20-F

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 20-F

(Mark One)

☐	REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934

or

☒	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2022.

or

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

or

☐	SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE <br>SECURITIES<br><br>EXCHANGE<br>ACT OF 1934

Date of event requiring this shell company report

For the transition period from

to

Commission File Number 1-15006

(Exact name of Registrant as specified in its charter)

PetroChina Company Limited

(Translation of Registrant’s name into English)

The People’s Republic of China (the “PRC”)

(Jurisdiction of incorporation or organization)

9 Dongzhimen North Street

Dongcheng District, Beijing 100007, the PRC

(Address of principal executive offices)

WANG Hua

Telephone number: (8610) 59982622

Facsimile number: ( 8610 ) 62099557

Email address: zhouyunpeng@petrochina.com.cn

Address: 9 Dongzhimen North Street, Dongcheng District, Beijing 100007, the PRC

WEI Fang

Telephone number: (852) 2899 2010

Facsimile number: (852) 2899 2390

Email address: hko@petrochina.com.hk

Address: Suite 3705, Tower 2, Lippo Centre, 89 Queensway, Hong Kong, the PRC

(Name, telephone, e-mail and/or facsimile number and address of registrant’s contact person)

Securities registered or to be registered pursuant to Section 12(b) of the Act.

None (1)

(1)	The Company has delisted its American Depositary Shares, or ADSs, from the NYSE on September 8, 2022.

Securities registered or to be registered pursuant to Section 12(g) of the Act.

ADSs (2) , each representing 100 Class H ordinary shares, par value RMB 1.00 per share.

H Shares, par value RMB1.00 per share

(Title of Class)

(2)	The Company has terminated its ADR Program on October 17, 2022.

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act.

None

(Title of Class)

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report:

A Shares, par value RMB1.00 per share*	161,922,077,818	(3)
H Shares, par value RMB1.00 per share**	21,098,900,000	***
(3)	Includes 147,103,617,108 A Shares held by CNPC and 14,818,460,710 A Shares held by the public shareholders.
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Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    ☒  Yes    ☐  No

If this is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.    ☐  Yes    ☒  No

Note — Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 from their obligations under those Sections.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) or the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    ☒  Yes    ☐  No

Indicate by check mark whether the registrant has submitted electronically, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    ☒  Yes    ☐  No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:

Large Accelerated Filer  ☒	Accelerated Filer  ☐	Non-Accelerated Filer  ☐	Emerging Growth company  ☐

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act.  ☐

The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.  ☒

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.  ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b).  ☐

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

U.S. GAAP  ☐	International Financial Reporting Standards as issued	Other  ☐
	by the International Accounting Standards Board          ☒

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow. Item 17  ☐ Item 18  ☐

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  ☒

(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS)

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.    Yes  ☐    No  ☐

*	PetroChina’s A Shares are listed and traded on the Shanghai Stock Exchange.
**	PetroChina’s H Shares are listed and traded on The Stock Exchange of Hong Kong Limited.
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***	Includes <br>245,589,700<br>H Shares represented by the ADSs.
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Table of Contents

Table of Contents

			Page
Certain Terms and Conventions				1
Forward-Looking Statements				4
Part I				6
Item 1	—	Identity of Directors, Senior Management and Advisors		6
Item 2	—	Offer Statistics and Expected Timetable		6
Item 3	—	Key Information		6
		Cash and Asset Flows within Our Organization		6
		Risk Factors		9
Item 4	—	Information on the Company		27
		Introduction		27
		Oil, Gas and New Energy		29
		Refining, Chemicals and New Materials		41
		Marketing		45
		Natural Gas Sales		47
		Competition		47
		Environmental Matters		49
		Properties, Plants and Equipment		50
		Intellectual Property		50
		Regulatory Matters		51
Item 4 A	—	Unresolved Staff Comments		61
Item 5	—	Operating and Financial Review and Prospects		61
		General		61
		Operating Results		65
		Liquidity and Capital Resources		71
		Off-Balance Sheet Arrangements		75
		Long-Term Contractual Obligations and Other Commercial Commitments and Payment Obligations		75
		Assets Retirement Obligation		75
		Research and Development		76
		Trend Information		77
		Other Information		78
Item 6	—	Directors, Senior Management and Employees		78
		Directors, Senior Management and Supervisors		78
		Compensation		91
		Board Practices		91
		Employees		94
		Share Ownership		94
Item 7	—	Major Shareholders and Related Party Transactions		95
		Major Shareholders		95
		Related Party Transactions		96
		Interests of Experts and Counsel		100
Item 8	—	Financial Information		100
		Financial Statements		100
		Legal Proceedings		100
		Dividend Policy		100
		Significant Changes		104
Item 9	—	The Offer and Listing		104
		Trading Market Information		104

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			Page
Item 10	—	Additional Information		104
		Memorandum and Articles of Association		104
		Material Contracts		109
		Foreign Exchange Regulation		109
		Taxation		109
		Documents on Display		115
		Annual Report to Security Holders		116
Item 11	—	Quantitative and Qualitative Disclosures About Market Risk		116
Item 12	—	Description of Securities Other Than Equity Securities		118
Part II				120
Item 13	—	Defaults, Dividends Arrearages and Delinquencies		120
Item 14	—	Material Modifications to the Rights to Security Holders and Use of Proceeds		120
Item 15	—	Controls and Procedures		120
Item 16 A	—	Audit Committee Financial Expert		120
Item 16 B	—	Code of Ethics		121
Item 16 C	—	Principal Accountant Fees and Services		121
Item 16 D	—	Exemptions from Listing Standards for Audit Committees		122
Item 16 E	—	Purchases of Equity Securities by the Issuer and Affiliated Purchasers		122
Item 16 F	—	Change in Registrant’s Certifying Accountant		122
Item 16 G	—	Corporate Governance		122
Item 16 H	—	Mine Safety Disclosure		122
Item 16 I	—	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections		122
Part III				123
Item 17	—	Financial Statements		123
Item 18	—	Financial Statements		123
Item 19	—	Exhibits		123
Signature				125
Index of Consolidated Financial Statements				F-1

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CERTAIN TERMS AND CONVENTIONS

Conventions Which Apply to this Annual Report

Unless the context otherwise requires, references in this annual report to:

•	“CNPC” or “CNPC group” are to our parent, China National Petroleum Corporation and its affiliates and subsidiaries, excluding PetroChina, its subsidiaries and its interests in long-term investments, and where the context refers to any time prior to the establishment of CNPC, those entities and businesses which were contributed to CNPC upon its establishment.
•	“PetroChina”, “we”, “our”, “our company”, “the Company” and “us” are to PetroChina Company Limited, a joint stock company incorporated in the PRC with limited liability and its subsidiaries and branch companies.
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•	“PRC” or “China” are to the People’s Republic of China. Unless otherwise indicated, the policies, laws, regulations and interpretations adopted by the government in the mainland of China which are specifically referenced in this annual report are not applicable to Hong Kong, Macau or Taiwan. The Company’s assets, business and revenues in Hong Kong as well as in foreign countries and regions outside of the mainland of China are accounted as “overseas” and not “domestic”.
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Our financial statements are presented in Renminbi or RMB. In this annual report, IFRS refers to International Financial Reporting Standards as issued by the International Accounting Standards Board.

Conversion Table

1 barrel-of-oil equivalent	= 1 barrel of crude oil	= 6,000 cubic feet of natural gas
1 cubic meter	= 35.315 cubic feet
1 ton of crude oil	= 1 metric ton of crude oil	= 7.389 barrels of crude oil (assuming an API gravity of 34 degrees)

Certain Oil and Gas Terms

Unless the context indicates otherwise, the following terms have the meanings shown below:

“acreage”	The total area, expressed in acres, over which an entity has interests in exploration or production. Net acreage is the entity’s interest, expressed in acres, in the relevant exploration or production area.
“condensate”	Light hydrocarbon substances produced with natural gas that condense into liquid at normal temperatures and pressures associated with surface production equipment.
“crude oil”	Crude oil, including condensate and natural gas liquids.
“developed reserves”	Under the reserves rules of the Securities and Exchange Commission, or SEC, developed reserves are reserves of any category that can be expected to be recovered:
	(i) through existing wells with existing equipment and operating methods or in which the cost of the required equipment is relatively minor compared to the cost of a new well; and
	(ii) through installed extraction equipment and infrastructure operational at the time of the reserves estimate if the extraction is by means not involving a well.

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“development cost”	For a given period, costs incurred to obtain access to proved reserves and to provide facilities for extracting, treating, gathering and storing the oil and gas.
“finding cost”	For a given period, costs incurred in identifying areas that may warrant examination and in examining specific areas that are considered to have prospects of containing oil and gas reserves, including costs of drilling exploratory wells and exploratory-type test wells. Finding cost is also known as exploration cost.
“lifting cost”	For a given period, costs incurred to operate and maintain wells and related equipment and facilities, including applicable operating costs of support equipment and facilities and other costs of operating and maintaining those wells and related equipment and facilities. Lifting cost is also known as production cost.
“natural gas liquids”	Hydrocarbons that can be extracted in liquid form during natural gas production. Ethane and pentanes are the predominant components, with other heavier hydrocarbons also present in limited quantities.
“offshore”	Areas under water with a depth of five meters or greater.
“onshore”	Areas of land and areas under water with a depth of less than five meters.
“primary distillation capacity”	At a given point in time, the maximum volume of crude oil a refinery is able to process in its basic distilling units.
“proved reserves”	Under the SEC reserves rules, proved reserves are those quantities of oil and gas, which, by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be economically producible — from a given date forward, from known reservoirs, and under existing economic conditions, operating methods, and government regulations — prior to the time at which contracts providing the right to operate expire, unless evidence indicates that renewal is reasonably certain, regardless of whether deterministic or probabilistic methods are used for the estimation. The project to extract the hydrocarbons must have commenced or the operator must be reasonably certain that it will commence the project within a reasonable time.
	(i) The area of the reservoir considered as proved includes:
	(A) The area identified by drilling and limited by fluid contacts, if any, and (B) Adjacent undrilled portions of the reservoir that can, with reasonable certainty, be judged to be continuous with it and to contain economically producible oil or gas on the basis of available geoscience and engineering data.
	(ii) In the absence of data on fluid contacts, proved quantities in a reservoir are limited by the lowest known hydrocarbons (LKH) as seen in a well penetration unless geoscience, engineering, or performance data and reliable technology establishes a lower contact with reasonable certainty.
	(iii) Where direct observation from well penetrations has defined a highest known oil (HKO) elevation and the potential exists for an associated gas cap, proved oil reserves may be assigned in the structurally higher portions of the reservoir only if geoscience, engineering, or performance data and reliable technology establish the higher contact with reasonable certainty.
	(iv) Reserves which can be produced economically through application of improved recovery techniques (including, but not limited to, fluid injection) are included in the proved classification when:
	(A) Successful testing by a pilot project in an area of the reservoir with properties no more favorable than in the reservoir as a whole, the operation of an installed

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	program in the reservoir or an analogous reservoir, or other evidence using reliable technology establishes the reasonable certainty of the engineering analysis on which the project or program was based; and (B) The project has been approved for development by all necessary parties and entities, including governmental entities.
	(v) Existing economic conditions include prices and costs at which economic producibility from a reservoir is to be determined. The price shall be the average price during the 12-month period prior to the ending date of the period covered by the report, determined as an unweighted arithmetic average of the first-day-of-the-month price for each month within such period, unless prices are defined by contractual arrangements, excluding escalations based upon future conditions.
“reserves-to-production ratio”	For any given well, field or country, the ratio of proved reserves to annual production of crude oil or, with respect to natural gas, to wellhead production excluding flared gas.
“natural gas for sale”	Marketable production of gas on an “as sold” basis, excluding flared gas, injected gas and gas consumed in operations.
“undeveloped reserves”	Under the SEC reserves rules, undeveloped reserves are reserves of any category that are expected to be recovered from new wells on undrilled acreage, or from existing wells where a relatively major expenditure is required for recompletion.
	(i) Reserves on undrilled acreage shall be limited to those directly offsetting development spacing areas that are reasonably certain of production when drilled, unless evidence using reliable technology exists that establishes reasonable certainty of economic producibility at greater distances.
	(ii) Undrilled locations can be classified as having undeveloped reserves only if a development plan has been adopted indicating that they are scheduled to be drilled within five years, unless the specific circumstances, justify a longer time.
	(iii) Under no circumstances shall estimates for undeveloped reserves be attributable to any acreage for which an application of fluid injection or other improved recovery technique is contemplated, unless such techniques have been proved effective by actual projects in the same reservoir or an analogous reservoir, or by other evidence using reliable technology establishing reasonable certainty.

References to:

•	BOE is to barrels-of-oil equivalent,
•	Mcf is to thousand cubic feet, and
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•	Bcf is to billion cubic feet.
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FORWARD-LOOKING STATEMENTS

This annual report contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities and Exchange Act of 1934, as amended. These forward-looking statements are, by their nature, subject to significant risks and uncertainties. These forward-looking statements include, without limitation, statements relating to:

•	the amounts and nature of future exploration, development and other capital expenditures;
•	future prices and demand for crude oil, natural gas, refined products and chemical products;
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•	development projects;
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•	exploration prospects;
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•	reserves potential;
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•	production of oil and gas and refined and chemical products;
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•	development and drilling potential;
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•	expansion and other development trends of the oil and gas industry;
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•	the planned development of our natural gas operations;
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•	the planned expansion of our refined product marketing network;
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•	the planned expansion of our natural gas infrastructure;
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•	the prospects of our new energy and new materials business;
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•	our strategies and blueprints for addressing climate change;
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•	the anticipated benefit from the acquisition of certain overseas assets from CNPC, our parent company;
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•	the plan to continue to pursue attractive business opportunities outside China;
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•	our future overall business development and economic performance;
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•	our anticipated financial and operating information regarding, and the future development and economic performance of, our business;
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•	our anticipated market risk exposure arising from future changes in interest rates, foreign exchange rates and commodity prices; and
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•	other prospects of our business and operations.
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The words “anticipate”, “believe”, “could”, “estimate”, “expect”, “intend”, “may”, “plan”, “seek”, “will” and “would” and similar expressions, as they related to us, are intended to identify a number of these forward-looking statements.

By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that will occur in the future and are beyond our control. The forward-looking statements reflect our current views with respect to future events and are not a guarantee of future performance. Actual results may differ materially from information contained in the forward-looking statements as a result of a number of factors, including, without limitation, the risk factors set forth in this annual report and the following:

•	fluctuations in crude oil and natural gas prices;
•	failure to achieve continued exploration success;
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•	failures or delays in achieving production from development projects;
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•	continued availability of capital and financing;
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•	acquisitions and other business opportunities that we may pursue;
•	general economic, market and business conditions, including volatility in interest rates, changes in foreign exchange rates and volatility in commodity markets;
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•	liability for remedial actions under environmental regulations;
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•	the actions of competitors;
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•	wars and acts of terrorism or sabotage;
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•	changes in policies, laws or regulations of the PRC, including changes in applicable tax rates;
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•	the other changes in global economic and political conditions, including those affecting the production, supply and demand and pricing of crude oil, refined products, petrochemical products and natural gas; and
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•	the other risk factors discussed in this annual report, and other factors beyond our control.
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You should not place undue reliance on any forward-looking statements.

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PART I

Item 1 — IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISORS

Not applicable. See “Item 6 — Directors, Senior Management and Employees — Directors, Senior Management and Supervisors” and “Item 16C—Principal Accountant Fees and Services”.

Item 2 — OFFER STATISTICS AND EXPECTED TIMETABLE

Not applicable.

Item 3 — KEY INFORMATION

Cash and Asset Flows within Our Organization

As a company incorporated in China, we operate our business primarily through our branch companies and subsidiaries in China. We also operate our international business through our overseas subsidiaries. We hold our interests in our subsidiaries through shareholding. We do not operate our business through variable interest entities. The cash flows within our organization mainly consist of payment of capital contributions, dividend distributions, loans and trade payables. For the information of our corporate structure, please refer to “Item 4 – Information on the Company.”

Since our shares were listed on The Stock Exchange of Hong Kong Limited (the “HKSE”) and New York Stock Exchange (the “NYSE”) in 2000, we have distributed dividends to our shareholders (including our ADS holders) twice a year, and we have continued to do so after our ADSs were delisted from the NYSE. When paying dividends to our non-PRC resident shareholders, we are obliged to withhold and pay tax on the dividends according to the Enterprise Income Tax Law of the PRC (the “EIT Law”), the Individual Income Tax Law of the PRC (the “IIT Law”), the implementing regulations of the EIT Law and the IIT law, the rules and interpretations of the State Taxation Administration (the “SAT”), the tax treaties or arrangements signed between China and foreign countries or Hong Kong and Macau. At present, we withhold and pay income tax for all shareholders of non-resident enterprises at the rate of 10%, as provided under Article 91 of the Implementation Regulation of the EIT Law. All the withholding tax rates discussed in this paragraph are based on the gross amount of dividends pursuant to the relevant tax laws. If any shareholder as a non-resident enterprise meets the conditions for a more preferential tax rate under any tax treaty, it may submit supporting documents such as a tax form and beneficial owner’s certificate to us in accordance with the Administrative Measures for Non-Resident Taxpayers Enjoying Treaty Treatment which has been implemented by the SAT since January 1, 2020. Once we receive complete supporting document, we will submit the same to the tax authorities for their retention and we will apply the applicable preferential tax rate for the shareholder. We withhold and pay personal income tax at a rate of 10% for non-resident individual shareholders who are residents of Hong Kong, Macau and other countries with which China has signed tax treaties which provide a tax rate at 10%. If any non-resident individual shareholder whose home country has a tax treaty with China that provide a tax rate lower than 10%, he/she needs to submit the tax form and beneficiary certificate to us, and we will submit the same to the tax authority for retention and we will apply the preferential tax rate for the shareholder. If a non-resident individual shareholder whose home country has a tax treaty with China providing a tax rate higher than 10% and less than 20%, we will withhold tax at the agreed effective tax rate. If the non-resident individual shareholder whose home country does not have any tax agreement with China or whose home country has a tax treaty with China providing a rate of 20% or otherwise, we will withhold the tax at 20%. For more details of income tax on dividends of non-resident shareholders, please refer to “Item 10 — Additional Information — Taxation” and “Item 8 — Financial Information — Dividend Policy”. Please note that our discussion of PRC tax law is not intended to provide and should not be construed as providing legal or tax advice to any particular investor. We urge you to consult your tax advisor.

Prior to paying dividends or other distributions to us, our subsidiaries will pay taxes in accordance with applicable tax laws and regulations of China or the jurisdictions in which they operate. The statutory rate of

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enterprise income tax in China is 25% on taxable income, and enterprises that meet certain conditions can enjoy preferential treatment. In 2022, we paid approximately RMB54,686 million in the aggregate to our shareholders as dividends for the second half of 2021 and the first half of 2022, which included approximately RMB5,713 million paid to the holders of our H Shares (including ADSs) after withholding and paying the PRC withholding tax of approximately RMB591 million. See “Item 4 — Information on the Company — Regulatory Matters — Taxes, Fees and Royalties”, “Item 5 — Operating and Financial Review and Prospects—Liquidity and Capital Resources”, “Item 8 — Financial Information —Dividend Policy”, “Item 10 — Additional Information — Taxation”, “Item 10 — Additional Information — Memorandum and Articles of Association — Dividends”, the financial statements and the Note 12.

Although other financing means are available to us, our ability to pay dividends to our shareholders and to service our debt depends in part on the cash generated by our branch companies and the dividends paid to us by our subsidiaries. We and our PRC subsidiaries’ ability to distribute earnings are mainly subject to the following restrictions and limitations:

•	Accumulated profit: Under PRC laws and regulations, we and our PRC subsidiaries can pay dividends only out of accumulated profit as determined in accordance with PRC accounting standards and regulations.
•	Statutory reserve fund: Under PRC laws and regulations, PRC companies are required to set aside at least 10% of their accumulated after-tax profits each year, if any, to fund a certain statutory reserve fund, until the aggregate amount of such fund reaches 50% of their respective registered capital. Such reserve funds cannot be distributed as dividends, except as part of liquidation in the event of insolvency. In 2022, we allocated a total of RMB12,987 million to our statutory common reserve fund. See Note 32 to the financial statements for further details.
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•	Capital requirements: To achieve our strategies and to meet our contractual or other obligations, we and our subsidiaries need to retain sufficient cash to satisfy the capital requirements. We and our subsidiaries are subject to the limits on distribution of dividends as provided in the articles of associations. For example, our articles of association provides that we can distribute dividends only if our net profit attributable to owners and the accumulated undistributed profit for a year are positive, and our cash flow can satisfy our normal operation and sustainable development.
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•	Debt instrument restrictions: For the debts incurred by us or our subsidiaries, the instruments governing such debts may restrict our or our subsidiaries’ ability to pay dividends.
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•	Foreign exchange regulation: Cash transfers from China to outside of China are subject to foreign exchange regulations by the PRC government. Shortages in the availability of foreign currency may temporarily delay our ability to remit sufficient foreign currency to pay dividends or other payments, or otherwise satisfy our foreign currency denominated obligations. Remittance of dividends by us out of China is also subject to the review by the financial institutions engaging in foreign exchange settlement as approved by the State Administration of Foreign Exchange (the “SAFE”), and the SAFE may also exercise its supervision and inspection authority over our remittance of dividends out of China, which could delay the distribution of dividends to our overseas investors. Although we have not experienced any delay in distribution of dividends to our overseas investors in the past due to any issues in relation to foreign exchange regulation or shortage in foreign currency, we cannot rule out the possibility of the occurrence of such delay in the future. See “Item 3 – Key Information — Risk Factors — Risks Related to Pricing and Foreign Exchange”.
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In 2022, the cash transfers between us and our subsidiaries mainly consisted of the following:

•	Transfer from us to our subsidiaries
•	Contributed capital of approximately RMB5,221 million;
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•	Repaid loans of approximately RMB70,296 million
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•	Transfer from our subsidiaries to us
•	Paid dividends of approximately RMB10,039 million;
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•	Granted loans of approximately RMB81,734 million
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The figures listed above with regard to our subsidiaries include both our domestic and overseas subsidiaries.

In addition, we are a group company with integrated upstream and downstream businesses. We and our subsidiaries work closely in the normal operations by supplying products and services to each other and settling the payments on an arm’s length basis, which are performed pursuant to the relevant regulation requirements in all material respects. See “Item 7 — Major Shareholders and Related Party Transactions — Related Party Transactions.”

At present, Hong Kong does not have foreign exchange regulations similar to those in the mainland of China, and the foreign exchange regulations in the mainland of China do not apply to Hong Kong. Therefore, at present, the transfer of funds by our subsidiaries in Hong Kong to out of Hong Kong is not subject to the restrictions under the foreign exchange regulations in the mainland of China. Our Hong Kong subsidiaries are free to transfer funds out of Hong Kong provided that they meet the general compliance obligations under Hong Kong law in terms of taxation, anti-money laundering, accounting rules, etc. In the future, if Hong Kong were to adopt any regulations that restrict the transfer of funds, and thereby affect the transfer of funds by our Hong Kong subsidiaries, our Hong Kong subsidiaries may be restricted in providing funds for operations outside of Hong Kong or distributing funds to their investors located out of Hong Kong.

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Risk Factors

Our business is subject to various changing competitive, economic, social, political and regulatory and other related conditions. Such changing conditions entail certain risks, which are described below.

Risks Related to Government Regulation

Our operations in China contribute a large majority of our revenue. Accordingly, we are affected and regulated by the economic and industrial policies, laws and regulations adopted in China. This may in turn adversely affect our financial condition, operation results, liquidity, and the value of our shares. These effects are reflected mainly in the following respects:

(1) In terms of general economic policies: The Chinese government regulates China’s economic development by stimulating general economic policies such as monetary and financial policy, fiscal and tax policy and foreign exchange policy. The application of any policy to us may affect our business decisions, production plans and strategy executions, which in turn may have an impact on our financial condition, operating results and value of our shares.

(2) In terms of industrial policies, laws and regulations: The business sector in which we operate is subject to regulation and regulatory control by the Chinese government. The regulation and regulatory control relate to many material aspects of our operations. As a result, we may face constraints and restrictions on our ability to implement our business strategies, to develop or expand our business operations or to maximize our profitability. For example:

•	Energy transition policy: In order to address climate change concerns, the Chinese government has set the goal to hit carbon peak by 2030 and achieve carbon neutrality by 2060. To achieve that goal, China has introduced and is expected to introduce a series of economic policies and supporting laws and regulations. These regulations would pose severe challenges to traditional oil extraction and refining operations and drive us to adjust our operational strategies and initiate steps to expand into new energy business while continuing to develop our traditional business with high quality. If our efforts to address climate change fail to produce satisfactory results, the overall operations, liquidity, profitability and the value of the shares of our company may suffer an adverse effect.
•	Product pricing mechanism: In China, the pricing of gasoline, diesel and natural gas products is subject to government regulation, and we cannot freely determine prices for these products. We are required to price these products in compliance with the Chinese government’s pricing mechanism. As a major supplier of essential energy sources in China, we are not permitted to cease supply to the market even if market prices are not favorable and we cannot exceed the pricing limit set by the government.
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•	Crude oil special gain levy: China collects a crude oil special gain levy on all oil production companies that sell crude oil produced from China. At present, we are required to pay the crude oil special gain levy for the excessive revenue received by us from the sale of domestically produced crude oil above US$65 per barrel.
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•	Mineral rights granting system: We are subject to various requirements under the Mineral Resources Law of the PRC and supporting laws and regulations, including those requirements relating to exploration licenses, production licenses, mineral rights fees, and minimum investment into mining blocks.
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•	Ecological and environmental protection and safety production: We are subject to a series of ecological and environmental protection and safety production laws and standards, which have become increasingly stringent over recent years in China with respect to the oil and gas industries.
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•	Project approvals: In China, the construction of significant refining and petrochemical facilities is subject to governmental approval. We presently have several significant projects pending approval
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<br>from the relevant government authorities and will need approvals from the relevant government authorities in connection with several other significant projects. We do not have control over the timing and outcome of the final project approvals.
•	Oil and gas production targets: The National Energy Administration of the PRC (“NEA”) publishes certain guiding targets for annual production of domestic energy companies. For example, for 2023, the NEA announced that its target is to procure China’s annual production of domestic crude oil to increase to about 205 million tons and annual production of domestic natural gas to increase by about 6 billion cubic meters, and at the same time, to vigorously promote the integrated development of oil and gas exploration and development and alternative energy. Although failure to achieve these targets will not subject us or other relevant companies to fines, these targets themselves would have an effect on our business decisions, hence, driving our management to make plans to work towards achievement of the pre-set targets.
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(3) In terms of generally applicable business laws and regulations: We are subject to generally applicable business laws and regulations, including, without limitation, corporate governance, securities regulation, employee benefits, information protection, anti-monopoly and anti-money-laundering laws and regulations. We are required to continue to invest substantial management resources to ensure compliance with all these laws and regulations. Any noncompliance with any of these laws or regulations will subject our company to penalties and reputational risks, and in turn harm the interests of our investors. For example:

•	Anti-monopoly: We are subject to anti-monopoly laws and regulations. We are prohibited from entering into or implementing anti-competitive agreements, abusing market position or conducting any concentration of business operators which has or may have the effect of excluding or limiting competition. Occupying a leading position in the oil and gas industry, we are more susceptible to anti-monopoly compliance risks. See the “Risks Related to Anti-Monopoly Initiatives” for a more detailed discussion of this risk.
•	Corporate governance and securities regulatory compliance: Our securities are currently traded on the Shanghai Stock Exchange (“SSE”), and the HKSE. Although our securities have been delisted from the NYSE, they have not been deregistered from the SEC, and therefore, till the completion of the deregistration, we continue to have a reporting obligation under the Securities Exchange Act of 1934. Accordingly, we are subject to all the applicable requirements under the listing rules, disclosure rules, securities laws as well as corporate governance and compliance rules adopted in relevant jurisdictions. As a result, we are required to continue to invest substantial management resources to ensure compliance with all these requirements.
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(4) In terms of regulation and supervision of state-owned assets: We are a company with controlling shares ultimately owned by the state. Our controlling shareholder CNPC is a state-owned enterprise. Although the State-owned Assets Supervision and Administration Commission of the State Council (“SASAC”) does not exert influence directly on us, it is positioned to make decisions on significant matters of CNPC in its capacity as shareholder and CNPC can in turn resolve on significant matters of our company in its capacity as shareholder (see the provisions regarding shareholders’ rights and obligations in our Articles of Association). As a consolidated subsidiary of CNPC, we are subject to certain regulations in relation to state-owned assets. For example, we are subject to the audits by the National Audit Office of the PRC relating to our business, finance and staff. For certain material transactions, we are required to retain external asset appraisal firms to evaluate the target assets. All these would increase our compliance burden. Please see “Item 7 — Major Shareholders and Related Party Transactions — Related Party Transactions” and “Item 3—Key Information—Risk Factors— Risks Related to Controlling Shareholder” for a detailed description of our transactions and relationships with our controlling shareholder.

(5) National security concerns, foreign investment restrictions and other considerations: The Chinese regulations requiring national security review with regard to foreign investment in certain sectors and overseas

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offering and listing by certain domestic companies or prohibiting or restricting foreign investment in certain businesses in China, are not applicable to us in light of our current situation. Nevertheless, we cannot assure you that the circumstances will not change or those regulations will not be amended and become applicable to us in the future.

•	National security review of foreign investment: According to the Measures for Security Review of Foreign Investment (the “Security Review Measures”) that were promulgated by the PRC government on December 19, 2020 and came into effect on January 18, 2021, where a foreign investor intends to invest in a business in China and seeks to obtain actual control of the business, and that business falls into a key sector that may cause national security concerns as set forth in the Security Review Measures, such investment should be filed with the Office of Foreign Investment Security Review (the “Security Review Office”) established by the PRC government for review. If the Security Review Office determines that, based on its review, such investment may have an impact on China’s national security, it may block the investment or grant a conditional approval. The Security Review Measures set forth a number of sectors where foreign investment would be subject to security review, and the critical energy and resources sectors are among them. The Security Review Measures delegate the China Securities Regulatory Commission (“CSRC”) to formulate rules regarding security review of foreign investment through purchasing shares of listed companies through stock exchanges. As of the date of this annual report, CSRC has not proposed any such rules. With regard to our company, as CNPC owns the majority of our share capital, it is our controlling shareholder. All other holders of our A Shares and H Shares (including ADSs) owned less than 20% of our share capital in the aggregate, and our H Shares (including ADSs) accounted for approximately 11.53% of our total share capital. Therefore, at present, based on our shareholding structure, our foreign investors are minority shareholders and do not have control over us. We believe that it is also extremely remote that our foreign investors could acquire actual control over us by holding our shares (including ADSs), and that the national security review requirement could be triggered. Nevertheless, we cannot assure you that the PRC government will not amend the Security Review Measures or promulgate new rules, including among other things, amending the conditions for triggering the security review. If the PRC government were to prohibit foreign persons from investing into our shares on the grounds of “national security concern”, we may have to take such actions including but not limited to buying back our H Shares (including ADSs) then issued and outstanding.
•	Overseas offering and listing: On February 17, 2023, the CSRC issued the Trial Measures for Administration of Overseas Offering and Listing of Securities by Domestic Enterprises (the “Measures”). According to the Measures, for overseas offering and listing of securities by a PRC domestic company, that company shall submit filings with the CSRC. The company shall strictly abide by the national security laws, administrative regulations and relevant provisions such as foreign investment, cybersecurity, and data security, and earnestly perform their obligations to safeguard national security. Where security review is involved, relevant safety review procedures shall be performed in accordance with law before submitting to the CSRC. The company shall, in accordance with the requirements of the relevant competent departments under the State Council, employ measures such as timely rectification, making commitments, and divesting business assets to eliminate or avoid the impact on national security arising out of overseas offering and listing. The CSRC also stated that it does not require immediate filing for those companies that have already been listed overseas, until such companies submit a filing for a follow-on financing. We have obtained the necessary government approvals, including the CSRC’s approval, prior to offering of our H Shares and ADSs in 2000 and getting listed on the HKSE and the NYSE, and we currently have no refinancing plan, so at present we will not be required to make any filings with the CSRC under the Measures. If in the future we seek to conduct a follow-on overseas offering or listing on another foreign stock exchange, we would be required to make the requisite filings under the Measures. If we were to be subject to security review, we cannot rule out the possibility that the Chinese government may impose restriction on our overseas offering and listing, or require us to take such measures as rectification, making commitment or
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<br>divesting assets in order to eliminate or avoid the impact on national security arising out of our overseas offering and listing.
•	Foreign investment restrictions: According to the Special Management Measures for Foreign Investment Access (Negative List) (2021 Version) (the “Negative List”) currently in effect in China, where any PRC domestic company operating in a sector in which foreign investment is prohibited under the Negative List intends to offer its shares and become listed on a foreign stock exchange, such company shall file the proposed overseas offering and listing with and obtain the approvals from the competent PRC governmental authorities, and it shall procure that at any time from and after the closing of its overseas offering and listing, its foreign investors will not participate in its business operation or management and its foreign ownership will not exceed certain limits. As of the date of this Annual Report, none of our business falls under the Negative List. On the contrary, our oil and gas exploration and development business and certain petrochemical business fall into the sectors in which foreign investment is encouraged under the Industry Catalogue of Sectors Encouraging Foreign Investment of 2022. Based on the foregoing, our business currently is not subject to foreign investment restrictions other than the national security review with regard to foreign investment in critical energy sector with actual control, as discussed above. If in the future the PRC government were to prohibit foreign investment in the sector in which we operate for any reason, we may face the following consequences pursuant to the Negative List: (i) any follow-on or new overseas share offering and overseas listing contemplated by us will need further approval by the competent PRC governmental authorities, although we have already received all required governmental approvals necessary for our initial offering and listing of our H Shares and ADSs in 2000; (ii) our foreign investors will not be permitted to participate in our business operations or management, although it is currently the case that our current holders of our H Shares (including ADSs) are financial investors only, who are entitled to vote at the shareholders’ meetings but do not participate in our business operation or management; and (iii) the percentage of foreign ownership in our company will be subject to certain limits, that is, the number of shares held by any foreign shareholder(s) individually may not exceed 10%, and collectively may not exceed 30%, of the total shares outstanding of the company.
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•	Effects on our daily operations, etc.: Although currently there are no specific restrictions imposed on our daily operations or our ability to legally transfer capital out of China or enter into normal business transactions with non-Chinese parties under any law or regulation on the grounds of “national security concerns” or foreign investment restrictions, we cannot assure you that the PRC government will not impose such type of restrictions on us in the future.
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(6) Impact of rapid evolution of PRC laws and regulations: PRC laws, regulations and legal requirements dealing with economic matters have experienced rapid development during the decades after China’s adoption of the reform and opening-up policy, especially during the most recent two decades. Some laws having a material effect on our company may be put into force or implementation without any transitional period or only after a very short transitional period, which have required us to quickly adjust our operation and compliance strategies in order to comply with the new rules.

We are advised by King & Wood Mallesons (“KWM”), our external PRC counsel, that we have obtained the necessary permissions and approvals from the Chinese governmental authorities in all material aspects for operating our principal business in China, including but not limited to the exploration licenses, exploitation licenses, refined oil operation licenses, ecological and environmental protection and other permissions in relation to our business operations; and we have obtained all requisite approvals for offering our H Shares and ADSs in 2000 including but not limited to the approval from the CSRC. As advised by KWM, our current principal business operation in China and listing status on the SSE and the HKSE do not involve extra material approvals of the Chinese government; and neither the currently valid rules and interpretations of the CSRC, the Cyberspace Administration of China (“CAC”) nor other government agencies require us to obtain any additional approvals. No permissions or licenses requisite for maintaining our main business operations in China and our listing status on the SSE and HKSE have been denied. Please note that we have delisted from the NYSE and our ADR

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program has been terminated. However, there is no assurance that we can obtain the permissions from the government for any new project and new offering in the future. If we or our subsidiaries (i) fail to receive or maintain the required permissions or approvals as set forth above, or (ii) inadvertently determine that such permissions or approvals are not required, we or our subsidiaries may be subject to administrative penalties, including fines, rectification, etc., which may result in fluctuations in our stock price and bring loss to our investors. In the future, if any applicable law, regulation or legal interpretation were to change and we are required to obtain any other permission or approval, such as in relation to data security associated with an overseas listing or security review in relation to outbound transmission of data, if we cannot obtain such permission or fail to pass any security review, we may be ordered to make rectifications for protection of critical information infrastructure data, or for protection of the personal data of our individual customers of our retail business on internet platforms, and if after such rectification, we still fail to meet the requirements of the CAC, such situation may cause an impact on our listing status on the HKSE and may also hinder any potential listing on other foreign exchanges.

We are also advised by KWM, our PRC and Hong Kong external counsel, that the Chinese economic policies, industry policies, laws and regulations with respect to mining rights, foreign exchange, pricing, taxation, general commercial affairs, anti-monopoly, foreign investment restrictions, data security reviews, etc. as referenced in this risk factor, are only applicable to the mainland of China. Therefore, “Risks Related to Government Regulation” is limited to the discussion of the risks associated with our exposure to government regulation in the mainland of China, except for the securities regulation of Hong Kong in connection with our listing of shares on HKSE. At present, we operate oil and gas trading, investment and retail businesses in Hong Kong and we do not have any oil and gas exploration, exploitation and refining businesses in Hong Kong. We have no business operations in Macau. We are advised by KWM that the laws and regulations of the mainland of China presently do not require us to cease, materially change or limit, in part or in whole, our trading, investment and retail business in Hong Kong, limit the development prospects of such business, nor require us not to comply with any law or regulation of Hong Kong, which could have a material adverse effect on our trading, investment and retail business in Hong Kong and our ability to maintain our listing status on the HKSE. We are also advised by KWM that Hong Kong has its own general commercial laws and regulations applicable to Hong Kong businesses, such as with regard to corporate, financial, securities, commercial, competition, labor, personal information protection, accounting and other regulations, as well as its own general economic policies, while it has no policies and regulations for the oil and gas industry which are commensurate to those in the mainland of China as discussed under this Risk Factors section, and it has no foreign exchange regulations and foreign investment regulations commensurate to those in the mainland of China. The current regulatory regime in Hong Kong has no material adverse effect on our oil and gas trading, investment and retail business in Hong Kong and our ability to maintain our listing status on HKSE, and, as of the date of this annual report, there are no material adverse changes expected in this regard. However, if in the future Hong Kong and/or Macau were to adopt equivalent or similar regulations in any respect commensurate to those in the mainland of China and thereby have an effect on our business in Hong Kong and/or Macau (if any, in the future) at that time, then the relevant aspects of the above discussed risk factor may also apply to our businesses in Hong Kong and/or Macau (if any, in the future).

See also “Item 4 — Information on the Company — Regulatory Matters” and the other relevant risk factors disclosed in this section, including without limitation, “Risks Related to Marco Economic Conditions”, “Risks Related to Competition”, “Risks Related to Financial Reporting Differences”, “Risks Related to Pricing and Exchange Rate”, “Risks Related to Environmental Protection and Safety Production”, and “Risks Related to Climate Change”, “Risks Related to Audit Reports Prepared by an Auditor Who Is Not Inspected by the Public Company Accounting Oversight Board” and “Risks Related to China’s Anti-Monopoly Initiatives”.

Risks Related to Controlling Shareholder

We are a company with controlling shares ultimately owned by the state. CNPC, which is controlled by SASAC, is our controlling shareholder. SASAC’s control over CNPC and CNPC’s control over us are mainly

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shareholding relationships. SASAC holds the equity interests in state-owned enterprises (such as CNPC) on behalf of the Chinese government. As a result, in the corporate governance structure SASAC is a shareholder and accordingly has to comply with the shareholder’s rights and obligations under the PRC Company Law. Likewise, CNPC’s control over us is also subject to the shareholder’s rights and obligations under the PRC Company Law. Although SASAC does not exert direct influence over us, it can make decisions on significant matters relating to CNPC in its capacity as CNPC’s shareholder and CNPC can in turn resolve on significant matters of our company in its capacity as our shareholder (see the provisions in relation to shareholders’ rights and obligations in our Articles of Association). As a consolidated subsidiary of CNPC, we are subject to certain regulations in relation to state-owned assets. For example, we are subject to the audits by the National Audit Office of the PRC on the compliance of our business, finance and staff. For material merger and acquisition transactions, we are required to retain external asset appraisal firms to evaluate the target assets.

As of March 31, 2023, CNPC beneficially owned approximately 82.62% of our share capital. As a result, CNPC can vote on significant matters relating to our company by exercising its rights as our controlling shareholder, as set forth in detail in our Articles of Association. Accordingly, CNPC is in a position to:

•	direct our policies, management and other various affairs;
•	subject to applicable PRC laws and regulations and provisions of our Articles of Association, affect the timing and amount of dividend payments and adopt amendments to certain of the provisions of our Articles of Association; and
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•	otherwise determine the outcome of most corporate actions and, subject to the regulatory requirements of the jurisdictions in which our shares are listed, cause our company to effect corporate transactions without the approval of minority shareholders.
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CNPC’s interests may occasionally conflict with those of some or all of our minority shareholders. We cannot assure you that CNPC, as our controlling shareholder, will always vote its shares in a way that benefits our minority shareholders.

In addition to its relationship with us as our controlling shareholder, CNPC by itself or through its affiliates also provides us with certain services and products necessary for our business activities, such as construction and technical services, production services, materials supply services, social services and financial services. The interests of CNPC and its affiliates as providers of these services and products to us may conflict with our interests.

Risks Related to Pricing and Exchange Rate

Our operations are affected by the volatility of prices for crude oil, refined products and natural gas. We adjust our crude oil median prices periodically based on the international trading prices for crude oil.

In recent years, international prices for crude oil have fluctuated substantially in response to a wide range of factors, including changes in global and regional economy, the 2020-2022 pandemic, politics, geopolitical tensions and supply and demand for crude oil. We do not have, and will not have, control over factors affecting international prices for crude oil. Fluctuations and volatility in crude oil prices have a significant impact on our results of operations. The decline in international crude oil prices would have a material adverse effect on our upstream business profits, and also have an impact on our downstream business profits through China’s pricing mechanism of refined oil products, thereby adversely affecting our overall sales revenue and profits. Further, in the situations where crude oil prices remain at a low level for a long period of time, we would be required to determine and estimate whether our oil and gas assets may suffer impairment and, if so, the amount of the impairment. An increase in crude oil prices may, however, increase the production costs of refined products, reduce demand for our products and affect our operating profits.

Under the current refined oil pricing mechanism implemented by the PRC government, when there is a change in the average crude oil price in the international market during a given time period, the PRC government

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can adjust refined oil prices. When international crude oil price experiences significant increases or volatility, the PRC government may strengthen its control over the refined oil prices. As a result, the regulation on refined product prices by the PRC government may reduce our profit and cause our refining assets to suffer impairment.

We negotiate the actual settlement price with natural gas users within the price range permitted by the PRC government. When the domestic price is lower than the international natural gas price, the cost of our imported natural gas will be higher than the sales price of our natural gas, which may reduce our revenues and profit, or result in losses, cause our natural gas assets to suffer impairment.

Currently, RMB is not a freely convertible currency. Conversion and remittance of foreign currencies out of China are subject to the supervision of the PRC government’s foreign exchange administrative agencies, through filings and/or approval requirements. We receive and maintain a portion of cash and cash equivalents in foreign currencies as part of our international business. We receive most of our revenue in RMB. We convert RMB into foreign currencies from time to time to meet our foreign currency obligations, including repayment of foreign currency denominated debt, payment of overseas capital expenditures and equity investments, import of oil, gas, equipment and materials, and payment of dividends declared with respect to the H Shares. Although we have not been denied any application for converting foreign currency for use in our outbound investments, international trade and distribution of dividends, etc., the PRC government’s regulation on foreign exchange may influence our international strategies, and/or prolong, delay or otherwise impose restrictions on our international business, and may also result in an increase of our financing costs in certain circumstances. For example, unlike our competitors located in countries where foreign exchange is not regulated, we must consider foreign exchange implications when making and pursuing our international business strategies. Where we expect to encounter difficulties in obtaining sufficient foreign currency to support certain international strategies, we may have to choose not to pursue those plans. Pursuant to the PRC’s foreign exchange rules currently in effect, in most circumstances, the entities of our company incorporated in China cannot directly use their receipts in foreign currencies to satisfy their payment obligations in foreign currencies. Instead, they are required to convert their receipts in foreign currencies into RMB. As a result, they have to apply for and purchase foreign exchange when they have a need for funds in foreign currencies. We are prohibited from obtaining overseas financing through debt offerings or loan facilities, or providing guarantees for overseas debts, without the approval of and/or registration with the relevant PRC government authorities. Consequently, we may not be able to make use of certain low-cost sources of funds which may be available to non-PRC companies. We are required to obtain approvals from and/or register with the relevant PRC government authorities, and make filings with the foreign exchange authorities before we can conduct and/or finance our overseas direct investment projects. Therefore, we may not be able to take advantage of international business opportunities if we do not hold, or cannot obtain in a timely fashion, sufficient foreign currency.

The value of RMB against U.S. dollar and other currencies may fluctuate and is affected by, among other things, changes in China’s political and economic conditions. The PRC government has implemented a floating exchange rate system to allow the value of RMB to fluctuate within a regulated band based on market supply and demand and by reference to a basket of foreign currencies. Because a substantial part of our imports and our outbound investments are settled in foreign currencies, the exchange rates between RMB and U.S. dollars and any other relevant foreign currencies may have an effect on our purchase costs and our investment costs.

Risks Related to the Enforceability of Securities Law Liabilities against Our Officers and Directors

PRC laws and regulations have their foundation in written laws, and PRC laws, regulations and legal requirements dealing with economic matters continue to evolve. PRC laws and regulations are different in certain material areas such as legislation, judicial system, and enforcement from those in the United States and other common law jurisdictions. Because of the non-binding nature of prior court decisions in China, the enforcement of laws, regulations and legal requirements involve some degree of uncertainty. Given that the PRC laws and regulations with respect to companies, securities and litigation are different in certain important aspects from those in the United States and other common law jurisdictions, and most of our assets are located in the PRC and

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most of our directors and substantially all of our executive officers reside in the PRC, it may be difficult for our shareholders (including investors of our ADSs) to enforce any judgments against our assets or the assets of our directors and officers located in China in an event that they believe their rights have been infringed and even if they successfully bring an action against us or our directors and officers and they are successful in an action of this kind.

The ability of U.S. government agencies, such as the U.S. Securities and Exchange Commission, or the SEC, and the U.S. Department of Justice, or the DOJ, to investigate and bring enforcement actions against us may be constrained by the PRC laws. For example, the securities regulators of the U.S. cannot directly enter into China to carry out investigations and collect evidence, but need to resort to the regulatory cooperation channels with the regulatory authorities in China, and the DOJ can only conduct investigations through bilateral judicial assistance channels with the PRC judicial authorities. According to Article 177 of the PRC Securities Law, the securities regulatory authority under the State Council of China may establish a supervision and administration cooperation mechanism with the securities regulatory authorities of other countries or regions for cross-border securities supervision and administration, and no foreign securities regulator is allowed to directly conduct investigations or evidence collection activities within the territory of China. Without the consent of the securities regulatory department of the State Council and other competent authorities under the State Council, no organization or individual may provide documents or materials relating to securities business activities to overseas parties.

Where an effective civil judgment or ruling of a foreign court requires recognition and enforcement by a court in China, a party may apply directly to a court in China which has the jurisdiction or apply to the foreign court for the foreign court to request recognition and enforcement by a court in China according to the treaty concluded or acceded to by China with the home country of the party or under the principle of reciprocity. After examining an application or request, if the court deems that the judgment or ruling does not violate the basic principles of the laws of China and the sovereignty, national security and public interest of China, the court shall issue a ruling to recognize the legal validity of the judgment or ruling and issue an order for enforcement as needed to enforce the judgment or ruling. If the court deems that the judgment or ruling violates the basic principles of the laws of China or the sovereignty, national security or public interest of China, the court will not grant recognition and enforcement. Where an arbitration award of a foreign arbitral tribunal requires recognition and enforcement by a court in China, a party shall apply directly to the court at the place of domicile of the party against whom enforcement is sought or at the place where the property of that party is located, and the court shall process the application in accordance with the treaty concluded or acceded to by China or under the principle of reciprocity.

Civil judgments of U.S. courts cannot be directly enforced in Hong Kong either. At present, there are no treaties or other arrangements between the U.S. and Hong Kong for reciprocal enforcement of foreign judgments. However, common law permits an action to be brought upon a foreign judgment. Because a judgment can be regarded as creating a debt between the parties, the foreign judgment itself may form the basis of the cause of action. To enforce a foreign judgment in Hong Kong, a common law action for debt must be brought and the enforcement of a foreign judgment in Hong Kong is subject to a number of conditions, including but not limited to: (a) the foreign judgment is a final judgment on the merits of the case; (b) the judgment is a judgment on liquidated damages in a civil action and not on taxes, fines, or similar complaints; (c) the proceedings in which the judgment was obtained were not contrary to natural justice; and (d) that the enforcement of the judgment is not contrary to the public policy of Hong Kong. In addition, there is a six-year limitation period from the date of the foreign judgment to commence enforcement proceedings under common law in Hong Kong. The defenses that are available to a defendant in a common law action brought on the basis of a foreign judgment include lack of jurisdiction, fraud, or inconsistency of any previous judgment of a Hong Kong court or a foreign judgment recognized in Hong Kong.

As a result of the reasons including but not limited to the foregoing, our foreign public shareholders may have difficulty and face uncertainties in protecting their interests through actions against our company, directors,

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officers or our majority shareholder. Shareholder protection through actions initiated by the SEC, DOJ and other U.S. government agencies may also be limited.

Risks Related to Macro Economic Conditions

Our operations may be adversely affected by international and domestic economic conditions. As the oil and gas industry is sensitive to macro-economic trends, oil and gas prices tend to fluctuate along with changes in macro-economic conditions. We may experience pricing pressure on our refined products in recessionary periods, which would have an adverse effect on our profitability. Changes in macro-economic conditions can affect the demand for certain of our products. These factors may also lead to intensified competition for market share, with consequential potential adverse effects on sales volumes. Inflation may lead to increase in our operating costs. Notwithstanding the measures taken by the PRC government to control inflation, China may experience an increase in inflation in the future and our operating costs may become higher than anticipated. The financial, economic or political situation may also have a negative impact on third parties with whom we do business, and may impact their ability to perform contractual obligations to us. In addition, other factors that affect the macro economy, such as declining population growth rates, inflationary pressures, supply chain disruptions, geopolitical tensions, conflicts and wars, trade and tariff policies, and major public health may have an adverse impact on oil and gas and petrochemical industries, including us.

In addition, if in the future any government or governmental authorities were to impose restrictions, or any negative comments or warnings are made by any government or governmental authorities on the investments and inflow of capital into China or China-based companies in general or about us specifically, or if there is any escalation of geopolitical tensions or any news or rumors thereof or if we are involved in any negative news, rumors or controversies, or if investment and trading restrictions are imposed on us or we are threatened with investment or trading restrictions, we may suffer from disruptions in our supply chain and it may be difficult for us to obtain substitution from other sources in a timely, sufficiently and costly manner, which may increase our costs and reduce our profits, and potential investors may shun away from our securities and/or certain of our existing investors may divest from us. Any of these factors may adversely affect our financial condition, results of operations, liquidity, and the value and liquidity of our shares.

Risks Related to Competition

The oil, gas and petrochemicals industries are highly competitive. There is strong competition, both within the oil and gas industry and with other industries, in supplying the fuel needs of commercial, industrial and residential markets. In recent years, with the intensive reform of China’s petroleum, refining and chemical, natural gas, LNG and refined oils sales industries, we have been facing increasingly intense competition in the exploration, refinery, chemical, sales, and oil and gas service sectors from privately-owned companies, foreign-invested enterprises and other state-owned enterprises that recently entered the oil and gas industries.

Alternative energy sources and new products also pose strong competition against the oil and gas and petrochemical industries. In particular, the booming of the new energy vehicle industry confronts the oil industry with tough challenges. In October 2020, the State Council issued the New Energy Vehicle Industry Development Plan (for 2021-2035), according to which, China expects that the share of new energy vehicles out of total vehicle sales in China to rise to 20% by 2025 and pure electric vehicles to account for the majority of vehicle sales by 2035. We expect to see continued rapid development of the new energy vehicle industry, which will adversely affect the consumption of refined oil products. Competition puts pressure on product prices, affects oil products marketing and requires continuous management focus on identifying new trends, reducing unit costs and improving efficiency. The implementation of our growth strategy requires continued technological advances and innovation, including advances in exploration & production, and refining & chemicals manufacturing technology and advances in technology related to energy usage. Our performance could be impeded if competitors developed or acquired intellectual property rights to technology that we required or if our innovation lagged the industry.

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The Eastern and Southern regions of China have a higher demand for refined products and chemical products than the Western and Northern regions. Although we have strived to increase our refinery capacity in the Southern regions of China over recent years, most of our refineries and chemical plants are located in the Northeastern and Northwestern regions of China. We incur relatively higher transportation costs for delivery of our refined products and chemical products to certain areas of the Eastern and Southern regions from our refineries and chemical plants in Western and Northern China. We face strong competition from other traditional domestic oil companies, local independent refineries and other competitors. As a result, we expect that we will continue to encounter some difficulty in increasing our sales of refined products and chemical products in these regions.

Risks Related to Anti-Monopoly Initiatives

The Anti-Monopoly Law of the PRC (the “Anti-Monopoly Law”) prohibits the entry into or implementation of any horizontal or vertical monopoly agreements, the taking of any action by abusing dominant market position, and any concentration of business operators that has or may have the effect of excluding or limiting competition. Penalties for violations of the Anti-Monopoly Law include, inter alia, confiscation of illegal gains and imposition of penalties as high as 10% of the sales revenue in the preceding year. We have directed our headquarter office and subsidiaries not to take any action in violation of the Anti-Monopoly Law or any of its supporting laws and regulation in their conduct of business, and have monitored company-wide anti-monopoly compliance through our internal compliance system. Despite that, we cannot assure you that our company can prevent all anti-monopoly compliance risks due to the fact that our company occupies a leading market position, the large scale of our business operations and our company has a large number of subsidiaries and branches. If in the future our company is determined to have deficiencies in the anti-monopoly compliance, or any business model adopted or particular transaction conducted by our company is determined, for example, to have abused our market position, entered into monopoly agreements, or implemented a concentration of business operators in violation of anti-monopoly requirements, we may be subject to investigations or enforcement actions by the government. In the case of such determination, in addition to being subject to a substantial fine, we may need to adjust our business model accordingly or make corresponding changes to a particular transaction structure. All of these would have a material adverse effect on our business operations, financial condition, operating results and corporate reputation, and may reduce the value of our securities and the profits distributable to our shareholders.

Risks Related to Economic Sanctions and Trade Controls

The U.S. government has imposed various sanctions on Chinese companies and individuals. For example, many Chinese companies have been placed on the trade control lists administered by the U.S. Department of Commerce Bureau of Industry and Security (“BIS”) due to various allegations, thereby prohibiting or restricting the supply of certain designated U.S. goods and technologies to such companies. Certain Chinese companies were designated by the Office of Foreign Assets Control (“OFAC”) of the US Department of the Treasury on a list that prohibits U.S. entities from investing in the publicly traded securities of such companies, resulting in U.S. investors having to dispose of their securities within a specified period of time. The U.S. government has also worked with the European Union, the governments of United Kingdom and other countries to expand the scope of these sanctions. We are not currently included in any sanction lists, but there can be no assurance that we or any of our subsidiaries would not be a target, be involved in or impacted by sanctions in any way in the future.

In addition, CNPC, our controlling shareholder, has for a long time engaged in international oil and gas operations. Some of these operations are located in countries which are subject to sanctions by the U.S. government, the European Union or other governments or international organizations. Some operations involve certain entities, which are subject to sanctions. We are also heavily dependent on imports of crude oil and natural gas, a part of which is indirectly or directly sourced from Russia.

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In summary, sanctions and trade controls may pose the following risks to us:

•	Risks of being sanctioned or implicated in sanctions: We have always endeavored to prevent our own business and/or our direct or indirect ties with any sanctioned entity from violating the sanctions imposed by the U.S. or any other governments or international organizations. However, we cannot assure you that any future sanctions will not target or implicate CNPC or our company.
•	Divestment: Some investors (including U.S. investors) are prohibited from investing or may not wish to invest and have proposed or adopted divestment or similar initiatives regarding investments in companies that do business in countries and regions or have trade or investment ties with entities that are subject to sanctions. As a result, these investors may also divest their investment in us because of our and/or CNPC’s (including its subsidiaries) investments, trade and other operations in certain countries which are subject to sanctions, and our and/or CNPC’s (including its subsidiaries) trade and investment ties with certain sanctioned companies, or the concerns that our company may be the target or subject of sanctions. As a result, the liquidity and value of our securities may be materially and adversely affected.
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•	Supply disruptions and wind-down of operations: Since certain U.S. sanction programs have extraterritorial effect or effect on non-US persons, such as certain secondary sanctions administered by the OFAC, and certain trade controls administered by the BIS, especially under the “foreign direct product rules”, in certain circumstances, we and certain of our business partners may need to exercise business judgment to wind down certain existing projects or abandon or change some business plans. As a result, we may suffer adverse consequences, such as supply disruptions, increased costs of raw materials, impairment of assets or loss of profit-making opportunities. If any sanctions were to directly target or indirectly affect us, we could face immediate supply chain disruptions which could have a material adverse impact on our operations.
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•	Reputation risks: Although most of the sanction programs do not prohibit us or our parent company from carrying on existing operations in sanctioned countries, or from maintaining direct or indirect ties with any sanctioned entity, to maintain such operations may have an adverse impact on our reputation.
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•	Compliance risks: In view of the complexity of the various sanctions regimes, the frequent expansion and escalation of sanctions policies and programs, the power of sanction regulators to interpret policies, and the increasing enforcement of sanction laws, we are required to continuously invest substantial resources in compliance management, and the risk of being penalized for any non-compliance cannot be completely avoided and any non-compliance of sanctions may subject us to penalties.
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Set forth below, please see our disclosure on a country-by-country basis of CNPC’s and our operations in certain sanctioned countries and business ties with certain sanctioned entities.

About Iran

In 2018, the United States government withdrew from the Joint Comprehensive Plan of Action (“JCPOA”) and reimposed certain sanctions against Iran, which were conditionally lifted in 2015 following entry into the JCPOA. These reimposed sanctions have implications for non-U.S. companies, including requiring foreign companies to cease participation in projects in certain sectors of Iran (including the energy sector), and prohibiting or restricting oil and petrochemicals imports from Iran, except for eight countries and regions (including China) which were granted a Significant Reduction Exception (“SRE”) to be able to continue to import limited oil and petrochemicals until May 2019. Pursuant to section 13(r) to the U.S. Securities Exchange Act of 1934, reporting issuers are required to disclose whether they or any of their affiliates have knowingly engaged in certain activities, transactions, or dealings related to Iran during the reporting period, including activities not prohibited by U.S. law. Based on CNPC’s response to our inquiries, a subsidiary of CNPC (the “CNPC Sub”) held interests in certain oil and gas development projects in Iran, namely, (i) the MIS oilfields in

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which the CNPC Sub obtained a 100% interest in 2010, and (ii) the North Azadegan oilfield, in which the CNPC Sub obtained a 100% interest in 2009. From the re-imposition of U.S. sanctions, the CNPC Sub has been providing minimal support and services to the two oilfields. Since May 2019 when the SRE expired, the two oilfields have suspended lifting oil for recovery and did not generate any revenue for the CNPC Sub.

In July 2012, OFAC added Bank of Kunlun Co., Ltd., or Kunlun Bank, a subsidiary of CNPC, to its “List of Foreign Financial Institutions Subject to Part 561”, which was replaced by the list of Correspondent Account of Payable-Through Account Sanctions, pursuant to the Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010. According to OFAC, Kunlun Bank allegedly provided financial services to at least six Iranian banks that were on OFAC’s sanctions list during 2012. These financial services included holding accounts, making transfers and paying letters of credit on behalf of the designated banks. Since 2018, Kunlun Bank’s settlement business involving Iran has been limited to settlement of humanitarian materials and other business activities that are not subject to sanctions. We have no involvement in or control over such activities of Kunlun Bank or CNPC and CNPC subsidiaries and affiliates, and we have never received any revenue or profit derived from these activities.

About Russia

Since July 2014, the United States government has adopted economic sanctions against certain Russian persons and entities, including various entities operating in the financial, energy and defense sectors, such as Rosneft, Gazprom, Transneft, and OAO Novatek as well as those companies in which the foregoing companies independently or jointly hold a 50% or more interest. These sanctions prohibit U.S. persons from transacting in, providing financing for or otherwise dealing in debt issuance by certain of these entities, or exporting, transferring, or providing certain technologies, equipment or services to certain oil-development projects in Russia.

Since February 2022, the U.S. government has expanded the sanctions against Russia. Please refer to the websites of OFAC and other sanction regulators for details. In conjunction with such measures by the U.S. government, E.U., U.K. and certain other countries have also announced similar sanctions against Russia.

Pursuant to certain pre-existing agreements or arrangements, CNPC has for a long time imported crude oil and natural gas from Russia and held investment interests in certain projects in Russia. Our company also has direct or indirect business ties with certain sanctioned Russian entities. These operations include the following:

•	CNPC indirectly holds 20% equity interest in OAO Yamal LNG and 10% equity interest in Arctic LNG 2, both of which are more than 50% owned by OAO Novatek.
•	CNPC has long-term agreements with Rosneft, Transneft, Gazprom and Arctic LNG 2 (all subject to OFAC sanctions), to import crude oil, natural gas or LNG from Russia. CNPC has resold, and will for the foreseeable future resell or transfer, all or a substantial portion of the imported crude oil and gas under the agreements to us.
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•	Our company has for a long time imported natural gas from Gazprom, and LNG from a subsidiary of OAO Yamal LNG.
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In 2022, the revenue derived from our operations in oil and gas involving those sourced from Russia accounted for 6.2% of our total revenue.

Both CNPC and our company have been continuously assessing the risks related to operations involving Russia. The above business ties may cause a high risk in the context of the Ukraine crisis. At present, the U.S. and certain other countries implement a price limit policy on Russian oil exports. It is possible that such countries may implement more severe policies in the future, and we cannot guarantee that these countries will not intervene in our Russia-related business. We also cannot guarantee that our business partners will not have any negative perception of us as a result of the business ties mentioned above, or they may even consider divesting from us and/or terminating the business relationships with us.

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About Venezuela

In 2017, the United States imposed economic sanctions against the Government of Venezuela and certain state-owned entities, including Petroleos de Venezuela, S.A. (“PdVSA”). These sanctions prohibit U.S. persons from transacting in, providing financing for or otherwise dealing in “new debt” issued by these entities on or after August 25, 2017, with certain exceptions for short-term debt. In 2019, the United States issued enhanced sanction measures against Venezuela, which included blocking the property of Venezuelan government and its controlled entities (including PdVSA), and introducing new restrictions on Venezuela’s oil sector. Under these programs, persons determined to be operating in the oil sector of the Venezuelan economy, or to have materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of, any person included on the list of SDNs and Blocked Persons, may also be subject to risk of being designated for sanctions. In 2008, CNPC Exploration and Development Company Limited (“CNPC E&D”), a joint venture held as to 50% by us and 50% by CNPC, established a joint venture with PdVSA (the “JV”) to operate the Sinovensa block located in Carabobo, Monagas State, Venezuela, which block produces and sells extra-heavy oil. CNPC E&D holds a 40% interest in the JV and PdVSA holds 60%. In the past three years, CNPC E&D contributed no new investment in the JV. We also indirectly hold minority interests in a few other small projects in Venezuela. For the year ended December 31, 2022, the share of net profit from the Sinovensa block and the other projects in aggregate accounted for approximately 0.56% of our net profit attributable to owners of the company.

Others

As a major supplier of essential energy sources in China, we may in the ordinary course of our business, develop ties with certain Chinese entities or individuals who are currently or in the future could be subject to various sanctions. In performing daily compliance work, on the one hand, we take great care to identify and assess the risks of violating the US and other countries’ sanction regimes, and on the other hand, we strive to comply with PRC anti-sanctions and anti-boycott laws and regulations. When faced with the situation where foreign sanctions conflict with China’s anti-sanctions and anti-boycott rules, we may be obligated to comply with China’s rules. Hence, we may be unable to completely prevent all sanctions compliance risks.

Our controlling shareholder, CNPC, may have some operations in certain other countries and regions sanctioned by the U.S. to different extents. None of such activities result in us violating any U.S. or any other international sanctions.

Risks Related to Outbound Investments and Trading

We are subject to various political, legal and regulatory environments in foreign countries in which we have investments or with which we conduct trading transactions. The legal and regulatory regimes of some of those countries may not be as developed or sophisticated and may differ in many significant respects from those prevailing in developed countries. Expansion into new international markets requires significant resources, management attention and increased legal compliance costs and subjects us to regulatory, economic, tax and political risks. We are also subject to general risks inherent in international operations, such as fluctuations in exchange rates, changes in trade policies, tariff regulations, embargoes and customs clearances, or other trade restrictions, as well political or social unrest or economic instability in regions in which we operate.

As we continue to expand our business and geographic footprint, including in countries with regulatory and compliance regimes with which we are unfamiliar, we will need to adapt and implement compliance and operational protocols to ensure compliance in each such market. The laws and regulations of various countries in which we currently operate or may operate in the future are evolving. Consequently, such laws and regulations may change and sometimes may conflict with each other, making it more complicated for us to be compliant and sometimes may be at odds such that we must make a strategic decision to abandon or scale back operations in some markets. At any time, authorities in the countries where we currently operate may require us to obtain additional, or extend existing, licenses, permits or approvals. However, there is no guarantee that we will be able

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to obtain these in a timely and cost-effective manner. Authorities may revoke existing licenses, and we may not be able to appeal any such revocations in a timely and/or effective manner, or at all.

Risks Related to Climate Change

In recent years, the oil industry has faced increasingly severe challenges posed by global climate change. Numerous international, domestic and regional treaties and agreements which restrict carbon emissions have been executed and become effective. China and some other countries in which we operate have adopted, or are considering the adoption of, regulations to reduce carbon emissions. These include the adoption of carbon emissions “cap and trade” regimes, carbon taxes, more stringent efficiency standards, and incentives or mandates for clean energy. The Chinese government has announced that China strives to hit carbon peak by 2030 and achieve carbon neutrality by 2060. These policies and measures will bring opportunities to our new energy business, but may lead to changes to our oil extraction and refining businesses. We will continue to enhance our oil and gas exploration and development while seek to explore and use new energy sources, aiming to achieve an integrated development of fossil energy and clean energy. Our proposed initiatives to pursue this strategy will include without limitation: to put more efforts into the development and exploitation of geothermal energy, solar energy, wind energy, hydrogen energy and other new energy; to promote the substitution of energy used for our operation with clean energy; to promote the development of gas-to-power business; to increase investments in R&D of new energies; and to enhance carbon capture, utilization and storage (“CCUS”) measures. We will strive to achieve the following goals (i) by 2025, our new energy production capacity to reach 7% of our domestic energy supply capacity; (ii) by 2035, the volume of our external supply of carbon-free energy to exceed the fossil energy we consume, and to achieve an equal share among new energy, oil and gas in our total production capacity (i.e., each accounting for one-third), and (iii) by around 2050, to achieve near-zero emissions, when our new energy capacity to amount to half of our total energy production capacity. In the course of striving to achieve these goals, we expect to encounter the following major risks:

•	In terms of market position: As a result of the acceleration of energy transition in China, clean energy players are expected to be offered more development opportunities and become increasingly competitive. On the contrary, the share of fossil fuels in primary energy consumption is expected to decrease. The Chinese government plans to increase the share of non-fossil fuels in primary energy consumption from 15% in 2019 to around 25% by 2030. This would have an effect on our position in the refined oil market and the development strategies for the new energy market that we are currently implementing.
•	In terms of liquidity: In order to achieve a success in relation to energy transition initiatives, we expect to spend more on developing and obtaining new technologies and investing in and implementing our business expansion strategy. This will require our company to maintain an appropriate level of liquidity sufficient to support our transition strategies.
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•	In terms of compliance: the Chinese government is expected to introduce more stringent policies and standards relating to climate change (mainly relating to energy conservation and carbon emission reduction), which could increase our compliance cost. Any noncompliance may subject us to government investigation or penalties.
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•	In terms of legal proceedings: as advised by our PRC legal counsel, at present, under existing PRC laws, the legal basis for initiating any environment-related litigation mainly relates to the laws governing natural resources, environmental or ecological protection. Whether such legal basis is directly applicable to climate change-related litigation remains subject to clarification by further legislation or judicial interpretation. There have only been a few cases in China that are directly or indirectly related to climate change and they are not typical enough to be referred to as precedents. As a result, the potential impact of climate change-related litigation in China on us is not estimable at this stage. Despite that, we have noticed that the Chinese government is working on building a comprehensive legal regime with respect to climate change, and hence we cannot rule out the risk of potential legal proceedings involving oil and gas companies or petrochemical companies in the future.
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•	In terms of reputation: A low carbon profile has become an important indication of the influence of energy companies and a major concern for stakeholders. If we fail to meet our low-carbon development goals, our reputation may be affected adversely.
•	In terms of physical impact: Natural disasters such as typhoons, rainstorms, floods, and landslides caused by climate change may directly damage our assets and business operations, and the resulting tentative disruption to the supply chain will indirectly affect our operations. As we are an integrated oil and gas operator, with operations extending from upstream to downstream, any tentative supply chain disruption will primarily impact the supply among different segments within our company, and to a lesser extent, the supply to external customers and suppliers. The aforementioned natural disasters may result in, among others, flooding of oil and gas wells, limitations on our ability to operate certain facilities, pipelines exposure, road disruptions and shipping suspensions, any of which can reduce the production of our oil and gas fields, and reduce the workload of our refineries and/or the sales volumes of our sales enterprises. In extreme scenarios, it may cause tentative disruption of delivery and supply at various parts of the supply chains and adversely affect us and our external suppliers and customers.
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See also “Risk Factors – Risks Related to Environmental Protection and Safety Production”.

Risks Related to Environmental Protection and Safety Production

Compliance with changes in laws, regulations and obligations relating to environmental protection and safety production could result in substantial expenditures and reduced profitability from increases in operating costs. In recent years, the PRC government has implemented environmental and ecological protection and safety production laws and regulations and has gradually raised refined oil standards which have stricter requirements for our business, and the requirements as to the increase in provision of safety production funds led to an increase in our operating costs. In the future, the PRC government will implement more stringent environmental protection and safety production regulations and impose higher standards on refined oil products. Compliance with these new regulations and standards will increase our costs and expenses.

Our oil and gas exploration and production activities shall comply with relevant PRC environmental protection laws and regulations governing abandonment and disposal processes for oil and gas exploration and production activities. We have established standard abandonment procedures pursuant to these laws and regulations. We have included under our asset retirement obligations the costs for these abandonment activities and this asset retirement obligation is based on our best estimate of future abandonment expenditures. In addition, PRC national or local governments may enact stricter environmental protection regulations and our abandonment costs may increase as a result.

Exploring, producing and transporting crude oil and natural gas and producing and transporting refined products and chemical products involve many hazards. These hazards may result in fires, explosions, spills, blow-outs and other unexpected or dangerous conditions causing personal injuries or death, property damage, environmental damage and interruption of operations.

Some of our oil and natural gas fields and production facilities are surrounded by residential areas or located in areas where natural disasters, such as earthquakes, floods and sandstorms, tend to occur more frequently than in other areas. Any natural disaster or accident encountered by our oil or natural gas fields or production facilities would aggravate any personal injuries, deaths and property damage.

Significant operating hazards and natural disasters such as earthquake, tsunami and health epidemics and pandemic (such as the 2020-2021 pandemic), may cause partial interruptions to our operations, property damage, personal injuries or deaths and environmental damage that could have an adverse impact on our production and operations and financial condition.

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Risks Related to Oil and Gas Reserves

The crude oil and natural gas reserves data in this annual report are only estimates. The reliability of reserves estimates depends on a number of factors, assumptions and variables, such as the quality and quantity of our technical and economic data and the prevailing oil and gas prices applicable to our production, some of which are beyond our control and may prove to be incorrect over time. Results of drilling, testing and production after the date of estimates may require substantial upward or downward revisions in our reserves data. Our actual production, revenues and expenditures with respect to our reserves may differ materially from these estimates because of these revisions.

We are actively pursuing business opportunities outside China to improve our international operations. We cannot assure you, however, that we can successfully locate sufficient, if any, alternative sources of crude oil supply due to the complexity of the international political, economic and other conditions. If we fail to obtain sufficient alternative sources of crude oil supply, our results of operations and financial condition may be materially and adversely affected.

Risks Related to Liquidity

We have made best endeavors to ensure an appropriate level of liquidity and financing ability. However, as we are currently making our efforts to find high-quality large-scale reserves, strengthening capacity building in key areas, constructing new, expanding and upgrading some existing, refinery and petrochemical facilities and expanding the oil and gas terminal markets, we may have to make substantial capital expenditures and investments. In addition, we are endeavoring to advance energy transition and striving to achieve our pre-set goals (see also “Risks Related to Climate Change”). We cannot assure you that the cash generated by our operations will be sufficient to fund these development plans or that our actual future capital expenditures and investments will not significantly exceed our current planned amounts. If either of these conditions arises, we may have to seek external financing to satisfy our capital needs. Our inability to obtain sufficient funding for our development plans could adversely affect our business, financial condition and results of operations.

Risks Related to Audit Reports Prepared by an Auditor who is not Inspected by the Public Company Accounting Oversight Board

As a company with shares registered with the SEC, and previously traded publicly in the United States, our independent registered public accounting firm is required under the laws of the United States to be registered with the Public Company Accounting Oversight Board, or the PCAOB, and undergo regular inspections by the PCAOB to assess its compliance with the laws of the United States and professional standards. Under PRC laws, the PCAOB’s inspection of a registered public accounting firm’s audit work in China should be by way of regulatory cooperation from relevant Chinese authorities. The CSRC also stated that cross-border audit supervision should be realized through regulatory cooperation between China and the U.S. Therefore, the PCAOB’s inspection of our independent registered public accounting firm should be realized through regulatory cooperation between China and the U.S. In 2020, the Holding Foreign Companies Accountable Act, or the HFCAA, was signed into law. According to the HFCAA, where a covered foreign company listed in the U.S. retains an auditor who has a branch or office located in a foreign jurisdiction, and the PCAOB is unable to completely inspect or investigate the auditor for three consecutive years because of a position taken by an authority in the foreign jurisdiction, the SEC may prohibit securities of such covered foreign company from being traded on any national securities exchange or over-the-counter market in the U.S. and such covered foreign company is required to satisfy certain additional disclosure requirements. On December 29, 2022, President Biden signed the 2023 Consolidated Appropriations Act, which, among other things, amended the HFCAA to reduce the number of consecutive years an issuer can be identified as a Commission-Identified Issuer before the SEC must impose an initial trading prohibition on the issuer’s securities from three years to two years. In December 2021, the SEC issued the rules to implement the requirements of the HFCAA. In December 2021, PCAOB issued the list of accounting firms that it is unable to inspect or investigate completely as determined by

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it (the “2021 Determination”), which included our external auditor. In May 2022, we were identified as a covered issuer. In August 2022, the CSRC, the Ministry of Finance (the “MOF”) and the PCAOB signed an audit supervision cooperation agreement. From September 2022, PCAOB conducted audit inspections in Hong Kong. In December 2022, PCAOB announced that it had secured complete inspection and vacated its 2021 Determination. The SEC subsequently announced that it would no longer identify issuers to which the HFCAA applies until the PCAOB again decides that it cannot conduct a complete inspection and investigation.

Our shares have been delisted from the NYSE on September 8, 2022 and we have terminated our ADR program on October 17, 2022. We expect to deregister our shares with the SEC upon satisfaction of the relevant conditions under the Securities Exchange Act. Prior to the deregistration, we will continue to need to meet the disclosure obligations under the Securities Exchange Act. Given that our shares have been delisted from the NYSE, the risk of trading prohibition under the HFCAA no longer applies to us. However, if PCAOB determines that it cannot conduct complete inspection and investigation of accounting firms located in China again, the risk of resuming the implementation of the HFCAA may adversely affect the value of our H Shares.

By conducting inspections of independent registered public accounting firms, the PCAOB has at times identified deficiencies in the audit procedures and quality control procedures of those accounting firms. Such deficiencies may be addressed in those accounting firms’ future inspection process to improve their audit quality. If PCAOB is unable to conduct regular inspections of audit work undertaken in China again, it may cause the investors to lose confidence in the financial statements and reports of the issuers audited by such independent registered public accounting firms.

Risks Related to Effectiveness of Internal Control over Financial Reporting

The SEC, as required by Section 404 of the Sarbanes-Oxley Act of 2002, has adopted rules requiring every public company in the United States to include a management report on such company’s internal control over financial reporting in its annual report, which contains management’s assessment of the effectiveness of our internal control over financial reporting. In addition, an independent registered public accounting firm must attest to and report on the effectiveness of our internal control over financial reporting. Although our management concluded that our internal control over our financial reporting as of December 31, 2022 was effective, and our independent registered public accounting firm has issued an attestation report, which concluded that our internal control over financial reporting was effective in all material aspects as of December 31, 2022, we may discover other deficiencies in the course of our future evaluation of our internal control over our financial reporting and may be unable to remediate such deficiencies in a timely manner. If we fail to maintain the adequacy of our internal control over financial reporting, we may not be able to conclude that we have effective internal control over financial reporting on an ongoing basis, in accordance with the Sarbanes-Oxley Act. Moreover, effective internal control is necessary for us to produce reliable financial reports and is important to prevent fraud. As a result, our failure to maintain effective internal control over financial reporting could result in the loss of investor confidence in the reliability of our financial statements, which in turn could harm our business and negatively impact the trading prices of our shares.

Risks Relating Financial Reporting Differences

As a foreign private issuer, we are exempt from certain disclosure requirements under the U.S. Exchange Act, which may afford less protection to you than you would enjoy if we were a domestic U.S. company. As a foreign private issuer, we are exempt from, among other things, the rules prescribing the furnishing and content of proxy statements under the U.S. Exchange Act and the rules relating to selective disclosure of material nonpublic information under Regulation FD under the U.S. Exchange Act. In addition, our executive officers, directors and principal shareholders are exempt from the reporting and short-swing profit and recovery provisions contained in Section 16 of the U.S. Exchange Act. We are also not required under the U.S. Exchange Act to file periodic reports and financial statements with the SEC as frequently or as promptly as domestic U.S. companies with securities registered under the U.S. Exchange Act. For example, in addition to annual

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reports with audited financial statements, domestic U.S. companies are required to file with the SEC quarterly reports that include interim financial statements reviewed by an independent registered public accounting firm and certified by the companies’ principal executive and financial officers. By contrast, as a foreign private issuer, we are not required to file such quarterly reports with the SEC or to provide quarterly certifications by our principal executive and financial officers. Although we are required by the listing rules of SSE with respect to our A Shares to publish quarterly and semi-annual reports and also required by listing rules of HKSE with respect to our H Shares to publish semi-annual reports, and such reports are furnished to the SEC on Form 6-K, our financial statements included in the reports are not reviewed by an independent registered public accounting firm, and are only reviewed and signed by all our directors, president and CFO.

Risks Related to Employee Misconduct

We may not be able to detect or prevent employee misconduct, including misconduct by senior management, and such misconduct may damage our reputation and could adversely affect the price of our shares. We have gradually reinforced and enhanced our internal control and corporate governance policies and procedures in order to strengthen our ability to detect and prevent employee misconduct. We cannot assure you, however, that we will be able to detect or prevent such misconduct in a timely fashion, or at all. If we fail to prevent employee misconduct, our reputation may be harmed, and the trading price of our shares could be adversely affected.

Risks Related to Cyber Security

In recent years, we have increased the utilization of artificial intelligence, cloud computing, big data, Internet of Things, and other types of information technology (“IT”) in our production and operations, our activities are therefore heavily dependent on the reliability and security of our IT systems. Our IT systems may suffer disruptions due to technical failure and disruptions, cyber-attack, computer intrusions and viruses, power and network outages or natural disasters. We have adopted multi-layer technological measures for prevention and detection of cybersecurity problems, and we also train our employees in order to improve their awareness and ability to detect and respond to cybersecurity situations. If our measures prove to be insufficient, deficiencies in any processes could adversely affect or disrupt our normal operations or result in incidents or property loss or personal injuries. Cyberattacks may also result in proprietary information being altered, lost, or stolen, result in employee, customer, or third-party information or material intellectual property being breached, or otherwise disrupt our business operations. In case we suffer any grave cybersecurity incident, we could face regulatory actions, third party litigations or reputational harm in addition to being required to make compensation for direct losses resulting from the incident. As a result, we and our customers, employees, or third parties could be adversely affected, potentially having a material adverse effect on our business and financial conditions.

Risks Related to Insurance

Due to the fact that oil industry is susceptible to high and industry-specific risks in nature, the current ordinary commercial insurance cannot cover all the risks we are exposed to. We maintain insurance coverage against liability risks relating to assets that have significant operational risks, auto risks, and third-party liabilities for personal, property, and environmental risks, but not all, potential losses. We may suffer material losses resulting from uninsurable or uninsured risks or insufficient insurance coverage.

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Item 4— INFORMATION ON THE COMPANY

Introduction

History and Development of Our Company

Our legal name is “中国石油天然气股份有限公司” and its English translation is PetroChina Company Limited.

We were established as a joint stock company with limited liability under the Company Law of the PRC on November 5, 1999 as part of a restructuring in which CNPC transferred to us most of the assets and liabilities of CNPC relating to its exploration and production, refining and marketing, chemicals and natural gas businesses. In April 2000, we completed a global offering of H Shares and ADSs. In September 2005, we completed a follow-on offering of over 3 billion H Shares. In October 2007, we issued 4 billion A Shares. The A Shares were listed on the SSE in November 2007. As of March 31, 2023, CNPC beneficially owned 150,923,565,570 A Shares and 291,518,000 H Shares in us, representing approximately 82.62% of our share capital in aggregate. The H Shares held by CNPC were through Fairy King Investments Limited, an overseas wholly owned subsidiary of CNPC.

We are the largest oil and gas producer and seller occupying a leading position in the oil and gas industry in China, one of the largest companies in China in terms of sales revenue, and also one of the largest companies in the world. Currently, our principal business lines include the exploration, development, transmission, production and marketing of crude oil, natural gas and new energy; the refining of crude oil and petroleum products, as well as the production and marketing of basic petrochemical products, derivative chemical products and other chemical products and new materials; the marketing and trading of refined oil products and non-oil products; and the sale of natural gas.

Currently, substantially all of our crude oil and natural gas reserves and production-related assets are located in China. Our exploration, development and production activities commenced in the early 1950s. For seven decades, we have conducted crude oil and natural gas exploration activities in many regions of China. We commenced limited refining operations in the mid-1950s. Our chemicals operations commenced in the early 1950s. Our natural gas transmission and marketing activities commenced in Sichuan in Southwestern China in the 1950s. In the early 1960s, we began producing ethylene.

