In accordance with the "State Council Institutional Reform Plan" reviewed and approved by the First Session of the Ninth National People's Congress and the spirit of the State Council's replies on issues related to China National Petroleum Corporation and China Petrochemical Corporation, after half a year of active preparations, China National Petroleum Corporation and China Petrochemical Corporation were officially announced. On July 27, 1998, the two major group companies held their founding meeting in the Great Hall of the People. Wu Bangguo, member of the Political Bureau of the CPC Central Committee and Vice Premier of the State Council, attended the conference and delivered an important speech.

At the meeting, Wu Bangguo first expressed warm congratulations on the establishment of the two major group companies on behalf of the State Council, and expressed cordial condolences to the cadres and workers of the two major group companies. He said that the Party Central Committee and the State Council attach great importance to the establishment of the two major group companies and regard it as an important part of the institutional reform of the State Council. During the preparation and establishment process of the two major groups, the State Council held several meetings for study and discussion and issued a series of important instructions. Prime Minister Zhu Rongji personally determined the principles, guidelines and requirements for the establishment. The establishment of the two major groups is of extremely important significance for implementing the State Council's institutional reform plan, accelerating the reform and development of the petroleum and petrochemical industry, and achieving my country's economic development goals this year.

Wu Bangguo pointed out that since 1998, due to the impact of the Asian financial crisis, international oil prices have fallen sharply, and the impact of excessive imports and smuggling has caused great difficulties in the production and operation of the petroleum and petrochemical industry. More than 3,700 oil wells were shut down in the first quarter, and the petroleum and petrochemical industry suffered losses for the first time from January to May. However, as the expansion of domestic demand increases, especially the implementation of more active fiscal policies, the role of stimulating production will be further enhanced; lowering bank interest rates, increasing loans, increasing the export tax rebate rate, and severely cracking down on smuggling will further alleviate the difficulties of enterprises; while production and sales Integration and integration of domestic and foreign trade also create institutional conditions for enterprises to improve efficiency. The petroleum and petrochemical industry plays a decisive role in the industrial economy, both in terms of output value and profits and taxes. Employees on the petroleum and petrochemical front must vigorously regulate the refined oil market on the basis of a profit of 540 million yuan in June, severely crack down on smuggling, ensure that domestic oil well capacity is fully operational, connect refinery production and sales, strengthen corporate management, and strive to preserve safety. Annual profit shall not be less than 10 billion yuan.

It is understood that the newly established China National Petroleum Corporation is a petroleum and petrochemical enterprise established by the state on the basis of the former China National Petroleum Corporation. Its member enterprises and institutions include: 12 directly affiliated to the former China National Petroleum Corporation. oil and gas field enterprises, 14 refining and chemical enterprises and 5 sales companies transferred from the former China Petroleum and Chemical Corporation, and oil companies and their affiliated companies in 12 provinces, autonomous regions, municipalities directly under the Central Government and 1 city under separate state planning transferred from local governments. grade oil companies and gas stations, Jilin Petroleum Group Co., Ltd., Jilin Chemical Group Company, and other enterprises and institutions directly under the former China National Petroleum Corporation. China National Petroleum Corporation focuses on the exploration and development of oil and natural gas, as well as the petrochemical business.

The newly established China Petroleum & Chemical Corporation is a petroleum and petrochemical enterprise established by the state on the basis of the former China Petroleum & Chemical Corporation. Its member enterprises and institutions include: 22 directly under and controlled by the former China Petroleum & Chemical Corporation. Refining and chemical enterprises include 12 oil and gas field enterprises transferred from the former China National Petroleum Corporation, 5 production enterprises and 1 oil company from the former China Eastern Petrochemical Group Co., Ltd., 18 provinces, autonomous regions, and Petroleum companies in municipalities directly under the Central Government and four cities under separate state planning and their affiliated petroleum companies and gas stations at all levels, as well as other enterprises and institutions directly under the former China Petroleum and Chemical Corporation. After the establishment of Sinopec Group Corporation, China Eastern Petrochemical Group and China Eastern Petrochemical Group Co., Ltd. will be canceled in accordance with the law. Sinopec Group Corporation focuses on the petrochemical business and also engages in the exploration and development of oil and natural gas.

Both major group companies are contacted by the State Economic and Trade Commission.

The state granted the two major group companies the right to operate foreign trade in crude oil and refined oil, and approved the two major group companies to conduct pilot projects as state-authorized investment institutions and state-controlled companies. The two major group companies were included as a whole in the list of pilot enterprise groups determined by the State Council.