2024-03-21 16:00Board Composition and Governance - As of December 31, 2023, the board consists of eight directors, with four being independent non-executive directors, representing 50% of the board, exceeding the requirement of at least one-third as per the Hong Kong Stock Exchange rules[6]. - The nomination committee, composed of two independent non-executive directors and the non-executive chairman, held two meetings during the year to review the independence and qualifications of board members[10][23]. - The company emphasizes the importance of continuous professional development for directors, arranging training sessions on corporate governance and compliance during the reporting period[15]. - The board meets at least four times a year, with an average of one meeting per quarter, ensuring adequate oversight and decision-making[25]. - The company has achieved gender diversity on the board, with two female members, fulfilling the requirement for gender representation[5]. - The board regularly reviews its composition and diversity, considering factors such as cultural background and industry experience when selecting independent non-executive directors[5]. - The company’s independent non-executive directors possess extensive experience in legal, economic, financial, or investment fields, contributing significantly to strategic decision-making[3]. - The board has established a framework for evaluating the independence of its non-executive directors, ensuring they can provide unbiased opinions[8]. - The board has a structured approach to ensure that all directors contribute adequately to their roles, with regular assessments of their performance and time commitment[26]. - Independent non-executive directors actively participated in meetings and provided professional opinions to enhance corporate governance and business development[83]. - The company has undergone significant changes in its board composition, with multiple resignations and appointments effective from May 31, 2023, and June 30, 2023[85]. - The company has appointed new independent non-executive directors and committee members as part of its governance structure changes[85]. - The company has confirmed that there were no other changes to the directors' information apart from those disclosed in the annual report[86]. - The company is committed to compliance with the Corporate Governance Code and has made changes to its board of directors during the reporting period[114]. Financial Performance - The basic earnings per share for 2023 is CNY 2.60, a decrease of 14% compared to CNY 3.03 in 2022[50]. - The diluted earnings per share for 2023 is also CNY 2.60, reflecting the same 14% decrease from 2022[50]. - The weighted average return on equity for 2023 is 19.55%, down by 6.45 percentage points from 26.00% in 2022[50]. - The net profit attributable to shareholders for Q1 2023 is CNY 32,113 million, showing an increase from CNY 31,648 million in Q2 2022[54]. - The net profit attributable to shareholders after deducting non-recurring gains and losses for Q3 2023 is CNY 33,382 million, compared to CNY 29,482 million in Q4 2022[54]. - The company's operating cash flow for Q2 2023 is CNY 47,650 million, an increase from CNY 51,968 million in Q1 2023[54]. - The company's operating revenue for 2023 was RMB 416.609 billion, a decrease of 1% compared to RMB 422.230 billion in 2022[145]. - Net profit attributable to shareholders for 2023 was RMB 123.843 billion, down 13% from RMB 141.700 billion in 2022[145]. - The net profit excluding non-recurring gains and losses for 2023 was RMB 125.188 billion, a decrease of 11% compared to RMB 140.250 billion in 2022[145]. - The net cash flow from operating activities for 2023 was RMB 209.743 billion, an increase of 2% from RMB 205.574 billion in 2022[145]. - As of the end of 2023, the net assets attributable to shareholders were RMB 666.586 billion, reflecting a 12% increase from RMB 597.182 billion at the end of 2022[145]. - Total assets at the end of 2023 reached RMB 1,005.598 billion, an 8% increase from RMB 929.031 billion at the end of 2022[145]. Risk Management and Compliance - The internal audit function has evaluated the effectiveness of the company's risk management and internal control systems, finding no significant deficiencies[39]. - The company has established procedures for handling insider information to comply with relevant laws and regulations[37]. - The board confirmed its responsibility to ensure the establishment and maintenance of an effective risk management, internal control, and compliance management system[61]. - The company adopted ISO31000:2018 and GBT24353-2022 as guidelines for risk management, integrating ESG risk management into its regular risk management processes[62]. - The company has outlined potential business development risks and uncertainties in its annual report, emphasizing the importance of risk management[187]. - The company has established compliance procedures to ensure adherence to applicable laws and regulations, with oversight from the board and senior management[199]. Shareholder Engagement and Communication - The company maintains an investor relations department to facilitate communication with shareholders and investors, responding actively to inquiries[77]. - The company conducts annual reviews of its shareholder communication policy to ensure its effectiveness[78]. - In 2023, the company held its annual general meeting using a combination of in-person and video conferencing, providing sufficient notice to shareholders[79]. - The annual general meeting held on May 31, 2023, approved 11 resolutions with no rejections[110]. - The company emphasizes the importance of maintaining ongoing dialogue with shareholders, particularly during annual general meetings[105]. - The company will issue notices for special general meetings as required by shareholders under the relevant stock exchange rules[108]. Environmental and Social Responsibility - The company has implemented comprehensive environmental protection measures throughout the project lifecycle, including environmental risk assessments and pollution control strategies[183]. - The company is committed to achieving "increased production without increased pollution" or "increased production with reduced pollution" in its operations[183]. - The company has established a special fund for environmental protection from the decommissioning costs to restore marine ecological environments[183]. - The company’s environmental, social, and governance (ESG) report is available for stakeholders to review significant environmental issues impacting business performance and future development[184]. - The company continues to comply with laws and regulations regarding employee welfare, including retirement plans and medical insurance[185]. - As of December 31, 2023, the company has implemented a "14th Five-Year" energy-saving and carbon reduction action plan to align with national carbon peak and neutrality goals[198]. - The company emphasizes environmental protection in oil and gas extraction, contributing to national pollution prevention efforts[197]. Dividend Policy - The company has maintained a dividend payout ratio of no less than 40% from 2022 to 2024, with an absolute dividend value expected to be no less than HKD 0.70 per share (including tax) regardless of operational performance[93]. - Future dividend payments will depend on factors such as future earnings, capital requirements, and financial condition[121]. - The company’s ability to pay dividends will also depend on cash flows from subsidiaries and associates[121]. - The company has ensured compliance with the Hong Kong Stock Exchange Listing Rules and has made necessary adjustments to its dividend distribution policy[93]. Audit and Remuneration - The remuneration committee is responsible for reviewing and determining the compensation packages for executive directors and senior management[48]. - The remuneration committee held five meetings in fiscal year 2023 to evaluate the performance of executive directors and review service agreements[74]. - The audit fees for the fiscal year ending December 31, 2022, totaled RMB 2.98 million, while for the fiscal year ending December 31, 2023, they increased to RMB 3.48 million[120]. - The total fees for tax compliance, tax consulting, and tax planning services provided by auditors amounted to RMB 93.1 million for the fiscal year ending December 31, 2022, and increased to RMB 103.3 million for the fiscal year ending December 31, 2023[91]. Company Overview - The company was established in August 1999 and listed on the Hong Kong Stock Exchange in February 2001[171]. - The company is the largest offshore oil and gas producer in China and one of the largest independent exploration and production companies globally[171]. - The company has core operational areas in Bohai Sea, Western South China Sea, Eastern South China Sea, and East China Sea[171]. - The company’s stock is included in the Hang Seng Index since July 2001[171]. - The company has expanded its asset distribution across Asia, Africa, North America, South America, Oceania, and Europe[171]. - The company’s A-shares were listed on the Shanghai Stock Exchange on April 21, 2022[171]. - The company’s CEO is Zhou Xinhai[172]. Production and Reserves - As of December 31, 2023, the company has net proven reserves of approximately 6.78 billion barrels of oil equivalent[171]. - The average daily net production for the year reached 1,857,619 barrels of oil equivalent[171]. - The net oil liquid production in China increased from 726,866 barrels per day in 2019 to 981,748 barrels per day in 2023, representing a growth of approximately 35%[189]. - The net natural gas production in China rose from 987.9 million cubic feet per day in 2019 to 1,747.1 million cubic feet per day in 2023, marking an increase of about 77%[189]. - The total net oil liquid production across all regions reached 1,421,053 barrels per day in 2023, up from 1,095,751 barrels per day in 2019, reflecting a growth of approximately 30%[189]. - The company’s overseas net oil liquid production increased from 368,886 barrels per day in 2019 to 439,305 barrels per day in 2023, an increase of approximately 19%[189].