We have continued to pursue attractive business opportunities outside China as part of our business growth strategy to utilize both domestic and international resources to strengthen our competitiveness. Since 2005, we have acquired interests in various oil and natural gas assets in several countries, which significantly expanded our overseas operations and effectively increased our oil and gas reserves and production volumes. At the same time, we have been maintaining certain proportion of imported crude oil and natural gas in accordance with our needs. In 2020, 2021 and 2022, we imported approximately 679.3 million barrels, 583.1 million barrels and 528.8 million barrels of crude oil, respectively.

To address the climate change concerns, we have adopted a three-steps energy transition plan. We will strive to achieve the following goals (i) by 2025, our new energy production capacity to reach 7% of our domestic energy supply capacity; (ii) by 2035, the volume of our external supply of carbon-free energy to exceed the fossil energy we consume, and to achieve an equal share among new energy, oil and gas in our total production capacity (i.e., each accounting for one-third), and (iii) by around 2050, to achieve near-zero emissions, when our new energy capacity to amount to half of our total energy production capacity.

Our headquarters are located at 9 Dongzhimen North Street, Dongcheng District, Beijing, China, 100007, and our telephone number at this address is (8610) 5998-2622. Our website address is www.petrochina.com.cn. The information on our website is not part of this annual report. We file our annual reports on Form 20-F, interim reports on Form 6-K and other documents required to be filed with the SEC on the SEC’s website www.sec.gov.

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Our Corporate Organization Structure

The following chart illustrates our corporate organization structure as of March 31, 2023.

(1)	Indicates approximate shareholding.
(2)	Indicates approximate shareholding, including 291,518,000 H Shares indirectly held by CNPC as of March 31, 2023 through Fairy King Investments Limited, a wholly owned overseas subsidiary of CNPC.
---	---
(3)	Includes PetroChina Exploration & Development Research Institute, PetroChina Planning & Engineering Institute, PetroChina Petrochemical Research Institute and several other companies.
---	---
*	Our major subsidiaries, all included in the chart above, are classified into different business segments based on the nature of their principal business activities. See Note 19 to our financial statements for a detailed discussion. Other than the major subsidiaries, companies in which we hold equity interest mainly include China Oil & Gas Pipeline Network Corporation (“PipeChina”), CNPC Finance Co., Ltd., CNPC Captive Insurance Company Limited and other associate companies and joint ventures as well as other equity investments measured at fair value through other comprehensive income. See Note 17 and Note 18 to our financial statements for a detailed discussion.
---	---

For information on capital expenditures, please see “Item 5 — Operating and Financial Review and Prospects — Liquidity and Capital Resources — Capital Expenditures and Investments.”

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Oil, Gas and New Energy

We engage in crude oil and natural gas exploration, development and production and new energy business. Substantially all of our estimated proved crude oil and natural gas reserves are located in China, principally in Northeastern, Northern, Southwestern and Northwestern China. Meanwhile, we have enhanced our overseas cooperation and expanded our strategic presence in five major overseas oil and gas cooperation regions by conducting new project development.

In 2022, we strengthened our overall research and top-down design in the domestic oil and gas business, risk exploration in new areas and new fields and the concentrated exploration and fine exploration in key reserve-increasing areas and strategic replacement areas. We achieved multiple breakthroughs and important discoveries in Tarim, Junggar, Sichuan, Bohai Bay and other key basins, developing into various large-scale oil and gas reserve areas. We vigorously enhanced the stable output in the existing oil and gas fields and optimized the layout of production capacity in new fields, and the output of oil and gas continued to increase. In 2022, our domestic business achieved a crude oil output of 767.4 million barrels, representing an increase of 1.9% as compared with last year, a marketable natural gas output of 4,471.3 Bcf, representing an increase of 5.9% as compared with last year, and an oil and natural gas equivalent output of 1,512.6 million BOE, representing an increase of 3.8% as compared with last year.

In 2022, our overseas oil and gas business adhered to high quality development, and important discoveries have been made in various projects such as Niger and Chad; we enhanced full-cycle management of development plans, promoting various key capacity projects put into operation. In 2022, we enhanced the acquisition of new projects and cooperation in existing projects, completed the restructuring and closing of the Rumaila project, and extended the contract term of the Aktobe project. In 2022, the crude oil output from overseas operations amounted to 138.8 million barrels, representing an increase of 3.3% as compared with last year, the output of marketable natural gas from overseas operations was 203.7 Bcf, representing an increase of 3.0% as compared with last year; and the output of oil and gas equivalent from overseas operations was 172.8 million BOE, representing an increase of 3.2% as compared with last year, accounting for 10.3% of our total oil and natural gas equivalent output.

In 2022, our crude oil output amounted to 906.2 million barrels, representing an increase of 2.1% as compared with last year. The marketable natural gas output reached 4,675.0 Bcf, representing an increase of 5.8% as compared with last year. The oil and natural gas equivalent output amounted to 1,685.4 million BOE, representing an increase of 3.7% as compared with last year.

As of December 31, 2022, our exploration and exploitation licenses for oil and gas (including coalbed methane) covered a total area of approximately 240.7 million acres, including the exploration licenses covering a total area of approximately 203.0 million acres and the production licenses covering a total area of approximately 37.7 million acres.

The following table sets forth the financial and operating data of our oil, gas and new energy segment for each of the years ended December 31, 2020, 2021 and 2022:

	Year Ended December 31,
	2020		2021		2022
Revenue (RMB in millions)		530,807		688,334		929,279
Profit from operations (RMB in millions)		23,092		68,452		165,748
Proved developed and undeveloped reserves
Crude oil (million barrels)		5,206.1		6,063.8		6,418.4
Natural gas (Bcf)		76,437.1		74,915.9		73,452.7
Production
Crude oil (million barrels)		921.8		887.9		906.2
Natural gas for sale (Bcf)		4,221.0		4,420.0		4,675.0

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Reserves

As of December 31, 2022, our total estimated proved reserves of crude oil was approximately 6,418.4 million barrels and our total estimated proved reserves of natural gas was approximately 73,452.7 Bcf. As of December 31, 2022, our proved developed reserves of crude oil accounted for 86.8% of our total proved reserves of crude oil, and our proved developed reserves of nature gas accounted for 56.5% of our total proved reserves of natural gas. Total proved hydrocarbon reserves, including our overseas crude oil reserves of 722.5 million barrels and overseas natural gas reserves of 1,288.1 Bcf, increased by 0.6% from approximately 18,549.8 million BOE as of December 31, 2021 to approximately 18,660.6 million BOE as of December 31, 2022. Natural gas reserves accounted for 65.6% of our total proved hydrocarbon reserves as of December 31, 2022.

Approximately 54%, 57% and 58% of our estimated proved reserves as of December 31, 2020, 2021 and 2022, respectively, were assessed by our internal assessment team and audited by our independent engineering consultants. Other portions were based on the estimates performed by our independent engineering consultants, DeGolyer and MacNaughton, McDaniel & Associates, Ryder Scott and GLJ. The reserves assessments and reports of our company were performed and prepared in compliance with SEC’s oil and gas reserves reporting rules. Our reserves estimates include only crude oil and natural gas which we believe can be reasonably produced within the current terms of our production licenses or within the terms of the licenses which we are reasonably certain to be renewed. See “Regulatory Matters — Exploration Licenses and Production Licenses” for a discussion of our production licenses. Also see “Item 3 — Key Information — Risk Factors — Risks Related to Oil and Gas Reserves” for a discussion of the uncertainty inherent in the estimation of proved reserves.

We have adopted methods generally accepted in the industry to assess our proved reserves, including production decline curve analysis methods, volumetric methods, material balance methods, and reservoir simulation methods, or a combination of these methods, and took into account economic conditions in performing the assessments. Basic data used by us to assess our proved reserves estimates include geological, geophysical, engineering and financial data as well as other relevant data. In order to satisfy the requirements for establishing a reasonable certainty for proved reserves, including material increase in proved reserves estimates, we adopted field-tested repeatable and consistent reliable technologies, including, among others, logging, 3D seismic data, rock core analyses, static or dynamic pressure tests and production well testing. To the extent that appropriate analogous reservoirs are available, we use analogous reservoir parameters to enhance the quality of our reserves assessment results so as to be consistent with the reliable results required for proved reserves assessment as specified in applicable SEC rules.

Internal Controls Over Reserves Estimates

We have an oil and gas reserves management committee, which is chaired by the president of our company.

We require our employees engaged in oil and gas reserves evaluation and audit must hold a competent professional qualification. Both our headquarters and regional companies are staffed with reserves personnels. We have a reserves management department in our oil, gas and new energy branch company. The main staff of the department have over 20 years of experience in the oil industry and many years of experience in reserves evaluation pursuant to SEC rules. All of the staff of the department hold national certificates for reserves assessment. Each regional company has a reserves management committee and a multi-disciplinary reserves research office. Mr. Duan Xiaowen from the reserves administration division of our oil, gas and new energy branch company, is the person in charge of our reserves estimation. Mr. Duan holds a bachelor’s degree in geology and a master’s degree in business administration. He has many years of work experience in oil and gas exploration and development industry and has been engaged in reserves estimate and management for a long time. Since 2008, Mr. Duan has been participating in the supervision of reserves estimation and management in our company. In 2016, Mr. Duan became the division head primarily responsible for overseeing the preparation of the reserves estimates, estimation technology and management. The reserves research offices of the regional

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companies are responsible for estimating newly discovered reserves and updating the estimates of existing reserves. The results of our oil and gas reserves assessment are subject to a two-level review by both the regional companies and our oil, gas and new energy branch company, with final examination and approval of the reserves management committee.

In addition, we retain independent assessment firms to perform reserves evaluation and/or audit our estimates of proved reserves each year in accordance with relevant SEC rules. We disclose the reserves in accordance with the SEC’s oil and gas reporting rules. The independent engineering consultants providing us with reserves audit and/or assessment services for 2022 were DeGolyer and MacNaughton, Ryder Scott Company L.P., GLJ Petroleum Consultants and McDaniel & Associates Consultants Ltd. None of them or their partners, senior officers or employees has any direct or indirect financial interest in our company and the remunerations to the firms are not in any way contingent upon reported reserves estimates. The summaries of the reserves assessment reports and audit reports issued to us by the foregoing independent engineering consultants have been included as exhibits 15.1 through 15.5 to this annual report on Form 20-F.

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The following table sets forth our estimated reserves and the changes in the years ended December 31, 2020, 2021 and 2022.

	Crude Oil and<br>Condensate^(1)^			Natural Gas ^(2)^			Combined
	(Million barrels)			(Bcf)			(BOE, in millions)
Proved developed and undeveloped reserves
On a consolidated basis:
Reserves as of December 31, 2020		5,206.1			76,437.1			17,945.6
Revisions of previous estimates		1,159.1			(2,011.6	)		824.1
Extensions and discoveries		472.3			4,885.3			1,286.5
Improved recovery		116.7			27.0			121.2
Purchased		—			—			—
Sold		(2.5	)		(1.9	)		(2.8	)
Production for the year		(887.9	)		(4,420.0	)		(1,624.8	)
Reserves as of December 31, 2021		6,063.8			74,915.9			18,549.8
Revisions of previous estimates		511.4			(3,155.9	)		(14.4	)
Extensions and discoveries		622.9			6,236.8			1,662.3
Improved recovery		124.9			130.9			146.7
Purchased		1.6			—			1.6
Sold		—			—			—
Production for the year		(906.2	)		(4,675.0	)		(1,685.4	)
Reserves as of December 31, 2022		6,418.4			73,452.7			18,660.6
Proved developed reserves
As of December 31, 2020		4,653.6			42,076.7			11,666.4
Of which: domestic		3,987.0			40,732.3			10,775.8
Overseas		666.6			1,344.4			890.6
As of December 31, 2021		5,374.8			42,575.6			12,470.7
Of which: domestic		4,799.6			41,343.5			11,690.2
Overseas		575.2			1,232.1			780.5
As of December 31, 2022		5,574.2			41,508.4			12,492.3
Of which: domestic		5,024.3			40,449.3			11,765.9
Overseas		549.9			1,059.1			726.4
Proved undeveloped reserves
As of December 31, 2020		552.5			34,360.4			6,279.2
Of which: domestic		387.9			34,062.0			6,064.9
Overseas		164.6			298.4			214.3
As of December 31, 2021		689.0			32,340.3			6,079.1
Of which: domestic		486.0			32,116.5			5,838.8
Overseas		203.0			223.8			240.3
As of December 31, 2022		844.2			31,944.3			6,168.3
Of which: domestic		671.6			31,715.3			5,957.5
Overseas		172.6			229.0			210.8
Share of proved developed and undeveloped reserves in associates and joint ventures calculated by the equity method
As of December 31, 2020		195.5			362.7			256.0
As of December 31, 2021		208.5			511.4			293.7
As of December 31, 2022		175.6			537.1			265.1
(1)	As of December 31, 2022, the crude oil and condensate reserves included 318.3 million barrels of natural gas liquid.
---	---
(2)	Represents the remaining natural gas after on-site condensate separation treatment and minus the vented combustion gas.
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As of December 31, 2020, 2021 and 2022, our total proved developed and undeveloped reserves on consolidated basis and on equity method, were 18,202 million BOE, 18,844 million BOE and 18,926 million BOE, including 5,402 million, 6,272 million and 6,594 million barrels of crude oil and condense, and 76,799.8 Bcf, 75,427.3 Bcf and 73,989.8 Bcf of natural gas.

Our proved undeveloped reserves were 6,168.3 million BOE as of December 31, 2022, representing an increase of 1.5% as compared to 6,079.1 million BOE for 2021. The main changes in our proved undeveloped reserves in 2022 included (i) an increase of 1,662.3 million BOE through extensions and discoveries; (ii) an increase of 146.7 million BOE through improved recovery; (iii) a reduction of 459.2 million BOE due to certain downward adjustments primarily for purposes of optimizing investment in proved undeveloped reserves; (iv) the conversion of 1,260.7 million BOE of proved undeveloped reserves into proved developed reserves; and (v) an increase of 0.2 million BOE through purchase. In 2022, we spent RMB161,933 million on developing proved undeveloped reserves.

The overwhelming majority of our proved undeveloped reserves are situated around the oil fields that are currently producing. Some of our proved undeveloped reserves of natural gas are scheduled for development more than five years after their initial disclosure primarily due to the effect of long-term natural gas supply contracts. The sale of natural gas produced from our reserves located in China is subject to our long-term contractual obligations to provide a stable supply of natural gas to customers. We sell all of the natural gas under long-term supply arrangements with customers.

There are mainly two types of long-term supply arrangements. The first is multi-year supply contracts with terms ranging from 20 to 30 years that can be extended upon mutual agreement. The second type is renewable annual contracts. The majority of the natural gas produced in our gas fields in China is put into the nationwide, long-range pipeline system to be sold to customers who have entered into multi-year supply contracts with us in the areas where the long-range pipeline system covers. A small portion of the natural gas produced by our company is put into local pipeline systems to be sold to customers in the areas adjacent to our gas fields. These customers typically have formed de-facto long-term relationships with our company over the years and enter into supply contracts with us before the year end to determine the amount of gas to be purchased for the next year, with such contracts being renewed every year. In general, our supply relationships with customers under the annual contracts have existed for more than ten years.

Mainly as a result of our contractual obligations to ensure a long-term, stable supply of natural gas to customers, we must maintain a relatively large amount of proved undeveloped natural gas reserves and develop them over an extended period of time (in some cases, longer than five years).

Most of our proved reserves are located in China, and no individual country, region or continent outside of China contains 15% or more of our total proved reserves. In the years ended December 31, 2020, 2021 and 2022, our overseas proved reserves, taken together, accounted for 6.2%,5.5% and 5.0% of our total proved reserves, respectively.

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The following tables set forth our crude oil and natural gas proved reserves and proved developed reserves by region as of December 31, 2020, 2021 and 2022.

	As of December 31,
	2020				2021				2022
	Proved<br>Developed<br>and<br>Undeveloped		Proved<br>Developed		Proved<br>Developed<br>and<br>Undeveloped		Proved<br>Developed		Proved<br>Developed<br>and<br>Undeveloped		Proved<br>Developed
Crude oil reserves (Million barrels)
Daqing		928.6		881.5		960.1		936.6		929.3		922.5
Changqing		1,262.5		1,185.8		1,516.1		1,380.4		1,607.1		1,342.9
Xinjiang		717.2		677.8		825.9		774.1		961.8		864.0
Other regions in China		1,479.6		1,254.9		1,983.5		1,708.5		2,197.7		1,894.9
Overseas		818.2		653.6		778.2		575.2		722.5		549.9
Total		5,206.1		4,653.6		6,063.8		5,374.8		6,418.4		5,574.2
Natural gas Reserves^(1)^ (Bcf)^^
Changqing		25,969.8		10,700.7		25,467.6		10,910.4		23,806.1		10,610.0
Tarim		22,680.6		15,091.9		21,128.9		14,711.3		19,633.1		13,118.3
Chuanyu		14,933.6		8,316.5		15,580.2		9,074.3		16,663.8		10,030.0
Other regions in China		11,212.0		6,624.9		11,283.3		6,647.5		12,061.6		6,691.0
Overseas		1,641.1		1,342.7		1,455.9		1,232.1		1,288.1		1,059.1
Total		76,437.1		42,076.7		74,915.9		42,575.6		73,452.7		41,508.4
(1)	Represents the remaining natural gas after on-site condensate separation treatment and minus the vented combustion gas.
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Exploration and Development

We currently conduct exploration and development in 12 provinces, two municipalities under the direct administration of the central government and three autonomous regions in China as well as in certain regions in other countries.

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The following table sets forth the number of wells we drilled, or in which we owned an interest, and the results thereof, in 2020, 2021 and 2022.

Year		Daqing		Xinjiang		Changqing		Tarim		Other regions<br>in China ^(1)^		Overseas		Total
2020
	Net exploratory wells drilled^(2)^		166		151		661		35		526		24.0		1,563.0
	Crude oil		142		120		380		11		345		17.9		1,015.9
	Natural gas		9		9		53		8		65		1.8		145.8
	Dry^(3)^		15		22		228		16		116		4.3		401.3
	Net development wells drilled^(2)^		3,264		1,048		4,630		123		2,998		210.5		12,273.5
	Crude oil		3,240		1,040		3,082		57		2,349		209.5		9,977.5
	Natural gas		11		8		1,512		59		642		1.0		2,233.0
	Dry^(3)^		13		—		36		7		7		—		63.0
2021
	Net exploratory wells drilled^(2)^		207		149		604		39		457		23.3		1,479.3
	Crude oil		160		86		371		15		265		15.6		912.6
	Natural gas		17		17		43		8		90		1.1		176.1
	Dry^(3)^		30		46		190		16		102		6.6		390.6
	Net development wells drilled^(2)^		3,387		736		4,034		75		3,124		266.4		11,622.4
	Crude oil		3,370		732		2,483		42		2,497		262.2		9,386.2
	Natural gas		6		4		1,518		30		620		4.2		2,182.2
	Dry^(3)^		11		—		33		3		7		—		54.0
2022
	Net exploratory wells drilled^(2)^		167		136		557		31		460		24.2		1,375.2
	Crude oil		112		116		318		9		232		18.2		805.2
	Natural gas		16		20		43		8		116		2		205.0
	Dry^(3)^		39		—		196		14		112		4		365.0
	Net development wells drilled^(2)^		3,449		485		4,367		102		3,250		286.7		11,939.7
	Crude oil		3,429		465		2,641		75		2,720		276.8		9,606.8
	Natural gas		9		20		1,702		25		529		9		2,294.0
	Dry^(3)^		11		—		24		2		1		0.9		38.9
(1)	Represents the Liaohe, Jilin, Huabei, Dagang, Southwest, Tuha, Qinghai, Jidong, Yumen, Zhejiang, Southern and other oil regions.
---	---
(2)	“Net” wells refer to the wells after deducting interests of others.
---	---
(3)	“Dry” wells are wells with insufficient reserves to sustain commercial production.
---	---

As of December 31, 2022, we had 441 net wells in the process of being drilled, including 6.7 net wells located outside of China. For the year ended December 31, 2022, we completed 7,282 net wells with multiple completions, including 34.6 net wells located outside of China.

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Oil-and-Gas Properties

The following table sets forth the gross and net productive crude oil and natural gas wells and acreage we owned an interest as of December 31, 2022.

									Acreage ^(1)^ (Thousand acres)
Oil and<br>Gas<br>Region ^(3)^	Productive Wells ^(1)^								Developed								Undeveloped
	Crude Oil				Natural Gas				Crude Oil				Natural Gas				Crude Oil				Natural Gas
	Gross		Net		Gross		Net		Gross		Net		Gross		Net		Gross		Net		Gross		Net
Daqing		78,477		69,323		755		755		1,404.89		1,395.54		196.19		196.19		438.98		438.98		352.81		352.81
Changqing		69,200		63,922		24,863		23,701		2,049.27		2,049.27		9,051.79		8,871.12		1,017.47		1,017.47		3,240.56		3,012.64
Xinjiang		33,921		27,690		286		286		502.88		486		74.37		74.37		210.08		210.08		18.24		18.24
Tarim		1,707		1,707		825		787		436.94		436.94		379.32		371.13		419.12		419.12		241.75		241.75
Other Regions in China ^(2)^		76,709		69,102		15,673		14,529		1,625.91		1,564.11		2,032.92		1,951.09		686.66		686.66		2,405.67		2,361.84
Overseas Total		11,050		8,783.7		610		239.3		511.84		336.33		90.75		39.70		90.64		69.85		20.06		11.02
Total		271,064		240,527.7		43,012		40,297.3		6,531.73		6,268.19		11,825.34		11,503.60		2,862.95		2,842.16		6,279.09		5,998.30
(1)	Includes all wells and acreage in which we have an interest.
---	---
(2)	Represents the Liaohe, Jilin, Huabei, Dagang, Southwestern, Tuha, Qinghai, Jidong, Yumen, Zhejiang, Southern and other oil regions.
---	---
(3)	The gross and the net number of wells and amounts of acreage in the oil regions in which we operate solely and not in partnership with any other party are the same.
---	---

The term of our production licenses covering our acreage located in China varies from 10 to 30 years, depending on the actual size of the blocks. The production licenses with respect to our oil and gas acreage located in China are renewable upon application prior to expiration. Our developed and undeveloped acreage located outside China relates to multiple concessions, blocks and leases, which have materially different contractual terms and conditions. The term of our licenses for acreage development outside China generally varies from 20 to 30 years, and the contracts for certain projects are renewable on a preferred basis upon application prior to expiration. Our decision as to whether to apply for a renewal of any production license for any project located outside China depends on our assessment of the prospects of such project and the need of our development strategies. None of our undeveloped acreage located outside China will expire in the near future.

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Production

The following table sets forth our historical average net daily crude oil and natural gas production by region and our average sales price for the years ended December 31, 2020, 2021 and 2022.

						% of<br>2022
		2021		2022
Crude oil production(1)
(thousand barrels per day, except percentages or otherwise indicated)
Daqing	595.7		596.3		601.5		24.2
Changqing	497.7		513.0		519.8		20.9
Xinjiang	262.2		273.6		288.6		11.6
Other(2)	1,162.9		1,049.7		1,072.9		43.3
Total	2,518.5		2,432.6		2,482.8		100.0
Annual production (million barrels)	921.8		887.9		906.2		100.0
Domestic	743.8		753.4		767.4		84.7
Overseas	178.0		134.5		138.8		15.3
Average sales price (US per barrel)	40.33		65.58		92.12
Natural gas production(1)(3)
(million cubic feet per day, except percentages or otherwise indicated)
Changqing	3,757.6		3,916.9		4,160.5		32.5
Tarim	2,748.0		2,820.6		2,860.1		22.3
Chuanyu	2,793.7		3,140.3		3,407.9		26.6
Other(4)	2,233.5		2,231.8		2,379.8		18.6
Total	11,532.8		12,109.6		12,808.3		100.0
Annual production (Bcf)	4,221.0		4,420.0		4,675.0		100.0
Domestic	3,993.8		4,222.2		4,471.3		95.6
Overseas	227.2		197.8		203.7		4.4
Average realized price (US per Mcf)	4.80		7.59		11.30

All values are in US Dollars.

(1)	Production volumes for each region include our share of the production from all of our cooperative projects with foreign companies in that region.
(2)	Represents production from the Liaohe, Jilin, Huabei, Dagang, Tarim, Tuha, Qinghai, Jidong, Yumen, Southern and other oil regions and our share of overseas production as a result of our acquisition of overseas assets.
---	---
(3)	Represents production of natural gas for sale.
---	---
(4)	Represents production from the Daqing, Qinghai, Tuha, Xinjiang, Liaohe, Huabei, Dagang, Jilin, Jidong, Yumen, Zhejiang, Southern and other oil and gas regions and our share of overseas production as a result of our acquisition of overseas assets.
---	---

In 2022, we supplied a substantial majority of our total crude oil sales to our own refineries. In addition, we and China Petroleum & Chemical Corporation, or Sinopec, supply crude oil to each other’s refineries to allow supplies to be easily obtained from nearby resources.

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The following table sets forth our average sales prices and average lifting costs of crude oil and natural gas of our company on an overall basis and those in China in 2020, 2021 and 2022.

	Crude Oil Average<br>Realized Prices<br>(RMB/ton)		Natural Gas<br>Average Realized Prices<br>(RMB/Kilostere)		Average LiftingCost(US/BOE)
2020
Overall		2,056		1,170
- China		2,111		1,314
2021
Overall		3,126		1,729
- China		3,140		1,426
2022
Overall		4,578		2,684
- China		4,602		1,820

All values are in US Dollars.

Principal Oil and Gas Regions

Daqing Oil Region

In 1950s, we discovered the Daqing oil region. The Daqing oil region is our largest oil and gas producing property, located in the Songliao basin and consisting of 40 oilfields. In 2022, the Daqing oil region produced an average of 601.5 thousand barrels of crude oil per day, representing approximately 24.2% of our total daily crude oil production.

As of December 31, 2022, our proved crude oil reserves in the Daqing oil region were 929.3 million barrels, representing 14.5% of our total proved crude oil reserves. As of December 31, 2022, the crude oil reserves-to-production ratio of the Daqing oil region was approximately 4.2 years.

Daqing’s crude oil has low sulfur and high paraffin content. As many refineries in China, particularly those in Northeastern China, primarily refine Daqing crude oil, we have a stable market for the crude oil we produce in the Daqing oil region.

Changqing Oil and Gas Region

In the early 1990s, we discovered the Changqing oil and gas region, which covers parts of Shaanxi Province, Gansu Province, Ningxia, Inner Mongolia and Shanxi Province and consists of 48 oil and gas producing blocks. In 2022, the Changqing oil region produced an average of 519.8 thousand barrels of crude oil per day and an average of 4.2 Bcf of natural gas for sale per day, respectively, representing approximately 20.9% of our total daily crude oil production, and approximately 32.5% of our total daily production of natural gas for sale, respectively.

As of December 31, 2022, the Changqing oil and gas region had total proved crude oil reserves of 1,607.1 million barrels and total proved natural gas reserves of 23,806.1 Bcf, respectively, representing 25.0% of our total proved crude oil reserves and 32.4% of our total proved natural gas reserves, respectively. As of December 31, 2022, the crude oil and gas reserves-to-production ratio at the Changqing oil region was approximately 12.6 years.

In January 2001, we discovered the Sulige gas field in the Changqing oil and gas region, which had total proved natural gas reserves of 12,972.8 Bcf as of December 31, 2022. Sulige gas field is currently the largest gas field in China.

Changqing crude oil has low sulfur content and is paraffin-based. We have configured the Changqing oil region with refineries specializing in the refining of Changqing crude oil located in the adjacent area. Sinopec

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also has refineries nearby. In addition, supporting railway facilities have been built for outgoing transportation of relevant products from the Changqing oil and gas region. We therefore have a stable market for the crude oil we produce in the Changqing oil region. The majority of the natural gas produced at the Changqing oil and gas region has been transmitted to Beijing, Tianjin and Hebei regions and a small portion is offered for sale in Shaanxi, Inner Mongolia, Gansu, Ningxia and other parts of Northwestern China.

Xinjiang Oil Region

We commenced operations in the Xinjiang oil region in 1950s. The Xinjiang oil region is located in the Junggar basin in Northwestern China, consisting of 29 oil producing blocks. In 2022, our crude oil production fields in the Xinjiang oil region produced an average of 288.6 thousand barrels per day, representing approximately 11.6% of our total daily crude oil production.

As of December 31, 2022, our proved crude oil reserves in the Xinjiang oil region were 961.8 million barrels, representing 15.0% of our total proved crude oil reserves. As of December 31, 2022, the crude oil reserves-to-production ratio at the Xinjiang oil region was approximately 9.1 years.

Xinjiang crude oil comes in multiple varieties, namely light crude oils, medium crude oils and heavy crude oils. We have configured Xinjiang oilfields with refineries located in the adjacent area and pipelines for crude oil outgoing transportation so that the crude oil produced in the Xinjiang oil region can be delivered to other refineries located in the western region. We therefore have a stable market for the crude oil we produce in the Xinjiang oil region.

Tarim Oil and Gas Region

In 1980s, we discovered Tarim oil and gas region. The Tarim oil and gas region is located in the Tarim basin in Northwestern China, consisting of 33 oil producing blocks. In 2022, the Tarim oil and gas region produced an average of 148.7 thousand barrels of crude oil per day and an average of 2.9 Bcf of natural gas for sale per day, respectively, representing approximately 6.0% of our total daily crude oil production, and approximately 22.3% of our total daily natural gas for sale, respectively.

As of December 31, 2022, the Tarim oil and gas region had total proved crude oil reserves of 442.2 million barrels and total proved natural gas reserves of 19,633.1 Bcf, respectively, representing 6.9% of our total proved crude oil reserves and 26.7% of our total proved natural gas reserves, respectively. As of December 31, 2022, the oil and natural gas reserves-to-production ratio in the Tarim oil and gas region was approximately 16.3 years.

We deliver natural gas produced in the Tarim oil and gas region through gas pipelines to the central and eastern regions of China where there is strong demand for natural gas.

Chuanyu Gas Region

We commenced natural gas exploration and production in the Chuanyu gas region in the 1950s. The Chuanyu gas region is located in the Sichuan basin in Southwestern China, consisting of 119 gas producing blocks.

In 2022, the Chuanyu gas region produced an average of 3.4 Bcf of natural gas for sale per day, representing approximately 26.6% of our total daily production of natural gas for sale. As of December 31, 2022, our proved natural gas reserves in the Chuanyu gas region were 16,663.8 Bcf, representing 22.7% of our total proved natural gas reserves. As of December 31, 2022, the natural gas reserves-to-production ratio in the Chuanyu gas region was approximately 13.4 years.

In 2019, we discovered the Sichuan shale gas field in the Chuanyu gas region. As of December 31, 2022, the proved reserves in the Sichuan shale gas field were 1,970.6 Bcf.

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The majority of the natural gas produced at the Chuanyu gas region is offered for sale in the Chuanyu region and only a small portion is transmitted to Central and South China.

New Energy Business

We have accelerated the development of new energy business and the construction of key projects, achieving remarkable results in the expansion in the markets of clean energy substitution for production and external clean energy supply. We have strived to obtain clean power grid connection, and vigorously promoted wind power generation, photovoltaic power generation, geothermal heating and CCUS businesses. Our first integrated wind and solar storage development project – the Daqing Oilfield Puerlian small-sized distributed generation cluster demonstration and application project (first phase) has been connected to the power grid for power generation. In 2022, we completed wind and photovoltaic power projects with an aggregate installed capacity of more than 1.4 million kilowatts and an aggregate geothermal heating area of 25 million square meters. In 2022, the total capacity of our new energy projects developed and utilized amounted to 8 million tons of standard coal per year.

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Refining, Chemicals and New Materials

We now operate 33 enterprises located in nine provinces, four autonomous regions and three municipalities to engage in refining of crude oil and petroleum products, as well as the production and marketing of basic petrochemical products, derivative chemical products, new materials and other chemical products.

In 2022, we grasped opportunities arising from the industry and market demand changes in the refining, chemicals and new materials business, and continued to push forward the transformation and upgrades. We promptly optimized the workload of production equipment and products structure, adhered to the strategy to reduce the production of refined products and increase the production of chemical products, to reduce the production of traditional refining products and increase the production of special petroleum products, and vigorously developed new chemical products and materials. We also improved the integrated technical service system of production, marketing, research and application, leveraged the function of the “PetroChina e-Chemical” platform, and strengthened the marketing of chemical products. In 2022, we processed 1,212.7 million barrels of crude oil, representing a decrease of 1.0% as compared with last year, among which 688.7 million barrels of crude oil were from our oil and gas business, accounting for 56.8% of the total amount and showing good synergic effects; we produced 105.354 million tons of refined oil, representing a decrease of 3.1% as compared with last year; the volume of chemical products output was 31.568 million tons, representing an increase of 2.5% as compared with last year; the output of ethylene, synthetic resin and urea increased by 10.5%, 6.6% and 5.2%, respectively, as compared with last year; and the volume of new chemical materials output reached 0.855 million tons, representing an increase of 56.3% as compared with last year.

The following table sets forth the financial and operating data of our refining and chemicals segment for each of the years ended December 31, 2020, 2021 and 2022.

	Year Ended December 31,
	2020		2021		2022
Revenue (RMB in millions)		774,775		974,972		1,164,596
Profit from operations/(loss) (RMB in millions)		(1,834)		49,740		40,570
Crude oil processed (million barrels)		1,177.5		1,225.0		1,212.7
Crude oil primary distillation capacity (million barrels/year)		1,492.6		1,492.6		1,640.4
Production of refined oil products (thousand tons)		107,042		108,712		105,354

Refining

Refined Products

We produce a wide range of refined products at our refineries. Some of the refined products are for our internal consumption and used as raw materials in our petrochemical operation. The table below sets forth production volumes of our principal refined products in 2020, 2021 and 2022.

	Year Ended December 31,
Principal Products	2020		2021		2022
	(In thousand tons)
Diesel		50,719		48,245		53,648
Gasoline		46,280		49,388		43,514
Kerosene		10,043		11,079		8,192
Lubricants		1,575		1,964		1,679
Fuel oil		4,086		6,662		9,387
Naphtha		12,706		12,878		11,745

Our Refineries

Most of our refineries are strategically located close to our crude oil production and storage bases along the crude oil and refined product transmission pipelines and railways, which provide our refineries with secure supplies of crude oil and facilitate our distribution of refined products to the domestic markets.

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In 2020, 2021 and 2022, our exploration and production operations supplied approximately 57.6%, 55.8% and 56.8%, respectively, of the crude oil processed in our refineries.

In 2022, Daqing Petrochemical, Jilin Petrochemical, Fushun Petrochemical, Lanzhou Petrochemical, Dushanzi Petrochemical, Dalian Petrochemical, Dalian West Pacific, Liaoyang Petrochemical, Huabei Petrochemical, Urumqi Petrochemical, Guangxi Petrochemical, Sichuan Petrochemical and Yunnan Petrochemical were our principal refineries in terms of both primary distillation capacity and refining throughput. Guangdong Petrochemical will also be a principal refinery once it is put into production. The table below sets forth the primary distillation capacity and refining throughput of our principal refineries in 2020, 2021 and 2022.

	As of December 31,
	2020		2021		2022
Primary distillation capacity ^(1)^ (thousand barrels per day)
Daqing Petrochemical		202.4		202.4		202.4
Jilin Petrochemical		198.4		198.4		198.4
Fushun Petrochemical		222.7		222.7		222.7
Lanzhou Petrochemical		212.6		212.6		212.6
Dushanzi Petrochemical		202.4		202.4		202.4
Dalian Petrochemical		415.0		415.0		415.0
Dalian West Pacific		202.4		202.4		202.4
Liaoyang Petrochemical		182.2		182.2		182.2
Huabei Petrochemical		202.4		202.4		202.4
Urumqi Petrochemical		172.1		172.1		172.1
Guangxi Petrochemical		202.4		202.4		202.4
Sichuan Petrochemical		202.4		202.4		202.4
Yunnan Petrochemical		263.2		263.2		263.2
Guangdong Petrochemical		—		—		404.8
Other refineries		1,208.7		1,208.7		1,208.7
Total		4,089.3		4,089.3		4,494.1
(1)	Represents the primary distillation capacity of crude oil and condensate.
---	---
	Year Ended December 31,
---	---	---	---	---	---	---
	2020		2021		2022
Refining throughput (thousand barrels per day)
Daqing Petrochemical		122.6		163.6		160.3
Jilin Petrochemical		178.8		158.7		182.3
Fushun Petrochemical		162.8		145.2		166.0
Lanzhou Petrochemical		183.7		182.4		189.7
Dushanzi Petrochemical		143.6		147.6		156.7
Dalian Petrochemical		269.0		317.8		310.0
Dalian West Pacific		166.0		166.9		117.8
Liaoyang Petrochemical		173.3		165.9		161.0
Huabei Petrochemical		110.4		123.5		116.2
Urumqi Petrochemical		123.2		125.4		135.6
Guangxi Petrochemical		157.5		197.2		187.7
Sichuan Petrochemical		207.3		166.9		165.1
Yunnan Petrochemical		154.8		197.0		202.2
Other refineries		1,072.9		1,098.0		1,071.8
Total		3,225.9		3,356.1		3,322.4

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In 2022, Guangdong Petrochemical’s integrated refining and chemicals project, Jilin Petrochemical’s Jieyang ABS project and certain other projects have been fully completed. The construction of key projects such as Jilin Petrochemical’s refining and chemical transformation and upgrading project has commenced.

The table below sets forth the major indicators of the realized productivity of our refineries in each of 2020, 2021 and 2022.

	Year Ended December 31,
	2020		2021		2022
Average utilization rate of primary distillation capacity (%)		80.0		82.5		80.9
Average yield for principal refined products (%)^(1) (2)^		68.2		66.8		65.2
Overall refining yield (%)		93.5		93.9		93.9
(1)	Principal refined products include gasoline, kerosene, diesel and lubricant.
---	---
(2)	“Yield” represents the number of tons of a refined product expressed as a percentage of the number of tons of crude oil from which that product is processed.
---	---

Chemicals

Most of our chemical plants are close to our refineries and are connected to the refineries by pipelines, providing additional production flexibility and opportunities for cost competitiveness. The raw materials required by our chemicals operations are mainly supplied by our own refineries.

Our Chemical Products

The table below sets forth the production volumes of our principal chemical products for each of the years ended December 31, 2020, 2021 and 2022.

	Year Ended December 31,
	2020		2021		2022
	(In thousand tons)
Basic petrochemicals
Ethylene		6,345		6,713		7,419
Derivative petrochemicals
Synthetic resin		10,287		10,903		11,620
Synthetic fiber raw materials and polymers		1,278		1,146		1,099
Synthetic rubber		1,001		1,044		1,044
Other chemicals
Urea		2,163		2,422		2,549

We are one of the major producers of ethylene in China. We use the bulk of the ethylene we produce as a principal feedstock for the production of many chemical products, such as polyethylene. As of December 31, 2022, our annual ethylene production capacity was 8,610 thousand tons. We produce a number of synthetic resin products, including polyethylene, polypropylene and ABS. As of December 31, 2022, our annual production capacities for polyethylene, polypropylene and ABS were 7,662 thousand tons, 5,020 thousand tons and 1,303 thousand tons, respectively.

Marketing of Chemicals

Our chemical products are distributed to a number of industries including the automotive, construction, electronics, pharmaceutical, printing, electrical appliances, household products, insulation, packaging, paper, textile, paint, footwear, agriculture and furniture industries.

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The following table sets forth the sales volumes of our chemical products by principal product category for each of the years ended December 31, 2020, 2021 and 2022.

	Year Ended December 31,
Products	2020		2021		2022
	(In thousand tons)
Derivative petrochemicals
Synthetic resin		10,912.8		11,302.1		11,733.2
Synthetic fiber		25.2		22.7		33.6
Synthetic rubber		1,098.4		1,066.4		1,052.5
Intermediates		12,929.0		13,525.6		13,074.7
Other chemicals
Urea		2,596.9		2,399.1		2,562.2

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Marketing

We engage in domestic marketing of refined products through 34 regional sales companies including two distribution branch companies and one convenience store chain company, PetroChina uSmile Company Limited, operated under the trade name “uSmile”. These operations include transportation and storage of the refined products, wholesale, retail and export of gasoline, diesel, kerosene and other refined products, and non-oil business. We engage in international trade business through PetroChina International Company Limited. Its major businesses include international trade in crude oil, refined oil, natural gas, petrochemical products, oil and gas entrepot trade, investment, construction and operation of overseas trade operation platforms, and futures business.

The following table sets forth the financial and operating data of our marketing segment for each of the years ended December 31, 2020, 2021 and 2022:

	Year Ended December 31,
	2020			2021		2022
Revenue (RMB in millions)		1,497,533			2,170,062		2,771,894
(Loss)/profits from operations (RMB in millions)		(2,906	)		13,277		14,374
External sales volume of gasoline, kerosene and diesel (thousand tons)		161,230			163,307		150,649

With respect to our domestic sales business, our marketing network consists of:

•	Nationwide wholesale distribution outlets. Almost all of these outlets are located in high demand areas across China, particularly in the coastal areas, along major railways and along the Yangtze River. We sell refined products both directly and through distributors to various wholesale markets, as well as to utility, commercial, petrochemical, aviation, agricultural, fishery and transportation companies in China.
•	Service stations owned and operated by us and franchised service stations owned and operated by third parties across China.
---	---

In relation to domestic marketing, in 2022 we actively responded to unfavourable environment such as the decline in market demand, by optimizing resource allocation and inventory management for marketing business, ensuring the smooth operation of our refining business, and maintaining the overall stability of the industry chain. By leveraging the advantages arising from the domestic refined oil market’s continuous standardization, we adhered to strategies such as the integration of wholesale and retail, mutual promotion of refined oil and non-oil products, and integration of online and offline marketing to increase our market share. We adapted to the new trends in energy consumption and actively promoted the building of sales networks such as oil and gas stations, charging and swapping stations, photovoltaic stations and comprehensive energy service stations. We explored the “oil + commodity + service” marketing model and strived to expand the sales of our non-oil business.

In relation to international trade, in 2022, we actively promoted the overseas oil sale channels, and coordinated the export of refined oil and chemical products. We took various actions to ensure the smooth operation of the industrial chain and to maximize our overall profitability.

The PRC government and other institutional customers, including railway, transportation and fishery operators, are long-term purchasers of the gasoline and diesel that we produce. We sell gasoline and diesel to these customers based on the supply prices for special customers prescribed by the PRC government. See “Item 4 — Regulatory Matters — Pricing — Refined Products” for a discussion of refined product pricing.

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The following table sets forth the major operation data relating to our marketing segment for the years ended December 31, 2020, 2021 and 2022:

	Year Ended / As of December 31,
	2020		2021		2022
Sales volume of gasoline, kerosene and diesel (thousand tons)		161,230		163,307		150,649
Of which: Gasoline		66,084		65,981		58,209
Kerosene		14,350		15,598		13,678
Diesel		80,796		81,728		78,762
Domestic sales volume of gasoline, kerosene and diesel (thousand tons)		105,896		112,493		105,164
Of which: gasoline		49,188		52,626		44,284
Kerosene		8,331		9,005		5,467
Diesel		48,377		50,862		55,413
Lubricants sales volume (thousand tons)		1,404		1,565		1,132
Market share in domestic refined oil market (%）		35.9		35.3		34.4
Number of service stations		22,619		22,800		22,586
Of which: owned service stations		21,042		20,734		20,564
Sales volume per service station (tons/day)		8.48		8.05		7.79
Number of convenience stores		20,212		20,178		20,600

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Natural Gas Sales

We are China’s largest natural gas seller. We sell natural gas primarily to industrial companies, power plants, fertilizer and chemical companies, commercial users and municipal utilities owned by local governments.

In 2022, for the natural gas sales business, we overcame the unfavourable situation of cost increase for imported natural gas and decline in consumption in the domestic market, continuously optimized the scale and structure of imported gas, and the market structure and sales flow according to the profitability principle, and enhanced the promotion of end customer market; we optimized marketing strategies, enhanced professional marketing and sales ability and actively developed online transactions to improve sales profitability.

The following table sets forth the financial and operating data of our natural gas sales segment for each of the years ended December 31, 2020, 2021 and 2022:

	As of December 31,
	2020		2021		2022
Revenue (RMB in millions)		370,771		417,022		519,211
Profit from operations (RMB in millions)		72,410		43,965		12,957
Total volume of natural gas sold (Bcf)		8,784.4		9,675.4		9,191.9

Our Principal Markets for Natural Gas

We sell our natural gas across China. Our natural gas supply covers all provinces, municipalities under direct administration of the central government, autonomous regions and Hong Kong of China, except Macau and Taiwan. The Bohai Rim, the Yangtze River Delta and the Southwestern region in China are our principal markets for natural gas. In addition, provinces such as Inner Mongolia, and Anhui consume more and more natural gas and have become another significant natural gas market of us. We supply natural gas to these regions primarily through pipelines except for Tibet where we supply natural gas by LNG tanker trucks.

Driven by environmental and efficiency concerns, the PRC government encourages industrial and residential use of natural gas. The current value-added tax rate for natural gas is 9%, while the value-added tax rate for crude oil and refined oil products is 13%.

Competition

As an oil and gas company operating in a competitive industry, we compete in each of our business segments in both China and international markets for desirable business prospects and for customers. At present, our principal competitors in China are China Petrochemical Corporation, or Sinopec Group, and China National Offshore Oil Corporation, or CNOOC.

Oil, Gas and New Energy

We are the largest onshore oil and gas company in China in terms of proved crude oil and natural gas reserves as well as crude oil and natural gas production and sales. However, we compete with other domestic oil and gas companies for the acquisition of desirable crude oil and natural gas prospects. Similarly, we face some competition in the development of offshore oil and gas resources. In 2019, the Chinese government lifted the restrictions on foreign investment in oil and gas exploration and development, which had been limited to joint ventures and cooperation, introduced market competition mechanisms in the oil and gas industry to support private enterprises participating in oil and gas exploration and development. These policy changes mean that the barriers to entering the area of oil and gas exploration have been removed, and our exploration and development business may face heightened competition from foreign capital and private enterprises. In addition, the competition of international energy supply has intensified, the crude oil market continues to fluctuate, and price volatility has become frequent. We believe that our experience in crude oil and natural gas exploration and

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production and our advanced exploration and development technologies that are suitable for the diverse geological conditions in China will enable us to maintain our leading position in discovering and developing crude oil and natural gas reserves in China.

We have a competitive advantage in the development of new energy. We have abundant wind, solar and geothermal resources within our oil and gas fields. We will vigorously promote the integration of wind, solar, gas and electricity and the scale application of geothermal energy, promote the development of the use of hydrogen energy within our whole industry chain, and promote our transformation into a comprehensive energy company of oil, gas, thermoelectric and hydrogen.

Refining, Chemicals and New Materials and Marketing

We compete with our primary competitor Sinopec in our refining and chemicals operations and marketing operations on the basis of price, quality and customer service. Most of our refineries and chemical plants are located in the Northeastern and Northwestern regions of China where we have the significant market share for refined products and chemical products. We sell the remainder of our refined products and chemical products to the Eastern, Southern, Southwestern and Central-southern regions of China, where our products have a considerable market share. The Eastern and Southern regions of China, where refined products and chemical products are in higher demand, are important markets for our refined products and chemical products. Sinopec has a strong presence in the Eastern and Southern regions of China in competition with us, and most of Sinopec’s refineries, chemical plants and distribution networks are located in these regions in close proximity to these markets. Moreover, as the newly constructed facilities of CNOOC commenced operation in the same region, large quantity of chemical products have been marketed into that area, which made the competition even intense. We expect that we will continue to face competition in our refined products and chemical products sales in these regions.

In recent years, China has gradually liberalized the restrictions on market access for the refining and chemical industry. The refining and chemical industry led by us and Sinopec has been rapidly transformed into diversified market participants. Some large state-owned enterprises and private enterprises have entered the refining and chemical industry. Local refineries have rapidly emerged, and international refining and chemical companies have recently opened large refineries in China. The restrictions on foreign investment in wholesale and retail chains of refined oil have been further liberalized. In 2019, the Chinese government issued policies to further liberalize market access for private enterprises, encouraging private enterprises to enter the industries of refineries and sales, and to construct storage and transportation infrastructure for refined oil, and encourage qualified enterprises to participate in crude oil imports and refined oil exports. We expect to continue to face strong market competition.

We also face competition from imported refined products and chemical products in terms of price and quality. In recent years, competition from foreign producers of refined products and chemical products has increased as a result of changes in China’s tariff policies toward imported refined products and chemical products. In response, we have sought to reduce our production costs, improve the quality of our products and optimize our product mix.

In addition, we also face competition from alternative energy. Alternative energy is developing rapidly in China, and electric power, liquefied gas, natural gas and biodiesel have increasingly become effective alternatives to refined oil, continually reducing the demand for refined oil. Among them, vehicular natural gas is still the main substitute for refined oil. Driven by the national policy and breakthroughs in battery and self-driving technologies, China’s electric vehicle industry has developed rapidly, which has led to a rapid growth in the number of electric cars in China. Electricity is expected to replace vehicular natural gas as the primary alternative energy source for refined oils and will continuously reduce the importance of refined oils as a major energy source. In October 2020, the State Council issued the New Energy Vehicle Industry Development Plan (for 2021-2035), according to which China expects that the share of new energy vehicles out of total vehicle sales in China will rise to 20% by 2025 and pure electric vehicles will account for the majority of vehicle sales by 2035.

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Natural Gas Sales

We are the largest natural gas supplier in the PRC in terms of sales volume. Currently, we mainly face competition from Sinopec, CNOOC, coal-based natural gas producers and importers of natural gas and LNG in the supply of natural gas to Beijing, Tianjin, Hebei Province, Shanghai, Jiangsu Province, Anhui Province, Henan Province, Hubei Province, Hunan Province and the Northwestern regions of China, our existing principal markets for natural gas. Currently, Sinopec has natural gas fields in Sichuan Province and Chongqing Municipality and sells natural gas to users in places such as Sichuan Province, Chongqing, Hunan Province, Jiangsu Province, Zhejiang Province and Shanghai. We have also expanded into the coastal regions in Eastern and Southern China where we face competition from CNOOC and Sinopec. Over the recent years, as the reform of the oil and gas regulatory system has continuously progressed amidst macro-economic changes, the reshaping of the oil and gas industry has accelerated in China. In addition to us, Sinopec and CNOOC, more and more other companies are expected to join the competition in the natural gas resources sector and oil and gas terminal business. We believe that our advantages in natural gas resources, production, sales and technologies will enable us to maintain our position as a leading player in the natural gas markets in China. See “Item 3 — Key Information — Risk Factors — Risks Related to Competition”.

Environmental Matters

We are subject to numerous national, regional and local environmental and ecological protection laws and regulations promulgated by the governments in those jurisdictions where we have business operations. These laws and regulations concern our oil and gas exploration and production operations, petroleum and petrochemical products and other activities. In particular, some of these laws and regulations:

•	require an environmental impact evaluation report to be submitted and approved prior to the commencement of exploration, production, refining and chemical projects;
•	restrict the type, quantities, and concentration of various substances that can be released into the environment in connection with drilling and production activities;
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•	limit or prohibit drilling activities within protected areas and certain other areas; and
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•	impose penalties for pollution resulting from oil, natural gas and refining operations, including criminal and civil liabilities for serious pollution.
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These laws and regulations may also restrict the emissions into the air and discharges into water from our gas processing plants, chemical plants, refineries, pipeline systems and other facilities that we own or operate. In addition, our operations are subject to laws and regulations relating to the generation, handling, storage, transportation, disposal and treatment of solid waste materials. In 2020, 2021 and 2022, we paid a total environmental protection tax of approximately RMB143 million, RMB155 million and RMB127 million, respectively.

To meet future environmental obligations, we have been committed to developing effective environmental protection measures. These measures include:

•	building eco-friendly projects;
•	improving the quality of refined oil products and reducing toxic substances in refined oil products;
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•	improving the utilization efficiency of energy sources, water, land, raw materials and other resources, and continuously reducing emissions and effluents from operations;
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•	strengthening the automated monitoring and control of effluents and emissions;
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•	adopting clean production technologies and enhancing the comprehensive utilization of oil containing wastes and other similar solid wastes;
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•	continuously improving our system of biodiversity conservation, incorporating biodiversity risk assessment into the whole life cycle management of projects, and carrying out a variety of biodiversity conservation practices;
•	deploying across our company on a world-wide basis a centralized HSE management system and risk management platform to identify environmental risks, and implementing strict hierarchical management and level by level prevention of environmental risks; and
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•	incorporating ecological and environmental protection factor into the performance appraisal of the management of our company, subsidiaries and branch companies, and implementing a life-long accountability system for ecological and environmental responsibility.
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Our capital expenditures on environmental programs in 2020, 2021 and 2022 were approximately RMB2.94 billion, RMB3.92 billion and RMB3.91 billion, respectively.

Because a number of our production facilities are located in populated areas, we have established a series of preventative measures to improve the safety of our employees and surrounding residents and minimize disruptions or other adverse effects on our business. These measures include:

•	providing the residents surrounding our production facilities with printed materials to explain and illustrate safety and protection knowledge and skills; and
•	enhancing the implementation of various effective safety production measures we have adopted previously.
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We believe that these preventative measures have helped reduce the possibility of incidents that may result in serious casualties and environmental consequences. In addition, the adoption of these preventative measures has not required significant capital expenditures to date, and therefore, will not have a material adverse effect on our results of operations and financial condition.

See “Item 3 — Key Information — Risk Factors — Risks Related to Environmental Protection and Safety” and “Item 3 — Key Information — Risk Factors — Risks Related to Climate Change”.

Properties, Plants and Equipment

We own substantially all of our properties, plants and equipment relating to our business activities. We hold exploration and production licenses covering all of our interests in developed and undeveloped acreage, oil and natural gas wells and relevant facilities.

See the description of our properties, plants and equipment relating to our business activities included elsewhere in this “Item 4 — Information on the Company” and “Item 7 — Major Shareholders and Related Party Transactions — Related Party Transactions”.

Intellectual Property

Our logo “

” is jointly owned by us and CNPC and has been used since December 26, 2004. Together with CNPC, we have applied for trademark registrations of the logo both in China and abroad. We have received 506 International Trademark Registration Certificates for our logo covering more than 50 jurisdictions.

As of December 31, 2022, we owned approximately 19,869 patents in China and other jurisdictions. We were granted 1,598 patents in 2022.

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Regulatory Matters

Overview

China’s oil and gas industry is subject to regulation by the PRC government with respect to exploration, production, transmission and marketing of crude oil and natural gas as well as production, transportation and marketing of refined products and chemical products. The central government authorities which exercise control over China’s oil and gas industry include, but not be limited to:

•	The National Energy Administration, or the NEA, which is primarily responsible for the formulation of energy development plans and annual directive plans, approving major energy-related projects and facilitating the implementation of sustainable development of energy strategies, coordinating the development and utilization of renewable energy and new energy, and organizing matters relating to energy conservation and comprehensive utilization as well as environmental protection for the energy industries.
•	The Ministry of Natural Resources, or the MNR, which has the authority to grant, examine and approve mineral resources exploration and production licenses, and to oversee the registration and transfer of exploration and production licenses;
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•	The Ministry of Commerce, or the MOFCOM, which
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•	determines and grants import and export volume quotas for crude oil and refined oil products;
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•	issues import and export licenses for crude oil and refined products to oil and gas companies that have obtained import and export quotas;
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•	is responsible for the record-filing of Sino-foreign joint venture contracts, and monitoring the foreign investors’ oil and gas exploration projects in the PRC; and
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•	is responsible for approving and filing of overseas investment projects by PRC enterprises.
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•	The National Development and Reform Commission, or the NDRC, which
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•	is responsible for industry administration, industry policy and policy coordination over China’s oil and gas industry;
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•	publishes guidance prices for natural gas and maximum retail prices for gasoline and diesel;
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•	formulates the plan for aggregate import and export volume of crude oil and refined products in accordance with the market supply and demand in China;
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•	approves significant petroleum, natural gas, oil refinery and chemical projects set forth under the Catalogs of Investment Projects Subject to Approval of the Central Government; and
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•	approves Sino-foreign equity and cooperative projects of certain types.
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•	The Ministry of Ecology and Environment, which
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•	is responsible for taking measures to address climate change concerns, proposing and formulating significant strategies, plans and policies to address climate change concerns and reduce greenhouse emissions, and supervising the achievement of emissions compliance targets;
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•	is responsible for supervising and administering the prevention and treatment of environmental pollution, and guiding, coordinating and supervising the protection and restoration of the ecological environment;
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•	is responsible for supervising and administering the ecological and environmental access, evaluating the environmental impact of critical economic and technological policies and development plans, and significant economic development programs entrusted to it by the State Council; examines and approves or reviews environmental impact evaluation documents for critical development or construction areas, plans or projects; and formulates and organizes the implementation of the ecological and environment access lists;
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•	The National Anti-Monopoly Bureau, which
•	is responsible for proposing and formulating anti-monopoly rules, measures and guidelines;
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•	is responsible for organizing the implementation of anti-monopoly enforcement actions; and
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•	is responsible for organizing and guiding the fair competition reviews.
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Exploration Licenses and Production Licenses

The Mineral Resources Law authorizes the MNR to exercise administrative authority over the exploration and production of mineral resources within the PRC. The Mineral Resources Law and its supplementary regulations provide the basic legal framework under which exploration licenses and production licenses are granted. License applicants must be companies approved by the State Council to engage in oil and gas exploration and production activities.

Applicants for exploration licenses must first register the blocks that they intend to engage in exploration activities with the MNR. The holder of an exploration license is obligated to make a progressively increasing annual minimum exploration investment in each corresponding block. Investments range from RMB2,000 per square kilometer for the initial year to RMB5,000 per square kilometer for the second year, and to RMB10,000 per square kilometer for the third and subsequent years. Additionally, the holder has to pay royalty fees that starts at RMB100 per square kilometer per year for each of the first three years and increases by an additional RMB100 per square kilometer per year for subsequent years up to a maximum of RMB500 per square kilometer per year. The maximum term of an oil and natural gas exploration license is seven years, subject to renewal upon expiration of the original term, with each renewal being up to two years. At the exploration stage, an applicant can also apply for a progressive exploration and production license that allows the holder to test and develop reserves not yet fully proven. Upon the detection and confirmation of the quantity of reserves in a certain block, the holder must apply for a production license based on economic evaluation, market conditions and development planning in order to shift into the production phase in a timely fashion. In addition, the holder needs to obtain the right to use that block of land. Generally, the holder of a full production license must obtain a land use rights certificate for industrial land use covering that block of land.

The MNR issues production licenses to applicants on the basis of the reserves reports approved by the relevant authorities. Production license holders are required to pay a royalty of RMB1,000 per square kilometer per year. Administrative rules issued by the State Council provide that the maximum term of a production license is 30 years, 20 years, or 10 years as applicable to large, medium and small mineral blocks, respectively. In accordance with a special approval from the State Council, the MNR has issued production licenses with terms coextensive with the projected productive life of the assessed proven reserves as discussed above. Each of our production licenses is renewable upon our application 30 days prior to expiration. If oil and gas prices increase, the productive life of our crude oil and natural gas reservoirs may be extended beyond the current terms of the relevant production licenses.

The MNR comprehensively promotes the manner which mining rights are granted through competitive ways, such as bidding, auction or listing, while strictly limits the non-competitive ways.

China has implemented the regulation of unified licensing of oil and gas exploration and production, pursuant to which, if an oil and gas exploration license holder discovers any oil and gas reservoir available for production, it may commence production immediately after having submitted a report to the local natural resource authorities, and is not required to obtain a separate oil and gas production license. If such oil and gas exploration license holder has since then conducted oil and gas production activities, it is required to enter into a mining rights grant contract and complete the mining rights registration in accordance with applicable laws within five years thereafter.

Among the major PRC oil and gas companies, the exploration licenses and production licenses held by us, Sinopec and CNOOC account for the majority of mining rights in China. Among those companies, we and

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Sinopec primarily engage in onshore exploration and production, while CNOOC primarily engages in offshore exploration and production. According to the new policies of the Chinese government, private enterprises and foreign-invested enterprises are allowed to obtain exploration licenses.

Pricing

In recent years, the pricing of gasoline, diesel, natural gas and pipeline transmission services, depending on the situation, has either been subject to government guiding prices or government set prices, while the pricing of crude oil and other refined oil products is not subject to government regulation.

Gasoline and Diesel

According to the Measures for Administration of Petroleum Products Pricing issued by the NDRC on January 13, 2016, (i) the retail prices and wholesale prices of gasoline and diesel, and the prices for supply of gasoline and oil to special customers such as social wholesale enterprises, railway and other transportation operators are expected to follow government guiding prices, and (ii) the supply prices for supply of gasoline and diesel to the country’s Strategic Petroleum Reserve and Xinjiang Production and Construction Corps are expected to follow government set prices. The ceiling retail prices of gasoline and diesel are determined on the basis of international crude oil prices, by taking into consideration the average domestic processing cost, tax, reasonable circulation costs and appropriate profit margin. Further, when the international crude oil prices drop to US$40 per barrel or below, the prices of refined oil products in China will be calculated as if the crude oil price were still US$40 per barrel and by taking into consideration a normal processing profit margin. When the international crude oil prices rise to the range between US$40 per barrel (exclusive) and US$80 per barrel (inclusive), the prices of refined oil products in China will be calculated by taking into consideration a normal processing profit margin. When the international crude oil prices surge to more than US$80 per barrel, the processing profit margin used to determine the prices of refined oil products will be reduced until to zero. When the international crude oil prices surge to US$130 per barrel or above, appropriate financial and taxation policies will be adopted to ensure the production and supply of refined oil products but the prices of gasoline and diesel will in principle remain unadjusted or will only be slightly adjusted upwards in principle by adhering to the principle of taking into account the interests of both the producers and the consumers so as to maintain the smooth operation of the national economy. The government would adjust the gasoline and diesel prices every 10 working days in line with fluctuations in international crude oil prices. Refined oil retail enterprises have freedom to set their own specific retail prices as long as their retail prices do not exceed the ceiling prices set by the government. The ceiling supply prices of gasoline and diesel to be supplied to special customers such as railway, transportation and other business operators by domestic refined oil production and marketing enterprises are determined by reducing the ceiling national average retail price by RMB400 per ton. Domestic refined oil production and marketing enterprises may determine the specific supply prices with special customers such as railway, transportation and other business operators through negotiations subject to the ceiling supply prices published by the government. When market retail prices drop, the supply prices set for special customers will be adjusted downward accordingly. The so-called “special customers” means big customers who have for historical reasons established their own independent oil supply system, as identified in a list formulated by the NDRC. The supply prices of gasoline and diesel to be supplied to the country’s Strategic Petroleum Reserve and Xinjiang Production and Construction Corps by domestic refined oil production and marketing enterprises are determined by deducting circulation markup from the ceiling national average retail price.

On March 13, 2020, the NDRC issued the updated version of the Central Pricing Catalogue. According to the updated Catalogue, in the interim, prices of refined oil products will continue to be determined by the existing pricing mechanism, as adjusted in line with the fluctuations in international oil prices. The updated Catalogue indicates that based on the progress of the oil and gas reform, China will fully liberalize the pricing of refined oil products and allow it to be entirely market-based in due course.

On May 18, 2021, the NDRC issued the Notice on the Action Plan for Deepening the Pricing Reform During the 14th Five-Year Plan Period. In the Notice, the NDRC stated that during the 14th Five-Year Plan

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period, the Chinese government will conduct research to enhance the pricing mechanism for refined oil products in line with the changes in the domestic and international energy market conditions and the progress in the domestic energy pricing system.

Natural Gas

According to the updated Central Pricing Catalogue issued by the NDRC on March 13, 2020, the prices of offshore gas, shale gas, coal bed methane, coal gas, LNG, gas supplied directly to certain customers, gas supplied to and resold by gas storage facilities, gas publicly traded on trading platforms, gas imported through pipelines put into operation after 2015, and citygate gas prices in those provinces possessing conditions for determining citygate gas prices through competition should become market based. The prices of other domestically produced onshore pipeline gas and the citygate prices of the gas imported through pipelines put into operation before the end of 2014 should in the interim continue to be determined by the existing pricing mechanism, and will be liberalized and become market-based in due course as the reform to marketize the natural gas sector progresses. Pursuant to the natural gas pricing reform programs issued by the NDRC in recent years, at present, the PRC government regulates natural gas pricing mainly through the citygate benchmark price. Under this regime, gas suppliers and purchasers would determine the specific citygate prices for their transactions through negotiations by using the citygate benchmark prices published by the relevant local governments as the base and then adjusting the base either upwards by no more than 20% or downwards without limit. The NDRC also rolled out seasonal natural gas prices to encourage market-oriented pricing. Natural gas production and marketing enterprises and users are encouraged to proactively trade on natural gas trading platforms. Prices of natural gas publicly traded on natural gas exchanges such as Shanghai Oil and Gas Exchange and Chongqing Oil and Gas Exchange are entirely driven by market conditions.

On May 18, 2021, the NDRC issued the Notice on the Action Plan for Deepening the Pricing Reform During the 14th Five-Year Plan Period. In the Notice, the NDRC stated that during the 14th Five-Year Plan period, China would steadily advance the oil and natural gas pricing reform. By following the guidelines “to control the middle and liberalize the two ends” and in line with the progress in the independent operation of natural gas pipeline network and diversification of the entities operating in oil and gas exploration and development, gas supply and gas sales sectors, the market-oriented citygate gas pricing reform will be steadily pushed forward, enhancing the mechanism to synchronize the terminal selling prices with the purchasing costs. Meanwhile, great effort will be made to coordinate the boosting of fair access to urban gas distribution networks, reduce the gas distribution levels, tighten the monitoring over the gas distribution pricing, and explore ways to advance the marketization of the pricing of the natural gas supplied to end users.

Pipeline Transmission Tariff

Pipeline transmission tariffs for crude oil, refined oil and natural gas are set by the government. Cross province transmission tariffs are set by the NDRC and provincial transmission tariffs are set by the provincial level branches of the NDRC.

For those pipelines constructed prior to 1984, which were funded by the government, the transmission tariff is a uniform flat tariff determined based on the principle of minimum profit margin. For those pipelines constructed with the funds of the enterprises after 1984, the tariffs must be submitted to the NDRC for examination and approval on a case by case basis and based on the capital investment made in the pipeline, the operation period for the pipeline and a reasonable profit margin.

On October 9, 2016, the NDRC issued Regulation on Administration of the Pipeline Transmission Tariff for Natural Gas (on trial) and Rules on Supervision and Review of the Costs Used in Setting the Pipeline Transmission Tariff (on trial), which provides that effective January 1, 2017, the pipeline transmission tariff for natural gas shall be reviewed and determined on the principle of “permissible costs plus reasonable margins”, and the rules intended to regulate the tariff charged by companies engaged in cross-province pipeline transmission operation.

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On June 7, 2021, the NDRC issued the Regulation on Administration of the Pipeline Transmission Tariff for Natural Gas (Interim) and the Rules on Supervision and Review of the Costs Used in Setting the Pipeline Transmission Tariff (Interim). The Regulations and the Rules generally simplified the current mechanism for setting the natural gas pipeline transmission tariffs by reducing the number of China’s pipeline price zones from 15 to 4. According to the Regulations and the Rules, going forward, the rates of return allowed for natural gas pipeline network transmission businesses shall be adjusted dynamically by taking into account China’s national strategic requirements and industrial development needs and users’ bearing capacity. The Regulation and Rules further state that the initially approved rate of return shall be 8% and the depreciable life of the pipelines used for setting the natural pipeline transmission tariffs shall be extended from 30 years to 40 years.

Production and Marketing

Crude Oil

Each year, the NDRC publishes the projected target for the production and processing of crude oil in China based on the domestic consumption estimates submitted by domestic producers, including but not limited to us, Sinopec and CNOOC, the production of these companies as well as the forecast of international crude oil prices. The actual production volumes are determined by the producers themselves and may vary from estimates. The MOFCOM and its local branches were previously responsible for supervising and managing the crude oil market. Enterprises that meet certain operating conditions may apply for the permit for crude oil sales and warehousing business. On December 3, 2019, the MOFCOM issued the Notice on Proper Implementation of the Reform to “Streamline Administration, Delegate Power, Strengthen Regulation and Improve Services” in the Administration of Circulation of Refined Petroleum Products. According to the Notice, MOFCOM offices will no longer accept applications for qualifications for crude oil marketing or warehousing business, or for amendment, renewal or cancellation of the certificates of such qualifications, and such certificates shall expire automatically upon expiration and will not be taken back. This means that the operation of crude oil marketing and warehousing business will no longer be subject to MOFCOM approval.

Refined Products

Historically, only we and Sinopec had the right to conduct gasoline and diesel wholesale business. Other companies, including foreign invested companies, were not allowed to engage in wholesale of gasoline and diesel in China’s domestic market. In general, only domestic companies, including Sino-foreign joint venture companies, were permitted to engage in retail of gasoline and diesel. Since December 11, 2004, wholly foreign-owned enterprises are permitted to conduct refined oil retail business. Since January 1, 2007, when the Measures on the Administration of the Refined Products Market became effective, all entities meeting certain requirements are allowed to submit applications to the MOFCOM to conduct refined oil products wholesale, retail and storage businesses. On July 28, 2018, the PRC government removed the restriction that a Chinese partner must hold a majority share in the construction and operation of a retail oil station chain which has more than 30 outlets and sells refined products of different types and brands supplied through multiple channels. On August 27, 2019, the State Council canceled government approval of qualifications for operation of refined oil wholesale warehousing and delegated the approval of refined oil retail qualifications to local municipal governments.

On December 3, 2019, the MOFCOM issued the Notice on Proper Implementation of the Reform to “Streamline Administration, Delegate Power, Strengthen Regulation and Improve Services” in the Administration of Circulation of Refined Petroleum Products. According to the Notice, any market player proposed to engage in the refined petroleum product wholesale and warehousing activities may commence and carry out such activities in accordance with applicable laws and regulations after they meet relevant criteria and obtain relevant qualifications or pass relevant acceptance tests and is not required to obtain operating licenses from MOFCOM. On December 31, 2020, the General Office of the MOFCOM issued the Guidelines for the Administration of the Refined Petroleum Product Circulation Sector. According to the Guidelines, any market player engaged in refined petroleum product wholesale and warehousing business activities shall comply with

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laws and regulations and criteria related to enterprise registration, land and resources administration, planning and construction, oil product quality, safety production, environmental protection, firefighting, terrorism-fighting, tax, transportation, meteorology, metering, etc., obtain relevant qualifications or pass relevant acceptance tests, and shall carry out business operation in accordance with laws and regulations. This means that the operation of refined oil marketing and warehousing business will no longer be subject to MOFCOM approval.

Natural Gas

The NDRC determines each year the annual national natural gas production target based on the natural gas production targets submitted by domestic natural gas producers. Domestic natural gas producers determine their annual natural gas production targets on the basis of consumption estimates. The actual production volume of each producer is determined by the producer itself, which may deviate from the production target submitted by it. The NDRC also formulates the annual natural gas supply guideline, which requires natural gas producers to distribute a specified amount of natural gas to the designated key municipalities and key enterprises.

Foreign Investments

Cooperation in Exploration and Production with Foreign Companies

Currently, CNPC is one of the few Chinese companies that have the right to cooperate with foreign companies in onshore crude oil and natural gas exploration and production in China. CNOOC has the right to cooperate with foreign companies in offshore crude oil and natural gas exploration and production in China.

Sino-foreign cooperation projects and foreign parties in onshore oil and gas exploration and production in China are generally selected through open bids and bilateral negotiations. Those projects are generally conducted through production sharing contracts. The MOFCOM must approve those contracts.

As authorized by the Regulations of the PRC on Exploration of Onshore Petroleum Resources in Cooperation with Foreign Enterprises, CNPC has the right to enter into joint cooperation arrangements with foreign oil and gas companies for onshore crude oil and natural gas exploration and production. We do not have the capacity to enter into production sharing contracts directly with foreign oil and gas companies under existing PRC law. Accordingly, CNPC will enter into production sharing contracts. After signing a production sharing contract, CNPC will, subject to approval of the MOFCOM, assign to us most of its commercial and operational rights and obligations under the production sharing contract as required by the Non-competition Agreement between CNPC and us.

In 2019, the Chinese government lifted the restrictions on foreign investment in oil and gas exploration. As a result, foreign companies are allowed to enter the oil and gas exploration and production sector through wholly-owned enterprises.

Transportation and Refining

Since December 1, 2007, PRC regulations have encouraged foreign investment in the construction and operation of oil and gas pipelines and storage facilities. On March 10, 2015, PRC lifted the restrictions on foreign investment in refineries with a production capacity of below 10 million tons per annum. Furthermore, when appropriate, projects must receive necessary approvals from relevant PRC government agencies. See “Item 3 — Key Information — Risk Factors — Risks Related to Government Regulation.”

The State Further Liberalized Oil And Gas Market Access

On June 30, 2019, the NDRC and the MOFCOM jointly issued Special Management Measures for Foreign Investment Access (Negative List) (2019 Edition), pursuant to which, the restrictions on oil and gas exploration and development that were previously limited to joint ventures and cooperation were lifted.

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On December 4, 2019, the Chinese government issued the Opinions on Creating a Better Development Environment to Support the Reform and Development of Private Enterprises, which further liberalized market access for private enterprises. It states that in key industries and fields such as power, telecommunications, railways, oil and gas, the state liberalizes competitive businesses and further introduces market competition mechanisms. It encourages private enterprises to enter the industries of oil and gas exploration and development, refining and sales, and construction of infrastructures such as storage, transportation and pipeline transportation of crude oil, natural gas and refined oil. It encourages qualified enterprises to participate in crude oil imports and refined oil exports.

Import and Export

Since January 1, 2002, state-owned trading companies have been allowed to import crude oil under an automatic licensing system. Non-state-owned trading companies have been allowed to import crude oil and refined products subject to quotas. The export of crude oil and refined oil products by both state-owned trading companies and non-state-owned trading companies is subject to quota control. The MOFCOM has granted us the right to conduct crude oil and refined product import and export business.

Capital Investment and Financing

Capital investments in exploration and production of crude oil and natural gas made by Chinese oil and gas companies are subject to approval by or filing with relevant government authorities. The following projects are subject to approval by the NDRC or the competent local authorities:

•	facilities for taking delivery of and storing liquefied petroleum gas (excluding accessory projects of oil or gas fields or refineries);
•	new facilities for taking delivery of or storing imported liquefied natural gas (including expansion on a different site other than the original facilities);
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•	oil or gas transmission pipeline networks (excluding gathering and transmission pipeline networks of oil or gas fields);
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•	new refineries, expansion of existing primary processing refineries;
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•	new ethylene, paraxylene (PX), diphenylmethane diisocyanate (MDI) projects；and
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•	new coal-to-olefins projects, new coal to paraxylene (PX) projects, and new coal-to-methanol projects with a capacity of 1 million tons per annum or more.
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Taxes, Fees and Royalties

We are subject to a variety of taxes, fees and royalties. The table below sets forth the major taxes, fees and royalty fees payable in China by us or by Sino-foreign oil and gas exploration and development cooperative projects. Our subsidiaries which have legal person status should report and pay enterprise income tax to the relevant tax authorities based on the applicable laws and regulations.

Tax Item	Tax Base	Tax Rate
Enterprise income tax	Taxable income	Standard rate is 25%; from January 1, 2021 to December 31, 2030, the corporate income tax on enterprises incorporated in encouraged industries in the western region of China will be levied at a reduced rate of 15%.
Value-added tax	Revenue	9% for liquefied natural gas, natural gas, liquefied petroleum gas, agricultural film and fertilizers and 13% for oil products and other products.<br> <br>From January 1, 2021 to December 31, 2025, (1) for natural gas imported under the long-term trade gas contracts signed before the end of 2014 and confirmed by the NDRC, the import value-added tax will be refunded at a rate of 70%; and (2) for other types of natural gas, if the import price is higher than the reference benchmark value, the import value-added tax will be refunded at a rate equal to a fraction, of which the numerator is equal to the import price less the reference benchmark value, and the denominator is the import price.
Consumption tax	Aggregate volume sold or self-consumed	RMB1.52 per liter for gasoline, naphtha, solvent naphtha and lubricant and RMB1.2 per liter for diesel, aviation kerosene and fuel oil.
Resource tax	Sales	The standard rate is 6%; but exemption or reduction may apply if qualified.<br> <br>From April 1, 2018 to December 31, 2023, shale gas production enjoys a 30% reduction.
Crude oil special gain levy	Sales amount above specific threshold	Five-level progressive tax rates from 20% to 40%, taxable if the crude oil price reaches the threshold of US$65 per barrel.
Environmental protection tax	Air pollution equivalent, water pollution equivalent, solid waste pollution equivalent and noise exceeding the standard decibel	Effective January 1, 2018, the PRC government started to impose environmental protection tax. Different emissions apply their corresponding tax rates.<br> <br>If a taxpayer’s emission of taxable atmospheric pollutants or water pollutants is less than 30% of the national and local pollutant discharge standards, the environmental protection tax shall be levied at 75%. If the taxpayer’s emission of taxable atmospheric pollutants or water pollutants is less than 50% of the national and local pollutant discharge standards, the environmental protection tax shall be levied at 50%.
Mining right royalty	Area	RMB100 to RMB500 per square kilometer per year for exploration; RMB1,000 per square kilometer per year for production.
Royalty fee ^(1)^	Production volume	Progressive rate of 0-12.5% for crude oil and 0-3% for natural gas.
(1)	It shall be paid in cash and is only applicable to Sino-foreign oil and gas exploration and development cooperative projects in China. However, effective December 1, 2010, the royalty fee payable by new
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Sino-foreign oil and gas exploration and development cooperative projects in Western regions was replaced by the resource tax, while those cooperative projects under contracts signed before December 1, 2010 continue to be subject to the royalty fee until the contracts expire. Effective November 1, 2011, the royalty fee payable by new Sino-foreign oil and gas exploration and development cooperative projects in the whole country was replaced by the resource tax, while those cooperative projects under contracts signed before November 1, 2011 continue to be subject to the royalty fee until the contracts expire.

Environmental Regulations

We are subject to various PRC national environmental laws and regulations and also environmental regulations promulgated by the local governments in whose jurisdictions we have operations. The PRC government has adopted environmental laws and regulations that affect the operation of the oil and gas industry. There are national and local standards applicable to emissions control, discharges to surface and subsurface water and disposal, generation, handling, storage, transportation, treatment and disposal of solid waste, reduction of carbon emission and upgrade of the standards for refined products.

The environmental regulations require a company, such as us, to register or file an environmental impact report with the relevant environmental authority for approval before it undertakes any construction of a new production facility or any major expansion or renovation of an existing production facility. The new facility or the expanded or renovated facility will not be permitted to operate unless the relevant environmental authority has inspected the environmental equipment installed at the facility and decides it satisfies the environmental protection requirements. Companies that need to discharge pollutants, whether in the form of gas, water or solid wastes, must submit application for pollutant discharge permits. The application must state in detail the types of discharge, discharge outlet, types of pollutants, concentration and amount of discharge. After reviewing the application materials, the relevant environmental administrative department will determine to issue a discharge permit to the company. The permit will specify the types of permitted pollutants, the permitted concentration and amount. If a company’s discharges deviated from what were permitted, the relevant administrative department may impose fines on the company or order the company to suspend or close down its operation for resolving the issues. In addition, companies discharging taxable pollutants should declare and pay corresponding environmental protection taxes in accordance with the PRC Environmental Protection Tax Law and its implementing regulations.

In order to reduce environmental pollution, the Chinese government has also raised the standards of oil products several times in recent years. After several years of upgrading and renovating our oil refining facilities, we have satisfied the relevant standards on time. In addition, we are also required to comply with relevant laws and regulations regarding management of hazardous chemicals.

On November 21, 2022, the MOF and the Ministry of Emergency Management jointly issued the amended Administrative Measures for the Collection and Utilization of Enterprise Work Safety Funds (Cai Zi [2022] No.136), which provides, among others, that enterprises in various industries, including onshore and offshore oil and gas production, hazardous material operation and others, shall allocate safety production funds each month based on certain criteria, and the use of such funds by the enterprises are strictly limited to safety-related purposes. An oil and natural gas producer is required to allocate the fund at the rate of RMB20 per ton of crude oil and RMB7.5 per kilostere of gas it produced in that month. A hazardous material operator is required to allocate the funds by equal installments each month based on its revenue in the preceeding year at the regressive rates as follows: (i) 4.5% for the portion of revenue below RMB10 million; (ii) 2.25% for the portion above RMB10 million and below RMB100 million, (iii) 0.55% for the portion above RMB100 million and below RMB1 billion and (iv) 0.2% for the portion above RMB1 billion.

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Policies, Regulations and Rules to Address Climate Change Concerns

On September 22, 2021, the Chinese government issued the Opinions on Fully, Accurately and Comprehensively Implementing the New Development Philosophy and Procuring Satisfactory Performance of the Work Aiming at Achievement of the Carbon Peak and Carbon Neutrality Goals (the “Opinions”), in which a series of milestones to be achieved and steps to be taken for finally achieving the carbon peak and carbon neutrality goals are set. The milestones for phased increase of the share of non-fossil fuels in primary energy consumption set in the Opinions are to increase the share to about 20% by 2025, about 25% by 2030, and more than 80% by 2060. According to the Opinions, China’s petroleum consumption will reach its peak plateau during the 15^th^ Five-Year Plan period and the Chinese government will strictly control the investments in petrochemical and other high carbon projects by then.

On October 24, 2021, the State Council issued the Action Plan for Hitting Carbon Peak by 2030 (the “Action Plan”), which sets forth in great detail the initiatives proposed to be pursued for achieving the goal to hit carbon peak by 2030. The initiatives related to petroleum, natural gas, petrochemicals and new energy mainly include the following:

•	putting more effort into the development of wind energy, solar energy, and other non-fossil energy sources and increasing the total installed capacity of wind power and solar power facilities to more than 1,200,000 MW by 2030;
•	reasonably adjusting and regulating oil and gas consumption; using great efforts to promote the replacement of conventional fuel oil with biological liquid fuels and sustainable aviation fuels so as to improve the energy efficiency of the end-use fuel oil products; and expediting the large-scale development of shale gas, coalbed methane, tight oil (gas) and other unconventional oil and gas resources;
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•	guiding natural gas consumption in an orderly manner by optimizing the structure of natural gas usage, prioritizing the supply of natural gas required for ensuring people’s livelihood and striving to promote the integrated development of natural gas together with multiple other energy sources; and supporting the use of LNG as fuel for vehicles and ships;
---	---
•	for the petrochemical sector, boosting the phasing out of obsolete production capacity and strictly controlling the increase of new refining capacity with an aim to control the domestic crude oil primary processing capacity at no more than 1 billion tons by 2025; and
---	---
•	extending the use of electric power, hydrogen energy, natural gas, advanced biological liquid fuels and other new energy and clean energy sources in the transportation sector with an aim to procure that by 2030, the share of incremental vehicles fueled by new and clean energy will reach around 40%, carbon emission intensity of commercial vehicles measured on the basis of converted turnover will be cut by about 9.5% compared with 2020, and comprehensive energy consumption of the national railways per unit of converted turnover will be cut by 10% compared with 2020; and striving to hit peak for petroleum consumption in the land transportation sector by 2030.
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On December 28, 2021, the State Council issued the 14th Five-Year Plan for Energy Conservation and Emission Reduction (the “Work Plan”), which primarily provided the following goals: by 2025, as compared with 2020, China’s energy consumption per unit of GDP will be reduced by 13.5%, with the total energy consumption being reasonably controlled, and China’s total emissions of chemical oxygen demand, ammonia nitrogen, nitrogen oxides and volatile organic compounds to decrease by 8%, 8%, over 10%, and over 10%, respectively. The Work Plan proposes to implement key projects for energy conservation and emission reduction, including focusing on petrochemical and chemical industries, promoting energy-saving transformation and in-depth treatment of pollutants, deepening the control of volatile organic compound pollution in petrochemical and other industries, and comprehensively improving the waste gas collection, the synchronous operation of treatment facilities, etc.

