Dear investors, shareholders, ladies and gentlemen, good afternoon. I am Hou Qijun from Board Office of PetroChina. On behalf of the company I would like to give a warm welcome to all of you attending the Q1 Results Announcement of 2022. On April 29, we held the meeting of the Board of Directors and Supervisors and elected the candidates of Board Directors and Supervisors and also hired Chief Geology, also issued the reporting of our Q1 results of 2022. Today regarding our Q1 performance and key questions we have entered the market, we are going to have an online communication with analysts and fund managers on many fronts. Today attending the conference call are our Executive Director and President Mr. Fangzheng; Executive Director of the Company, Senior Vice President, Mr. Li Xin; CFO and Board Secretary, Mr. Chai Shouping; Mr. Lv Bo, our Finance Department; and Mr. Jiang Lifu, Deputy Director General of our Production and Operation Management Department; and Mr. Houliang, the Deputy Director General of International Department; also we have our relevant colleagues from the Spending Department, finance department, production and operation management department, international department as well as the board office. Now we will have our first item on our agenda. The Executive Director and President, Mr. Fangzheng, would like to give some opening remarks.

Thank you, Mr. Hou. Dear investors and shareholders good afternoon. I’m more than pleased to meet with you online. First of all, on behalf of the Board of Directors, Management and all PetroChina’s staff, I would like to extend my candid gratitude for your long-term attention and support. Entering 2022, this was resurgence of COVID-19 and geopolitical complexities and volatilities as well as rising prices of bulk energy commodities. We maintained top priority of facilities and proceeded advance studies, achieved very good progress on all fronts. We provided a very strong guarantee of natural gas supply amid the peak season and provided very strong support for the Green Winter Olympics. We defend with our green and low-carbon transition, continue to improve quality and efficiency and have a very good head start with very solid and sound performance. Our production and operation indicators grew steadily on gas production and their increase out performed most of our peers internationally. Currently, there are still much uncertainties in the global economic recovery and global energy landscape, a space with profound adjustments. All these pose new challenges and the higher requirement was to keep up with good work and to improve corporate value. At the same time we can all see that the fundamental sustaining China’s economic growth remain unchanged. The government attach great importance to the development of energy companies and continue to pursue market-oriented reforms in the energy sector and continued to build a unified national market and provide strong support for real economy. All these provides more enabling environment and condition for China’s growth. In the past few years we have accumulated comparative advantages regarding oil and gas resources, management technologies and talents. Therefore we are full of confidence about our future development. On the annual results announcement held at the end of March, our Chairman Mr. Dai Hou Liang proposed my requirement regarding how to fully accomplish our 2022 target. It is a guidance for the whole company to exert our efforts. Petro China will always uphold the values of green development and reliable energy delivery, fulfill the growth of customers, and empower people’s happy lives and maintain strategic focus. We’ll pursue a new development in oil and gas E&P, a new achievement in refining and chemical transformation and upgrading for the optimization of the production, supply and marketing system. New steps in our growing on low carbon transition, new breakthrough in R&D. We will actively guarantee the stable supply to meet oil and gas market demand and fully deliver our environmental and social responsibilities with even better and fullness we will continue to the reward both our shareholders and the general public. With persistence and diligence we will definitely bring about a brighter prospect. We sincerely hope that you can as always follow closely and support. We look forward to joining hands with you and travel long and far. Now I’ll give you a brief introduction of our Q1 performance. Thank you. First, now we’ll move on to the second item on our agenda, secretary and authorized representative of the company to review our 2021 – 2022 Q1 results at the same time on the English line representative from Hong Kong Dr. Wei Fang to give the same presentation. Now the floor is open.

Thank you for the presentation. Now we’ll move on to the Q&A session and it will come with Chinese and English conductor interpreting and please inform which organization you represent before posing the question will give more people the chance to ask no more than two questions. Now the floor is open.

Thank you. The first question now is from Everbright Securities. Please go ahead.

First question is from Everbright Securities. First, I would like to congratulate on the service stellar performance in the beginning of the year. And we can see from announcement the performance is very sound. I wonder if the management can share more information regarding the increase of your crude and gas production. And second questions regarding the net profit increased of your respective business segments. Can you please shed more light on that?

Thank you for the question. Now, Mr. Houliang is taking our first question. You listen PetroChina continues to step up our E&P efforts in 2021, our SEC are for crude and gas equivalent was 147% among which are for crude 221%, which is a record high since our listing. It is a very solid foundation for the production increase. In Q1, our oil and gas equivalents production 52.754 million pounds at 4.5% year-on-year among which crude production in China 26.066 million up 2.7% year-on-year much more natural gas 33.49 BCM up 5.4% year-on-year. I know that you probably give special attention to crude production. And the reason behind the 2.7% increase in crude is at first, when you have the basic management of crude development and profitable development. Natural decline and comprehensive decline, both saw a decline year-on-year, second we carry out targeted measures to increase production and profitability in maturing blocks to improve to improve our overall development. Third, in the major oil fields such as Daqing, Tarim and Xinjiang, these are the most important areas for posting reserve and production, with carried out profitable capacity building. In Q1, we added a new capacity of 2.56 million pounds are significantly young. And the rate was also accelerated obviously with production of new as well as daily production for single well, so a steady increase. I believe that answers your first question regarding oil and gas production. The second question will be answered by our CFO Mr. Chai Shouping.

