Market-oriented and profit-centered since the beginning of this year, FREP proactively stands up to the New Normal, optimizes production plan, improves unit operation and achieves a good start of production operation with a total profit of RMB 320million in the first quarter.

Confronted with the tough situation of huge upset of international crude market and weak demand of domestic product oil, FREP rigorously carried out HSE management responsibility, paid much attention to optimal operation of units in a safe and steady manner, optimized the program of refining and chemical integration, energetically explored the external markets and achieved significant improvement of production operation. Since February, the Company has turned losses into gains. Under the circumstance of poor market demand especially severe constraints of diesel, a net income of RMB 82.09million was made in February, RMB 42.75million from refining section and RMB 39.34million from chemical section. A net income of RMB 415 million Yuan was made In march, of which RMB 270 million Yuan contributed by refining section and RMB 145 million Yuan by chemical section.

Profit is the value of a company to exist while stability is the basis for optimization, equivalent to the best profit. The Company employees operated elaborately, reinforced operation maintenance, improved reliability, realized production stability and reduced loss of opportunity due to unplanned shutdown of units.

With market constrained for diesel sales, the Company optimized the mentality of refining and chemical integration to reduce crude run as appropriate, optimize reefing product structure and produce additional gasoline by all means, reducing the diesel/gasoline ratio from 2.16 in first quarter last year to the 1.64 nowadays. With sales volume constrained for diesel, the Company maximized the percentage of road diesel and minimized the output of regular diesel. The profit of refining section brought about an upswing and made profit for a row of two months.

When crude run was limited, the Company purchased additional intermediates such as naphtha, LPG and VGO, ran SC/Aromatics and other chemical units at high load, optimized the structure of SC feedstock, significantly enhanced the economic and technical indicators of SC unit and drove the improvement of production gross margin. From January to March, the accumulative yield of ethylene and propylene was 46.57% basically flat with that in 2014 (46.47%) while energy consumption by SC unit was reduced from the accumulative 610kg fine oil/ton to 524kg fine oil/ton demonstrating remarkable improvement of energy efficiency.

The Company vigorously explored markets and made efforts to reinforce communication and coordination with SINOPEC headquarter and external interfaces for incremental sales of jet fuel, asphalt, PX and other products. In total 237.3kt jet fuel was sold from January to March 2015, with an increase of 65kt than the same period in 2014.

The Company adopted a lot of practical measures such as maintaining low crude inventory to reduce the exposure of crude price drop and improve the status of cash flow. To cope with the tumbling crude price since September 2014, the Company kept up the strategy of minimum inventory, mitigated the exposure of price drop and improved the cash flow situation. The average crude inventory from January to March 2015 was 540kt, which was 140kt lower than that in the same period last year.

The successful start-up of EO/EG unit on March 30^th and production of EG products from April will become the new point of benefit improvement for the Company.

Presently the whole organization is comprehensively implementing the essence of Company Management Work Conference, continually focusing on the five key focus areas and business priorities, reinforcing cooperation and striving forward to embrace the new normal with new act to open up new prospects. (Xiao Wanyuan)