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Anti-Monopoly

We are subject to the Anti-Monopoly Law of the PRC and other related PRC laws and regulations. Those laws and regulations prohibit dominant operators from abusing their position, or operators entering into monopoly agreements or conducting any concentration of business operators which has or may have the effect of excluding or limiting competition. Violators can be ordered to cease illegal activities, confiscated of illegal gains, and imposed a fine or other restrictive measures. The anti-monopoly law enforcement agency is the National Anti-Monopoly Bureau.

Item 4A — UNRESOLVED STAFF COMMENTS

None.

Item 5 — OPERATING AND FINANCIAL REVIEW AND PROSPECTS

General

You should read the following discussion together with our consolidated financial statements and their notes included elsewhere in this annual report. Our consolidated financial statements have been prepared in accordance with IFRS. This Item 5 does not include the comparison of 2021 to 2020, which can be found in our Form 20-F filed with the SEC on April 29, 2022.

Overview

Currently, we are engaged in a broad range of petroleum and natural gas related activities, including:

•	exploration, development, production and sale of crude oil and natural gas, and new energy business;
•	refining of crude oil and petroleum products, and production and marketing of primary petrochemical products, derivative chemical products, other chemical products and new materials;
---	---
•	marketing of refined oil products and non-oil products and trading business; and
---	---
•	sale of natural gas.
---	---

We are the largest producer of crude oil and natural gas in China. We are also one of the largest companies in China in terms of revenue. In 2022, we produced approximately 906.2 million barrels of crude oil and approximately 4,675.0 Bcf of natural gas for sale. Our refineries processed approximately 1,212.7 million barrels of crude oil in 2022. In 2022, our revenue was RMB3,239,167 million and net profit attributable to owners of the company was RMB149,380 million.

Factors Affecting Results of Operations

Our results of operations and the period-to-period comparability of our financial results are affected by a number of external factors, including changes in the prices, production and sales volume of our principal products, operating costs and the regulatory environment.

Prices of Principal Products

The fluctuations in the prices of crude oil, refined oil products, chemical products and natural gas have a significant impact on our revenue.

Production and Sales Volume for Principal Products

Our results of operations are also affected by production and sales volumes. Our crude oil and natural gas production volumes depend primarily on the level of the proved developed reserves in the fields in which we

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have an interest, as well as other factors such as the general macroeconomic environment and market supply and demand conditions, while the sales of crude oil, natural gas, refined oil and chemical products are subject to our marketing capabilities and the competitive environment.

Operating costs

The general macroeconomic environment and market supply and demand conditions may also affect our operating costs. For example, labor costs and the price index (CPI) in general in the countries where we operate are affected by the global and local macroeconomic environment. Changes in commodity prices may also affect our operating costs, as it would affect our ability to pass on the change in such commodity prices through a change in the prices of our products.

Regulatory Environment

Our operating activities are subject to regulation by the PRC government, including but not limited to the issuance of exploration and production licenses, the imposition of industry-specific taxes or product-specific taxes and levies and the implementation of environmental policies and safety standards. Our results of operations will be affected by any future changes of such regulatory environment.

Critical Accounting Policies

The preparation of our consolidated financial statements requires our management to select and apply significant accounting policies, the application of which may require management to make judgments and estimates that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities as of the date of our financial statements, and the reported amounts of revenue and expenses during the reporting period. Notwithstanding the presentation of our principal accounting policies in Note 3 to our consolidated financial statements included elsewhere in this annual report, we have identified the accounting policies below as most critical to our business operations and the understanding of our financial condition and results of operations presented in accordance with IFRS. Although these estimates are based on our management’s best knowledge of current events and actions, actual results ultimately may differ from those estimates.

Accounting for Oil and Gas Exploration and Production Activities

We use the successful efforts method of accounting, with specialized accounting rules that are unique to the oil and gas industry, for oil and gas exploration and production activities. Under this method, geological and geophysical costs incurred are expensed when incurred. However, all costs for developmental wells, support equipment and facilities, and proved mineral interests in oil and gas properties are capitalized. Costs of exploratory wells are capitalized as construction in progress pending determination of whether the wells find proved reserves. For exploratory wells located in regions that do not require substantial capital expenditures before the commencement of production, the evaluation of the economic benefits of the reserves in such wells will be completed within one year following the completion of the exploration drilling. Where such evaluation indicates that no economic benefits can be obtained, the relevant costs of exploratory wells will be converted to dry well exploration expenses. The relevant costs will be classified as oil and gas assets and go through impairment review if the evaluation indicates that economic benefits can be obtained. For wells with economically viable reserves in areas where a major capital expenditure would be required before production can begin, the related well costs remain capitalized only if additional drilling is under way or firmly planned. Otherwise, the well costs are expensed as dry wells. We have not capitalized any significant costs incurred when reserves are unknown in our oil and gas assets.

Oil and Gas Reserves

The estimation of the quantities of recoverable oil and gas reserves in oil and gas fields is integral to effective management of our exploration and production operations. Because of the subjective judgments

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involved in developing and assessing such information, engineering estimates of the quantities of recoverable oil and gas reserves in oil and gas fields are inherently imprecise and represent only approximate amounts.

Before estimated oil and gas reserves are designated as “proved”, certain engineering criteria must be met in accordance with industry standards and the regulations of the SEC. Proved oil and gas reserves are the estimated quantities of crude oil and natural gas, which, by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be economically producible from a given date forward, from known reservoirs, and under existing economic conditions, operating methods, and government regulation before the time at which contracts providing the right to operate expire, unless evidence indicates that renewal is reasonably certain, regardless of whether the estimate is a deterministic estimate or probabilistic estimate. Therefore, these estimates do not include probable or possible reserves. Our proved reserves estimates are assessed or audited annually by independent, qualified and experienced oil and gas reserves engineering firms in the United States and Canada. Our oil and gas reserves engineering department has policies and procedures in place to ensure that these estimates are consistent with these authoritative guidelines. Among other factors required by authoritative guidelines, this estimation takes into account recent information about each field, including production and seismic information, estimated recoverable reserves of each well, and oil and gas prices and operating costs as of the date the estimate is made. The price shall be the average price during the 12-month period before the ending date of the period covered by this report, determined as an unweighted arithmetic average of the first-day-of-the-month price for each month within such period, unless prices are defined by contractual arrangements, excluding escalations based upon future conditions. The costs shall be that prevailing at the end of the period.

Despite the inherent imprecision in these engineering estimates, estimated proved oil and gas reserves quantity has a direct impact on certain amounts reported in the financial statements. In addition to the capitalization of costs related to oil and gas properties on the balance sheet discussed earlier, estimated proved reserves also impact the calculation of depreciation, depletion and amortization expenses of oil and gas properties. The cost of oil and gas properties is amortized at the field level on the unit of production method. Unit of production rates are based on the total oil and gas reserves estimated to be recoverable from existing facilities based on the current terms of our production licenses. Our reserves estimates include only crude oil and natural gas which the management believes can be reasonably produced within the current terms of the production licenses that are granted by the MNR, ranging from 30 years to 55 years from the effective date of issuance in March 2000, renewable upon application 30 days prior to expiration. Consequently, the impact of changes in estimated proved reserves is reflected prospectively by amortizing the remaining book value of the oil and gas property assets over the expected future production. If proved reserves estimates are revised downward, earnings could be affected by higher depreciation expense or an immediate write-down of the property’s book value had the downward revisions been significant. Given our large number of producing properties in our portfolio, and the estimated proved reserves, it is unlikely that any changes in reserves estimates will have a significant effect on prospective charges for depreciation, depletion and amortization expenses.

In addition, due to the importance of these estimates in understanding the perceived value and future cash flows of a company’s oil and gas operations, we have also provided supplemental disclosures of “proved” oil and gas reserves estimates prepared in accordance with authoritative guidelines elsewhere in this annual report.

Property, Plant and Equipment

Where it is probable that property, plant and equipment, including oil and gas properties, will generate future economic benefits, their costs are initially recorded in the consolidated statement of financial position as assets. Cost represents the purchase price of the asset and other costs incurred to bring the asset into expected use. Subsequent to their initial recognition, property, plant and equipment are carried at cost less accumulated depreciation, depletion and amortization (including any impairment).

Depreciation, to write off the cost of each asset, other than oil and gas properties, to their residual values over their estimated useful lives is calculated using the straight-line method.

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We use the following useful lives for depreciation purposes:

Buildings and plants	8-40 years
Equipment and machinery	4-30 years
Motor vehicles	4-14 years
Other	5-12 years

No depreciation is provided on construction in progress until the assets are completed and ready for use.

The assets’ residual values and useful lives are reviewed, and adjusted as appropriate, at the end of each reporting period.

Property, plant and equipment, including oil and gas properties, are reviewed for possible impairments when events or changes in circumstances indicate that the carrying amount may not be recoverable. Determination as to whether and how much an asset is impaired involves management estimates and judgments such as future crude oil prices, prices of refined products and chemical products, the operation costs, the product mix, production volumes and the oil and gas reserves. Certain estimates and assumptions adopted by the management in the impairment reviews and calculations are formed by the internal professional team (including operations and finance teams) by reference to external institutions’ analysis reports and taking into account current economic conditions. The other estimates and assumptions are consistent with the assumptions used in our business plans.

In forming the relevant estimates and assumptions for impairment tests by our management, our internal professional team (including operations and finance teams) forms a preliminary conclusion by reference to the external institutions’ analysis reports and our historical financial data, and taking into account current economic conditions and our business plans. Then, the preliminary conclusion is reviewed and approved by the management. The approved estimates and assumptions are then utilized by our subsidiaries and branches to perform the impairment tests.

When determining whether there are indications of impairment for oil and gas properties, we consider internal factors, mainly including the decline of production and reserves volumes at the late development stage of certain oil blocks and a significant drop in economic benefits of certain oil blocks resulting from the lower price of crude oil, and external factors, mainly including a significant drop in international prices of crude oil, resulting from the imbalance of supply and demand of crude oil. When an indication of impairment of certain oil blocks is identified, we will perform the impairment tests on the oil blocks. An impairment loss is recognized for the amount by which the carrying amount of the cash-generating unit exceeds the higher of its fair value less costs to sell and its value in use. Value in use is determined by reference to the discounted expected future cash flows to be derived from the cash-generating unit.

The expected medium-to-long-term future international prices of crude oil utilized by us when estimating the expected future cash flows are determined mainly based upon the forecast of the international prices of crude oil made by principal international investment institutions combined with the judgment and analysis of the future trends of international prices of crude oil made by us. We calculated the expected future cash flows of each oil block according to the estimates of future production volume levels per year stated in the oil and gas reserves reports, the estimates of operation costs of oil and gas made by us, and taking into account our future capital expenditure plan. We refer to the weighted average cost of capital of the oil and gas industry when determining the discount rate and makes relevant adjustments according to specific risks in different countries or regions. In the years ended December 31, 2020, 2021 and 2022, the after-tax discount rates adopted by most of our oil and gas regions were in the range of 5.9%-12.0%, 7.6% -15.0% and 7.2%-16.0%, respectively.

Given the broad scope of our property, plant and equipment, the impairment test involves numerous assumptions, which are interrelated to each other to a certain extent. For example, the estimates and judgments

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with respect to the product mix, production costs and oil and gas reserves may vary along with the changes in crude oil prices. The sensitivity analysis performed after taking into account the interrelationship among all of the estimates and judgments would be neither cost efficient nor time efficient. As a result, the management believes that a sensitivity analysis of relevant assumptions on impairment is not practicable. Favorable changes to some assumptions might have avoided the need to impair any assets or make it necessary to reverse an impairment loss recognized in prior periods, whereas unfavorable changes might have caused an additional unknown number of other assets to become impaired, or resulted in larger impacts on impaired assets.

Our operating results in the following fiscal year may deviate from management’s estimates or judgments. This would require an adjustment to the provision for impairment of the property, plant and equipment disclosed in Note 15 to the consolidated financial statements.

Gains and losses on disposals of property, plant and equipment are determined by reference to their carrying amounts and are recorded in the consolidated profit or loss.

Interest and other costs on borrowings to finance the purchase and construction of property, plant and equipment are capitalized during the period of time that is required to complete and prepare the asset for its intended use. Costs for repairs and maintenance activities are expensed as incurred except for costs of components that result in improvements or betterments which are capitalized as part of property, plant and equipment and depreciated over their useful lives.

Asset Retirement Obligation

Provision is recognized for the future decommissioning and restoration of oil and gas properties. The amounts of the provision recognized are the present values of the estimated future expenditures. The estimation of the future expenditures is based on current local conditions and requirements, including legal requirements, technology, price level, etc. In addition to these factors, the present values of these estimated future expenditures are also impacted by the estimation of the economic lives of oil and gas properties. Changes in any of these estimates will impact our operating results and the financial position over the remaining economic lives of the oil and gas properties.

For a detailed discussion of our critical accounting policies, please see Note 3 to our consolidated financial statements included elsewhere in this annual report.

Operating Results

The following discussion is based on our historical results of operations. As a result of the factors discussed above, such results of operations may not be indicative of our future operating performance.

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The table below sets forth our statement of comprehensive income for the years ended December 31, 2020, 2021 and 2022.

	Year Ended December 31,
	2020			2021			2022
	(RMB in millions)
Revenue		1,933,836			2,614,349			3,239,167
Operating expenses		(1,857,899	)		(2,453,196	)		(3,022,507	)
Profit from operations		75,937			161,153			216,660
Exchange gain /(loss), net		108			538			(1,818	)
Interest expense, net		(23,505	)		(16,755	)		(16,816	)
Share of profit of affiliates and joint ventures		3,533			13,267			15,251
Profit before income tax expense		56,073			158,203			213,277
Income tax expense		(22,588	)		(43,507	)		(49,295	)
Profit for the year attributable to non-controlling interests		14,479			22,526			14,602
Profit for the year attributable to owners of the Company		19,006			92,170			149,380

The table below sets forth our revenue by business segment for the years ended December 31, 2020, 2021 and 2022 as well as the percentage changes for the periods shown.

	2020			2021			2021<br>vs.<br>2020			2022			2022<br>vs.<br>2021
	(RMB in millions, except percentages)
Revenue
Oil, gas and new energy		530,807			688,334			29.7	%		929,279			35.0	%
Refining, chemicals and new materials		774,775			974,972			25.8	%		1,164,596			19.4	%
Marketing		1,497,533			2,170,062			44.9	%		2,771,894			27.7	%
Natural gas sales		370,771			417,022			12.5	%		519,211			24.5	%
Headquarters and others		3,547			3,894			9.8	%		5,473			40.5	%
Total		3,177,433			4,254,284			33.9	%		5,390,453			26.7	%
Less: elimination		(1,243,597	)		(1,639,935	)		31.9	%		(2,151,286	)		31.2	%
Consolidated net sales from operations		1,933,836			2,614,349			35.2	%		3,239,167			23.9	%

The table below sets forth our operating income by business segment for the years ended December 31, 2020, 2021 and 2022, as well as the percentage changes in operating income for the periods shown. Loss from operations for headquarters and others shown below consists of expenses for research and development, business services and infrastructure support to our operating business segments.

	2020			2021			2021<br>vs.<br>2020			2022			2022<br>vs.<br>2021
	(RMB in millions, except percentages)
Profit/(loss) from operations
Oil, gas and new energy		23,092			68,452			196.4	%		165,748			142.1	%
Refining, chemicals and new materials		(1,834	)		49,740			—			40,570			(18.4	)%
Marketing		(2,906	)		13,277			—			14,374			8.3	%
Natural gas sales		72,410			43,965			(39.3	)%		12,957			(70.5	)%
Headquarters and others		(14,825	)		(14,281	)		—			(16,989	)		(19.0	)%
Total		75,937			161,153			112.2	%		216,660			34.4	%

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Year Ended December 31, 2022 Compared to Year Ended December 31, 2021

Consolidated Results of Operations

Overview

In 2022, we achieved a revenue of RMB3,239,167 million, representing an increase of 23.9% as compared with RMB2,614,349 million for last year. Net profit attributable to owners of the company was RMB149,380 million, representing an increase of 62.1% as compared with RMB92,170 million for last year. Basic earnings per share were RMB0.82, representing an increase of 64.0% as compared with RMB0.50 for last year.

Revenue Our revenue was RMB3,239,167 million for 2022, representing an increase of 23.9% as compared with RMB2,614,349 million for last year. This was primarily due to the increase in the prices of most of our oil and gas products. The table below sets out our external sales volume and average realized prices for the major products sold by us in 2021 and 2022 and their respective percentage of change:

	Sales Volume (’000 ton)							Average Realized Price (RMB/ton)
	2022		2021		Percentage of<br>Change (%)			2022		2021		Percentage of<br>Change (%)
Crude oil^(a)^		125,625		158,342		(20.7	)		4,645		3,198		45.2
Natural gas (hundred million cubic metres, RMB/’000 cubic metre)^(b)^		2,602.84		2,739.74		(5.0	)		2,684		1,729		55.2
Gasoline		58,209		65,981		(11.8	)		8,686		7,018		23.8
Diesel		78,762		81,728		(3.6	)		7,861		5,395		45.7
Kerosene		13,678		15,598		(12.3	)		6,771		3,661		84.9
Polyethylene		6,455		5,808		11.1			7,807		7,835		(0.4	)
Polypropylene		4,007		4,272		(6.2	)		7,488		7,830		(4.4	)
Lubricant		1,132		1,565		(27.7	)		9,149		6,858		33.4
(a)	The volume of crude oil listed above represents all our external sales volume.
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(b)	The natural gas listed above represents all our external sales volume. The substantial increase in average realized prices was mainly due to a significant increase in overseas re-export trade prices. The average realized price of domestic natural gas increased by 27.6% as compared with last year.
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Operating Expenses Operating expenses for 2022 were RMB3,022,507 million, representing an increase of 23.2% as compared with RMB2,453,196 million for last year, of which:

Purchases, Services and Other Expenses Purchases, services and other expenses for 2022 were RMB2,213,080 million, representing an increase of 25.0% as compared with RMB1,770,019 million for last year. This was primarily due to the increase in the expenses for purchasing oil and gas products and the increase in trading expenses.

Employee Compensation Costs Employee compensation costs (including salaries of employees and cost of market-oriented temporary and seasonal contractors, various types of insurance, housing provident funds, training fees and other additional costs) for 2022 were RMB163,073 million, representing an increase of 5.3% as compared with RMB154,835 million for last year. This was primarily due to an increase in employee compensation commensurate with improvements in our operating results.

Exploration Expenses Exploration expenses for 2022 were RMB27,074 million, representing an increase of 11.7% as compared with RMB24,248 million for last year. This was primarily due to that along with the increase in the prices of oil and gas, we strengthened our exploration and development efforts and vigorously promoted the increase in both our reserves and production of oil and gas.

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Depreciation, Depletion and Amortisation Depreciation, depletion and amortisation for 2022 was RMB238,036 million, representing an increase of 2.9% as compared with RMB231,269 million for last year. This was primarily due to an increase in long-term assets and the structural change in oil and gas resources, partially offset by the impairment in assets.

Selling, General and Administrative Expenses Selling, general and administrative expenses for 2022 were RMB59,529 million, representing an increase of 3.0% as compared with RMB57,802 million for last year. This was primarily due to the increase of expected credit loss, and the increase in the expenses of safe production due to the increase of revenue and the higher provision standard.

Taxes other than Income Taxes Taxes other than income taxes for 2022 were RMB278,055 million, representing an increase of 22.0% as compared with RMB228,003 million for last year, among which the consumption tax for 2022 was RMB159,132 million, representing a decrease of 1.5% as compared with RMB161,623 million for last year; the resource tax for 2022 was RMB32,991 million, representing an increase of 39.1% as compared with RMB23,723 million for last year; and crude oil special gain levy for 2022 was RMB43,768 million, representing an increase of RMB39,113 million as compared with RMB4,655 million for last year.

Other (Expenses)/Income, net

Other net expenses for 2022 was RMB43,660 million, as compared with a net income of RMB12,980 million for last year, primarily due to the one-time gain recorded in 2021 from the pipeline assets transaction of Kunlun Energy Company Limited (“Kunlun Energy”), a subsidiary of our company.

Profit from Operations The profit from operations for 2022 was RMB216,660 million, representing an increase of 34.4% as compared with RMB161,153 million for last year.

Net Exchange (Loss)/Gain Net exchange loss for 2022 was RMB1,818 million, as compared with a net exchange gain of RMB538 million for last year. This was primarily due to the impact of fluctuations in the exchange rate of US Dollar against RMB.

Net Interest Expense Net interest expense for 2022 was RMB16,816 million, in line with RMB16,755 million recorded last year.

Profit Before Income Tax Expense Profit before income tax expense for 2022 was RMB213,277 million, representing an increase of 34.8% as compared with RMB158,203 million for last year.

Income Tax Expense The income tax expense for 2022 was RMB49,295 million, representing an increase of 13.3% as compared with RMB43,507 million for last year, which was primarily due to the increase in our profit before income tax expense.

Profit for the Year Net profit for 2022 was RMB163,982 million, representing an increase of 43.0% as compared with RMB114,696 million for last year.

Profit Attributable to Non-controlling Interests Profit attributable to non-controlling interests for 2022 was RMB14,602 million, representing a decrease of 35.2% as compared with RMB22,526 million for last year, which was primarily due to the one-time gain from the pipeline assets transaction of Kunlun Energy, which was recorded in 2021.

Profit Attributable to Owners of the Company Profit attributable to owners of the company for 2022 was RMB149,380 million, representing an increase of 62.1% as compared with RMB92,170 million for last year.

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Segment Results

Oil, Gas and New Energy

Revenue The realized revenue of our oil, gas and new energy segment for 2022 was RMB929,279 million, representing an increase of 35.0% as compared with RMB688,334 for last year, which was primarily due to the increase in the prices of our oil, gas and other products.

The average realized crude oil price of our company in 2022 was US$92.12 per barrel, representing an increase of 40.5% as compared with US$65.58 per barrel in last year.

Operating Expenses Operating expenses of the oil, gas and new energy segment for 2022 were RMB763,531 million, representing an increase of 23.2% as compared with RMB619,882 million for last year, which was primarily due to the increase in procurement expenses and taxes expenses.

In 2022, the unit oil and gas lifting cost of our company was US$12.42 per barrel, which was in line with US$12.30 per barrel in last year.

Profit from Operations In 2022, by seizing the favourable opportunity in the rise of international oil prices, our domestic business of the oil, gas and new energy segment enhanced profitable exploration, actively increased oil and gas reserves and output, further implemented quality and profitability enhancement, strengthened benchmarking analysis and strictly controlled the investment and cost in the domestic business. Our overseas business of the oil, gas and new energy segment focused on optimizing the asset structure, actively obtained new high-quality projects, effectively promoted the disposal of assets that generated low profitability or were unprofitable and concentrated resources onto the areas where we have competitive advantages to continuously improve the profitability of the overseas business. In 2022, the oil, gas and new energy segment realized an operating profit of RMB165,748 million, representing an increase of by RMB97,296 million as compared with RMB68,452 million for last year.

Refining, Chemicals and New Materials

Revenue The revenue of our refining, chemicals and new materials segment for 2022 was RMB1,164,596 million, representing an increase of 19.4% as compared with RMB974,972 million for last year, primarily due to the increase in the price of the refined and chemical products. The revenue from our refining business for 2022 was RMB906,782 million, representing an increase of 23.2% as compared with RMB736,004 million for last year and the revenue from our chemical business for 2022 was RMB257,814 million, representing an increase of 7.9% as compared with RMB238,968 million for last year.

Operating Expenses Operating expenses of the refining, chemicals and new materials segment for 2022 were RMB1,124,026 million, representing an increase of 21.5% as compared with RMB925,232 million for last year, primarily due to the increase in the procurement costs of crude oil and feedstock.

In 2022, the cash processing cost of our refineries was RMB215.37 per ton, representing an increase of 2.7% as compared with last year, primarily due to the increase in the price of fuel and power.

Profit from Operations In 2022, our refining, chemicals and new materials segment strengthened the stable operation of equipment and the coordination between production activities and sales activities. We adhered to market-oriented principles, continuously optimized the products structure in accordance with the principle of maximizing the profitability of the industry chain and achieved the potential of cost reduction and profitability improvement in the whole process and all elements of production. The refining, chemicals and new materials segment in 2022 realized operating profits of RMB40,570 million, representing a decrease of 18.4% as compared with RMB49,740 million for last year, among which, the refining business recorded an operating profit of RMB41,168 million, representing an increase of 9.1% as compared with RMB37,730 million for last year, primarily due to the increase in profit margin of the refining business; while the chemical business generated an operating loss of RMB598 million, decreased by RMB12,608 million from operating profit of

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RMB12,010 million for last year, primarily due to the rise in cost of raw materials as a result of the increase in oil prices.

Marketing

Revenue The revenue of our marketing segment for 2022 was RMB2,771,894 million, representing an increase of 27.7% as compared with RMB2,170,062 million for last year, primarily due to the increase in the price of refined oil and the increase in revenue of our international trading operations.

Operating Expenses Operating expenses of the marketing segment for 2022 were RMB2,757,520 million, representing an increase of 27.9% as compared with RMB2,156,785 million for last year, primarily due to the increase in the expenditures incurred for the external purchase of refined oil and the increase in trading expenses.

Profit from Operations In 2022, the marketing segment, strived to optimize its marketing strategies, create innovative marketing modes, increase sales volumes, market shares and price realisation rates, allocate resources scientifically, arrange the sales flow rationally and endeavoured to control the marketing expenses in the domestic market. In the overseas business, the marketing segment strengthened its market trend analysis, seized market opportunities, vigorously carried out the operation of the global integrated market and actively promoted the widening of income sources and increase in its profitability. In 2022, the marketing segment recorded an operating profit of RMB14,374 million, representing an increase of 8.3% as compared with RMB13,277 million for last year.

Natural Gas Sales

Revenue The revenue of the natural gas sales segment amounted to RMB519,211 million for 2022, representing an increase of 24.5% as compared with RMB417,022 million for last year, primarily due to the increase in price of natural gas.

Operating Expenses Operating expenses of the natural gas sales segment amounted to RMB506,254 million for 2022, representing an increase of 35.7% as compared with RMB373,057 million for last year, primarily due to the increase in the natural gas purchase expenditure as a result of the increase in natural gas prices in the international market.

Profit from Operations

In 2022, the natural gas sales segment actively optimized the structure of its resource pool, strived to control procurement costs and strived to satisfy the market demand for clean and low-carbon energy. We highlighted our professional marketing, strengthened our lean management, expanded diversified sales channels and actively developed high-efficiency markets and high-end customers. In 2022, the natural gas sales segment realized an operating profit of RMB12,957 million, representing a decrease of RMB12,688 million as compared with last year after excluding the impact of the Kunlun Energy pipeline assets transaction on the profit from operations for last year. The decrease was primarily due to the increase in the cost of imported natural gas.
In 2022, our international operations ^(a)^ realized a revenue of RMB1,350,261 million, accounting for 41.7% of our total revenue. Profit before income tax expenses amounted to RMB35,527 million, accounting for 16.7% of our profit before taxes. Our international operations maintained a stable development with continuous improvement in our abilities of international operation.

(a) International operations do not constitute a separate operating segment of the company. The financial data of international operations are included in the financial data of respective operating segments mentioned above.

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Liquidity and Capital Resources

Our primary sources of funding include cash generated by operating activities and short-term and long-term borrowings, which are expected to be adequate to meet our requirements for cash in the next 12 months and thereafter under existing agreements and other known obligations. Our primary uses of funds were for operating activities, capital expenditures, repayment of short-term and long-term borrowings and distributions of dividends to shareholders. Our payments to CNPC are limited to dividends and payments for the goods and services provided, and land and real properties leased, to us by CNPC. See “Item 7 — Major Shareholders and Related Party Transactions — Related Party Transactions — Continuing Related Party Transactions” and Note 39 to our consolidated financial statements included elsewhere in this annual report.

For 2022, we have distributed interim dividends of RMB37,076 million to our shareholders. Based on an overall consideration of various factors, including our operating performance, financial status and cash flows, our board of directors recommended the final dividends for 2022 of RMB40,265 million, which would result in the aggregate dividends for 2022 to amount to RMB77,341 million. See “Item 8 — Financial Information — Dividend Policy” for a discussion of factors which may affect the determination by our board of directors of the appropriate level of dividends.

Our financing ability may be limited by our financial condition, our results of operations and the international and domestic capital markets. In general, we need to obtain PRC government approval or to complete the required filings for any project involving significant capital investment for all of our segments. For a more detailed discussion of factors which may affect our ability to satisfy our financing requirements, see “Item 3 — Key Information — Risk Factors — Risks Related to Liquidity”.

We fund the capital and related expenditures described in this annual report principally through cash from operating activities, short-term and long-term borrowings and cash and cash equivalents. Net cash flows from operating activities in the year ended December 31, 2022 was RMB393,768 million. As of December 31, 2022, we had cash and cash equivalents of RMB191,190 million. While each of the projects described in this annual report for which significant capital expenditures will be required is important to our future development, we do not believe that failure to implement any one of these projects would have a material adverse effect on our financial condition or results of operations. If the price of crude oil declines sharply in the future, it is likely that we would delay or reduce the scale of the capital expenditures for each segment.

We currently do not have any outstanding options, warrants or other rights for any person to require us to issue any common stock at a price below its market value. We do not currently intend to issue any such rights or to otherwise issue any common stock for a price below its market value. There are currently no restrictions on the ability of our subsidiaries to transfer funds to our company in the form of cash dividends, loans or advances, which restriction, if imposed, have had or would be expected to have the effect of limiting our ability to meet our cash obligations.

In addition, as of December 31, 2022, we did not have any transactions, arrangements or other relationships with unconsolidated entities or other persons that are reasonably likely to materially affect the liquidity or availability of or requirements for our capital resources.

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The table below sets forth our net cash flows for each of the years ended December 31, 2020, 2021 and 2022 and the balance of our cash and cash equivalents at the end of each of the years.

	Year Ended December 31,
	2020			2021			2022
	(RMB in millions)
Net cash flows from operating activities		318,575			341,469			393,768
Net cash flows used for investing activities		(181,986	)		(213,032	)		(232,971	)
Net cash flows used for financing activities		(99,400	)		(107,971	)		(113,713	)
Currency translation difference		(4,967	)		(2,308	)		7,317
Cash and cash equivalents		118,631			136,789			191,190

Our cash and cash equivalents increased by 39.8% from RMB136,789 million as of December 31, 2021 to RMB191,190 million as of December 31, 2022. The cash and cash equivalents were mainly denominated in RMB and US Dollar (approximately 55.1% were denominated in RMB, approximately 43.3% were denominated in US Dollar, approximately 1.0% were denominated in HK Dollar and approximately 0.6% were denominated in other currencies).

Net Cash Flows from Operating Activities

Our net cash flows from operating activities amounted to RMB393,768 million in 2022, representing an increase of 15.3% from RMB341,469 million in 2021. This was mainly due to a combination of an increase in profit for the year and changes in working capital.

Net Cash Flows Used for Investing Activities

Our net cash flows used for investing activities in 2022 amounted to RMB232,971 million, representing an increase of 9.4% from RMB213,032 million in 2021. The increase was primarily due to the effects of proceeds received from the Kunlun Energy pipeline assets transaction in 2021, which also lowered the net cash flows used for investing activities in 2021.

Net Cash Flows Used for Financing Activities

Our net cash used for financing activities in 2022 was RMB113,713 million, representing an increase of 5.3% from RMB107,971 million in 2021. This was primarily due to the optimization of our debt structure, an overall decrease of long-term and short-term borrowings.

Our net borrowings as of December 31, 2020, 2021 and 2022 were as follows:

	As of December 31,
	2020		2021		2022
	(RMB in millions)
Short-term borrowings (including current portion of long-term borrowings)		117,542		53,275		100,639
Long-term borrowings		251,379		287,175		222,478
Total borrowings		368,921		340,450		323,117
Less: cash and cash equivalents		118,631		136,789		191,190
Net borrowings		250,290		203,661		131,927

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The following table sets out the remaining contractual maturity of borrowings as of December 31, 2021 and 2022 according to the earliest contractual maturity dates. The amounts set out below are contractual undiscounted cash flows, including principal and interest:

	As of December 31,
	2021		2022
	(RMB in million)
Within 1 year		58,923		107,461
Between 1 and 2 years		53,250		129,885
Between 2 and 5 years		226,124		102,490
After 5 years		28,053		16,500
Total		366,350		356,336

Our total borrowings as of December 31, 2022 consisted of approximately 34.9% of fixed-rate loans and approximately 65.1% of floating-rate loans. Of our borrowings as of December 31, 2022, approximately 67.7% were denominated in RMB, approximately 30.2% were denominated in US Dollars and approximately 2.1% were denominated in other currencies.

Our debt to capital ratio (calculated by dividing interest-bearing debts by the aggregate of interest-bearing debts and shareholder’s equity; interest-bearing debts including various long and short term borrowings) as of December 31, 2020, 2021 and 2022 was 21.3%, 19.5% and 17.4%.

As of December 31, 2022, the outstanding amount of our debts secured by CNPC and its subsidiaries and other third parties was RMB11,186 million.

Capital Expenditures and Investments

In 2022, our capital expenditures amounted to RMB274,307 million, representing an increase of 9.2% from RMB251,178 million in 2021.

The table below sets forth our capital expenditures and investments by business segment for each of the years ended December 31, 2020, 2021 and 2022, and the estimated amounts for 2023.

	2020				2021				2022				2023 (estimated)
	(RMB in<br>millions)		%		(RMB in<br>millions)		%		(RMB in<br>millions)		%		(RMB in<br>millions)		%
Oil, gas and new energy		186,620		75.71		178,259		70.97		221,592		80.78		195,500		80.29
Refining, chemicals and new materials		21,810		8.85		54,487		21.69		41,771		15.23		34,000		13.96
Marketing		16,294		6.61		10,982		4.37		5,069		1.85		7,000		2.88
Natural gas sales		21,143		8.58		6,750		2.69		4,936		1.80		6,000		2.46
Headquarters and others		626		0.25		700		0.28		939		0.34		1,000		0.41
Total		246,493		100.00		251,178		100.00		274,307		100.00		243,500		100.00

As of December 31, 2022, the capital commitments contracted but not paid by us were approximately RMB882 million, mainly related to property, plant and equipment.

Oil, Gas and New Energy

A majority of our capital expenditures and investments relate to our oil, gas and new energy segment. For the years ended December 31, 2020, 2021 and 2022, the capital expenditures in relation to the oil, gas and new

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energy segment amounted to RMB186,620 million, RMB178,259 million and RMB221,592 million, respectively. In 2022, our capital expenditures were primarily used for exploration and development, achieving economies of scale and profitability in key domestic basins such as Tarim, Sichuan, Ordos, Junggar, Songliao and Bohai Bay, devoting greater efforts in the exploration of unconventional resources such as shale gas and shale oil, promoting new energy projects including clean electricity and CCUS; and actively responded to changes in the overseas environment, focused on key areas to deepen effective exploration, strengthened production capacity construction of key projects such as the Middle East, Central Asia and the Americas and continuously optimized business strategy and asset structure.

We estimate that our capital expenditures for the oil, gas and new energy segment for 2023 will be RMB195,500 million, which is expected to be primarily used for our continuous exploration and development achieving economies of scale and profitability in key domestic basins such as Songliao, Ordos, Junggar, Tarim, Sichuan and Bohai Bay. The Company expects to devote greater efforts in the exploration of unconventional resources such as shale gas and shale oil, promote new energy projects including clean electricity and CCUS, adhere to the principle of centralized and profitable development in overseas operations, strengthen the procurement of high-quality projects, continuously optimize asset structure, business structure and regional strategy while continuing operating existing projects in cooperation areas such as the Middle East, Central Asia, the Americas and the Asia Pacific region.

Refining, Chemicals and New Materials

Our capital expenditures for our refining, chemicals and new materials segment for the years ended December 31, 2020, 2021 and 2022 were RMB21,810 million, RMB54,487 million and RMB41,771 million, respectively. In 2022, our capital expenditures were primarily used for the Guangdong Petrochemical integrated refining and chemical project, transformation and upgrading projects such as Jilin Petrochemical ABS project and research projects for new materials and new technologies.

It is estimated that the capital expenditures for the refining, chemicals and new materials segment for 2023 will be RMB34,000 million, which is expected to be used primarily for the construction of large-scale refining and chemical projects such as Jilin Petrochemical and Guangxi Petrochemical Ethylene projects, completion of the Guangdong Petrochemical integration project for refining and chemicals as well as transformation and upgrading projects related to reduction of refining capacity and increasing of chemicals production capacity and new materials and new technologies.

Marketing

Our capital expenditures for our marketing segment for the years ended December 31, 2020, 2021 and 2022 were RMB16,294 million, RMB10,982 million and RMB5,069 million, respectively. In 2022, our capital expenditures were primarily used for the construction of our domestic terminal network for the sales of oil and gas, the expansion of new energy projects such as hydrogen refueling stations and the construction of overseas oil and gas storage, transportation and sales facilities.

It is estimated that the capital expenditures for the marketing segment for 2023 will be RMB7,000 million, which is expected to be used primarily for the construction of domestic comprehensive energy stations for “oil, gas, hydrogen, power and non-oil” and the optimization of our terminal network layout and the construction of overseas oil and gas storage, transportation and sales facilities.

Natural Gas Sales

Our capital expenditures for the natural gas sales segment for the years ended December 31, 2020, 2021 and 2022 were RMB21,143 million, RMB6,750 million and RMB4,936 million, respectively. Our capital expenditures for the natural gas sales segment in 2022 were mainly used for construction of natural gas branch lines and market development of urban gas end-use markets.

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We estimate that our capital expenditures for the natural gas and pipeline segment for 2023 will be RMB6,000 million, which is expected to be used primarily for the construction of Fujian LNG receiving stations, natural gas branch lines and market development projects for urban gas end-market.

Headquarters and Others

Our non-segment capital expenditures for each of the years ended December 31, 2020, 2021 and 2022 were RMB626 million, RMB700 million and RMB939 million, respectively, which were primarily used for the improvement of scientific research facilities and construction of our IT system.

We estimate that our capital expenditures for the head office and other segments for 2023 will be RMB1,000 million, which is expected to be used primarily for the enhancement of research facilities and construction of our IT systems.

Off-Balance Sheet Arrangements

As of December 31, 2022, we had no off-balance sheet arrangements with unconsolidated entities or persons that had or were reasonably likely to have a material current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, working capital, cash requirements or sources of funds.

Long-Term Contractual Obligations and Other Commercial Commitments and Payment Obligations

All information that is not historical in nature disclosed under “Item 5 — Operating and Financial Review and Prospects — Long-Term Contractual Obligations and Other Commercial Commitments and Payment Obligations” is deemed to be a forward-looking statement. See “Forward-Looking Statements” for additional information.

The tables below set forth our long-term contractual obligations as of December 31, 2022.

	Payment Due by Period
Contractual Obligations	Total		Less Than<br>1 Year		1-3 Years		3-5 Years		After<br>5 Years
	(RMB in millions)
Long-term debt		284,742		62,264		187,660		19,332		15,486
Lease obligations		204,514		13,244		22,156		20,140		148,974
Capital commitments		882		831		51		—		—
Debt-related interest		18,604		8,616		7,554		1,420		1,014
Total		508,742		84,955		217,421		40,892		165,474

In the next five years, we estimate that we are obligated to pay to the MNR RMB500 million each year with respect to our exploration and production licenses.

Assets Retirement Obligation

Most of the provinces and regions in which our oil and gas exploration and production activities are located have promulgated environmental protection regulations, which set forth specific abandonment and disposal processes for oil and gas exploration and production activities. We have established standard abandonment procedures, including plugging all retired wells, dismantling all retired metering stations and other related facilities and performing site restoration, in response to the issuance of these provincial and regional regulations. As of December 31, 2022, the balance of assets retirement obligation was RMB142,081 million.

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Research and Development

We have three research institutions under the supervision of our research and development management department at our headquarters. Except for those branch companies which are engaged in marketing activities, each of our other branch companies has its own research and development management department. Most of our branch companies have their own research institutions. Our research and development management departments are mainly responsible for managing and coordinating the research and development activities conducted by each of the research institutions. As of December 31, 2022, we had 30,729 employees in our research and development departments and institutions.

In each of the years ended December 31, 2020, 2021 and 2022, our total expenditures for research and development (including capitalized expenditures) were approximately RMB22,921 million, RMB23,731 million and RMB28,718 million, respectively. In 2022, our total expenditures for research and development accounted for 0.9% of our operating revenue, and 30.3% of our expenditures for research and development for 2022 was capitalized.

Exploration and Production

Most of China’s major oil and gas fields are characterized by a broad range of geological conditions, and a majority of China’s oil and gas fields are in continental sedimentary basins with complex structures. Our research and development efforts with respect to our exploration and production business focus on:

•	theories and technologies of crude oil and natural gas exploration;
•	oil and gas development theories and technologies;
---	---
•	engineering technologies and equipment; and
---	---
•	technologies for security, energy conservation and environmental protection.
---	---

Refining and Chemicals

Currently, our research and development efforts in the refining and chemicals segment are focusing on the following areas:

•	new catalyst and catalytic materials;
•	technologies for clean refined oil products;
---	---
•	technologies for unqualified heavy oil processing;
---	---
•	refining-chemical integration technologies;
---	---
•	technologies for production of olefin aromatics;
---	---
•	technologies for new products of synthetic resin and synthetic rubber; and
---	---
•	technologies for safety, energy saving and environmental protection.
---	---

New Energy and New Materials

We expect to increase our efforts into the research and development of new energy and new materials technologies. In 2021, we established the Shenzhen New Energy Research Institute and the Shanghai New Materials Research Institute. In 2022, we established a research institution in Japan. We will continue to increase investment into the technology research and development to provide technical support for the development of new energy, new materials and new business.

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Trend Information

In 2023, the world economy is expected to continue to maintain slow growth, and there will still be many unstable and uncertain factors. The volatility of international crude oil prices may increase. As the effect of stable growth of the macro-economy continues to emerge, China’s economic growth is expected to rebound on the whole, the demand for refined oil in the domestic market is expected to recover and the competition will continue to be fierce. Facing various opportunities and challenges, we will adhere to our new development concept, actively integrate into the new development pattern, implement the high-quality development requirements, vigorously implement the five development strategies of innovation, resources, market, internationalization, green and low-carbon, focus on developing our main business, strengthen enterprise management, reform and innovation, improve quality and profitability, green transformation, digital transformation and risk prevention, and strive to create value for shareholders.

With respect to our oil, gas and new energy business, our domestic oil and gas business will continue to promote efficient exploration, strengthen risk exploration and pre-exploration in six major areas, including marine carbonate rocks, lithologic strata, volcanic rocks, thrust structural zones, new areas and new fields for shale oil and gas. We will organize the centralized exploration in oil and natural gas areas with scale reserves and strive to increase oil and natural gas reserves. We expect to precisely develop oil and gas, control the gradual decline of old oil field production and improve the collection rate of old oil fields. We will focus on the construction of new areas and strive to improve oil and gas production. Our international oil and gas business will maintain efficient exploration, expand the discovery scale of new fields, attach great importance to the fine exploration of mature exploration areas and maintain a good momentum of reserves discovery. We will strengthen fine development and accelerate the construction of key production capacity and engineering projects. We will increase the procurement of high-quality projects, promote the disposal of low profitability and unprofitable assets, continue to optimize the structure of overseas oil and gas assets, business structure and regional strategy. Our new energy business will fully implement the carbon emission peak action plan, continue to optimize the development plans of offshore wind power, CCS/CCUS, gas power, etc., and accelerate the construction of new energy bases, fully participate in the construction of the “desert, Gobi, wasteland” large base and the far-reaching offshore wind power large base projects and strengthen the deployment and implementation of clean power, geothermal, hydrogen energy and other projects. In 2023, we plan to reach a crude oil output of 912.9 million barrels and a marketable natural gas output of 4,888.9 Bcf, thus achieving a total oil and natural gas output of 1,727.7 million BOE.

With respect to our refining, chemicals and new materials business, we will promote the optimal allocation of regional resources, leverage the advantages of characteristic crude oil resources and refinery facilities, optimize production routes and product plans and increase the production of low-sulphur marine fuel oil, paraffin, lubricating oil, asphalt and other characteristic products. We will optimize the supply of ethylene raw materials, maintain the high load operation of ethylene and aromatics units and strive to increase the production of high value-added chemical products. We will adhere to the development idea of “base + high-end” and promote the construction of ethylene projects of Jilin Petrochemical and Guangxi Petrochemical. We will vigorously develop new materials business and accelerate the research and development of new products at Liaoyang Petrochemical and Daqing Petrochemical. We will actively expand the sales channels of chemical products, leverage the functions of the “PetroChina e-Chemical” platform, further promote the “product manager + customer manager” professional marketing model and further improve the sales and profitability of chemical products. In 2023, we plan to process crude oil of 1,293.1 million barrels.

With respect to our marketing business, we plan to actively ensure smooth sales channels for our upstream production; we will fully increase marketing, continue to strengthen market research, build an integrated wholesale and retail marketing system, enhance the development of group customers, small and medium-sized enterprises, and other end customers, develop differentiated marketing strategies for different regions, different industries, different periods of time and different oil products, accurately control the sales trends and steadily increase market share and sales profitability. We expect to further optimize the whole marketing process,

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improve the on-site service of gas stations, continuously improve customer experience, enhance brand reputation and influence, and increase the sales of gasoline. We will adjust and optimize the investment direction and optimize the construction of terminal networks such as gas stations, comprehensive energy service stations, charging and swapping stations and photovoltaic stations. We will continue to vigorously develop the non-oil sales business, improve store marketing ability, accelerate the construction of our e-commerce platform and strive to increase revenue and create efficiency. We will improve the international trade system, strive to expand the scale of trade, build the trading resource pool, enhance the flexibility and stability of operation and promote the cost reduction and increase the profitability of the oil and gas industry chain.

With respect to our natural gas sales business, we will make full use of both domestic and foreign resources, strengthen demand-side dynamic analysis and management, scientifically and reasonably sign purchase and sales contracts, strictly implement sales plans and profitably ensure market supply. We will adhere to the principle of prioritizing incremental resources for high-profitability markets and high-end users, strengthen strategic cooperation with relevant enterprises, accelerate the development of urban gas market and strive to increase the sales proportion of terminal markets. We expect to refine and differentiate the marketing strategy, strictly implement the national price policy, continuously expand the online trading volume, promote the spot purchasing mode and continuously improve the marketing quality and profitability. We will promote the construction of natural gas sales branch lines and LNG terminals in an orderly manner and constantly enhance the market supply and service capacity.

Other than as disclosed above and elsewhere in this annual report, we are not aware of any trends, uncertainties, demands, commitments or events for the periods covered in this annual report that are reasonably likely to have a material effect on our net sales revenue or income, continuous operating revenue, profitability, liquidity or capital resources, or that would cause the disclosed financial information to be misleading.

Other Information

Inflation

In 2022, RMB in which our financial statements are presented did not experience hyperinflation. Inflation did not have a significant impact on our results of operations for the year ended December 31, 2022.

Related Party Transactions

For a discussion of related party transactions, see “Item 7 — Major Shareholders and Related Party Transactions — Related Party Transactions” and Note 39 to our consolidated financial statements included elsewhere in this annual report.

Recent Developments in IFRS

For a detailed discussion of recent developments in IFRS, see Note 2 to our consolidated financial statements.

Item 6 — DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

Directors, Senior Management and Supervisors

As of the date of this report, our board of directors consists of 11 directors, four of whom are independent non-executive directors, or INEDs. Directors are appointed at our general meetings for a three-year term. The directors may

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be re-appointed upon the expiration of his/her term of office. The functions and duties conferred on the board of directors include:

•	convening shareholders’ meetings and reporting its work to the shareholders’ meeting;
•	implementing the resolutions of the shareholders’ meeting;
---	---
•	determining our business plans and investment programs;
---	---
•	formulating our annual budget and final accounts;
---	---
•	formulating our profit distribution and loss recovery proposals;
---	---
•	formulating proposals for the increase or reduction of our registered capital and the issuance of our debentures or other securities and listings;
---	---
•	proposing to redeem shares, merge, spin-off, dissolve or otherwise change the form of the Company;
---	---
•	deciding on our internal management structure;
---	---
•	appointing or dismissing the president of the Company, and upon the nomination of the president, appointing or dismissing vice president, senior vice president, chief financial officer, or CFO, and other senior management, and determining matters relating to their remuneration;
---	---
•	formulating our basic management system;
---	---
•	preparing amendments to our Articles of Association;
---	---
•	managing the information disclosures of our company; and
---	---
•	exercising any other powers and duties conferred by the shareholders at general meetings.
---	---

Seven of our directors are affiliated with CNPC or its subsidiaries other than us.

The PRC Company Law requires a joint stock company with limited liability to establish a supervisory committee. This requirement is reflected in our Articles of Association. The supervisory committee is responsible for monitoring our financial matters and overseeing the corporate actions of our board of directors and our senior management personnel. As of the date of this report, the supervisory committee consists of eight supervisors, four of whom were elected, and may be removed, by the shareholders at a general meeting, and four of whom are employees representatives supervisors who were elected by our staff, and may be removed, by our staff. The term of office of our supervisors is three years. The supervisors may be re-elected and re-appointed. A supervisor cannot concurrently hold the position of a director, president, senior vice president, vice president or CFO in our company.

The supervisory committee shall be responsible to the shareholders’ meeting and shall exercise the following functions and powers in accordance with law:

•	to review the periodic reports prepared by the board of directors and issue written opinions in connection with such review;
•	to review our financial condition;
---	---
•	to oversee the performance of duties by the directors, the president, senior vice presidents, vice presidents, the CFO and other senior officers of the Company and to propose the removal of any of the foregoing persons who acts in contravention of any law, regulation, the Company’s Articles of Association or any resolutions of the shareholders’ meeting;
---	---
•	to demand any director, the president, senior vice president, vice president, the CFO or any other senior officer who acts in a manner which is harmful to the Company’s interest to rectify such behavior;
---	---
•	to check the financial information such as the financial report, business report and plans for distribution of profits to be submitted by the board of directors at the shareholders’ meetings and to authorize, in
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<br>the Company’s name, publicly certified and practicing auditors to assist in the re-examination of such information should any doubt arise in respect thereof;
•	to propose the convening of an extraordinary shareholders’ meeting, and convene and preside over a shareholders’ meeting when the board fails to perform its duties to do so as set forth in the PRC Company Law;
---	---
•	to submit proposals at the shareholders’ meetings;
---	---
•	to confer with any director, or initiate legal proceedings on behalf of the Company against any director, the president, senior vice president, vice president, the CFO or any other senior officer in accordance with Article 152 of the PRC Company Law;
---	---
•	to initiate investigations upon being aware of any extraordinary development in the operational conditions of the Company;
---	---
•	together with the audit committee of the board of directors, to review the performance of the external auditors on a yearly basis, and to propose the engagement, renewal of engagement and termination of engagement of the external auditors, as well as the service fees with respect to the audit services;
---	---
•	to oversee the compliance of related party transactions; and
---	---
•	other functions and powers as set forth in the Articles of Association of the Company.
---	---

Supervisors shall attend meetings of the board of directors as observers.

In the event that any action of our directors adversely affects our interests, supervisors shall confer with or initiate legal proceedings against such directors on our behalf. A resolution proposed at any meeting of the supervisory committee shall be adopted only if it is approved by two-thirds or more of our supervisors.

Our senior management is appointed by and serves at the supervision of our board of directors. The board of directors will review, evaluate and supervise the performance of the management and reward or punish the members of the management in accordance with relevant rules and regulations.

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Directors

Information on our current directors is as set out below:

Name	Gender	Age	Position	Term	Remuneration<br>before tax<br>received from<br>the Company<br>in 2022<br>(RMB’000)		Whether<br>received<br>remuneration<br>from offices<br>held in CNPC		Number of Shares held<br>in the Company
								As at<br>December 31,<br>2021			As at<br>December 31,<br>2022
Dai Houliang	M	59	Chairman	2020.03-<br> <br>2023.06		—		Yes		0		0
Hou Qijun	M	56	Vice Chairman	2021.10-<br> <br>2023.06		—		Yes		0		0
Duan Liangwei	M	55	Non-executive Director	2017.06-<br> <br>2023.06		—		Yes		0		0
Jiao Fangzheng	M	60	Executive Director,<br> <br>Chief Geologist	2019.06-<br> <br>2023.06		761		No		0		0
Huang Yongzhang	M	56	Executive Director,<br> <br>President	2020.09-<br> <br>2023.06		1,114		No		0		0
Ren Lixin	M	55	Executive Director, Senior Vice President	2021.10-<br> <br>2023.06		1,226		No		0		0
Xie Jun	M	55	Non-executive Director	2022.06-<br> <br>2023.06		—		Yes		0		0
Elsie Leung Oi-sie	F	84	INED	2017.06-<br> <br>2023.06		529		No		0		0
Tokuchi Tatsuhito	M	70	INED	2017.06-<br> <br>2023.06		539		No		0		0
Cai Jinyong	M	63	INED	2020.06-<br> <br>2023.06		593		No		0		0
Jiang, Simon X.	M	69	INED	2020.06-<br> <br>2023.06		603		No		0		0

Note:

1.	Starting from May 2022, Mr. Jiao Fangzheng has received remuneration from our company.
2.	The above remunerations are pre-tax amounts counted on a calendar year basis, including salaries, basic retirement pension, basic medical insurance, housing provident fund and other benefits.
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3.	The above remunerations for 2022 do not include the bonus of RMB1.1 million paid to certain directors by our company in accordance with the relevant requirements of the Chinese government for their service during the term from 2019 to 2021.
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4.	Other than our INEDs, our directors do not receive directors’ remuneration in their capacity as our director from our company. The level of our INEDs’ remuneration is determined with reference to the overall market conditions.
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Biography of Current Directors

Dai Houliang, age 59, is the chairman of our company, and concurrently the chairman of CNPC and the secretary of the CPC Leadership Team of CNPC. Mr. Dai is a professor-level senior engineer and holds a doctorate degree. He is a member of the 14th CPPCC National Committee, and a member of the Committee on Population, Resources and Environment under the 14th CPPCC National Committee. He is an academician of the Chinese Academy of Engineering. From December 1997, Mr. Dai served successively as deputy general manager of Yangzi Petrochemical Corporation, director, deputy general manager, vice chairman, general manager, chairman, and member of the standing committee of the CPC Committee, of Yangzi Petrochemical Co., Ltd., and deputy CFO, director, vice president, senior vice president, CFO, vice chairman, president and chairman of Sinopec. From June 2008, he served as member of the CPC Leadership Team of Sinopec Group. From May 2016, he served as general manager, director, and deputy secretary of the CPC Leadership Team, of Sinopec Group. From July 2018, he served as chairman, and secretary of the CPC Leadership Team of Sinopec Group. In January 2020, Mr. Dai was appointed as the chairman, and the secretary of the CPC Leadership Team, of CNPC. In March 2020, Mr. Dai was appointed as a director and the chairman of our company.

Hou Qijun, age 56, is the vice chairman of our company, and concurrently a director, the general manager of CNPC, and the deputy secretary of the CPC Leadership Team of CNPC. Mr. Hou is a professor-level senior engineer and holds a doctorate degree. From October 2002, Mr. Hou served successively as director and deputy general manager of Daqing Oilfield, general manager and deputy secretary of the CPC Committee of Jilin Oilfield Company, secretary of the CPC Committee and deputy general manager of PetroChina Natural Gas and Pipeline Company, director general, and deputy secretary of the CPC Committee, of Beijing Oil & Gas Control Center, and general manager of the Planning Department of our company and of CNPC. From March 2017, Mr. Hou served as deputy general manager of CNPC, and from April 2017, concurrently as deputy secretary of the CPC Committee and general manager of PetroChina Exploration and Production Company. Mr. Hou was appointed as a director and vice president of our company in June 2017. He served as president of our company from March 2019. Mr. Hou served as director, general manager, and deputy secretary of the CPC Leadership Team, of PipeChina from October 2021. He was appointed as a director, the general manager, and deputy secretary of the Leadership Team, of CNPC in July 2021. In October 2021, he was appointed as a director and the vice chairman of our company.

Duan Liangwei, age 55, is a director of our company, and a director of CNPC, the deputy secretary of the CPC Leadership Team of CNPC and the secretary of the CNPC CPC Affairs Committee. Mr. Duan is a professor-level senior engineer and holds a doctorate degree. From February 2006, Mr. Duan served successively as deputy general manager, chief safety officer, and member of the CPC Committee, of Jilin Petrochemical Company (“Jilin Petrochemical”), general manager, deputy secretary of the CPC Committee, of Dagang Petrochemical Company, and general manager, and deputy secretary of the CPC Committee, of PetroChina Dalian Petrochemical Company. He served as deputy general manager of CNPC from March 2017 and then as the chief safety officer of CNPC from April 2017. Mr. Duan was appointed as a director of our company in June 2017, and a member of the CPC Leadership Team of CNPC in September 2019. Mr. Duan served as the president of our company from March 2020. In September 2020, Mr. Duan was appointed as a director, and the deputy secretary of the CPC Leadership Team, of CNPC. In October 2020, Mr. Duan was appointed as the secretary of the CNPC CPC Affairs Committee.

Jiao Fangzheng, age 60, is a director and the chief geologist of our company. Mr. Jiao is a professor-level senior engineer and holds a doctorate degree. From January 1999, Mr. Jiao served successively as chief geologist of Zhongyuan Petroleum Exploration Administration of Sinopec Group, deputy manager and chief geologist of Sinopec Zhongyuan Oilfield Company, a branch of Sinopec, deputy director general, and member of the CPC Committee, of Sinopec Petroleum Exploration & Development Research Institute, deputy director general of Sinopec Exploration & Production Department, director general, and deputy secretary of the CPC Committee, of Northwest Petroleum Administration of Sinopec Group, director general of Sinopec Petroleum Exploration &

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Production Department, and vice president, director and senior vice president of Sinopec. From July 2014, Mr. Jiao served as deputy general manager, and member of the CPC Leadership Team, of Sinopec Group. Mr. Jiao was appointed as a member of the CPC Leadership Team and a deputy general manager of CNPC in June 2018. In June 2019, Mr. Jiao was appointed as a director of our company, and in April 2022, the chief geologist of our company.

Huang Yongzhang, age 56, is a director and the president of our company, and concurrently a member of the CPC Leadership Team, and deputy general manager and chief safety officer, of CNPC. Mr. Huang is a professor-level senior engineer and holds a doctorate degree. From June 2008, Mr. Huang served successively as a deputy general manager of CNPC International (Nile) Ltd., deputy general manager and chief safety officer of China National Oil Exploration and Development Corporation, executive deputy general manager and general manager of CNPC Middle East Corporation, and senior deputy general manager and member of the CPC Committee, of CNODC. Mr. Huang was appointed as a member of the CPC Leadership Team and deputy general manager of CNPC in April 2020, and a director of our company in September 2020. Mr. Huang has served concurrently as the chief safety officer of CNPC from February 2021. He was appointed as the president of our company in March 2021.

Ren Lixin, age 55, is a director and the senior vice president of our company, and concurrently a member of the CPC Leadership Team, and the deputy general manager, of CNPC. Mr. Ren is a professor-level senior engineer and holds a bachelor’s degree. From September 2005, Mr. Ren served successively as member of the CPC Committee, deputy general manager, general manager, deputy secretary of CPC Committee, and chief safety director of PetroChina Dushanzi Petrochemical Company, and general manager, and deputy secretary of the CPC Committee, of PetroChina Refining and Chemical Company. He was appointed as a member of the CPC Committee and a deputy general manager of CNPC in June 2021. In August 2021, Mr. Ren was appointed as the senior vice president of our company, and in October 2021, as a director of our company.

Xie Jun, age 55, is a director of our company, and concurrently a member of the CPC Committee, a deputy general manager of CNPC and the director general of CNPC Consulting Center. Mr. Xie is a professor level senior engineer and holds a bachelor’s degree. From August 2013, Mr. Xie served successively as member of the CPC Committee, deputy general manager, executive deputy general manager, secretary of the CPC Committee, and general manager of PetroChina Southwest Oil and Gasfield Company, general manager of the Development and Planning Department of CNPC and the Development and Planning Department our company. He has served as member of the CPC Committee and deputy general manager of CNPC since January 2022, and as director general of CNPC Consulting Center since March 2022. Mr. Xie was appointed as a director of our company in June 2022.

Elsie Leung

Oi-sie, age 84, is an INED of our company. She is a consultant of Iu, Lai & Li Solicitors & Notaries, and an INED of China Resources Power Holdings Co., Ltd. Ms. Leung obtained her LLM degree from the University of Hong Kong and is an academician of College of International Marriage Law. She holds the practicing qualifications for attorney of Hong Kong and Britain. Ms. Leung was the first Secretary for Justice of the Hong Kong SAR, and a member of the Executive Council of Hong Kong SAR. Ms. Leung was appointed as the Justice of the Peace, the Notary Public, and the China-Appointed Attesting Officer, and was awarded a Grand Bauhinia Medal. Ms. Leung was appointed as an INED of our company in June 2017.

Tokuchi Tatsuhito, age 70, is an INED of our company, and concurrently an INED of Daiwa Securities (China) Co., Ltd. He is also the executive director & research fellow of the Center for Industrial Development and Environment Governance, Tsinghua University, and the senior fellow of Rebuild Japan Initiative Foundation. Mr. Tokuchi graduated from the Department of Chinese Language and Literature, Peking University, and received his master’s degree in East Asian Economy from the Center for East Asian Studies of Stanford University. He was a former member & expert advisor to the Foreign Advisory Committee of State Administration of Foreign Experts Affairs of the PRC, and previously held various positions in multiple companies such as the general manager of Investment

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Banking Division of Daiwa Securities SMBC Co., Ltd., the president of Daiwa Securities Singapore Limited, the Executive Vice President of Daiwa Securities (Hong Kong) Inc., a vice president of Daiwa Securities (America) Inc., the vice chairman of Singapore Investment Banking Association, a deputy general manager, the managing director, and Investment Banking Committee chairman, of CITIC Securities Co., Ltd., and the chairman of CITIC Securities International Co., Ltd. In 2009, Mr. Tokuchi was awarded the China Friendship Award, China’s award for foreigners. Mr. Tokuchi was appointed as an INED of our company in June 2017.

Cai Jinyong, age 63, is an INED of our company. Mr. Cai is a partner of Global Infrastructure Partners and a board member of Aon Corporation. Mr. Cai received bachelor’s degree in science from Peking University and doctorate degree in economics from Boston University. Mr. Cai has over 30 years’ work experience in finance service industry, including at TPG Group, World Bank Group, Goldman Sachs Group, Inc. (“Goldman”) and Morgan Stanley. Mr. Cai worked at Central Europe Bureau of the Head Office of the World Bank in charge of energy sectors from 1990 to 1994. From 1994 to 2000, he served in Morgan Stanley and was also a member of the team which established China International Capital Corporation Limited (the first domestic joint venture investment bank in the PRC). From 2000 to 2012, he worked in Goldman, where he was in charge of the PRC Investment Banking Business. From 2012 to 2016, he served as CEO of International Finance Corporation of the World Bank Group. From 2016 to 2018, he led the infrastructure business in emerging economies at TPG. In June 2020, Mr. Cai was appointed as an INED of our company.

Jiang, Simon X., age 69, is an INED of our company. Mr. Jiang has been an INED of COSCO Shipping International (Hong Kong) Co., Ltd. since April 2007. He is the chairman of Cyber City International Limited. Mr. Jiang is also a director of China Foundation for Disabled Persons, a senior associate at the Judge Business School of Cambridge University of England, and a member of the United Nations Investments Committee. Mr. Jiang received his bachelor’s degree from Beijing Foreign Studies University, master’s degree from Australian National University and Ph.D. degree in Economics from Cambridge University of England. Mr. Jiang has investment management experience. Mr. Jiang previously worked at the United Nations Joint Staff Pension Fund, first as a deputy chief of the Office of Investment Management, and then as a member of the Investment Committee. He was a member of the 11th and 12th National Committee of the CPPCC, an independent director of China Oilfield Services Limited, Greenland Hong Kong Holdings Limited, Sinopec Corp., and Nokia Corporation. In June 2020, Mr. Jiang was appointed as an INED of our company.

Information on our resigned directors is as set out below:

Name	Gender	Age	Position	Term	Remuneration<br>before tax<br>received from<br>the Company<br>in 2022<br>(RMB’000)		Whether<br>received<br>remuneration<br>from offices<br>held in CNPC		Number of Shares held<br>in the Company
								As at<br>December 31,<br>2021			As at<br>December 31,<br>2022
Liu Yuezhen	M	61	Non-executive Director	2014.05-<br> <br>2022.04		—		Yes		0		0
Simon Henry	M	61	INED	2017.06-<br> <br>2022.06		510		No		0		0

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Supervisors

Information on our current supervisors is as set out below:

Name	Gender	Age	Position	Term	Remuneration<br>before tax<br>received from<br>the Company<br>in 2022<br>(RMB’000)		Whether<br>received<br>remuneration<br>from offices<br>held in CNPC		Number of Shares held<br>in the Company
								As at<br>December 31,<br>2021			As at<br>December 31,<br>2022
Cai Anhui	M	53	Chairman of the<br>Supervisory<br>Committee	2022.06-<br> <br>2023.06		—		Yes		0		0
Xie Haibing	M	52	Supervisor	2022.06-<br> <br>2023.06		—		Yes		0		0
Zhao Ying	F	55	Supervisor	2022.06-<br> <br>2023.06		—		Yes		0		0
Cai Yong	M	48	Supervisor	2022.06-<br> <br>2023.06		—		Yes		0		0
Lan Jianbin	M	56	Employee<br>Representative<br>Supervisor	2022.05-<br> <br>2023.06		731		No		0		0
He Jiangchuan	M	57	Employee<br>Representative<br>Supervisor	2022.05-<br> <br>2023.06		930		No		0		0
Jin Yanjiang	M	56	Employee<br>Representative<br>Supervisor	2022.05-<br> <br>2023.06		747		No		0		0
Fu Bin	M	58	Employee<br>Representative<br>Supervisor	2022.09-<br> <br>2023.06		506		No		0		0

Note:

1.	Mr. Lan Jianbin, Mr. He Jiangchuan and Mr. Jin Yanjiang were each elected as an employee representative supervisor of the company on May 19, 2022, and Mr. Fu Bin was elected as an employee representative supervisor of the company on September 29, 2022. The remuneration received in 2022 in the above table is the remuneration received from the company as an employee of the company after being elected as employee representative supervisor of the company.
2.	The above remunerations are pre-tax amounts paid on a calendar year basis, including salaries, allowance, basic retirement pension, basic medical insurance, housing provident fund and other benefits.
---	---

Biography of Current Supervisors

Cai Anhui, age 53, is the chairman of the supervisory committee of our company, and concurrently a member of the CPC committee and the chief accountant of CNPC. Mr. Cai is a professor-level senior accountant and a professor-level senior engineer, and holds a doctorate degree. From April 2004, he served successively as CFO of China Aluminum International Engineering Co., Ltd., deputy general manager of China Aluminum International Technology Development Co., Ltd., secretary of the CPC committee and deputy general manager of Guiyang Aluminum & Magnesium Design Institute Co., Ltd., executive director and general manager of Chinalco Finance Company Limited, secretary of the CPC Committee, chairman and general manager of Chinalco Capital Holdings Co., Ltd., and assistant to general manager of Aluminum Corporation of China. Mr. Cai was appointed as a member of the CPC committee and the chief accountant of China Energy Investment Corporation in December 2019. He has served as member of the CPC committee and chief accountant of CNPC since March 2022. Mr. Cai was appointed as the chairman of the supervisory committee of our company in June 2022.

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Xie Haibing, age 52, is a supervisor of our company, and concurrently the assistant to general manager of CNPC, the chairman of CNPC Capital Company Limited (“CNPC Capital”) and the chairman of CNPC Kunlun Capital Company Limited (“Kunlun Capital”). Mr. Xie is a professor-level senior economist and holds a doctorate degree. He is a member of the 14th CPPCC Beijing Municipal Committee. From April 2009, Mr. Xie served successively as chief information officer of Karamay City Commercial Bank, chief information officer and vice president of Kunlun Bank, deputy general manager of the Finance Department of CNPC and deputy general manager of the Finance Department of our company, deputy head of the preparatory team of the Shared Service Center of CNPC, general manager of CNPC Shared Operation Co. Ltd., and general manager of the Finance Department of CNPC and the Finance Department of our company. He has served as assistant to general manager of CNPC, and chairman of CNPC Capital and chairman of Kunlun Capital since April 2021. He was appointed as a supervisor of our company in June 2022.

Zhao Ying, age 55, is a supervisor of our company, and concurrently the general counsel and chief compliance officer of CNPC. Ms. Zhao is a professor-level senior economist and holds a bachelor’s degree. From April 2009, she successively served as general counsel of China Oil Exploration and Development Corporation, general counsel of PetroChina Overseas Exploration and Development Branch and PetroChina Natural Gas Exploration and Development Corporation, deputy general manager of PetroChina Kazakhstan Company, deputy general manager of PetroChina Middle Asia Company, deputy general manager and deputy secretary of the CPC Committee of China National Oil and Gas Exploration and Development Corporation (“CNODC”), general manager of the Legal Affairs Department and the Legal and Enterprise Reform Department of CNPC and general manager of the Legal Affairs Department and the Legal and Enterprise Reform Department of our company. Ms. Zhao was appointed as the general counsel of CNPC in March 2022. Ms. Zhao was appointed as a supervisor of our company in June 2022, and then as the chief compliance officer of CNPC in December 2022.

Cai Yong, age 48, is a supervisor of our company, and concurrently the general manager of the Finance Department of CNPC. Mr. Cai is a senior economist and holds a master’s degree. From March 2016, he served successively as chief accountant of PetroChina Middle East Company, and general manager of the Finance, Tax and Price Department and general manager of the Funding Department of CNPC and our company. He has served as the general manager of the Finance Department of CNPC since April 2021. Mr. Cai was appointed as a supervisor of our company in June 2022.

Lan Jianbin, age 56, is an employee representative supervisor of our company, and concurrently the executive director of the CNPC Safety and Environmental Protection Technology Research Institute Co., Ltd. (“Environment Institute”) and the deputy director general of the CNPC Safety and Environment Supervision Center (“Safety Supervision Center”). Mr. Lan is a professor-level senior engineer and holds a bachelor’s degree. From December 2010, he served successively as deputy general manager and general manager of PetroChina Yunnan Marketing Company, general manager of PetroChina Gansu Marketing Company, and executive director of PetroChina Marketing Co., Ltd. He was appointed as a supervisor of our company in May 2022, and as the executive director of the Environment Institute and the deputy director general of the Safety Supervision Center in December 2022.

He Jiangchuan, age 57, is an employee representative supervisor of our company, and concurrently the general manager of the Oil, Gas and New Energy Branch Company and the general manager of the Crude Oil Sales Branch Company. Mr. He is a professor-level engineer and holds a doctorate degree. From December 2007, he served successively as deputy general manager of PetroChina Exploration and Production Company, executive deputy general manager of PetroChina Tarim Oilfield Company, and general manager and executive director of PetroChina Changqing Oilfield Company (“Changqing Oilfield”). He was appointed the general manager of the Oil, Gas and New Energy Branch Company and the general manager of the Crude Oil Sales Branch Company in March 2023. Mr. He was appointed as a supervisor of our company in May 2022.

Jin Yanjiang, age 56, is an employee representative supervisor of our company, and concurrently the executive director of Jilin Petrochemical. Mr. Jin is a professor-level engineer and holds a doctorate degree. From August 2011, he served successively as deputy general manager, chief safety officer of

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Jilin Petrochemical, deputy general manager of PetroChina North China Petrochemical Company, executive director and general manager of PetroChina Yunnan Petrochemical Company Limited, and general manager of Jilin Petrochemical. He has served as executive director of Jilin Petrochemical since October 2020. Mr. Jin was appointed as a supervisor of our company in May 2022.

Fu Bin, age 58, is an employee representative supervisor of our company, concurrently the executive director of the Natural Gas Marketing Branch Company, the chairman of Kunlun Energy. Mr. Fu is a professor-level economist and holds a master’s degree. From November 2003, Mr. Fu served successively as executive deputy general manager and general manager of China Marine Bunker (PetroChina) Co., Ltd., deputy general manager of PetroChina Marketing Company, general manager of PetroChina Sichuan Marketing Company, general manager of PetroChina Marketing Company, and general manager of PetroChina Natural Gas and Pipeline Company. He has served as executive director of the Natural Gas Marketing Branch Company and chairman of Kunlun Energy since October 2020. Mr. Fu was appointed as a supervisor of our company in September 2022.

Information on our resigned supervisors is as set out below:

Name	Gender	Age	Position	Term	Remuneration<br>before tax<br>received from<br>the Company<br>in 2022<br>(RMB’000)		Whether<br>received<br>remuneration<br>from offices<br>held in<br>CNPC		Number of Shares held<br>in the Company
								As at<br>December 31,<br>2021			As at<br>December 31,<br>2022
Lv Bo	M	60	Chairman of the<br>Supervisory<br>Committee	2020.11-<br> <br>2022.06		—		Yes		0		0
Zhang Fengshan	M	61	Supervisor	2014.05-<br> <br>2022.06		—		Yes		0		0
Jiang Lifu	M	59	Supervisor	2014.10-<br> <br>2022.06		—		Yes		0		0
Lu Yaozhong	M	58	Supervisor	2017.06-<br> <br>2022.06		—		Yes		0		0
Wang Liang	M	60	Supervisor	2017.10-<br> <br>2022.09		—		Yes		0		0
Fu Suotang	M	61	Employee<br>Representative<br>Supervisor	2017.06-<br> <br>2022.05		143		No		0		0
Li Jiamin	M	59	Employee<br>Representative<br>Supervisor	2014.05-<br> <br>2022.05		251		No		0		0
Liu Xianhua	M	60	Employee<br>Representative<br>Supervisor	2016.05-<br> <br>2022.05		230		No		0		0

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Senior Management Team Members other than Executive Directors

Information on current members of our senior management team other than executive directors is as set out below:

Name	Gender	Age	Position	Term	Remuneration<br>before tax<br>received from<br>the Company<br>in 2022<br>(RMB’000)		Whether<br>received<br>remuneration<br>from offices<br>held in<br>CNPC		Number of Shares held<br>in the Company
								As at<br>December 31,<br>2021			As at<br>December 31,<br>2022
Yang Jigang	M	60	Vice President and<br>Chief Engineer	2017.12-		1,541		No		0		0
Zhang Minglu	M	59	Chief Safety<br>Officer	2021.07-		1,505		No		0		0
Zhu Guowen	M	56	Vice President	2021.07-		1,621		No		0		0
Zhang Daowei	M	50	Vice President	2022.06-		748		No		0		0
Wan Jun	M	57	Vice President	2022.06-		757		No		0		0
Wang Hua	M	49	CFO and Board<br>Secretary	2022.06-		720		No		0		0

Note:

1.	Mr. Zhang Daowei and Mr. Wan Jun were each appointed as a vice president of our company on June 17, 2022. Mr. Wang Hua was appointed as the CFO and board secretary of the company on June 17, 2022. The remuneration received in 2022 as set forth in the above table was the remuneration received from the company after each relevant person was appointed as a senior management member of the company.
2.	The above remunerations are pre-tax amounts paid on a calendar year basis, including salaries, allowance, basic retirement pension, basic medical insurance, housing provident fund and other benefits.
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Biography of Current Senior Management Members other than Executive Directors

Yang Jigang, age 60, is a vice president and the chief engineer of our company. Mr. Yang is a professor-level senior engineer and holds a master’s degree. From August 1997, Mr. Yang served successively as deputy manager of Lanzhou Chemical Industry Corporation, chief engineer of the Oil Refinery and Chemical Engineering Department of CNPC, chief engineer of PetroChina Refinery and Marketing Company, deputy general manager and chief engineer of PetroChina Chemical Engineering and Marketing Company, general manager of PetroChina Daqing Petrochemical Company, and deputy general manager, general manager and executive director of PetroChina Refinery and Chemical Engineering Company. In December 2017, Mr. Yang was appointed as a vice president of our company and then in April 2021 as the chief engineer of our company.

Zhang Minglu, age 59, is the chief safety officer of our company and the general manager of the Quality, Health, Safety and Environment Department (“QHSE Department”) of our company, and concurrently the deputy chief safety officer of CNPC and the general manager of the QHSE Department of CNPC. Mr. Zhang is a professor-level senior engineer and holds a doctorate degree. From June 2008, he served successively as chief geologist, deputy general manager and chief safety officer of Changqing Oilfield, and general manager of PetroChina Qinghai Oilfield Company (“Qinghai Oilfield”). From March 2021, Mr. Zhang has served as general manager of the QHSE Department of our company and CNPC. In June 2021, Mr. Zhang was appointed as the deputy safety director of CNPC and in July 2021 as the chief safety officer of our company.

Zhu Guowen, age 56, is a vice president of our company, and concurrently the executive director of Daqing Oilfield Co., Ltd. (“Daqing Oilfield”), and executive director of Daqing Petroleum Administration Bureau Co., Ltd. (“Daqing Petroleum Bureau”) Mr. Zhu is a professor-level senior engineer and holds a doctorate degree.

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From March 2010, Mr. Zhu served successively as plant manager of the First Production Plant of Daqing Oilfield, deputy general manager of Daqing Oilfield, general manager of PetroChina Zhejiang Oilfield Company, and general manager of Daqing Oilfield. From June 2021, he has served as executive director of Daqing Oilfield and executive director of Daqing Petroleum Bureau. Mr. Zhu was appointed as a vice president of our company in July 2021.

Zhang Daowei, age 50, is a vice president of our company, and concurrently serves as the executive director of the Oil, Gas and New Energy Branch Company. Mr. Zhang is a professor-level senior engineer and holds doctorate degree. From December 2015, he served successively as deputy general manager, executive deputy general manager of Qinghai Oilfield, general manager and executive director of PetroChina Southwest Oilfield Company, and general manager of PetroChina Exploration and Production Company. He was appointed as a vice president of our company in June 2022, and then as the executive director of the Oil, Gas and New Energy Branch Company in August 2022.

Wan Jun, age 57, is a vice president of our company, and concurrently the general manager of the Development and Planning Department of CNPC and our company. Mr. Wan is a professor-level senior engineer and holds a doctorate degree. From February 2006, he served successively as plant manager of the First Production Plant of Daqing Oilfield, deputy general manager, chief safety officer and executive deputy general manager of Daqing Oilfield, general manager of PetroChina Liaohe Oilfield Company, and general manager of PetroChina Exploration and Production Company. He has served as the general manager of the Development and Planning Department of CNPC and our company since January 2022. Mr. Wan was appointed as a vice president of our company in June 2022. Mr. Wan was appointed to concurrently serve as the executive director of PetroChina Planning & Engineering Institute in March 2023.

Wang Hua, age 49, is the CFO and board secretary of our company. Mr. Wang is a senior accountant and holds a master’s degree. From October 2016, he served successively as CFO of CNPC Capital Co., Ltd., deputy general manager of the Finance Department of CNPC and deputy general manager and the general manager of the Finance Department of our company. Mr. Wang was appointed as the CFO and board secretary of our company in June 2022, and then as the board secretary of our company in August 2022.

Information on resigned members of our senior management team is as set out below:

Name	Gender	Age	Position	Term	Remuneration<br>before tax<br>received from<br>the Company<br>in 2022<br>(RMB’000)		Whether<br>received<br>remuneration<br>from offices<br>held in CNPC		Number of Shares held<br>in the Company
								As at<br>December 31,<br>2021			As at<br>December 31,<br>2022
Sun Longde	M	61	Vice President and<br>Chief Geologist	2007.06-<br> <br>2022.04		287		No		0		0
Li Luguang	M	61	Vice President	2018.06-2022.04		167		No		0		0
Tian Jinghui	M	60	Vice President	2015.11-2023.01		1,447		No		0		0
Chai Shouping	M	61	CFO and Board<br>Secretary	2017.01-2022.06		361		No		0		0

Changes in Directors, Supervisors and Senior Management Team

(1)	On April 29, 2022,
•	Mr. Liu Yuezhen resigned from his position as a non-executive director of our company due to age and simultaneously ceased to serve as a member of the audit committee and the evaluation and remuneration committee of our company;
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•	Mr. Sun Longde resigned from his position as a vice president and the chief geologist of our company due to age;
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•	Mr. Li Luguang resigned from his position as a vice president of our company due to age;
•	The board of directors of our company resolved to appoint Mr. Duan Liangwei as a member of the evaluation and remuneration committee of our company, Mr. Jiao Fangzheng as the chief geologist of our company, and appointed Mr. Jiao Fangzheng, a former non-executive director of our company, as an executive director.
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(2)	On May 19, 2022,
---	---
•	Mr. Fu Suotang resigned from his position as an employee representative supervisor of our company due to age;
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•	Mr. Li Jiamin and Mr. Liu Xianhua resigned from their positions as employee representative supervisor of our company due to work arrangement; and
---	---
•	Mr. Lan Jianbin, Mr. He Jiangchuan and Mr. Jin Yanjiang were each elected as an employee representative supervisor of our company through the democratic election of the employee representatives of our company.
---	---
(3)	On June 9, 2022,
---	---
•	Mr. Lv Bo resigned from his position as the chairman of the supervisory committee and supervisor of our company due to work arrangement;
---	---
•	Mr. Zhang Fengshan resigned from his position as a supervisor of our company due to age;
---	---
•	Mr. Jiang Lifu and Mr. Lu Yaozhong resigned from their positions as supervisor of our company due to work arrangement;
---	---
•	Mr. Cai Anhui, Mr. Xie Haibing, Ms. Zhao Ying, and Mr. Cai Yong were each elected as a supervisor of our company at the 2021 annual general meeting of our company;
---	---
•	Mr. Xie Jun was appointed as a non-executive director of our company; and
---	---
•	Mr. Cai Anhui was elected as the chairman of the supervisory committee by the supervisory committee of our company.
---	---
(4)	On June 15, 2022, Mr. Simon Peter Henry resigned from his position as an INED of our company due to personal business commitments and simultaneously ceased to serve as a member of the investment and development committee of our company.
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(5)	On June 17, 2022,
---	---
•	Mr. Chai Shouping resigned from his position as the CFO and the board secretary of our company due to age; and
---	---
•	The board of directors of our company resolved to appoint Mr. Huang Yongzhang as a member of the investment and development committee, Mr. Xie Jun as a member of the audit committee, Mr. Zhang Daowei and Mr. Wan Jun as a vice presidents of our company, and Mr. Wang Hua as the CFO and board secretary of our company.
---	---
(6)	On August 12, 2022, Mr. Chai Shouping resigned from his position as the company secretary of our company; and the board of directors of our company resolved to appoint Mr. Wang Hua as the company secretary of our company.
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(7)	On September 29, 2022, Mr. Wang Liang resigned from his position as a supervisor of our company due to age; and Mr. Fu Bin was elected as an employee representative supervisor of our company through the democratic election of employee representatives.
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(8)	On January 6, 2023, Mr. Tian Jinghui resigned from his position as a vice president of our company due to age.
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Compensation

The senior management members’ compensation consists of fixed salaries and variable compensation. The variable compensation, which accounts for approximately 75% of the total compensation package, is linked to the attainment of specific performance targets, such as our net income for the year, return on capital and the individual performance evaluation results. All of our senior management members have entered into performance contracts with us.

