REG - China Pet &Chem Corp - Report on Payments to Govts

China Petroleum & ChemicalAnnouncement

27/06/2022 10:00

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RNS Number : 2867Q  China Petroleum & Chemical Corp  27 June 2022

 

China Petroleum & Chemical Corporation

Report on Payments to Governments for 2021

1.       Introduction

Section 4.3А of the UK Disclosure Rules and Transparency Rules (DTR 4.3А)
requires the extractive sector companies whose transferable securities are
admitted to trading on a regulated market to publicly disclose payments made
to the governments of those countries where they carry out extractive
operations.

DTR 4.3А apply without limitation to companies incorporated outside the UK
but that have transferable securities traded on the London Stock Exchange
(LSE).

China Petroleum & Chemical Corporation (Sinopec Corp.) consolidated Report
on payments to governments for 2021 (the Report) is presented below pursuant
to DTR 4.3А. It includes Payments made by Sinopec Corp.'s Extractive
Companies as defined below, for the benefit of each government in the
countries in which these companies carry out their activities. The Report also
provides details on the total amount of such payments by type, specific
project and government paid.

Where the amount of payment made during the period for a specific project or
country are less than £86,000 or the equivalent amount in another currency,
such payment is not disclosed in the Report.

2.       Reporting principles

Definitions

Extractive Companies: China Petroleum & Chemical Corporation and its
subsidiaries whose activities consist, in whole or in part, of the
exploration, prospection, discovery, development and extraction of minerals,
crude oil and natural gas, amongst others, fully consolidated by Sinopec Corp.
in accordance with International Financial Reporting Standards (IFRS).

Payment: a single payment or multiple interconnected payments, whether in
money or in kind, for extractives activities.

The payment types included in this Report:

Production Entitlement: host Government's share of production. This payment is
generally made in kind.

Taxes: taxes and levies paid on income, production or profits, excluding taxes
levied on consumption such as value added tax, personal income taxes and sales
taxes. Regarding taxes paid in the People's Republic of China (PRC), the
Report includes Income Tax, Special Oil Income Levy and Resource Tax.

Royalties: products or monetary value payment for the mining rights to extract
oil and gas resources.

Dividends: dividends paid to host Government, other than dividends paid to
Government as an ordinary shareholder unless they are paid in lieu of a
production entitlement or royalty. For the financial year of 2021, there were
no reportable Dividend payments to Governments.

Signature, Discovery and Production Bonuses: bonuses paid for and in
consideration of signature, discovery, production, awards, grants and
transfers of extraction rights; bonuses related to achievement or failure to
achieve certain production levels or targets, and the discovery of additional
mineral reserves or deposits. For the financial year of 2021, there were no
reportable Signature, Discovery and Production Bonuses payments to
Governments.

Licence and Other Fees: licence fees, rental fees, entry fees and other
considerations for licences and/or concessions that are paid for access to the
area where the extractive activities will be conducted. Regarding Licence and
other fees paid in PRC, the Report includes Exploration License Fee and
Production License Fee.

Infrastructure Improvements: payments for local infrastructure development,
including the improvement of infrastructure, except where the infrastructure
is exclusively used for operational purposes. For the financial year of 2021,
there were no reportable Infrastructure Improvement payments to Governments.

Government: any national, regional or local authority of a country or
territory, or any department, agency or undertaking controlled by that
authority.

Project: operational activities governed by a single contract, licence, lease,
concession or similar legal agreement that form the basis for payment
liabilities with a Government. If multiple such agreements are substantially
interconnected, they are considered as a single Project.

Reporting currency

All amounts presented in the Report are stated in Reminbi (RMB). Payments made
to Governments in US Dollars were translated into the equivalent RMB amount
using an average exchange rate during the reporting period of 2021.

In-kind payments

Production Entitlement and Royalties paid in kind owed to Governments pursuant
to legal or contractual provisions (not booked in the Extractive Companies'
accounts pursuant to the accounting standards) are reported in proportion to
the interest held in the Project. Payments in kind are estimated at fair value
which corresponds to the contractual price of oil and gas, market price (if
available) or an appropriate benchmark price. These prices may be calculated
on an averaged basis over a given period.

Operatorship

Payments made by the Extractive Companies directly to a Government arising
from a Project are reported in the full amount, regardless of whether the
Extractive Companies are the Operators. Such payments are reported in the full
amount even where the Extractive Companies acting as Operators are
proportionally reimbursed by their non-operating venture partners.

3. Summary Report

2021
                              Unit: RMB million

 Country  Total Amount of Payments  Production Entitlement  Taxes  Royalties  Licence and Other Fees
 China    8,283                     -                       8,075  -          208
 Angola   3,540                     3,216                   324    -          -

 

4. Reporting by Subsidiary/Project

2021
Unit: RMB million

 Subsidiary/Project                           Total Amount of Payments  Production Entitlement  Taxes  Royalties  Licence and Other Fees
 China                                        8,283                     -                       8,075  -          208
 Sinopec Shengli Oilfield Company             3,408                     -                       3,360  -          48
 Sinopec Zhongyuan Oilfield Company           1,188                     -                       1,179  -          9
 Sinopec Henan Oilfield Company               185                       -                       179    -          6
 Sinopec Jianghan Oilfield Company            993                       -                       980    -          13
 Sinopec Jiangsu Oilfield Company             197                       -                       185    -          12
 Sinopec Shanghai Offshore Petroleum Company  90                        -                       88     -          2
 Sinopec North China Company                  341                       -                       325    -          16
 Sinopec Northwest Oilfield Company           809                       -                       756    -          53
 Sinopec East China Company                   236                       -                       223    -          13
 Sinopec Northeast Oil and Gas Company        112                       -                       108    -          4
 Sinopec Southwest Oil & Gas Company          723                       -                       692    -          31
 Angola                                       3,540                     3,216                   324    -          -
 Sonangol Sinopec International Limited       3,540                     3,216                   324    -          -

 

 

 

 

5. Reporting by Government

2021
Unit: RMB million

 Government                      Total Amount of Payments  Production Entitlement  Taxes  Royalties  Licence and Other Fees
 China                           8,283                     -                       8,075  -          208
 Ministry of Finance             588                       -                       588    -          -
 Tax Authorities                 7,488                     -                       7,488  -          -
 Ministry of Natural Resources   208                       -                       -      -          208
 Angola                          3,540                     3,216                   324    -          -
 Ministry of Finance and others  3,540                     3,216                   324    -          -

 

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