And you can see that in Q1 was very strong performance. Net profit attributable to parent RMB39 billion, up by 48.9% year-on-year. That mainly comes from two factors. First, with the increase of oil and gas prices and increase sales. And second with ever more efforts in our campaign to improve quality and efficiency. Such as my colleague the oil prices increase significantly and also oil production at 3.7% and GAAP 5.4%. At the same time, we sort of optimize our corporate management and the combined to improve quality and efficiency added actual 4 billion. These net profit, you can see that coming from our business segment also turned a process. In terms of operating profit, E&P segment CNY38.7 billion refining and chemical CNY10.7 billion and marketing segment CNY4.5 billion and natural gas CNY8.9 billion. And the E&P segment remains to be the major profit contributor. Thank you.

Next question is from Credit Suisse. Please go ahead.

I have two questions. First about the losses in imported gas, in Q1 can you share some information about that? And regarding the next few quarters, you have an outlook especially against the backdrop of the high oil price. And my question is at after the heating season, how did you expect to pass on the cost of your import? And regarding natural gas, how do you plan to achieve a mark up?

Mr. Chai Shouping is taking your question. About our imported natural gas, in Q1 it followed 21.2 BCM with a tax refund of RMB3 billion and a net profit of RMB3.47 billion and profit per cubic meter RMB0.164. It has rather achieved effective loss control about our natural gas imports in Q1. Now we have entered Q2 and in Q2 and following Q3 and Q4 the natural gas marketing is entering an off-season. Under certain circumstance, we are tightening our control regarding imports catalogue and to carry out various efforts and measures accordingly. Into the COVID-19 pandemic as well as the Russia-Ukrainian issue, the international oil prices went high and so as natural gas. And of course, our natural gas imports are increasing with a lot of uncertainties going ahead. And as of time now we have continued to carry out various measures to handle the situation and market demand to give attractable marketing strategy. First, we will actively explore direct sale and end user consumers. Second, we will fuel the system for natural gas supply and purchase contract negotiation. Third, we’ll increase the online trading of un-contracted resources. With market sales measures, we will drive our best to review import gas process. Regarding your second question, since there is an increase of both the import gas cost and the overall prices we expect to see higher prices domestically than last year. Thank you.

The next question is from Morgan Stanley. Please go ahead.

I have two questions. First, in solar question on imported natural gas, what is your estimate about the tax refund in Q2, Q3 and Q4, and what are you expect of the import LNG cost? And my second question is about refined product demand in April will see that with COVID resurgence could be a quarter-on-quarter refined product demand define and what do you expect of the full year level, do you still expect a year-on-year increase with certain circumstances? One from the finance department is taking your first question. About the tax reform of imported natural gas, it will 30% of the value added tax, therefore the specific amount will be index to the natural gas process as well as the volume. And our import gas prices is indexed to oil prices with top line, we expect that Q2 to Q3 import GAAP cost will be higher that of Q1. Therefore we expect that in Q2, Q3 and Q4 it has three forms in terms of absolute volume will be higher than that of the front. However the specific amount will be determined by the oil price changes. As for the import gas cost of 2022 we do expect a large increase compared later half last year. And the specific amount will be defended on the oil price changes in the coming months. And your second question. About the refined products, actually in Q1 the total national demand in terms of a parent consumption around flat from that last year with slight different between different pipes of refined products. And diesel saw a rather large increase. That are very large decline. And is mainly due to the COVID-19 impact. And from the whole year an economic growth is still maintained in a very appropriate range. Therefore we expect that the full year consumption as per last year we will maintain an upward trend. Thank you.

The next question is . Please go ahead.

I have two questions. First, in terms of our imports of Russia resourced oil and gas, how do you carry out the segment for now with what kind of costs. And my second question is that I read from the news that India is demanding discount of its energy imports. I wonder, if we have the opportunity to demand a cheaper import from Russia.

Mr. Chai Shouping is taking your question. Currently our operations with Russian counterparts are being executed according to the pre-signed contracts and they are proceeding normally. Clearly, our oil and gas operations with Russian companies are sometimes starts with U.S. dollars and sometimes with euro. As for now, Q2 assumptions and some other factors the settlement was impacted to a certain extent. But the overall proceeding operations are still normal. As for now, we don’t have any plant arrangements to acquire discounted oil or gas. Currently we are executing pre-signed contracts.