Our directors and supervisors, who hold senior management positions or are otherwise employed by us and other senior management of our company receive compensation in the form of salaries, insurance and other benefits in kind, including our contribution to the pension plans for them.

The aggregate amount of salaries and other compensation, insurance and other benefits in kind paid by us to our directors, who hold senior management positions or are otherwise employed by us, during the year ended December 31, 2022 was RMB2,613 thousand which does not include the fees totaling RMB2,774 thousand paid to our independent directors. The aggregate amount of salaries or other compensation, insurance and other benefits in kind paid by us to our supervisors, who hold senior management position or are otherwise employed by us during the year ended December 31, 2022 was RMB3,118 thousand. The aggregate amount of salaries or other compensation, insurance and other benefits in kind paid by us to other senior management during the year ended December 31, 2022 was RMB8,009 thousand.

In 2022, we paid RMB2,052 thousand as our contribution to the pension plans for our directors and supervisors, who hold senior management positions or are otherwise employed by us and other senior management of our company.

Save as disclosed, no other payments have been paid or are payable, with respect to the year ended December 31, 2022, by us or any of our subsidiaries to our directors. In addition, we have no service contracts with our directors that provide for benefits to our directors upon the termination of their employment with us.

For discussions about the compensations of our individual directors and supervisors, please see Note 11 to our consolidated financial statements included elsewhere in this annual report.

Board Practices

Our board of directors has five committees, namely, the nominating committee, the audit committee, the investment and development committee, the evaluation and remuneration committee and the sustainable development committee.

Nominating Committee

Our nominating committee is composed of Mr. Dai Houliang, as chairman of the committee, and Mr. Cai Jinyong and Mr. Jiang, Simon X., as members. The nominating committee’s major responsibilities include:

•	reviewing and discussing the structure, size and composition of the board of directors regularly, and making recommendations on changes to the board to follow the Company’s corporate strategy;
•	considering the criteria and procedures for selection of directors, president and other senior management, and making recommendations to the board of directors;
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•	considering the board diversity policy and the training systems for directors and management;
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•	selecting qualified candidates for directorship and members of senior management, reviewing the qualifications of candidates for directorship and president, and making recommendations;
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•	reviewing the proposals on candidates nominated by the nominators who have the nominating rights under the Articles of Association;
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•	reviewing the independence of INEDs; and
•	attending the shareholders’ meeting and answer the investor’s consultation on the work of the nomination committee, as well as the relevant laws, regulations, listing rules and other matters authorized by the board of directors.
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Audit Committee

Our audit committee is composed of two INEDs, Mr. Cai Jinyong and Mr. Jiang, Simon X., and one non-executive director, Mr. Xie Jun. Mr. Cai Jinyong serves as the chairman of the committee. Under our audit committee charter, the chairman of the committee must be an independent director and all resolutions of the committee must be approved by independent directors. The audit committee’s major responsibilities include:

•	reviewing and supervising the engagement of external auditors and their performance;
•	reviewing and ensuring the completeness of annual reports, interim reports and quarterly reports, if any, and related financial statements and accounts, and reviewing any material opinion contained in the aforesaid statements and reports with respect to financial reporting;
---	---
•	reporting to the board of directors in writing on the financial reports of the Company and related information, having considered the issues raised by external auditors;
---	---
•	reviewing and scrutinizing the work conducted by the internal audit department in according with the applicable PRC and international rules;
---	---
•	monitoring the financial reporting system and internal control procedures of the Company, as well as checking and assessing matters relating to, among others, the financial operations, internal control and risk management of the Company;
---	---
•	receiving, keeping and dealing with complaints or anonymous reports regarding accounting, internal accounting control or audit matters and ensuring the confidentiality of such complaints or reports;
---	---
•	reporting regularly to the board of directors with respect to any significant matters which may affect the financial position of the Company and its operations and with respect to the self-evaluation of the committee and its members on the performance of their duties; and
---	---
•	performing other responsibilities as may be required under relevant laws, regulations and the listing rules of the stock exchanges where our shares are listed (as amended from time to time).
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Investment and Development Committee

Our investment and development committee is composed of Mr. Hou Qijun, as chairman of the committee, and Mr. Duan Liangwei and Mr. Huang Yongzhang, as members. The investment and development committee’s major responsibilities include:

•	studying the long-term development strategies of the Company proposed by our president and making recommendations to the board of directors;
•	studying the annual investment budget and the adjustment proposal regarding the investment plan as proposed by our president and making recommendations to the board of directors;
---	---
•	reviewing feasibility studies and preliminary feasibility studies for investment or financing proposals, capital operation projects and asset operation projects of great significance to our company subject to the approval of the board of directors and making recommendations to the board of directors;
---	---
•	deliberating on other significant matters that may have an effect on the development of our company and making recommendations to the board of directors; and
---	---
•	addressing issues related to relevant laws, regulations and listing rules and requirements of the stock exchanges on which our shares are listed and handing other matters as delegated by the board of directors.
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Evaluation and Remuneration Committee

Our evaluation and remuneration committee is composed of Ms. Elsie Leung Oi-sie, as chairman of the committee, and Mr. Duan Liangwei and Mr. Tokuchi Tatsuhito, as members. The evaluation and remuneration committee’s major responsibilities include:

•	studying the evaluation criteria for directors and senior officers, conducting the evaluations and proposing suggestions;
•	studying and evaluating the remuneration policies and plans for directors and senior officers (including the compensation in connection with the removal or retirement of the director and senior officers);
---	---
•	organizing the evaluation of the performance of our president and reporting the evaluation result to the board of directors, supervising the evaluation of the performance of our senior vice presidents, vice presidents, CFO and other senior management members conducted under the leadership of the president;
---	---
•	studying our incentive plan and compensation plan, supervising and evaluating the implementation of these plans and making recommendations for improvements to and perfection of such plans; and
---	---
•	studying the relevant laws, regulations and the listing rules of the stock exchanges where the shares of the Company are listed (as amended from time to time) and other matters authorized by the board of directors.
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Sustainable Development Committee

Our sustainable development committee is composed of Mr. Huang Yongzhang, as chairman of the committee, and Mr. Jiao Fangzheng and Mr. Ren Lixin, as members. The sustainable development committee’s major responsibilities include:

•	studying the sustainable development (including but not limited to environment, society and governance) matters of the Company, identifying and assessing major risks and impacts on the sustainable development of the Company, strengthening risk management in respect of environment, social responsibility and corporate governance and making proposals to the board of directors;
•	supervising the Company’s commitments and performance on key issues such as response to climate change, safeguarding of health and safety and fulfilment of social responsibilities, and making proposals to the board of directors;
---	---
•	reviewing the relevant guidelines, strategies, objectives, measures and relevant important issues related to the sustainable development of the Company, and supervising and checking the implementation of the sustainable development objectives of the Company against the corresponding sustainable development objectives that have been set;
---	---
•	reviewing the Company’s annual reports on environment, social responsibility and governance and the reports on quality, safety and environmental protection and making proposals to the board of directors;
---	---
•	paying attention to the important information of sustainable development matters related to the Company’s business, determining the potential material effect that the environmental, society and governance matters may have on the stakeholders, supervising and studying the material safety and environmental risks facing the Company and recommending response measures, and making corresponding proposals to the board of directors;
---	---
•	other matters delegated by the board of directors.
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Employees

As of December 31, 2020, 2021 and 2022, we had 432,003, 417,173 and 398,440 employees (not including the temporary employees), respectively. During 2022, we employed 242,867 temporary employees on an average. As of December 31, 2022, we had 236,527 temporary employees. The table below sets forth the number of our employees by business segment as of December 31, 2022.

	Employees		% of Total
Oil, gas and new energy		230,008		57.73
Refining, chemicals and new materials		125,002		31.37
Marketing		34,181		8.58
Natural gas sales		3,803		0.95
Headquarters and others ^(1)^		5,446		1.37
Total		398,440		100.00
(1)	Including the numbers of employees of the management of our headquarters, specialized companies, PetroChina Exploration & Development Research Institute, PetroChina Planning & Engineering Institute, Petrochemical Research Institute and other units.
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Our employees participate in various basic social insurance plans organized by municipal and provincial governments whereby we are required to make monthly contributions to these plans at certain rates of the employees’ salary as stipulated by relevant local regulations. Expenses incurred by us in connection with the retirement benefit plans were approximately RMB16,833 million, RMB19,939 million and RMB20,728 million, respectively, for the years ended December 31, 2020, 2021 and 2022, respectively.

In 2022, we did not experience any strikes, work stoppages, labor disputes or actions that affected the operation of any of our businesses.

Share Ownership

As of December 31, 2022 our directors, senior officers and supervisors did not have share ownership in us or any of our affiliates.

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Item 7 — MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

Major Shareholders

We were established on November 5, 1999 with CNPC as the sole promoter. As of March 31, 2023, CNPC beneficially owned 151,215,083,570 shares, which include 291,518,000 H Shares indirectly held by CNPC through Fairy King Investments Limited, an overseas wholly owned subsidiary of CNPC, representing approximately 82.62% of our share capital, and, accordingly, CNPC is our controlling shareholder. The following table sets forth the major shareholders of our A Shares and H Shares as of March 31, 2023:

Name of<br>Shareholders	Class of<br>Shares	Number of Shares<br>Held	Capacity	Percentage of<br>Such Shares in<br>That Class of<br>the<br>Issued Shares<br>Capital (%)		Percentage in<br>the Total<br>Share<br>Capital (%)
CNPC	A Shares	150,923,565,570 (long position)^(1)^	Beneficial Owner		93.21		82.46
	H Shares	291,518,000 (long position)^(2)^	Interest of Corporation<br> <br>Controlled by the<br> <br>Substantial Shareholder		1.38		0.16
BlackRock, Inc ^(3)^	H Shares	1,669,220,483 (long position)	Interest of Corporation<br> <br>Controlled by the<br> <br>Substantial Shareholder		7.91		0.91
Brown Brothers Harriman & Co.	H Shares	1,061,620,645 (long position) 1,061,620,645 (shares available for lending)	Approved Lending Agent		5.03<br>5.03		0.58<br>0.58

Notes:

(1)	CNPC completed the public issuance of exchangeable corporate bonds in 2018, whereby a part of the A shares of our company were used as the underlying shares. The exchangeable corporate bonds were issued for RMB20 billion for a term of five years and 3,820,000,000 underlying shares of our company held by CNPC were transferred into the 18 CNPC EB Special Account. As at the date of this announcement, CNPC has completed the delisting of the 2018 exchangeable corporate bonds and the procedures for the release of the registration of pledge and trust of the above exchangeable corporate bonds. Upon the completion of the release of the registration of pledge and trust of the above shares, CNPC held 150,923,565,570 A Shares of our company, and the 18 CNPC EB Special Account ceased to hold any shares of our company.
(2)	291,518,000 H shares (long position) were held by Fairy King Investments Limited, an overseas wholly-owned subsidiary of CNPC. CNPC is deemed to be interested in the H shares held by Fairy King Investments Limited.
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(3)	BlackRock, Inc., through various subsidiaries, had an interest in the H shares of our company. 1,669,220,483 H shares (long position) were held in its capacity as interest of corporation controlled by the substantial shareholder.
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Related Party Transactions

CNPC is a controlling shareholder of our company. We have extensive business dealings with CNPC and other members of the CNPC group, all of which constitute related party transactions for us. We also continued to carry out existing continuing transactions with other related parties in 2022.

Continuing Related Party Transactions

Since 2000, our company has engaged a variety of continuing related party transactions with CNPC. CNPC provides various services to us and our company also provides specific products and services to CNPC. These transactions are governed by several agreements between CNPC and us, including the comprehensive products and services agreement, land lease, building lease, intellectual property licensing contracts and contract for the transfer of rights under Sino-foreign cooperative production sharing contracts, as amended.

1. The comprehensive products and services agreement between CNPC and us

The comprehensive products and services agreement (the “Comprehensive Agreement”) entered into between CNPC and us is updated every three years. The latest Comprehensive Agreement (the “New Comprehensive Agreement”) was signed in 2020, which covers the period from January 1, 2021 to December 31, 2023. The New Comprehensive Agreement revised the previous Comprehensive Agreement mainly as follows: (1) updated the pricing basis for refining products, natural gas, power supply, and gas supply services provided by us to CNPC and jointly-held entities; (2) updated the pricing basis for project design, project supervision, power supply, and gas supply services provided by CNPC to us; and (3) added the sharing services to the services provided by CNPC to us. Other terms and conditions remain unchanged. The New Comprehensive Agreement was approved at the extraordinary general meeting held on November 5, 2020.

Under the New Comprehensive Agreement, we and CNPC will provide the following products and services to each other:

(A) Products and services to be provided by us to CNPC mainly include: refined oil products, chemical products, crude oil, natural gas, water supply, electricity supply, gas supply and heating supply, metering and measuring, and commissioned operations, supply of materials, financial services, and other products and services that CNPC and jointly held companies may request us to provide from time to time for itself to consume, use or sell. In addition, we will provide financial services to jointly held companies, including provision of entrusted loans, guarantees and other financial services.

(B) Products and services to be provided by CNPC/jointly held companies to us mainly include:

•	construction and technical services, including but not limited to exploration technology service, downhole operation service, oilfield construction service, refinery construction service and engineering and design service;
•	production services, which will be mainly the products and services provided in light of the requirements for our daily operations, including but not limited to crude oil, natural gas, refined oil products, chemical products, water supply, electricity supply, gas supply and communications;
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•	supply of materials services not included in the foregoing construction and technical services or production services due to difference in nature, which will be mainly materials procurement agency services, including but not limited to procurement of materials, quality inspection, storage of materials and delivery of materials;
---	---
•	social and ancillary services, including but not limited to security systems, staff canteens and training centers; and
---	---
•	financial services, including loans and other financial aids, deposit services, entrusted loans, settlement services, finance lease services and other financial services.
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The general principle of the New Comprehensive Agreement is that all products and services provided by each party shall be of good quality and fair and reasonable price. If a third party provides similar products or services or participates in similar transactions, it shall not be inferior to the conditions provided by the third party for such products or services. The pricing of the products and services to be provided under the New Comprehensive Agreement shall be either following government-prescribed price, market price, cost price, or contractual price, depending on the circumstances. The deposit and loan interest rates of financial services shall be subject to the interest rates and relevant charging standards for the same period as published by the People’s Bank of China (“PBOC”) or relevant financial regulatory agencies, and shall not be inferior to the interest rates, charging standards and other conditions for the party to obtain funds and services from an independent third party. The New Comprehensive Agreement is not exclusive, and the parties may provide to and purchase products and services from third parties. Each party may terminate the performance of on or more products or services by giving at least six months’ written notice. However, if we are unable to easily obtain services that CNPC provides from a third party, CNPC shall not terminate the provision of such services unless it get our written consent.

2. Specific product and service implementation agreements

According to the current arrangements contemplated under the New Comprehensive Agreement, from time to time and when necessary, the parties may enter into implementation agreements for specific products and services. The specific product and service implementation agreements shall not violate the principles, terms and conditions of the New Comprehensive Agreement in any material respect.

Since a specific product and service implementation agreements is only a further elaboration of the products and services as contemplated by the New Comprehensive Agreement, they do not constitute new categories of related party transactions.

3. Land Use Rights Lease Agreement

We entered into a Land Use Rights Lease Agreement with CNPC in March 2000 for a term of 50 years. The rent may, as at the expiration of 10-year term of the Land Use Rights Lease Agreement, be adjusted to reflect market conditions prevalent at such time of adjustment, including the then prevailing market prices, inflation or deflation (as applicable) and other factors.

We entered into a supplementary agreement to the Land Use Rights Lease Agreement with CNPC on August 25, 2011. Thereafter, the parties adjusted the area and rent every three years. The latest adjustment happened on August 27, 2020, whereby the parties adjusted the area to 1,142 million square meters and the annual rent to approximately RMB5,673 million (exclusive of taxes) for the three years since January 1, 2021.

All of the amendments and adjustment were approved by the relevant general meetings. The latest adjustment was approved by the extraordinary general meeting of our company on November 5, 2020.

4. Buildings Lease Agreement

On August 24, 2017, we entered into an agreement with CNPC. The agreement took effect on January 1, 2018, with a term of 20 years. The parties may adjust the area of building leased and the rent fees every three years as appropriate by reference to the status of the production and operations and the prevailing market price, but the adjusted rent fees shall not exceed the comparable fair market price. On August 27, 2020, the parties confirmed that effective from January 1, 2021, the area of the leased buildings should be 1.29 million square meters and the annual rent be adjusted to approximately RMB713 million. All of the amendments and adjustments were approved by the relevant general meetings. The latest adjustment was approved by the extraordinary general meeting of our company on November 5, 2020.

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5. Intellectual Property Licensing Contracts

We and CNPC continue to implement the three intellectual property licensing contracts entered on March 10, 2000, namely the Trademark Licensing Contract, the Patent and Know-how Licensing Contract and the Computer Software Licensing Contract. CNPC has agreed to extend the term of the Computer Software Licensing Contract to the expiry date of the statutory protection period of the relevant software or when such software enters the public domain. Pursuant to these licensing contracts, CNPC has granted us the exclusive right to use certain trademarks, patents, know-how and computer software of CNPC at no cost.

6. Contract for the Transfer of Rights under Sino-Foreign Cooperative Production Sharing Contracts

We and CNPC continue to implement the Contract for the Transfer of Rights under Sino-Foreign Cooperative Production Sharing Contracts dated December 23, 1999. As part of the restructuring to organize our company, CNPC transferred to us relevant rights and obligations under 28 production sharing contracts executed with international oil and natural gas companies, except the rights and obligations relating to CNPC’s supervisory functions.

As of December 31, 2022, a total of 29 projects were being executed by CNPC under the production sharing contracts. CNPC has assigned to us at nil consideration all of its rights and obligations under the production sharing contracts and all the related interests vested in CNPC pursuant to applicable PRC laws and regulations, except the rights and obligations relating to CNPC’s supervisory functions.

7. Ongoing connected transactions with CNPC Finance

CNPC Finance Co., Ltd. (“CPF”) is an internal finance company of CNPC. CNPC, CNPC Capital Co., Ltd. and the Company each hold 40%, 28% and 32% equity interest in CPF, respectively. In 2022, the beginning balance of our deposits with CPF was RMB30,128 million, with cash inflow of RMB4,050,243 million and cash outflow of RMB4,039,179 million during the reporting period, and the end-of-period balance was RMB41,192 million; the deposit interest rate range of RMB was from 0.25% to 4.26%. The beginning balance of the loans provided by CPF to us was RMB70,567 million, with new loans of RMB59,255 million and repaid loans of RMB65,206 million during the reporting period, and the end-of-period balance was RMB64,616 million. The loan interest rate range of RMB was from 2.60% to 5.00%. In 2022, the amount of acceptance bills issued and discounting of bills undertaken by CPF for us was RMB15,175 million and RMB2,964 million, respectively. The amount of the relevant continuing related party transactions with CPF has been included in the upper limit of related party transactions between CNPC and us.

On March 31, 2022, we signed a framework agreement on monetary derivatives services with CPF for monetary derivatives transaction for 2022, pursuant to which, we and CPF conducted monetary financial derivatives business transactions in 2022, in order to lock the exchange rates in advance, avoid market risks and achieve hedging purposes. The agreement expired on December 31, 2022. In 2022, the monetary derivatives transactions conducted by CPF and us amounted to US$3,984 million.

8. Upper Limits for the Continuing Related Party Transactions

We and CNPC determine the upper limits for continuing related party transactions every three years, by taking into consideration the transactions and transaction amounts for provision of products and services by us, CNPC and our jointly held companies to each other during the prior periods, and by taking into account the need for business development and the potential magnitude of fluctuation of the prices of crude oil, petrochemical products, natural gas, and other petroleum products and services in both the international and Chinese markets. The upper limits, after being approved at the general meeting of our company, should be adopted as the upper limits of continuing related party transactions for the next three years. The transaction amounts of all the historical continuing related party transactions as described above were all within the upper limits for the corresponding periods.

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The upper limits of continuing related party transactions for 2021, 2022 and 2023 are as follows:

Products and Services	2021		2022		2023
	RMB (in millions)
(i) Products and services provided by us to the CNPC and jointly-held companies		150,000		147,200		144,600
(ii) Products and services provided by CNPC and jointly-held companies to us
(a) Construction and technical services		198,200		197,500		197,000
(b) Production services		207,700		205,500		204,500
(c) Supply of materials services		35,300		35,300		35,300
(d) Social and ancillary services		5,800		5,800		5,800
(e) Financial Services
- Aggregate of the daily highest amount of deposits of our company in CNPC and the total amount of interest received in respect of these deposits		55,000		55,000		55,000
- Insurance fees, handling charges for entrusted loans, and fees and charges for settlement services and other intermediary business		2,400		2,400		2,400
- Rents and other payments made under financial leasing		5,000		5,000		5,000
- Monetary derivatives provide by CPF to us		7,500
(iii) Financial services provided by us to the jointly-held companies		22,000		22,000		22,000
(iv) Land leases provided to us by CNPC		16,578		11,019		5,685
(v) Building leases provided to us by CNPC		2,083		1,384		714
*	The annual upper limits of the rent for the land and property leased by us from CNPC shall be determined by reference to the annual value of the right-of-use assets.
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9. INEDs’ Confirmation

In relation to the continuing connected transactions undertaken by the Company in 2022, the INEDs of the Company confirmed that:

•	the connected transactions disclosed above have been made in the ordinary course of business of the Company;
•	the connected transactions disclosed above have been made on normal commercial terms or better terms;
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•	the connected transactions disclosed above have been conducted in accordance with the agreements governing such transactions and their terms are fair and reasonable and consistent with the interests of shareholders as a whole.
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10. Auditor’s Confirmation

The auditor of the Company has audited the connected transactions disclosed above and has provided our board of directors with a letter indicating that:

•	all the connected transactions have been approved by our board of directors;
•	all the connected transactions have been conducted in compliance with the pricing policies of the Company in all material respects if the transactions involve the provision of goods or services by the Company;
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•	all the connected transactions have been carried out in accordance with the terms of agreements; and
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•	all the transactions have been entered into within the annual caps disclosed above, if applicable.
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Loans and Guarantees

In 2022, we did not provide any guarantee to or for the benefit of CNPC and its subsidiaries. As of December 31, 2022, the total outstanding guarantee we provided to or for the benefit of our subsidiaries, associates and affiliates other than CNPC and its subsidiaries was RMB144,128 million.

For a detailed discussion of continuing related party transactions, please see Note 39 to our consolidated financial statements included in this annual report.

One-off Related Party Transactions

In line with our overall development strategies, on June 20, 2022, we and Liaohe Petroleum Exploration Bureau Co., Ltd. (“Liaohe Bureau Company”) entered into an equity transfer agreement, pursuant to which we agreed to transfer 100% equity interests in Liaohe Oilfield (Panjin) Gas Storage Co., Ltd. held by us to Liaohe Bureau Company for a consideration of RMB1,287,756,500. As Liaohe Bureau Company is a wholly-owned subsidiary of our controlling shareholder, CNPC, according to the SSE Listing Rules and the Hong Kong Listing Rules, the transaction constitutes a connected transaction. The consideration of the deal was based on the asset evaluation performed by an independent third party and the agreement was entered into on normal commercial terms. The transaction closed on July 8, 2022.

Interests of Experts and Counsel

Not applicable.

Item 8 — FINANCIAL INFORMATION

Financial Statements

See the F-pages following Item 19.

Legal Proceedings

We are involved in several legal proceedings concerning matters arising in the ordinary course of our business and due to other reasons. We believe, based on currently available information, that these proceedings, individually or in the aggregate, will not have a material adverse effect on our profitability or financial condition.

Dividend Policy

Our Articles of Association provided that if our net profit attributable to owners of the company and the accumulated undistributed profit for a year are positive, and our cash flow can satisfy our normal operation and sustainable development, the amount of cash dividend to be distributed shall not be less than 30% of the net profit attributable to owners of the company realized in that year. We distribute dividends twice a year. Distribution of final dividends needs to be passed at the general meeting by ordinary resolution. The general meeting can, by ordinary resolution, authorize the board of directors to determine the distribution of interim dividends. Since the listing of our ADSs and our shares, we have distributed dividends to the shareholders by strictly complying with the Articles of Association and other relevant regulatory requirements, and adhering to the principle of bringing returns to shareholders, and after an overall consideration of various factors, including our operating performance, financial status, and cash flows. The total dividend for 2022 accounted for 51.8% of our net profit attributable to owners of the Company of 2022.

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Our board of directors will declare dividends, if any, in RMB on a per share basis. Dividends payable to the holders of A Shares shall be paid in RMB. Save for the H Shares traded through the Southbound Trading Link, dividends payable to the holders of H Shares shall be paid in HK dollar. Our ADR program was terminated on October 17, 2022. According to the depositary agreement entered into among Bank of New York Mellon (“BNYM”), the owners and beneficial owners of ADS and us as of March 29, 2000, within one year after the termination of the depositary program, BNYM is obliged to continue to accept dividend distributions pertaining to the ADSs and deliver the dividends to the ADSs owners after deducting related expenses when the ADSs owners come to cancel the ADSs. One year after the termination of the depositary program, BNYM has the right to sell all the remaining uncancelled ADSs for cash, and the owners of ADSs will then become general creditors with respect to such net proceeds. Holders of A Shares and H Shares will share all dividends and other distribution items announced by our board of directors on a per share basis. We will take into account factors including the following for declaration of dividends:

•	general business conditions;
•	our financial results;
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•	capital requirements;
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•	contractual restrictions on the payment of dividends by us to our shareholders or by our subsidiaries to us;
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•	our shareholders’ interests;
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•	the effect on our debt ratings; and
---	---
•	other factors our board of directors may deem relevant.
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We may only distribute dividends after we have made allowances for:

•	recovery of losses, if any;
•	allocations to the statutory common reserve fund; and
---	---
•	allocations to a discretionary common reserve fund if approved by our shareholders.
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The allocation to the statutory common reserve funds is 10% of profit for the year attributable to owners of the company determined in accordance with PRC accounting rules. Under PRC law, our distributable earnings will be equal to our profit for the year attributable to owners of the company determined in accordance with PRC accounting rules or IFRS, whichever is lower, less allocations to the statutory and discretionary funds.

We believe that our dividend policy strikes a balance between two important goals:

•	providing our shareholders with a competitive return on investment; and
•	assuring sufficient reinvestment of profits to enable us to achieve our strategic objectives.
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Arrangement for Distribution of the Final Dividends for 2022

After an overall consideration of our operating performance, financial status and cash flows, etc. and in return for the shareholders, the board of directors recommended final dividends of RMB40,265 million in aggregate, representing RMB0.22 per share (inclusive of applicable taxes) for the second half of 2022. The proposed final dividends is subject to the shareholders’ approval at the forthcoming annual general meeting for 2022. The final dividends shall be paid to our shareholders listed on our shareholder register as of the close of business on June 27, 2023. The register of members of H Shares will be closed from June 22, 2023 to June 27, 2023 (both days inclusive) during which period no transfer of H Shares will be registered. In order to be eligible for the final dividends, the holders of our H Share must lodge all share transfer documents together with the relevant share certificates at Hong Kong Securities and Registrar Limited, Shop 1712-1716, Hopewell Centre,

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183 Queen’s Road East, Wan Chai, Hong Kong, at or before 4:30 p.m. on June 21, 2023. Holders of A shares whose names appear on the register of members of the Company maintained at China Securities Depository and Clearing Corporation Limited (“CSDC”) at the close of trading on the SSE in the afternoon of June 27, 2023 are eligible for the final dividends. The final dividends for A Shares and H Shares (including ADSs) for 2022 will be paid on or about June 28, 2023 and July 28, 2023, respectively.

In accordance with the relevant provisions of the Articles of Association of the Company and relevant laws and regulations, dividends payable to the Company’s shareholders shall be declared in RMB. Dividends payable to the holders of A Shares shall be paid in RMB, and for the A Shares of the Company listed on the SSE and invested by the investors through the HKSE, dividends shall be paid in RMB to the accounts of the nominal shareholders through CSDC. Save for the H Shares of the Company listed on the HKSE and invested by the investors through the SSE and the Shenzhen Stock Exchange (the “H Shares under the Southbound Trading Link”), dividends payable to the holders of H Shares shall be paid in Hong Kong Dollar. The applicable exchange rate shall be the average of the medium exchange rates for RMB to Hong Kong Dollar as announced by the PBOC in the week prior to the declaration of the dividends at the 2022 general meeting of the Company. Dividends payable to the holders of H Shares under the Southbound Trading Link shall be paid in RMB. In accordance with the Agreement on Payment of Cash Dividends on the H Shares under the Southbound Trading Link between the Company and CSDC, CSDC will receive the dividends payable by the Company to holders of the H Shares under the Southbound Trading Link as a nominal holder of the H Shares under the Southbound Trading Link on behalf of investors and assist the payment of dividends on the H Shares under the Southbound Trading Link to investors thereof.

In relation to individual shareholders and securities investment funds holding A Shares of the Company, according to the rules of the Implementation of Differential Individual Income Tax Policies on Dividends and Bonuses of Listed Companies (Cai Shui [2012] No.85) and the Notice of the MOF, the SAT and the CSRC on Issues concerning Differentiated Individual Income Tax Policies on Dividends and Bonuses of Listed Companies (Cai Shui [2015] No.101), when the Company distributes dividends, investors holding the shares of the Company for more than one year shall be temporarily exempted from individual income tax; investors holding the shares of the Company for less than one year (including one year) shall be temporarily exempted from paying individual income tax. When individual shareholders and securities investment funds holding A shares of the Company transfer their shares after the equity registration date, the Shanghai Branch of CSDC will calculate the actual tax payable based on the period of their shareholding, and securities companies and other share custodians will withhold the amount of tax payable from their respective accounts and transfer to the Shanghai Branch of CSDC. The actual tax payable is calculated as follows: if the shareholding period (meaning the duration from the date of public offering or acquiring the Company’s shares from the market to the day before the date of transfer and delivery of the stock) is within one month (including one month), the dividends and bonuses will be fully considered as taxable income, and the actual tax payable will be 20% of the dividends and bonuses; if the shareholding period is more than one month to one year (including one year), 50% of the dividends and bonuses will be considered as taxable income, and the actual tax payable will be 10% of the dividends and bonuses; if the shareholding period exceeds one year, the dividends and bonuses are temporarily exempted from individual income tax.

In relation to Qualified Foreign Institutional Investors (“QFII”) holding A shares of the Company, according to the Notice of the SAT on Issues Concerning the Withholding of Enterprise Income Tax on Dividends, Bonuses and Interests Paid to QFII by Chinese Resident Enterprises (Letter No. 47 [2009] of the SAT), the Company will withhold corporate income tax at the rate of 10%; if the relevant shareholders consider that they are entitled to tax treatment under certain tax treaty (arrangement) in relation to the dividends, such shareholders may file an application for the tax treatment under the tax treaty (arrangement) with the competent tax authority after receiving dividends according to Letter No. 47 [2009] of the SAT.

According to the Law on Corporate Income Tax of the PRC and its implementing rules which came into effect on January 1, 2008, as amended on February 24, 2017 and December 29, 2018, the Company is required to withhold corporate income tax at the rate of 10% before distributing dividends to non-resident enterprise

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shareholders whose names appear on the register of members of H Shares of the Company. Any H Shares registered in the name of non-individual shareholders, including HKSCC Nominees Limited, other nominees, trustees or other groups and organisations will be treated as being held by non-resident enterprise shareholders and therefore will be subject to the withholding of the corporate income tax. Should any holder of H Shares wish to change their shareholder status, please consult their agent or trust institution over the relevant procedures. The Company will withhold and pay the corporate income tax strictly in accordance with the relevant laws or requirements of the relevant governmental departments and strictly based on the information registered on the Company’s H Share register of members on June 27, 2023.

According to the applicable requirements of the SAT, the Company is required to withhold and pay the individual income tax for its individual H shareholders and an individual H shareholder is entitled to certain tax preferential treatments according to the tax agreements between the country where the individual H shareholder is resident and China and the provisions in the tax arrangements between China’s mainland and Hong Kong (Macau). The Company would withhold and pay the individual income tax at the tax rate of 10% on behalf of the individual H shareholders who are Hong Kong residents, Macau residents or residents of those countries having agreements with China for individual income tax on dividend at a rate equal to 10%. For individual H shareholders who are residents of those countries having agreements with China for individual income tax on dividend at a rate lower than 10%, the Company would make applications on their behalf to seek entitlement of the relevant agreed preferential treatments pursuant to the applicable provisions of the SAT. For individual H shareholders who are residents of those countries having agreements with China for individual income tax on dividend at a rate higher than 10% but lower than 20%, the Company would withhold the individual income tax at the agreed-upon effective tax rate. For individual H shareholders who are residents of those countries without any tax agreements with China or having agreements with China for individual income tax on dividend at a rate of 20% or in other situations, the Company would withhold the individual income tax at a tax rate of 20%.

The Company will determine the country of domicile of the individual H shareholders based on the registered address as recorded in the register of members of the Company (the “Registered Address”) on June 27, 2023, and will accordingly withhold and pay the individual income tax. If the country of domicile of an individual H shareholder is not the same as the Registered Address, the individual H shareholder shall notify the share registrar of the Company’s H Shares and provide relevant supporting documents on or before 4:30 p.m. June 21, 2023 (address: Hong Kong Registrars Limited, Shops 1712-1716, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong). If the individual H shareholder does not provide the relevant supporting documents to the share registrar of the Company’s H Shares within the period stated above, the Company will determine the country of domicile of the individual H shareholder based on the recorded Registered Address on June 27, 2023.

The Company will not entertain any claims arising from and assume no liability whatsoever in respect of any delay in or inaccurate determination of the country of domicile of any shareholder of the Company or any disputes over the withholding and payment of tax.

In accordance with the Notice of the MOF, the SAT and the CSRC on Taxation Policies concerning the Pilot Program of an Interconnection Mechanism for Transactions in the Shanghai and Hong Kong Stock Markets (Cai Shui [2014] No.81) which became effective on November 17, 2014 and the Notice of the MOF, the SAT and the CSRC on Taxation Policies concerning the Pilot Program of an Interconnection Mechanism for Transactions in the Shenzhen and Hong Kong Stock Markets (Cai Shui [2016] No. 127) which became effective on December 5, 2016, with regard to the dividends obtained by individual mainland investors from investment in the H shares of the Company listed on the HKSE through the Shanghai-Hong Kong and Shenzhen-Hong Kong Stock Connect, the Company will withhold their individual income tax at the rate of 20% in accordance with the register of individual mainland investors provided by CSDC. As to the withholding tax having been paid abroad, an individual investor may file an application for tax credit with the competent tax authority of CSDC with an effective credit document. With respect to the dividends obtained by mainland securities investment funds from investment in the H shares of the Company listed on the HKSE through the Shanghai-Hong Kong and Shenzhen-Hong Kong Stock Connect, the Company will withhold tax with reference to the provisions

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concerning the collection of tax on individual investors. The Company will not withhold income tax on dividends obtained by mainland enterprise investors, and mainland enterprise investors shall file their income tax returns and pay tax themselves instead.

With regard to the dividends earned by the investors (including enterprises and individuals) from investment in the A Shares of the Company listed on SSE through the HKSE, the Company will withhold income tax at the rate of 10%, and file tax withholding returns with the competent tax authority. Where any Hong Kong investor is a tax resident of a foreign country and the rate of income tax on dividends is less than 10%, as provided for in the tax treaty between the country and the PRC, the enterprise or individual may personally, or designate a withholding agent to, file an application for the tax treatment under the tax treaty with the competent tax authority of the Company. Upon review, the competent tax authority will refund tax based on the difference between the amount of tax having been collected and the amount of tax payable calculated at the tax rate as set out in the tax treaty.

Significant Changes

None.

Item 9 — THE OFFER AND LISTING

Trading Market Information

Our ADSs, each representing 100 H Shares, par value RMB1.00 per H Share, had been listed and traded on the NYSE since April 6, 2000 under the symbol “PTR”. Our H Shares have been listed and traded on the HKSE since April 7, 2000 under the symbol “857”. In September 2005, our company issued an additional 3,196,801,818 H Shares. CNPC also sold 319,680,182 state-owned shares it held concurrently with our issuance of new H Shares in September 2005. In October 2007, we issued 4 billion A Shares and these shares were listed on the SSE on November 5, 2007 under the symbol “601857”. Following the issuance of A Shares, all the domestic shares of our company existing prior to the issuance of A Shares, i.e. the shares held by CNPC (our controlling shareholder) in our company, have been registered with CSDC as tradable A Shares. The HKSE and SSE are the principal trading markets for our H Shares and A Shares, respectively. NYSE was the principal trading market for our ADSs. On September 8, 2022, our ADSs were delisted from the NYSE. On October 17, 2022, our ADR program was terminated.

As of December 31, 2022, there were 21,098,900,000 H Shares and 161,922,077,818 A Shares issued and outstanding. As of December 31, 2022, there were 116 registered holders of ADSs evidencing 2,455,897 ADSs representing 245,589,700 H Shares. The depositary of the ADSs is BNYM which provides the ADSs holders with services primarily in connection with cancellation of the ADSs during a term of one year after termination of the ADR program.

Item 10— ADDITIONAL INFORMATION

Memorandum and Articles of Association

Our Articles of Association Currently in Effect

The following is a summary based on the significant provisions of our Articles of Association. For details, you should read our amended and restated Articles of Association furnished to SEC on June 9, 2022.

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Objectives and Purposes

We are a joint stock limited company established in accordance with the PRC Company Law and certain other laws and regulations of the PRC. We are registered with the PRC State Administration for Industry and Commerce with a business license number being 1000001003252. Article 10 of our Articles of Association provides that our objectives are to comply with the rules of the market, to continuously explore business models which are suitable for the development of the Company, to fully utilize every resource of the Company, to place emphasis on personnel training and technological development, to provide the society with competitive products, and to use its best endeavors to maximize its profits. For details of our scope of business, please refer to Article 11 of our Articles of Association.

Directors

Our directors shall be elected at our shareholders’ general meeting. Our directors shall be elected for a term of three years and may serve consecutive terms upon re-election, except that independent directors may only serve a maximum of two terms. Our directors are not required to hold any shares in us, and there is no age limit requirement for the retirement or non-retirement of our directors.

Where a director is in any way, directly or indirectly, materially interested in a proposal, arrangement or contract (other than his contract of service with the Company), he shall declare the nature and extent of his interests to the board of directors at the earliest opportunity, whether or not the proposal, arrangement or contract therefor is subject to the approval of the board of directors. Unless the interested director discloses his interests to the board of directors and the proposal, arrangement or contract is approved by the board of directors at a meeting in which the interested director, is not counted as part of the quorum and abstain from voting, the proposal, arrangement or contract in which that director is materially interested is voidable at the discretion of the Company except as against a bona fide party thereto who does not have knowledge of the breach of duty by the interested director. For this purpose, a director is deemed to be interested in a proposal, arrangement or contract in which his associate is interested. Where a director gives to the board of directors a notice in writing stating that, by reason of the facts specified in the notice, he is interested in a proposal, arrangement or contract which may subsequently be entered into by the Company, that notice shall be deemed to be a sufficient declaration of his interests so far as the content stated in such notice is concerned, provided that such notice shall have been given before the date on which the entering into the relevant contract or arrangement is first taken into consideration by the Company.

Matters relating to the remuneration of our directors shall be determined by the shareholders’ general meeting.

We shall not directly or indirectly make a loan to or provide any security for a director, unless the provision by the Company of a loan or a security or any other funds to a director to meet expenditure incurred or to be incurred by him for the sake of the Company or for the purpose of enabling him to perform his duties properly, in accordance with the terms of a service contract approved by the shareholders in a general meeting. If the ordinary business scope of the Company includes the provision of loans and security, the Company may make a loan to or provide a security to a director on normal commercial terms.

Dividends

Dividends shall be paid twice a year. The final dividends of the Company shall be decided by the shareholders by way of an ordinary resolution. The shareholders may by way of an ordinary resolution authorize the board of directors to decide on the interim dividends. The Company may pay any dividends in cash, shares or otherwise in such other way as permitted by laws and regulations. The Company shall pay any such dividends in cash in preference over other methods of payment. The Company shall pay cash dividends for the year in which both the net profit attributable to the owners of the company and the cumulative undistributed profit are positive

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and so long as the cash flows of the Company may support its normal course of operation and sustainable development. Any such cash dividends shall not be less than 30% of the net profit attributable to the owners of the company for that year. If the shareholders’ general meeting passes motions in connection with the distribution of cash dividends, allotment of bonus shares, or conversion of capital common reserve fund into share capital, the Company shall implement detailed plans thereof within two months after the conclusion of such shareholders’ general meeting. If a shareholder has not claimed his dividends six years after such dividends has been declared in accordance with the Articles of Association, such shareholder is deemed to forfeit his right to claim such dividends.

When the Company distributes its after-tax profits for a given year, it shall allocate 10% of profits to its statutory common reserve fund. The Company shall no longer be required to make allocations to its statutory common reserve fund once the aggregate amount of such reserve reaches 50% or more of its registered capital. If the Company’s statutory common reserve fund is insufficient to make up its losses of the previous years, such losses shall be made up from the profit for the current year before the Company makes allocations to the statutory common reserve fund. The Company may, if so resolved by the shareholders’ meeting, make allocations to the discretionary common reserve fund from after-tax profits after making allocations to the statutory common reserve fund from the after-tax profits. The Company’s after-tax profits remaining after it has made up its losses and made allocations to its common reserve fund shall be distributed in proportion to the shareholdings of its shareholders. If the shareholders’ meeting distributes profits before the Company has made up its losses and made allocations to the statutory common reserve fund, the profits distributed must be returned to the Company.

Shareholders’ Rights

A shareholder of the Company is a person who lawfully holds shares of the Company and whose name (title) is entered in the register of shareholders. Shareholders who hold shares of the same class shall enjoy the same rights. Article 49 set forth the rights of shareholders of ordinary shares such as the right to (i) receive dividends and other distributions in proportion to the number of shares held; (ii) propose, convene, preside over, attend or appoint a proxy to attend shareholders’ general meetings and to vote thereat in accordance with laws; (iii) supervise management over business operations and present proposals or to raise queries; (iv) transfer, donate or pledge shares; (v) obtain financial information and other company information; (vi) participate in the distribution of residual assets of the Company in proportion to the number of shares held, in the event of the termination or liquidation of the Company, etc.

If the content of a resolution of a shareholders’ general meeting or the board of directors violates any laws or administrative regulations, a shareholder has the right to file a petition with the court to invalidate the resolution. If the procedure for convening or the method of voting at a shareholders’ general meeting or a meeting of the board of directors violates any laws, administrative regulations or the Company’s Articles of Association, or if the contents of a resolution breaches the Company’s Articles of Association, a shareholder may file a petition with the court to revoke the resolution within 60 days from the date on which the resolution was passed. If a director or any other senior officers violated any laws, administrative regulations or the Company’s Articles of Association in the course of performing his or her duties to the Company, and thereby caused the Company to incur a loss, a shareholder or shareholders who individually or jointly hold one per cent (1%) or more of the Company’s shares for more than one hundred and eighty (180) consecutive days may request in writing the supervisory committee to initiate proceedings in the court. If the supervisory committee has violated the laws, administrative regulations or the Articles of Association in the course of performing its duties to the Company, and thereby caused the Company to incur a loss, shareholder(s) may request in writing the board of directors to initiate proceedings in the court in respect thereof. If the supervisory committee or the board of directors refuses to initiate proceedings after receipt of a written request from the shareholder(s) as mentioned in the preceding paragraph, or fails to initiate proceedings within 30 days of the date of receipt of the request, or under urgent circumstances where failure to promptly initiate proceedings would cause irreparable harm to the Company’s interests, the shareholders mentioned in the preceding paragraph are entitled to directly initiate proceedings in the court in their own name in the interests of the Company.

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Shareholders’ General Meetings

Shareholders’ general meetings shall be convened by the board of directors. Annual general meetings are held once every year and within 6 months from the end of the preceding financial year. The board of directors shall convene an extraordinary general meeting within 2 months of the occurrence of any one of the events set forth in Article 63.

A 45-days prior written notice should be given to all of the shareholders whose names appear in the share register. A shareholder who intends to attend the meeting shall deliver to the Company his written reply concerning his attendance at such meeting 20 days before the date of the meeting. Shareholder(s) holding 3% or more of the total voting shares of the Company shall have the right to propose motions in writing to the convener 10 days prior to the date of such meeting. Any shareholder who is entitled to attend and vote at a general meeting shall be entitled to appoint one or more persons as his proxies to attend and vote on his behalf.

A shareholder (including a proxy), when voting at a general meeting, may exercise such voting rights as are attached to the voting shares which he represents, except where the cumulative voting system is adopted for voting on the election of directors and supervisors, each share shall have one vote. The voting on the election of directors and supervisors at the general meeting shall apply the cumulative voting system, which means that each share held by a shareholder shall have the same number of voting rights as the number of directors and supervisors to be elected and the voting rights held by a shareholder can be collectively exercised. At any shareholders’ general meeting, a resolution shall be decided on a show of hands unless voting by way of a poll is required under the listing rules or demanded by the following persons before or after any vote by a show of hands: (i) the chairman of the meeting; (ii) at least two shareholders present in person or by proxy entitled to vote thereat; (iii) one or more shareholders present in person or by proxy who represent(s), individually or in aggregate, 10% or more of all shares carrying the right to vote at the meeting.

An ordinary resolution must be passed by votes representing one-half or more of the voting rights represented by the shareholders (including proxies) present at the general meeting. The following matters shall be resolved by an ordinary resolution: (i) work reports of the board of directors and the supervisory committee; (ii) annual profit distribution plans and loss recovery plans formulated by the board of directors; (iii) appointment or removal of members of the board of directors and members of the supervisory committee, their remuneration and manner of payment; (iv) annual budgets and final accounts, balance sheets and profit and loss accounts and other financial statements of the Company; (v) matters other than those which are required by the laws, administrative regulations or the Company’s Articles of Association to be adopted by a special resolution.

A special resolution must be passed by votes representing two-thirds or more of the voting rights represented by the shareholders (including proxies) present at the general meeting. The following matters shall be resolved by a special resolution: (i) increase or reduction in the share capital of the Company and the issue of shares of any class, warrants and other similar securities by the Company; (ii) issue of debentures of the Company; (iii) division, merger, dissolution and liquidation of the Company; (iv) amendment of the Company’s Articles of Association; (v) acquisition or disposal of major assets in one year or provision of securities for third parties which exceeds 30% of the latest audited total assets of the Company; (vi) stock incentive plans; (vii) any other matters considered by the shareholders at general meeting, and resolved by way of an ordinary resolution, to be of a nature which may have a material impact on the Company and should be adopted by a special resolution in accordance with the laws, administrative regulations and the Company’s Articles of Association.

Where any shareholders request for the convention of an extraordinary general meeting or a class meeting the following procedures shall be followed: (i) shareholders who individually or in aggregate hold not less than 10% of the Company’s shares with voting right shall have the right to request in writing the board of directors to convene an extraordinary general meeting or a class meeting. The board of directors shall, according to the laws, administrative regulations and the Company’s Articles of Association, give written feedback of consenting to or refusing the convening of such extraordinary shareholders’ general meeting within 10 days after it has received

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the request. If the board of directors consents to convene an extraordinary general meeting or a class meeting, it shall give notice for such shareholders’ general meeting within five days after it has so resolved. The consent of the concerned shareholders shall be obtained if any change is to be made to the request in the notice. If the board of directors refuses to convene an extraordinary general meeting or a class meeting, or it fails to give any feedback within 10 days after it has received the request, the shareholders who individually or in aggregate hold not less 10% of the Company’s shares shall have the right to request in writing the supervisory committee to convene the extraordinary general meeting or class meeting; and (ii) If the supervisory committee consents to convene the extraordinary general meeting or the class meeting, it shall give the notice for such shareholders’ general meeting within five days after it has received the request. The consent of the concerned shareholders shall be obtained if any change is to be made to the request in the notice. If the supervisory committee fails to give notice of convening the shareholders’ general meeting within the provided time limit, the supervisory committee shall be deemed to have failed to convene and preside the shareholders’ general meeting, and the shareholders who individually or in aggregate hold not less than 10% of the Company’s shares for more than 90 consecutive days may at their own discretion convene and preside such a meeting.

The general meeting may authorize the board of directors to carry out matters on their behalf, with clear and specific authorization. For authorization of a matter that requiring an ordinary resolution, an ordinary resolution of the shareholders’ general meeting shall be passed by affirmative votes representing at least 50% of the voting rights represented by the shareholders (including shareholders’ proxies) present at the meeting. For authorization of a matter that requiring a special resolution, a special resolution of the shareholders’ general meeting shall be passed by affirmative votes representing at least two-thirds of the voting rights represented by the shareholders (including shareholders’ proxies) present at the meeting.

Special Procedures for Voting by a Class of Shareholders and Modification of Rights

In addition to holders of other classes of shares, the holders of the domestic-invested shares and holders of overseas-listed foreign-invested shares shall be deemed to be holders of different classes of shares. Rights conferred on any class of shareholders (“class rights”) may not be varied or abrogated save with the approval of a special resolution of shareholders at a general meeting and by the class shareholders affected at a separate meeting. Article 96 set forth the circumstances which shall be deemed to be variation or abrogation of the rights attaching to a particular class of shares, including but not limited to increasing or decreasing the number of shares of that class, reducing or removing preferential rights attached to shares of that class to receive dividends or the distribution of assets in the event that the Company is liquidated, etc. Shareholders of the affected class, whether or not otherwise having the right to vote at shareholders’ general meetings, have the right to vote at class meetings in respect of certain matters listed in Article 96, but interested shareholder(s) shall not be entitled to vote at such class meetings. Resolutions of a class meeting shall be passed by votes representing two-thirds or more of the voting rights of shareholders of that class present at the relevant meeting who are entitled to vote. Written notice of a class meeting shall be given to all shareholders who are registered as holders of that class in the register of shareholders 45 days before the date of the class meeting. A shareholder who intends to attend the class meeting shall deliver his written reply in respect thereof to the Company 20 days before the date of the class meeting. The special procedures for approval by separate class shareholders shall not apply to the circumstances where the Company issues, upon the approval by a special resolution of its shareholders at a general meeting, either separately or concurrently once every 12 months, not more than 20% of each of its existing issued Domestic-Invested Shares and Overseas-Listed Foreign-Invested Shares.

Share Capital

The Company must have ordinary shares at all times. Subject to the applicable government approvals, the Company may create different classes of shares. Each share of the same class shall carry the same rights and the same benefits. The Company may, based on its operating and development needs, authorize the increase in its capital pursuant to the Articles of Association. The Company may increase its capital by public or non-public offering of shares; by allotting bonus shares to its existing shareholders; by converting common reserve fund into

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share capital; by any other means which is stipulated by law and administrative regulation and approved the relevant government authorities. Unless otherwise stipulated in the relevant laws or administrative regulations, shares of the Company shall be freely transferable and are not subject to any lien. Domestic-invested shares and overseas-listed foreign-invested shares shall be purchased, sold, donated, inherited and charged on in accordance with the PRC laws and the Company’s Articles of Association. The Company may not accept its own shares as the subject matter of a pledge. Subject to certain conditions, the Company has the power to sell the shares of a shareholder who is untraceable and retain the payment. According to the procedures provided in the Company’s Articles of Association, the Company may reduce its registered capital. The Company may, in accordance with the procedures set out in the Company’s Articles of Association and with the approval of the relevant governing authorities, repurchase its issued shares under certain circumstances. The repurchase may be made by a general offer, stock exchange, off-market agreement, etc. The Company must obtain prior approval of the shareholders in a general meeting (in the manner stipulated in the Company’s Articles of Association) before it can repurchase shares outside of the stock exchange by means of an off-market agreement.

Material Contracts

In the two years proceeding the date of this report, we have not entered into any material contracts other than in the ordinary course of business and other than those described under “Item 4 — Information on the Company”, “Item 7 — Major Shareholders and Related Party Transactions” or elsewhere in this Form annual report.

Foreign Exchange Regulation

Currently, RMB is not a freely convertible currency. Exchange and remittance of foreign currencies in China are subject to the supervision of the PRC government’s foreign exchange administrative agencies, such as through filings and/or approval requirements. We maintain a portion of cash and cash equivalents in foreign currencies in the course of our international business, while we receive most of our revenues in RMB. We convert foreign currencies from time to time to meet our foreign currency obligations, including repayment of foreign currency denominated debt, payment of overseas capital expenditures and equity investment, import of oil, gas, equipment and materials, and payment of dividends declared with respect to the H Shares. The requirements of the PRC government such as filings and approvals with respect to foreign exchange transactions may impose restrictions on our international business.

The PRC government has implemented a floating exchange rate system to allow the value of RMB to fluctuate within a regulated band based on market supply and demand and by reference to a basket of foreign currencies. Because a substantial part of our imports and our outbound investments are settled in foreign currencies, the exchange rates between RMB and U.S. dollars and any other relevant foreign currencies may have an effect on our purchase costs and our investment costs.

We are not aware of any other PRC laws, decrees or regulations that restrict the export or import of capital or that affect the remittance of dividends, interest or other payments to non-resident holders.

Taxation

The following discussion addresses the main PRC and United States federal income tax consequences of the ownership of H Shares or ADSs purchased held by the investor as capital assets.

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PRC Taxation

Dividends and Individual Investors

Pursuant to the IIT Law, all foreign individuals are subject to a 20% withholding tax on dividends paid by a PRC company on its shares listed overseas, or Overseas Shares, unless specifically exempt by the financial authority of the State Council of the PRC. However, pursuant to the Notice on the Collection of Individual Income Tax after the Abolishment of Guoshuifa [1993] No. 045, or Circular 348, issued by the SAT on June 28, 2011, foreign individual shareholders holding H Shares, or individual H shareholders, in a PRC company listed in Hong Kong may be subject to different levels of withholding taxes on dividends based on the tax treaties of their home countries with China. Individual H shareholders, who are residents of Hong Kong or Macau or who enjoy a 10% tax rate on dividends based on the tax treaties of their home countries with China, are subject to a withholding tax rate of 10% with respect to the H Share dividends they receive. For those individual H shareholders whose home countries have tax treaties with China prescribing a tax rate on dividends lower than 10%, the PRC company, whose shares are held by such individual H shareholders, needs to make tax filings on behalf of the individual H shareholders in order for them to enjoy such tax treatment. For individual H shareholders whose home countries have tax treaties with China prescribing a tax rate on dividends between 10% and 20%, the PRC company, whose shares are held by such individual H shareholders, shall withhold the individual income tax at the agreed-upon tax rate. For individual H shareholders whose home countries have no tax treaties with China or whose home countries have tax treaties with China prescribing a tax rate on dividends higher than 20%, the PRC company shall withhold the tax at a rate of 20%.

Dividends and Foreign Enterprises

Pursuant to the EIT Law and the implementing rules thereunder, the Circular on Issues Concerning the Withholding of Corporate Income Tax by PRC Resident Enterprises from Dividends Payable to H Share Non-resident Corporate Shareholders, and the Measures for the Administration of the Enjoyment by Non-residents of the Treatments under the Treaties, when paying any of its H Share non-resident corporate shareholders any dividends, we withhold the corporate income tax from such dividends at a rate of 10%. For an H Share non-resident corporate shareholder whose home country has a tax treaty with China prescribing a tax rate on dividends lower than 10%, such H Share non-resident corporate shareholder may, by itself or through an agent or us, make filings with the competent taxation authority for the treatment under the applicable tax treaty and present the documents evidencing that such shareholder is qualified to be a beneficial owner as defined under the applicable tax treaty.

Tax Treaties

If you are a tax resident or citizen of a country that has entered into a double-taxation treaty with the PRC, you may be entitled to a reduction in the amount of tax withheld, if any, imposed on the payment of dividends. The PRC currently has such treaties with a number of countries, including, but not limited to, the United States, Australia, Canada, France, Germany, Japan, Malaysia, Singapore, the United Kingdom and the Netherlands.

Under certain treaties, the rate of withholding tax imposed by China’s taxation authorities may be reduced. Pursuant to the Measures for the Administration of the Enjoyment by Non-residents of the Treatments under Applicable Treaties promulgated by the SAT on October 14, 2019, a non-PRC resident may apply the applicable benefit under tax treaties to him/herself when he/she makes tax filings or upon withholding by third parties and no prior approvals of the taxation authorities are required, if such non-PRC resident decides based on his/her own judgement that he/she is entitled to such benefits.

Capital Gains

The IIT Law provides for a capital gains tax of 20% on individuals. The Provisions for Implementing the IIT Law, provides that the measures to levy individual income tax on the gains realized on the sale of shares will be

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made in the future by the MOF and subject to the approval of the State Council. However, the MOF has not so far promulgated a specific taxation method to levy tax on the capital gains realized by individual holders of H Shares or ADSs from sale of shares. If in the future such specific taxation method is promulgated, an individual holder of H Shares or ADSs may be subject to a 20% tax on capital gains under the IIT Law as amended from time to time, unless exempted or reduced by an applicable double taxation treaty or relevant PRC law or regulation.

Under the EIT Law, capital gains realized by foreign enterprises which are non-resident enterprises in the PRC upon the sale of Overseas Shares by PRC companies are generally subject to a PRC withholding tax levied at a rate of 10%, unless exempted or reduced pursuant to an applicable double-taxation treaty or other exemptions.

Shanghai-Hong Kong Stock Connect

In April 2014, China launched the Shanghai-Hong Kong Stock Connect Program, which is a cross-border investment channel that connects the SSE and the HKSE. Under the program, investors in each market are able to trade shares on the other market using their local brokers and clearing agencies. In accordance with the current PRC tax policies, foreign investors are temporarily exempt from income tax on capital gains derived from the trading of A Shares under the program and will be subject to a 10% withholding tax on the dividends received under the program. For a shareholder whose home country has tax treaty with China prescribing a tax rate on dividends lower than 10%, such shareholder may by itself or through an agent or the withholding agent, apply to the competent taxation authority for the treatment under the applicable tax treaty and present the documents evidencing that such shareholder is qualified to be a beneficial owner as defined under the applicable tax treaty.

Additional PRC Tax Considerations

Under the Provisional Regulations of the PRC Concerning the Stamp Duty, a stamp duty is not imposed by the PRC on the transfer of shares, such as the H Shares or ADSs, of PRC publicly traded companies that take place outside of China.

United States Federal Income Taxation

The following is a general discussion of the material United States federal income tax consequences of purchasing, owning and disposing of the H Shares or ADSs if you are a U.S. holder, as defined below, and hold the H Shares or ADSs as capital assets within the meaning of Section 1221 of the Internal Revenue Code of 1986, as amended, or the Code. This discussion does not address all of the tax consequences relating to the purchase, ownership and disposition of the H Shares or ADSs, and does not take into account U.S. holders who may be subject to special rules including:

•	tax-exempt entities;
•	banks, financial institutions, or certain insurance companies;
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•	broker-dealers;
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•	traders in securities that elect to mark to market;
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•	U.S. expatriates;
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•	U.S. holders liable for alternative minimum tax;
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•	U.S. holders that own (directly, indirectly, or constructively) 10% or more of the voting power or value of our equity;
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•	U.S. holders that hold as part of a straddle or a hedging or conversion transaction; or
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•	U.S. holders whose functional currency is not the U.S. dollar.
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This discussion is based on the Code, its legislative history, final, temporary and proposed United States Treasury regulations promulgated thereunder, published rulings and court decisions as in effect on the date hereof, all of which are subject to change, or changes in interpretation, possibly with retroactive effect. In addition, this discussion is based in part upon representations of the depositary and the assumption that each obligation in the deposit agreement and any related agreements will be performed according to its terms.

You are a “U.S. holder” if you are:

•	a citizen or resident of the United States for United States federal income tax purposes;
•	a corporation, or other entity treated as a corporation for United States federal income tax purposes, created or organized under the laws of the United States, or any state thereof or the District of Columbia;
---	---
•	an estate the income of which is subject to United States federal income tax without regard to its source; or
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•	a trust:
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•	subject to the primary supervision of a United States court and the control of one or more United States persons; or
---	---
•	that has elected to be treated as a United States person under applicable United States Treasury regulations.
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If a partnership (or other entity or arrangement treated as a partnership for United States federal income tax purposes) holds the H Shares or ADSs, the tax treatment of a partner generally will depend on the status of the partner and the activities of the partnership. If you are a partner of a partnership that holds the H Shares or ADSs, we urge you to consult your tax advisors regarding the consequences of the purchase, ownership and disposition of the H Shares or ADSs.

This discussion does not address any aspects of United States taxation other than federal income taxation.

We urge you to consult your tax advisors regarding the United States federal, state, local and non-United States tax consequences of the purchase, ownership and disposition of the H Shares or ADSs.

In general, for United States federal income tax purposes, U.S. holders who own ADSs (or American depositary receipts evidencing ADSs) will be treated as the beneficial owners of the H Shares represented by those ADSs. Accordingly, the surrender of ADSs in exchange for H Shares (or vice versa) will not result in the realization of gain or loss for United States federal income tax purposes. The following discussion assumes that we are not a passive foreign investment company, or PFIC, as discussed under “PFIC Rules” below.

Distributions on the H Shares or ADSs

The gross amount of any distribution (without reduction for any PRC tax withheld) we make on the H Shares or ADSs out of our current or accumulated earnings and profits (as determined for United States federal income tax purposes) will be includible in your gross income as dividend income when the distribution is actually or constructively received by you, in the case of the H Shares, or by the depositary in the case of ADSs. Distributions that exceed our current and accumulated earnings and profits will be treated as a return of capital to you to the extent of your tax basis in the H Shares or ADSs and thereafter as capital gains. Because we do not intend to determine our earnings and profits on the basis of United States federal income tax principles, any distribution paid will generally be treated as a “dividend” for United States federal income tax purposes. Subject to certain limitations, dividends paid to non-corporate U.S. holders, including individuals, currently are eligible

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for a reduced rate of taxation if we are deemed to be a “qualified foreign corporation” for United States federal income tax purposes. A qualified foreign corporation includes:

•	a foreign corporation that is eligible for the benefits of a comprehensive income tax treaty with the United States that includes an exchange of information program; or
•	a foreign corporation if its stock with respect to which a dividend is paid (or ADSs backed by such stock) is readily tradable on an established securities market within the United States (as determined for United States federal income tax purposes),
---	---

but does not include an otherwise qualified foreign corporation that is a PFIC in the taxable year that the dividend is paid or in the prior taxable year. We believe that we will be a qualified foreign corporation so long as we are not a PFIC and we are considered eligible for the benefits of the Agreement between the Government of the USA and the Government of the PRC for the Avoidance of Double Taxation and the Prevention of Tax Evasion with Respect to Taxes on Income, or the Treaty. Our status as a qualified foreign corporation, however, may change.

Any dividend will not be eligible for the dividends-received deduction generally allowed to United States corporations with respect to dividends received from United States corporations. The amount of any distribution of property other than cash will be the fair market value of such property on the date of such distribution.

If we make a distribution paid in HK dollars, you will be considered to have received the U.S. dollar value of the distribution determined at the spot HK dollar/ U.S. dollar rate on the date such distribution is received by you or by the depositary, regardless of whether you or the depositary convert the distribution into U.S. dollars. Any gain or loss resulting from currency exchange fluctuations during the period from the date the dividend payment is includible in your income to the date you or the depositary convert the distribution into U.S. dollars will be treated as United States source ordinary income or loss for foreign tax credit limitation purposes.

Subject to various limitations, any PRC tax withheld from distributions in accordance with PRC law, as limited by the Treaty, as discussed under “—PRC Taxation,” will be deductible or creditable against your United States federal income tax liability. For foreign tax credit limitation purposes, dividends paid on the H Shares or ADSs will be foreign source income, and will be treated as “passive category income” or, in the case of some U.S. holders, “general category income.” You may not be able to claim a foreign tax credit (and instead may claim a deduction) for non-United States taxes imposed on dividends paid on the H Shares or ADSs if you (i) have held the H Shares or ADSs for less than a specified minimum period during which you are not protected from risk of loss with respect to such Shares, or (ii) are obligated to make payments related to the dividends (for example, pursuant to a short sale).

Sale, Exchange or Other Disposition

Upon a sale, exchange or other disposition of the H Shares or ADSs, you will recognize a capital gain or loss for United States federal income tax purposes in an amount equal to the difference between the U.S. dollar value of the amount realized and your tax basis, determined in U.S. dollars, in such H Shares or ADSs. Any gain or loss will generally be United States source gain or loss for foreign tax credit limitation purposes. Capital gain of certain non-corporate U.S. holders, including individuals, is generally taxed at a reduced rate where the property has been held more than one year. Your ability to deduct capital losses is subject to limitations. If any PRC tax is withheld from your gain on a sale, exchange or other disposition of H Shares or ADSs, as discussed under “—PRC Taxation,” such tax would only be creditable against your United States federal income tax liability to the extent that you have foreign source income. However, in the event that such PRC tax is withheld, a U.S. holder that is eligible for the benefits of the Treaty may be able to treat the gain as foreign source income for foreign tax credit satisfaction purposes. Pursuant to the United States Treasury regulations that apply to foreign income taxes paid or accrued in taxable years beginning on or after December 28, 2021, any such foreign income tax would generally not be eligible for a foreign tax credit unless there is a sufficient nexus between the foreign

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country imposing the tax and the U.S. holder’s activities. The United States Treasury regulations provide for an exception if the U.S. holder elected benefits under an applicable income tax treaty between the United States and the foreign country imposing the tax. Alternatively, the U.S. holder may take a deduction for foreign income taxes paid or accrued if the U.S. holder elects to deduct (rather than credit) all such taxes paid or accrued during the taxable year. You are urged to consult your tax advisors regarding the United States federal income tax consequences if PRC tax is withheld from your gain on the sale, exchange or other disposition of H Shares or ADSs, including the availability of a foreign tax credit under your particular circumstances.

If you are paid in a currency other than U.S. dollars, any gain or loss resulting from currency exchange fluctuations during the period from the date of the payment resulting from the sale, exchange or other disposition to the date you convert the payment into U.S. dollars will be treated as United States source ordinary income or loss for foreign tax credit limitation purposes.

PFIC Rules

In general, a foreign corporation is a PFIC for United States federal income tax purposes for any taxable year in which, after applying relevant look-through rules with respect to the income and assets of subsidiaries:

•	75% or more of its gross income consists of passive income, such as dividends, interest, rents and royalties; or
•	50% or more of the average quarterly value of its assets consists of assets that produce, or are held for the production of, passive income.
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For this purpose, passive income generally includes dividends, interest, certain types of rents and royalties, annuities, net gains from the sale or exchange of property producing such income, net gains from commodity transactions, net foreign currency gains and net income from notional principal contracts. In addition, cash, cash equivalents, securities held for investment purposes, and certain other similar assets are generally categorized as passive assets.

We did not meet the PFIC tests in the taxable year ended December 31, 2022. We believe that we will not meet the PFIC tests in subsequent taxable years either and therefore we will not be treated as a PFIC for such periods. We must make a separate determination after the close of each taxable year as to whether we were a PFIC for that year. Accordingly, there can be no assurance that we will not be a PFIC in the current or subsequent taxable years.

If we were a PFIC in any taxable year that you held the H Shares or ADSs, you generally would be subject to special rules with respect to “excess distributions” made by us on the H Shares or ADSs and with respect to gain from your disposition of the H Shares or ADSs. An “excess distribution” generally is defined as the excess of the distributions you receive with respect to the H Shares or ADSs in any taxable year over 125% of the average annual distributions you have received from us during the shorter of the three preceding years or your holding period for the H Shares or ADSs. Generally, you would be required to allocate any excess distribution or gain from the disposition of the H Shares or ADSs ratably over your holding period for the H Shares or ADSs. The portion of the excess distribution or gain allocated to a prior taxable year, other than a year prior to the first year in which we became a PFIC, would be taxed at the highest United States federal income tax rate on ordinary income in effect for such taxable year, and you would be subject to an interest charge on the resulting tax liability, determined as if the tax liability had been due with respect to such particular taxable years. The portion of the excess distribution or gain that is not allocated to prior taxable years, together with the portion allocated to the years prior to the first year in which we became a PFIC, would be included in your gross income for the taxable year of the excess distribution or disposition and taxed as ordinary income.

The foregoing rules with respect to excess distributions and dispositions may be avoided or reduced if you are eligible for and timely make a valid “mark-to-market” election. If your H Shares or ADSs were treated as

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shares regularly traded on a “qualified exchange” for United States federal income tax purposes and a valid and timely mark-to-market election was made, in calculating your taxable income for each taxable year, you generally would be required to take into account as ordinary income or loss the difference, if any, between the fair market value and the adjusted tax basis of your H Shares or ADSs at the end of your taxable year. However, the amount of loss you would be allowed is limited to the extent of the net amount of previously included income as a result of the mark-to–market election. The NYSE on which the ADSs were traded is a qualified exchange for United States federal income tax purposes.

Alternatively, a timely election to treat us as a qualified electing fund under Section 1295 of the Code could be made to avoid the foregoing rules with respect to excess distributions and dispositions. You should be aware, however, that if we become a PFIC, we do not intend to satisfy record keeping requirements that would permit you to make a qualified electing fund election.

If you own the H Shares or ADSs during any year that we are a PFIC, you must annually file Internal Revenue Service, or IRS, Form 8621(or any other form subsequently specified by the United States Treasury Department), subject to certain exceptions based on the value of PFIC stock held. We encourage you to consult your own tax advisor concerning the United States federal income tax consequences of holding the H Shares or ADSs that would arise if we were considered a PFIC.

Backup Withholding and Information Reporting

In general, information reporting requirements will apply to dividends with respect to the H Shares or ADSs or the proceeds of the sale, exchange or other disposition of the H Shares or ADSs paid within the United States, and in some cases, outside of the United States, other than to various exempt recipients, including corporations. In addition, you may, under some circumstances, be subject to “backup withholding” with respect to dividends paid on the H Shares or ADSs or the proceeds of any sale, exchange or other disposition of the H Shares or ADSs, unless you:

•	are a corporation or fall within various other exempt categories, and, when required, demonstrate this fact; or
•	provide a correct taxpayer identification number on a properly completed IRS Form W-9 or a substitute form, certify that you are exempt from backup withholding and otherwise comply with applicable requirements of the backup withholding rules.
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Backup withholding is not an additional tax. Any amount withheld under the backup withholding rules generally will be creditable against your United States federal income tax liability provided that you furnish the required information to the IRS in a timely manner and you may obtain a refund of any excess amounts withheld under the backup withholding rules by filing the appropriate claim for refund with the IRS in a timely manner and furnishing any required information. If you do not provide a correct taxpayer identification number you may be subject to penalties imposed by the IRS.

In addition, certain U.S. holders who are individuals that hold certain foreign financial assets (which may include the H Shares or ADSs) may be required to report information relating to such assets, subject to certain exceptions. You should consult your own tax advisors regarding the effect, if any, of this requirement on your ownership and disposition of the H Shares or ADSs.

Documents on Display

You may find our annual reports on Form 20-F, the exhibits and other documents filed with the SEC on its website www.sec.gov and our website www.petrochina.com.cn. Upon request, we will provide hardcopies of our annual report on Form 20-F to you free of charge.

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The SEC allows us to “incorporate by reference” the information we file with the Commission. This means that we can disclose important information to you by referring you to another document filed separately with the Commission. The information incorporated by reference is considered to be part of this annual report on Form 20-F. This annual report contains exhibits and schedules. Any statement in this annual report about any of our contracts or other documents is not necessarily complete. If the contract or document is filed or incorporated by reference as an exhibit to this annual report, the contract or document is deemed to modify the description contained in this annual report. You must review the exhibits themselves for a complete description of the contracts or documents.

As a foreign private issuer, we are exempt from the rules under the Exchange Act prescribing the furnishing and content of quarterly reports and proxy statements, and officers, directors and principal shareholders are exempt from the reporting and short-swing profit recovery provisions contained in Section 16 of the Exchange Act.

Annual Report to Security Holders

Our 2022 Annual Report as published on April 21, 2023 and submitted to the HKSE has been furnished to SEC in electronic format under a Form 6-K on the same day in accordance with the EDGAR filer Manual.

Item 11 — QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

In the normal course of business, we hold or issue various financial instruments which expose us to interest rate and foreign exchange rate risks. We hedge part of the exchange rate risk through hedging instruments. Additionally, our operations are affected by certain commodity price movements. We use derivative instruments such as commodity futures, commodity swaps and commodity options for hedging some price risks efficiently. We regard an effective market risk management system as an important element of our treasury function and are currently enhancing our systems. A primary objective of our market risk management is to implement certain methodologies to better measure and monitor risk exposures.

The following discussions and tables, which constitute “forward-looking statements” that involve risks and uncertainties, summarize our market-sensitive financial instruments including fair value, maturity and contract terms. Such discussions address market risk only and do not present other risks which we face in the normal course of business.

Interest Rate Risk

Our interest risk exposure arises from changing interest rates. The tables below provide information about our financial instruments including various debt obligations that are sensitive to changes in interest rates. The tables present principal cash flows and related weighted-average interest rates at expected maturity dates. Weighted-average variable rates are based on effective rates as of December 31, 2020, 2021 and 2022. The information is presented in RMB equivalents, our reporting currency.

Foreign Exchange Rate Risk

We conduct our business primarily in RMB. However, a portion of our RMB revenues are converted into other currencies to be used in foreign investment and trading, to meet foreign currency financial instrument obligations and to pay for imported oil, gas, equipment and other materials. Foreign currency payments for imported oil and gas represented 21.6%, 22.1% and 25.1% of our total purchases, services and other expenses in 2020, 2021 and 2022, respectively. These are the main foreign exchange payments of our company.

RMB is not a freely convertible currency. Limitation in foreign exchange transactions imposed by the PRC government could cause future exchange rates to vary significantly from current or historical exchange rates.

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The tables below provide information about our financial instruments including foreign currency denominated debt instruments that are sensitive to foreign currency exchange rates. The tables below summarize such information by presenting principal cash flows and related weighted-average interest rates at expected maturity dates in RMB equivalents, using the exchange rates in effect on December 31, 2022.

December 31, 2022

																				Percentage<br>to Total<br>Long-Term<br>Borrowings			Fair<br>Value
			2024			2025			2026			2027			Thereafter			Total
Long term debt
Loans in RMB
Fixed Rate Loan	1,954			4,224			14,086			115			3,807			1,744			25,930		9.11	%		25,000
Average Interest Rate	3.89	%		2.58	%		4.20	%		3.85	%		2.35	%		3.57	%		—		—			—
Variable Rate Loan	28,679			61,162			8,099			2,661			535			10,058			111,194		39.05	%		106,953
Average Interest Rate	2.51	%		3.00	%		3.30	%		2.82	%		3.86	%		3.70	%		—		—			—
Loans in Euro
Fixed Rate Loan	—			—			—			—			—			118			118		0.04	%		86
Average Interest Rate	2.00	%		—			—			—			—			0.10	%		—		—			—
Variable Rate Loan	—			—			3,526			—			—			—			3,526		1.24	%		3,398
Average Interest Rate	—			—			1.18	%		—			—			—			—		—			—
Loans in US
Fixed Rate Loan	9			9			9			9			9			3,556			3,601		1.26	%		2,818
Average Interest Rate	—			—			—			—			—			2.13	%		—		—			—
Variable Rate Loan	6,619			7,870			46,823			1,194			—			10			62,516		21.96	%		59,629
Average Interest Rate	1.76	%		1.41	%		4.33	%		3.61	%		—			5.41	%		—		—			—
Loans in Japanese Yen
Fixed Rate Loan	3			2			2			2			—			—			9		0.00	%		7
Average Interest Rate	2.10	%		2.10	%		2.10	%		2.10	%		—			—			—		—			—
Variable Rate Loan	—			—			—			—			—			—			—		—			—
Average Interest Rate	—			—			—			—			—			—			—		—			—
Debentures in US
Fixed Rate Debentures	—			—			3,468			—			—			—			3,468		1.22	%		3,402
Average Interest Rate	—			—			3.75	%		—			—			—			—		—			—
Debentures in RMB
Fixed Rate Debentures	4,000			—			—			9,000			2,000			—			15,000		5.27	%		14,508
Average Interest Rate	4.88	%		—			—			3.57	%		5.04	%		—			—		—			—
Medium Term Notes in RMB
Fixed Rate Notes	21,000			35,880			2,500			—			—			—			59,380		20.85	%		70,969
Average Interest Rate	2.42	%		3.59	%		2.20	%		—			—			—			—		—			—
Total	62,264			109,147			78,513			12,981			6,351			15,486			284,742		100	%		286,770

All values are in US Dollars.

See “Item 3 — Key Information — Risk Factors — Risks Related to Pricing and Exchange Rate”.

Commodity Price Risk

We are engaged in a wide range of petroleum-related activities and purchase certain quantity of oil from the international market to meet our demands. The prices of crude oil and refined products in the international market are affected by various factors such as changes in global and regional politics and economy, the demand and supply of crude oil and refined products, as well as unexpected events and disputes with international repercussions. The domestic crude oil price is determined with reference to the international price of crude oil

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whereby the domestic refined oil prices adjust with changes in crude oil prices in the international market. We use derivative instruments such as commodity futures, commodity swaps and commodity forwards to hedge some commodity price risks. We have strict internal control requirements with respect to the purpose, types, holding volumes of any derivative instruments as against the inventories, and the transaction process of the derivatives. For a sensitive analysis, please refer to Note 4 to the financial Statements.

See Note 4 to our financial statements and “Item 3 — Key Information — Risk Factors — Risks Related to Pricing and Exchange Rate”.

Item 12 — DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

Fees paid by our ADS holders

BNYM, the depositary of our ADR program, collects its fees for delivery and surrender of ADSs directly from investors depositing shares or surrendering ADSs for the purpose of withdrawal or from intermediaries acting for them. The depositary collects fees for making distributions to investors by deducting those fees from the amounts distributed or by selling a portion of distributable property to pay the fees. The depositary may refuse to deliver ADSs or the deposited shares or provide any distributions until its fees for those services are paid.

Persons Depositing or Withdrawing Shares Must Pay:	For:
$5.00 (or less) per 100 ADSs (or portion thereof)	Issuance of ADSs, including issuances resulting from a distribution of shares or rights or other property
	Cancelation of ADSs for the purpose of withdrawal, including if the deposit agreement terminates
$0.05 (or less) per ADS (or portion thereof)	Any cash distribution to ADS holders
$0.05 (or less) per ADS per calendar year	Depositary services
A fee equivalent to the fee that would be payable if securities distributed to you had been shares and the shares had been deposited for issuance of ADSs	Distribution of securities distributed to holders of deposited securities which are distributed by the depositary to ADS holders
Registration or transfer fees	Transfer and registration of shares on our share register to or from the name of the depositary or its agent when you deposit or withdraw shares
Expenses of the depositary	Cable, telex and facsimile transmissions (when expressly provided in the deposit agreement)
	Converting foreign currency to U.S. dollars

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Persons Depositing or Withdrawing Shares Must Pay:	For:
Taxes and other governmental charges the depositary or the custodian have to pay on any ADS or share underlying an ADS, for example, stock transfer taxes, stamp duty or withholding taxes	As necessary
Any charges incurred by the depositary or its agents for servicing the deposited securities	As necessary

Fees and Payments from the Depositary to Us

In the year ended December 31, 2022, we did not receive any payment from the depositary.

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PART II

Item 13 — DEFAULTS, DIVIDENDS ARREARAGES AND DELINQUENCIES

None.

Item 14— MATERIAL MODIFICATIONS TO THE RIGHTS TO SECURITY HOLDERS AND USE OF PROCEEDS

None.

Item 15 — CONTROLS AND PROCEDURES

Evaluation of the Management on Disclosure Controls and Procedures

Our chairman, president and CFO, after evaluating the effectiveness of our disclosure controls and procedures (as defined in the United States Exchange Act Rules 13a-15(e) and 15d(e)) as of the end of the period covered by this annual report, have concluded that, as of such date, our disclosure controls and procedures were effective to ensure that material information required to be disclosed in the reports that we file and furnish under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and regulations and that such information is accumulated and communicated to our management, including our chairman, president and CFO, as appropriate, to allow timely decisions regarding required disclosure.

Management’s Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Exchange Act Rules 13a-15(f). Under the supervision and with the participation of our management, including our chairman, president and CFO, our company evaluated the effectiveness of its internal control over financial reporting based on criteria established in the framework in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, our management has concluded that our internal control over financial reporting was effective as of December 31, 2022.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies and procedures may deteriorate.

The effectiveness of our internal control over financial reporting as of December 31, 2022 has been audited by PricewaterhouseCoopers Zhong Tian LLP (“PwC”), our independent registered public accountant. Please refer to PwC’s Opinions on the Financial Statements and Internal Control over Financial Reporting.

Changes in Internal Control over Financial Reporting

During the year ended December 31, 2022, there were no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Item 16A — AUDIT COMMITTEE FINANCIAL EXPERT

Our audit committee is composed of two INEDs, Mr. Cai Jinyong and Mr. Jiang, Simon X., and one non-executive director, Mr. Xie Jun. See “Item 6 — Directors, Senior Management and Employees — Board Practices — Audit Committee”. Mr. Cai Jinyong, our INED, has been confirmed as a “financial expert” as defined in Item 16A of Form 20-F.

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Item 16B — CODE OF ETHICS

We adopted our code of business conduct and ethics for senior management on March 23, 2004 and our code of business conduct and ethics for employees on March 2, 2005 and have disclosed the content of both codes on our website.

These two Codes of Ethics may be accessed as follows:

1. From our main web page, first click on “Investor Relations”.

2. Next, click on “Corporate Governance Structure”.

3. Finally, click on “Code of Ethics for Senior Management” or “Code of Ethics for Employees of PetroChina Company Limited”.

This 20-F also includes both of the codes as exhibit 11.1 and 11.2.

Item 16C — PRINCIPAL ACCOUNTANT FEES AND SERVICES

PwC served as our independent accountant for the fiscal year of 2021 and 2022. The office of PwC is located at 11/F, PricewaterhouseCoopers Center, 2 Corporate Avenue, 202 Hu Bin Road, Huangpu District, Shanghai 200021, China.

