Speech at the Fifth NOC Forum

Promoting Reciprocal Cooperation, Achieving Common Development

Jiang Jiemin, President
November 8, 2008

Dear Guests, Ladies and Gentlemen,

In the early winter with clear sky and red maple, we have gathered in Beijing for the Fifth NOC Forum to meet our friends, discuss cooperation opportunities and think about common growth. Here, on behalf of CNPC, I would like to extend my sincere welcome to our new and old friends who have come to take part in the Forum and my hearty congratulations to the success of the Forum.

Since the founding of NOC Forum in 2002, we have had four successful events which have proven to be an important platform for national oil companies to foster high-level exchange of views, to promote cooperation of mutual benefits and commonly increase international influence. With the continuous global economic development, particularly the industrialization of all the countries, we are all faced with the challenges of how to effectively protect the environment, maintain energy security and promote sustainable growth of enterprises and are obliged to come up with solutions. It is my great pleasure to have the opportunity to discuss this with our peers here.

We always believe that the most important resources are human beings and the natural environment in which we live. Environmental protection is our national policy, is prerequisite for the realization of better and faster economic / social development and is, above all, the corporate responsibility. CNPC has always adhered to the corporate mission of "Caring for Energy, Caring for You", focusing our efforts on caring for life and environmental protection. With deep rooted idea of "Environment First", we follow the clean development path and strictly abide by the national laws and regulations. We have effectively avoided any major accidents that could cause pollution and ecological damage and have cut down the total emissions of major pollutants while our production has been growing. We have achieved positive results in combining business growth with environmental conservation and making us an environment-friendly enterprise. At the same time, we also take climate change seriously and proactively support the initiatives taken by both international community and the Chinese government. We have taken a number of actions for the reduction of carbon emission and carbon sequestration, including afforestration programme in Xinjiang, establishing China Green Carbon Fund together with State Forestry Administration Bureau and China Green Foundation, China's largest project for nitrogen oxide emission reduction in Liaoyang PetroChemical Plant, jointly sponsoring a carbon credit exchange together with Tianjin City and Chicago Climate Exchange. In the future, we will continue to make more efforts in dealing with climate change.

Energy security is fundamental to the world economic growth and is an important part of overall national economic security. Ensuring energy security is one of the major responsibilities to be undertaken by national oil company. In line with the continuous and fast economic growth, the gap between oil and gas supply and demand in China continues to widen year after year, resulting in ever rising dependence on imports. As national oil company, we will implement national strategy for energy development by steadfastly honoring the principles of "Relying on Domestic Resource, Supplement from Overseas Resource, Focusing on Energy Saving and Diversifying Energy Supply" to safeguard national energy security. We have and will continue to focus on the exploration and production of domestic oil and gas resources, maximizing potential of existing reserves, promoting overall development of new oil fields and enhanced oil recovery of existing fields to realize steady and continuous growth of oil output and fast natural gas production output. We have also been trying to optimize refinery and petrochemical production for continuous growth of crude run and petrochemical products, set up and improve country-wide oil products sales network and oil and gas pipeline grid in order to satisfy market demand with a strengthened supply position.

Inevitably, it is a practical choice for us to utilize overseas resources as supplement to our domestic supply and expand international energy cooperation in order to secure energy supply and to promote common growth. CNPC has been actively pursuing opportunities in international energy cooperation based on mutual benefits and win-win principle. To date, CNPC is operating 72 projects in 26 countries, having developed a number of major oil and gas cooperation regions. So far, we have developed in an integrated manner, covering oil and gas exploration and production, international engineering service and international trade. It is worth mentioning that our cooperation with resource rich countries in Central Asia, Africa and South America has greatly enhanced the oil and gas development efficiency and stimulated local economic growth and social progress.

The critical path to securing energy supply also lies in energy saving by reducing oil and gas consumption. We have and continue to be committed to combination of development with conservation, sticking to the principle of energy saving first and efficiency oriented. Priority is given to saving in energy, water and land by way of constantly improving resources allocation and optimizing production, R & D and application of new energy saving technologies and equipment, shutting down high energy consuming installations and well stations. As a result, we have experienced continuous improvement of energy efficiency with higher resource utilization rate. Meanwhile, we are actively pushing forward the massive development of coal bed methane, maintaining a paced development of biofuel, increasing our input in resource evaluation of non-conventional resources such as oil shale, shale gas and oil sands, in an attempt to provide alternative clean fuels to the society. By 2015, PetroChina will set up 7 m toe new energy production capacity, serving as supplement to ensure stable domestic energy supply.

To ensure a fully concerted and sustainable development, we must transform our current development mode, try to coordinate development speed with quality, structure and economic efficiency and to raise the scientific development of an enterprise by way of technical advancement, management innovation and higher employee qualifications. We regard scientific and technical progress as the key theme for our development mode transformation, prioritizing several areas such as major technical breakthrough programme, on-site technical experiment and application of mature technology. In addition, we are actively mobilizing our resources to focus on key specialized equipment and research on cutting edge technology. As a result, we have now owned some key technologies, which will provide technical support to our sustainable development.

Production safety is a prerequisite for achieving scientific development and is a key parameter for social progress. Bearing deep in our mind the idea of "Safety First", we make it an on-going task to improve our HSE management system, consecutively launch the program of "Safety and Environmental Protection Year", focus our attention on some key areas and critical points to reduce risks and prevent accidents, realizing safe and stable production. It is our long-term goal to pursue relentlessly zero accident, zero damage and zero defects while trying to set up an everlasting safety production mechanism.

System innovation is the key guarantee to the scientific development of an enterprise. We will continue to streamline our organization structure and management system in order to provide system support for transforming the current development mode. We will continue to push forward the internal reform and re-organization, promote optimized resources allocation, creating a sound system platform to realize sustainable development. As is known to all, the market is changing rapidly and every country or region differs from each other. There is no such a fixed and perfect model to follow for large-sized corporations. Therefore, we will aim at intensity, specialization and integration in our management system so as to establish step by step a new corporate structure that fits in with both the requirements for a modern enterprise but also is unique to PetroChina, which will help to further boost our dynamics, operation efficiency and economic gains.

Employees are most valuable resources and assets for a company to realize scientific development. We have always adhered to the concept of "People Oriented", regarding the full development of staff as the major driving force for the transformation of production mode. We continue to improve the system of training, attracting and utilizing talents. As a result, we have effectively upgraded the overall proficiency of employees. In the future, we will pay closer attention to provision of training according to needs aiming at all employees, make more efforts in cultivating pool of talents, highly skilled in different fields and at different levels so as to provide strong human resources support for the company's further growth and development.

A company's wealth comes from society. Therefore, National Oil Company should not forget its commitment to social returns. We have always worked together with the local communities for mutual benefits, trying to promote concerted development of local economy and society through various activities and in many different ways.

In China, we have carried out poverty-alleviation work and assistance to disadvantaged groups in certain areas, actively taken part in public welfare activities such as disaster relief, donations to education and serving Olympics. For example, after Wenchuan Mega Earthquake, our company carried out quake relief efforts both internally and externally, dispatching over 25,000 personnel/times and a number of specialized rescue teams to quake hit areas in addition to mobilizing emergency production and sending out all kinds of relief materials together with over RMB320 million equivalent donations from almost 1 million employees. In overseas operations, we fully understand and respect the host country's culture, tradition and custom, strive to maintain harmonious relationship with local community, support public welfare activities, promote the economic development in the host country, all of which have helped bolster a good corporate image for our company.