The questionnaire is Tobby from Citibank. Please go ahead.

Can you hear now? Okay. I have two questions. First, what is the is timeline of natural gas direct sale and end user market. I would like to ask what is the portion of this part of operations in Europe hold of natural gas sales? And my second question is, you just talked about the resurgence and impact of Q2 COVID situation, I wonder if you have adjusted your utilization ratio of refining and chemical plants to kop with the current sales market.

Mr. Li Xin from the production operation management department is taking your question regarding natural gas sales. In Q1 natural gas sales is only 60.6 BCM, up 10.9%. During the same period, the apparent consumption within China 93.2 BCM, 2.5% therefore, it is apparent that our increase far outperformed that of the total increase nationally. Also you can see from the market structures were boosting our efforts in end-user marketing. In Q1, the end-user marketing volume account for about 28%. Thank you.

The next question is from UBS. Please go ahead.

My two questions are about refining and chemical arm. First question, in Q1, due to the higher oil prices, we see in narrowing gross margin of your chemical business and what is your expectations regarding the profitability of your chemical and refined product? And second, we will see a declining in the inventory of refined product and the government has halted the exports of refined products. If the inventory climbs in later months, do you expect that the government will re-allow the exports of refined products?

Mr. Li Xin is taking your question. About the profitability of our chemical segment, in Q1 due to the higher oil prices, there is a high cause of the feedstock for the chemical, therefore, is striking a balance. Informed by the market realities, we adjusted the utilization ratio of our chemical plants and product mix. And these efforts saw very good results. We expect that crude and natural gas will remain high in terms of prices going into Q2. And feedstock and processing fee of our chemicals will remain high. And that will press down the profitability of our chemical operations. Also there is a resurgence of COVID-19 within China. And that hurts the consumption. Therefore, there will be even more intense competition in the chemical market. Later, we’ll carefully analyze the market changes and adjust our product mix accordingly to drive down procurement cost of the feedstock as well as the processing fee so as to improve the profitability of our chemical operations. For now, the inventory for refined products compared with that of the beginning of the year remains rather high. On the one hand, based on market realities were boosted our marketing efforts to increase sales volume. On the other hand, we further refined our refining and technical product mix. Made in-time adjustments to our refining capacity and utilization ratio. And we also arranged appropriate exports of certain products with strict abidance to relevant authorities and export protocols. For now the accrued industry is operating smoothly with a balance between production and marketing. With the improvement in the COVID situation lately, we see that the inventory is going down. In the future as COVID-19 died down and macro economy picks up we believe that the accrued value-chain will operate even more smoothly. Thank you.

In the interest of time now we’ll have the last question, please.

The last question is . Please go ahead.

My two questions are about the upstream. First in Q1, I wonder what is your all-in-call for crude and for the reminder of the year what do you expect of your accrued production cost? And second, since the oil prices will be higher than that of last year, do you expect to see a very hard high IRR this year over or 100% or even 200% likely.

Mr. Chai Shouping from the finance department is taking our question.

In Q1 the accrued operating cost 10.82, up by 8.4%. That was in China was 11.25 at 7.5% year-on-year. And that mainly comes from two reasons. First, the changes in exchange rate, up RMB0.20. And second, the price hike of materials and power added to more than RMB 0.50. We all see that in Q1 the prices of world commodities increased significantly and so is that our fields and power. According to Chinese Bureau of Statistics, the PPI in Q1 increased by about 8.5%. And the price hike of oil and gas field companies, their procurement of materials and power will see a higher increase. That is the two most vital issues behind the cost increase. And PetroChina always adhere to the principle of local development strategies besides these Bridget sectors in terms of controllable costs, you can see that there is still a decline. And second about the – about the gains of the E&P Sector. In Q1 the operating profits of our E&P segment up 200%. That comes partly from the 55% increase of the realized crude price. And also there is just as Mr. Zhang, Mr. Yang briefed you there is an increase of our production and sales upstream. Meanwhile that also mirrored our efforts to drive down cost improve quality and efficiency of the entire staff. And throughout the year, we expect the oil price to be higher than that of last year and… And we do foresee a better performance of the upstream segment compared with that of 2021. Thank you.

Also this year with the Mr. Wei Fang would like to add a few words. Also this year with the higher oil prices, we are going to boost our E&P efforts just as our executive briefed in this conference and against the high oil price environment and the new supply and demand realities we strive to make more E&P deliveries to better survive the market. And now I would like to thank. Mr. Zhang, Mr. Ren and Mr. Chai as well as other colleagues from different departments for attending this conference call and it has come to a close. If you have further inquiries, you are more than welcome to contact our Investor Relations team in both Hong Kong and Beijing. Thank you all for your time.