The following table presents the aggregate fees paid by us (not including our subsidiaries) for professional audit services, tax and other services rendered by PwC to us for the years ended December 31, 2021 and 2022, respectively.

	2021		2022
	RMB in millions
Audit fees		47		47
Audit-related fees		—		—
Tax fees		—		—
All other fees		—		—
Total		47		47

The remuneration above did not include fees paid by our subsidiaries to PwC and its network firms. For 2022, our subsidiaries paid a total of RMB39 million to PwC and its network firms which primarily included audit fees of RMB35 million, tax fees of RMB1 million, and other service fees of RMB3 million.

For 2021, our subsidiaries paid a total of RMB41 million to PwC and its network firms which primarily included audit fees of RMB34 million, audit-related fees of RMB2 million, tax fees of RMB2 million, and other service fees of RMB3 million.

See Note 7 to our financial statements prepared in accordance with IFRS included elsewhere in this annual report for detailed information about auditor’s remuneration.

Audit Committee Pre-approved Policies and Procedures

Currently, all services to be provided by our independent registered public accountant must be pre-approved by our audit committee.

During the year ended December 31, 2022, services relating to all non-audit related fees provided to us by PwC were approved by our audit committee in accordance with the de minimis exception to the pre-approval requirement provided by paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.

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Item 16D — EXEMPTIONS FROM LISTING STANDARDS FOR AUDIT COMMITTEES

Not applicable.

Item 16E — PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS

None.

Item 16F — CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT

None.

Item 16G — CORPORATE GOVERNANCE

Not applicable.

Item 16H — MINE SAFETY DISCLOSURE

Not applicable.

Item 16I — DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS.

On May 26, 2022, following our filing with the SEC on April 29, 2022 of our annual report on 20-F for the year ended December 31, 2021, the SEC identified us as a “Commission-Identified Issuer” pursuant to the HFCAA and the rules of the SEC implementing the HFCAA. We were so identified because the PCAOB had reported to the SEC on December 16, 2021 that it had been unable to completely inspect or investigate audit firms in the mainland of China and Hong Kong, including PwC, our independent auditor, because of the positions taken by authorities in the mainland of China and Hong Kong. On December 15, 2022, the PCAOB reported to the SEC that it had been able to secure complete access to inspect and investigate the audit firms in the mainland of China and Hong Kong and therefore it vacated its previous determinations to the contrary.

As of March 31, 2023, CNPC held 82.62% of our shares and it holds a controlling financial interest in us. CNPC is directly owned by the SASAC. Please see “Item 4 — Information on the Company — Our Corporate Organization Structure”.

For those directors who are CPC members, please see the biographies under “Item 6 — Directors, Senior Management and Employees — Directors, Senior Management and Supervisors”.

Article 8 and Article 105 in our Articles of Association are in connection with the charter of the CPC. Please refer to our Articles of Association filed as Exhibit 1.1 to this annual report on Form 20-F.

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PART III

Item 17— FINANCIAL STATEMENTS

We have elected to provide the financial statements and related information specified in Item 18 in lieu of Item 17.

Item 18 — FINANCIAL STATEMENTS

See page F-pages following Item 19.

Item 19 — EXHIBITS

(a) See Item 18 for a list of the financial statements as part of this annual report.

(b) Exhibits to this annual report.

Exhibit<br>Number	Description of<br> <br>Exhibits
1.1	Articles of Association (as amended on June 9, 2022) (English translation)^(3)^
2.1*	A description of rights of each class of securities registered under Section 12 of the Securities Exchange Act of 1934
4.1	Non-competition Agreement between CNPC and PetroChina (English translation)^(1)^
4.2	Trademark Licensing Contract between CNPC and PetroChina (English translation)^(1)^
4.3	Patent and Proprietary Technology Licensing Contract between CNPC and PetroChina (English translation) ^(1)^
4.4	Computer Software Licensing Contract between CNPC and PetroChina (English translation) ^(1)^
4.5	Contract for Transfer of Rights under Production Sharing Contracts between CNPC and PetroChina (English translation)^(1)^
4.6	Contract for the Supervision of Certain Sales Enterprises between CNPC and PetroChina (English translation) ^(1)^
4.7	Comprehensive Products and Services Agreement, dated August 27, 2020, between CNPC and PetroChina (English translation)^(4)^
4.8	Letter of Confirmation regarding the Land Use Rights Lease Agreement and Building Lease Agreement, dated August 27, 2020, between CNPC and PetroChina (English translation) ^(4)^
4.9	Production and Operation Agreement between PipeChina and PetroChina (English Translation)^(4)^
8.1*	List of major subsidiaries
11.1	Code of Ethics for Senior Management ^(2)^
11.2	Code of Ethics for Employees ^(2)^
12.1*	Certification of Chairman required by Section 302 of the Sarbanes-Oxley Act of 2002
12.2*	Certification of President required by Section 302 of the Sarbanes-Oxley Act of 2002
12.3*	Certification of CFO required by Section 302 of the Sarbanes-Oxley Act of 2002
13.1**	Certification of Chairman required by 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

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Exhibit <br>Number	Description of<br>Exhibits
13.2**	Certification of President required by 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
13.3**	Certification of CFO required by 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
15.1*	Reserves Report of DeGolyer and MacNaughton for 2022
15.2*	Reserves Audit Report of DeGolyer and MacNaughton for 2022
15.3*	Reserves Report of Ryder Scott for 2022
15.4*	Reserves Report of GLJ Petroleum Consultants for 2022
15.5*	Reserves Report of McDaniel & Associates Consultants, Ltd. for 2022
15.6*	Consent letter of KWM, as PRC counsel
15.7*	Consent letter of KWM, as HK counsel
101.INS*	Inline XBRL Instance Document—the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
101.SCH*	Inline XBRL Taxonomy Extension Schema Document
101.CAL*	Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*	Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*	Inline XBRL Taxonomy Extension Labels Linkbase Document
101.PRE*	Inline XBRL Taxonomy Extension Presentation Linkbase Document — the cover page XBRL tags are embedded within the Exhibit 101 Inline XBRL
104*	CoverPage Interactive Data File (embedded within the Inline XBRL document)
*	Filed as exhibits to this Form 20-F.
---	---
**	Furnished as exhibits to this Form 20-F.
---	---
(1)	Paper filing; incorporated into this annual report by reference to our Registration Statement on Form F-1 (File No. 333-11566) filed with the Commission, as declared effective on March 29, 2000.
---	---
(2)	Incorporated into this annual report by reference to the exhibits to Form 20-F for the fiscal year ended December 31, 2004 (File No. 1-15006).
---	---
(3)	Incorporated into this annual report by reference to Exhibit 99.2 to Form 6-K (File No. 1-15006) furnished to the Commission on June 10, 2022.
---	---
(4)	Incorporated into this annual report by reference to the exhibits to Form 20-F for the fiscal year ended December 31, 2020 (File No. 1-15006).
---	---

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SIGNATURE

The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.

Very truly yours,
/s/ WANG Hua
Name:	WANG Hua
Title:	CFO and Secretary to Board of Directors

Date: April 28, 2023

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INDEX OF CONSOLIDATED FINANCIAL STATEMENTS

	Page
PetroChina Company Limited and its Subsidiaries
Consolidated Financial Statements
Report of Independent Registered Public Accounting Firm – KPMG Huazhen LLP, Beijing, the People’s Republic of China (PCAOB ID: 1186)		F-2
Report of Independent Registered Public Accounting Firm – PricewaterhouseCooper Zhongtian LLP, Shanghai, the People’s Republic of China (PCAOB ID: 1424)		F-3
Consolidated Statements of Comprehensive Income for the years ended December 31, 2022, 2021 and 2020		F-6
Consolidated Statements of Financial Position as of December 31, 2022 and 2021		F-7
Consolidated Statements of Cash Flows for the years ended December 31, 2022, 2021 and 2020		F-9
Consolidated Statements of Changes in Equity for the years ended December 31, 2022, 2021 and 2020		F-11
Notes to the Financial Statements		F-12
Supplementary Information on Oil and Gas Exploration and Production Activities (Unaudited)		F-69

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Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors

PetroChina Company Limited:

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated statements of comprehensive income, cash flows and changes in equity of PetroChina Company Limited and subsidiaries (the “Company”) for the year ended December 31, 2020, and the related notes (collectively, the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the results of operations of the Company and its cash flows for the year ended December 31, 2020, in conformity with International Financial Reporting Standards as issued by International Accounting Standards Board.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audit provides a reasonable basis for our opinion.

/s/ KPMG Huazhen LLP

We served as the Company’s auditor from 2013 to 2021.

Beijing, China

April 29, 2021

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Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders of PetroChina Company Limited

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated statement of financial position of PetroChina Company Limited and its subsidiaries (the “Company”) as of December 31, 2022 and December 31, 2021, and the related consolidated statements of comprehensive income, changes in equity and cash flows for each of the two years in the period ended December 31, 2022, including the related notes (collectively referred to as the “consolidated financial statements”). We also have audited the Company’s internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated

financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and December 31, 2021, and the results of its operation and its cash flow for each of the two years in the period ended December 31, 2022 in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control — Integrated Framework (2013) issued by the COSO.

Basis for Opinions

The Company’s management is responsible for these consolidated

financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting appearing under Item 15. Our responsibility is to express opinions on the Company’s consolidated

financial statements and on the Company’s internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated

financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated

financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated

financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in

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accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Critical Audit Matters

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated

financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the

consolidated

financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matter does not alter in any way our opinion on the consolidated

financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Recoverability of the carrying amount of oil and gas properties

As described in Note 5 and 16 to the consolidated financial statements, the net book value of oil and gas properties as included in property, plant and equipment amounted to RMB 832,610 million as at 31 December 2022, and impairment loss of RMB 14,750 million was recorded for the year ended 31 December 2022. Uncertainty in future oil prices, future production costs, changes in operating conditions and the economic outlook gave rise to possible indicators that the carrying amount of the oil and gas properties as at December 31, 2022 might be impaired. Management has adopted value in use as the respective recoverable amounts of oil and gas properties, which involved key estimations or assumptions related to future crude oil prices, future costs, future production volumes and discount rates.

The principal considerations for our determination that performing procedures relating to recoverability of the carrying amount of oil and gas properties is a critical audit matter are the significance of the carrying amount of oil and gas properties as at 31 December 2022, together with the significant estimates and judgements by management in the use of key estimates or assumptions in determining recoverable amounts for oil and gas properties. We had placed our audit emphasis on this matter.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included obtaining an understanding of the management’s internal control and assessment process of impairment of oil and gas properties and evaluating and testing the key controls relating to the determination of recoverable amounts of oil and gas properties. These procedures also included assessing the appropriateness of the method used to determine recoverable amounts, including the methodology adopted in the discounted cash flow projections, testing mathematical accuracy of the projections, and the completeness, accuracy, and relevance of underlying data used in the projections. Evaluating the significant assumptions relating to the key assumptions in discounted cash flow projections will involve (i) comparing estimates of future crude oil prices adopted by the management against a range of published crude oil price forecasts, (ii) comparing the future cost profiles against historical costs or relevant budgets of the management or relevant industry data, (iii) comparing the future production profiles

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against the oil and gas reserve estimation report approved by the management, evaluating the competence, capability and objectivity of the management’s experts engaged in estimating the oil and gas reserves, and assessing key estimations or assumptions used in the reserve estimation, by reference to historical data, management plans and/or relevant industry data. Professionals with specialized skill and knowledge were used to assist in the evaluation of the appropriateness of discount rates adopted by the management.

/s/ PricewaterhouseCoopers Zhong Tian LLP<br><br>Shanghai, the People’s Republic of China<br><br>April 28, 2023

We have served as the Company’s auditor since 2021.

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PETROCHINA COMPANY LIMITED

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

For the Years Ended December 31, 2022, 2021 and 2020

(Amounts in millions, except for the per share data)

	Notes		2022			2021			2020
			RMB			RMB			RMB
REVENUE		6		3,239,167			2,614,349			1,933,836
OPERATING EXPENSES
Purchases, services and other				(2,213,080	)		(1,770,019	)		(1,267,797	)
Employee compensation costs		8		(163,073	)		(154,835	)		(147,604	)
Exploration expenses, including exploratory dry holes				(27,074	)		(24,248	)		(19,333	)
Depreciation, depletion and amortization				(238,036	)		(231,269	)		(213,875	)
Selling, general and administrative expenses				(59,529	)		(57,802	)		(64,345	)
Taxes other than income taxes		9		(278,055	)		(228,003	)		(195,850	)
Other (expense)/ income, net				(43,660	)		12,980			50,905
TOTAL OPERATING EXPENSES				(3,022,507	)		(2,453,196	)		(1,857,899	)
PROFIT FROM OPERATIONS				216,660			161,153			75,937
FINANCE COSTS
Exchange gain				23,772			13,377			14,387
Exchange loss				(25,590	)		(12,839	)		(14,279	)
Interest income				4,738			2,984			3,023
Interest expense		10		(21,554	)		(19,739	)		(26,528	)
TOTAL NET FINANCE COSTS				(18,634	)		(16,217	)		(23,397	)
SHARE OF PROFIT OF ASSOCIATES AND JOINT VENTURES				15,251			13,267			3,533
PROFIT BEFORE INCOME TAX EXPENSE		7		213,277			158,203			56,073
INCOME TAX EXPENSE		12		(49,295	)		(43,507	)		(22,588	)
PROFIT FOR THE YEAR				163,982			114,696			33,485
OTHER COMPREHENSIVE INCOME
Item that will not be reclassified to profit or loss
Fair value changes in equity investment measured at fair value through other comprehensive income				(116	)		232			113
Currency translation differences				6,201			(2,045	)		(6,893	)
Items that are or may be reclassified subsequently to profit or loss
Gains on cash flow hedges				11,273			—			—
Share of the other comprehensive income of associates and joint ventures accounted for using the equity method				654			(4	)		(441	)
Currency translation differences				3,758			(2,684	)		(3,909	)
OTHER COMPREHENSIVE INCOME, NET OF TAX				21,770			(4,501	)		(11,130	)
TOTAL COMPREHENSIVE INCOME FOR THE YEAR				185,752			110,195			22,355
PROFIT FOR THE YEAR ATTRIBUTABLE TO:
Owners of the Company		13		149,380			92,170			19,006
Non-controlling interests				14,602			22,526			14,479
				163,982			114,696			33,485
TOTAL COMPREHENSIVE INCOME FOR THE YEAR ATTRIBUTABLE TO:
Owners of the Company				165,050			89,561			14,634
Non-controlling<br> interests				20,702			20,634			7,721
				185,752			110,195			22,355
BASIC AND DILUTED EARNINGS PER SHARE ATTRIBUTABLE TO OWNERS OF THE COMPANY(RMB)		14		0.82			0.50			0.10

The accompanying notes are an integral part of these financial statements.

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PETROCHINA COMPANY LIMITED

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

As of December 31, 2022 and 2021

(Amounts in millions)

	Notes		December 31,2022		December 31,2021
			RMB		RMB
NON-CURRENT<br> ASSETS
Property, plant and equipment		16		1,492,513		1,459,296
Investments in associates and joint ventures		17		269,569		265,785
Equity investments measured at fair value through other comprehensive income		18		943		1,168
Right-of-use<br> assets		20		203,065		208,606
Intangible and other <br>non-current<br> assets		21		69,813		66,344
Deferred tax assets		33		19,699		12,161
Time deposits with maturities over one year				4,016		8,064
TOTAL <br>NON-CURRENT<br> ASSETS				2,059,618		2,021,424
CURRENT ASSETS
Inventories		22		167,751		143,848
Accounts receivable		23		72,028		52,746
Derivative financial instruments		24		21,133		3,913
Prepayments and other current assets		25		119,654		112,820
Financial assets at fair value through other comprehensive income		26		4,376		3,975
Financial assets at fair value through profit or loss				3,876		—
Time deposits with maturities over three months but within one year				33,859		26,747
Cash and cash equivalents		27		191,190		136,789
TOTAL CURRENT ASSETS				613,867		480,838

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PETROCHINA COMPANY LIMITED

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION — (CONTINUED)

As of December 31, 2022 and 2021

(Amounts in millions)

	Notes		December 31,2022			December 31,2021
			RMB			RMB
CURRENT LIABILITIES
Accounts payable and accrued liabilities		28		372,369			299,121
Contract liabilities		29		77,337			78,481
Income taxes payable				16,471			9,915
Other taxes payable				37,043			66,859
Short-term borrowings		30		100,639			53,275
Derivative financial instruments		24		11,146			3,881
Lease liabilities		20		7,560			6,626
Financial liabilities at fair value through profit or loss				1,698			—
TOTAL CURRENT LIABILITIES				624,263			518,158
NET CURRENT LIABILITIES				(10,396	)		(37,320	)
TOTAL ASSETS LESS CURRENT LIABILITIES				2,049,222			1,984,104
EQUITY
EQUITY ATTRIBUTABLE TO OWNERS OF THE COMPANY:
Share capital		31		183,021			183,021
Retained earnings				853,585			771,980
Reserves		32		332,721			308,560
TOTAL EQUITY ATTRIBUTABLE TO OWNERS OF THE COMPANY				1,369,327			1,263,561
NON-CONTROLLING<br> INTERESTS				168,526			145,308
TOTAL EQUITY				1,537,853			1,408,869
NON-CURRENT LIABILITIES
Long-term borrowings		30		222,478			287,175
Asset retirement obligations		34		142,081			129,405
Lease liabilities		20		118,200			123,222
Deferred tax liabilities		33		21,016			26,638
Other long-term obligations				7,594			8,795
TOTAL NON-CURRENT LIABILITIES				511,369			575,235
TOTAL EQUITY AND NON-CURRENT LIABILITIES				2,049,222			1,984,104

The accompanying notes are an integral part of these financial statements.

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PETROCHINA COMPANY LIMITED

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Years Ended December 31, 2022, 2021 and 2020

(Amounts in millions)

	2022			2021			2020
	RMB			RMB			RMB
CASH FLOWS FROM OPERATING ACTIVITIES
Profit for the year		163,982			114,696			33,485
Adjustments for:
Income tax expense		49,295			43,507			22,588
Depreciation, depletion and amortization		238,036			231,269			213,875
Capitalized exploratory costs charged to expense		14,118			12,557			8,934
Safety fund reserve		(691	)		(1,750	)		(1,505	)
Share of profit of associates and joint ventures		(15,251	)		(13,267	)		(3,533	)
Accrual of provision for impairment of receivables, net		1,625			415			343
Write down in inventories, net		8,567			580			8,151
Impairment of other <br>non-current<br> assets		4,653			465			—
Loss on disposal and scrap of property, plant and equipment		20,726			18,959			5,398
(Gain)/loss on disposal and scrap of other <br>non-current<br> assets		(479	)		587			(1,142	)
Loss/(gain)<br>on disposal of subsidiaries		185			(3,575	)		(1,242	)
Gain on Pipeline restructuring		—			(18,320	)		(46,946	)
Fair value loss		2,464			—			—
Dividend income		(15	)		(17	)		(25	)
Interest income		(4,738	)		(2,984	)		(3,023	)
Interest expense		21,554			19,739			26,528
Changes in working capital:
Accounts receivable, prepayments and other current assets		(20,127	)		(8,265	)		14,751
Inventories		(32,470	)		(15,889	)		43,645
Accounts payable and accrued liabilities		7,504			2,251			8,410
Contract liabilities		(1,144	)		(12,996	)		8,987
CASH FLOWS GENERATED FROM OPERATIONS		457,794			367,962			337,679
Income taxes paid		(64,026	)		(26,493	)		(19,104	)
NET CASH FLOWS FROM OPERATING ACTIVITIES		393,768			341,469			318,575

The accompanying notes are an integral part of these financial statements.

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PETROCHINA COMPANY LIMITED

CONSOLIDATED STATEMENTS OF CASH FLOWS — (CONTINUED)

For the Years Ended December 31, 2022, 2021 and 2020

(Amounts in millions)

	2022			2021			2020
	RMB			RMB			RMB
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures		(243,349	)		(261,617	)		(248,376	)
Acquisition of investments in associates and joint ventures		(1,396	)		(387	)		(2,599	)
Prepayments on long-term leases		—			—			(3,048	)
Acquisition of intangible assets and other <br>non-current<br> assets		(1,524	)		(3,946	)		(5,303	)
Acquisition of subsidiaries		(460	)		(1,822	)		(1,947	)
Acquisition of financial assets at fair value through profit or loss		(2,830	)		—			—
Proceeds from disposal of property, plant and equipment		(364	)		2,746			1,195
Proceeds from disposal of other <br>non-current<br> assets		2,830			4,183			2,224
Proceeds from Pipeline restructuring		3,445			31,074			80,621
Interest received		3,001			2,836			2,532
Dividends received		10,740			12,274			4,778
(Increase)/decrease in time deposits with maturities over three months		(3,064	)		1,627			(12,063	)
NET CASH FLOWS USED FOR INVESTING ACTIVITIES		(232,971	)		(213,032	)		(181,986	)
CASH FLOWS FROM FINANCING ACTIVITIES
Repayments of short-term borrowings		(800,692	)		(758,307	)		(797,892	)
Repayments of long-term borrowings		(90,637	)		(78,127	)		(219,770	)
Repayments of lease liabilities		(12,730	)		(13,016	)		(12,794	)
Interest paid		(12,298	)		(12,821	)		(16,700	)
Dividends paid to <br>non-controlling<br> interests		(9,547	)		(16,508	)		(14,264	)
Dividends paid to owners of the Company		(54,686	)		(39,866	)		(28,078	)
Cash paid to acquire <br>non-controlling<br> interests		—			(22	)		(2	)
Increase in short-term borrowings		784,049			681,258			751,157
Increase in long-term borrowings		82,299			128,834			238,335
Cash contribution from <br>non-controlling<br> interests		529			673			613
Capital reduction in subsidiaries paid to <br>non-controlling<br> interests		—			(69	)		(5	)
NET CASH FLOWS USED FOR FINANCING ACTIVITIES		(113,713	)		(107,971	)		(99,400	)
TRANSLATION OF FOREIGN CURRENCY		7,317			(2,308	)		(4,967	)
Increase in cash and cash equivalents		54,401			18,158			32,222
Cash and cash equivalents at beginning of the year		136,789			118,631			86,409
Cash and cash equivalents at end of the year		191,190			136,789			118,631

The accompanying notes are an integral part of these financial statements.

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PETROCHINA COMPANY LIMITED

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

For the Years Ended December 31, 2022, 2021 and 2020

(Amounts in millions)

	Attributable to owners of the Company											Non-<br><br> <br>controlling<br> Interests			Total<br> Equity
	Share<br><br> <br>Capital		Retained<br><br> <br>Earnings			Reserves			Subtotal
	RMB		RMB			RMB			RMB			RMB			RMB
Balance at January 1, 2020		183,021		743,124			304,011			1,230,156			214,149			1,444,305
Profit for the year ended December 31, 2020		—		19,006			—			19,006			14,479			33,485
Other comprehensive income for the year ended December 31, 2020		—		—			(4,372	)		(4,372	)		(6,758	)		(11,130	)
Special reserve-safety fund reserve		—		—			(1,633	)		(1,633	)		128			(1,505	)
Transfer to reserves		—		(6,275	)		6,275			—			—			—
Dividends		—		(28,078	)		—			(28,078	)		(14,827	)		(42,905	)
Transaction with <br>non-controlling<br> interests in subsidiaries		—		—			—			—			(2	)		(2	)
Capital contribution from <br>non-controlling<br> interests		—		—			2			2			823			825
Pipeline restructuring		—		—			—			—			(57,425	)		(57,425	)
Acquisition of subsidiaries		—		—			1			1			1,186			1,187
Disposal of subsidiaries		—		—			—			—			(489	)		(489	)
Other		—		178			(102	)		76			199			275
Balance at December 31, 2020		183,021		727,955			304,182			1,215,158			151,463			1,366,621
Balance at January 1, 2021		183,021		727,955			304,182			1,215,158			151,463			1,366,621
Profit for the year ended December 31, 2021		—		92,170			—			92,170			22,526			114,696
Other comprehensive income for the year ended December 31, 2021		—		—			(2,609	)		(2,609	)		(1,892	)		(4,501	)
Special reserve-safety fund reserve		—		—			(1,579	)		(1,579	)		(171	)		(1,750	)
Transfer to reserves		—		(8,413	)		8,413			—			—			—
Dividends		—		(39,866	)		—			(39,866	)		(15,975	)		(55,841	)
Transaction with <br>non-controlling<br> interests in subsidiaries		—		—			(15	)		(15	)		(19	)		(34	)
Capital contribution from <br>non-controlling<br> interests		—		—			—			—			1,059			1,059
Acquisition of subsidiaries		—		—			—			—			769			769
Disposal of subsidiaries		—		—			—			—			(12,380	)		(12,380	)
Other		—		134			168			302			(72	)		230
Balance at December 31, 2021		183,021		771,980			308,560			1,263,561			145,308			1,408,869
Balance at January 1, 2022		183,021		771,980			308,560			1,263,561			145,308			1,408,869
Profit for the year ended December 31, 2022		—		149,380			—			149,380			14,602			163,982
Other comprehensive income for the year ended December 31, 2022		—		—			15,670			15,670			6,100			21,770
Special reserve-safety fund reserve		—		—			(741	)		(741	)		50			(691	)
Transfer to reserves		—		(12,987	)		12,987			—			—			—
Dividends		—		(54,686	)		—			(54,686	)		(9,709	)		(64,395	)
Capital contribution from <br>non-controlling<br> interests		—		—			3			3			11,125			11,128
Acquisition of subsidiaries		—		—			—			—			634			634
Disposal of subsidiaries		—		—			—			—			7			7
Other		—		(102	)		(3,758	)		(3,860	)		409			(3,451	)
Balance at December 31, 2022		183,021		853,585			332,721			1,369,327			168,526			1,537,853

The accompanying notes are an integral part of these financial statements.

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PETROCHINA COMPANY LIMITED

NOTES TO THE FINANCIAL STATEMENTS

(All amounts in millions, except for the per share data and otherwise stated)

1	ORGANIZATION AND PRINCIPAL ACTIVITIES

PetroChina Company Limited (the “Company”) was established as a joint stock company with limited liability on November 5, 1999 by 中国石油天然气集团公司

(China National Petroleum Corporation (“CNPC”)) as the sole proprietor in accordance with the approval Guo Jing Mao Qi Gai [1999] No. 1024 “Reply on the approval of the establishment of PetroChina Company Limited” from the former State Economic and Trade Commission of the People’s Republic of China (“China” or “PRC”). CNPC restructured (“the Restructuring”) and injected its core business and the related assets and liabilities into the Company.

中国石油天然气集团公司

was renamed

中国石油天然气集团有限公司

(CNPC before and after the change of name) on December 19, 2017. CNPC is a wholly state-owned company registered in China. The Company and its subsidiaries are collectively referred to as the “Group”.

The Group is principally engaged in (i) the exploration, development, transportation and production and marketing of crude oil and natural gas, and new energy business; (ii) the refining of crude oil and petroleum products, production and marketing of primary petrochemical products, derivative petrochemical products and other chemical products, and new materials business; (iii) the marketing of refined products and non-oil products, and trading business; and (iv) the transportation and the sale of natural gas (Note 40).

2	BASIS OF PREPARATION

The consolidated financial statements of the Group have been prepared in accordance with the International Financial Reporting Standards (“IFRSs”) as issued by the International Accounting Standards Board (“IASB”). These financial statements also comply with the disclosure requirements of the Hong Kong Companies Ordinance and the applicable disclosure provisions of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited. A number of new or amended standards became applicable for the current reporting period. The Group did not have to change its accounting policies or make retrospective adjustments as a result of adopting these new or amended standards. The consolidated financial statements and the statement of financial position of the Company have been prepared under the historical cost convention except as disclosed in the accounting policies below.

The preparation of financial statements in conformity with IFRSs requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the statement of financial position and the reported amounts of revenues and expenses during the reporting period. Although these estimates are based on management’s best knowledge of current events and actions, actual results may ultimately differ from those estimates. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in Note 5.

(a)	New and amended standards and interpretations adopted by the Group

The IASB has issued the following amendments to IFRSs that are first effective for the current accounting period of the Group:

•	Rent Concessions Extension of the practical expedient — Amendments to IFRS 16
•	Reference to the Conceptual Framework — Amendments to IFRS 3
---	---
•	Property, Plant and Equipment: Proceeds before Intended Use — Amendments to IAS 16
---	---
•	Onerous Contracts — Cost of Fulfilling a Contract — Amendments to IAS 37
---	---
•	Annual Improvements to IFRS Standards 2018-2020
---	---

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PETROCHINA COMPANY LIMITED

NOTES TO THE FINANCIAL STATEMENTS — (Continued)

(All amounts in millions, except for the per share data and otherwise stated)

These amendments listed above have no material impact on the Group for the December 31, 2022 reporting period.

(b)	New and amended standards and interpretations not yet adopted by the Group

Certain new accounting standards, amendments to accounting standards and interpretations have been published that are not mandatory for the December 31, 2022 reporting period and have not been early adopted by the Group. These standards, amendments or interpretations are not expected to have a material impact on the Group in the current or future reporting periods and on foreseeable future transactions.

3	SUMMARY OF PRINCIPAL ACCOUNTING POLICIES
(a)	Basis of consolidation
---	---

Subsidiaries are entities controlled by the Group. The Group controls an entity when it is exposed to, or has right to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.

A subsidiary is consolidated from the date on which control is transferred to the Group and is no longer consolidated from the date that control ceases. The Group accounts for business combinations (except for business combination under common control) using the acquisition method when the acquired set of activities and assets meets the definition of a business and control is transferred to the Group. In determining whether a particular set of activities and assets is a business, the Group assesses whether the set of assets and activities acquired includes, at a minimum, an input and substantive process and whether the acquired set has the ability to produce outputs. The Group has an option to apply a ‘concentration test’ that permits a simplified assessment of whether an acquired set of activities and assets is not a business. The optional concentration test is met if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets. The consideration transferred for the acquisition of a subsidiary is the fair values of the assets transferred, the liabilities incurred and the equity interests issued by the Group. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Acquisition-related costs are expensed as incurred. Identifiable assets acquired and liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. Contingent liabilities assumed in a business combination are recognized in the acquisition accounting if they are present obligations and their fair value can be measured reliably. On an acquisition-by-acquisition basis, the Group recognizes any non-controlling interests in the acquiree either at fair value or at the non-controlling interests’ proportionate share of the acquiree’s net assets.

The excess of the consideration transferred, the amount of any non-controlling interests in the acquiree and the acquisition-date fair value of any previous equity interest in the acquiree over the fair value of the identifiable net assets is recorded as goodwill. If this is less than the fair value of the net assets of the subsidiary acquired in the case of a bargain purchase, the difference is recognized directly in the consolidated statement of comprehensive income.

An acquisition of a business which is a business combination under common control is accounted for in a manner similar to a uniting of interests whereby the assets and liabilities acquired are accounted for at carryover predecessor values to the other party to the business combination with all periods presented as if the operations of the Group and the business acquired have always been combined. The difference between the consideration paid by the Group and the net assets or liabilities of the business acquired is adjusted against equity.

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PETROCHINA COMPANY LIMITED

NOTES TO THE FINANCIAL STATEMENTS — (Continued)

(All amounts in millions, except for the per share data and otherwise stated)

Intercompany transactions, balances and unrealized gains on transactions between group companies are eliminated. Unrealized losses are eliminated in the same way as unrealized gains, but only to the extent that there is no evidence of impairment. Where necessary, accounting policies of subsidiaries have been changed to ensure consistency with the policies adopted by the Group.

For purpose of the presentation of the Company’s statement of financial position, investments in subsidiaries are accounted for at cost less impairment.

A listing of the Group’s principal subsidiaries is set out in Note 19.

(b)	Investments in associates

Associates are entities over which the Group has significant influence but not control, generally accompanying a shareholding of between 20% and 50% of the voting rights. Investments in associates are accounted for by the equity method of accounting in the consolidated financial statements of the Group and are initially recognized at cost.

Under this method of accounting, the Group’s share of the post-acquisition profits or losses of associates is recognized in profit or loss and its share of post-acquisition movements in other comprehensive income is recognized in other comprehensive income. The cumulative post-acquisition movements are adjusted against the carrying amounts of the investments. When the Group’s share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured receivables, the Group does not recognize further losses, unless it has incurred obligations or made payments on behalf of the associate.

Unrealized gains on transactions between the Group and its associates are eliminated to the extent of the Group’s interest in the associates; unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. The Group’s investment in associates includes goodwill identified on acquisition, net of any accumulated impairment loss and is tested for impairment as part of the overall balance. Goodwill represents the excess of the cost of an acquisition over the fair value of the Group’s share of the fair value of net identifiable assets of the acquired associate at the date of acquisition. Accounting policies of associates have been changed where necessary to ensure consistency with the policies adopted by the Group. The gain or loss resulting from a downstream transaction involving assets that constitute a business, as defined in IFRS 3, between the Group and its associate or joint ve n ture is recognized in full in the consolidated financial statement.

A listing of the Group’s principal associates is shown in Note 17.

(c)	Investments in joint ventures

Joint ventures are arrangements in which the Group with one or more parties have joint control, whereby the Group has rights to the net assets of the arrangements, rather than rights to their assets and obligations for their liabilities. The Group’s interests in joint ventures are accounted for by the equity method of accounting (Note 3(b)) in the consolidated financial statements.

A listing of the Group’s principal joint ventures is shown in Note 17.

(d)	Investments in joint operations

A joint operation is a joint arrangement whereby the Group and other joint operators that have joint control of the arrangement have rights to the assets, and obligations for the liabilities, relating to the arrangement.

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PETROCHINA COMPANY LIMITED

NOTES TO THE FINANCIAL STATEMENTS — (Continued)

(All amounts in millions, except for the per share data and otherwise stated)

The Group recognises items related to its interest in a joint operation as follows:

•	its assets, including its share of any assets held jointly;
•	its liabilities, including its share of liabilities incurred jointly;
---	---
•	its revenue from the sale of its share of the output arising from the joint operation;
---	---
•	its share of the revenue from the sale of the output by the joint operation; and
---	---
•	its expenses, including its share of any expenses incurred jointly.
---	---
(e)	Transactions with <br>non-controlling<br> interests
---	---

Transactions with non-controlling interests are treated as transactions with owners in their capacity as owners of the Group. Gains and losses resulting from disposals to non-controlling interests are recorded in equity. The differences between any consideration paid and the relevant share of the carrying value of net assets of the subsidiary acquired resulting from the purchase of non-controlling interests, are recorded in equity.

When the Group ceases to have control or significant influence, any retained interest in the entity is remeasured to its fair value, with the change in carrying amount recognized in profit or loss. The fair value is the initial carrying amount for the purposes of subsequently accounting for the retained interest as an associate, joint venture or financial asset. In addition, any amounts previously recognized in other comprehensive income in respect of that entity are accounted for as if the Group had directly disposed of the related assets or liabilities. The amounts previously recognized in other comprehensive income are reclassified to profit or loss.

If the ownership interest in an associate is reduced but significant influence is retained, only a proportionate share of the amounts previously recognized in other comprehensive income are reclassified to profit or loss where appropriate.

(f)	Foreign currencies

Items included in the financial statements of each entity in the Group are measured using the currency of the primary economic environment in which the entity operates (“the functional currency”). Most assets and operations of the Group are located in the PRC (Note 40), and the functional currency of the Company and most of the consolidated subsidiaries is the Renminbi (“RMB”). The consolidated financial statements are presented in the presentation currency of RMB.

Foreign currency transactions of the Group are accounted for at the exchange rates prevailing at the respective dates of the transactions; monetary assets and liabilities denominated in foreign currencies are translated at exchange rates at the date of the statement of financial position; gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities are recognized in profit or loss.

For the Group entities that have a functional currency different from the Group’s presentation currency, assets and liabilities for each statement of financial position presented are translated at the closing rate at the date of the statement of financial position. Income and expenses for each statement of comprehensive income presented are translated at the average exchange rates for each period and the resulting exchange differences are recognized in other comprehensive income.

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PETROCHINA COMPANY LIMITED

NOTES TO THE FINANCIAL STATEMENTS — (Continued)

(All amounts in millions, except for the per share data and otherwise stated)

(g)	Property, plant and equipment

Property, plant and equipment, including oil and gas properties (Note 3(h)), are initially recorded in the consolidated statement of financial position at cost if it is probable that they will generate future economic benefits. Cost represents the purchase price of the asset and other costs incurred to bring the asset into intended use. Subsequent to their initial recognition, property, plant and equipment are carried at cost less accumulated depreciation, depletion and amortization (including any impairment).

Depreciation, to write off the cost of each asset, other than oil and gas properties (Note 3(h)), to their residual values over their estimated useful lives is calculated using the straight-line method.

The Group uses the following estimated useful lives, estimated residual value ratios and annual depreciation rates for depreciation purposes:

	Estimated useful lives		Estimated residual<br> value ratio %		Annual depreciation<br> rate %
Buildings		8 to 40 years		5		2.4 to 11.9
Equipment and Machinery		4 to 30 years		3 to 5		3.2 to 24.3
Motor Vehicles		4 to 14 years		5		6.8 to 23.8
Other		5 to 12 years		5		7.9 to 19.0

No depreciation is provided on construction in progress until the assets are completed and ready for use.

The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.

Property, plant and equipment, including oil and gas properties (Note 3(h)), are reviewed for possible impairment when events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognized for the amount by which the carrying amount of a cash-generating unit exceeds the higher of its fair value less costs to sell and its value in use. Value in use is the estimated net present value of future cash flows to be derived from the cash-generating unit.

Gains and losses on disposals of property, plant and equipment are determined by reference to their carrying amounts and are recorded in profit or loss.

Interest and other costs on borrowings to finance the construction of property, plant and equipment, including oil and gas properties (Note 3(h)), are capitalized during the period of time that is required to complete and prepare the asset for its intended use. Costs for repairs and maintenance activities are expensed as incurred except for costs of components that result in improvements or betterments which are capitalized as part of property, plant and equipment and depreciated over their useful lives.

(h)	Oil and gas properties

The successful efforts method of accounting is used for oil and gas exploration and production activities. Under this method, all costs for development wells, support equipment and facilities, and proved mineral interests in oil and gas properties are capitalized. Geological and geophysical costs are expensed when incurred. Costs of exploratory wells are capitalized pending determination of whether the wells find proved oil and gas reserves. Proved oil and gas reserves are the estimated quantities of crude oil and natural gas, which, by analysis

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NOTES TO THE FINANCIAL STATEMENTS — (Continued)

(All amounts in millions, except for the per share data and otherwise stated)

of geoscience and engineering data, can be estimated with reasonable certainty to be economically producible from a given date forward, from known reservoirs, and under existing economic conditions, operating methods, and government regulation before the time at which contracts providing the right to operate expire, unless evidence indicates that renewal is reasonably certain, regardless of whether the estimate is a deterministic estimate or probabilistic estimate. Existing economic conditions include prices and costs at which economic producibility from a reservoir is to be determined. The price shall be the average price during the 12-month period before the ending date of the period covered by the proved oil and gas reserve report, determined as an unweighted arithmetic average of the first-day-of-the-month price for each month within such period unless prices are defined by contractual arrangements, excluding escalations based upon future conditions. The costs shall be that prevailing at the end of the period.

Exploratory wells in areas not requiring major capital expenditures are evaluated for economic viability within one year of completion of drilling. The related well costs are expensed as dry holes if it is determined that such economic viability is not attained. Otherwise, the related well costs are reclassified to oil and gas properties and are subject to impairment review (Note 3( g )). For exploratory wells that are found to have economically viable reserves in areas where major capital expenditure will be required before production can commence, the related well costs remain capitalized only if additional drilling is underway or firmly planned. Otherwise the related well costs are expensed as dry holes. The Group does not have any significant costs of unproved properties capitalized in oil and gas properties.

The Ministry of Natural Resources in China issues production licenses to applicants on the basis of the reserve reports approved by relevant authorities.

The cost of oil and gas properties is amortized at the field level based on the units of production method. Units of production rates are based on oil and gas reserves estimated to be recoverable from existing facilities based on the current terms of the Group’s production licenses.

(i)	Intangible assets and goodwill

Expenditures on acquired patents, trademarks, technical know-how and licenses are capitalized at historical cost and amortized using the straight-line method over their estimated useful lives. Intangible assets are not subsequently revalued. The carrying amount of each intangible asset is reviewed and adjusted for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognized whenever the carrying amount of an intangible asset exceeds its recoverable amount and is recognized in profit or loss. The recoverable amount is measured as the higher of fair value less costs to sell and value in use. Value in use is the estimated net present value of future cash flows to be derived from the asset.

Goodwill arises on the acquisition of subsidiaries and represents the excess of the consideration transferred over the net fair value of identifiable assets, liabilities and contingent liabilities of the acquiree and the amount of any non-controlling interests in the acquiree.

Goodwill impairment reviews are undertaken annually or more frequently if events or changes in circumstances indicate a potential impairment. An impairment loss is recognized if the carrying amount of the cash-generating unit containing goodwill exceeds its recoverable amount. Impairment losses are allocated first to reduce the carrying amount of any goodwill allocated to the cash-generating unit, and then to reduce the carrying amounts of the other assets in the cash-generating unit on a pro rata basis. Any impairment is recognized immediately as an expense and is not subsequently reversed.

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PETROCHINA COMPANY LIMITED

NOTES TO THE FINANCIAL STATEMENTS — (Continued)

(All amounts in millions, except for the per share data and otherwise stated)

(j)	Financial instruments
(a)	Recognition and initial measurement
---	---

Accounts receivable and debt securities issued are initially recognised when they are originated. All other financial assets and financial liabilities are initially recognised when the Group becomes a party to the contractual provisions of the instrument.

A financial asset (unless it is a accounts receivable without a significant financing component) or financial liability is initially measured at fair value plus or minus, for an item not at Fair value through profit or loss (“FVTPL”), transaction costs that are directly attributable to its acquisition or issue. An accounts receivable without a significant financing component is initially measured at the transaction price.

(b)	Classification and subsequent measurement

On initial recognition, a financial asset is classified as measured at: amortised cost; Fair value through other comprehensive income (“FVOCI”) — debt investment; FVOCI — equity investment; or FVTPL.

Financial assets are not reclassified subsequent to their initial recognition unless the Group changes its business model for managing financial assets, in which case all affected financial assets are reclassified on the first day of the first reporting period following the change in the business model.

A financial asset is measured at amortised cost if it meets both of the following conditions and is not designated as at FVTPL:

•	it is held within a business model whose objective is to hold assets to collect contractual cashflows; and
•	its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
---	---

A debt investment is measured at FVOCI if it meets both of the following conditions and is not designated as at FVTPL:

•	it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets; and
•	its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
---	---

On initial recognition of an equity investment that is not held for trading, the Group may irrevocably elect to present subsequent changes in the investment’s fair value in OCI. This election is made on an investment-by-investment basis.

All financial assets not classified as measured at amortised cost or FVOCI as described above are measured at FVTPL. This includes all derivative financial assets.

The Group makes an assessment of the objective of the business model in which a financial asset is held at a portfolio level because this best reflects the way the business is managed and information is provided to management.

For the purposes of this assessment whether contractual cash flows are solely payments of principal and interest, “principal” is defined as the fair value of the financial asset on initial recognition. “Interest” is defined as

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PETROCHINA COMPANY LIMITED

NOTES TO THE FINANCIAL STATEMENTS — (Continued)

(All amounts in millions, except for the per share data and otherwise stated)

consideration for the time value of money and for the credit risk associated with the principal amount outstanding during a particular period of time and for other basic lending risks and costs (e.g. liquidity risk and administrative costs), as well as a profit margin.

In assessing whether the contractual cash flows are solely payments of principal and interest, the Group considers the contractual terms of the instrument. This includes assessing whether the financial asset contains a contractual term that could change the timing or amount of contractual cash flows such that it would not meet this condition.

Detailed accounting policies for subsequent measurement of financial assets are set out below:

Financial assets at FVTPL	These assets are subsequently measured at fair value. Net gains and losses, including any interest or dividend income, are recognised in profit or loss.
Financial assets at amortised cost	These assets are subsequently measured at amortised cost using the effective interest method. The amortised cost is reduced by impairment losses. Interest income, foreign exchange gains and losses and impairment are recognised in profit or loss. Any gain or loss on derecognition is recognised in profit or loss.
Debt investments at FVOCI	These assets are subsequently measured at fair value. Interest income calculated using the effective interest method, foreign exchange gains and losses and impairment are recognised in profit or loss. Other net gains and losses are recognised in OCI. On derecognition, gains and losses accumulated in OCI are reclassified to profit or loss.
Equity investments at FVOCI	These assets are subsequently measured at fair value. Dividends are recognised as income in profit or loss unless the dividend clearly represents a recovery of part of the cost of the investment. Other net gains and losses are recognised in OCI and are never reclassified to profit or loss.
(c)	Derecognition
---	---

Financial assets

The Group derecognises a financial asset when the contractual rights to the cash flows from the financial asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred or in which the Group neither transfers nor retains substantially all of the risks and rewards of ownership and it does not retain control of the financial asset.

The Group enters into transactions whereby it transfers assets recognised in its consolidated statement of financial position, but retains either all or substantially all of the risks and rewards of the transferred assets. In these cases, the transferred assets are not derecognised.

Financial liabilities

The Group derecognises a financial liability when its contractual obligations are discharged or cancelled, or expire. The Group also derecognises a financial liability when its terms are modified and the cash flows of the modified liability are substantially different, in which case a new financial liability based on the modified terms is recognised at fair value.

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PETROCHINA COMPANY LIMITED

NOTES TO THE FINANCIAL STATEMENTS — (Continued)

(All amounts in millions, except for the per share data and otherwise stated)

On derecognition of a financial liability, the difference between the carrying amount extinguished and the consideration paid (including any non-cash assets transferred or liabilities assumed) is recognised in profit or loss.

(d)	Offsetting

Financial assets and financial liabilities are offset and the net amount presented in the consolidated statement of financial position when, and only when, the Group currently has a legally enforceable right to set off the amounts and it intends either to settle them on a net basis or to realise the asset and settle the liability simultaneously.

(e)	Derivative financial instruments and hedge accounting

Derivative financial instruments are recognised initially at fair value. At each date of the statement of financial position, the fair value is remeasured. The gain or loss on remeasurement to fair value is recognised immediately in profit or loss, except where the derivatives qualify for hedge accounting.

Hedge accounting is a method which recognises the offsetting effects on profit or loss (or other comprehensive income) of changes in the fair values of the hedging instrument and the hedged item in the same accounting period, to represent the effect of risk management activities.

Hedged items are the items that expose the Group to risks of changes in future fair value or future cash flows and that are designated as being hedged and that must be reliably measurable. The Group’s hedged items include a forecast transaction that is settled with an undetermined future market price and exposes the Group to risk of variability in cash flows, etc.

A hedging instrument is a designated derivative whose changes in fair value or cash flows are expected to offset changes in fair value or cash flows of the hedged item.

The hedging relationship meets all of the following hedge effectiveness requirements:

(i)	There is an economic relationship between the hedged item and the hedging instrument, which shares a risk and that gives rise to opposite changes in fair value that tend to offset each other.
(ii)	The effect of credit risk does not dominate the value changes that result from that economic relationship.
---	---
(iii)	The hedge ratio of the hedging relationship is the same as that resulting from the quantity of the hedged item that the entity actually hedges and the quantity of the hedging instrument that the entity actually uses to hedge that quantity of hedged item. However, that designation does not reflect an imbalance between the weightings of the hedged item and the hedging instrument.
---	---

Cash flow hedges

Cash flow hedge is a hedge of the exposure to variability in cash flows that is attributable to a particular risk associated with all, or a component of, a recognised asset or liability or a highly probable forecast transaction, and could affect profit or loss. Hedge effectiveness is determined at the inception of the hedge relationship, and through periodic prospective effectiveness assessments to ensure that an economic relationship exists between the hedged item and hedging instrument.

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PETROCHINA COMPANY LIMITED

NOTES TO THE FINANCIAL STATEMENTS — (Continued)

(All amounts in millions, except for the per share data and otherwise stated)

As long as a cash flow hedge meets the qualifying criteria for hedge accounting, the separate component of equity associated with the hedged item (cash flow hedge reserve) is adjusted to the lower of the following (in absolute amounts):

(i) The cumulative gain or loss on the hedging instrument from inception of the hedge; and

(ii) The cumulative change in fair value (present value) of the hedged item (i.e. the present value of the cumulative change in the hedged expected future cash flows) from inception of the hedge.

The gain or loss on the hedging instrument that is determined to be an effective hedge is recognised in other comprehensive income.

The portion of the gain or loss on the hedging instrument that is determined to be an ineffective hedge is recognised in profit or loss.

The amount that has been accumulated in the cash flow hedge reserve shall be accounted for as follows:

(i) If a hedged forecast transaction subsequently results in the recognition of a non-financial asset or non-financial liability, or a hedged forecast transaction for a non-financial asset or a non-financial liability becomes a firm commitment for which fair value hedge accounting is applied, the entity removes that amount from the cash flow hedge reserve and include it directly in the initial cost or other carrying amount of the asset or the liability.

(ii) For cash flow hedges, other than those covered by the preceding policy statements, that amount is reclassified from the cash flow hedge reserve to profit or loss as a reclassification adjustment in the same period or periods during which the hedged expected future cash flows affect profit or loss.

(iii) If the amount that has been accumulated in the cash flow hedge reserve is a loss and the Group expects that all or a portion of that loss will not be recovered in one or more future periods, the Group immediately reclassifies the amount that is not expected to be recovered into profit or loss.

An entity shall discontinue hedge accounting prospectively only when the hedging relationship (or a part of a hedging relationship) ceases to meet the qualifying criteria such as situations as follows:

(i) When the hedging relationship no longer meets the risk management objective on the basis of which it qualified for hedge accounting (i.e. the entity no longer pursues that risk management objective);

(ii) When a hedging instrument expires or is sold, terminated, exercised;

(iii) There is no longer an economic relationship between the hedged item and the hedging instrument or the effect of credit risk starts to dominate the value changes that result from that economic relationship

(iv) When the hedging relationship no longer meets other criteria for hedge accounting.

When an entity discontinues hedge accounting for a cash flow hedge, it shall account for the amount that has been accumulated in the cash flow hedge reserve as follows:

(i) If the hedged future cash flows are still expected to occur, that amount shall remain in the cash flow hedge reserve and is accounted for as cash flow hedges.

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NOTES TO THE FINANCIAL STATEMENTS — (Continued)

(All amounts in millions, except for the per share data and otherwise stated)

(ii) If the hedged future cash flows are no longer expected to occur, that amount shall be immediately reclassified from the cash flow hedge reserve to profit or loss as a reclassification adjustment. A hedged future cash flow that is no longer highly probable to occur may still be expected to occur.

(k)	Impairment for financial assets

The Group recognizes loss allowances for expected credit losses (“ECLs”) on:

–	financial assets measured at amortized cost;
–	debt investments measured at FVOCI; and
---	---
–	contract assets.
---	---

The Group measures loss allowances at an amount equal to lifetime ECLs, except for the financial assets for which credit risk (i.e. the risk of default occurring over the expected life of the financial instrument) has not increased significantly since initial recognition, which are measured as 12-month ECLs. When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating ECLs, the Group considers reasonable and supportable information that is relevant and available without undue cost or effort.

Loss allowances for accounts receivable are always measured at an amount equal to lifetime ECLs. The maximum period considered when estimating ECLs is the maximum contractual period over which the Group is exposed to credit risk.

ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls (i.e. the difference between the cash flows due to the Group in accordance with the contract and the cash flows that the Group expects to receive). ECLs are discounted at the effective interest rate of the financial asset.

At each reporting date, the Group assesses whether financial assets carried at amortized cost and debt securities at FVOCI are credit-impaired. A financial asset is ‘credit-impaired’ when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred.

Loss allowances for financial assets measured at amortized cost are deducted from the gross carrying amount of the assets. Impairment losses on trade and other receivables are presented under ‘Selling, general and administrative expenses’, similar to the presentation under IAS 39.

The gross carrying amount of a financial asset is written off when the Group has no reasonable expectations of recovering a financial asset in its entirety or a portion thereof. For customers, the Group individually makes an assessment with respect to the timing and amount of write-off based on whether there is a reasonable expectation of recovery. The Group expects no significant recovery from the amount written off. However, financial assets that are written off could still be subject to enforcement activities in order to comply with the Group’s procedures for recovery of amounts due.

(l)	Leases
(a)	As a lessee
---	---

At commencement or on modification of a contract that contains a lease component, the Group allocates the consideration in the contract to each lease component on the basis of its relative stand-alone prices.

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PETROCHINA COMPANY LIMITED

NOTES TO THE FINANCIAL STATEMENTS — (Continued)

(All amounts in millions, except for the per share data and otherwise stated)

The Group recognizes a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.

The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the end of the lease term, unless the lease transfers ownership of the underlying asset to the Group by the end of the lease term or the cost of the right-of-use asset reflects that the Group will exercise a purchase option. In that case the right-of-use asset will be depreciated over the useful life of the underlying asset, which is determined on the same basis as those of property and equipment. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Group’s incremental borrowing rate. Generally, the Group uses its incremental borrowing rate as the discount rate.

Lease payments included in the measurement of the lease liability comprise the following:

–	fixed payments, including <br>in-substance<br> fixed payments;
–	variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date;
---	---
–	amounts expected to be payable under a residual value guarantee; and
---	---
–	the exercise price under a purchase option that the Group is reasonably certain to exercise, lease payments in an optional renewal period if the Group is reasonably certain to exercise an extension option, and penalties for early termination of a lease unless the Group is reasonably certain not to terminate early.
---	---

The lease liability is measured at amortized cost using the effective interest method. It is remeasured when there is a change in future lease payments arising from a change in an index or rate, if there is a change in the Group’s estimate of the amount expected to be payable under a residual value guarantee, if the Group changes its assessment of whether it will exercise a purchase, extension or termination option or if there is a revised in-substance fixed lease payment.

When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.

The Group present right-of-use assets and lease liabilities separately in the statement of financial position.

The Group has elected not to recognize right-of-use assets and lease liabilities for leases of low-value assets and short-term leases. The Group recognizes the lease payments associated with these leases as an expense on a straight-line basis over the lease term.

Payments made to the Ministry of Natural Resources to secure land use rights (excluding mineral properties) are treated as leases.

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PETROCHINA COMPANY LIMITED

NOTES TO THE FINANCIAL STATEMENTS — (Continued)

(All amounts in millions, except for the per share data and otherwise stated)

(b)	As a lessor

At inception or on modification of a contract that contains a lease component, the Group allocates the consideration in the contract to each lease component on the basis of their relative stand-alone prices.

When the Group acts as a lessor, it determines at lease inception whether each lease is a finance lease or an operating lease.

To classify each lease, the Group makes an overall assessment of whether the lease transfers substantially all of the risks and rewards incidental to ownership of the underlying asset. If this is the case, then the lease is a finance lease; if not, then it is an operating lease. As part of this assessment, the Group considers certain indicators such as whether the lease is for the major part of the economic life of the asset. There are no significant finance lease for the Group.

If an arrangement contains lease and non-lease components, then the Group applies IFRS 15 to allocate the consideration in the contract.

The Group recognizes lease payments received under operating leases as income on a straight-line basis over the lease term as part of “other revenue”.

(m)	Inventories

Inventories include oil products, chemical products and crude oil and other raw materials and supplies which are stated at the lower of cost and net realizable value. Cost is primarily determined by the weighted average cost method. The cost of finished goods comprises raw materials, direct labor, other direct costs and related production overheads, but excludes borrowing costs. Net realizable value is the estimated selling price in the ordinary course of business, less the cost of completion and directly attributable marketing and distribution costs.

(n)	Contract costs

Contract costs are either the incremental costs of obtaining a contract with a customer or the costs to fulfil a contract with a customer which are not capitalized as inventory (Note 3(m)), property, plant and equipment (Note 3(g)), oil and gas properties (Note 3(h)) or intangible assets (Note 3(i)).

Incremental costs of obtaining a contract are those costs that the Group incurs to obtain a contract with a customer that it would not have incurred if the contract had not been obtained. Incremental costs of obtaining a contract are capitalized when incurred if the costs relate to revenue which will be recognized in a future reporting period and the costs are expected to be recovered, unless the expected amortization period is one year or less from the date of initial recognition of the asset, in which case the costs are expensed when incurred. Other costs of obtaining a contract are expensed when incurred.

Costs to fulfil a contract are capitalized if the costs relate directly to an existing contract or to a specifically identifiable anticipated contract; generate or enhance resources that will be used to provide goods or services in the future; and are expected to be recovered.

Capitalized contract costs are stated at cost less accumulated amortization and impairment losses. Impairment losses are recognized to the extent that the carrying amount of the contract cost asset exceeds the net of (i) remaining amount of consideration that the Group expects to receive in exchange for the goods or services to which the asset relates, less (ii) any costs that relate directly to providing those goods or services that have not yet been recognized as expenses.

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PETROCHINA COMPANY LIMITED

NOTES TO THE FINANCIAL STATEMENTS — (Continued)

(All amounts in millions, except for the per share data and otherwise stated)

Amortization of capitalized contract costs is charged to profit or loss when the revenue to which the asset relates is recognized.

(o)	Contract assets and contract liabilities

A contract asset is recognized when the Group recognizes revenue before being unconditionally entitled to the consideration under the payment terms set out in the contract. Contract assets are assessed for ECLs in accordance with the policy set out in Note 3(k) and are reclassified to receivables when the right to the consideration has become unconditional (Note 3(p)).

A contract liability is recognized when the customer pays consideration before the Group recognizes the related revenue. A contract liability would also be recognized if the Group has an unconditional right to receive consideration before the Group recognizes the related revenue. In such cases, a corresponding receivable would also be recognized (Note 3(p)).

When the contract includes a significant financing component, the contract balance includes interest accrued under the effective interest method (Note 3(u)).

(p)	Accounts receivable

Accounts receivable are recognized when the Group has an unconditional right to receive consideration. A right to receive consideration is unconditional if only the passage of time is required before payment of that consideration is due (Note 3(o)).

Receivables are stated at amortized cost using the effective interest method less allowance for credit losses (Note 3(k)).

(q)	Cash and cash equivalents

Cash and cash equivalents comprise cash in hand, deposits held with banks and highly liquid investments with original maturities of three months or less from the time of purchase.

(r)	Accounts payable

Accounts payable are recognized initially at fair value and subsequently measured at amortized cost unless the effect of discounting would be immaterial, in which case they are stated at cost.

(s)	Borrowings

Borrowings are recognized initially at fair value, net of transaction costs incurred. In subsequent periods, borrowings are stated at amortized cost using the effective interest method.

General and specific borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.

All other borrowing costs are recognized in profit or loss in the period in which they are incurred.

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PETROCHINA COMPANY LIMITED

NOTES TO THE FINANCIAL STATEMENTS — (Continued)

(All amounts in millions, except for the per share data and otherwise stated)

Borrowings are classified as current liabilities unless the Group has unconditional rights to defer settlements of the liabilities for at least 12 months after the reporting period.

(t)	Share capital

Incremental costs directly attributable to the issue of ordinary shares are recognized as a deduction from equity. Income tax relating to transaction costs of an equity transaction is accounted for in accordance with IAS 12 “Income Taxes”.

(u)	Interest income and interest expense

Interest income or expense is recognized using the effective interest method.

The “effective interest rate” is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial instrument to:

•	the gross carrying amount of the financial asset; or
•	the amortized cost of the financial liability.
---	---

In calculating interest income and expense, the effective interest rate is applied to the gross carrying amount of the asset (when the asset is not credit-impaired) or to the amortized cost of the liability. However, for financial assets that have become credit-impaired subsequent to initial recognition, interest income is calculated by applying the effective interest rate to the amortized cost of the financial asset. If the asset is no longer credit-impaired, then the calculation of interest income reverts to the gross basis.

(v)	Taxation

Income tax expense comprises current and deferred tax. It is recognized in profit or loss except to the extent that it relates to a business combination, or items recognized directly in equity or in other comprehensive income.

The Group has determined that interest and penalties related to income taxes, including uncertain tax treatments, do not meet the definition of income taxes, and therefore accounted for them under IAS 37 “Provisions, Contingent Liabilities and Contingent Assets”.

(a)	Current tax

Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year and any adjustment to the tax payable or receivable in respect of previous years. The amount of current tax payable or receivable is the best estimate of the tax amount expected to be paid or received that reflects uncertainty related to income taxes, if any. It is measured using tax rates enacted or substantively enacted at the reporting date. Current tax also includes any tax arising from dividends.

Current tax assets and liabilities are offset only if certain criteria are met.

(b)	Deferred tax

Deferred tax is provided in full, using the liability method, for temporary differences arising between the tax bases of assets and liabilities and their carrying values in the financial statements. However, deferred tax is not

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PETROCHINA COMPANY LIMITED

NOTES TO THE FINANCIAL STATEMENTS — (Continued)

(All amounts in millions, except for the per share data and otherwise stated)

accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred tax is determined using tax rates that have been enacted or substantively enacted by the date of the statement of financial position and are expected to apply to the period when the related deferred tax asset is realized or deferred tax liability is settled, and reflects uncertainty related to income taxes, if any.

The principal temporary differences arise from depreciation on oil and gas properties and equipment and provision for impairment of receivables, inventories, investments and property, plant and equipment. Deferred tax assets relating to the carry forward of unused tax losses and deductible temporary differences are recognized to the extent that it is probable that future taxable income will be available against which they can be used.

(c)	Taxes other than income tax

The Group also incurs various other taxes and levies that are not income taxes. “Taxes other than income taxes”, which form part of operating expenses, primarily comprise consumption tax (Note 9), resource tax (Note 9), crude oil special gain levy (Note 9), urban construction tax and education surcharges.

(w)	Revenue recognition

Income is classified by the Group as revenue when it arises from the the sale of crude oil, natural gas, refined products, chemical products, non-oil products, etc., and the provision of services in the ordinary course of the Group’s business.

Revenue is recognized when control over a product or service is transferred to the customer at the amount of promised consideration to which the Group is expected to be entitled, excluding those amounts collected on behalf of third parties. Revenue excludes value added tax or other sales taxes and is after deduction of any trade discounts.

Where the contract contains a financing component more than 12 months, interest income is accrued or interest expense is accrued separately under the effective interest method. The Group does not adjust the consideration for any effects of a significant financing component if the period of financing is 12 months or less.

(x)	Provisions

Provisions are recognized when the Group has present legal or constructive obligations as a result of past events, it is probable that an outflow of resources will be required to settle the obligations, and reliable estimates of the amounts can be made.

Provision for future decommissioning and restoration is recognized in full on the installation of oil and gas properties. The amount recognized is the present value of the estimated future expenditure determined in accordance with local conditions and requirements. A corresponding addition to the related oil and gas properties of an amount equivalent to the provision is also created. This is subsequently depreciated as part of the costs of the oil and gas properties. Any change in the present value of the estimated expenditure other than due to passage of time which is regarded as interest expense, is reflected as an adjustment to the provision and oil and gas properties. Due to technological progress, legal requirements or changes in the market environment, changes in the provisions caused by changes in the amount of expenditure, estimated time of retirement obligations, discount rate, etc., may occur in fulfilling the retirement obligation. For an increase in provisions, the cost of oil and gas properties will be increased accordingly; for a decrease in provisions, the cost of oil and gas properties

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PETROCHINA COMPANY LIMITED

NOTES TO THE FINANCIAL STATEMENTS — (Continued)

(All amounts in millions, except for the per share data and otherwise stated)

will be deducted within the limit of the carrying amount of assets related to decommissioning expenses. If a decrease in the provision exceeds the carrying amount of the oil and gas properties recognized corresponding to the provision, the excess shall be recognized immediately in profit or loss.

Provision for onerous contracts is measured at the present value of the lower of the expected cost of terminating the contract and the expected net cost of continuing with the contract. Before a provision is established, the Group recognizes any impairment loss on the assets associated with that contract.

(y)	Research and development

Research expenditure incurred is recognized as an expense. Costs incurred on development projects are recognized as intangible assets to the extent that such expenditure is expected to generate future economic benefits.

(z)	Retirement benefit plans

The Group contributes to various employee retirement benefit plans organized by PRC municipal and provincial governments under which it is required to make monthly contributions to these plans at prescribed rates for its employees in China. The relevant PRC municipal and provincial governments undertake to assume the retirement benefit obligations of existing and future retired employees of the Group in China. The Group has similar retirement benefit plans for its employees in its overseas operations. Contributions to these PRC and overseas plans (“defined contribution plan”) are charged to expense as incurred. In addition, the Group joined the corporate annuity plan approved by relevant PRC authorities. Contribution to the annuity plan is charged to expense as incurred. The Group currently has no additional material obligations outstanding for the payment of retirement and other post-retirement benefits of employees in the PRC or overseas other than what described above.

(aa)	Related parties
(a)	A person, or a close member of that person’s family, is related to the Group if that person:
---	---

(i) has control or joint control over the Group;

(ii) has significant influence over the Group; or

(iii) is a member of the key management personnel of the Group or the Group’s parent.

(b)	An entity is related to the Group if any of the following conditions applies:

(i) The entity and the Group are members of the same group (which means that each parent, subsidiary and fellow subsidiary is related to the others).

(ii) One entity is an associate or joint venture of the other entity (or an associate or joint venture of a member of a group of which the other entity is a member).

(iii) Both entities are joint ventures of the same third party.

(iv) One entity is a joint venture of a third entity and the other entity is an associate of the third entity.

(v) The entity is a post-employment benefit plan for the benefit of employees of either the Group or an entity related to the Group.

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NOTES TO THE FINANCIAL STATEMENTS — (Continued)

(All amounts in millions, except for the per share data and otherwise stated)

(vi) The entity is controlled or jointly controlled by a person identified in (a).

(vii) A person identified in (a)(i) has significant influence over the entity or is a member of the key management personnel of the entity (or of a parent of the entity).

(viii)The entity, or any member of a group of which it is a part, provides key management personnel services to the Group or to the Group’s parent.

Close members of the family of a person are those family members who may be expected to influence, or be influenced by, that person in their dealings with the entity.

4	FINANCIAL RISK AND CAPITAL MANAGEMENT
4.1	Financial risk factors
---	---

The Group’s activities expose it to a variety of financial risks, including market risk, credit risk and liquidity risk.

(a)	Market risk

Market risk is the possibility that changes in foreign exchange rates, interest rates and the prices of oil and gas products will adversely affect the value of assets, liabilities and expected future cash flows.

(i)	Foreign exchange risk

The Group conducts its domestic business primarily in RMB, but maintains a portion of its assets in other currencies to pay for imported crude oil, natural gas, imported equipment and other materials and to meet foreign currency financial liabilities. The Group is exposed to currency risks arising from fluctuations in various foreign currency exchange rates against the RMB. The RMB is not a freely convertible currency and is regulated by the PRC government. Limitations on foreign exchange transactions imposed by the PRC government could cause future exchange rates to vary significantly from current or historical exchange rates.

Additionally, the Group operates internationally and foreign exchange risk arises from future acquisitions and commercial transactions, recognized assets and liabilities and net investments in foreign operations. Certain entities in the Group might use currency derivatives to manage such foreign exchange risk.

(ii)	Interest rate risk

The Group has no significant interest rate risk on interest-bearing assets. The Group’s exposure to interest rate risk arises from its borrowings. The Group’s borrowings at floating rates expose the Group to cash flow interest rate risk and its borrowings at fixed rates expose the Group to fair value interest rate risk. However, the exposure to interest rate risk is not material to the Group. A detailed analysis of the Group’s borrowings, together with their respective interest rates and maturity dates, is included in Note 30 .

(iii)	Price risk

The Group is engaged in a wide range of oil and gas products-related activities. Prices of oil and gas products are affected by a wide range of global and domestic factors which are beyond the control of the Group. The fluctuations in such prices may have favorable or unfavorable impacts on the Group.

The Group uses derivative financial instruments, including commodity futures, commodity swaps and commodity forwards , to hedge some price risks efficiently.

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PETROCHINA COMPANY LIMITED

NOTES TO THE FINANCIAL STATEMENTS — (Continued)

(All amounts in millions, except for the per share data and otherwise stated)

As at 31 December 2022, the Group had certain commodity contracts of crude oil, refined oil products and chemical products designated as hedges. As at 31 December 2022, the fair value of such derivative hedging financial instruments is derivative financial assets of RMB 20,988 (2021: RMB 3,913) and derivative financial liabilities of RMB 10,941 (2021: RMB 3,881).

As at 31 December 2022, it is estimated that a general increase/decrease of USD 10 per barrel in basic price of derivative financial instruments, with all other variables held constant, would impact the fair value of derivative financial instruments, which would decrease/ increase th e Group’s profit for the year by approximately RMB 331 (2021: increase/decrease RMB 2,104), and would decrease/ increase the Group’s other

comprehensive income

for the year by approximately RMB 1,074 (2021: Nil). This sensitivity analysis has been determined assuming that the change in prices had occurred at the balance sheet date and the change was applied to the Group’s derivative financial instruments at that date with exposure to commodity price risk.

(b)	Credit risk

Credit risk arises from cash and cash equivalents, time deposits with banks, accounts receivable, prepayments and other current assets and intangible and other non-current assets.

A substantial portion of the Group’s cash at bank and time deposits are placed with the major state-owned banks and financial institutions in China and management believes that the credit risk is low.

The Group performs ongoing assessment of the credit quality of its customers and sets appropriate credit limits taking into account the financial position and past history of defaults of customers. The aging analysis of accounts receivable (net of impairment of accounts receivable) is presented in Note 23.

The carrying amounts of cash and cash equivalents, time deposits placed with banks, accounts receivable, prepayments and other current assets and financial assets at fair value through other comprehensive income included in the consolidated statement of financial position represent the Group’s maximum exposure to credit risk. No other financial assets carry a significant exposure to credit risk.

The Group has no significant concentration of credit risk.

(c)	Liquidity risk

Liquidity risk is the risk that the Group will encounter difficulty in meeting obligations associated with financial liabilities.

In managing its liquidity risk, the Group has access to funding at market rates through equity and debt markets, including using undrawn committed borrowing facilities to meet foreseeable borrowing requirements.

Given the low level of gearing and continued access to funding, the Group believes that its liquidity risk is not material.

Analysis of the Group’s borrowings and lease liabilities based on the remaining period at the date of the statement of financial position to the contractual maturity dates is presented in Note 30 and Note 20.

4.2	Capital management

The Group’s objectives when managing capital are to safeguard its ability to continue as a going concern, optimize returns for owners and to minimize its cost of capital. In meeting its objectives of managing capital, the Group may issue new shares, adjust its debt levels or the mix between short-term and long-term borrowings.

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PETROCHINA COMPANY LIMITED

NOTES TO THE FINANCIAL STATEMENTS — (Continued)

(All amounts in millions, except for the per share data and otherwise stated)

The Group monitors capital on the basis of the gearing ratio which is calculated as interest-bearing borrowings / (interest-bearing borrowings + total equity), interest-bearing borrowings include short-term and long-term borrowings. The gearing ratio at December 31, 2022 is 17.4% (December 31, 2021: 19.5%).

4.3	Fair value estimation

The methods and assumptions applied in determining the fair value of each class of financial assets and financial liabilities of the Group at December 31, 2022 and 2021 are disclosed in the respective accounting policies.

The carrying amounts of the following financial assets and financial liabilities approximate their fair value as all of them are short-term in nature: cash and cash equivalents, time deposits with maturities over three months but within one year, accounts receivable, other receivables, trade payables, other payables and short-term borrowings. The fair values of fixed rate long-term borrowings are likely to be different from their respective carrying amounts. Analysis of the fair values and carrying amounts of long-term borrowings is presented in Note 30 .

The Group’s investments in FVTPL, derivative financial instruments and FVOCI are measured at fair value on the balance sheet date. The fair value of FVTPL are categorised into Level 1 of the fair value hierarchy, which are based on the unadjusted quoted prices in active markets for identical assets or liabilities as inputs used in the valuation techniques. The fair value of derivative financial instruments are mainly categorised into Level 1 and Level 2 of the fair value hierarchy, which are based on the unadjusted quoted prices in active markets for identical assets or liabilities as inputs used in the valuation techniques, or the inputs other than quoted prices included within Level 1 that are observable either directly or indirectly. Bills receivable in FVOCI are mainly categorised into Level 3 of the fair value hierarchy, which are based on that bills receivable are mainly short-term bills of acceptance issued by banks, and their fair values approximate the face values of the bills. The equity investments in FVOCI that are not held for trading are measured at fair value at the end of the reporting period. The fair value of such equity investments are mainly categorised into Level 1 of the fair value hierarchy, which are based on the unadjusted quoted prices in active markets for identical assets or liabilities as inputs used in the valuation techniques.

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PETROCHINA COMPANY LIMITED

NOTES TO THE FINANCIAL STATEMENTS — (Continued)

(All amounts in millions, except for the per share data and otherwise stated)

As of December 31, 2022, financial assets and financial liabilities continuing to be measured at fair value are listed as follows in three levels:

	Level 1<br> RMB		Level 2<br> RMB		Level 3<br> RMB		Total<br> RMB
Financial assets
Financial assets at fair value through profit or loss:
— Financial assets at fair value through profit or loss		3,876		—		—		3,876
Derivative financial instruments:
— Derivative financial assets		14,508		6,625		—		21,133
Financial assets at fair value through other comprehensive income:
— Bills receivable		—		—		4,376		4,376
— Other Investments		623		—		320		943
		19,007		6,625		4,696		30,328
Financial liabilities
Financial liabilities at fair value through profit or loss
— Financial liabilities at fair value through profit or loss		1,698		—		—		1,698
Derivative financial instruments:
— Derivative financial liabilities		983		10,163		—		11,146
		2,681		10,163		—		12,844

As of December 31, 2021, financial assets and financial liabilities continuing to be measured at fair value are listed as follows in three levels:

	Level 1<br> RMB		Level 2<br> RMB		Level 3<br> RMB		Total<br> RMB
Financial assets
Derivative financial instruments:
— Derivative financial assets		2,625		1,288		—		3,913
Financial assets at fair value through other comprehensive income:
— Bills receivable		—		—		3,975		3,975
— Other Investments		905		—		263		1,168
		3,530		1,288		4,238		9,056
Financial liabilities
Derivative financial instruments:
— Derivative financial liabilities		726		3,155		—		3,881
		726		3,155		—		3,881

The Group uses discounted cash flow model with inputted interest rate and commodity index, which were influenced by historical fluctuation and the probability of market fluctuation, to evaluate the fair value of the bills receivable classified as Level 3 financial assets.

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PETROCHINA COMPANY LIMITED

NOTES TO THE FINANCIAL STATEMENTS — (Continued)

(All amounts in millions, except for the per share data and otherwise stated)

5	CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS

Estimates and judgments are regularly evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

The matters described below are considered to be the most critical in understanding the estimates and judgments that are involved in preparing the Group’s consolidated financial statements.

(a)	Estimation of oil and gas reserves

Estimates of oil and natural gas reserves are key elements in the Group’s investment decision-making process. They are also important elements in testing impairment of property, plant and equipment (Note 5(b)). Changes in proved oil and gas reserves, particularly proved developed reserves, will affect unit-of-production depreciation, depletion and amortization recorded in the consolidated financial statements for property, plant and equipment relating to oil and gas production activities. An increase/reduction in proved developed reserves will decrease/increase depreciation, depletion and amortization charges. Proved oil and gas reserves estimates are subject to revision, either upward or downward, based on new information, such as from development drilling and production activities or from changes in economic factors, including product prices, contract terms, evolution of technology or development plans, etc.

(b)	Estimation of impairment of property, plant and equipment

Property, plant and equipment, including oil and gas properties, are reviewed for possible impairments when events or changes in circumstances indicate that the carrying amount may not be recoverable. Determination as to whether and how much an asset is impaired involves management estimates and judgments such as the future price of crude oil, natural gas, refined and chemical products, the operation costs, the product mix, production volumes, production profile and the oil and gas reserves. The impairment reviews and calculations are based on assumptions that are consistent with the Group’s business plans taking into account current economic conditions. Favorable changes to some assumptions, may allow the Group to avoid the need to impair any assets or make it necessary to reverse an impairment loss recognized in prior periods, whereas unfavorable changes may cause the assets to become impaired. For example, when the assumed future price and production profile of crude oil used for the expected future cash flows are different from the actual price and production profile of crude oil or respectively experienced in future, the Group may either over or under recognize the impairment losses for certain assets.

(c)	Estimation of asset retirement obligations

Provision is recognized for the future decommissioning and restoration of oil and gas properties. The amount of the provision recognized is the present values of the estimated future expenditures. The estimation of the future expenditures is based on current local conditions and requirements, including legal requirements, technology, price levels, etc. In addition to these factors, the present values of these estimated future expenditures are also impacted by the management plan for the decommissioning of oil and gas properties, the estimation of the economic lives of oil and gas properties and estimates of discount rates. The estimations and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future period. Changes in any of these estimates will impact the operating results and the financial position of the Group over the remaining economic lives of the oil and gas properties.

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PETROCHINA COMPANY LIMITED

NOTES TO THE FINANCIAL STATEMENTS — (Continued)

(All amounts in millions, except for the per share data and otherwise stated)

According to changes in the internal and external environment, accounting standards and company asset retirement expense measures and other relevant regulations, oil and gas field companies recalculate their asset retirement obligations of oil and gas properties based on the latest parameters, to more objectively reflect the actual situation of the Company’s asset retirement obligation of oil and gas properties.

6	REVENUE

Revenue represents revenues from the sale of crude oil, natural gas, refined products, chemical products, non-oil products, etc., and from the transportation of crude oil and natural gas. Revenue from contracts with customers is mainly recognized at a point in time. The revenue information for the year ended December 31, 2022, 2021 and 2020 are as follows:

2022<br><br>Type of contract	Oil, Gas and<br> New Energy<br> Resource			Refining,<br> Chemicals<br> and New<br> Material			Marketing			Natural Gas<br> Sales			Head<br><br> <br>Office and<br> Other			Total
Type of goods and services
Crude oil		667,205			—			813,328			—			—			1,480,533
Natural gas		151,241			—			553,551			482,590			—			1,187,382
Refined products		—			938,829			880,682			—			—			1,819,511
Chemical products		—			219,089			60,872			—			—			279,961
Pipeline transportation business		—			—			—			829			—			829
Non-oil<br> sales in gas stations		—			—			30,590			—			—			30,590
Others		110,550			6,515			432,103			35,730			5,452			590,350
Intersegment elimination		(777,846	)		(827,572	)		(520,502	)		(22,156	)		(3,210	)		(2,151,286	)
Revenue from contracts with customers		151,150			336,861			2,250,624			496,993			2,242			3,237,870
Other revenue		283			163			768			62			21			1,297
Total		151,433			337,024			2,251,392			497,055			2,263			3,239,167
Geographical Region
China’s mainland		86,645			336,861			964,872			496,993			2,242			1,887,613
Others		64,505			—			1,285,752			—			—			1,350,257
Revenue from contracts with customers		151,150			336,861			2,250,624			496,993			2,242			3,237,870
Other revenue		283			163			768			62			21			1,297
Total		151,433			337,024			2,251,392			497,055			2,263			3,239,167

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NOTES TO THE FINANCIAL STATEMENTS — (Continued)

(All amounts in millions, except for the per share data and otherwise stated)

2021<br><br>Type of contract	Oil, Gas and<br> New Energy<br> Resource			Refining,<br> Chemicals<br> and New<br> Material			Marketing			Natural Gas<br> Sales			Head<br><br> <br>Office and<br> Other			Total
Type of goods and services
Crude oil		464,298			—			685,743			—			—			1,150,041
Natural gas		133,148			—			344,196			381,370			—			858,714
Refined products		—			759,912			1,064,890			—			—			1,824,802
Chemical products		—			207,810			48,240			—			—			256,050
Pipeline transportation business		—			—			—			3,360			—			3,360
Non-oil<br> sales in gas stations		—			—			25,148			—			—			25,148
Others		90,539			7,072			1,272			32,208			3,871			134,962
Intersegment elimination		(571,705	)		(650,018	)		(397,485	)		(19,526	)		(1,201	)		(1,639,935	)
Revenue from contracts with customers		116,280			324,776			1,772,004			397,412			2,670			2,613,142
Other revenue		349			178			573			84			23			1,207
Total		116,629			324,954			1,772,577			397,496			2,693			2,614,349
Geographical Region
China’s mainland		68,327			324,776			832,229			397,412			2,670			1,625,414
Others		47,953			—			939,775			—			—			987,728
Revenue from contracts with customers		116,280			324,776			1,772,004			397,412			2,670			2,613,142
Other revenue		349			178			573			84			23			1,207
Total		116,629			324,954			1,772,577			397,496			2,693			2,614,349

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PETROCHINA COMPANY LIMITED

NOTES TO THE FINANCIAL STATEMENTS — (Continued)

(All amounts in millions, except for the per share data and otherwise stated)

2020<br><br>Type of contract	Oil, Gas and<br> New Energy<br> Resource			Refining,<br> Chemicals<br> and New<br> Material			Marketing			Natural Gas<br> Sales			Head<br><br> <br>Office and<br> Other			Total
Type of goods and services
Crude oil		333,557			—			447,384			—			—			780,941
Natural gas		118,388			—			173,696			294,297			—			586,381
Refined products		—			616,063			822,192			—			—			1,438,255
Chemical products		—			150,296			30,344			—			—			180,640
Pipeline transportation business		—			—			—			52,273			—			52,273
Non-oil<br> sales in gas stations		—			—			22,360			—			—			22,360
Others		78,631			8,254			1,300			23,800			3,515			115,500
Intersegment elimination		(437,670	)		(492,667	)		(276,503	)		(35,437	)		(1,320	)		(1,243,597	)
Revenue from contracts with customers		92,906			281,946			1,220,773			334,933			2,195			1,932,753
Other revenue		231			162			257			401			32			1,083
Total		93,137			282,108			1,221,030			335,334			2,227			1,933,836
Geographical Region
China’s mainland		27,028			281,946			554,620			334,933			2,195			1,200,722
Others		65,878			—			666,153			—			—			732,031
Revenue from contracts with customers		92,906			281,946			1,220,773			334,933			2,195			1,932,753
Other revenue		231			162			257			401			32			1,083
Total		93,137			282,108			1,221,030			335,334			2,227			1,933,836

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PETROCHINA COMPANY LIMITED

NOTES TO THE FINANCIAL STATEMENTS — (Continued)

(All amounts in millions, except for the per share data and otherwise stated)

7	PROFIT BEFORE INCOME TAX EXPENSE
	2022			2021		2020
---	---	---	---	---	---	---	---
	RMB			RMB		RMB
Items credited and charged in arriving at the profit before income tax expense include:
Credited
Dividend income from equity investments measured at fair value through other comprehensive income		15			17		25
Reversal of provision for impairment of receivables		160			360		95
Reversal of write down in inventories		42			76		186
(Loss)/Gain on disposal of investment in subsidiaries<br>(i)		(185	)		3,575		1,242
Gain on Pipeline restructuring <br>(i)		—			18,320		46,946
Gain from ineffective portion of cash flow hedges <br>(i)		2,217			—		—
Charged
Amortization of intangible and other assets		5,574			5,774		5,944
Depreciation and impairment losses:
Owned property, plant and equipment		217,731			211,107		194,015
Right-of-use<br> assets		14,731			14,388		13,916
Auditors’ remuneration <br>(ii)		47			47		49
Cost of inventories recognized as expense		2,500,861			2,047,256		1,527,271
Provision for impairment of receivables		1,784			775		438
Loss on disposal and scrap of property, plant and equipment<br>(i)		20,726			18,959		5,398
Variable lease payments, <br>low-value<br> and short-term lease payment not included in the measurement of lease liabilities		2,083			2,645		3,362
Research and development expenses		20,016			16,729		15,746
Write down in inventories		8,609			656		8,337
Investment loss from disposal of derivative financial instruments<br>(i)		28,931			—		—
Impairment of other <br>non-current<br> assets<br>(i)		4,653			465		—
(i)	Other income, net primarily includes<br><br><br>(loss)/gain on disposal of investment in subsidiaries, gain on Pipeline restructuring,<br>gain from ineffective portion of cash flow hedges, loss on disposal of property, plant and equipment, investment loss from disposal of derivative <br>financial instruments, impairment of other non-current assets.
---	---
(ii)	The auditors’ remuneration above represents the annual audit fees paid by the Company. This remuneration does not include fees of RMB 39 (2021: RMB 41, 2020: RMB 62) paid by subsidiaries to the Company’s current auditor and its network firms which primarily relates to audit, tax compliance and other advisory services.
---	---
8	EMPLOYEE COMPENSATION COSTS
---	---
	2022		2021		2020
---	---	---	---	---	---	---
	RMB		RMB		RMB
Wages, salaries and allowances		107,808		100,971		98,832
Social security costs		55,265		53,864		48,772
		163,073		154,835		147,604

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PETROCHINA COMPANY LIMITED

NOTES TO THE FINANCIAL STATEMENTS — (Continued)

(All amounts in millions, except for the per share data and otherwise stated)

Social security costs mainly represent contributions to plans for staff welfare organized by the PRC municipal and provincial governments and others, including contributions to the retirement benefit plans (Note 35).

