On the arrival of this New Year, on behalf of the board of directors and the office of the president, I extend my best wishes to all employees and their families, and my sincere appreciation and best wishes to all shareholders, government authorities, contractors, customers and friends in all circles who always care and support the construction and development of FREP.

Looking back at the year of 2016, we experience increased market competition while the international crude oil price was stabilizing and recovering, the domestic product oil market was oversupplied with intense competition, and the chemicals market featured both structural oversupply and structural shortage. In faced with severe challenges and difficulties, under great support of shareholders and correct leadership of the Board of Directors, FREP focused on quality upgrading and efficiency improvement, accelerated the change of development mode and adjustment of product structure, made full efforts on optimization, market exploration, cost reduction and risk control, coordinated and facilitated each work, and achieved the hard-won accomplishments. In 2016, FREP run safely and stable, constantly optimized production and operation, continuously enhanced people management, significantly increased crude oil and raw materials procurement efficiency, and effectively explored the market. Out of the joint contribution of all employees, FREP created the new best operation performance in the history and demonstrated FREP’s contributions to guaranteeing market supply and serving local economy.

Looking forward into the year of 2017, FREP is faced with severer challenges in production and operation including the remained excess industry capacity, more fierce market competition and severer constraints on safety and environmental protection. We shall always keep clear-minded, benchmarking with advanced enterprises at home and abroad, learning from the best practices and closing our gaps, to obtain profit by doing well in terms of technological and economic indices; to stick to green development, carrying out safety/ environmental protection work compliant with high standards and strict requirements, to obtain profit in terms of safety/environmental protection; to keep on optimize production/ operation, enhancing cross-functional cooperation, to obtain profit in terms of management; to keep an close eye on the market, seizing the opportunity, adjusting the strategy, to obtain profit in terms of market; to continuously strengthen win-win cooperation with customers, suppliers and contractors, concerning for society/ community developments, performing enterprise’s political, social and economic responsibility proactively, to pay back shareholders and the society with our better performances.

In the coming new year, we hope that the whole company could make efforts jointly, initiatively undertake the responsibilities, proactively respond to challenges, struggle for exploiting and proceeding, ride on the momentum of making profits and achieve another brilliant performance; meanwhile, we sincerely hope to acquire support from aspects of all shareholders, relevant authorities at all levels, friends of the society, contractors, customers and so on. Let us join hands for a better future of FREP!

Happy New Year to everyone! Wish you good health and happy family.

FREP Chairman and President

January 2017