand yuan) | | :--- | :--- | | Operating Revenue | 33,148,652 | | Gross Profit | 2,654,272 | | Profit Before Tax | 732,751 | | Profit for the Period | 555,642 | [Catalogue of Documents for Reference](index=158&type=section&id=第九節%20備查文件目錄) - This section lists documents available for inspection by shareholders and regulatory bodies, including the signed semi-annual report, original financial reports, the "Articles of Association," and all publicly disclosed documents during the reporting period[512](index=512&type=chunk)