9	TAXES OTHER THAN INCOME TAXES
	2022		2021		2020
---	---	---	---	---	---	---
	RMB		RMB		RMB
Consumption tax		159,132		161,623		145,525
Resource tax		32,991		23,723		18,468
City maintenance and construction tax		17,003		16,078		13,647
Educational surcharge		12,436		11,660		9,882
Crude oil special gain levy		43,768		4,655		178
Urban and township land use tax		3,702		3,572		3,588
Other<br>s		9,023		6,692		4,562
		278,055		228,003		195,850
10	INTEREST EXPENSE
---	---
	2022			2021			2020
---	---	---	---	---	---	---	---	---	---
	RMB			RMB			RMB
Interest on
Bank loans		4,160			2,540			1,677
Other loans		7,583			8,092			14,342
Lease liabilities		5,447			5,419			6,297
Accretion expense (Note 34)		5,681			4,696			5,107
		22,871			20,747			27,423
Less: Amounts capitalized		(1,317	)		(1,008	)		(895	)
		21,554			19,739			26,528

Amounts capitalized are borrowing costs that are attributable to the construction of qualifying assets. The average interest rate used to capitalize such general borrowing cost was 4.14% per annum for the year ended December 31, 2022 (2021: 4.19% per annum, 2020: 4.23% per annum).

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NOTES TO THE FINANCIAL STATEMENTS — (Continued)

(All amounts in millions, except for the per share data and otherwise stated)

11	EMOLUMENTS OF DIRECTORS AND SUPERVISORS

Details of the emoluments of directors and supervisors for the years ended December 31, 2022, 2021 and 2020 are as follows:

	2022								2021		2020
Name	Fee for<br> directors and<br> supervisors		Salaries,<br> allowances<br> and other<br> benefits		Contribution to<br> retirement<br> benefit scheme		Total		Total		Total
	RMB’000		RMB’000		RMB’000		RMB’000		RMB’000		RMB’000
Chairmen:
Mr. Dai Houliang<br>(i)		—		—		—		—		—		—
Mr. Wang Yilin<br>(i)		—		—		—		—		—		—
Vice chairmen:
Mr. Hou Qijun<br>(ii)		—		—		—		—		—		—
Mr. Li Fanrong<br>(i)		—		—		—		—		—		—
Executive directors:
Mr. Jiao Fangzheng<br>(iv)		—		638		123		761		—		—
Mr. Huang Yongzhang<br>(iii)		—		931		183		1,114		629		—
Mr. Ren Lixin<br>(ii)		—		1,044		182		1,226		195		—
		—		2,613		488		3,101		824		—
Non-executive<br> directors:
Mr. Duan Liangwei<br>(iii)		—		—		—		—		237		735
Mr.Xie Jun<br>(v)		—		—		—		—		—		—
Mr. Liu Yuezhen<br>(iv)		—		—		—		—		—		—
Mr. Lin Boqiang<br>(x)		—		—		—		—		—		388
Mr. Zhang Biyi<br>(x)		—		—		—		—		—		398
Ms. Elsie Leung <br>Oi-sie		529		—		—		529		556		331
Mr. Tokuchi Tatsuhito		539		—		—		539		527		331
Mr. Simon <br>Peter<br>Henry<br>(vi)		510		—		—		510		499		320
Mr. Cai Jinyong<br>(x)		593		—		—		593		575		—
Mr. Jiang Xiaoming<br>(x)		603		—		—		603		575		—
		2,774		—		—		2,774		2,969		2,503
Supervisors:
Mr. Cai Anhui<br>(v)		—		—		—		—		—		—
Mr. Lv Bo<br>(v)		—		—		—		—		—		—
Mr. Xu Wenrong<br>(v)		—		—		—		—		—
Mr. Xie Haibing<br>(v)		—		—		—		—		—		—
Ms. Zhao Ying<br>(v)		—		—		—		—		—		—
Mr. Cai Yong<br>(v)		—		—		—		—		—		—
Mr. Lan Jianbin<br>(vii)		—		642		89		731		—		—
Mr. He Jiangchuan<br>(vii)		—		846		84		930		—		—
Mr. Jin Yanjiang<br>(vii)		—		694		53		747		—		—
Mr. Fu Bin<br>(viii)		—		445		61		506		—		—
Mr. Zhang Fengshan<br>(v)		—		—		—		—		—		—
Mr. Jiang Lifu<br>(v)		—		—		—		—		—		—
Mr. Lu Yaozhong<br>(v)		—		—		—		—		—		—

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NOTES TO THE FINANCIAL STATEMENTS — (Continued)

(All amounts in millions, except for the per share data and otherwise stated)

	2022								2021		2020
Name	Fee for<br> directors and<br> supervisors		Salaries,<br> allowances<br> and other<br> benefits		Contribution to<br> retirement<br> benefit scheme		Total		Total		Total
	RMB’000		RMB’000		RMB’000		RMB’000		RMB’000		RMB’000
Mr. Wang Liang<br>(viii)		—		—		—		—		—		—
Mr. Fu Suotang<br>(vii)		—		115		28		143		1,433		1,367
Mr. Li Jiamin<br>(vii)		—		192		59		251		1,255		1,006
Mr. Li Wendong<br>(ix)		—		—		—		—		137		1,193
Mr. Liu Xianhua<br>(vii)		—		184		46		230		945		1,011
		—		3,118		420		3,538		3,770		4,577
		2,774		5,731		908		9,413		7,563		7,080
(i)	Mr. Wang Yilin ceased being the chairman from January 19, 2020. Mr. Dai Houliang was elected as the chairman and Mr. Li Fanrong was elected as the vice chairman from March 25, 2020. Mr. Li Fanrong ceased being the vice chairman and the director from May 10, 2021.
---	---
(ii)	Mr. Hou Qijun and Mr. Ren Lixin <br>were<br> appointed as director<br>s<br> from October 21, 2021; and Mr. Hou Qijun was appointed as Vice chairman from October 28, 2021.
---	---
(iii)	Mr. Duan Liangwei was appointed as the president and executive director from March 9, 2020.On March 25, 2021, Mr. Duan Liangwei resigned as the Company’s president and was transferred from an executive director to a <br>non-executive<br> director, and no longer received remuneration from the Company; Mr. Huang Yongzhang was appointed as the Company’s president and the executive director.
---	---
(iv)	Mr. Jiao Fangzheng was transferred from a <br>non-executive<br> director to an executive director from April 29, 2022; Mr. Liu Yuezhen ceased being a director of the Company.
---	---
(v)	Mr. Xie Jun was elected as director of the Company from June 9, 2022; Mr. Lv Bo ceased being the chairman and supervisor of the Supervisory Committee of the Company, and Mr. Zhang Fengshan, Mr. Jiang Lifu and Mr. Lu Yaozhong ceased being the supervisors of the Company; <br>Mr. Cai Anhui was elected as a supervisor and the chairman of the Supervisory Committee of the Company, and Mr. Xie Haibing, Ms. Zhao Ying and Mr. Cai Yong were elected as supervisors of the Company. Mr. Xu Wenrong ceased being the Chairman of the Supervisory Committee and supervisor and Mr. Lv Bo ceased being the non-executive director from October 20, 2020. Mr. Lv Bo was elected as the Chairman of the Supervisory Committee and supervisor from November 5, 2020.
---	---
(vi)	Mr. Simon <br>Peter<br>Henry ceased being a <br>non-executive<br> director of the Company from June 15, 2022.
---	---
(vii)	Mr. Fu Suotang, Mr. Li Jiamin and Mr. Liu Xianhua ceased being the supervisors of the Company from May 19, 2022; Mr. Lan Jianbin, Mr. He Jiangchuan and Mr. Jin Yanjiang were elected as supervisors of the Company.
---	---
(viii)	Mr. Wang Liang ceased being a supervisor of the Company from September 29,2022; Mr. Fu Bin was elected as a supervisor of the Company.
---	---
(ix)	On May 28, 2021, Mr. Li Wendong resigned as the employee representative supervisor of the Company.
---	---
(x)	Mr. Cai Jinyong and Mr. Jiang Xiaoming were elected as independent <br>non-executive<br> directors from June 11, 2020, and began to perform their duties. The remuneration had not been paid at the end of December 31, 2020. Mr. Zhang Biyi and Mr. LinBoqiang ceased being the independent <br>non-executive<br> director from June 11, 2020.
---	---
(xi)	The emoluments above are all <br>pre-tax<br> amounts<br>paid by calender year<br>.
---	---
(xii)	The above emoluments for 2022 do not include the <br>tenure incentive<br> of RMB1.10 million for 2019-2021 payable by the Company to <br>some<br>directors in accordance with the relevant regulations of the PRC government.
---	---

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NOTES TO THE FINANCIAL STATEMENTS — (Continued)

(All amounts in millions, except for the per share data and otherwise stated)

None of the directors and supervisors has waived their remuneration during the year ended December 31, 2022, 2021 and 2020.

The five highest paid individuals in the Company for the year ended December 31, 2022 are the five senior management whose allowances and other benefits were RMB 1.439, RMB 1.359, RMB 1.323, RMB 1.265 and RMB 1.044, respectively, and whose contribution to retirement benefit scheme were RMB 0.182, RMB 0.182, RMB 0.182, RMB 0.182 and RMB 0.182, respectively.

The five highest paid individuals in the Company for the year ended December 31, 2021 included one supervisor whose emolument is reflected in the analysis shown above and the note; and four senior management whose allowances and other benefits were RMB 1.533, RMB 1.310, RMB 1.308 and RMB 1.257, respectively, and whose contribution to retirement benefit scheme were RMB 0.164, RMB 0.164, RMB 0.164 and RMB 0.164, respectively.

The five highest paid individuals in the Company for the year ended December 31, 2020 included one supervisor whose emolument is reflected in the analysis shown above and the note; and four senior management whose allowances and other benefits were RMB 1.550, RMB 1.310, RMB 1.292 and RMB 1.270, respectively, and whose contribution to retirement benefit scheme were RMB 0.116, RMB 0.116, RMB 0.116 and RMB 0.116, respectively.

During the years ended December 31, 2022, 2021 and 2020, the Company did not incur any severance payment to any director for loss of office or any payment as inducement to any director to join the Company.

12	INCOME TAX EXPENSE
	2022			2021		2020
---	---	---	---	---	---	---	---
	RMB			RMB		RMB
Current taxes		63,328			33,822		14,922
Deferred taxes (Note 33)		(14,033	)		9,685		7,666
		49,295			43,507		22,588

In accordance with the relevant PRC income tax rules and regulations, the PRC corporate income tax rate applicable to the Group is principally 25%. In accordance with the Circular jointly issued by the Ministry of Finance (“MOF”), the General Administration of Customs of the PRC and the State Administration of Taxation (“SAT”) on Issues Concerning Tax Policies for In-depth Implementation of Western Development Strategy (Cai Shui [2011] No.58) and the Notice on Continuing the Income Tax Policy for Western Development (Notice No.23 of 2020 of the MOF, the SAT, the NDRC), the corporate income tax for the enterprises engaging in the encouraged industries in the Western China Region is charged at a preferential corporate income tax rate of 15% from January 1, 2011 to December 31, 2030. Certain branches and subsidiaries of the Company in the Western China Region obtained the approval for the use of the preferential corporate income tax rate of 15%.

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NOTES TO THE FINANCIAL STATEMENTS — (Continued)

(All amounts in millions, except for the per share data and otherwise stated)

The tax on the Group’s profit before taxation differs from the theoretical amount that would arise using the corporate income tax rate in the PRC applicable to the Group as follows:

	2022			2021			2020
	RMB			RMB			RMB
Profit before income tax expense		213,277			158,203			56,073
Tax calculated at a tax rate of 25%		53,319			39,551			14,018
Tax return <br>true-up		(910	)		(256	)		256
Effect of income taxes from international operations different from taxes at the PRC statutory tax rate		7,857			2,692			1,522
Effect of preferential tax rate		(14,197	)		(8,603	)		(1,312	)
Tax effect of income not subject to tax		(7,347	)		(10,305	)		(3,612	)
Tax effect of expenses not deductible for tax purposes		9,241			15,789			5,455
Tax effect of temporary differences and losses <br>not recognized<br>as deferred tax assets		1,332			4,639			6,261
Income tax expense		49,295			43,507			22,588
13	PROFIT ATTRIBUTABLE TO OWNERS OF THE COMPANY
---	---

The profit attributable to owners of the Company in the consolidated financial statements of the Group is RMB 149,380 for the year ended December 31, 2022 (2021: RMB 92,170 , 2020: 19,006 ) .

14	BASIC AND DILUTED EARNINGS PER SHARE

Basic and diluted earnings per share for the years ended December 31, 2022, 2021 and 2020 have been computed by dividing profit for the year attributable to owners of the Company by 183,021 million shares issued and outstanding for the year.

There are no potentially dilutive ordinary shares.

15	DIVIDENDS
	2022		2021		2020
---	---	---	---	---	---	---
	RMB		RMB		RMB
Interim dividends attributable to owners of the Company for 2022 (a)		37,076		—		—
Proposed final dividends attributable to owners of the Company for 2022 (b)		40,265		—		—
Interim dividends attributable to owners of the Company for 2021 (c)		—		23,866		—
Final<br>dividends attributable to owners of the Company for 2021 (d)		—		17,610		—
Interim dividends attributable to owners of the Company for 2020 (e)		—		—		16,000
Final dividends attributable to owners of the Company for 2020 (f)		—		—		16,000
		77,341		41,476		32,000
(a)	Interim dividends attributable to owners of the Company in respect of 2022 of RMB 0.20258 yuan (inclusive of applicable tax) per share, amounting to a total of RMB 37,076. The dividends were paid on September 20, 2022 (A shares) and October 28, 2022 (H shares).
---	---
(b)	At the 20th meeting of the 8th Board, the Board of Directors proposed final dividends attributable to owners of the Company in respect of 2022 of RMB 0.22<br><br>yuan (inclusive of applicable tax) per share amounting
---	---

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NOTES TO THE FINANCIAL STATEMENTS — (Continued)

(All amounts in millions, except for the per share data and otherwise stated)

to a total of RMB 40,265. These consolidated financial statements do not reflect this dividend payable as the final dividends were proposed after the reporting period and will be accounted for in equity as an appropriation of retained earnings during the year ended December 31, 2023 when approved at the forthcoming 2022 Annual General Meeting.
(c)	Interim dividends attributable to owners of the Company in respect of 2021 of RMB 0.13040 yuan (inclusive of applicable tax) per share, amounting to a total of RMB 23,866. The dividends were paid on September 17, 2021 (A shares) and October 29, 2021 (H shares).
---	---
(d)	Final dividends attributable to owners of the Company in respect of 2021 of RMB 0.09622 yuan (inclusive of applicable tax) per share, amounting to a total of RMB 17,610. The dividends approved at the 2021 Annual General Meeting held on June 9, 2022, and were paid on June 28, 2022 (A shares) and July 29, 2022 (H shares).
---	---
(e)	Interim dividends attributable to owners of the Company in respect of 2020 of RMB 0.08742 yuan (inclusive of applicable tax) per share<br>,<br> amounting to a total of RMB 16,000. The dividends were paid on September 22, 2020 (A shares) and November 13, 2020 (H shares).
---	---
(f)	Final dividends attributable to owners of the Company in respect of 2020 of RMB 0.08742 yuan (inclusive of applicable tax) per share, amounting to a total of RMB 16,000. The dividends approved at the 2020 Annual General Meeting held on 10 June, 2021, and were paid on June 29, 2021 (A shares) and July 30, 2021 (H shares).
---	---
16	PROPERTY, PLANT AND EQUIPMENT
---	---
Year Ended<br><br>December 31, 2022	Buildings			Oil<br><br> <br>and Gas<br> Properties			Equipment<br><br> <br>and<br><br> <br>Machinery			Motor<br> Vehicles			Other<br>s			Construction<br><br> <br>in Progress			Total
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
	RMB			RMB			RMB			RMB			RMB			RMB			RMB
Cost
At beginning of the year		258,858			2,452,625			778,003			21,903			47,275			232,282			3,790,946
Additions		327			78,917			3,877			125			462			258,562			342,270
Transfers		17,536			171,634			78,205			427			2,106			(269,908	)		—
Disposals or write offs		(2,388	)		(70,106	)		(12,059	)		(1,470	)		(1,250	)		(17,468	)		(104,741	)
Currency translation differences		671			20,534			1,110			19			539			1,387			24,260
At end of the year		275,004			2,653,604			849,136			21,004			49,132			204,855			4,052,735
Accumulated depreciation and impairment
At beginning of the year		(120,417	)		(1,635,837	)		(516,649	)		(16,991	)		(33,145	)		(8,611	)		(2,331,650	)
Charge for the year and others		(10,678	)		(206,472	)		(32,650	)		(859	)		(2,011	)		—			(252,670	)
Impairment charge		(957	)		(14,750	)		(3,510	)		(20	)		(1,328	)		(1,830	)		(22,395	)
Disposals or write offs or transfers		31			52,701			6,450			1,355			1,180			2,366			64,083
Currency translation differences		(187	)		(16,636	)		(475	)		(19	)		(369	)		96			(17,590	)
At end of the year		(132,208	)		(1,820,994	)		(546,834	)		(16,534	)		(35,673	)		(7,979	)		(2,560,222	)
Net book value
At end of the year		142,796			832,610			302,302			4,470			13,459			196,876			1,492,513

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NOTES TO THE FINANCIAL STATEMENTS — (Continued)

(All amounts in millions, except for the per share data and otherwise stated)

Year Ended<br> <br>December 31, 2021	Buildings			Oil<br><br> <br>and Gas<br> Properties			Equipment<br><br> <br>and<br><br> <br>Machinery			Motor<br> Vehicles			Other<br>s			Construction<br><br> <br>in Progress			Total
	RMB			RMB			RMB			RMB			RMB			RMB			RMB
Cost
At beginning of the year		248,948			2,355,925			746,404			22,857			45,014			228,882			3,648,030
Additions		1,561			18,556			5,305			645			1,880			241,843			269,790
Transfers		13,736			160,810			38,649			—			2,369			(215,564	)		—
Disposals or write offs		(5,101	)		(75,411	)		(12,010	)		(1,588	)		(1,675	)		(22,175	)		(117,960	)
Currency translation differences		(286	)		(7,255	)		(345	)		(11	)		(313	)		(704	)		(8,914	)
At end of the year		258,858			2,452,625			778,003			21,903			47,275			232,282			3,790,946
Accumulated depreciation and impairment
At beginning of the year		(110,899	)		(1,542,037	)		(488,109	)		(17,431	)		(31,937	)		(5,526	)		(2,195,939	)
Charge for the year and others		(11,057	)		(138,251	)		(33,404	)		(992	)		(2,485	)		—			(186,189	)
Impairment charge		(516	)		(19,463	)		(2,723	)		—			(121	)		(3,648	)		(26,471	)
Disposals or write offs or transfers		1,952			58,312			7,429			1,421			997			396			70,507
Currency translation differences		103			5,602			158			11			401			167			6,442
At end of the year		(120,417	)		(1,635,837	)		(516,649	)		(16,991	)		(33,145	)		(8,611	)		(2,331,650	)
Net book value
At end of the year		138,441			816,788			261,354			4,912			14,130			223,671			1,459,296

The Group’s oil, gas and new energy resource segment determines whether there are any indicators of impairment for the oil fields or blocks and performs the impairment tests on those oil fields or blocks with indications of impairment, and reports the results to the Group’s internal professional team (including exploration and finance expert) for further overall assessment and evaluation. The final results of the impairment tests have been submitted to the Group’s management for review and approval. The Group recorded impairment losses amounting to RMB 14,750 related to oil and gas properties under the oil, gas and new energy resource segment for the year ended December 31, 2022 (2021: RMB 19,463 related to oil and gas properties under the oil, gas and new energy resource segment, 2020: RMB 13,908 related to oil and gas properties under the oil, gas and new energy resource segment) due to the decline of oil and gas reserves in certain oilfield or change in business condition. The carrying amount of those impaired oil and gas properties was written down to their respective recoverable amounts, which were primarily determined using the discounted cash flow model. The Group referred to the weighted average cost of capital of the oil and gas industry when determining discount rate, and made relevant adjustments according to specific risks in different countries or regions. In 2022, the after-tax discount rates adopted by most oil fields or blocks of the Group ranged

from 7.2% to 16.0% (2021: 7.6% to 15.0%, 2020: 5.9% to 12.0%) per annum.

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PETROCHINA COMPANY LIMITED

NOTES TO THE FINANCIAL STATEMENTS — (Continued)

(All amounts in millions, except for the per share data and otherwise stated)

The following table indicates the changes to the Group’s exploratory well costs, which are included in construction in progress, for the years ended December 31, 2022, 2021 and 2020.

	2022			2021			2020
	RMB			RMB			RMB
At beginning of the year		29,387			38,807			36,101
Additions to capitalized exploratory well costs pending the determination of proved reserves		29,199			30,338			30,104
Reclassified to wells, facilities, and equipment based on the determination of proved reserves		(19,623	)		(27,201	)		(18,464	)
Capitalized exploratory well costs charged to expense		(14,118	)		(12,557	)		(8,934	)
At end of the year		24,845			29,387			38,807

The following table provides an aging of capitalized exploratory well costs based on the date the drilling was completed.

	December 31,<br> 2022		December 31,<br> 2021
	RMB		RMB
One year or less		16,780		19,354
Over one year		8,065		10,033
Balance at December 31		24,845		29,387

Capitalized exploratory well costs over one year are principally related to the wells that are under further evaluation of drilling results or pending completion of development planning to ascertain economic viability.

17	INVESTMENTS IN ASSOCIATES AND JOINT VENTURES

The summarized financial information of the Group’s principal associates and joint ventures, including the aggregated amounts of assets, liabilities, revenue, profit or loss and the interest held by the Group were as follows:

Name	Country of<br><br> <br>Incorporation		Registered Capital		Principal Activities	Interest Held
				Direct %				Indirect %
China Oil & Gas Piping Network Corporation (“PipeChina”)		PRC		500,000	Pipeline transport, storage service, import of equipment, import and export of techniques, science and technology research, research and application of informatization, technology consulting, technology service, technology transfer, promotion of technology		29.90		—

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NOTES TO THE FINANCIAL STATEMENTS — (Continued)

(All amounts in millions, except for the per share data and otherwise stated)

Name	Country of<br><br> <br>Incorporation		Registered Capital		Principal Activities	Interest Held
				Direct %				Indirect %
China Petroleum Finance Co., Ltd. (“CP Finance”)		PRC		16,395	Deposits, loans, settlement, lending, bills acceptance discounting, guarantee and other banking business		32.00		—
CNPC Captive Insurance Co., Ltd.		PRC		6,000	Property loss insurance, liability insurance, credit insurance and deposit insurance; as well as the application of the above insurance reinsurance and insurance capital business		49.00		—
China Marine Bunker (PetroChina) Co., Ltd.		PRC		1,000	Oil import and export trade and transportation, sale and storage		—		50.00
Mangistau Investment B.V.		Netherlands		USD 131<br><br>million	Engages in investing activities, the principle activities of its main subsidiaries are exploration, development and sale of oil and gas.		—		50.00
Trans-Asia Gas Pipeline Co., Ltd.		PRC		5,000	Main contractor, investment holding, investment management, investment consulting, enterprise management advisory, technology development, promotion and technology consulting		—		50.00

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NOTES TO THE FINANCIAL STATEMENTS — (Continued)

(All amounts in millions, except for the per share data and otherwise stated)

Interest in Associates

Summarized consolidated statement of financial information in respect of the Group’s principal associates and reconciliation to carrying amount is as follows:

	PipeChina				CP Finance				CNPC Captive<br> Insurance Co., Ltd.
	December 31,<br> 2022		December 31,<br> 2021		December 31,<br> 2022		December 31,<br> 2021		December 31,<br> 2022		December 31,<br> 2021
	RMB		RMB		RMB		RMB		RMB		RMB
Percentage ownership interest (%)		29.90		29.90		32.00		32.00		49.00		49.00
Current assets		104,889		86,335		401,971		415,139		8,859		9,100
Non-current<br> assets		816,301		768,161		126,363		116,765		2,349		2,618
Current liabilities		132,266		136,150		442,283		446,369		470		859
Non-current<br> liabilities		199,675		103,243		3,823		8,396		3,504		3,900
Net assets		589,249		615,103		82,228		77,139		7,234		6,959
Net assets attributable to owners of the Company		525,235		526,241		82,228		77,139		7,234		6,959
Group’s share of net assets		157,045		157,346		26,313		24,684		3,545		3,410
Goodwill		—		—		349		349		—		—
Carrying amount of interest in associates		157,045		157,346		26,662		25,033		3,545		3,410

Summarized statement of comprehensive income and dividends received by the Group are as follow:

	PipeChina						CP Finance								CNPC Captive<br><br><br>Insurance Co., Ltd.
	2022		2021		From<br><br><br>Oct 01,<br>2020 to<br>Dec 31,<br>2020		2022		2021			2020			2022		2021		2020
	RMB		RMB		RMB		RMB		RMB			RMB			RMB		RMB		RMB
Revenue		112,832		101,572		22,766		13,302		12,691			7,954			931		1,510		735
Profit for the year		31,908		29,776		6,444		6,312		6,304			7,819			449		424		389
Other comprehensive<br> <br>income/(loss)		—		2		—		1,174		(606	)		(1,603	)		—		—		—
Total comprehensive income		31,908		29,778		6,444		7,486		5,698			6,216			449		424		389
Total comprehensive income attributable to owners of the Company		26,212		22,895		5,124		7,486		5,698			6,216			449		424		389
Group’s share of total comprehensive income		7,837		6,846		1,532		2,396		1,823			1,989			220		207		191
Dividends received by the Group		4,312		943		—		767		904			677			85		78		74

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PETROCHINA COMPANY LIMITED

NOTES TO THE FINANCIAL STATEMENTS — (Continued)

(All amounts in millions, except for the per share data and otherwise stated)

Interest in Joint Ventures

Summarized consolidated statement of financial position as included in their own financial statements, adjusted for fair value adjustments and differences in accounting policies in respect of the Group’s principal joint ventures and reconciliation to carrying amount is as follows:

	China Marine Bunker<br> (PetroChina) Co., Ltd.				Mangistau Investment B.V.				Trans-Asia Gas Pipeline<br><br> <br>Co., Ltd.
	December 31,<br> 2022		December 31,<br> 2021		December 31,<br> 2022		December 31,<br> 2021		December 31,<br> 2022		December 31,<br> 2021
	RMB		RMB		RMB		RMB		RMB		RMB
Percentage ownership interest (%)		50.00		50.00		50.00		50.00		50.00		50.00
Non-current<br> assets		1,803		1,571		10,392		9,927		48,715		44,011
Current assets		10,551		11,305		1,196		2,220		644		1,437
Including: cash and cash equivalents		1,661		2,292		431		1,631		634		1,411
Non-current<br> liabilities		196		540		2,333		2,033		2,105		2,147
Including: <br>Non-current<br> financial liabilities		—		—		14		—		2,100		2,101
Current liabilities		9,778		9,997		823		872		74		483
Including: Current financial liabilities excluding trade and other payables		6,143		5,810		—		—		—		—
Net assets		2,380		2,339		8,432		9,242		47,180		42,818
Net assets attributable to owners of the Company		2,070		1,952		8,432		9,242		47,180		42,818
Group’s share of net assets		1,035		976		4,216		4,621		23,590		21,409
Carrying amount of interest in joint ventures		978		976		4,216		4,621		23,590		21,409

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PETROCHINA COMPANY LIMITED

NOTES TO THE FINANCIAL STATEMENTS — (Continued)

(All amounts in millions, except for the per share data and otherwise stated)

Summarized statement of comprehensive income as included in their own financial statements, adjusted for fair value adjustments and differences in accounting policies and dividends received by the Group is as follows:

	China Marine Bunker<br> (PetroChina) Co., Ltd.									Mangistau Investment B.V.									Trans-Asia Gas Pipeline<br> Co., Ltd.
	2022			2021			2020			2022			2021			2020			2022			2021			2020
	RMB			RMB			RMB			RMB			RMB			RMB			RMB			RMB			RMB
Revenue		80,086			58,210			36,695			13,279			11,543			8,152			16			17			18
Depreciation, depletion and amortization		(180	)		(190	)		(195	)		(950	)		(1,002	)		(1,048	)		(11	)		(57	)		(38	)
Interest income		48			11			16			16			3			4			36			31			42
Interest expense		(219	)		(72	)		(60	)		(137	)		(141	)		(160	)		(47	)		(56	)		(58	)
Income tax expense		(72	)		(56	)		(57	)		(558	)		(846	)		(293	)		(27	)		—			1
Profit/(loss) for the year		126			(610	)		185			1,486			2,114			362			4,112			4,067			3,060
Total comprehensive income / (loss)		163			(691	)		140			1,878			1,874			(650	)		5,031			3,508			(3,007	)
Total comprehensive income/(loss) attributable to owners of the Company		118			(687	)		92			1,878			1,874			(650	)		5,031			3,508			(3,007	)
Group’s share of total comprehensive income/ (loss)		59			(344	)		46			939			937			(325	)		2,516			1,754			(1,504	)
Dividends received by the Group		—			29			—			1,344			233			539			335			410			—

Dividends received or receivable from associates and joint ventures were RMB 9,803 in 2022 (2021: RMB 4,715, 2020: RMB 4,517).

In 2022, investments in associates and joint ventures of RMB 721(2021: RMB 489, 2020: RMB 1,687) were disposed of, resulting in a loss of RMB 24 (2021: RMB 4, 2020: RMB 5 ) which was included in other income.

In 2022, the share of profit and other comprehensive loss in all individually immaterial associates and joint ventures accounted for using equity method in aggregate was RMB 2,324 (2021: RMB 1,418, 2020: a loss of RMB 2,468) and RMB 386(2021: an income of RMB 622, 2020: an income of RMB 3,631), respectively.

18	EQUITY INVESTMENTS MEASURED AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME
	December 31, 2022		December 31, 2021
---	---	---	---	---
	RMB		RMB
Houpu Clean Energy Group Co., Ltd.		251		534
China Pacific Insurance (Group) Co., Ltd.		120		133
Other items		572		501
		943		1,168

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PETROCHINA COMPANY LIMITED

NOTES TO THE FINANCIAL STATEMENTS — (Continued)

(All amounts in millions, except for the per share data and otherwise stated)

Dividends amounting to RMB 15 were received on these investments during the year ended December 31, 2022 (2021: RMB 17, 2020: RMB 25).

19	SUBSIDIARIES

The principal subsidiaries of the Group are:

Company Name	Country of<br><br> <br>Incorporation		Registered<br><br> <br>Capital		Type of<br> Legal<br> Entity	Attributable<br><br> <br>Equity<br> Interest %		Voting<br> Rights %		Principal Activities
Daqing Oilfield Company Limited		PRC		47,500	Limited liability company		100.00		100.00	Exploration, production and sale of crude oil and natural gas
CNPC Exploration and Development Company Limited (i)		PRC		16,100	Limited liability company		50.00		57.14	Exploration, production and sale of crude oil and natural gas outside the PRC
PetroChina Hong Kong Limited		Hong Kong		HKD 7,592<br> million	Limited liability company		100.00		100.00	Investment holding. The principal activities of its subsidiaries, associates and joint ventures are the exploration, production and sale of crude oil in and outside the PRC as well as natural gas sale and transmission in the PRC
PetroChina International Investment Company Limited		PRC		31,314	Limited liability company		100.00		100.00	Investment holding. The principal activities of its subsidiaries, associates and joint ventures are the exploration, development and production of crude oil, natural gas, oil sands and coalbed methane outside the PRC
PetroChina International Company Limited		PRC		18,096	Limited liability company		100.00		100.00	Marketing of refined products and trading of crude oil and petrochemical products, storage, investment in refining, chemical engineering, storage facilities, service station, and transportation facilities and related business in and outside the PRC

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PETROCHINA COMPANY LIMITED

NOTES TO THE FINANCIAL STATEMENTS — (Continued)

(All amounts in millions, except for the per share data and otherwise stated)

Company Name	Country of<br><br> <br>Incorporation		Registered<br><br> <br>Capital		Type of<br> Legal<br> Entity	Attributable<br><br> <br>Equity<br> Interest %		Voting<br> Rights %		Principal Activities
PetroChina Sichuan Petrochemical Company Limited		PRC		10,000	Limited liability company		90.00		90.00	Engaged in oil refining, petrochemical, chemical products production, sales, chemical technology development, technical transfer and services
KunLun Energy Company Limited(ii)		Bermuda		HKD 160<br> million	Limited liability company		54.38		54.38	Investment holding. The principal activities of its principal subsidiaries, associates and joint ventures are the sales of natural gas, sales of liquefied petroleum gas and liquefied natural gas processing and terminal business in the PRC and the exploration and production of crude oil and natural gas in the PRC, the Republic of Kazakhstan, the Sultanate of Oman, the Republic of Peru, the Kingdom of Thailand and the Republic of Azerbaijan.
(i)	The Company consolidated the financial statements of the entity because it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.
---	---
(ii)	Kunlun Energy Co., Ltd. is a company listed on The Stock Exchange of Hong Kong Limited.
---	---

Summarized financial information in respect of the Group’s principal subsidiaries with significant non-controlling interests is as follows:

	CNPC Exploration and Development<br> Company Limited				PetroChina Sichuan Petrochemical<br> Company Limited
	December 31,<br> 2022		December 31,<br> 2021		December 31,<br> 2022		December 31,<br> 2021
	RMB		RMB		RMB		RMB
Percentage ownership interest (%)		50.00		50.00		90.00		90.00
Current assets		20,186		15,596		4,391		3,973
Non-current<br> assets		190,630		184,486		22,131		25,317
Current liabilities		15,463		11,282		1,700		3,876
Non-current<br> liabilities		20,904		30,293		313		382
Net assets		174,449		158,507		24,509		25,032

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PETROCHINA COMPANY LIMITED

NOTES TO THE FINANCIAL STATEMENTS — (Continued)

(All amounts in millions, except for the per share data and otherwise stated)

Summarized statement of comprehensive income is as follows:

	CNPC Exploration and Development<br> Company Limited							PetroChina Sichuan Petrochemical<br> Company Limited
	2022		2021		2020			2022		2021		2020
	RMB		RMB		RMB			RMB		RMB		RMB
Revenue		55,499		42,730		33,312			58,131		48,493		35,319
Net profit		12,390		8,413		6,006			33		3,383		520
Total comprehensive income/(loss)		23,813		5,231		(6,972	)		33		3,383		520
Profit attributable to <br>non-controlling<br> interests		6,956		4,837		3,311			3		338		52
Dividends paid to <br>non-controlling<br> interests		4,383		1,485		1,498			62		307		12

Summarized statement of cash flows is as follows:

	CNPC Exploration and Development<br> Company Limited									PetroChina Sichuan Petrochemical<br> Company Limited
	2022			2021			2020			2022			2021			2020
	RMB			RMB			RMB			RMB			RMB			RMB
Net cash inflow/(outflow) from operating activities		16,850			13,320			5,681			(771	)		2,666			5,119
Net cash inflow/(outflow) from investing activities		3,013			(5,191	)		(16,187	)		1,466			(231	)		(380	)
Net cash (outflow)/inflow from financing activities		(16,628	)		(8,531	)		7,410			(695	)		(3,995	)		(3,186	)
Effect of foreign exchange rate changes on cash and cash equivalents		33			(15	)		(776	)		—			—			—
Net increase/(decrease) in cash and cash equivalents		3,268			(417	)		(3,872	)		—			(1,560	)		1,553
Cash and cash equivalents at the beginning of the year		8,785			9,202			13,074			1			1,561			8
Cash and cash equivalents at the end of the year		12,053			8,785			9,202			1			1			1,561

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PETROCHINA COMPANY LIMITED

NOTES TO THE FINANCIAL STATEMENTS — (Continued)

(All amounts in millions, except for the per share data and otherwise stated)

20	LEASES

The leases where the Group is a lessee.

(a)	Right-of-use<br> assets
	December 31,<br> 2021			Additions			Reduction			December 31,<br> 2022
---	---	---	---	---	---	---	---	---	---	---	---	---
Cost
Land		180,600			4,659			(1,456	)		183,803
Buildings		56,890			5,451			(3,708	)		58,633
Equipment and Machinery		4,474			2,613			(492	)		6,595
Other<br>s		1,818			97			(724	)		1,191
Total		243,782			12,820			(6,380	)		250,222
Accumulated depreciation
Land		(18,417	)		(6,694	)		384			(24,727	)
Buildings		(14,425	)		(6,521	)		2,226			(18,720	)
Equipment and Machinery		(1,577	)		(1,730	)		350			(2,957	)
Other<br>s		(757	)		(140	)		144			(753	)
Total		(35,176	)		(15,085	)		3,104			(47,157	)
Net book value
Land		162,183									159,076
Buildings		42,465									39,913
Equipment and Machinery		2,897									3,638
Other<br>s		1,061									438
Total		208,606									203,065

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PETROCHINA COMPANY LIMITED

NOTES TO THE FINANCIAL STATEMENTS — (Continued)

(All amounts in millions, except for the per share data and otherwise stated)

	December 31,<br> 2020			Additions			Reduction			December 31,<br> 2021
Cost
Land		171,941			9,331			(672	)		180,600
Buildings		57,337			5,120			(5,567	)		56,890
Equipment and Machinery		2,641			2,614			(781	)		4,474
Other<br>s		2,195			186			(563	)		1,818
Total		234,114			17,251			(7,583	)		243,782
Accumulated depreciation
Land		(11,611	)		(7,022	)		216			(18,417	)
Buildings		(10,839	)		(6,334	)		2,748			(14,425	)
Equipment and Machinery		(1,166	)		(1,096	)		685			(1,577	)
Other<br>s		(712	)		(313	)		268			(757	)
Total		(24,328	)		(14,765	)		3,917			(35,176	)
Net book value
Land		160,330									162,183
Buildings		46,498									42,465
Equipment and Machinery		1,475									2,897
Other<br>s		1,483									1,061
Total		209,786									208,606

The Group’s use of right assets mainly include leased land, buildings, equipment and machinery. The leases underlying assets classified as buildings are mainly the leased gas filling stations, oil storages and office buildings. The leases underlying assets classified as equipment and machinery are mainly drilling equipment, production equipment and other movable equipment.

(b)	Lease liabilities
	December 31,<br> 2022			December 31,<br> 2021
---	---	---	---	---	---	---
	RMB			RMB
Lease liabilities		125,760			129,848
Less: Lease liabilities due within one year		(7,560	)		(6,626	)
		118,200			123,222

Depreciation charged to profit or loss provided on right-of-use assets for the year ended December 31, 2022 was RMB 14,731 (2021: RMB 14,388).

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PETROCHINA COMPANY LIMITED

NOTES TO THE FINANCIAL STATEMENTS — (Continued)

(All amounts in millions, except for the per share data and otherwise stated)

Analysis of the undiscounted cash flow of the lease liabilities is as follows:

	December 31,<br> 2022		December 31,<br> 2021
	RMB		RMB
Within 1 year		13,244		12,495
Between 1 and 2 years		11,301		11,181
Between 2 and 5 years		30,995		30,541
Over 5 years		148,974		154,636
		204,514		208,853

21 INTANGIBLE AND OTHER NON-CURRENT ASSETS

	December 31, 2022							December 31, 2021
	Cost		Accumulated<br> amortization and<br> impairment losses			Net		Cost		Accumulated<br> amortization and<br> impairment losses			Net
	RMB		RMB			RMB		RMB		RMB			RMB
Patents and technical <br>know-how		10,196		(7,295	)		2,901		8,213		(6,905	)		1,308
Computer software		13,582		(10,169	)		3,413		13,016		(9,751	)		3,265
Goodwill<br><br>(i)		8,623		(1,306	)		7,317		8,023		(36	)		7,987
Other<br>s		27,502		(11,505	)		15,997		27,335		(10,889	)		16,446
Intangible assets		59,903		(30,275	)		29,628		56,587		(27,581	)		29,006
Other assets							40,185							37,338
							69,813							66,344
(i)	Goodwill primarily relates to the acquisition of Singapore Petroleum Company and PetroIneos Trading Limited, subsidiaries in the Marketing segment, completed in 2009 and 2011, respectively.
---	---

The impairment of goodwill shall be tested in combination with its related asset groups. The recoverable amount of all cash-generating units has been determined based on the higher of fair value less costs to sell and value in use. These calculations use post-tax cash flow projections based on financial budgets prepared by management. The post-tax discount rates reflect specific risks relating to the cash-generating unit.

For impairment test of the goodwill, the post-tax discount rates ranged 9.0% to 18.6% (2021: 8.5% to 14.7%, 2020: 4.9%

to 10.5%) were used by the management, and the impairment loss was charged for the goodwill for the year ended December 31, 2022 amounted to RMB 1,227 (2021: nil, 2020:nil).

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PETROCHINA COMPANY LIMITED

NOTES TO THE FINANCIAL STATEMENTS — (Continued)

(All amounts in millions, except for the per share data and otherwise stated)

22	INVENTORIES
	December 31, 2022			December 31, 2021
---	---	---	---	---	---	---
	RMB			RMB
Crude oil and other raw materials		56,756			40,334
Work in progress		14,448			15,393
Finished goods		104,722			88,811
Spare parts and consumables		109			91
		176,035			144,629
Less: Write down in inventories		(8,284	)		(781	)
		167,751			143,848

The Group recognises inventories, includes unsold products produced before that property, plant and equipment is available for use. The cost of such inventories includes incremental costs directly attributable to the p rodu ction process and indirect manufacturing costs allocated by a reasonable method.

23	ACCOUNTS RECEIVABLE
	December 31, 2022			December 31, 2021
---	---	---	---	---	---	---
	RMB			RMB
Accounts receivable		74,917			54,160
Less: Provision for impairment of accoun<br>t<br>s receivable		(2,889	)		(1,414	)
		72,028			52,746

The aging analysis of accounts receivable (net of impairment of accounts receivable) based on the invoice date (or date of revenue recognition, if earlier), at December 31, 2022 and 2021 is as follows:

	December 31, 2022		December 31, 2021
	RMB		RMB
Within 1 year		71,307		51,533
Between 1 and 2 years		266		816
Between 2 and 3 years		302		194
Over 3 years		153		203
		72,028		52,746

The Group offers its customers credit terms up to 180 days.

Movements in the provision for impairment of accounts receivable are as follows:

	2022			2021			2020
	RMB			RMB			RMB
At beginning of the year		1,414			1,140			2,431
Provision for impairment of accounts receivable		1,598			396			426
Reversal of provision for impairment of accounts receivable		(124	)		(110	)		(76	)
Receivables written off as uncollectible and others		1			(12	)		(1,641	)
At end of the year		2,889			1,414			1,140

The Group measures loss allowance for accounts receivable at an amount equal to lifetime ECLs. The ECLs were calculated by reference to the historical actual credit loss experience. The rates were considered the

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PETROCHINA COMPANY LIMITED

NOTES TO THE FINANCIAL STATEMENTS — (Continued)

(All amounts in millions, except for the per share data and otherwise stated)

differences between economic conditions during the period over which the historical data has been collected, current conditions and the Group’s view of economic conditions over the expected lives of the receivables. The Group performed the calculation of ECL rates by the operating segment and geography.

	Gross<br> carrying<br> amount		Impairment<br> provision on<br> individual<br> basis		Impairment provision on<br> provision matrix basis					Loss<br> allowance
				Weighted-<br> average loss<br> rate			Impairment<br> provision
December 31, 2022	RMB		RMB		%			RMB		RMB
Current (not past due)		68,951		—		1.1	%		803		803
Within 1 year past due		3,951		380		1.1	%		38		418
1 to 2 years past due		476		—		55.3	%		263		263
2 to 3 years past due		522		172		70.3	%		246		418
Over 3 years past due		1,017		446		94.7	%		541		987
Total		74,917		998					1,891		2,889
	Gross<br> carrying<br> amount		Impairment<br> provision on<br> individual<br> basis		Impairment provision on<br> provision matrix basis					Loss<br> allowance
---	---	---	---	---	---	---	---	---	---	---	---
				Weighted-<br> average loss<br> rate			Impairment<br> provision
December 31, 2021	RMB		RMB		%			RMB		RMB
Current (not past due)		49,185		—		0.1	%		55		55
Within 1 year past due		3,153		26		1.6	%		50		76
1 to 2 years past due		648		153		25.5	%		126		279
2 to 3 years past due		329		67		45.0	%		118		185
Over 3 years past due		845		352		94.7	%		467		819
Total		54,160		598					816		1,414
24	DERIVATIVE FINANCIAL INSTRUMENTS
---	---

The derivative financial instruments of the Group are mainly commodity futures, commodity swaps and commodity forwards contracts, as presented in Note 4.3.

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PETROCHINA COMPANY LIMITED

NOTES TO THE FINANCIAL STATEMENTS — (Continued)

(All amounts in millions, except for the per share data and otherwise stated)

25	PREPAYMENTS AND OTHER CURRENT ASSETS
	December 31, 2022			December 31, 2021
---	---	---	---	---	---	---
	RMB			RMB
Other receivables(i)		47,410			40,983
Advances to suppliers		14,261			14,900
		61,671			55,883
Less: Provision for impairment		(3,124	)		(2,986	)
		58,547			52,897
Value-added tax recoverable		34,256			42,644
Prepaid expenses		414			505
Prepaid income taxes		12,107			4,853
Other current assets(ii)		14,330			11,921
		119,654			112,820
(i)	As of December 31, 2022 and December 31, 2021, the Group’s other receivables are mainly in the first stage.
---	---
(ii)	Other current assets consist primarily of receivables from associates, dividends receivables, interests receivables, etc.
---	---
26	FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME
---	---

Financial assets at fair value through other comprehensive income represent mainly bills of acceptance issued by banks. The Group’s business model of financial assets at fair value through other comprehensive income is achieved both by collecting contractual cash flows and selling of these assets. All financial assets at fair value through other comprehensive income are due within one year, and their fair values approximate the face values of the bills.

27	CASH AND CASH EQUIVALENTS

The weighted average effective interest rate on bank deposits was 1.83% per annum for the year ended December 31, 2022 (2021: 1.68% per annum, 2020: 1.69% per annum).

28	ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
	December 31, 2022		December 31, 2021
---	---	---	---	---
	RMB		RMB
Trade payables		172,546		140,538
Salaries and welfare payable		9,385		8,975
Dividends payable by subsidiaries to <br>non-controlling<br> shareholders		581		419
Notes payables		15,630		20,089
Construction fee and equipment cost payables		116,571		92,683
Others (i)		57,656		36,417
		372,369		299,121
(i)	Others consist primarily of operating lease payable, deposit, earnest money, caution money and insurance payables, etc.
---	---

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PETROCHINA COMPANY LIMITED

NOTES TO THE FINANCIAL STATEMENTS — (Continued)

(All amounts in millions, except for the per share data and otherwise stated)

The aging analysis of trade payables at December 31, 2022 and 2021 is as follows:

	December 31, 2022		December 31, 2021
	RMB		RMB
Within 1 year		162,431		130,863
Between 1 and 2 years		2,682		2,767
Between 2 and 3 years		1,072		948
Over 3 years		6,361		5,960
		172,546		140,538
29	CONTRACT LIABILITIES
---	---

As of December 31, 2022 and December 31, 2021, contract liabilities mainly represented advances from customers related to the sales of refined oil, natural gas, chemical products and crude oil, etc. The majority of related obligations were expected to be performed with corresponding revenue recognised within one year. Substantially all of contract liabilities at the beginning of the year has been recognised as revenue for the year ended December 31, 2022.

30	BORROWINGS
	December 31, 2022		December 31, 2021
---	---	---	---	---
	RMB		RMB
Short-term borrowings excluding current portion of long-term borrowings		38,375		40,010
Current portion of long-term borrowings		62,264		13,265
		100,639		53,275
Long-term borrowings		222,478		287,175
		323,117		340,450
	December 31, 2022		December 31, 2021
---	---	---	---	---
	RMB		RMB
Bank loans		110,117		114,469
Corporate debentures		18,468		20,170
Medium-term notes		59,380		71,000
Other loans		135,152		134,811
		323,117		340,450

Borrowings of the Group of RMB 11,186 were guaranteed by CNPC and its fellow subsidiaries and non-controlling interests of the subsidiaries of the Group at December 31, 2022 (2021: RMB 13,558).

As of December 31, 2022, the RMB pledge borrowings were mainly pledged by natural gas charging rights. The US dollar pledge borrowings were pledged by the bank deposit of RMB 3,286 (2021: RMB 3,286).

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PETROCHINA COMPANY LIMITED

NOTES TO THE FINANCIAL STATEMENTS — (Continued)

(All amounts in millions, except for the per share data and otherwise stated)

The Group’s borrowings include mortgage loans totaling RMB 1,074 at December 31,2022 (2021: RMB 1,185), which were secured by property, plant and equipment with net book value of RMB 861 and intangible and other non-current assets with net book value of RMB 475.

	December 31, 2022			December 31, 2021
	RMB			RMB
Total borrowings:
— interest free		103			101
— at fixed rates		112,588			131,705
— at floating rates		210,426			208,644
		323,117			340,450
Weighted average effective interest rates:
— bank loans		3.04	%		2.18	%
— corporate debentures		4.05	%		4.14	%
— medium-term notes		3.12	%		3.28	%
— other loans		3.47	%		2.51	%

The borrowings by major currency at December 31, 2022 and 2021 are as follows:

	December 31, 2022		December 31, 2021
	RMB		RMB
RMB		218,897		238,361
US Dollar		97,503		94,803
Other currency		6,717		7,286
		323,117		340,450

The fair values of the Group’s long-term borrowings including the current portion of long-term borrowings are RMB 286,770 at December 31, 2022 (2021: RMB 290,937). The carrying amounts of short-term borrowings approximate their fair values. The fair values are based on discounted cash flows using applicable discount rates based upon the prevailing market rates of interest available to the Group for financial instruments with substantially the same terms and characteristics at the dates of the consolidated statement of financial position. Such discount rates ranged from 2.13 % to 5.48 % per annum as of December 31, 2022 (2021: 0.10% to 5.14%) depending on the type of the borrowings.

The following table sets out the borrowings’ remaining contractual maturities at the date of the consolidated statement of financial position, which are based on contractual undiscounted cash flows including principal and interest, and the earliest contractual maturity date:

	December 31, 2022		December 31, 2021
	RMB		RMB
Within 1 year		107,461		58,923
Between 1 and 2 years		129,885		53,250
Between 2 and 5 years		102,490		226,124
After 5 years		16,500		28,053
		356,336		366,350

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PETROCHINA COMPANY LIMITED

NOTES TO THE FINANCIAL STATEMENTS — (Continued)

(All amounts in millions, except for the per share data and otherwise stated)

Reconciliation of movements of borrowings to cash flows arising from financing activities:

	2022			2021
	RMB			RMB
At beginning of the year		340,450			368,921
Changes from financing cash flows:
Increase in borrowings		866,348			810,092
Repayments of borrowings		(891,329	)		(836,434	)
Total changes from financing cash flows		(24,981	)		(26,342	)
Exchange adjustments		7,648			(2,129	)
At end of the year		323,117			340,450
31	SHARE CAPITAL
---	---
	December 31, 2022		December 31, 2021
---	---	---	---	---
	RMB		RMB
Registered, issued and fully paid:
A shares		161,922		161,922
H shares		21,099		21,099
		183,021		183,021

In accordance with the Restructuring Agreement between CNPC and the Company effective as of November 5, 1999, the Company issued 160 billion state-owned shares in exchange for the assets and liabilities transferred to the Company by CNPC. The 160 billion state-owned shares were the initial registered capital of the Company with a par value of RMB 1.00 yuan per share.

On April 7, 2000, the Company issued 17,582,418,000 shares, represented by 13,447,897,000 H shares and 41,345,210 ADSs (each representing 100 H shares) in a global initial public offering (“Global Offering”) and the trading of the H shares and the ADSs on The Stock Exchange of Hong Kong Limited and the New York Stock Exchange commenced on April 7, 2000 and April 6, 2000, respectively. Pursuant to the approval of the China Securities Regulatory Commission, 1,758,242,000 state-owned shares of the Company owned by CNPC were converted into H shares for sale in the Global Offering. The H shares and ADSs were issued at prices of HK$ 1.28 per H share and US$ 16.44 per ADS respectively for which the net proceeds to the Company were approximately RMB 20 billion. The shares issued pursuant to the Global Offering rank equally with existing shares.

On September 1, 2005, the Company issued an additional 3,196,801,818 new H shares at HK$ 6.00 per share and net proceeds to the Company amounted to approximately RMB 19,692. CNPC also sold 319,680,182 state-owned shares it held concurrently with PetroChina’s sale of new H shares in September 2005.

On October 31, 2007, the Company issued 4,000,000,000 new A shares at RMB 16.70 yuan per share and net proceeds to the Company amounted to approximately RMB 66,243 and the listing and trading of the A shares on the Shanghai Stock Exchange commenced on November 5, 2007.

Following the issuance of the A shares, all the existing state-owned shares issued before November 5, 2007 held by CNPC have been registered with the China Securities Depository and Clearing Corporation Limited as A shares.

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PETROCHINA COMPANY LIMITED

NOTES TO THE FINANCIAL STATEMENTS — (Continued)

(All amounts in millions, except for the per share data and otherwise stated)

Shareholders’ rights are governed by the Company Law of the PRC that requires an increase in registered capital to be approved by the shareholders in shareholders’ general meetings and the relevant PRC regulatory authorities.

On September 8, 2022(EST), the Company’s ADSs were delisted from the NYSE.

32	RESERVES
	2022			2021
---	---	---	---	---	---	---
	RMB			RMB
Capital Reserve
Beginning balance		133,308			133,308
Ending balance		133,308			133,308
Statutory Common Reserve Fund<br>(a)
Beginning balance		211,970			203,557
Transfer from retained earnings		12,987			8,413
Ending balance		224,957			211,970
Special Reserve-Safety Fund Reserve
Beginning balance		9,231			10,810
Safety fund reserve		(741	)		(1,579	)
Ending balance		8,490			9,231
Currency Translation Differences<br>(b)
Beginning balance		(35,532	)		(32,848	)
Currency translation differences		3,758			(2,684	)
Ending balance		(31,774	)		(35,532	)
Other Reserves
Beginning balance		(10,417	)		(10,645	)
Transaction with <br>non-controlling<br> interests		—			(15	)
Fair value changes in equity investments measured at fair value through other comprehensive income		(10	)		79
Share of the other comprehensive income of associates and joint ventures accounted for using the equity method		654			(4	)
Cash flow hedges, net of deferred tax		11,273			—
Other		(3,760	)		168
Ending balance		(2,260	)		(10,417	)
		332,721			308,560
(a)	Pursuant to the PRC regulations and the Company’s Articles of Association, the Company is required to transfer 10% of its net profit, as determined under the PRC accounting regulations, to a Statutory Common Reserve Fund (“Reserve Fund”). Appropriation to the Reserve Fund may cease when the fund aggregates to 50% of the Company’s registered capital. The transfer to this reserve must be made before distribution of dividends to shareholders.
---	---

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PETROCHINA COMPANY LIMITED

NOTES TO THE FINANCIAL STATEMENTS — (Continued)

(All amounts in millions, except for the per share data and otherwise stated)

The Reserve Fund shall only be used to make good previous years’ losses, to expand the Company’s production operations, or to increase the capital of the Company. Upon approval of a resolution of shareholders’ in a general meeting, the Company may convert its Reserve Fund into share capital and issue bonus shares to existing shareholders in proportion to their original shareholdings or to increase the nominal value of each share currently held by them, provided that the balance of the Reserve Fund after such issuance is not less than 25% of the Company’s registered capital.

(b)	The translation reserve comprises all foreign currency differences arising from the translation of the financial statements of foreign operations.
33	DEFERRED TAXATION
---	---

The movements in the deferred taxation account are as follows:

	2022			2021			2020
	RMB			RMB			RMB
At beginning of the year		(14,477	)		(5,016	)		2,848
Transfer to profit and loss (Note 12)		14,033			(9,685	)		(7,666	)
(Debit)/credit<br> to other comprehensive income		(873	)		224			(198	)
At end of the year		(1,317	)		(14,477	)		(5,016	)

Deferred tax balances before offset are attributable to the following items:

	December 31,<br> 2022			December 31,<br> 2021
	RMB			RMB
Deferred tax assets:
Receivables and inventories		14,479			9,124
Tax losses		1,560			1,892
Impairment, depreciation and depletion of <br>long-term<br> assets		10,498			8,250
Others		8,672			7,897
Total deferred tax assets		35,209			27,163
Deferred tax liabilities:
Accelerated tax depreciation		9,436			16,023
Others		27,090			25,617
Total deferred tax liabilities		36,526			41,640
Net deferred tax liabilities		(1,317	)		(14,477	)

Deferred tax balances after offset are listed as follows:

	December 31,<br> 2022		December 31,<br> 2021
	RMB		RMB
Deferred tax assets		19,699		12,161
Deferred tax liabilities		21,016		26,638

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PETROCHINA COMPANY LIMITED

NOTES TO THE FINANCIAL STATEMENTS — (Continued)

(All amounts in millions, except for the per share data and otherwise stated)

At December 31, 2022, certain subsidiaries of the Group did not recognize deferred tax asset of deductible tax losses carried forward of RMB 112,702 (2021: RMB 109,752), of which RMB 5,229 (2021: RMB 13,866) was incurred for the year ended December 31, 2022, because it was not probable that the related tax benefit will be realized. These deductible tax losses carried forward of RMB 274, RMB 629, RMB 3,833, RMB

2,580 and RMB 105,386 will expire in 2023, 2024, 2025, 2026, 2027 and thereafter, respectively.

34	ASSET RETIREMENT OBLIGATIONS
	2022			2021			2020
---	---	---	---	---	---	---	---	---	---
	RMB			RMB			RMB
At beginning of the year		129,405			114,819			137,935
Net liabilities incurred, including reassessment<br>(i)		11,954			16,057			(24,059	)
Liabilities settled		(4,955	)		(5,969	)		(3,510	)
Accretion expense (Note 10)		5,681			4,696			5,107
Currency translation differences		(4	)		(198	)		(654	)
At end of the year		142,081			129,405			114,819
(i)	In 2020, domestic oil and gas field companies adjusted the discount period with reference to the remaining life corresponding to the proved developed reserves in each block, updated various oil and gas assets retirement standards based on the latest legal requirements, technology and price levels, reviewed the adopted discount rate, and then recalculate and adjust the provision for the asset retirement expense of oil and gas properties at the end of the year. The changes in related accounting estimates and new liabilities provided resulted in a reduction in estimated liabilities of RMB 24,059.
---	---

Asset retirement obligations relate to oil and gas properties (Note 16).

35	PENSIONS

The Group participates in various employee retirement benefit plans (Note 3(z)). Expenses incurred by the Group in connection with the retirement benefit plans for the year ended December 31, 2022 amounted to RMB 20,728 (2021: RMB 19,939, 2020: RMB 16,833).

For the years ended December 31, 2022

, 2021 and 2020

, the Group had no forfeited in the defined contribution plans available for the Group used to reduce the existing contribution level.

36	CONTINGENT LIABILITIES

(a) Bank and other guarantees

At December 31, 2022 and 2021, the Group did not guarantee related parties or third parties any significant borrowings or others.

(b) Environmental liabilities

The PRC has enacted comprehensive environmental laws and regulations that affect the operation of the oil and gas industry. Management believes that there are no probable liabilities under existing legislation, except for the amounts which have already been reflected in the consolidated financial statements, which may have a material adverse effect on the financial position of the Group.

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PETROCHINA COMPANY LIMITED

NOTES TO THE FINANCIAL STATEMENTS — (Continued)

(All amounts in millions, except for the per share data and otherwise stated)

As of December 31, 2022, the amounts of asset retirement obligations which have already been reflected in the consolidated financial statements relating to environmental liability were RMB 142,081 (2021: RMB 129,405) (Note 3 4 ).

(c) Legal contingencies

During the reporting period, the Group has complied with domestic and overseas laws and regulatory requirements. Notwithstanding certain insignificant lawsuits as well as other proceedings outstanding, management believes that any resulting liabilities will not have a material adverse effect on the financial position of the Group.

(d) Group insurance

The Group has insurance coverage for certain assets that are subject to significant operating risks, third-party liability insurance against claims relating to personal injury, property and environmental damages that result from accidents and employer liabilities insurance. The potential effect on the financial position of the Group of any liabilities resulting from future uninsured incidents cannot be estimated by the Group at present.

37	COMMITMENTS

(a) Capital commitments

At December 31, 2022, the Group’s capital commitments contracted but not provided for, mainly relating to property, plant and equipment were RMB 882 (2021: RMB 882). These capital commitments are transactions mainly with CNPC and its fellow subsidiaries.

(b) Exploration and production licenses

The Company is obligated to make annual payments with respect to its exploration and production licenses to the Ministry of Natural Resources. Payments incurred were RMB 482 for the year ended December 31, 2022 (2021: RMB 744, 2020: RMB 700).

According to the current policy, estimated annual payments for the next five years are as follows:

	December 31, 2022		December 31, 2021
	RMB		RMB
Within one year		500		500
Between one and two years		500		500
Between two and three years		500		500
Between three and four years		500		500
Between four and five years		500		500

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PETROCHINA COMPANY LIMITED

NOTES TO THE FINANCIAL STATEMENTS — (Continued)

(All amounts in millions, except for the per share data and otherwise stated)

38	MAJOR CUSTOMERS

The Group’s major customers are as follows:

	2022				2021				2020
	Revenue		Percentage<br> of total<br><br> <br>revenue		Revenue		Percentage<br> of total<br><br> <br>revenue		Revenue		Percentage<br> of total<br><br> <br>revenue
	RMB		%		RMB		%		RMB		%
China Petrochemical Corporation and its fellow subsidiaries		121,312		4		136,500		5		98,636		5
CNPC and its fellow subsidiaries		81,112		2		69,058		3		63,623		3
		202,424		6		205,558		8		162,259		8
39	RELATED PARTY TRANSACTIONS
---	---

CNPC, the immediate parent of the Company, is a limited liability company incorporated in PRC and directly controlled by the PRC government. Equity interest and voting rights of CNPC in the Company in 2022 was 80.54% (2021: 80.41%)

Related parties include CNPC and its fellow subsidiaries, their associates and joint ventures, other state-owned enterprises and their subsidiaries which the PRC government has control, joint control or significant influence over, and enterprises which the Group is able to control, jointly control or exercise significant influence over, key management personnel of the Company and CNPC and their close family members.

(a) Transactions with CNPC and its fellow subsidiaries, associates and joint ventures

The Group has extensive transactions with other companies in CNPC and its fellow subsidiaries, associates and joint ventures. Due to these relationships, it is possible that the terms of the transactions between the Group and other members of CNPC and its fellow subsidiaries, associates and joint ventures are not the same as those that would result from transactions with other related parties or wholly unrelated parties.

The principal related party transactions with CNPC and its fellow subsidiaries, associates and joint ventures, which were carried out in the ordinary course of business, are as follows:

The Company and CNPC entered into a new Comprehensive Products and Services Agreement on August 27, 2020 for a period of three years effective from January 1, 2021. The Comprehensive Products and Services Agreement provides for a range of products and services which may be required and requested by either party. The products and services to be provided by CNPC and its fellow subsidiaries to the Group under the Comprehensive Products and Services Agreement include construction and technical services, production services, supply of material services, social services, ancillary services and financial services. The products and services required and requested by either party are provided in accordance with (1) government-prescribed prices; or (2) where there is no government-prescribed price, with reference to relevant market prices; or (3) where neither (1) nor (2) is applicable, then the actual cost incurred or the agreed contractual prices are used.

On August 25, 2011, based on the Land Use Rights Leasing Contract signed for a period of 50 years from 2000, the Company and CNPC entered into a supplemental agreement to the Land Use Rights Leasing Contract which took effect on January 1, 2012. The expiry date of the supplemental agreement is the same as the Land Use Rights Leasing Contract, which is in 2050. The Company and CNPC may adjust area and rental payable for the leased land parcels every three years taking into consideration of production and operations of the Company and the prevailing market price. On August 27, 2020, the Company and CNPC each issued a confirmation letter

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PETROCHINA COMPANY LIMITED

NOTES TO THE FINANCIAL STATEMENTS — (Continued)

(All amounts in millions, except for the per share data and otherwise stated)

to the Land Use Rights Leasing Contract, which adjusted the rental payable and the area for the leased land parcels with effect from January 1, 2021. The Company agreed to rent from CNPC and its fellow subsidiaries parcels of land with an aggregate area of approximately 1,142 million square metres with annual rental payable (exclusive of tax and government charges) approximately RMB 5,673 based on the area of leased land parcels and the current market conditions. Apart from the annual rental payable and are for the leased parcels, the other terms in the Land Use Rights Leasing Contract and supplemental agreement remained.

On August 24, 2017, the Company entered into a new Buildings Leasing Contract with CNPC, which took effect on January 1, 2018 for a period of 20 years. The Company and CNPC may adjust the area of buildings leased and the rental fees every three years as appropriate by reference to the production and operations of the Company and the prevailing market prices, but the adjusted rental shall not exceed the comparable fair market prices. On August 27, 2020, the Company and CNPC issued a confirmation letter to the Buildings Leasing Contract, which adjusted the annual rental payable and the area for the leased which took effect on January 1, 2021. Buildings covering an aggregate area of 1,287.5 thousand square meters were leased at annual rental payable approximately RMB 713 in accordance with the confirmed rental area and the current property market conditions. Apart from the annual rental payable and area of the leased building, the other terms in the Building Leasing Contract remains unchanged.

Transactions with CNPC and its fellow subsidiaries, associates and joint ventures are summarised as follows:

•	Sales of goods represent the sale of crude oil, refined products, chemical products and natural gas, etc. The total amount of these transactions amounted to RMB 128,265 for the year ended December 31, 2022 (2021: RMB 115,587, 2020: RMB 105,535).
•	Sales of services principally represent the provision of services in connection with the transportation of crude oil and natural gas, etc. The total amount of these transactions amounted to RMB 34,872 for the year ended December 31, 2022 (2021: RMB 8,313, 2020: RMB 8,593).
---	---
•	Purchases of goods and services principally represent construction and technical services, production services, social services, ancillary services and material supply services, etc. The total amount of these transactions amounted to RMB 489,353 for the year ended December 31, 2022 (2021: RMB 416,561, 2020: RMB 321,858).
---	---
•	Purchases of assets principally represent the purchases of manufacturing equipment, office equipment and transportation equipment, etc. The total amount of these transactions amounted to RMB 1,196 for the year ended December 31, 2022 (2021: RMB 1,051, 2020: RMB 767).
---	---
•	Interest income represents interests from deposits placed with CNPC and its fellow subsidiaries. The total interest income amounted to RMB 705 for the year ended December 31, 2022 (2021: RMB 270, 2020: RMB 381). The balance of deposits at December 31, 2022 was RMB 47,656 (2021: RMB 36,489).
---	---
•	Interest expense and other financial service expense, principally represents interest charged on the loans from CNPC and its fellow subsidiaries, insurance fee charged on the insurance services from CNPC and its fellow subsidiaries, etc. The total amount of these transactions amounted to RMB 4,435 for the year ended December 31, 2022 (2021: RMB 4,878, 2020: RMB 8,051).
---	---
•	The borrowings from CNPC and its fellow subsidiaries at December 31, 2022 were RMB 133,453 (2021: RMB 133,800).
---	---
•	Rents and other payments paid to CNPC and its fellow subsidiaries including (1) the rental expense paid by the Group according to Land Use Rights Leasing Contract and Buildings Leasing Contract; (2) the payable by the Group (including all rents, leasing service fees and prices for exercising purchase
---	---

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PETROCHINA COMPANY LIMITED

NOTES TO THE FINANCIAL STATEMENTS — (Continued)

(All amounts in millions, except for the per share data and otherwise stated)

options) for the period according to the leasing agreements entered into by the Group and CNPC and its fellow subsidiaries. The total rents and other payments amounted to RMB 6,996 for the year ended December 31, 2022. (2021: RMB 6,797, 2020: RMB 8,294).

Amounts due from and to CNPC and its fellow subsidiaries, associates and joint ventures included in the following accounts captions are summarized as follows:

	December 31,<br> 2022		December 31,<br> 2021
	RMB		RMB
Accounts receivable		3,810		7,395
Prepayments and other current assets		20,566		24,925
Financial assets at fair value through other comprehensive income		1,000		1,850
Intangible and other <br>non-current<br> assets		16,758		15,696
Accounts payable and accrued liabilities		57,459		49,526
Contract liabilities		520		613
Lease liabilities		98,143		101,453

(b) Key management compensation

	Year End December 31,
	2022		2021		2020
	RMB’000		RMB’000		RMB’000
Emoluments and other benefits		16,515		15,143		16,598
Contribution to retirement benefit scheme		2,052		1,568		1,338
		18,567		16,711		17,936

(c) Transactions with other state-controlled entities in the PRC

Apart from the transactions with CNPC and its fellow subsidiaries, associates and joint ventures, the Group’s transactions with other state-controlled entities include but are not limited to the following:

•	Sales and purchases of goods and services;
•	Purchases of assets;
---	---
•	Lease of assets; and
---	---
•	Bank deposits and borrowings
---	---

These transactions are conducted in the ordinary course of the Group’s business.

40	SEGMENT INFORMATION

The Group is principally engaged in a broad range of petroleum related products, services and activities. The Group’s operating segments comprise: Oil, Gas and New energy resources, Refining, Chemicals and New materials, Marketing, Natural Gas Sales and Head Office and Other. On the basis of these operating segments, the management of the Company assesses the segmental operating results and allocates resources. Sales between operating segments are conducted principally at market price. Additionally, the Group presents geographical information based on entities located in regions with a similar risk profile.

The Oil, Gas and New energy resources segment is engaged in the exploration, development, transportation, production, marketing of crude oil and natural gas and new energy resources business.

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PETROCHINA COMPANY LIMITED

SUPPLEMENTARY INFORMATION ON OIL AND GAS EXPLORATION

AND PRODUCTION ACTIVITIES (UNAUDITED)

(All amounts in millions, except for the per share data and otherwise stated)

The Refining, Chemicals and New materials segment is engaged in the refining of crude oil and petroleum products, production and marketing of primary petrochemical products, derivative petrochemical products, other chemical products and new materials business.

The Marketing segment is engaged in the marketing of refined products and non-oil products, and the trading business.

The Natural Gas Sales segment is engaged in the transportation and sale of natural gas.

The Head Office and Other segment relates to cash management and financing activities, the corporate center, research and development, and other business services supporting the other operating business segments of the Group.

In 2020, in order to promote the transformation and upgrading of refining and chemicals business, promote the quality-oriented business development of refined products and lubricating oil production and marketing, promote specialized operation, market-oriented operation, lean management and integrated coordination, the Group transferred PetroChina Fuel Oil Co., Ltd. and PetroChina Lubricant Company from Marking to Refining, Chemicals and New materials segment, and synchronize budget control and performance evaluation indicator accordingly.

The accounting policies of the operating segments are the same as those described in Note 3 — “Summary of Principal Accounting Policies”.

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PETROCHINA COMPANY LIMITED

SUPPLEMENTARY INFORMATION ON OIL AND GAS EXPLORATION

AND PRODUCTION ACTIVITIES (UNAUDITED) — (Continued)

(All amounts in millions, except for the per share data and otherwise stated)

The segment information for the operating segments for the years ended December 31, 2022, 2021 and 2020 are as follows:

Year Ended December 31, 2022	Oil, Gas and<br> New Energy<br> Resources			Refining,<br> Chemicals<br> and New<br> Materials			Marketing			Natural Gas<br> Sales			Head Office and<br> Other			Total
	RMB			RMB			RMB			RMB			RMB			RMB
Revenue		929,279			1,164,596			2,771,894			519,211			5,473			5,390,453
Less: Intersegment sales		(777,846	)		(827,572	)		(520,502	)		(22,156	)		(3,210	)		(2,151,286	)
Revenue from external customers		151,433			337,024			2,251,392			497,055			2,263			3,239,167
Depreciation, depletion and amortisation		(182,989	)		(27,265	)		(20,563	)		(5,329	)		(1,890	)		(238,036	)
Including: Impairment losses of property, plant and equipment		(17,090	)		(3,394	)		(1,231	)		(680	)		—			(22,395	)
Profit/(loss) from operations		165,748			40,570			14,374			12,957			(16,989	)		216,660
Finance costs:
Exchange gain																	23,772
Exchange loss																	(25,590	)
Interest income																	4,738
Interest expense																	(21,554	)
Total net finance costs																	(18,634	)
Share of profit / (loss) of associates and joint ventures		4,765			37			(195	)		8,323			2,321			15,251
Profit before income tax expense																	213,277
Income tax expense																	(49,295	)
Profit for the year																	163,982
Segment assets		1,457,543			482,452			596,463			171,643			1,646,141			4,354,242
Other assets																	31,806
Investments in associates and joint ventures		46,053			2,205			17,829			169,903			33,579			269,569
Elimination of intersegment balances (a)																	(1,982,132	)
Total assets																	2,673,485
Capital expenditures		221,592			41,771			5,069			4,936			939			274,307
Segment liabilities		581,261			243,417			404,991			135,361			590,604			1,955,634
Other liabilities																	74,530
Elimination of intersegment balances (a)																	(894,532	)
Total liabilities																	1,135,632

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PETROCHINA COMPANY LIMITED

SUPPLEMENTARY INFORMATION ON OIL AND GAS EXPLORATION

AND PRODUCTION ACTIVITIES (UNAUDITED) — (Continued)

(All amounts in millions, except for the per share data and otherwise stated)

Year Ended December 31, 2021	Oil, Gas and<br> New Energy<br> Resources			Refining,<br> Chemicals<br><br> <br>and New<br> Materials			Marketing			Natural Gas<br> Sales			Head Office and<br> Other			Total
	RMB			RMB			RMB			RMB			RMB			RMB
Revenue		688,334			974,972			2,170,062			417,022			3,894			4,254,284
Less: Intersegment sales		(571,705	)		(650,018	)		(397,485	)		(19,526	)		(1,201	)		(1,639,935	)
Revenue from external customers		116,629			324,954			1,772,577			397,496			2,693			2,614,349
Depreciation, depletion and amortisation		(175,329	)		(28,466	)		(20,338	)		(5,288	)		(1,848	)		(231,269	)
Including: Impairment losses of property, plant and equipment		(20,218	)		(4,681	)		(1,396	)		(176	)		—			(26,471	)
Profit/(loss) from operations		68,452			49,740			13,277			43,965			(14,281	)		161,153
Finance costs:
Exchange gain																	13,377
Exchange loss																	(12,839	)
Interest income																	2,984
Interest expense																	(19,739	)
Total net finance costs																	(16,217	)
Share of profit of associates and joint ventures		2,633			68			680			7,570			2,316			13,267
Profit before income tax expense																	158,203
Income tax expense																	(43,507	)
Profit for the year																	114,696
Segment assets		1,391,129			457,914			520,938			164,934			1,573,900			4,108,815
Other assets																	17,014
Investments in associates and joint ventures		44,289			1,966			19,020			169,611			30,899			265,785
Elimination of intersegment balances (a)																	(1,889,352	)
Total assets																	2,502,262
Capital expenditures		178,259			54,487			10,982			6,750			700			251,178
Segment liabilities		550,365			199,159			349,609			128,490			566,602			1,794,225
Other liabilities																	103,412
Elimination of intersegment balances (a)																	(804,244	)
Total liabilities																	1,093,393

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PETROCHINA COMPANY LIMITED

SUPPLEMENTARY INFORMATION ON OIL AND GAS EXPLORATION

AND PRODUCTION ACTIVITIES (UNAUDITED) — (Continued)

(All amounts in millions, except for the per share data and otherwise stated)

Year Ended December 31, 202<br>0	Oil, Gas<br> and New<br> Energy<br> Resources			Refining,<br> Chemicals<br><br> <br>and New<br> Materials			Marketing			Natural<br> Gas<br> Sales			Head<br><br> <br>Office and<br><br> <br>Other			Total
	RMB			RMB			RMB			RMB			RMB			RMB
Revenue		530,807			774,775			1,497,533			370,771			3,547			3,177,433
Less: Intersegment sales		(437,670	)		(492,667	)		(276,503	)		(35,437	)		(1,320	)		(1,243,597	)
Revenue from external customers		93,137			282,108			1,221,030			335,334			2,227			1,933,836
Depreciation, depletion and amortization		(150,849	)		(23,893	)		(17,833	)		(19,475	)		(1,825	)		(213,875	)
Including: Impairment losses of property, plant and equipment		(15,364	)		—			(3	)		—			—			(15,367	)
Profit / (loss) from operations		23,092			(1,834	)		(2,906	)		72,410			(14,825	)		75,937
Finance costs:
Exchange gain																	14,387
Exchange loss																	(14,279	)
Interest income																	3,023
Interest expense																	(26,528	)
Total net finance costs																	(23,397	)
Share of (loss)/profit of associates and joint ventures		(616	)		(24	)		(728	)		2,128			2,773			3,533
Profit before income tax expense																	56,073
Income tax expense																	(22,588	)
Profit for the year																	33,485
Segment assets		1,452,554			432,022			489,984			195,353			1,631,577			4,201,490
Other assets																	17,361
Investments in associates and joint ventures		41,461			1,289			18,239			160,730			28,884			250,603
Elimination of intersegment balances <br>(a)																	(1,981,328	)
Total assets																	2,488,126
Capital expenditures		186,620			21,810			16,294			21,143			626			246,493
Segment liabilities		658,521			186,332			321,460			192,456			573,340			1,932,109
Other liabilities																	80,104
Elimination of intersegment balances <br>(a)																	(890,708	)
Total liabilities																	1,121,505

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PETROCHINA COMPANY LIMITED

SUPPLEMENTARY INFORMATION ON OIL AND GAS EXPLORATION

AND PRODUCTION ACTIVITIES (UNAUDITED) — (Continued)

(All amounts in millions, except for the per share data and otherwise stated)

Geographical information

	Revenue						Non-current<br> assets <br>(b)
	2022		2021		2020		December 31,<br> 2022		December 31,<br> 2021
	RMB		RMB		RMB		RMB		RMB
China’s mainland		1,888,906		1,626,616		1,212,821		1,853,462		1,838,505
Other		1,350,261		987,733		721,015		178,343		165,117
		3,239,167		2,614,349		1,933,836		2,031,805		2,003,622
(a)	Elimination of intersegment balances represents elimination of intersegment accounts and investments.
---	---
(b)	Non-current<br> assets mainly include <br>non-current<br> assets other than financial instruments and deferred tax assets.
---	---
41	APPROVAL OF FINANCIAL STATEMENTS
---	---

The financial statements were approved by the Board of Directors on April  28 , 2023.

In accordance with the Accounting Standards Update 2010-03 Extractive Activities – Oil and Gas (Topic 932): Oil and Gas Reserve Estimation and Disclosures (an update of Accounting Standards Codification Topic 932 Extractive Activities – Oil and Gas or “ASC 932”) issued by the Financial Accounting Standards Board and corresponding disclosure requirements of the U.S. Securities and Exchange Commission, this section provides supplemental information on oil and gas exploration and development; and results of operation related to oil and gas producing activities of the Company and its subsidiaries (the “Group”) and also the Group’s investments that are accounted for using the equity method of accounting.

The supplemental information presented below covers the Group’s proved oil and gas reserves estimates, historical cost information pertaining to capitalized costs, costs incurred for property acquisitions, exploration and development activities, result of operations for oil and gas producing activities, standardized measure of estimated discounted future net cash flows and changes in estimated discounted future net cash flows.

The “Other” geographic area includes oil and gas producing activities principally in countries such as Kazakhstan, Peru and Canada. As the Group does not have significant reserves held through its investments accounted for using the equity method, information presented in relation to these equity method investments is presented in the aggregate.

Proved Oil and Gas Reserve Estimates

Proved oil and gas reserves cannot be measured exactly. Reserve estimates are based on many factors related to reservoir performance that require evaluation by the engineers interpreting the available data, as well as price and other economic factors. The reliability of these estimates at any point in time depends on both the quality and quantity of the technical and economic data, and the production performance of the reservoirs as well as engineering judgment. Consequently, reserve estimates are subject to revision as additional data become available during the producing life of a reservoir. When a commercial reservoir is discovered, proved reserves are initially determined based on limited data from the first well or wells. Subsequent data may better define the extent of the reservoir and additional production performance, well tests and engineering studies will likely improve the reliability of the reserve estimate. The evolution of technology may also result in the application of improved recovery techniques such as supplemental or enhanced recovery projects, or both, which have the potential to increase reserves.

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PETROCHINA COMPANY LIMITED

SUPPLEMENTARY INFORMATION ON OIL AND GAS EXPLORATION

AND PRODUCTION ACTIVITIES (UNAUDITED) — (Continued)

(All amounts in millions, except for the per share data and otherwise stated)

Proved oil and gas reserves are the estimated quantities of crude oil and natural gas, which, by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be economically producible from a given date forward, from known reservoirs, and under existing economic conditions, operating methods, and government regulation before the time at which contracts providing the right to operate expire, unless evidence indicates that renewal is reasonably certain, regardless of whether the estimate is a deterministic estimate or probabilistic estimate.

