Notwithstanding the foregoing contractual arrangements, because Sinopec Group Company is our controlling shareholder, Sinopec Group Company may take actions that may conflict with our own interests.

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Further, the Iran Sanctions Act, as amended, and other U.S. laws and Executive Orders, authorize the imposition of sanctions on companies that engage in certain activities in and with Iran, especially in Iran’s energy sector. It is possible that Sinopec Group Company or its affiliates engage in activities that are targeted for sanctions by U.S. laws. It is possible that the U.S. government would determine, and in the event that the U.S. government so determines, that Sinopec Group Company or an entity it owns or controls, had engaged in any such activities and if the most extreme sanction, blocking, was applied to Sinopec Group Company’s property, including controlled subsidiaries, Sinopec Group Company could be prohibited from engaging in business activities in the United States or with U.S. individuals or entities, and U.S. transactions in our securities and distributions to U.S. individuals and entities with respect to our securities could also be prohibited.

·the imposition of fees for the discharge of waste substances;

·the levy of fines and payments for damages for serious environmental offenses; and

·the government, at its discretion, to close any facility which fails to comply with orders and require it to correct or stop operations causing environmental damage.

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·import of crude oil and other materials;

·debt service on foreign currency-denominated debt;

·purchases of imported equipment;

·payment of the principals and interests of bonds issued overseas; and

·payment of any cash dividends declared in respect of the H shares (including ADS).

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China does not have treaties providing for the reciprocal recognition and enforcement of judgments of courts with the United States, the United Kingdom or most other Western countries, and therefore recognition and enforcement in China of judgments of a court in any of these jurisdictions in relation to any matter not subject to a binding arbitration provision may not be assured. Our articles of association as well as the Listing Rules of the Hong Kong Stock Exchange provide that most disputes between holders of H shares and us, our directors, supervisors, officers or holders of domestic shares, arising out of the articles of association or the PRC Company Law concerning the affairs of our company, are to be resolved through arbitration by arbitration organizations in Hong Kong or the PRC, rather than through a court of law. On June 18, 1999, an arrangement was made between Hong Kong and the PRC for the mutual enforcement of arbitral awards. This new arrangement was approved by the Supreme People’s Court of the PRC and the Hong Kong Legislative Council, and became effective on February 1, 2000. We are uncertain as to the outcome of any action brought in China to enforce an arbitral award granted to shareholders.

ITEM 4.INFORMATION ON THE COMPANY

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We were established as a joint stock limited company on February 25, 2000 under the Company Law of the PRC with Sinopec Group Company as the sole shareholder at our inception. Our principal businesses consist of petroleum and petrochemical businesses transferred to us by Sinopec Group Company pursuant to a reorganization agreement.  Such businesses include:

·exploration for, development, production and marketing of crude oil and natural gas;

·refining of crude oil and marketing and distribution of refined petroleum products, including transportation, storage, trading, import and export of petroleum products; and

·production and sales of petrochemical products.

·exploring and developing oil and gas reserves overseas;

·operating certain petrochemical facilities and small capacity refineries;

·providing geophysical exploration, and well drilling, survey, logging and downhole operational services;

·manufacturing production equipment and providing equipment maintenance services;

·providing construction services;

·providing utilities, such as electricity and water; and

·providing other operational services including transportation services.

On September 30,

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In 2012, we received from Sinopec Group Company an undertaking to avoid its competition with us.  For details, please refer to the descriptions under “Item 7. Major Shareholders and Related Party Transactions —– A. Major Shareholders”.

On March 22,

On March 28, 2013, the board announced that JV HK has been duly incorporated in Hong Kong andprivate investors will be determined according to the Framework Agreement, eachmarket conditions. Our board of SHIdirectors authorized our Chairman, for so long as the aggregate shareholding percentage of social and Tiptop HK holds 50%private investors does not exceed 30%, to determine the investors, their respective shareholding percentages and the terms and conditions of their participation in the marketing and distribution segment

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As of December 31, 2012, we2013, our overseas subsidiary held 2 production licenses, in Africa (Anglo Block 18), with an aggregate acreage of 322.57 square kilometers. WeIt currently dodoes not have exploration licenses. Our overseas equity-accounted investments held 70 production licenses, in Africa.

with an aggregate acreage of 3,779.33 square kilometers, and 6 exploration licenses.

BOE.