Existing economic conditions include prices and costs at which economic producibility from a reservoir is to be determined. The price shall be the average price during the 12-month period before the ending date of the period covered by this report, determined as an unweighted arithmetic average of the first-day-of-the-month price for each month within such period, unless prices are defined by contractual arrangements, excluding escalations based upon future conditions. The costs shall be that prevailing at the end of the period.

Proved developed oil and gas reserves are proved reserves that can be expected to be recovered:

a. Through existing wells with existing equipment and operating methods or in which the cost of the required equipment is relatively minor compared with the cost of a new well.

b. Through installed extraction equipment and infrastructure operational at the time of the reserves estimate if the extraction is by means not involving a well.

Proved undeveloped oil and gas reserves are proved reserves that are expected to be recovered from new wells on undrilled acreage, or from existing wells where a relatively major expenditure is required for recompletion.

The taxes, fees and royalty in China are domestic tax schemes and are paid in cash to PRC authorities. The proved reserves includes quantities that are ultimately produced and sold to pay these taxes, fees and royalty.

Proved reserve estimates as of December 31, 2022, 2021 and 2020 were based on reports prepared by DeGolyer and MacNaughton, McDaniel & Associates, Ryder Scott and GLJ independent engineering consultants.

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PETROCHINA COMPANY LIMITED

SUPPLEMENTARY INFORMATION ON OIL AND GAS EXPLORATION

AND PRODUCTION ACTIVITIES (UNAUDITED) — (Continued)

(All amounts in millions, except for the per share data and otherwise stated)

Estimated quantities of net proved crude oil and condensate and natural gas reserves and of changes in net quantities of proved developed and undeveloped reserves for each of the periods indicated are as follows:

	Crude Oil and<br> Condensate			Natural Gas			Total<br> – All products
	(million barrels)			(billion cubic<br> feet)			(million barrels of<br> oil equivalent)
Proved developed and undeveloped reserves
The Group
Reserves at December 31, 2019		7,253			76,236			19,959
Changes resulting from:
Purchase		15			107			33
Revisions of previous estimates		(1,553	)		(595	)		(1,652	)
Improved recovery		108			—			108
Extensions and discoveries		385			4,976			1,215
Sales		(80	)		(66	)		(91	)
Production		(922	)		(4,221	)		(1,626	)
Reserves at December 31, 2020		5,206			76,437			17,946
Changes resulting from:
Purchase		—			—			—
Revisions of previous estimates		1,160			(2,011	)		825
Improved recovery		117			27			121
Extensions and discoveries		472			4,885			1,286
Sales		(3	)		(2	)		(3	)
Production		(888	)		(4,420	)		(1,625	)
Reserves at December 31, 2021		6,064			74,916			18,550
Changes resulting from:
Purchase		2			—			2
Revisions of previous estimates		511			(3,156	)		(14	)
Improved recovery		125			131			146
Extensions and discoveries		622			6,237			1,662
Sales		—			—			—
Production		(906	)		(4,675	)		(1,685	)
Reserves at December 31, 2022		6,418			73,453			18,661
Proved developed reserves at:
December 31, 2020		4,654			42,077			11,667
December 31, 2021		5,375			42,576			12,471
December 31, 2022		5,574			41,508			12,492
Proved undeveloped reserves at:
December 31, 2020		552			34,360			6,279
December 31, 2021		689			32,340			6,079
December 31, 2022		844			31,945			6,169
Equity method investments
Share of proved developed and undeveloped reserves of associates and joint ventures
December 31, 2020		196			363			256
December 31, 2021		208			511			294
December 31, 2022		176			537			265

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PETROCHINA COMPANY LIMITED

SUPPLEMENTARY INFORMATION ON OIL AND GAS EXPLORATION

AND PRODUCTION ACTIVITIES (UNAUDITED) — (Continued)

(All amounts in millions, except for the per share data and otherwise stated)

At December 31, 2022, total proved developed and undeveloped reserves of the Group and equity method investments is 18,926 million barrels of oil equivalent (2021: 18,844 million barrels of oil equivalent, 2020: 18,202 million barrels of oil equivalent ), comprising 6,594 million barrels of crude oil and condensate (2021: 6,272 million barrels, 2020: 5,402 million barrels) and 73,990 billion cubic feet of natural gas (2021: 75,427 billion cubic feet

, 2020: 76,800 billion cubic feet).

At December 31, 2022, 5,696 million barrels (2021: 5,286 million barrels, 2020: 4,375 million barrels) of crude oil and condensate and 72,165 billion cubic feet (2021: 73,460 billion cubic feet, 2020: 74,794 billion cubic feet) of natural gas proved developed and undeveloped reserves of the Group are located within China’s mainland , and 722 million barrels (2021: 778 million barrels, 2020: 831 million barrels) of crude oil and condensate and 1,288 billion cubic feet (2021: 1,456 billion cubic feet

, 2020: 1,643 billion cubic feet) of natural gas proved developed and undeveloped reserves of the Group are located overseas.

Capitalized Costs

	December 31,<br> 2022			December 31,<br> 2021
	RMB			RMB
The Group
Property costs and producing assets		2,156,134			1,969,409
Support facilities		500,489			483,216
Construction-in-progress		122,564			119,583
Total capitalized costs		2,779,187			2,572,208
Accumulated depreciation, depletion and amortization		(1,820,994	)		(1,635,837	)
Net capitalized costs		958,193			936,371
Equity method investments
Share of net capitalized costs of associates and joint ventures		20,728			19,056

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PETROCHINA COMPANY LIMITED

SUPPLEMENTARY INFORMATION ON OIL AND GAS EXPLORATION

AND PRODUCTION ACTIVITIES (UNAUDITED) — (Continued)

(All amounts in millions, except for the per share data and otherwise stated)

Costs Incurred for Property Acquisitions, Exploration and Development Activities

	2022
	China’s<br> mainland		Other		Total
	RMB		RMB		RMB
The Group
Property acquisition costs		216		2,100		2,316
Exploration costs		38,662		551		39,213
Development costs		152,935		17,057		169,992
Total		191,813		19,708		211,521
Equity method investments
Share of costs of property acquisition, exploration and development of associates and joint ventures		—		2,324		2,324
	2021
---	---	---	---	---	---	---
	China’s<br> mainland		Other		Total
	RMB		RMB		RMB
The Group
Property acquisition costs		—		7,610		7,610
Exploration costs		37,351		879		38,230
Development costs		132,829		12,084		144,913
Total		170,180		20,573		190,753
Equity method investments
Share of costs of property acquisition, exploration and development of associates and joint ventures		—		2,110		2,110
	2020
	China’s<br> mainland		Other		Total
	RMB		RMB		RMB
The Group
Property acquisition costs		—		3,712		3,712
Exploration costs		35,862		1,051		36,913
Development costs		129,738		16,420		146,158
Total		165,600		21,183		186,783
Equity method investments
Share of costs of property acquisition, exploration and development of associates and joint ventures		—		1,462		1,462

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PETROCHINA COMPANY LIMITED

SUPPLEMENTARY INFORMATION ON OIL AND GAS EXPLORATION

AND PRODUCTION ACTIVITIES (UNAUDITED) — (Continued)

(All amounts in millions, except for the per share data and otherwise stated)

Results of Operations for Oil and Gas Producing Activities

The results of operations for oil and gas producing activities for the years ended December 31, 2022, 2021 and 2020 are presented below. “Revenue” includes sales to third parties and inter-segment sales (at arm’s-length prices), net of value-added taxes. Resource tax, crude oil special gain levy and other taxes are included in “taxes other than income taxes”. Income taxes are computed using the applicable statutory tax rate, reflecting tax deductions and tax credits for the respective years ended.

	2022
	China’s mainland			Other			Total
	RMB			RMB			RMB
The Group
Revenue
Sales to third parties		108,179			56,388			164,568
Inter-segment sales		527,206			40,485			567,691
		635,385			96,873			732,259
Production costs excluding taxes		(136,890	)		(15,920	)		(152,810	)
Exploration expenses		(26,523	)		(551	)		(27,074	)
Depreciation, depletion and amortization		(195,316	)		(25,906	)		(221,222	)
Taxes other than income taxes		(76,633	)		(10,093	)		(86,727	)
Accretion expense		(5,446	)		(235	)		(5,681	)
Income taxes		(38,941	)		(23,061	)		(62,002	)
Results of operations from producing activities		155,636			21,107			176,743
Equity method investments
Share of profit for producing activities of associates and joint ventures		—			3,462			3,462
Total of the Group and equity method investments results of operations for producing activities		155,636			24,569			180,205

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PETROCHINA COMPANY LIMITED

SUPPLEMENTARY INFORMATION ON OIL AND GAS EXPLORATION

AND PRODUCTION ACTIVITIES (UNAUDITED) — (Continued)

(All amounts in millions, except for the per share data and otherwise stated)

	2021
	China’s mainland			Other			Total
	RMB			RMB			RMB
The Group
Revenue
Sales to third parties		82,654			40,695			123,349
Inter-segment sales		388,611			25,149			413,760
		471,265			65,844			537,109
Production costs excluding taxes		(126,916	)		(12,177	)		(139,093	)
Exploration expenses		(23,418	)		(830	)		(24,248	)
Depreciation, depletion and amortization		(128,297	)		(29,417	)		(157,714	)
Taxes other than income taxes		(28,611	)		(5,810	)		(34,421	)
Accretion expense		(4,557	)		(139	)		(4,696	)
Income taxes		(22,084	)		(11,210	)		(33,294	)
Results of operations from producing activities		137,382			6,261			143,643
Equity method investments
Share of profit for producing activities of associates and joint ventures		—			1,904			1,904
Total of the Group and equity method investments results of operations for producing activities		137,382			8,165			145,547
	2020
	China’s mainland			Other			Total
	RMB			RMB			RMB
The Group
Revenue
Sales to third parties		32,662			30,855			63,517
Inter-segment sales		306,623			12,408			319,031
		339,285			43,263			382,548
Production costs excluding taxes		(124,154	)		(9,605	)		(133,759	)
Exploration expenses		(18,851	)		(482	)		(19,333	)
Depreciation, depletion and amortization		(134,007	)		(15,953	)		(149,960	)
Taxes other than income taxes		(18,865	)		(2,690	)		(21,555	)
Accretion expense		(4,905	)		(202	)		(5,107	)
Income taxes		(9,369	)		(5,340	)		(14,709	)
Results of operations from producing activities		29,134			8,991			38,125
Equity method investments
Share of profit for producing activities of associates and joint ventures		—			(76	)		(76	)
Total of the Group and equity method investments results of operations for producing activities		29,134			8,915			38,049

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SUPPLEMENTARY INFORMATION ON OIL AND GAS EXPLORATION

AND PRODUCTION ACTIVITIES (UNAUDITED) — (Continued)

(All amounts in millions, except for the per share data and otherwise stated)

Standardized Measure of Discounted Future Net Cash Flows

The standardized measure of discounted future net cash flows related to proved oil and gas reserves at December 31, 2022, 2021 and 2020 is based on the prices used in estimating the Group’s proved oil and gas reserves, year-end costs, currently enacted tax rates related to existing proved oil and gas reserves and a 10% annual discount factor. “Future cash inflows” are net of value-added taxes. Corporate income taxes are included in “future income tax expense”. Other taxes are included in “future production costs” as production taxes.

The standardized measure of discounted future net cash flows related to proved oil and gas reserves at December 31, 2022, 2021 and 2020 is as follows:

	RMB
The Group
At December 31, 2022
Future cash inflows		6,719,784
Future production costs		(2,421,683	)
Future development costs		(557,902	)
Future income tax expense		(711,177	)
Future net cash flows		3,029,022
Discount at 10% for estimated timing of cash flows		(1,271,392	)
Standardized measure of discounted future net cash flows		1,757,630
	RMB
The Group
At December 31, 2021
Future cash inflows		5,244,811
Future production costs		(1,723,220	)
Future development costs		(462,411	)
Future income tax expense		(549,495	)
Future net cash flows		2,509,685
Discount at 10% for estimated timing of cash flows		(1,108,580	)
Standardized measure of discounted future net cash flows		1,401,105
	RMB
The Group
At December 31, 2020
Future cash inflows		4,366,906
Future production costs		(1,470,460	)
Future development costs		(445,462	)
Future income tax expense		(441,668	)
Future net cash flows		2,009,316
Discount at 10% for estimated timing of cash flows		(947,035	)
Standardized measure of discounted future net cash flows		1,062,281

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PETROCHINA COMPANY LIMITED

SUPPLEMENTARY INFORMATION ON OIL AND GAS EXPLORATION

AND PRODUCTION ACTIVITIES (UNAUDITED) — (Continued)

(All amounts in millions, except for the per share data and otherwise stated)

At December 31, 2022, RMB1,652,887 (2021: RMB 1,336,419, 2020: RMB 1,028,640) of standardized measure of discounted future net cash flows related to proved oil and gas reserves located within China’s mainland and RMB 104,743 (2021: RMB 64,686, 2020: RMB 33,641) of standardized measure of discounted future net cash flows related to proved oil and gas reserves located overseas.

Share of standardized measure of discounted future net cash flows of associates and joint ventures:

December 31, 2022	47,342
December 31, 2021	14,788
December 31, 2020	8,573

Changes in Standardized Measure of Discounted Future Net Cash Flows

Changes in the standardized measure of discounted net cash flows for the Group for each of the years ended December 31, 2022, 2021 and 2020 are as follows:

	Year Ended December 31,
	2022			2021			2020
	RMB			RMB			RMB
The Group
Beginning of the year		1,401,105			1,062,281			1,325,069
Sales and transfers of oil and gas produced, net of production costs		(467,040	)		(344,643	)		(215,390	)
Net changes in prices and production costs and other		551,666			407,882			(358,008	)
Extensions, discoveries and improved recovery		241,644			150,979			112,834
Development costs incurred		6,876			23,675			39,238
Revisions of previous quantity estimates		(1,871	)		88,332			(138,772	)
Accretion of discount		130,881			86,172			146,137
Net change in income taxes		(105,898	)		(73,272	)		156,122
Net change due to purchases and sales of minerals in place		267			(301	)		(4,949	)
End of the year		1,757,630			1,401,105			1,062,281

F-8 1

EX-2.1

Exhibit 2.1

Description of Rights of Each Class of Securities

Registered Under Section 12 of the Securities Exchange Act of 1934 (the “Exchange Act”)

American Depositary Shares (“ADSs”), each representing 100 H Shares of par value RMB 1.00 per share (the “H Shares”) of PetroChina Company Limited (“we,” “our company,” “our,” “us,” or the “Company”) were listed and traded on the New York Stock Exchange (the “NYSE”) until September 8, 2022. In connection with the listing, the H Shares and ADSs were registered under Section 12(b) of the Exchange Act. On September 8, 2022, our ADSs were delisted from the NYSE. On October 17, 2022, we terminated our ADR program by terminating the deposit agreement (the “Deposit Agreement”), dated March 29, 2000, among our company, Bank of New York Mellon (the “Depositary”), and the holders of ADRs thereunder. The ADSs and the H Shares are now deemed to be registered under Section 12(g) of the Exchange Act. This exhibit contains a description of the rights of (i) the holders of H Shares and (ii) ADS holders.

H Shares

The following are summaries of material provisions of our amended and restated memorandum and articles of association and the applicable PRC laws and regulations, insofar as they relate to the material terms of our H Shares. Notwithstanding this, because it is a summary, it may not contain all the information that you may otherwise deem important. For more complete information, you should read the entire memorandum and articles of association, which is an exhibit to our annual report on Form 20-F (the “Form 20-F”).

Type and Class of Securities (Item9.A.5 of Form 20-F)

The Company’s H Shares are of par value RMB 1.00 per share. The respective number of H Shares that have been issued and outstanding as of the last day of a financial year is set forth on the cover of the Form 20-F. The Company’s H Shares are registered shares. All H-Shares listed in Hong Kong which have been fully paid-up may be freely transferred in accordance with the Company’s Articles of Association, relevant laws, regulations and the applicable listing rules. However, unless such transfer complies with the following requirements, the board of directors may refuse to recognize any instrument of transfer and would not need to provide any reason therefor: (1) a fee of HK$2.50 per instrument of transfer or such higher amount as the board of directors may from time to time require but not exceeding the amount agreed from time to time in the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited has been paid to the Company for registration of the instrument of transfer and other documents relating to or which will affect the ownership of the shares; (2) the instrument of transfer only relates to H-Shares; (3) the stamp duty which is chargeable on the instrument of transfer has already been paid; (4) the relevant share certificate(s) and any other evidence which the board of directors may reasonably require to show that the transferor has the right to transfer the shares have been provided; (5) if it is intended that the shares be transferred to joint owners, the number of joint owners shall not be more than four; (6) the Company does not have any lien on the relevant shares. If the Company refuses to register any transfer of shares, the Company shall provide the transferor and transferee with a notice of refusal to register such transfer within two (2) months of formal application for the transfer. No change may be made in the H Share register of shareholders as a result of a transfer of shares within thirty days prior to the date of a shareholders’ general meeting or within five days prior to the record date set by the Company for its distribution of dividends.

Preemptive Rights (Item 9.A.3 of Form 20-F)

See “Item 10. Additional Information — B. Memorandum and Articles of Association.”

Limitations or Qualifications (Item 9.A.6 of Form 20-F)

See “Item 8. Financial Information — A. Consolidated Statements and other Financial Information — Dividend Policy,” “Item 10. Additional Information — B. Memorandum and Articles of Association” and “Item 12.

Description of Securities Other than Equity Securities — D. American Depositary Shares” of the Form 20-F, as well as the disclosure below on American Depositary Shares as required by Items 12.D.1 and 12.D.2 of the Form 20-F.

Other Rights With Respect To Securities Other than Common or Ordinary Shares (Item 9.A.7 of Form 20-F)

Not applicable.

Rights of the Shares (Item 10.B.3 of Form 20-F)

See “Item 8. Financial Information — A. Consolidated Statements and Other Financial Information — Dividend Policy” and “Item 10. Additional Information — B. Memorandum and Articles of Association – Shareholders’ Rights” of the Form 20-F.

Requirements for Amendments (Item 10.B.4 of Form 20-F)

See “Item 10. Additional Information — B. Memorandum and Articles of Association” of the Form 20-F.

Limitations on the Rights to Own Shares (Item 10.B.6 of Form 20-F)

See “Item 10. Additional Information — D. Exchange Controls” and “Item 12. Description of Securities Other than Equity Securities — D. American Depositary Shares” of the Form 20-F, as well as the disclosure below on American Depositary Shares as required by Items 12.D.1 and 12.D.2 of the Form 20-F.

Provisions Affecting Any Change ofControl (Item 10.B.7 of Form 20-F)

There is no provision in the Company’s Memorandum and Articles of Association that have an effect of delaying, deferring or preventing a change in control of the Company and that would operate only with respect to a merger, acquisition or corporate restructuring involving the Company (or any of its subsidiaries).

Ownership Threshold (Item 10.B.8 of Form 20-F)

There is no such provision in the Company’s Memorandum and Articles of Association governing the ownership threshold above which shareholder ownership must be disclosed. Shareholders will, however, be required to disclose shareholder ownership in according with the applicable securities laws, regulations and listing rules where the securities of the Company are listed.

Differences between the Law of Different Jurisdictions (Item 10.B.9 of Form 20-F)

See “Item 16G — Corporate Governance” of the Form 20-F.

Changes in Capital (Item 10.B.10 of Form 20-F)

See “Item 10. Additional Information — B. Memorandum and Articles of Association – Share Capital” of the Form 20-F.

Debt Securities (Item 12.A of Form 20-F)

Not applicable.

Warrants and Rights (Item12.B of Form 20-F)

Not applicable.

Other Securities (Item 12.C of Form 20-F)

Not applicable.

American Depositary Shares(Items 12.D.1 and 12.D.2 of Form 20-F)

Until October 17, 2022, when the Deposit Agreement and the ADR program were terminated, the Depositary issued ADSs upon the deposit of H Shares with its custodian, as agent of the Depositary. Each ADS represented an ownership interest of 100 H Shares, deposited with the custodian. On August 29, 2022, we filed a Form 25 to delist our ADSs from the NYSE. The delisting became effective on September 8, 2022. The Deposit

Agreement and the ADR program were terminated on October 17, 2022 (the “Termination Date”). You are able to surrender ADSs for cancellation and to take delivery of the deposited securities at any time prior to October 20, 2023. If you surrender ADSs for delivery of the deposited securities, you must pay a cable fee of $17.5, a cancellation fee of up to $5.0 per 100 ADR surrendered and any applicable U.S. or local taxes or governmental charges. Subsequent to October 20, 2023, under the terms of the Deposit Agreement, the Depositary may attempt to sell the H shares. If the Depositary has sold the H shares, you may surrender your ADRs to obtain payment of the sale proceeds, net of the expenses of sale, any applicable U.S. or local taxes or government charges and a cancellation fee of up to $0.05 per ADS. The address of the Depositary is: The Bank of New York Mellon, 240 Greenwich Street, Depositary Receipts Division – 8th Floor, Attention: Cancellation Desk, New York, NY 10286. Registered or overnight mail is the suggested method of delivering DRs to the Depositary.

EX-8.1

Exhibit 8.1

LIST OF SUBSIDIARIES

A list of PetroChina Company Limited’s principal subsidiaries is provided in Note 19 to the consolidated financial statements included in this annual report following Item 19.

EX-12.1

Exhibit 12.1

CERTIFICATION

I, DAI Houliang, certify that:

1. I have reviewed this annual report on Form 20-F of PetroChina Company Limited (the “Company”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report;

4. The Company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting; and

5. The Company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’s auditors and the audit committee of the Company’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting.

/s/ DAI Houliang
Name: DAI Houliang
Title: Chairman

Date: April 28, 2023

EX-12.2

Exhibit 12.2

CERTIFICATION

I, HUANG Yongzhang, certify that:

1. I have reviewed this annual report on Form 20-F of PetroChina Company Limited (the “Company”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report;

4. The Company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting; and

5. The Company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’s auditors and the audit committee of the Company’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting.

/s/ HUANG Yongzhang
Name: HUANG Yongzhang
Title: Director and President

Date: April 28, 2023

EX-12.3

Exhibit 12.3

CERTIFICATION

I, WANG Hua, certify that:

1. I have reviewed this annual report on Form 20-F of PetroChina Company Limited (the “Company”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report;

4. The Company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting; and

5. The Company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’s auditors and the audit committee of the Company’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting.

/s/ WANG Hua
Name: WANG Hua
Title: CFO and Secretary to the Board of Directors

Date: April 28, 2023

EX-13.1

EXHIBIT 13.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of PetroChina Company Limited (the “Company”) on Form 20-F for the period ending December 31, 2022, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, DAI Houliang, hereby certify that to the best of my knowledge:

1. The Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ DAI Houliang
Name: DAI Houliang
Title: Chairman

Date: April 28, 2023

EX-13.2

EXHIBIT 13.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of PetroChina Company Limited (the “Company”) on Form 20-F for the period ending December 31, 2022, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, HUANG Yongzhang, hereby certify that to the best of my knowledge:

1. The Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ HUANG Yongzhang
Name: HUANG Yongzhang
Title: Director and President

Date: April 28, 2023

EX-13.3

EXHIBIT 13.3

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of PetroChina Company Limited (the “Company”) on Form 20-F for the period ending December 31, 2022, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, WANG Hua, hereby certify that to the best of my knowledge:

1. The Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ WANG Hua
Name: WANG Hua
Title: CFO and Secretary to the Board of Directors

Date: April 28, 2023

EX-15.1

Exhibit 15.1

DEGOLYER AND MACNAUGHTON

5001 SPRING VALLEY ROAD

SUITE 800 EAST

DALLAS, TEXAS 75244

This is a digital representation of a DeGolyer and MacNaughton report.

This file is intended to be a manifestation of certain data in the subject report and as such is subject to the same conditions thereof. The information and data contained in this file may be subject to misinterpretation; therefore, the signed and bound copy of this report should be considered the only authoritative source of such information.

DEGOLYER ANDMACNAUGHTON

5001 SPRING VALLEY ROAD

SUITE 800 EAST

DALLAS, TEXAS 75244

March 9, 2023

PetroChina Company Limited

9 Dongzhimen North Street, Dongcheng District

Beijing 100007

P.R. China

Ladies and Gentlemen:

Pursuant to your request, this report of third party presents an independent evaluation, as of December 31, 2022, of the extent of the estimated net proved oil, condensate, light hydrocarbon (hereinafter referred to as natural gas liquids (NGL)), and gas reserves of certain properties in which PetroChina Company Limited (PetroChina) has represented it holds an interest. This evaluation was completed on March 9, 2023. The properties evaluated herein are located in China as well as Indonesia, Iraq, Kazakhstan, Mongolia, Oman, and the United Arab Emirates (collectively referred to herein as Other Countries). PetroChina has represented that these properties account for 40.58 percent on a net equivalent barrel basis of PetroChina’s net proved reserves as of December 31, 2022. The net proved reserves estimates have been prepared in accordance with the reserves definitions of Rules

4–10(a) (1)–(32) of Regulation S–X of the United States Securities and Exchange Commission (SEC). This report was prepared in accordance with guidelines specified in Item 1202 (a)(8) of Regulation S–K and is to be used for inclusion in certain SEC filings by PetroChina.

Reserves estimates included herein are expressed as net reserves. Gross reserves are defined as the total estimated petroleum remaining to be produced from these properties after December 31, 2022. Net reserves are defined as that portion of the gross reserves attributable to the interests held or controlled by PetroChina after deducting all interests held by others.

Certain properties in which PetroChina holds an interest are subject to the terms of various production sharing agreements. The terms of these agreements generally allow for working interest participants to be reimbursed for portions of capital costs and operating expenses and to share in the profits. The reimbursement and profit proceeds are converted to a barrel of oil equivalent or standard cubic foot of gas equivalent by dividing by product prices to estimate the “entitlement reserves.” These entitlement reserves are equivalent in principle to net reserves and are used to calculate an equivalent net share, termed an “entitlement interest.” In this report, PetroChina’s net reserves or interest for certain properties subject to these agreements is the entitlement based on PetroChina’s working interest.

DEGOLYER AND MACNAUGHTON	2

Estimates of reserves should be regarded only as estimates that may change as further production history and additional information become available. Not only are estimates based on that information which is currently available, but such estimates are also subject to the uncertainties inherent in the application of judgmental factors in interpreting such information.

Information used in this evaluation was obtained from PetroChina. In the preparation of this report we have relied, without independent verification, upon such information furnished by PetroChina with respect to the property interests being evaluated, production from such properties, current costs of operation and development, current prices for production, agreements relating to current and future operations and sale of production, and various other information and data that were accepted as represented.

Definition of Reserves

Petroleum reserves included in this report are classified as proved. Only proved reserves have been evaluated for this report. Reserves classifications used in this report are in accordance with the reserves definitions of Rules 4–10(a) (1)–(32) of Regulation S–X of the SEC. Reserves are judged to be economically producible in future years from known reservoirs under existing economic and operating conditions and assuming continuation of current regulatory practices using conventional production methods and equipment. In the analyses of production-decline curves, reserves were estimated only to the limit of economic rates of production under existing economic and operating conditions using prices and costs consistent with the effective date of this report, including consideration of changes in existing prices provided only by contractual arrangements but not including escalations based upon future conditions. The petroleum reserves are classified as follows:

Proved oil and gas reserves – Proved oil and gas reserves are those quantities of oil and gas, which, by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be economically producible—from a given date forward, from known reservoirs, and under existing economic conditions, operating methods, and government regulations—prior to the time at which contracts providing the right to operate expire, unless evidence indicates that renewal is reasonably certain, regardless of whether deterministic or probabilistic methods are used for the estimation. The project to extract the hydrocarbons must have commenced or the operator must be reasonably certain that it will commence the project within a reasonable time.

DEGOLYER AND MACNAUGHTON	3

(i) The area of the reservoir considered as proved includes:

(A) The area identified by drilling and limited by fluid contacts, if any, and (B) Adjacent undrilled portions of the reservoir that can, with reasonable certainty, be judged to be continuous with it and to contain economically producible oil or gas on the basis of available geoscience and engineering data.

(ii) In the absence of data on fluid contacts, proved quantities in a reservoir are limited by the lowest known hydrocarbons (LKH) as seen in a well penetration unless geoscience, engineering, or performance data and reliable technology establishes a lower contact with reasonable certainty.

(iii) Where direct observation from well penetrations has defined a highest known oil (HKO) elevation and the potential exists for an associated gas cap, proved oil reserves may be assigned in the structurally higher portions of the reservoir only if geoscience, engineering, or performance data and reliable technology establish the higher contact with reasonable certainty.

(iv) Reserves which can be produced economically through application of improved recovery techniques (including, but not limited to, fluid injection) are included in the proved classification when:

(A) Successful testing by a pilot project in an area of the reservoir with properties no more favorable than in the reservoir as a whole, the operation of an installed program in the reservoir or an analogous reservoir, or other evidence using reliable technology establishes the reasonable certainty of the engineering analysis on which the project or program was based; and (B) The project has been approved for development by all necessary parties and entities, including governmental entities.

DEGOLYER AND MACNAUGHTON	4

(v) Existing economic conditions include prices and costs at which economic producibility from a reservoir is to be determined. The price shall be the average price during the 12-month period prior to the ending date of the period covered by the report, determined as an unweighted arithmetic average of the first-day-of-the-month price for each month within such period, unless prices are defined by contractual arrangements, excluding escalations based upon future conditions.

Developed oil and gas reserves – Developed oil and gas reserves are reserves of any category that can be expected to be recovered:

(i) Through existing wells with existing equipment and operating methods or in which the cost of the required equipment is relatively minor compared to the cost of a new well; and

(ii) Through installed extraction equipment and infrastructure operational at the time of the reserves estimate if the extraction is by means not involving a well.

Undeveloped oil and gas reserves – Undeveloped oil and gas reserves are reserves of any category that are expected to be recovered from new wells on undrilled acreage, or from existing wells where a relatively major expenditure is required for recompletion.

(i) Reserves on undrilled acreage shall be limited to those directly offsetting development spacing areas that are reasonably certain of production when drilled, unless evidence using reliable technology exists that establishes reasonable certainty of economic producibility at greater distances.

(ii) Undrilled locations can be classified as having undeveloped reserves only if a development plan has been adopted indicating that they are scheduled to be drilled within five years, unless the specific circumstances justify a longer time.

DEGOLYER AND MACNAUGHTON	5

(iii) Under no circumstances shall estimates for undeveloped reserves be attributable to any acreage for which an application of fluid injection or other improved recovery technique is contemplated, unless such techniques have been proved effective by actual projects in the same reservoir or an analogous reservoir, as defined in [section 210.4–10 (a) Definitions], or by other evidence using reliable technology establishing reasonable certainty.

Methodology and Procedures

Estimates of reserves were prepared by the use of appropriate geologic, petroleum engineering, and evaluation principles and techniques that are in accordance with the reserves definitions of Rules 4–10(a) (1)–(32) of Regulation S–X of the SEC and with practices generally recognized by the petroleum industry as presented in the publication of the Society of Petroleum Engineers entitled “Standards Pertaining to the Estimating and Auditing of Oil and Gas Reserves Information (revised June 2019) Approved by the SPE Board on 25 June 2019” and in Monograph 3 and Monograph 4 published by the Society of Petroleum Evaluation Engineers. The method or combination of methods used in the analysis of each reservoir was tempered by experience with similar reservoirs, stage of development, quality and completeness of basic data, and production history.

Based on the current stage of field development, production performance, the development plans provided by PetroChina, and analyses of areas offsetting existing wells with test or production data, reserves were classified as proved.

The proved undeveloped reserves estimates were based on opportunities identified in the plan of development provided by PetroChina.

PetroChina has represented that its senior management is committed to the development plan provided by PetroChina and that PetroChina has the financial capability to execute the development plan, including the drilling and completion of wells and the installation of equipment and facilities.

DEGOLYER AND MACNAUGHTON	6

When applicable, the volumetric method was used to estimate the original oil in place (OOIP) and original gas in place (OGIP). Structure maps were prepared to delineate each reservoir, and isopach maps were constructed to estimate reservoir volume. Electrical logs, radioactivity logs, core analyses, and other available data were used to prepare these maps as well as to estimate representative values for porosity and water saturation. When adequate data were available and when circumstances justified, material-balance methods were used to estimate OOIP and OGIP.

Estimates of ultimate recovery were obtained after applying recovery factors to OOIP and OGIP. These recovery factors were based on consideration of the type of energy inherent in the reservoirs, analyses of the petroleum, the structural positions of the properties, and the production histories. When applicable, material balance and other engineering methods were used to estimate recovery factors based on an analysis of reservoir performance, including production rate, reservoir pressure, and reservoir fluid properties.

For depletion-type reservoirs or those whose performance disclosed a reliable decline in producing-rate trends or other diagnostic characteristics, reserves were estimated by the application of appropriate decline curves or other performance relationships. Reserves were estimated only to the limits of economic production as defined under the Definition of Reserves heading of this report.

In certain cases, reserves were estimated by incorporating elements of analogy with similar wells or reservoirs for which more complete data were available.

In the evaluation of undeveloped reserves, type-well analysis was performed using well data from analogous reservoirs for which more complete historical performance data were available.

For the evaluation of unconventional reservoirs, a performance-based methodology integrating the appropriate geology and petroleum engineering data was utilized for this report. Performance-based methodology primarily includes (1) production diagnostics, (2) decline-curve analysis, and (3) model-based analysis (if necessary, based on availability of data). Production diagnostics include data quality control, identification of flow regimes, and characteristic well performance behavior. These analyses were performed for all well groupings (or type-curve areas).

DEGOLYER AND MACNAUGHTON	7

Characteristic rate-decline profiles from diagnostic interpretation were translated to modified hyperbolic rate profiles, including one or multiple b-exponent values followed by an exponential decline. Based on the availability of data, model-based analysis may be integrated to evaluate long-term decline behavior, the effect of dynamic reservoir and fracture parameters on well performance, and complex situations sourced by the nature of unconventional reservoirs.

Data provided by PetroChina from wells drilled through November 30, 2022, and made available for this evaluation were used to prepare the reserves estimates herein. These reserves estimates were based on consideration of monthly production data available for certain properties only through August 2022. Estimated cumulative production as of December 31, 2022, was deducted from the estimated gross ultimate recovery to estimate gross reserves. This required that production be estimated for up to 4 months.

Oil and condensate reserves estimated herein are to be recovered by normal field separation. NGL reserves estimated herein include pentanes and heavier fractions (C5+) and ethane, propane, and butane fractions, and are the result of low-temperature plant processing. As represented by PetroChina, certain fields also produce C5+ as a result of oil processing. Oil, condensate, and NGL reserves included in this report are expressed in thousands of barrels (10^3^bbl). In these estimates, 1 barrel equals 42 United States gallons. For reporting purposes, oil, condensate, and NGL reserves have been estimated separately and are presented herein as a summed quantity.

Gas quantities estimated herein are expressed as marketable gas, fuel gas, and sales gas. Marketable gas is defined as the total gas produced from the reservoir after reduction for shrinkage resulting from field separation; processing, including removal of the nonhydrocarbon gas to meet pipeline specifications; and flare and other losses but not from fuel usage. Fuel gas is defined as that portion of the gas consumed in field operations. Sales gas is defined as the total gas to be produced from the reservoirs, measured at the point of delivery, after reduction for fuel usage, flare, and shrinkage resulting from field separation and processing. Gas reserves estimated herein are reported as marketable gas, fuel gas, and sales gas.

Gas quantities associated with the properties in China are expressed at a temperature base of 68 degrees Fahrenheit (°F) and at a pressure base of 14.696 pounds per square inch absolute (psia). Gas quantities associated with the properties in Other Countries are expressed at a temperature base of 60°F and at a pressure base of 14.7 psia. Gas quantities included in this report are expressed in millions of cubic feet (10^6^ft^3^).

DEGOLYER AND MACNAUGHTON	8

Gas quantities are identified by the type of reservoir from which the gas will be produced. Nonassociated gas is gas at initial reservoir conditions with no oil present in the reservoir. Associated gas is both gas-cap gas and solution gas. Gas-cap gas is gas at initial reservoir conditions and is in communication with an underlying oil zone. Solution gas is gas dissolved in oil at initial reservoir conditions. Gas quantities estimated herein include both associated and nonassociated gas.

At the request of PetroChina, marketable gas reserves estimated herein were converted to oil equivalent using an energy equivalent factor of 6,000 cubic feet of gas per 1 barrel of oil equivalent.

Primary Economic Assumptions

This report has been prepared using initial prices, expenses, and costs provided by PetroChina in United States dollars (U.S.$). Future prices were estimated using guidelines established by the SEC and the Financial Accounting Standards Board (FASB). The following economic assumptions were used for estimating the reserves reported herein:

Oil, Condensate, and NGL Prices

PetroChina has represented that the oil, condensate, and NGL prices were based on reference prices, calculated as the unweighted arithmetic average of the first-day-of-the-month price for each month within the 12-month period prior to the end of the reporting period, unless prices are defined by contractual agreements. PetroChina supplied the appropriate differentials to the reference prices.

PetroChina has represented that the 12-month average oil, condensate, and NGL prices for the fields in China were based on a 12-month average Dubai reference price of U.S.$96.08 per barrel with appropriate differentials applied to this reference price. The volume-weighted average oil and condensate price in China attributable to the estimated proved reserves was U.S.$91.16 per barrel. The volume-weighted average NGL price in China attributable to the estimated proved reserves was U.S.$46.48 per barrel. The oil, condensate, and NGL prices in China were held constant for the lives of the properties.

DEGOLYER AND MACNAUGHTON	9

PetroChina has also represented that the 12-month average oil and condensate prices for the fields in Other Countries were based on 12-month average reference prices of U.S.$98.50 per barrel for an international Brent reference price and U.S.$95.36 per barrel for an Oman reference price with appropriate differentials applied to these reference prices. The volume-weighted average oil and condensate price in Other Countries attributable to the estimated proved reserves was U.S.$78.74 per barrel. The volume-weighted average NGL price in Other Countries attributable to the estimated proved reserves was U.S.$14.79 per barrel. The oil, condensate, and NGL prices in Other Countries were held constant for the lives of the properties.

Gas Prices

PetroChina furnished the gas prices in China and has represented that the gas prices in China are defined by contractual agreements. The volume-weighted average gas price in China attributable to the estimated proved reserves was U.S.$7.05 per thousand cubic feet. The gas prices in China were held constant for the lives of the properties.

PetroChina has also represented that all of the gas reserves in Other Countries will be sold through contractual agreements and the gas prices are defined by these contracts. The volume-weighted average gas price in Other Countries attributable to the estimated proved reserves was U.S.$1.25 per thousand cubic feet. The gas prices in Other Countries were held constant for the lives of the properties, except for certain properties where escalations are contractually allowed under the terms of the gas sales agreements.

DEGOLYER AND MACNAUGHTON	10

Operating Expenses, Capital Costs, and Abandonment Costs

Estimates of operating expenses, provided by PetroChina and based on existing economic conditions, were held constant for the lives of the properties. Future capital expenditures were estimated using 2022 values, provided by PetroChina, and were not adjusted for inflation. In certain cases, forecasts of future operating expenses, either higher or lower than current expenses, have been used to correspond to the production profiles included herein, but no general escalation that might result from inflation was applied. Abandonment costs, which are those costs associated with the removal of equipment, plugging of wells, and reclamation and restoration associated with the abandonment, were provided by PetroChina for all properties and were not adjusted for inflation. Operating expenses, capital costs, and abandonment costs were considered, as appropriate, in determining the economic viability of the undeveloped reserves estimated herein.

Taxes

For PetroChina’s properties in China, local taxes and value-added taxes were considered in determining the economic limit for reserves estimated herein. The tax provisions provided by PetroChina were assumed to remain unchanged from current legislation. Future Chinese income tax was not taken into account in the preparation of the estimates for the fields in which only extensions and discoveries were evaluated.

For PetroChina’s properties in Other Countries, local taxes were applied where appropriate. The tax provisions provided by PetroChina were assumed to remain unchanged from current legislation.

Royalties

In properties where royalties are paid in kind, the petroleum quantities associated with these royalties are excluded from the net proved reserves estimates. For properties where royalties are paid in cash, these royalties are considered production taxes and associated quantities have not been excluded from the net proved reserves estimates. PetroChina has represented that it has no royalty obligations for the properties in China that were evaluated for this report.

DEGOLYER AND MACNAUGHTON	11

In our opinion, the information relating to estimated proved reserves of oil, condensate, NGL, and gas contained in this report has been prepared in accordance with Paragraphs 932-235-50-4 and 932-235-50-6 through 932-235-50-9 of the Accounting Standards Update 932-235-50, Extractive Industries – Oil and Gas (Topic 932): Oil and Gas Reserve Estimation and Disclosures (January 2010) of the FASB and Rules 4–10(a) (1)–(32) of Regulation S–X and Rules 302(b), 1201, 1202(a) (1), (2), (3), (4), (8), and 1203(a) of Regulation S–K of the SEC; provided, however, that estimates of proved developed and proved undeveloped reserves are not presented at the beginning of the year.

To the extent the above-enumerated rules, regulations, and statements require determinations of an accounting or legal nature, we, as engineers, are necessarily unable to express an opinion as to whether the above-described information is in accordance therewith or sufficient therefor.

DEGOLYER AND MACNAUGHTON	12

Summary of Conclusions

DeGolyer and MacNaughton has performed an independent evaluation of the extent of the estimated net proved oil, condensate, NGL, and gas reserves of certain properties in which PetroChina has represented it holds an interest. The estimated net proved reserves, as of December 31, 2022, attributable to the properties evaluated herein, which represent 40.58 percent of PetroChina’s reserves on a net equivalent basis, were based on the definition of proved reserves of the SEC and are summarized as follows, expressed in thousands of barrels (10^3^bbl), millions of cubic feet (10^6^ft^3^), and thousands of barrels of oil equivalent (10^3^boe):

	Estimated by DeGolyer and MacNaughton<br>Net Proved Reserves as of<br>December 31, 2022
	ProvedDeveloped		ProvedUndeveloped		Total<br>Proved
China
Oil, Condensate, and NGL, 10^3^bbl		1,410,327		534,159		1,944,486
Marketable Gas, 10^6^ft^3^		17,203,655		12,704,518		29,908,173
Fuel Gas, 10^6^ft^3^		989,803		698,934		1,688,737
Sales Gas, 10^6^ft^3^		16,213,852		12,005,584		28,219,436
Oil Equivalent, 10^3^boe		4,277,603		2,651,579		6,929,182
Other Countries
Oil, Condensate, and NGL, 10^3^bbl		422,880		119,329		542,209
Marketable Gas, 10^6^ft^3^		565,020		41,300		606,320
Fuel Gas, 10^6^ft^3^		1,016		0		1,016
Sales Gas, 10^6^ft^3^		564,004		41,300		605,304
Oil Equivalent, 10^3^boe		517,050		126,212		643,262
Total China and Other Countries
Oil Condensate, and NGL, 10^3^bbl		1,833,207		653,488		2,486,695
Marketable Gas, 10^6^ft^3^		17,768,675		12,745,818		30,514,493
Fuel Gas, 10^6^ft^3^		990,819		698,934		1,689,753
Sales Gas, 10^6^ft^3^		16,777,856		12,046,884		28,824,740
Oil Equivalent, 10^3^boe		4,794,653		2,777,791		7,572,444

Notes:

1.	The estimates of PetroChina’s net proved reserves in Other Countries include 210,455 10^3^bbl of oil, condensate, and NGL reserves and 327,775 10^6^ft^3^of sales gas reserves that are<br>attributable to minority interests held by others.
2.	PetroChina has represented that the estimates of net proved reserves in China include 5,261 10^3^bbl of oil, condensate, and NGL reserves and 148 10^6^ft^3^of sales gas reserves that are<br>attributable to minority interests held by others.
---	---
3.	Estimates of total proved reserves include 89,252 10^3^bbl<br>of NGL reserves in China.
---	---
4.	Marketable gas reserves estimated herein were converted to oil equivalent using an energy equivalent factor of<br>6,000 cubic feet of gas per 1 barrel of oil equivalent.
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DEGOLYER AND MACNAUGHTON	13
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While the oil and gas industry may be subject to regulatory changes from time to time that could affect an industry participant’s ability to recover its reserves, we are not aware of any such governmental actions which would restrict the recovery of the December 31, 2022, estimated reserves.

DeGolyer and MacNaughton is an independent petroleum engineering consulting firm that has been providing petroleum consulting services throughout the world since 1936. DeGolyer and MacNaughton does not have any financial interest, including stock ownership, in PetroChina. Our fees were not contingent on the results of our evaluation. This report has been prepared at the request of PetroChina. DeGolyer and MacNaughton has used all assumptions, data, procedures, and methods that it considers necessary and appropriate to prepare this report.

Submitted,
DeGOLYER and MacNAUGHTON
Texas Registered Engineering Firm F-716
Federico Dordoni, P.E.<br><br><br>Executive Vice President<br><br><br>DeGolyer and MacNaughton
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DEGOLYER AND MACNAUGHTON
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CERTIFICATE of QUALIFICATION

I, Federico Dordoni, Petroleum Engineer with DeGolyer and MacNaughton, 5001 Spring Valley Road, Suite 800 East, Dallas, Texas, 75244 U.S.A., hereby certify:

1.	That I am an Executive Vice President with DeGolyer and MacNaughton, which firm did prepare the report of third<br>party addressed to PetroChina dated March 9, 2023, and that I, as Executive Vice President, was responsible for the preparation of this report of third party.
2.	That I attended Buenos Aires Institute of Technology (ITBA) University, and that I graduated with a degree in<br>Petroleum Engineering in the year 2004; that I am a Registered Professional Engineer in the State of Texas; that I am a member of the Society of Petroleum Engineers and the Society of Petroleum Evaluation Engineers; and that I have in excess of 18<br>years of experience in oil and gas reservoir studies and reserves evaluations.
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Federico Dordoni, P.E.<br><br><br>Executive Vice President<br><br><br>DeGolyer and MacNaughton
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EX-15.2

Exhibit 15.2

DEGOLYER AND MACNAUGHTON

5001 SPRING VALLEY ROAD

SUITE 800 EAST

DALLAS, TEXAS 75244

This is a digital representation of a DeGolyer and MacNaughton report.

This file is intended to be a manifestation of certain data in the subject report and as such is subject to the same conditions thereof. The information and data contained in this file may be subject to misinterpretation; therefore, the signed and bound copy of this report should be considered the only authoritative source of such information.

DEGOLYER ANDMACNAUGHTON

5001 SPRING VALLEY ROAD

SUITE 800 EAST

DALLAS, TEXAS 75244

March 9, 2023

PetroChina Company Limited

9 Dongzhimen North Street, Dongcheng District

Beijing 100007

P.R. China

Ladies and Gentlemen:

Pursuant to your request, this report of third party presents an independent audit, as of December 31, 2022, of the extent of the estimated net proved oil, condensate, light hydrocarbon (hereinafter referred to as natural gas liquids (NGL)), and gas reserves of certain properties in which PetroChina Company Limited (PetroChina) has represented it holds an interest. This audit was completed on March 9, 2023. The properties reviewed herein are located in China. PetroChina has represented that these properties account for 57.84 percent on a net equivalent barrel basis of PetroChina’s net proved reserves as of December 31, 2022. The net proved reserves estimates have been prepared in accordance with the reserves definitions of Rules 4–10(a) (1)–(32) of Regulation S–X of the United States Securities and Exchange Commission (SEC). It is our opinion that the procedures and methodologies employed by PetroChina for the preparation of its proved reserves estimates as of December 31, 2022, comply with the current requirements of the SEC. We have reviewed information provided by PetroChina that it represents to be PetroChina’s estimates of the net reserves, as of December 31, 2022, for the same properties as those which we reviewed. This report was prepared in accordance with guidelines specified in Item 1202 (a)(8) of Regulation S–K and is to be used for inclusion in certain SEC filings by PetroChina.

Reserves estimates included herein are expressed as net reserves as represented by PetroChina. Gross reserves are defined as the total estimated petroleum remaining to be produced from these properties after December 31, 2022. Net reserves are defined as that portion of the gross reserves attributable to the interests held or controlled by PetroChina after deducting all interests held by others.

DEGOLYER AND MACNAUGHTON	2

Estimates of reserves should be regarded only as estimates that may change as further production history and additional information become available. Not only are estimates based on that information which is currently available, but such estimates are also subject to the uncertainties inherent in the application of judgmental factors in interpreting such information.

Information used in this audit was obtained from PetroChina. In the preparation of this report we have relied, without independent verification, upon such information furnished by PetroChina with respect to the property interests being evaluated, production from such properties, current costs of operation and development, current prices for production, agreements relating to current and future operations and sale of production, and various other information and data that were accepted as represented.

Definition of Reserves

Petroleum reserves included in this report are classified as proved. Only proved reserves have been evaluated for this report. Reserves classifications used in this report are in accordance with the reserves definitions of Rules 4–10(a) (1)–(32) of Regulation S–X of the SEC. Reserves are judged to be economically producible in future years from known reservoirs under existing economic and operating conditions and assuming continuation of current regulatory practices using conventional production methods and equipment. In the analyses of production-decline curves, reserves were estimated only to the limit of economic rates of production under existing economic and operating conditions using prices and costs consistent with the effective date of this report, including consideration of changes in existing prices provided only by contractual arrangements but not including escalations based upon future conditions. The petroleum reserves are classified as follows:

Proved oil and gas reserves – Proved oil and gas reserves are those quantities of oil and gas, which, by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be economically producible—from a given date forward, from known reservoirs, and under existing economic conditions, operating methods, and government regulations—prior to the time at which contracts providing the right to operate expire, unless evidence indicates that renewal is reasonably certain, regardless of whether deterministic or probabilistic methods are used for the estimation. The project to extract the hydrocarbons must have commenced or the operator must be reasonably certain that it will commence the project within a reasonable time.

DEGOLYER AND MACNAUGHTON	3

(i) The area of the reservoir considered as proved includes:

(A) The area identified by drilling and limited by fluid contacts, if any, and (B) Adjacent undrilled portions of the reservoir that can, with reasonable certainty, be judged to be continuous with it and to contain economically producible oil or gas on the basis of available geoscience and engineering data.

(ii) In the absence of data on fluid contacts, proved quantities in a reservoir are limited by the lowest known hydrocarbons (LKH) as seen in a well penetration unless geoscience, engineering, or performance data and reliable technology establishes a lower contact with reasonable certainty.

(iii) Where direct observation from well penetrations has defined a highest known oil (HKO) elevation and the potential exists for an associated gas cap, proved oil reserves may be assigned in the structurally higher portions of the reservoir only if geoscience, engineering, or performance data and reliable technology establish the higher contact with reasonable certainty.

(iv) Reserves which can be produced economically through application of improved recovery techniques (including, but not limited to, fluid injection) are included in the proved classification when:

(A) Successful testing by a pilot project in an area of the reservoir with properties no more favorable than in the reservoir as a whole, the operation of an installed program in the reservoir or an analogous reservoir, or other evidence using reliable technology establishes the reasonable certainty of the engineering analysis on which the project or program was based; and

(B) The project has been approved for development by all necessary parties and entities, including governmental entities.

(v) Existing economic conditions include prices and costs at which economic producibility from a reservoir is to be determined. The price shall be the average price during the12-month period prior to the ending date of the period covered by the report, determined as an unweighted arithmetic average of the first-day-of-the-month price for each month within such period, unless prices are defined by contractual arrangements, excluding escalations based upon future conditions.

DEGOLYER AND MACNAUGHTON	4

Developed oil and gas reserves – Developed oil and gas reserves are reserves of any category that can be expected to be recovered:

(i) Through existing wells with existing equipment and operating methods or in which the cost of the required equipment is relatively minor compared to the cost of a new well; and

(ii) Through installed extraction equipment and infrastructure operational at the time of the reserves estimate if the extraction is by means not involving a well.

Undeveloped oiland gas reserves – Undeveloped oil and gas reserves are reserves of any category that are expected to be recovered from new wells on undrilled acreage, or from existing wells where a relatively major expenditure is required for recompletion.

(i) Reserves on undrilled acreage shall be limited to those directly offsetting development spacing areas that are reasonably certain of production when drilled, unless evidence using reliable technology exists that establishes reasonable certainty of economic producibility at greater distances.

(ii) Undrilled locations can be classified as having undeveloped reserves only if a development plan has been adopted indicating that they are scheduled to be drilled within five years, unless the specific circumstances justify a longer time.

(iii) Under no circumstances shall estimates for undeveloped reserves be attributable to any acreage for which an application of fluid injection or other improved recovery technique is contemplated, unless such techniques have been proved effective by actual projects in the same reservoir or an analogous reservoir, as defined in [section 210.4–10 (a) Definitions], or by other evidence using reliable technology establishing reasonable certainty.

DEGOLYER AND MACNAUGHTON	5

Methodology and Procedures

Estimates of reserves were prepared by the use of appropriate geologic, petroleum engineering, and evaluation principles and techniques that are in accordance with the reserves definitions of Rules 4–10(a) (1)–(32) of Regulation S–X of the SEC and with practices generally recognized by the petroleum industry as presented in the publication of the Society of Petroleum Engineers entitled “Standards Pertaining to the Estimating and Auditing of Oil and Gas Reserves Information (revised June 2019) Approved by the SPE Board on 25 June 2019” and in Monograph 3 and Monograph 4 published by the Society of Petroleum Evaluation Engineers. The method or combination of methods used in the analysis of each reservoir was tempered by experience with similar reservoirs, stage of development, quality and completeness of basic data, and production history.

Based on the current stage of field development, production performance, the development plans provided by PetroChina, and analyses of areas offsetting existing wells with test or production data, reserves were classified as proved.

The proved undeveloped reserves estimates were based on opportunities identified in the plan of development provided by PetroChina.

PetroChina has represented that its senior management is committed to the development plan provided by PetroChina and that PetroChina has the financial capability to execute the development plan, including the drilling and completion of wells and the installation of equipment and facilities.

When applicable, the volumetric method was used to estimate the original oil in place (OOIP) and original gas in place (OGIP). Structure maps were prepared to delineate each reservoir, and isopach maps were constructed to estimate reservoir volume. Electrical logs, radioactivity logs, core analyses, and other available data were used to prepare these maps as well as to estimate representative values for porosity and water saturation.

Estimates of ultimate recovery were obtained after applying recovery factors to OOIP and OGIP. These recovery factors were based on consideration of the type of energy inherent in the reservoirs, analyses of the petroleum, the structural positions of the properties, and the production histories.

DEGOLYER AND MACNAUGHTON	6

For depletion-type reservoirs or those whose performance disclosed a reliable decline in producing-rate trends or other diagnostic characteristics, reserves were estimated by the application of appropriate decline curves or other performance relationships. Reserves were estimated only to the limits of economic production as defined under the Definition of Reserves heading of this report.

In certain cases, reserves were estimated by incorporating elements of analogy with similar wells or reservoirs for which more complete data were available.

In the evaluation of undeveloped reserves, type-well analysis was performed using well data from analogous reservoirs for which more complete historical performance data were available.

For the evaluation of unconventional reservoirs, a performance-based methodology integrating the appropriate geology and petroleum engineering data was utilized for this report. Performance-based methodology primarily includes (1) production diagnostics, (2) decline-curve analysis, and (3) model-based analysis (if necessary, based on availability of data). Production diagnostics include data quality control, identification of flow regimes, and characteristic well performance behavior. These analyses were performed for all well groupings (or type-curve areas).

Characteristic rate-decline profiles from diagnostic interpretation were translated to modified hyperbolic rate profiles, including one or multiple b-exponent values followed by an exponential decline. Based on the availability of data, model-based analysis may be integrated to evaluate long-term decline behavior, the effect of dynamic reservoir and fracture parameters on well performance, and complex situations sourced by the nature of unconventional reservoirs.

Data provided by PetroChina from wells drilled through November 30, 2022, and made available for this evaluation were used to prepare the reserves estimates herein. These reserves estimates were based on consideration of monthly production data available for certain properties only through August 2022. Estimated cumulative production as of December 31, 2022, was deducted from the estimated gross ultimate recovery to estimate gross reserves. This required that production be estimated for up to 4 months.

DEGOLYER AND MACNAUGHTON	7

Oil and condensate reserves estimated herein are to be recovered by normal field separation. NGL reserves estimated herein include pentanes and heavier fractions (C5+) and ethane, propane, and butane fractions, and are the result of low-temperature plant processing. As represented by PetroChina, certain fields also produce C5+ as a result of oil processing. Oil, condensate, and NGL reserves included in this report are expressed in thousands of barrels (10^3^bbl). In these estimates, 1 barrel equals 42 United States gallons. For reporting purposes, oil, condensate, and NGL reserves have been estimated separately and are presented herein as a summed quantity.

Gas quantities estimated herein are expressed as marketable gas, fuel gas, and sales gas. Marketable gas is defined as the total gas produced from the reservoir after reduction for shrinkage resulting from field separation; processing, including removal of the nonhydrocarbon gas to meet pipeline specifications; and flare and other losses but not from fuel usage. Fuel gas is defined as that portion of the gas consumed in field operations. Sales gas is defined as the total gas to be produced from the reservoirs, measured at the point of delivery, after reduction for fuel usage, flare, and shrinkage resulting from field separation and processing. Gas reserves estimated herein are reported as marketable gas, fuel gas, and sales gas. Gas quantities are expressed at a temperature base of 68 degrees Fahrenheit (°F) and at a pressure base of 14.696 pounds per square inch absolute (psia). Gas quantities included in this report are expressed in millions of cubic feet (10^6^ft^3^).

Gas quantities are identified by the type of reservoir from which the gas will be produced. Nonassociated gas is gas at initial reservoir conditions with no oil present in the reservoir. Associated gas is both gas-cap gas and solution gas. Gas-cap gas is gas at initial reservoir conditions and is in communication with an underlying oil zone. Solution gas is gas dissolved in oil at initial reservoir conditions. Gas quantities estimated herein include both associated and nonassociated gas.

At the request of PetroChina, marketable gas reserves estimated herein were converted to oil equivalent using an energy equivalent factor of 6,000 cubic feet of gas per 1 barrel of oil equivalent.

DEGOLYER AND MACNAUGHTON	8

Primary Economic Assumptions

This report has been prepared using initial prices, expenses, and costs provided by PetroChina in United States dollars (U.S.$). Future prices were estimated using guidelines established by the SEC and the Financial Accounting Standards Board (FASB). The following economic assumptions were used for estimating the reserves reported herein:

Oil, Condensate, and NGL Prices

PetroChina has represented that the oil, condensate, and NGL prices were based on a reference price, calculated as the unweighted arithmetic average of the first-day-of-the-month price for each month within the 12-month period prior to the end of the reporting period, unless prices are defined by contractual agreements. PetroChina supplied the appropriate differentials a Dubai reference price of U.S.$96.08 per barrel.

PetroChina has represented that the weighted average oil and condensate price attributable to the proved reserves estimated by PetroChina was U.S.$93.92 per barrel. PetroChina has represented that the weighted average NGL price attributable to the estimated proved reserves estimated by PetroChina was U.S.$58.47 per barrel. The oil, condensate, and NGL prices were held constant for the lives of the properties.

Gas Prices

PetroChina furnished the gas prices and has represented that the gas prices are defined by contractual agreements. PetroChina has represented that the weighted average gas price attributable to the estimated proved reserves estimated by PetroChina was U.S.$5.89 per thousand cubic feet. The gas prices were held constant for the lives of the properties.

DEGOLYER AND MACNAUGHTON	9

Operating Expenses, Capital Costs, and Abandonment Costs

Estimates of operating expenses, provided by PetroChina and based on existing economic conditions, were held constant for the lives of the properties. Future capital expenditures were estimated using 2022 values, provided by PetroChina, and were not adjusted for inflation. In certain cases, forecasts of future operating expenses, either higher or lower than current expenses, have been used to correspond to the production profiles included herein, but no general escalation that might result from inflation was applied. Abandonment costs, which are those costs associated with the removal of equipment, plugging of wells, and reclamation and restoration associated with the abandonment, were provided by PetroChina for all properties and were not adjusted for inflation. Operating expenses, capital costs, and abandonment costs were considered, as appropriate, in determining the economic viability of the undeveloped reserves estimated herein.

Taxes

Local taxes and value-added taxes in China were applied in the estimation of reserves.

Royalties

PetroChina has represented that it has no royalty obligations for the properties reported herein.

In our opinion, the information relating to estimated proved reserves of oil, condensate, NGL, and gas contained in this report has been prepared in accordance with Paragraphs 932-235-50-4 and 932-235-50-6 through 932-235-50-9 of the Accounting Standards Update 932-235-50, Extractive Industries – Oil and Gas (Topic 932): Oil and Gas Reserve Estimation and Disclosures (January 2010) of the FASB and Rules 4–10(a) (1)–(32) of Regulation S–X and Rules 302(b), 1201, 1202(a) (1), (2), (3), (4), (8), and 1203(a) of Regulation S–K of the SEC; provided, however, that estimates of proved developed and proved undeveloped reserves are not presented at the beginning of the year.

To the extent the above-enumerated rules, regulations, and statements require determinations of an accounting or legal nature, we, as engineers, are necessarily unable to express an opinion as to whether the above-described information is in accordance therewith or sufficient therefor.

DEGOLYER AND MACNAUGHTON	10

Summary of Conclusions

DeGolyer and MacNaughton has performed an independent audit of the extent of the estimated net proved oil, condensate, NGL, and gas reserves of certain properties in which PetroChina has represented it holds an interest. PetroChina has represented that its estimated net proved reserves attributable to the reviewed properties were based on the definition of proved reserves of the SEC. PetroChina’s estimates of the net proved reserves, as of December 31, 2022, attributable to these properties, which represent 57.84 percent of PetroChina’s reserves on a net equivalent basis, are summarized as follows, expressed in thousands of barrels (10^3^bbl), millions of cubic feet (10^6^ft^3^), and thousands of barrels of oil equivalent (10^3^boe):

	Estimated by PetroChinaNet Proved Reserves as ofDecember 31, 2022
	ProvedDeveloped		ProvedUndeveloped		Total<br>Proved
Properties Reviewed by<br><br><br>DeGolyer and MacNaughton
China
Oil, Condensate, and NGL, 10^3^bbl		3,614,014		137,396		3,751,410
Marketable Gas, 10^6^ft^3^		23,245,677		19,010,832		42,256,509
Fuel Gas, 10^6^ft^3^		1,752,022		1,245,864		2,997,886
Sales Gas, 10^6^ft^3^		21,493,655		17,764,968		39,258,623
Oil Equivalent, 10^3^boe		7,488,294		3,305,868		10,794,162

Notes:

1.	Marketable gas reserves estimated herein were converted to oil equivalent using an energy equivalent factor of<br>6,000 cubic feet of gas per 1 barrel of oil equivalent.
2.	PetroChina has represented that the estimates of total proved reserves include 192,265 10^3^bbl of NGL reserves.
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3.	PetroChina has represented that the estimates of PetroChina’s net proved reserves herein have zero oil,<br>condensate, NGL and marketable gas reserves that are attributable to others.
---	---

In comparing the detailed net proved reserves estimates prepared by DeGolyer and MacNaughton and by PetroChina, differences have been found, both positive and negative, resulting in an aggregate difference of 0.17 percent when compared on the basis of net equivalent barrels. It is DeGolyer and MacNaughton’s opinion that the net proved reserves estimates prepared by PetroChina on the properties reviewed and referred to above, when compared on the basis of net equivalent barrels, in aggregate, do not differ materially from those prepared by DeGolyer and MacNaughton.

DEGOLYER AND MACNAUGHTON	11

While the oil and gas industry may be subject to regulatory changes from time to time that could affect an industry participant’s ability to recover its reserves, we are not aware of any such governmental actions which would restrict the recovery of the December 31, 2022, estimated reserves.

DeGolyer and MacNaughton is an independent petroleum engineering consulting firm that has been providing petroleum consulting services throughout the world since 1936. DeGolyer and MacNaughton does not have any financial interest, including stock ownership, in PetroChina. Our fees were not contingent on the results of our evaluation. This report has been prepared at the request of PetroChina. DeGolyer and MacNaughton has used all assumptions, data, procedures, and methods that it considers necessary and appropriate to prepare this report.

Submitted,
DeGOLYER and MacNAUGHTON
Texas Registered Engineering Firm F-716
Federico Dordoni, P.E.<br><br><br>Executive Vice President<br><br><br>DeGolyer and MacNaughton
---
DEGOLYER AND MACNAUGHTON
---

CERTIFICATE of QUALIFICATION

I, Federico Dordoni, Petroleum Engineer with DeGolyer and MacNaughton, 5001 Spring Valley Road, Suite 800 East, Dallas, Texas, 75244 U.S.A., hereby certify:

1.	That I am an Executive Vice President with DeGolyer and MacNaughton, which firm did prepare the report of third<br>party addressed to PetroChina dated March 9, 2023, and that I, as Executive Vice President, was responsible for the preparation of this report of third party.
2.	That I attended Buenos Aires Institute of Technology (ITBA) University, and that I graduated with a degree in<br>Petroleum Engineering in the year 2004; that I am a Registered Professional Engineer in the State of Texas; that I am a member of the Society of Petroleum Engineers and the Society of Petroleum Evaluation Engineers; and that I have in excess of 18<br>years of experience in oil and gas reservoir studies and reserves evaluations.
---	---
Federico Dordoni, P.E.<br><br><br>Executive Vice President<br><br><br>DeGolyer and MacNaughton
---

EX-15.3

EXHIBIT 15.3

PetroChina Company Ltd.

Estimated Future Reserves and Income

Attributable to Certain Interests

Located in the Republic of Chad (Block H & PSA Area),

Iraq (Technical Service Contract) and

The Republic of Peru (Block 57 & Block X)

SEC Parameters

As of

December 31, 2022

\s\ Daniel R. Olds	\s\ Timour Baichev
Daniel R. Olds, P.E.	Timour Baichev, P.Eng.
TBPELS License No. 60996	APEGA License No. 87454
Managing Senior Vice President	Vice President
[SEAL]	[SEAL]
\s\ Hugo A. Ovalle	\s\ Vitaliy Charkovskyy
---	---
Hugo A. Ovalle	Vitaliy Charkovskyy, P.Eng.
TBPELS License No. 140035	APEGA License No. 160594
Vice President	Vice President
[SEAL]	[SEAL]

RYDER SCOTT COMPANY, L.P.

TBPELS Firm Registration No. F-1580

RYDER SCOTT COMPANY    PETROLEUM CONSULTANTS

TBPELS REGISTERED ENGINEERING FIRM F-1580		FAX (713) 651-0849
1100 LOUISIANA    SUITE 4600	HOUSTON, TEXAS 77002-5294	TELEPHONE (713) 651-9191
	February 22, 2023

PetroChina Company Limited

9 Dongzhimen North Street

Dongcheng District, Beijing 100007

Ladies and Gentlemen:

At your request, Ryder Scott Company, L.P. (Ryder Scott) has prepared an estimate of the proved reserves, future production and income attributable to certain leasehold interests of PetroChina Company Ltd. (PetroChina) as of December 31, 2022. The subject properties are located in the Bongor Basin (Block H & PSA Area) in the Republic of Chad, Africa; the West Qurna (Phase 1) field in the country of Iraq; and in Block 57 and Block X, in the Republic of Peru. The reserves and income data were estimated based on the definitions and disclosure guidelines of the United States Securities and Exchange Commission (SEC) contained in Title 17, Code of Federal Regulations, Modernization of Oil and Gas Reporting, Final Rule released January 14, 2009 in the Federal Register (SEC regulations). Our third party study, completed on January 27, 2023 and presented herein, was prepared for public disclosure by PetroChina in filings made with the SEC in accordance with the disclosure requirements set forth in the SEC regulations.

CNODC International Holding Ltd. (CNODCI), CNPC International (Chad) Co. Ltd. (CNPCIC) and PetroChina International Investment Company Ltd. (PIIC) (collectively hereinafter CNODC), owners of the properties in this report, are subsidiaries of PetroChina Company Ltd. The properties evaluated by Ryder Scott account for a portion of PetroChina’s total net proved reserves as of December 31, 2022. Based on information provided by PetroChina, the third party estimate conducted by Ryder Scott for the properties in this report addresses 1.85 percent of the total proved developed net liquid hydrocarbon reserves, 0.78 percent of the total proved developed net gas reserves, 3.61 percent of the total proved undeveloped net liquid hydrocarbon reserves, zero percent of the total proved undeveloped net gas reserves, and 1.0 percent of the total proved net barrels of oil equivalent of PetroChina. For the net reserves shown on an equivalent unit basis, the natural gas was converted to oil equivalent using a factor of 6,000 cubic feet of natural gas per one barrel of oil equivalent. The properties in Peru (Block 57) produce sales gas and natural gas liquids (NGLs), which are sold at the tailgate of the Malvinas Gas Plant. Throughout this report, references to condensate are referring to the natural gas liquids (NGLs). In Peru, condensate is produced at the wellhead but is injected back into the gas line feeding the gas plant, where the liquids are extracted and sold as NGL. There are no other condensate volumes in any of the other properties.

The estimated reserves and future net income amounts presented in this report, as of December 31, 2022, are related to hydrocarbon prices. The hydrocarbon prices used in the preparation of this report are based on the average prices during the 12-month period prior to the “as of date” of this report, determined as the unweighted arithmetic averages of the prices in effect on the first-day-of-the-month for each month within such period, unless prices were defined by contractual arrangements, as required by the SEC regulations. Actual future prices may vary considerably from the prices required by SEC regulations. The reserves volumes and the income attributable thereto have a direct relationship to the hydrocarbon prices actually received; therefore, volumes of reserves actually recovered, and the amounts of income actually received may differ significantly from the estimated quantities presented in this report. The results of this study are summarized below.

SUITE 2800, 350 7TH AVENUE, S.W.	CALGARY, ALBERTA T2P 3N9	TEL (403) 262-2799
633 17TH STREET, SUITE 1700	DENVER, COLORADO 80202	TEL (303) 339-8110

PetroChina Company Limited - Summary

February 22, 2023

Page 2

SEC PARAMETERS

Estimated Net Reserves and Income Data

Certain Leasehold Interests Located

in the Republic of Chad (Block H)

CNPC International (Chad) Co., Ltd.

As of December 31, 2022

						Total
		Non-Producing		Undeveloped		Proved
Net Reserves
Oil/Condensate – Mbbl	55,125		2,778		16,611		74,514
Income Data (M)
Future Gross Revenue	4,540,002	$	226,608	$	1,240,777	$	6,007,387
Deductions	634,367		44,438		413,933		1,092,738
Future Net Income (FNI)	3,905,635	$	182,170	$	826,844	$	4,914,649
Discounted FNI @ 10%	3,369,296	$	153,566	$	612,348	$	4,135,210

All values are in US Dollars.

SEC PARAMETERS

Estimated Net Reserves and Income Data

Derived Through Certain Production Sharing Contracts

In the Republic of Chad (PSA Area)

CNPC International (Chad) Co., Ltd.

As of December 31, 2022

						Total
		Non-Producing		Undeveloped		Proved
Net Reserves
Oil/Condensate – Mbbl	6,594		1,730		1,051		9,375
Income Data (M)
Future Gross Revenue	606,554	$	159,163	$	96,651	$	862,368
Deductions	170,850		14,888		27,707		213,445
Future Net Income (FNI)	435,704	$	144,275	$	68,944	$	648,923
Discounted FNI @ 10%	372,761	$	114,936	$	45,113	$	532,810

All values are in US Dollars.

RYDER SCOTT COMPANY    PETROLEUM CONSULTANTS

PetroChina Company Limited - Summary

February 22, 2023

Page 3

SEC PARAMETERS

Estimated Net Reserves and Income Data

Derived Through a Certain Technical Service Contract

PetroChina International Investment Company, Ltd. (Iraq)

As of December 31, 2022

						Total
		Non-Producing		Undeveloped		Proved
Net Remaining Reserves
Oil/Condensate – Mbbl	12,859		772		12,812		26,443
Income Data (M)
Future Gross Revenue	1,295,561	$	77,735	$	1,290,814	$	2,664,110
Deductions	883,931		66,064		1,184,833		2,134,828
Future Net Income (FNI)	411,630	$	11,671	$	105,981	$	529,282
Discounted FNI @ 10%	358,343	$	8,430	$	66,077	$	432,850

All values are in US Dollars.

SEC PARAMETERS

Estimated Net Reserves and Income Data

Certain Interests Located in the Republic of Peru (Block 57)

CNODC International Holding Ltd.

As of December 31, 2022

Net Reserves
Oil/Condensate – Mbbl	18,530
Gas – MMcf	316,832
Income Data (M)
Future Gross Revenue	5,049,483
Deductions	690,508
Future Net Income (FNI)	4,358,975
Discounted FNI @ 10%	2,857,760

All values are in US Dollars.

RYDER SCOTT COMPANY    PETROLEUM CONSULTANTS

PetroChina Company Limited - Summary

February 22, 2023

Page 4

SEC PARAMETERS

Estimated Net Reserves and Income Data

Certain Interests Located in the Republic of Peru (Block X)

CNODC International Holding Ltd.

As of December 31, 2022

Net Reserves
Oil/Condensate – Mbbl	4,757
Gas – MMcf	6,194
Income Data (M)
Future Gross Revenue	358,254
Deductions	85,022
Future Net Income (FNI)	273,232
Discounted FNI @ 10%	256,162

All values are in US Dollars.

SEC PARAMETERS – COMBINED SUMMARY

Estimated Net Reserves and Income Data

Certain Interests Located in the Republic of Chad, Iraq, and Peru

PetroChina Company Ltd.

As of December 31, 2022

						Total
		Non-Producing		Undeveloped		Proved
Net Reserves
Oil/Condensate – Mbbl	97,865		5,280		30,474		133,619
Gas – MMcf	323,026		0		0		323,026
Income Data (M)
Future Gross Revenue	11,849,854	$	463,506	$	2,628,242	$	14,941,602
Deductions	2,464,678		125,390		1,626,473		4,216,541
Future Net Income (FNI)	9,385,176	$	338,116	$	1,001,769	$	10,725,061
Discounted FNI @ 10%	7,214,322	$	276,932	$	723,538	$	8,214,792

All values are in US Dollars.

Liquid hydrocarbons are expressed in standard 42 U.S. gallon barrels and shown herein as thousands of barrels (Mbbl). All gas volumes are reported on an “as sold” basis expressed in millions of cubic feet (MMcf) at the official temperature and pressure bases of the areas in which the gas reserves are located. In this report, the revenues, deductions and income data are expressed as thousands of U.S. dollars ($M).

RYDER SCOTT COMPANY    PETROLEUM CONSULTANTS

PetroChina Company Limited - Summary

February 22, 2023

Page 5

The estimates of the reserves, future production, and income attributable to all of the properties in this report except for Iraq West Qurna were prepared using the economic software package PHDWin Petroleum Economic Evaluation Software, a copyrighted program of TRC Consultants L.C. West Qurna was prepared using MS Excel. Ryder Scott has found these programs to be generally acceptable but notes that certain summaries and calculations may vary due to rounding and may not exactly match the sum of the properties being summarized. Furthermore, one line economic summaries may vary slightly from the more detailed cash flow projections of the same properties, also due to rounding. The rounding differences are not material.

For the Technical Service Contract in West Qurna, the future gross revenue includes the contractor revenues which consist of certain service fees (Supplementary fee, Petroleum Cost and Remuneration fee).

The deductions incorporate the normal direct costs of operating the wells, workover and recompletion costs, development costs, and certain abandonment costs net of salvage for all areas except West Qurna. The deductions in West Qurna incorporate the normal direct costs of operating the wells, development costs, and training, technology and scholarship fund (TTS Fund). The future net income is before the deduction of income taxes and general administrative overhead and has not been adjusted for outstanding loans that may exist nor does it include any adjustment for cash on hand or undistributed income.

Liquid hydrocarbon reserves account for 71.2 percent, and gas reserves account for 28.8 percent of the total future gross revenue from proved reserves.

The discounted future net income shown above was calculated using a discount rate of 10 percent per annum compounded monthly, except for Iraq, where annual discounting was used.

The results shown above are presented for your information and should not be construed as our estimate of fair market value.

Reserves Included in This Report

The proved reserves included herein conform to the definition as set forth in the Securities and Exchange Commission’s Regulations Part 210.4-10(a). An abridged version of the SEC reserves definitions from 210.4-10(a) entitled “PETROLEUM RESERVES DEFINITIONS” is included as an attachment to this report.

The various reserves status categories are defined in the attachment entitled “PETROLEUM RESERVES STATUS DEFINITIONS AND GUIDELINES” in this report. The proved developed non-producing reserves included herein consist of the shut-in status category. In Chad, the proved developed injection category is reported in the cash flow to reflect the property cumulative oil production.

No attempt was made to quantify or otherwise account for any accumulated gas production imbalances that may exist.

Reserves are “estimated remaining quantities of oil and gas and related substances anticipated to be economically producible, as of a given date, by application of development projects to known accumulations.” All reserves estimates involve an assessment of the uncertainty relating the likelihood that the actual remaining quantities recovered will be greater or less than the estimated quantities determined as of the date the estimate is made. The uncertainty depends primarily on the amount of reliable geologic and engineering data available at the time of the estimate and the interpretation of these data. The relative degree of uncertainty may be conveyed by placing reserves into one of two principal categories, either proved or unproved. Unproved reserves are less certain to be recovered than proved reserves and may be further sub-categorized as probable and possible reserves to denote progressively increasing uncertainty in their recoverability. At PetroChina’s request, this report addresses only the proved reserves attributable to the properties evaluated herein.

RYDER SCOTT COMPANY    PETROLEUM CONSULTANTS

PetroChina Company Limited - Summary

February 22, 2023

Page 6

Proved oil and gas reserves are “those quantities of oil and gas which, by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be economically producible from a given date forward.” The proved reserves included herein were estimated using deterministic methods. The SEC has defined reasonable certainty for proved reserves, when based on deterministic methods, as a “high degree of confidence that the quantities will be recovered.”

Proved reserves estimates will generally be revised only as additional geologic or engineering data become available or as economic conditions change. For proved reserves, the SEC states that “as changes due to increased availability of geoscience (geological, geophysical, and geochemical), engineering, and economic data are made to the estimated ultimate recovery (EUR) with time, reasonably certain EUR is much more likely to increase or remain constant than to decrease.” Moreover, estimates of proved reserves may be revised as a result of future operations, effects of regulation by governmental agencies or geopolitical or economic risks. Therefore, the proved reserves included in this report are estimates only and should not be construed as being exact quantities, and if recovered, the revenues therefrom, and the actual costs related thereto, could be more or less than the estimated amounts.

The proved reserves reported herein are limited to the period prior to expiration of current contracts providing the legal rights to produce or a revenue interest in such production unless evidence indicates that contract renewal is reasonably certain. Furthermore, properties in the different contracts may be subjected to substantially varying contractual fiscal terms that affect the net revenue to PetroChina for the production of these volumes. The prices and economic return received for these net volumes can vary materially based on the terms of these contracts. Therefore, when applicable, Ryder Scott reviewed the fiscal terms of such contracts and discussed with PetroChina the net economic benefit attributed to such operations for the determination of the net hydrocarbon volumes and income thereof. Ryder Scott has not conducted an exhaustive audit or verification of such contractual information. Neither our review of such contractual information nor our acceptance of PetroChina’s representations regarding such contractual information should be construed as a legal opinion on this matter.

Ryder Scott did not evaluate the country and geopolitical risks in the countries where PetroChina operates or has interests. PetroChina’s operations may be subject to various levels of governmental controls and regulations. These controls and regulations may include, but may not be limited to, matters relating to land tenure and leasing contract terms, the legal rights to produce hydrocarbons including the granting, extension or termination of contracts, the fiscal terms of various production sharing contracts, drilling and production practices, environmental protection, marketing and pricing policies, royalties, various taxes and levies including income tax, and foreign trade and investment and are subject to change from time to time. Such changes in governmental regulations and policies may cause volumes of proved reserves actually recovered and amounts of proved income actually received to differ significantly from the estimated quantities.

The estimates of proved reserves presented herein were based upon a detailed study of the properties in which PetroChina owns or derives an interest; however, we have not made any field examination of the properties. No consideration was given in this report to potential environmental liabilities that may exist nor were any costs included for potential liabilities to restore and clean up damages, if any, caused by past operating practices.

RYDER SCOTT COMPANY    PETROLEUM CONSULTANTS

PetroChina Company Limited - Summary

February 22, 2023

Page 7

Estimates of Reserves

The estimation of reserves involves two distinct determinations. The first determination results in the estimation of the quantities of recoverable oil and gas and the second determination results in the estimation of the uncertainty associated with those estimated quantities in accordance with the definitions set forth by the Securities and Exchange Commission’s Regulations Part 210.4-10(a). The process of estimating the quantities of recoverable oil and gas reserves relies on the use of certain generally accepted analytical procedures. These analytical procedures fall into three broad categories or methods: (1) performance-based methods, (2) volumetric-based methods and (3) analogy. These methods may be used individually or in combination by the reserves evaluator in the process of estimating the quantities of reserves. Reserves evaluators must select the method or combination of methods which in their professional judgment is most appropriate given the nature and amount of reliable geoscience and engineering data available at the time of the estimate, the established or anticipated performance characteristics of the reservoir being evaluated, and the stage of development or producing maturity of the property.

In many cases, the analysis of the available geoscience and engineering data and the subsequent interpretation of this data may indicate a range of possible outcomes in an estimate, irrespective of the method selected by the evaluator. When a range in the quantity of reserves is identified, the evaluator must determine the uncertainty associated with the incremental quantities of the reserves. If the reserves quantities are estimated using the deterministic incremental approach, the uncertainty for each discrete incremental quantity of the reserves is addressed by the reserves category assigned by the evaluator. Therefore, it is the categorization of reserves quantities as proved, probable and/or possible that addresses the inherent uncertainty in the estimated quantities reported. For proved reserves, uncertainty is defined by the SEC as reasonable certainty wherein the “quantities actually recovered are much more likely to be achieved than not.” The SEC states that “probable reserves are those additional reserves that are less certain to be recovered than proved reserves but which, together with proved reserves, are as likely as not to be recovered.” The SEC states that “possible reserves are those additional reserves that are less certain to be recovered than probable reserves and the total quantities ultimately recovered from a project have a low probability of exceeding proved plus probable plus possible reserves.” All quantities of reserves within the same reserves category must meet the SEC definitions as noted above.

Estimates of reserves quantities and their associated reserves categories may be revised in the future as additional geoscience or engineering data become available. Furthermore, estimates of reserves quantities and their associated reserves categories may also be revised due to other factors such as changes in economic conditions, results of future operations, effects of regulation by governmental agencies or geopolitical or economic risks as previously noted herein.

For Chad, Blocks H and PSA Area, the proved reserves for the properties included herein were estimated by performance methods or the volumetric method. In general, the reserves attributable to producing wells and/or reservoirs were estimated by performance methods. These performance methods include, but may not be limited to, decline curve analysis which utilized extrapolations of historical production and pressure data available through September 2022 in those cases where such data were considered to be definitive. The data used in this analyses were furnished to Ryder Scott by CNODC and were considered sufficient for the purpose thereof. In certain cases producing reserves were estimated by the volumetric method or analogy. These methods were used where there were inadequate historical performance data to establish a definitive trend and where the use of production performance data as a basis for the estimates was considered to be inappropriate.

RYDER SCOTT COMPANY    PETROLEUM CONSULTANTS

PetroChina Company Limited - Summary

February 22, 2023

Page 8

The reserves for the properties included herein attributable to the non-producing and the undeveloped status categories were estimated by the volumetric method or analogy. The volumetric analysis utilized pertinent well and seismic data furnished to Ryder Scott by CNODC or which we have obtained from public data sources that were available through September 2022. The data utilized from the **** well and seismic data incorporated into our volumetric analysis were considered sufficient for the purpose thereof.

For those properties in Iraq, the proved producing reserves included herein were estimated by performance for those wells with enough history to determine a trend. The remaining producing reserves were determined by analogy. These performance methods include, but may not be limited to, decline curve analysis, which utilized extrapolations of historical production data available through August 2022 in those cases where such data were considered to be definitive. The data utilized in this analysis were furnished to Ryder Scott by CNODC and were considered sufficient for the purpose thereof.

The proved developed non-producing and the undeveloped reserves included herein were estimated by the analogy method or based on previous production trends. The data utilized from the analogues were considered sufficient for the purpose thereof.

For Block 57, in Peru, approximately 100 percent of the proved producing reserves were estimated by volumetric methods. The data utilized in this analysis were furnished to Ryder Scott by CNODC and were considered sufficient for the purpose thereof.

For Block X, in Peru, approximately 100 percent of the proved producing reserves were estimated by performance methods. These performance methods include, but may not be limited to, decline curve analysis which utilized extrapolations of historical production and pressure data available through August 2022 in those cases where such data were considered to be definitive. The data utilized in this analysis were furnished to Ryder Scott by CNODC and were considered sufficient for the purpose thereof.

To estimate economically producible proved oil and gas reserves and related future net cash flows, we consider many factors and assumptions including, but not limited to, the use of reservoir parameters derived from geological, geophysical and engineering data which cannot be measured directly, economic criteria based on current costs and SEC pricing requirements, and forecasts of future production rates. Under the SEC regulations 210.4-10(a)(22)(v) and (26), proved reserves must be anticipated to be economically producible from a given date forward based on existing economic conditions including the prices and costs at which economic producibility from a reservoir is to be determined. While it may reasonably be anticipated that the future prices received for the sale of production and the operating costs and other costs relating to such production may increase or decrease from those under existing economic conditions, such changes were, in accordance with rules adopted by the SEC, omitted from consideration in making this evaluation.

PetroChina has informed us that they have furnished us all of the material accounts, records, geological and engineering data, and reports and other data required for this investigation. In preparing our forecast of future proved production and income, we have relied upon data furnished by PetroChina with respect to property interests owned or derived, production and well tests from examined wells, normal direct costs of operating the wells or contract areas, other costs such as transportation and/or processing fees, recompletion and development costs, development plans, abandonment costs after salvage, product prices based on the SEC regulations, adjustments or differentials to product prices, geological structural and isochore maps, well logs, core analyses, and pressure measurements. Ryder Scott reviewed such factual data for its reasonableness; however, we have not conducted an independent verification of the data furnished by PetroChina. We consider the factual data used in this report appropriate and sufficient for the purpose of preparing the estimates of reserves and future net revenues herein.

RYDER SCOTT COMPANY    PETROLEUM CONSULTANTS

PetroChina Company Limited - Summary

February 22, 2023

Page 9

For the properties in Iraq, PetroChina International Investment Company, Ltd. (PIIC) has informed us that they have furnished us all of the material accounts, records, geological and engineering data, and reports and other data required for this investigation. In preparing our forecast of future proved production and income, we have relied upon data furnished by PIIC with respect to property interests derived, production and well tests from examined wells, normal direct costs of operating the wells or leases, other costs such as transportation and/or processing fees, production taxes, Training, Technology and Scholarship Fund (TTS Fund), recompletion and development costs, development plans, abandonment costs after salvage, product prices based on the SEC regulations, adjustments or differentials to product prices, geological structural and isochore maps, well logs, core analyses, and pressure measurements. Ryder Scott reviewed such factual data for its reasonableness; however, we have not conducted an independent verification of the data furnished by PIIC. We consider the factual data used in this report appropriate and sufficient for the purpose of preparing the estimates of reserves and future net revenues herein.

In summary, we consider the assumptions, data, methods and analytical procedures used in this report appropriate for the purpose hereof, and we have used all such methods and procedures that we consider necessary and appropriate to prepare the estimates of reserves herein. The proved reserves included herein were determined in conformance with the United States Securities and Exchange Commission (SEC) Modernization of Oil and Gas Reporting; Final Rule, including all references to Regulation S-X and Regulation S-K, referred to herein collectively as the “SEC Regulations.” In our opinion, the proved reserves presented in this report comply with the definitions, guidelines and disclosure requirements as required by the SEC regulations.

Future Production Rates

For wells currently on production, our forecasts of future production rates are based on historical performance data. If no production decline trend has been established, future production rates were held constant, or adjusted for the effects of curtailment where appropriate, until a decline in ability to produce was anticipated. An estimated rate of decline was then applied until depletion of the reserves. If a decline trend has been established, this trend was used as the basis for estimating future production rates.

Test data and other related information were used to estimate the anticipated initial production rates for those wells or locations that are not currently producing. For reserves not yet on production, sales were estimated to commence at an anticipated date furnished by PetroChina. Wells or locations that are not currently producing may start producing earlier or later than anticipated in our estimates due to unforeseen factors causing a change in the timing to initiate production. Such factors may include delays due to weather, the availability of rigs, the sequence of drilling, completing and/or recompleting wells and/or constraints set by regulatory bodies.

The future production rates from wells currently on production or wells or locations that are not currently producing may be more or less than estimated because of changes including, but not limited to, reservoir performance, operating conditions related to surface facilities, compression and artificial lift, pipeline capacity and/or operating conditions, producing market demand and/or allowables or other constraints set by regulatory bodies.

RYDER SCOTT COMPANY    PETROLEUM CONSULTANTS

PetroChina Company Limited - Summary

February 22, 2023

Page 10

Hydrocarbon Prices

The hydrocarbon prices used herein are based on SEC price parameters using the average prices during the 12-month period prior to the “as of date” of this report, determined as the unweighted arithmetic averages of the prices in effect on the first-day-of-the-month for each month within such period, unless prices were defined by contractual arrangements. For hydrocarbon products sold under contract, the contract prices, including fixed and determinable escalations, exclusive of inflation adjustments, were used until expiration of the contract. Upon contract expiration, the prices were adjusted to the 12-month unweighted arithmetic average as previously described.

PetroChina **** furnished us with the above-mentioned average benchmark prices in effect on December 31, 2022. These initial SEC hydrocarbon prices were determined using the 12-month average first-day-of-the-month benchmark prices appropriate to the geographic area where the hydrocarbons are sold. These benchmark prices are prior to the adjustments for differentials as described herein. The table below summarizes the “benchmark prices” and “price reference” used for the geographic area(s) included in the report. In certain geographic areas, the price reference and benchmark prices may be defined by contractual arrangements. In cases where there are numerous contracts or price references within the same geographic area, the benchmark price is represented by the unweighted arithmetic average of the initial 12-month average first-day-of-the-month benchmark prices used.

The product prices that were actually used to determine the future gross revenue for each property reflect adjustments to the benchmark prices for gravity, quality, local conditions, gathering and transportation fees and/or distance from market, referred to herein as “differentials.” The differentials used in the preparation of this report were furnished to us by PetroChina. The differentials furnished to us were accepted as factual data and reviewed by us for their reasonableness; however, we have not conducted an independent verification of the data used by PetroChina to determine these differentials.

In addition, the tables below summarize the net volume weighted benchmark prices adjusted for differentials and referred to herein as the “average realized prices.” For Block 57, in Peru, the average realized price of condensate is referring to the weighted average liquids prices. Condensate is produced at the wellhead but is injected back into the gas line feeding the gas plant, where the liquids (condensate and NGL) are extracted and sold as NGL. The average realized prices shown in the table below were determined from the total future gross revenue before production taxes and the total net reserves for the geographic area and presented in accordance with SEC disclosure requirements for each of the geographic areas included in the report.

Geographic Area	Product	Price<br><br><br>Reference	Volume,bbl/day		Average<br>Benchmark<br>Prices	AverageRealized<br>Prices
Chad – Block H
Domestic	Oil	Contractual		15,000	$46.85/bbl	$46.85/bbl
Export	Oil	Brent		Remaining<br>Volume	$100.25/bbl	$92.56/bbl
Chad – PSA Area	Oil	Brent		N/A	$100.25/bbl	$91.99/bbl
Iraq	Oil	Brent		N/A	$100.25/bbl	$100.75/bbl
Peru – Block 57	Oil/Condensate	Contract		N/A	N/A	$58.08/bbl
	Gas	Contract		N/A	N/A	$14.07/Mcf
Peru – Block X	Oil/Condensate	Brent		N/A	$100.25/bbl	$92.83/bbl
	Gas	Contract		N/A	N/A	$2.74/Mcf

RYDER SCOTT COMPANY    PETROLEUM CONSULTANTS

PetroChina Company Limited - Summary

February 22, 2023

Page 11

For Chad, Block H, the Chad Government and CNPCIC have the obligation to sell 15,000 bbl/day to the Domestic market at the fixed price of $46.85/bbl with the remaining volume to be sold at the Export oil price. If the total royalty share of Chad Government (12.5% of oil production) cannot meet the obligation for Domestic market then CNPCIC has to fulfill the remaining volume. Based on forecasted future oil rates for the proved producing category, we calculated the effective blended price for future years. The oil price is $89.47/bbl in 2023, $86.80 in 2024, $83.31 in 2025, $77.81 in 2026, $67.82 in 2027, $49.45 in 2028 and $46.85 in 2029 and all remaining years when all oil volumes will be sold on the Domestic market. Export volumes are subject to a transportation fee, which has been included in the average realized price.

For Peru, the price for gas is set by contract.

The effects of derivative instruments designated as price hedges of oil quantities are not reflected in our individual property evaluations.

Costs

Operating costs for the contract areas and wells in this report were furnished by PetroChina and are based on the operating expense reports of PetroChina and include only those costs directly applicable to the contract areas or wells. The operating costs include a portion of general and administrative costs allocated directly to the contract areas and wells. The operating costs furnished to us were accepted as factual data and reviewed by us for their reasonableness; however, we have not conducted an independent verification of the operating cost data used by PetroChina. No deduction was made for loan repayments, interest expenses, or exploration and development prepayments that were not charged directly to the contract areas or wells.

Development costs were furnished to us by PetroChina and are based on authorizations for expenditure for the proposed work or actual costs for similar projects. The development costs furnished to us were accepted as factual data and reviewed by us for their reasonableness; however, we have not conducted an independent verification of these costs. The estimated net cost of abandonment after salvage was included for properties where abandonment costs net of salvage were material. The estimates of the net abandonment costs furnished by PetroChina were accepted without independent verification. ****

The proved developed non-producing and undeveloped reserves in this report **** have been incorporated herein in accordance with PetroChina’s plans to develop these reserves as of December 31, 2022. The implementation of PetroChina’s development plans as presented to us and incorporated herein is subject to the approval process adopted by PetroChina’s management. As the result of our inquiries during the course of preparing this report, PetroChina has informed us that the development activities included herein have been subjected to and received the internal approvals required by PetroChina’s management at the appropriate local, regional and/or corporate level. In addition to the internal approvals as noted, certain development activities may still be subject to specific partner AFE processes, Joint Operating Agreement (JOA) requirements or other administrative approvals external to PetroChina. PetroChina has provided written documentation supporting their commitment to proceed with the development activities as presented to us**.** Additionally, PetroChina has informed us that they are not aware of any legal, regulatory, or political obstacles that would significantly alter their plans. While these plans could change from those under existing economic conditions as of December 31, 2022, such changes were, in accordance with rules adopted by the SEC, omitted from consideration in making this evaluation.

Current costs used by PetroChina were held constant throughout the life of the properties.

RYDER SCOTT COMPANY    PETROLEUM CONSULTANTS

PetroChina Company Limited - Summary

February 22, 2023

Page 12

Standards of Independence and Professional Qualification

Ryder Scott is an independent petroleum engineering consulting firm that has been providing petroleum consulting services throughout the world since 1937. Ryder Scott is employee-owned and maintains offices in Houston, Texas; Denver, Colorado; and Calgary, Alberta, Canada. We have approximately eighty engineers and geoscientists on our permanent staff. By virtue of the size of our firm and the large number of clients for which we provide services, no single client or job represents a material portion of our annual revenue. We do not serve as officers or directors of any privately-owned or publicly-traded oil and gas company and are separate and independent from the operating and investment decision-making process of our clients. This allows us to bring the highest level of independence and objectivity to each engagement for our services.

Ryder Scott actively participates in industry-related professional societies and organizes an annual public forum focused on the subject of reserves evaluations and SEC regulations. Many of our staff have authored or co-authored technical papers on the subject of reserves related topics. We encourage our staff to maintain and enhance their professional skills by actively participating in ongoing continuing education.

Prior to becoming an officer of the Company, Ryder Scott requires that staff engineers and geoscientists receive professional accreditation in the form of a registered or certified professional engineer’s license or a registered or certified professional geoscientist’s license, or the equivalent thereof, from an appropriate governmental authority or a recognized self-regulating professional organization. Regulating agencies require that, in order to maintain active status, a certain amount of continuing education hours be completed annually, including an hour of ethics training. Ryder Scott fully supports this technical and ethics training with our internal requirement mentioned above.

We are independent petroleum engineers with respect to PetroChina. Neither we nor any of our employees have any financial interest in the subject properties and neither the employment to do this work nor the compensation is contingent on our estimates of reserves for the properties which were reviewed.

The results of this study, presented herein, are based on technical analyses conducted by teams of geoscientists and engineers from Ryder Scott. The professional qualifications of the undersigned, the technical persons primarily responsible for overseeing, reviewing and approving the evaluation of the reserves information discussed in this report, are included as an attachment to this letter.

Terms of Usage

The results of our third party study, presented in a combined summary report form herein, were prepared in accordance with the disclosure requirements set forth in the SEC regulations and intended for public disclosure as an exhibit in filings made with the SEC by PetroChina. This combined summary report, prepared at the request of PetroChina, is intended to provide the necessary information required for filing with the SEC. In the event that additional information is required, the full report for each of these five areas has been provided to PetroChina.

We have provided PetroChina with a digital version of the original signed copy of this report letter. In the event there are any differences between the digital version included in filings made by PetroChina and the original signed report letter, the original signed report letter shall control and supersede the digital version.

RYDER SCOTT COMPANY    PETROLEUM CONSULTANTS

PetroChina Company Limited - Summary

February 22, 2023

Page 13

The data and work papers used in the preparation of this report are available for examination by authorized parties in our offices. Please contact us if we can be of further service.

	Very truly yours,
	RYDER SCOTT COMPANY, L.P.
	TBPELS Firm Registration No. F-1580
	\s\ Daniel R. Olds
	Daniel R. Olds, P.E.
	TBPELS License No. 60996
	Managing Senior Vice President         [SEAL]
	\s\ Timour Baichev
	Timour Baichev, P.Eng.
	APEGA License No. 87454
	Vice President<br>                    [SEAL]
	\s\ Hugo A. Ovalle
	Hugo Ovalle
	TBPELS License No. 140035
	Vice President<br>                        [SEAL]
	\s\ Vitaliy Charkovskyy
	Vitaliy Charkovskyy, P.Eng.
	APEGA License No. 160594
DRO-TB-HAO-VC (LPC)/pl	Vice President<br>                      [SEAL]

RYDER SCOTT COMPANY    PETROLEUM CONSULTANTS

Professional Qualifications of Primary Technical Person

The conclusions presented in this report are the result of technical analysis conducted by teams of geoscientists and engineers from Ryder Scott Company, L.P. Daniel R. Olds was the primary technical person responsible for overseeing the estimate of the reserves, future production, and income prepared by Ryder Scott presented herein.

Mr. Olds, an employee of Ryder Scott Company, L.P. (Ryder Scott) since 2001, is a Managing Senior Vice President and also serves as an Engineering Group Coordinator responsible for coordinating and supervising staff and consulting engineers of the company in ongoing reservoir evaluation studies worldwide. He is a member of Ryder Scott’s Board of Directors. Before joining Ryder Scott, Mr. Olds served in a number of engineering and evaluation positions with PricewaterhouseCoopers, Wintershall Oil and Gas Company and Cities Service Oil Company. For more information regarding Mr. Olds’ geographic and job specific experience, please refer to the Ryder Scott Company website at www.ryderscott.com/Employees.

Mr. Olds earned a Bachelor of Science degree in Petroleum Engineering from West Virginia University in 1981, an MBA from the University of Houston in 1991 and is a licensed Professional Engineer in the State of Texas. He is also a member of the Society of Petroleum Evaluation Engineers (past president) and the Society of Petroleum Engineers. He currently serves on the SPE Oil and Gas Reserves Committee.

In addition to gaining experience and competency through prior work experience, the Texas Board of Professional Engineers requires a minimum of fifteen hours of continuing education annually, including at least one hour in the area of professional ethics, which Mr. Olds fulfills. For 2022, Mr. Olds has 29 continuing education hours related to reserves, reserve evaluation, and ethics.

Based on his educational background, professional training and 40 years of practical experience in the estimation and evaluation of petroleum reserves, Mr. Olds has attained the professional qualifications as a Reserves Estimator and Reserves Auditor set forth in Article III of the “Standards Pertaining to the Estimating and Auditing of Oil and Gas Reserves Information” promulgated by the Society of Petroleum Engineers as of June 2019.

RYDER SCOTT COMPANY    PETROLEUM CONSULTANTS

Professional Qualifications of Primary Technical Person

The conclusions presented in this report are the result of technical analysis conducted by teams of geoscientists and engineers from Ryder Scott Company, L.P. Mr. Timour Baichev was the primary technical person responsible for overseeing the estimate of the reserves, future production and income prepared by Ryder Scott presented herein.

Mr. Timour Baichev, an employee of Ryder Scott Company L.P. (Ryder Scott) since 2006, is a Vice President – Project Coordinator. Before joining Ryder Scott, Mr. Baichev served in a number of engineering positions with Wood Group ESP, GeoData Consulting LLC, United Consultants FDP and RPC Overseas Inc. For more information, regarding Mr. Baichev’s geographic and job experience please refer to the Ryder Scott Company website at www.ryderscott.com/Experience/Employees.

Mr. Baichev earned a Master of Science of Petroleum Engineering (cum laude) from Moscow Oil and Gas Institute in 1977 and Ph.D. degree in 1987 from the same institution. Mr. Baichev is a registered Professional Engineer in the Province of Alberta and is a member of the Society of Petroleum Engineers.

In addition to gaining experience and competency through prior work experience, the Association of Professional Engineers, Geologists and Geophysicists of Alberta (APEGGA) has a mandatory Continuing Professional Development Program (CDP) which requires a minimum of 240 hours of professional development over three years in at least three of six categories, including Professional Practice, Formal Activity, Informal Activity, Participation, Presentations (outside normal job functions) and Contributions to Knowledge (outside normal job functions). Mr. Baichev has met APEGGA’s CPD requirements and as part of his 2022 continuing education hours, Mr. Baichev attended an internally presented 20 **** hours of formalized training relating to the definitions and disclosure guidelines contained in the United States Securities and Exchange Commission Title 17, Code of Federal Regulations, Modernization of Oil and Gas Reporting, Final Rule released January 14, 2009 in the Federal Register. In addition, Mr. Baichev has over 30 hours of informal training during 2022 covering such topics as the SPE/WPC/AAPG/SPEE Petroleum Resources Management System, Canadian Securities Administrators National Policy NI 51-101, reservoir engineering, geoscience and petroleum economics evaluation methods, procedures and software.

Based on his educational background, professional training and more than 30 years of practical experience in the estimation and evaluation of petroleum reserves, Mr. Baichev has attained the professional qualifications as a Reserves Estimator and Reserves Auditor set forth in Article III of the “Standards Pertaining to the Estimating and Auditing of Oil and Gas Reserves Information” promulgated by the Society of Petroleum Engineers as of June 2019.

RYDER SCOTT COMPANY    PETROLEUM CONSULTANTS

Professional Qualifications of Primary Technical Person

The conclusions presented in this report are the result of technical analysis conducted by teams of geoscientists and engineers from Ryder Scott Company, L.P. Hugo Ovalle was the primary technical person responsible for overseeing the estimate of the reserves, future production and income prepared by Ryder Scott **** presented herein.

Mr. Ovalle, an employee of Ryder Scott Company L.P. (Ryder Scott) since 2008, is a Vice President responsible for coordinating and supervising staff and consulting engineers of the company in ongoing reservoir evaluation studies worldwide. Before joining Ryder Scott, Mr. Ovalle served in a number of engineering positions with Petroleum Services Inc. and Accumyn Consulting. For more information regarding Mr. Ovalle’s geographic and job specific experience, please refer to the Ryder Scott Company website at www.ryderscott.com/Experience/Employees.

Mr. Ovalle earned a Bachelor of Science degree in Petroleum Engineering from the University of Oklahoma in 2002 and is a registered Professional Engineer in the State of Texas. He is also a member of the Society of Petroleum Engineers and the Association of International Petroleum Negotiators.

In addition to gaining experience and competency through prior work experience, the Texas Board of Professional Engineers requires a minimum of fifteen hours of continuing education annually, including at least one hour in the area of professional ethics, which Ovalle fulfills. As part of his continuing education hours, Mr. Ovalle has attended formalized training including the RSC Reserves Conference and various professional society presentations specifically relating to the definitions and disclosure guidelines contained in the United States Securities and Exchange Commission Title 17, Code of Federal Regulations, Modernization of Oil and Gas Reporting, Final Rule released January 14, 2009 in the Federal Register. Mr. Ovalle attended an additional formalized in-house training as well as formalized external training includes attending various professional society meetings covering such topics as the SPE/WPC/AAPG/SPEE Petroleum Resources Management System, reservoir engineering, geoscience and petroleum economics evaluation methods, procedures and software and ethics for consultants. Mr. Ovalle routinely teaches various company reserves evaluation workshops and schools around the world.

Based on his educational background, professional training and more than 13 years of practical experience in the estimation and evaluation of petroleum reserves, Mr. Ovalle has attained the professional qualifications as a Reserves Estimator and Reserves Auditor set forth in Article III of the “Standards Pertaining to the Estimating and Auditing of Oil and Gas Reserves Information” promulgated by the Society of Petroleum Engineers as of June 2019.

RYDER SCOTT COMPANY    PETROLEUM CONSULTANTS

Professional Qualifications of Primary Technical Person

The conclusions presented in this report are the result of technical analysis conducted by teams of geoscientists and engineers from Ryder Scott Company, L.P. Mr. Vitaliy Charkovskyy was the primary technical person responsible for overseeing the estimate of the reserves, future production and income prepared by Ryder Scott presented herein.

Mr. Vitaliy Charkovskyy, an employee of Ryder Scott Company L.P. (Ryder Scott) since 2012, is a Vice President. Before joining Ryder Scott, Mr. Charkovskyy served in a number of engineering positions with Saskatchewan Research Council. For more information, regarding Mr. Charkovskyy’s geographic and job experience please refer to the Ryder Scott Company website at www.ryderscott.com/Experience/Employees.

Mr. Charkovskyy earned a Bachelor of Mining degree from Ivano-Frankivsk National Technical University of Oil and Gas in 2007, Master of Engineering degree in Petroleum Engineering in 2008 from the same institution and Master of Applied Science degree in Petroleum Engineering from University of Regina in 2011. Mr. Charkovskyy is a registered Professional Engineer in the Province of Alberta, Saskatchewan and British Columbia and is a member of the Society of Petroleum Engineers.

In addition to gaining experience and competency through prior work experience, the Association of Professional Engineers, Geologists and Geophysicists of Alberta (APEGGA) has a mandatory Continuing Professional Development Program (CDP) which requires a minimum of 240 hours of professional development over three years in at least three of six categories, including Professional Practice, Formal Activity, Informal Activity, Participation, Presentations (outside normal job functions) and Contributions to Knowledge (outside normal job functions). Mr. Charkovskyy has met APEGGA’s CPD requirements and as part of his 2022 continuing education hours, Mr. Charkovskyy attended 3 **** hours of training, presented internally, relating to the definitions and disclosure guidelines contained in the United States Securities and Exchange Commission Title 17, Code of Federal Regulations, Modernization of Oil and Gas Reporting, Final Rule released January 14, 2009 in the Federal Register. In addition, Mr. Charkovskyy has over 40 hours of informal training during 2022, covering such topics as the SPE/WPC/AAPG/SPEE Petroleum Resources Management System, Canadian Securities Administrators National Policy NI 51-101, reservoir engineering, geoscience and petroleum economics evaluation methods, procedures and software.

Based on his educational background, professional training and 11 years of practical experience in the estimation and evaluation of petroleum reserves, Mr. Charkovskyy has attained the professional qualifications as a Reserves Estimator and Reserves Auditor set forth in Article III of the “Standards Pertaining to the Estimating and Auditing of Oil and Gas Reserves Information” promulgated by the Society of Petroleum Engineers as of June 2019.

RYDER SCOTT COMPANY    PETROLEUM CONSULTANTS

PETROLEUM RESERVES DEFINITIONS

As Adapted From:

RULE 4-10(a) of REGULATION S-X PART 210

UNITED STATESSECURITIES AND EXCHANGE COMMISSION (SEC)

PREAMBLE

On January 14, 2009, the United States Securities and Exchange Commission (SEC) published the “Modernization of Oil and Gas Reporting; Final Rule” in the Federal Register of National Archives and Records Administration (NARA). The “Modernization of Oil and Gas Reporting; Final Rule” includes revisions and additions to the definition section in Rule 4-10 of Regulation S-X, revisions and additions to the oil and gas reporting requirements in Regulation S-K, and amends and codifies Industry Guide 2 in Regulation S-K. The “Modernization of Oil and Gas Reporting; Final Rule”, including all references to Regulation S-X and Regulation S-K, shall be referred to herein collectively as the “SEC regulations”. The SEC regulations take effect for all filings made with the United States Securities and Exchange Commission as of December 31, 2009, or after January 1, 2010. Reference should be made to the full text under Title 17, Code of Federal Regulations, Regulation S-X Part 210, Rule 4-10(a) for the complete definitions (direct passages excerpted in part or wholly from the aforementioned SEC document are denoted in italics herein).

Reserves are estimated remaining quantities of oil and gas and related substances anticipated to be economically producible, as of a givendate, by application of development projects to known accumulations. All reserve estimates involve an assessment of the uncertainty relating the likelihood that the actual remaining quantities recovered will be greater or less than the estimated quantities determined as of the date the estimate is made. The uncertainty depends chiefly on the amount of reliable geologic and engineering data available at the time of the estimate and the interpretation of these data. The relative degree of uncertainty may be conveyed by placing reserves into one of two principal classifications, either proved or unproved. Unproved reserves are less certain to be recovered than proved reserves and may be further sub-classified as probable and possible reserves to denote progressively increasing uncertainty in their recoverability. Under the SEC regulations as of December 31, 2009, or after January 1, 2010, a company may optionally disclose estimated quantities of probable or possible oil and gas reserves in documents publicly filed with the SEC. The SEC regulations continue to prohibit disclosure of estimates of oil and gas resources other than reserves and any estimated values of such resources in any document publicly filed with the SEC unless such information is required to be disclosed in the document by foreign or state law as noted in §229.1202 Instruction to Item 1202.

Reserves estimates will generally be revised only as additional geologic or engineering data become available or as economic conditions change.

Reserves may be attributed to either natural energy or improved recovery methods. Improved recovery methods include all methods for supplementing natural energy or altering natural forces in the reservoir to increase ultimate recovery. Examples of such methods are pressure maintenance, natural gas cycling, waterflooding, thermal methods, chemical flooding, and the use of miscible and immiscible displacement fluids. Other improved recovery methods may be developed in the future as petroleum technology continues to evolve.

Reserves may be attributed to either conventional or unconventional petroleum accumulations. Petroleum accumulations are considered as either conventional or unconventional based on the nature of their in-place characteristics, extraction method applied, or degree of processing prior to sale. Examples of unconventional petroleum accumulations include coalbed or coalseam methane (CBM/CSM), basin-centered gas, shale gas, gas hydrates, natural bitumen and oil shale deposits. These unconventional accumulations may require specialized extraction technology and/or significant processing prior to sale.

RYDER SCOTT COMPANY    PETROLEUM CONSULTANTS

PETROLEUM RESERVES DEFINITIONS

Page 2

Reserves do not include quantities of petroleum being held in inventory.

Because of the differences in uncertainty, caution should be exercised when aggregating quantities of petroleum from different reserves categories.

RESERVES (SEC DEFINITIONS)

Securities and Exchange Commission Regulation S-X §210.4-10(a)(26) defines reserves as follows:

Reserves. Reserves are estimatedremaining quantities of oil and gas and related substances anticipated to be economically producible, as of a given date, by application of development projects to known accumulations. In addition, there must exist, or there must be a reasonableexpectation that there will exist, the legal right to produce or a revenue interest in the production, installed means of delivering oil and gas or related substances to market, and all permits and financing required to implement the project.

Note to paragraph (a)(26): Reserves should not be assigned to adjacent reservoirs isolated by major, potentially sealing, faults untilthose reservoirs are penetrated and evaluated as economically producible. Reserves should not be assigned to areas that are clearly separated from a known accumulation by a non-productive reservoir(i.e., absence of reservoir, structurally low reservoir, or negative test results). Such areas may contain prospective resources (i.e., potentially recoverable resources from undiscovered accumulations).

PROVED RESERVES (SEC DEFINITIONS)

Securities and Exchange Commission Regulation S-X §210.4-10(a)(22) defines proved oil and gas reserves as follows:

***Proved oil and gas reserves.***Proved oil and gas reserves are those quantities of oil and gas, which, by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be economically producible—from a given date forward, from knownreservoirs, and under existing economic conditions, operating methods, and government regulations—prior to the time at which contracts providing the right to operate expire, unless evidence indicates that renewal is reasonably certain,regardless of whether deterministic or probabilistic methods are used for the estimation. The project to extract the hydrocarbons must have commenced or the operator must be reasonably certain that it will commence the project within a reasonabletime.

(i) The area of the reservoir considered as proved includes:

(A) The area identified by drilling and limited by fluid contacts, if any, and

(B) Adjacent undrilled portions of the reservoir that can, with reasonable certainty, be judged to be continuous with it and to containeconomically producible oil or gas on the basis of available geoscience and engineering data.

RYDER SCOTT COMPANY    PETROLEUM CONSULTANTS

PETROLEUM RESERVES DEFINITIONS

Page 3

(ii) In the absence of data on fluid contacts, proved quantities in a reservoir arelimited by the lowest known hydrocarbons (LKH) as seen in a well penetration unless geoscience, engineering, or performance data and reliable technology establishes a lower contact with reasonable certainty.

(iii) Where direct observation from well penetrations has defined a highest known oil (HKO) elevation and the potential exists for anassociated gas cap, proved oil reserves may be assigned in the structurally higher portions of the reservoir only if geoscience, engineering, or performance data and reliable technology establish the higher contact with reasonable certainty.

(iv) Reserves which can be produced economically through application of improved recovery techniques (including, but not limitedto, fluid injection) are included in the proved classification when:

(A) Successful testing by a pilot project in an area of thereservoir with properties no more favorable than in the reservoir as a whole, the operation of an installed program in the reservoir or an analogous reservoir, or other evidence using reliable technology establishes the reasonable certainty of theengineering analysis on which the project or program was based; and

(B) The project has been approved for development by allnecessary parties and entities, including governmental entities.

(v) Existing economic conditions include prices and costs at whicheconomic producibility from a reservoir is to be determined. The price shall be the average price during the 12-month period prior to the ending date of the period covered by the report, determined as anunweighted arithmetic average of the first-day-of-the-month price for each month withinsuch period, unless prices are defined by contractual arrangements, excluding escalations based upon future conditions.

RYDER SCOTT COMPANY    PETROLEUM CONSULTANTS

PETROLEUM RESERVES STATUS DEFINITIONS AND GUIDELINES

As Adapted From:

RULE 4-10(a) of REGULATION S-X PART 210

UNITED STATESSECURITIES AND EXCHANGE COMMISSION (SEC)

and

2018 PETROLEUM RESOURCES MANAGEMENT SYSTEM (SPE-PRMS)

Sponsored and Approved by:

SOCIETY OF PETROLEUM ENGINEERS (SPE)

WORLD PETROLEUM COUNCIL (WPC)

AMERICAN ASSOCIATION OF PETROLEUM GEOLOGISTS (AAPG)

SOCIETY OF PETROLEUM EVALUATION ENGINEERS (SPEE)

SOCIETY OF EXPLORATION GEOPHYSICISTS (SEG)

SOCIETY OF PETROPHYSICISTS AND WELL LOG ANALYSTS (SPWLA)

EUROPEAN ASSOCIATION OF GEOSCIENTISTS & ENGINEERS (EAGE)

Reserves status categories define the development and producing status of wells and reservoirs. Reference should be made to Title 17, Code of Federal Regulations, Regulation S-X Part 210, Rule 4-10(a) and the SPE-PRMS as the following reserves status definitions are based on excerpts from the original documents (direct passages excerpted from the aforementioned SEC and SPE-PRMS documents are denoted in italics herein).

DEVELOPED RESERVES (SEC DEFINITIONS)

Securities and Exchange Commission Regulation S-X §210.4-10(a)(6) defines developed oil and gas reserves as follows:

Developed oil and gasreserves are reserves of any category that can be expected to be recovered:

(i) Through existing wells with existing equipment andoperating methods or in which the cost of the required equipment is relatively minor compared to the cost of a new well; and

(ii)Through installed extraction equipment and infrastructure operational at the time of the reserves estimate if the extraction is by means not involving a well.

Developed Producing (SPE-PRMS Definitions)

While not a requirement for disclosure under the SEC regulations, developed oil and gas reserves may be further sub-classified according to the guidance contained in the SPE-PRMS as Producing or Non-Producing.

Developed Producing Reserves

Developed Producing Reserves are expected quantities to be recovered from completion intervals that are open and producing at the effectivedate of the estimate.

RYDER SCOTT COMPANY    PETROLEUM CONSULTANTS

PETROLEUM RESERVES STATUS DEFINITIONS AND GUIDELINES

Page 2

Improved recovery reserves are considered producing only after the improved recoveryproject is in operation.

Developed Non-Producing

Developed Non-Producing Reserves include shut-in andbehind-pipe Reserves.

Shut-In

Shut-in Reserves are expected to be recovered from:

(1) completion intervals that are open at the time of the estimate but which have not yet started producing;

(2) wells which were shut-in for market conditions or pipeline connections; or

(3) wells not capable of production for mechanical reasons.

Behind-Pipe

Behind-pipe Reserves are expected to be recovered from zones in existing wells that will require additional completion work or future re-completion before start of production with minor cost to access these reserves.

In all cases,production can be initiated or restored with relatively low expenditure compared to the cost of drilling a new well.

UNDEVELOPED RESERVES (SECDEFINITIONS)

Securities and Exchange Commission Regulation S-X §210.4-10(a)(31) defines undeveloped oil and gas reserves as follows:

Undeveloped oil and gasreserves are reserves of any category that are expected to be recovered from new wells on undrilled acreage, or from existing wells where a relatively major expenditure is required for recompletion.

(i) Reserves on undrilled acreage shall be limited to those directly offsetting development spacing areas that are reasonably certain ofproduction when drilled, unless evidence using reliable technology exists that establishes reasonable certainty of economic producibility at greater distances.

(ii) Undrilled locations can be classified as having undeveloped reserves only if a development plan has been adopted indicating that theyare scheduled to be drilled within five years, unless the specific circumstances, justify a longer time.

(iii) Under nocircumstances shall estimates for undeveloped reserves be attributable to any acreage for which an application of fluid injection or other improved recovery technique is contemplated, unless such techniques have been proved effective by actualprojects in the same reservoir or an analogous reservoir, as defined in paragraph (a)(2) of this section, or by other evidence using reliable technology establishing reasonable certainty.

RYDER SCOTT COMPANY    PETROLEUM CONSULTANTS

EX-15.4

Page: 1 of 18

Exhibit 15.4

PETROCHINA CANADA LTD.

CNPC INTERNATIONAL (CANADA) LTD

RESERVES ASSESSMENT AND

EVALUATION OF

CANADIANOIL AND GAS PROPERTIES

ABBREVIATED SEC RESERVES REPORT

Effective December 31, 2022

1223644

Page: 2 of 18

SEC ABBREVIATED RESERVES REPORT

TABLE OF CONTENTS

		Page
COVERING LETTER		****	3
INDEPENDENT PETROLEUM CONSULTANTS’ CONSENT		****	5
INTRODUCTION		****	6
EVALUATION PROCEDURE		****	9
CERTIFICATES OF QUALIFICATION		****	17
SUMMARY
Table 1	Summary of Reserves and Values	****	18

March 22, 2023 12:49:13

January 18, 2023
Projects 1223644
Mr. Zhaowen Li
---
PetroChina Canada Ltd.<br> <br>2700, 707 –<br>5^th^ Street S.W.
Calgary, Alberta T2P 1V8
Dear Mr. Li:
---	---	---
	Re:	PetroChina Canada and
		CNPC International (Canada) Ltd.
		Corporate Evaluation (SEC)
		Effective December 31, 2022

GLJ Ltd. (GLJ) has completed an independent reserves assessment and evaluation of the oil and gas properties of PetroChina Canada Ltd. and CNPC International (Canada) Ltd. (jointly referred to as the “Company”). The effective date of this evaluation is December 31, 2022. The preparation date of this report is January 18, 2023.

Properties included in this evaluation are:

•	PetroChina Canada Ltd. Properties
•	Duvernay Properties (Kaybob Duvernay, Willesden Green Duvernay)
---	---
•	Groundbirch Joint Venture
---	---
•	CNPC International (Canada) Properties:
---	---
•	Lone Rock (Sask)
---	---

Please note that the reserves information provided herein represents a consolidated report of the Company’s reserves. For further details, please refer to the following report tables and discussion.

GLJ has prepared the reserves estimates utilizing reserves definitions contained in National Instrument 51-101 (NI 51-101) and following standards set out in the Canadian Oil and Gas Evaluation (COGE) Handbook as required for securities reporting in Canada. Proved reserves definitions provided in NI 51-101 are similar to the United States Securities and Exchange Commission (SEC) Reg. S-X definitions, and guidance provided in COGE is generally in keeping with SEC guidelines. Economic forecasts provided herein have been prepared using the SEC mandated average of previous 12 months first-day-of-the-month constant product pricing guidelines; all future capital and operating costs using 2022 cost estimates and are unescalated. For the subject evaluation, the application of the SEC definitions would cause no change to the proved reserves and economic forecasts prepared following COGE using the SEC constant product prices. Accordingly, the constant pricing proved reserves estimates and economic forecasts are considered appropriate for U.S. reporting purposes.

This report has been prepared for the Company for the purpose of annual disclosure, other financial requirements and for inclusion as an exhibit in a filing made to the SEC. It should be noted that all values contained herein are in Canadian dollars. In preparation of the reserves and values contained herein, GLJ utilized industry best practices as outlined in SPE-PRMS and COGE. It is our opinion that the assumptions, data, methods and procedures utilized in preparation of this report are appropriate for the purposes of the report. In addition, GLJ used all methods and procedures considered necessary to properly evaluate the reserves contained herein.

1920, 401 – 9^th^ Ave SW Calgary, AB, Canada T2P 3C5	tel 403-266-9500	gljpc.com
Page 2
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It was GLJ’s primary mandate in this evaluation to provide an independent evaluation of the oil and gas reserves of each Company individually and in aggregate. Accordingly, it may not be appropriate to extract individual property or entity estimates for other purposes. Our engagement letter notes these limitations on the use of this report.

Please refer to the following tables, forecasts and evaluation procedures as enclosed in the following report. It should be noted, GLJ has only evaluated a sub-set of the Company’s total proved reserves as detailed above, accounting for approximately 0.47% of PetroChina Company Ltd’s reserves portfolio.

While government regulations in the oil and gas industry are often subject to change, GLJ is not aware of any such governmental actions (provincially or federally) which would restrict the recovery of the Company’s December 31, 2022 estimated reserves.

It is trusted that this evaluation meets your current requirements. Should you have any questions regarding this analysis, please contact the undersigned.

Yours very truly,
GLJ LTD.
Trisha S. MacDonald, P. Eng.
Vice President, Corporate Evaluations

TSM/md

Attachments

Page: 5 of 18

INDEPENDENT PETROLEUM CONSULTANTS’ CONSENT

The undersigned firm of Independent Petroleum Consultants of Calgary, Alberta, Canada has prepared an independent evaluation of PetroChina Canada Ltd.’s and CNPC International (Canada) Ltd.’s (jointly referred to as the “Company”) Canadian oil and gas properties and hereby gives consent to the use of their name and to the said estimates. The effective date of the evaluation is December 31, 2022.

In the course of the evaluation, the Company provided GLJ Ltd. personnel with basic information which included land data, well information, geological information, reservoir studies, estimates of on-stream dates, contract information, current hydrocarbon product prices, operating cost data, capital budget forecasts, financial data and future operating plans. Other engineering, geological or economic data required to conduct the evaluation and upon which this report is based, were obtained from public records, other operators and from GLJ Ltd. nonconfidential files. The Company has provided a representation letter confirming that all information provided to GLJ Ltd. is correct and complete to the best of its knowledge. Procedures recommended in the Canadian Oil and Gas Evaluation (COGE) Handbook and SPE-PRMS to verify certain interests and financial information were applied in this evaluation. In applying these procedures and tests, nothing came to GLJ Ltd.’s attention that would suggest that information provided by the Company was not complete and accurate. GLJ Ltd. reserves the right to review all calculations referred to or included in this report and to revise the estimates in light of erroneous data supplied or information existing but not made available which becomes known subsequent to the preparation of this report.

The accuracy of any reserves and production estimate is a function of the quality and quantity of available data and of engineering interpretation and judgment. While reserves and production estimates presented herein are considered reasonable, the estimates should be accepted with the understanding that reservoir performance subsequent to the date of the estimate may justify revision, either upward or downward.

Revenue projections presented in this report are based on existing economic conditions, market prices and operating conditions as of the effective date of evaluation and excludes any inflation or escalation of price. Currency exchange rates, market demand and government policy are subject to many uncertainties and may, in future, differ materially from the estimates contained herein. Present values of revenues documented in this report do not necessarily represent the fair market value of the reserves evaluated herein.

PERMIT TO PRACTICE
GLJ LTD.
Signature:
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Date:	January 18, 2023
---	---
	PERMIT NUMBER: P 2066
	The Association of Professional Engineers<br>and Geoscientists of Alberta
	APEGA ID#77134

Page: 6 of 18

INTRODUCTION

GLJ (GLJ) was commissioned by PetroChina Canada Ltd. and CNPC International (Canada) Ltd. (jointly referred to as the “Company”) to prepare an independent evaluation of their oil and gas reserves effective December 31, 2022.

The evaluation was initiated in September 2022 and completed by January 2023. Estimates of reserves and projections of production were generally prepared using well information and production data available from public sources to approximately August 31, 2022. The Company provided land, accounting data and other technical information not available in the public domain to approximately December 31, 2022. In certain instances, the Company also provided recent engineering, geological and other information up to December 31, 2022. The Company has confirmed that, to the best of its knowledge, all information provided to GLJ is correct and complete as of the effective date.

This evaluation has been prepared in accordance with procedures and standards contained in the Canadian Oil and Gas Evaluation (COGE) Handbook, which are considered to be generally consistent with those outlined in SPE-PRMS. The reserves definitions used in preparing this report (included herein under “Reserves Definitions”) are those contained in the SEC Reserves Definitions from excerpts S-X210.4-10 and those as detailed in SPE-PRMS (published in 2018).

The evaluation was conducted on the basis of the average of the first day posted prices in each of the 12 months of the Company’s fiscal year as summarized in the Product Price and Market Forecasts section of this report, consistent with the SEC mandated average of previous 12 months first-day-of-the-month constant product pricing guidelines.

A summary of average realized prices used in the evaluation (volume weighted prices), after quality and location adjustments, by product, are illustrated in the following table:

Product	Volume Weighted Average<br>Price after deductions
Shale Gas	$	6.24/mcf
Oil	$	112.23/bbl
Field Condensate	$	120.70/bbl
Condensate	$	104.38/bbl
Butane	$	58.00/bbl
Propane	$	49.86/bbl
Ethane	$	6.70/bbl

Page: 7 of 18

All commodity prices are based on the Company’s historical received pricing and are forecast using constant (unescalated) differentials for quality and location, from the appropriate pricing benchmark as illustrated in the Product price and Market Forecasts section of this report. Of note, the average forecast pricing is the result of a combination of properties; the average prices illustrated in the economic forecasts fluctuates due to volumes and prices as at each property, and the impact of the offsets on each price at each location (quality and location offsets).

Tables summarizing production, royalties, costs, revenue projections, reserves and present value estimates for various reserves categories for individual properties and the Company total are provided in the tabbed sections of this Summary Report.

The Evaluation Procedure section outlines general procedures used in preparing this evaluation. The individual property reports, provided under separate cover, provide additional evaluation details. The following summarizes evaluation matters that have been included/excluded in cash flow projections:

•	provisions for the abandonment and reclamation of all of the Company’s existing and future wells, to which<br>reserves or resources have been included within this evaluation, to a standard imposed by applicable government or regulatory authorities have been included; all other abandonment and reclamation costs have not been included; it is noted that the<br>exclusion of abandonment and reclamation costs for existing wells without reserves is consistent with disclosure requirements within NI 51-101,
•	per existing regulation as of the effective date, carbon taxes associated with greenhouse gas emissions as part<br>of the Canadian Federal Greenhouse Gas Pollution Pricing Act, the Update to the Pan-Canadian Approach to Carbon Pollution Pricing, Alberta Climate Change and Emissions Management Act’s Technology<br>Innovation and Emissions Reduction Regulation, British Columbia Carbon Tax Act and Saskatchewan Oil and Gas Emission Management Regulations, have been included. Carbon taxes have been included as operating costs considering historical carbon tax<br>payments in accordance with the regulations on carbon pollution taxes, from current levels of $65/T to $170/T in 2030. Carbon taxes beyond 2030 remain constant.
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Economic forecasts are provided on an after-tax basis including tax pools provided by the Company in the “Evaluation Procedure” section.

Page: 8 of 18

The preparation of an evaluation requires the use of judgment in applying the standards and definitions contained in SEC Reserves Definitions from excerpts S-X210.4-10 and those as detailed in SPE-PRMS (published in 2018). GLJ has applied those standards and definitions based on its experience and knowledge of industry practice. While GLJ believes that the reserves data set forth in this evaluation have, in all material respects, been determined and are in accordance with these guidelines, because the application of the standards and definitions contained in the SPE-PRMS and SEC Reserves Definitions require the use of judgment there is no assurance that the applicable securities regulator(s) will not take a different view as to some of the determinations in the evaluation.

Page: 9 of 18

EVALUATION PROCEDURE

TABLE OF CONTENTS

INTEREST DESCRIPTIONS	10
WELL DATA	10
ACCOUNTING SUMMARY	10
PRODUCTION FORECASTS	10
AFTER TAX ANALYSIS	11
ECONOMIC PARAMETERS	14
OIL EQUIVALENT OR GAS EQUIVALENT	15
LIST OF ABBREVIATIONS	15

Page: 10 of 18

EVALUATION PROCEDURE

The following outlines the methodology employed by GLJ Ltd. in conducting the evaluation of the Company’s oil and gas properties. GLJ evaluation procedures are in compliance with standards contained in the Canadian Oil and Gas Evaluation (COGE) Handbook which is generally keeping with SEC guidelines.

INTEREST DESCRIPTIONS

The Company provided GLJ with current land interest information. The Company provided a representation letter confirming accuracy of land information. Certain cross-checks of land and accounting information were undertaken by GLJ as recommended in the COGE Handbook. In this process, nothing came to GLJ’s attention that indicated that information provided by the Company was incomplete or unreliable.

In GLJ’s reports, “Company Interest” reserves, resources and values refer to the sum of royalty interest* and working interest reserves and resources before deduction of royalty burdens payable.

* Royalty interest reserves and resources include royalty volumes derived only from other working interest owners.

WELL DATA

Pertinent interest and offset well data such as drill stem tests, workovers, pressure surveys, production tests, etc., were provided by the Company or were obtained from other operators, public records or GLJ nonconfidential files.

ACCOUNTING SUMMARY

The Company provided GLJ with available accounting data on a property basis for the period November 1, 2020 to December 31, 2022. In some circumstances this information was also provided on a cost centre basis to address major resources entities that are a subset of a Company property. The Company has also provided historical accounting data by property for 2015 to 2022.

PRODUCTION FORECASTS

In establishing all production forecasts, consideration was given to existing gas contracts and the possibility of contract revisions, to the operator’s plans for development drilling and to reserves, resources and well capability. Generally, development drilling in an area was not considered unless there was some indication from the operator that drilling could be expected.

Page: 11 of 18

The on-stream date for currently shut-in reserves and resources was estimated with consideration given to the following:

•	proximity to existing facilities
•	plans of the operator
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•	economics
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GLJ used industry best practices as outlined in the COGE Handbook and SPE-PRMS to establish estimates of technical recoverable reserves. As mentioned in the preceding sections, guidelines contained in the COGE Handbook and SPE-PRMS are generally consistent with each other; Proved reserves definitions provided in NI 51-101 are similar to the U.S. SEC Reg. S-X definitions, and guidance provided in the COGE Handbook is generally in keeping with SEC guidelines.

Key methodologies used in this evaluation include performance-based analyses including decline curve analysis, development of type curves, pressure-transient and rate-transient analysis generally coupled with geological, geo-mechanical (unconventional reservoirs), petrophysical and volumetric analysis where applicable, with consideration to producing conditions and analogy to offset wells. An important consideration to the estimation of producing reserves is the proper establishment of flow regime for conventional (depletion drive) and unconventional reservoirs (expansion drive).

For producing wells, GLJ used a combination of decline curve analysis from existing rates (as of the effective date of the evaluation), extrapolated to expected final rates as estimated by technical lift calculations and economic cutoff.

AFTER TAX ANALYSIS

Canadian income taxes were calculated based on currently legislated federal and provincial tax rates, tax regulations and tax pool information provided by the Company. After tax values for reserves development status or production status subcategories (i.e. developed, undeveloped, producing, non-producing) are calculated by difference.

Page: 12 of 18

Current Capital

Following the Federal Accelerated Investment Incentive changes, capital is written off at the following depreciation rates:

Capital Classification	2023		2024-2027		2028
Canadian Oil and Gas Property Expense (COGPE)		15		12.5		10
Canadian Development Expense (CDE)		45		37.5		30
Capital Cost Allowance: (CCA)
Class 41		37.5		25		12.5

Tax Pools

The following tax pools as of the effective date were included in the income tax calculations for the reserves properties:

PetroChina Canada Ltd.Assets:

Tax Pool Classification	Write-Off Rate (%)_		Tax Pool (M)
Canadian Oil and Gas Property Expense (COGPE)		10
Canadian Exploration Expense (CEE)		100
Non-Capital Losses		100
Canadian Development Expense (CDE)		30
Capital Cost Allowance: (CCA)
Class 1		10
Class 41		25
Class 49		8
Scientific Research and Experimental
Development (SRED)		100

All values are in US Dollars.

Page: 13 of 18

CNPC International Asset:

Tax Pool Classification	Write-Off Rate (%)_		Tax Pool (M)
Canadian Oil and Gas Property Expense (COGPE)		10
Canadian Exploration Expense (CEE)		100
Canadian Development Expense (CDE)		30
Non-Capital Loss		100
Capital Cost Allowance: (CCA)
Class 1		10
Class 8		20
Class 10		30
Class 12		100
Class 41		25
Class 46		30
Class 50		55

All values are in US Dollars.

Tax Rates

Federal income tax calculations incorporate income tax rates as follows:

Year	Federal Income<br>Tax Rate
2023+		15.0	%

Allocation of revenues to Canadian provinces for income tax purposes depends on several factors in addition to the provincial origin of the resource revenues. The average future annual provincial tax rate has been calculated based on an allocation of provincial resource revenues and their respective tax rate as follows:

PetroChina Canada Ltd. Assets:

Year	Alberta<br>Tax Rate	Alberta<br>Allocation			B.C.<br>Tax Rate			B.C.<br>Allocation			Sask.<br>Tax Rate			Sask.<br>Allocation			Avg. Ann.<br>Tax Rate
2023+	8.00%		75.92	%		12.00	%		24.08	%		12.00	%		0	%		8.96	%

CNPC International Assets:

Year	Alberta<br>Tax Rate	Alberta<br>Allocation			B.C.<br>Tax Rate			B.C.<br>Allocation		Sask.<br>Tax Rate			Sask.<br>Allocation			Avg. Ann.<br>Tax Rate
2023+	8.00%		0.00	%		12.00	%		0.00		12.00	%		100	%		12.00	%

Page: 14 of 18

ECONOMIC PARAMETERS

Pertinent economic parameters are listed as follows:

a)	The effective date is December 31, 2022.
b)	Operating and capital costs, including maintenance capital, were estimated in 2022 dollars and are unescalated<br>as summarized in the Product Price and Market Forecasts section of this report.
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c)	Operating costs have been included for active and inactive wells in active properties; operating costs for<br>inactive properties are excluded.
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d)	Economic forecasts were prepared for each property on a before income tax basis. After tax analysis was<br>conducted for each property individually. Detailed discounting of future cash flow was performed using a discount factor of 10.0 percent with all values discounted monthly to December 31, 2022, until December 31, 2023, and then<br>discounted annually on a mid-calendar-year basis thereafter.
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e)	Royalty holidays applicable to existing wells or forecast drilling are included in individual well economics.<br>These credits are itemized within the property reports.
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f)	Gas processing allowances relating to remaining undepreciated capital bases, were included in individual<br>property economic evaluations.
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g)	Mineral taxes on freehold interests were included.
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h)	The Saskatchewan Resource Surcharge was included.
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i)	Field level overhead expenses have been included; recovery of overhead expenses has not been included.<br>
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j)	The Company’s office G&A costs have not been included.
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k)	Provisions for the abandonment and reclamation of all of the Company’s existing and future wells, to which<br>reserves have been included within this evaluation, to a standard imposed by applicable government or regulatory authorities have been included. All other abandonment and reclamation costs have not been included. It is noted that the exclusion of<br>abandonment and reclamation costs for existing wells without reserves is consistent with disclosure requirements within NI 51-101.
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Page: 15 of 18

l)

Per existing regulation as of the effective date, carbon taxes associated with greenhouse gas emissions as part<br>of the Canadian Federal Greenhouse Gas Pollution Pricing Act, the Update to the Pan-Canadian Approach to Carbon Pollution Pricing, Alberta Climate Change and Emissions Management Act’s Technology<br>Innovation and Emissions Reduction Regulation, British Columbia Carbon Tax Act and Saskatchewan Oil and Gas Emission Management Regulations, have been included. Carbon taxes have been included as operating costs considering historical carbon tax<br>payments in accordance with the regulations on carbon pollution taxes, from current levels of $65/T to $170/T in 2030. Carbon taxes beyond 2030 remain constant.

OIL EQUIVALENT OR GAS EQUIVALENT

In this report, quantities of hydrocarbons have been converted to barrels of oil equivalent (boe); or to sales gas equivalent (sge) using factors of 6 Mcf/boe for gas, 1 bbl/boe for all liquids, and 0 boe for sulphur. Users of oil equivalent values are cautioned that while boe based metrics are useful for comparative purposes, they may be misleading when used in isolation.

LIST OF ABBREVIATIONS

AOF	absolute open flow
bbl	barrels
Bcf	billion cubic feet of gas at standard conditions
BIIP	bitumen initially-in-place
boe	barrel of oil equivalent, in this evaluation determined using 6 Mcf/boe for gas, 1 bbl/boe for all liquids, and 0 boe for sulphur
bopd	barrels of oil per day
Btu	British thermal units
bwpd	barrels of water per day
DSU	drilling spacing unit
GCA	gas cost allowance
GIIP	gas initially-in-place
GOC	gas-oil contact
GOR	gas-oil ratio
GORR	gross overriding royalty
GWC	gas-water contact
Mbbl	thousand barrels
Mboe	thousand boe
Mcf	thousand cubic feet of gas at standard conditions
Mcfe	thousand cubic feet of gas equivalent
Mlt	thousand long tons
M$	thousand dollars
MM$	million dollars
MMbbl	million barrels

Page: 16 of 18

MMboe	million boe
MMBtu	million British thermal units
MMcf	million cubic feet of gas at standard conditions
MRL	maximum rate limitation
Mstb	thousand stock tank barrels
MMstb	million stock tank barrels
NGL	natural gas liquids (ethane, propane, butane and condensate)
NPI	net profits interest
OIIP	oil initially-in-place
ORRI	overriding royalty interest
OWC	oil-water contact
P&NG	petroleum and natural gas
PIIP	petroleum initially-in-place
psia	pounds per square inch absolute
psig	pounds per square inch gauge
PVT	pressure-volume-temperature
RLI	reserves life index, calculated by dividing reserves by the forecast of first year production
scf	standard cubic feet
sge	sales gas equivalent – if presented in this evaluation, determined using 1 barrel of oil or natural gas liquid = 6 Mcfe; 0 for sulphur
stb	stock tank barrel
WI	working interest
WTI	West Texas Intermediate

Page: 17 of 18

CERTIFICATION OF QUALIFICATION

I, Trisha S. MacDonald, Professional Engineer, 1920, 401 – 9th Avenue S.W., Calgary, Alberta, Canada hereby certify:

1.	That I am an employee of GLJ Ltd., which company did prepare a detailed analysis of Canadian oil and gas<br>properties of PetroChina Canada Ltd. and CNPC International (Canada) Ltd.’s (jointly referred to as the “Company”). The effective date of this evaluation is December 31, 2022.
2.	That I do not have, nor do I expect to receive any direct or indirect interest in the securities of the Company<br>or its affiliated companies.
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3.	That I attended the University of Calgary where I graduated with a Bachelor of Science Degree in Oil and Gas<br>Engineering in 2004; that I am a Registered Professional Engineer in the Province of Alberta; and, that I have in excess of sixteen years of experience in engineering studies relating to oil and gas fields.
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4.	That a personal field inspection of the properties was not made; however, such an inspection was not considered<br>necessary in view of the information available from public information and records, the files of the Company, and the appropriate provincial regulatory authorities.
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January 18, 2023

ID# 72500

Page: 18 of 18

Company:	PetroChina Canada Ltd. CNPC International (Canada) Ltd.	Reserve Class:	Various
Property:	Corporate	Development Class:	Classifications
Description:	SEC Summary—ATAX	Pricing:	SEC 2022-Dec-31 Posted (12 Month Avg.)
		Effective Date:	December 31, 2022

Summary of Reserves and Values

		ProvedDevelopedNon-Producing		ProvedUndeveloped		TotalProvedNon-Producing		TotalProved
MARKETABLE RESERVES
Heavy Oil (Mbbl)
Total Company Interest	24		0		0		0		24
Working Interest	24		0		0		0		24
Net After Royalty	23		0		0		0		23
Shale Gas (MMcf)
Total Company Interest	187,123		15,229		219,404		234,633		421,756
Working Interest	187,123		15,229		219,404		234,633		421,756
Net After Royalty	159,195		11,811		187,706		199,518		358,713
Natural Gas Liquids (Mbbl)
Total Company Interest	11,496		77		24,581		24,658		36,154
Working Interest	11,496		77		24,581		24,658		36,154
Net After Royalty	8,142		62		19,990		20,052		28,194
Oil Equivalent (Mboe)
Total Company Interest	42,708		2,615		61,149		63,764		106,471
Working Interest	42,708		2,615		61,149		63,764		106,471
Net After Royalty	34,698		2,031		51,274		53,305		88,002
BEFORE TAX PRESENT VALUE (M)
0%	1,277,213		40,511		2,117,137		2,157,648		3,434,862
5%	1,012,125		27,933		1,365,811		1,393,744		2,405,869
8%	899,833		23,740		1,089,548		1,113,288		2,013,121
10%	838,162		21,651		948,404		970,055		1,808,217
12%	784,748		19,941		832,209		852,150		1,636,898
15%	716,973		17,882		692,890		710,772		1,427,745
20%	628,497		15,336		524,855		540,191		1,168,688
AFTER TAX PRESENT VALUE (M)
0%	1,231,969		30,010		2,066,133		2,096,143		3,328,112
5%	984,237		20,682		1,335,639		1,356,322		2,340,559
8%	878,117		17,586		1,065,984		1,083,570		1,961,687
10%	819,531		16,047		928,035		944,082		1,763,613
12%	768,611		14,789		814,392		829,181		1,597,792
15%	703,765		13,279		678,051		691,330		1,395,095
20%	618,706		11,417		513,520		524,937		1,143,643

All values are in US Dollars.

BOE Factors:	HVY OIL	1.0	RES GAS	6.0	PROPANE	1.0	ETHANE	1.0
	COND	1.0	SLN GAS	6.0	BUTANE	1.0	SULPHUR	0.0

Run Date: March 20, 2023 11:44:29

1223486	Class (PDP,TP,PDNP,PUD,B), SEC 2022-Dec-31 Posted (12 Month Avg.), psum	March 20, 2023 12:43:37

EX-15.5

Exhibit 15.5

March 7, 2023

China National Oil and Gas Exploration

And Development Corporation

InternationalHolding Ltd (“CNODCI”)

No.6-1 Fuchengmen Beidajie

Xicheng District

Beijing, China 100034

Reference:	CNODCI Interest in PetroKazakhstan Inc.
Evaluation of Crude Oil Reserves, Third Party Report
---

Dear Ladies and Gentlemen:

1.	INTRODUCTION

McDaniel & Associates Consultants Ltd. (“McDaniel”) was requested by PetroKazakhstan Inc. (“PKI”) to prepare an evaluation of the crude oil reserves and the net present values of these reserves for the interests of PKI in the South Turgai Basin, Republic of Kazakhstan, effective as of December 31, 2022.

PKI is an integrated oil and gas company, owned 67 percent by CNODCI and 33 percent by JSC KazMunaiGas Exploration Production (“KMG EP”). PKI requested McDaniel to prepare this Third-Party Report for CNODCI based on the 67 percent interest owned by CNODCI in PKI for the assets of CNODCI that are held within three operating subsidiaries: PetroKazakhstan Kumkol Resources (“PKKR”), Kolzhan LLP (“Kolzhan”) and PetroKazakhstan Ventures Inc. (“PKVI”).

This report was prepared to support PKI’s and CNODCI’s annual securities filings with the SEC. The reserves estimates have been prepared and presented in accordance with U.S. Securities Exchange Commission (SEC) standards. The estimated net proved reserves attributable to the properties evaluated herein, represent 0.1 percent of PetroChina’s reserves on a net equivalent basis. The net proved reserves estimates have been prepared in accordance with the reserves definitions of Rules 4-10(a) (1)-(32) of Regulation S-X of the United States Securities and Exchange Commission (SEC). This report was prepared in accordance with guidelines specified in Item 1202 (a)(8) of Regulation S-K and is to be used for inclusion in certain SEC filings by PetroChina. The assumptions, data, methods, and procedures are appropriate for the purpose served by the report.

2000, Eighth Avenue Place, East Tower, 525 – 8 Avenue SW, Calgary AB T2P 1G1    Tel: (403) 262-5506    www.mcdan.com

CNODCI Interest in PetroKazakhstan Inc.<br><br><br>Evaluation of Oil and Gas Reserves – Third Party Report	Page 2<br> <br>March 7, 2023
2.	RESERVES DEFINITIONS
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The SEC reserves definitions are contained in the Final Rule of Modernization of Oil and Gas Reporting (17 CFR Parts 210, 211, 229 and 249) published by the SEC Regulation on January 14, 2009. A summary of the key proved reserves definitions in Regulation S-X 210.4-10 is presented below.

Reserves

Reserves are estimated remaining quantities of oil and gas and related substances anticipated to be economically producible, as of a given date, by application of development projects to known accumulations. In addition, there must exist, or there must be a reasonable expectation that there will exist, the legal right to produce or a revenue interest in the production, installed means of delivering oil and gas or related substances to market, and all permits and financing required to implement the project.

Note: Reserves should not be assigned to adjacent reservoirs isolated by major, potentially sealing, faults until those reservoirs are penetrated and evaluated as economically producible. Reserves should not be assigned to areas that are clearly separated from a known accumulation by a non- productive reservoir (i.e., absence of reservoir, structurally low reservoir, or negative test results). Such areas may contain prospective resources (i.e., potentially recoverable resources from undiscovered accumulations).

Proved Oil and Gas Reserves

Proved oil and gas reserves are those quantities of oil and gas, which, by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be economically producible—from a given date forward, from known reservoirs, and under existing economic conditions, operating methods, and government regulations—prior to the time at which contracts providing the right to operate expire, unless evidence indicates that renewal is reasonably certain, regardless of whether deterministic or probabilistic methods are used for the estimation. The project to extract the hydrocarbons must have commenced or the operator must be reasonably certain that it will commence the project within a reasonable time.

(i)	The area of the reservoir considered as proved includes:
(A)	The area identified by drilling and limited by fluid contacts, if any, and
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(B)	Adjacent undrilled portions of the reservoir that can, with reasonable certainty, be judged to be continuous<br>with it and to contain economically producible oil or gas on the basis of available geoscience and engineering data.
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CNODCI Interest in PetroKazakhstan Inc.<br><br><br>Evaluation of Oil and Gas Reserves – Third Party Report	Page 3<br> <br>March 7, 2023
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(ii)	In the absence of data on fluid contacts, proved quantities in a reservoir are limited by the lowest known<br>hydrocarbons (LKH) as seen in a well penetration unless geoscience, engineering, or performance data and reliable technology establishes a lower contact with reasonable certainty.
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(iii)	Where direct observation from well penetrations has defined a highest known oil (HKO) elevation and the<br>potential exists for an associated gas cap, proved oil reserves may be assigned in the structurally higher portions of the reservoir only if geoscience, engineering, or performance data and reliable technology establish the higher contact with<br>reasonable certainty.
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(iv)	Reserves which can be produced economically through application of improved recovery techniques (including, but<br>not limited to, fluid injection) are included in the proved classification when:
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(A)	Successful testing by a pilot project in an area of the reservoir with properties no more favorable than in the<br>reservoir as a whole, the operation of an installed program in the reservoir or an analogous reservoir, or other evidence using reliable technology establishes the reasonable certainty of the engineering analysis on which the project or program was<br>based; and
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(B)	The project has been approved for development by all necessary parties and entities, including governmental<br>entities.
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(v)	Existing economic conditions include prices and costs at which economic producibility from a reservoir is to be<br>determined. The price shall be the average price during the 12-month period prior to the ending date of the period covered by the report, determined as an unweighted arithmetic average of the first-day-of-the-month price for each month within such period, unless prices are defined by<br>contractual arrangements, excluding escalations based upon future conditions.
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Analogous Reservoir

Analogous reservoirs, as used in resources assessments, have similar rock and fluid properties, reservoir conditions (depth, temperature, and pressure) and drive mechanisms, but are typically at a more advanced stage of development than the reservoir of interest and thus may provide concepts to assist in the interpretation of more limited data and estimation of recovery. When used to support proved reserves, an “analogous reservoir” refers to a reservoir that shares the following characteristics with the reservoir of interest:

(i) Same geological formation (but not necessarily in pressure communication with the reservoir of interest);

(ii) Same environment of deposition; (iii) Similar geological structure; and (iv) Same drive mechanism.

CNODCI Interest in PetroKazakhstan Inc.<br><br><br>Evaluation of Oil and Gas Reserves – Third Party Report	Page 4<br> <br>March 7, 2023

Reasonable Certainty

If deterministic methods are used, reasonable certainty means a high degree of confidence that the quantities will be recovered. If probabilistic methods are used, there should be at least a 90 percent probability that the quantities actually recovered will equal or exceed the estimate. A high degree of confidence exists if the quantity is much more likely to be achieved than not, and, as changes due to increased availability of geoscience (geological, geophysical, and geochemical), engineering, and economic data are made to estimated ultimate recovery (EUR) with time, reasonably certain EUR is much more likely to increase or remain constant than to decrease.

3.	METHODOLOGY AND PROCEDURES

Crude oil reserves estimates and their associated net present values were evaluated in this report by McDaniel for the interests of PKI in Kazakhstan.

Essentially all of the basic information employed in the preparation of this report was obtained from PKI including geological, geophysical, engineering and financial data. McDaniel utilized this data to prepare an independent assessment of the crude oil reserves as of December 31, 2022. PKI has represented that it is committed to the development plan provided by PKI and has the financial capability to drill the locations and undertake the various developments scheduled in its development plan.

Reserves were assigned by volumetric, material balance, decline analysis or analogy where considered appropriate. In many cases, where sufficient data were available, a combination of the methods were applied. For volumetric methods, the recoverable estimates were based on an estimation of the oil initially-in-place (OIIP) derived from the net oil pay map and petrophysical parameters of the specific pool and a recovery factor based the drive mechanism of the pool, recovery efficiencies in analogous reservoirs, production performance of the existing wells and the benefits expected from future drilling taking into account structural position. For reservoirs where reliable performance trends could be extrapolated, production decline curve analysis was conducted using the appropriate decline curve.

Test data and other related information were used to estimate the anticipated initial production rates for those wells or analogous locations. For reserves not yet on production, forecast sales were estimated to commence at an anticipated date furnished by PKI. The proved undeveloped reserves estimates were based on opportunities identified in the plan of development provided by PKI. Wells or locations that are not currently producing may start producing earlier or later than anticipated in our estimates due to unforeseen factors causing a change in the timing to initiate production. Such factors may include delays due to weather, the availability of rigs, the sequence of drilling, completing and/or recompleting wells and/or constraints set by regulatory bodies.

CNODCI Interest in PetroKazakhstan Inc.<br><br><br>Evaluation of Oil and Gas Reserves – Third Party Report	Page 5<br> <br>March 7, 2023

The future production rates from wells currently on production or wells or locations that are not currently producing may be more or less than estimated because of changes including, but not limited to, reservoir performance, operating conditions related to surface facilities, compression and artificial lift, pipeline capacity and/or operating conditions, producing market demand and/or allowable or other constraints set by regulatory bodies.

Oil and gas reserves estimates have an inherent degree of associated uncertainty the extent of which is affected by many factors. Reserves estimates will vary due to the limited and imprecise nature of data upon which the estimates of reserves are predicated. Moreover, the methods and data used in estimating reserves are often necessarily indirect or analogical in character rather than direct or deductive. Furthermore, the persons involved in the preparation of reserves estimates and associated information are required, in applying geosciences, petroleum engineering and evaluation principles, to make numerous unbiased judgments based upon their educational background, professional training, and professional experience. The extent and significance of the judgments to be made are, in themselves, sufficient to render reserves estimates inherently imprecise. Reserves estimates may change substantially as additional data becomes available and as economic conditions impacting oil and gas prices and costs change. Reserves estimates will also change over time due to other factors such as knowledge and technology, fiscal and economic conditions, contractual, statutory and regulatory provisions.

4.	ECONOMIC ASSUMPTIONS

Net present value estimates were calculated based on future revenue forecasts. As per SEC guidelines, the future net revenues and net present values presented were calculated using the first day of the month crude oil prices for each of the 12 months prior to the effective date of December 31, 2022 and were presented in United States dollars. No escalation of the prices were made nor were the operating and capital costs increased for inflation in this evaluation. The relevant benchmark for PKI’s reserves is Brent at US $100.19/bbl.

The product prices that were used to determine the future gross revenue for each property reflect adjustments to the benchmark prices for gravity, quality, local conditions, and/or distance from market, referred to herein as “differentials”. The differentials used in the preparation of this report estimated from received price information provided by PKI. The average realized prices for PKI’s reserves in the report are US $44.30/bbl.

Future capital costs and operating costs were based on PKI budgets for each respective property with adjustments as deemed appropriate by McDaniel. Capital costs are included as required for workovers, new development wells and production equipment. Based on our understanding of future development plans, a review of the records provided to us, and our knowledge of similar properties, we regard these estimated capital costs to be reasonable. Abandonment costs are represented by PKI to be inclusive of those costs associated with the removal of equipment, plugging of wells, and reclamation and restoration costs associated with the abandonment. Estimates of the operating costs, capital costs and abandonment costs were considered in determining the economic viability of the undeveloped reserves.

CNODCI Interest in PetroKazakhstan Inc.<br><br><br>Evaluation of Oil and Gas Reserves – Third Party Report	Page 6<br> <br>March 7, 2023

Our report has been prepared assuming the continuation of existing regulatory and fiscal conditions subject to the guidance in the SEC regulations. Notwithstanding that PKI currently has regulatory approval to produce the reserves identified in our report, there is no assurance that changes in the regulation will not occur; such chances, which cannot reliably be predicted, could impact PKI’s ability to recover the estimated reserves.

5.	EVALUATION SUMMARY
5.1	NET RESERVES
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The net share of proved developed, proved undeveloped and total proved crude oil reserves as of December 31, 2022 attributable to CNODCI for each of the three subsidiary companies are summarized below.

CNODCI’S NET ENTITLEMENT OF PROVED RESERVES^(1)^

AS OF DECEMBER 31, 2022

	ProvedDeveloped		ProvedUndeveloped		TotalProved
Crude Oil, Mbbl
PKKR		9,951		1,356		11,306
Kolzhan		5,170		1,214		6,384
PKVI		518		283		801
Total	****	15,639	****	2,853	****	18,491
^(1)^	Net entitlement reserves are the working interest reserves in each property after deducting royalties payable<br>to others. In the case of all properties, there are no royalties payable to others.
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5.2	GROSS RESERVES
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The total proved developed, proved undeveloped and total proved crude oil reserves as of December 31, 2022 for each of the three subsidiary companies are presented below for reference purposes only. These gross reserves estimates are based on a 100 percent working interest in each of the properties and include all reserves attributable to government and working interest partners.

GROSS PROVED RESERVES

AS OF DECEMBER 31, 2022

	ProvedDeveloped		ProvedUndeveloped		TotalProved
Crude Oil, Mbbl
PKKR		14,852		2,023		16,875
Kolzhan		13,350		3,015		16,365
PKVI		1,031		564		1,595
Total	****	29,233	****	5,602	****	34,834
CNODCI Interest in PetroKazakhstan Inc.<br><br><br>Evaluation of Oil and Gas Reserves – Third Party Report	Page 7<br> <br>March 7, 2023
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5.3	NET PRESENT VALUES
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The net present values for the proved developed, proved undeveloped and total proved crude oil reserves as of December 31, 2022 attributable to CNODCI for each of the three subsidiary companies are presented below. All of the net present values have been presented at a 10 percent discount rate after tax.

CNODCI NET PRESENT VALUES DISCOUNTED AT 10 PERCENT AFTER TAX

AS OF DECEMBER 31, 2022, $MM

	ProvedDeveloped		ProvedUndeveloped		TotalProved
PKKR		60		12		72
Kolzhan		55		11		66
PKVI		7		3		10
Total	****	122	****	25	****	147
6	BASIS OF OPINION
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McDaniel & Associates Consultants Ltd. has over 65 years of experience in the evaluation of oil and gas properties. McDaniel is registered with the Association of Professional Engineers and Geoscientists of Alberta (APEGA). All of the professionals involved in the preparation of this report have in excess of five years of experience in the evaluation of oil and gas properties. Mr. Cam Boulton, Executive Vice President, supervised the preparation of this report. Mr. Boulton is a professional engineer registered with APEGA and has over 15 years of experience in the evaluation of oil and gas properties. All of the persons involved in the preparation of this report and McDaniel & Associates are independent of PKI and CNODCI.

In preparing this report, we relied upon certain factual information including ownership, well data, production data, prices, revenues, operating costs, capital costs, contracts, and other relevant data supplied by PKI. We used all methods and procedures as it considered necessary under the circumstances to prepare the report. Assumptions, data, methods and procedures are appropriate for the purpose served by the report. This report was prepared by McDaniel for the use of PKI and CNODCI for its securities filings. It is not to be reproduced, distributed or made available, in whole or in part, to any person, company or organization other than PetroKazakhstan Overseas Services Inc.. without the knowledge and consent of McDaniel & Associates Consultants Ltd. Individual property reserves estimates may not reflect the same confidence level as required by the reserves definitions for the overall group of properties. Consequently, McDaniel & Associates reserves the right to re-assess the reserves estimates and future net revenues for any individual property or group of properties if considered in isolation. The reserves estimates for all properties evaluated in the report meet the requirements for reasonable certainty in Rule 4-10(a)(24) of Regulation S-X.

CNODCI Interest in PetroKazakhstan Inc.<br><br><br>Evaluation of Oil and Gas Reserves – Third Party Report	Page 8<br> <br>March 7, 2023

We reserve the right to revise any estimates provided herein if any relevant data existing prior to preparation of this report was not made available, if any data between the preparation date and the evaluation date of this evaluation were to vary significantly from that forecast, or if any data provided was found to be erroneous.

Sincerely,

McDANIEL & ASSOCIATES CONSULTANTS LTD.

APEGA PERMIT NUMBER: P3145

Cameron T. Boulton, P.Eng.<br> <br>Executive Vice<br>President<br> <br>March 7, 2023	Anatoli Tchernavskikh, P.Geol.<br> <br>Manager,<br>International Geology<br> <br>March 7, 2023

CTB/AT:jep

[22-0202]

CERTIFICATE OF QUALIFICATION

I, Cameron Boulton, Petroleum Engineer of 2000, 525 – 8 Avenue SW, Calgary, Alberta, Canada hereby certify:

1.	That I am an Executive Vice President of McDaniel & Associates Consultants Ltd., APEGA Permit Number<br>P3145, which Company did prepare, at the request of PetroKazakhstan Inc., the report entitled “CNODCI Interest in PetroKazakhstan Inc., Evaluation of Crude Oil Reserves, Third Party Report, As of December 31, 2022”, dated<br>March 7, 2023, and that I was involved in the preparation of this report. I am also registered as a Responsible Member as outlined by APEGA for McDaniel & Associates Consultant Ltd. APEGA Permit Number 3145.
2.	That I attended the Queen’s University in the years 2002 to 2006 and that I graduated with a Bachelor of<br>Science degree in Chemical Engineering, that I am a registered Professional Engineer with the Association of Professional Engineers and Geoscientists of Alberta and that I have in excess of 15 years of experience in oil and gas reservoir studies and<br>evaluations.
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3.	That I have no direct or indirect interest in the properties or securities of PetroKazakhstan Inc., nor do I<br>expect to receive any direct or indirect interest in the properties or securities of PetroKazakhstan Inc., or any affiliate thereof.
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4.	That the aforementioned report was not based on a personal field examination of the properties in question,<br>however, such an examination was not deemed necessary in view of the extent and accuracy of the information available on the properties in question.
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APEGA ID 89981

Calgary, Alberta

Dated: March 7, 2023

CERTIFICATE OF QUALIFICATION

I, Anatoli V. Tchernavskikh, Petroleum Geologist, of 2000, 525 – 8 Avenue SW, Calgary, Alberta, Canada hereby certify:

1.	That I am the Manager of International Geology of McDaniel & Associates Consultants Ltd., APEGA Permit<br>Number P3145, which Company did prepare, at the request of PetroKazakhstan Inc., the report entitled “CNODCI Interest in PetroKazakhstan Inc., Evaluation of Crude Oil Reserves, Third Party Report, As of December 31, 2022”, dated<br>March 7, 2023, and that I was involved in the preparation of this report. I am also registered as a Responsible Member as outlined by APEGA for McDaniel & Associates Consultant Ltd. APEGA Permit Number 3145.
2.	That I attended Moscow State University (Russia) in the years 1984 to 1991, graduating with a Honorary Master<br>of Science degree in Geology; that I am a registered Professional Geologist with the Association of Professional Engineers and Geoscientists of Alberta and that I have in excess of 30 years of experience in oil and gas reservoir studies and<br>evaluations.
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3.	That I have no direct or indirect interest in the properties or securities of PetroKazakhstan Inc., nor do I<br>expect to receive any direct or indirect interest in the properties or securities of PetroKazakhstan Inc., or any affiliate thereof.
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4.	That the aforementioned report was not based on a personal field examination of the properties in question,<br>however, such an examination was not deemed necessary in view of the extent and accuracy of the information available on the properties in question.
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APEGA ID 66495

Calgary, Alberta

Dated: March 7, 2023

EX-15.6

Exhibit 15.6

<br><br><br><br><br> <br><br> <br>18th Floor, East Tower, World Financial Center<br><br><br>1 Dongsanhuan Zhonglu<br> <br>Chaoyang District<br><br><br>Beijing, 100020<br> <br>P.R. China<br><br><br>T +86 10 5878 5588<br> <br>F +86 10 5878 5577<br><br><br>www.kwm.com

CONSENT LETTER

To PetroChina Company Limited

No. 9 Dongzhimen North Street

Dongcheng District, Beijing 100007

People’s Republic of China

April 28, 2023

Dear Sir/Madam:

We hereby consent to the reference of our name under the headings “Item 3. Key Information — Risk Factors” in PetroChina Company Limited’s Annual Report on Form 20-F for the year ended December 31, 2022 (the “Annual Report”), which will be filed with the Securities and Exchange Commission (the “SEC”) on the date hereof. We also consent to the filing of this consent letter with the SEC as an exhibit to the Annual Report on Form 20-F for the year ended December 31, 2022.

In giving such consent, we do not thereby admit that we come within the category of persons whose consent is required under Section 7 of the Securities Act of 1933, or under the Securities Exchange Act of 1934, in each case, as amended, or the regulations promulgated thereunder.

Yours faithfully

King & Wood Mallesons

EX-15.7

Exhibit 15.7

<br><br><br><br><br> <br><br> <br>13/F, Gloucester Tower, The Landmark<br><br><br>15 Queen’s Road Central, Central, Hong Kong<br> <br><br><br><br>T +852 3443 1000<br> <br>F +852 3443 1299<br><br><br><br> <br>wwwkwm.com

CONSENT LETTER

To: PetroChina Company Limited

No. 9 Dongzhimen North Street

Dongcheng District

Beijing

People’s Republic of China, 100007

April 28, 2023

Dear Sir/Madam:

We hereby consent to the reference of our name under the headings “Item 3. Key Information — Risk Factors” in PetroChina Company Limited’s Annual Report on Form 20-F for the year ended December 31, 2022 (the “Annual Report”), which will be filed with the Securities and Exchange Commission (the “SEC”) on the date hereof. We also consent to the filing of this consent letter with the SEC as an exhibit to the Annual Report on Form 20-F for the year ended December 31, 2022.

In giving such consent, we do not thereby admit that we come within the category of persons whose consent is required under Section 7 of the Securities Act of 1933, or under the Securities Exchange Act of 1934, in each case, as amended, or the regulations promulgated thereunder.

Yours faithfully,

King & Wood Mallesons