Announcement of Annual Results for the Year Ended December 31, 2000

　　The Board of Directors (the "Board") of PetroChina Company Limited (the "Company") is pleased to announce the audited consolidated results of the Company and its subsidiaries (the "Group") for the year ended December 31, 2000, which have been prepared in accordance with International Accounting Standards as follows:
　　Consolidated profit and loss account

　　Notes
　　1. BASIS OF PREPARATION
　　The historical results of operations are presented on a carve-out basis from January 1, 1999 to November 4, 1999. The combined results of operations present the results of the Group as if the Group had been in existence throughout the period from January 1, 1999 to November 4, 1999 and the predecessor operations and businesses of the core units and the five chemical production facilities retained by China National Petroleum Corporation ("CNPC") had been transferred to the Company from CNPC and included in the results of operations. (Note: The Company was incorporated on November 5, 1999.)
　　The results of operations have been prepared on a consolidated basis for the period from November 5, 1999 to December 31, 2000.
　　The restructuring has been accounted for as a reorganisation of business under common control and the Group is regarded as a continuing entity.
　　2. TURNOVER
　　Turnover represents revenue from the sale of crude oil, natural gas, refined products and chemical products and from the transportation of crude oil and natural gas.
　　3. TAXATION

　　In accordance with the relevant PRC income tax laws and regulations, the enacted PRC income tax rate applicable to the Group in 2000 is 33% (1999: 33%)
　　4. BASIC AND DILUTED EARNINGS PER SHARE
　　Basic and diluted earnings per share for the year ended December 31, 2000 have been computed by dividing the net profit by the weighted average number of 171.63 billion shares issued and outstanding for the accounting period.
　　Basic and diluted earnings per share for the year ended December 31, 1999 have been computed by dividing the net profit by the 160 billion State-owned shares issued and outstanding upon the establishment of the Company on November 5, 1999 as if such shares had been outstanding during such accounting period.
　　There are no dilutive potential ordinary shares during the accounting period.
　　5. CHANGES IN EQUITY

　　*Note: In accordance with the Restructuring Agreement entered into between the Company and CNPC, the Company distributed to CNPC in 2000 RMB 2,640 million in respect of the Group's net profit for the period from October 1, 1999 to November 4, 1999, determined in accordance with PRC accounting standards.
　　6. ALLOCATION TO STATUTORY COMMON RESERVE FUND AND STATUTORY COMMON WELFARE FUND
　　According to its articles of association, the Company is required to transfer a proportion of its profit after taxation under the PRC accounting standards to the statutory common reserve fund and the statutory common welfare fund. The percentage of profit after taxation and the amount transferred to each of these reserves for the year ended 2000 are as follows:

　　7. DIVIDEND
　　The Company distributed an interim dividend of RMB 0.059042 per share on October 5, 2000, which amounted to a total of RMB 10.381 billion. At the board meeting held on April 23, 2001, it has been resolved that a final dividend of RMB 0.082315 per share be proposed for 2000 (1999: nil), which amounts to a total of RMB 14.473 billion (1999: nil). The proposed dividend payment is, subject to approval by shareholders at the annual general meeting for 2000 to be held on June 8, 2001. The said dividend has not been reflected in the financial statements for 2000, and such dividend shall be accounted for in the shareholders' equity in 2001 and treated as a distribution of retained earnings in 2001.

　　MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
　　In perusing the following discussion, please also refer to the Company's consolidated financial statements and their notes contained in the information required by paragraphs 45(1) to 45(3) (both inclusive) of Appendix 16 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited and to be submitted to The Stock Exchange of Hong Kong Limited (the "HKSE") and published on the website of the HKSE (website: http://www.hkex.com.hk) on or before April 30, 2001.
　　Overview
　　In the 12 months ended December 31, 2000, profit before taxation of the Group was RMB 82,051 million, representing an increase of 124.61% compared to the previous year. Net profit was RMB 55,231 million, representing an increase of 104.6% over the previous year. The main reasons for the increase in profitability of the Group are increases in prices of principal products, an increase in sales, a decrease in financial costs and the insistence on the strategy of on-going restructuring of the Company and reducing cost following the listing of the Company. Profit was primarily derived from the sale of crude oil from the Group's exploration and production segment.
　　Basic and diluted earnings per share of the Group for the 12 months ended December 31, 2000 were RMB 0.32.
　　Year Ended December 31, 2000 Compared To Year Ended December 31, 1999
　　Total Revenue. 　Total revenue increased 37.5% from RMB 175,969 million for the year ended December 31, 1999 to RMB 241,992 million for the year ended December 31, 2000. This increase reflected an increase in revenues in each of our business segments due primarily to increases in the prices of crude oil, refined products and natural gas as well as increased sales volume of our chemical and natural gas segments.
　　Operating Expenses.　Operating expenses increased 21.0% from RMB 129,069 million for the year ended December 31, 1999 to RMB 156,233 million for the year ended December 31, 2000. This increase resulted primarily from increases in depreciation, depletion and amortisation, expenses associated with workforce reduction and shutting down of inefficient refining and chemical units and facilities, selling, general and administrative expenses, employee compensation costs and taxes other than income taxes.
　　Purchases, Services and Other. 　Purchases, services and other expenses increased 1.8% from RMB 61,470 million for the year ended December 31, 1999 to RMB 62,598 million for the year ended December 31, 2000. This increase reflected primarily increases in crude oil purchase expenses in our refining and marketing segment, prices of feedstock in our chemical segment, as well as purchase expenses resulted from increased sales volume in our natural gas segment.
　　Employee Compensation Costs. 　Employee compensation costs increased 30.4% from RMB 11,064 million for the year ended December 31, 1999 to RMB 14,430 million for the year ended December 31, 2000. This increase was due primarily to our new employee compensation system adopted in 2000, and increases in salary and certain benefit expenses. Such increase in benefit expenses was primarily attributable to a change in the classification of expenses.
　　Selling, General and Administrative Expenses. 　Selling, general and administrative expenses increased 32.2% from RMB 12,596 million for the year ended December 31, 1999 to RMB 16,649 million for the year ended December 31, 2000. This increase was due primarily to an increase in land lease expenses (no such expenses were paid by the Company prior to its establishment on November 5, 1999, and such expenses were borne by the Company in 2000), increases in bad debt reserves and increases in transportation and storage expenses resulted from the expansion of our refined product retail network.
　　Depreciation, Depletion and Amortisation. Depreciation　, depletion and amortisation increased 43.5% from RMB 23,533 million for the year ended December 31, 1999 to RMB 33,760 million for the year ended December 31, 2000. This increase was due primarily to increases in fixed assets in each of our business segments and the effect of revaluation of our assets on June 30, 1999.
Expenses Relating to Workforce Reduction and Shutting Down of Refining and Chemical Units and Facilities. Expenses relating to our workforce reduction and shutting down of refining and chemical units and facilities were RMB 6,579 million for the year ended December 31, 2000. Out of such expenses, RMB 4,215 million were used for our workforce reduction, including RMB 3,180 million paid to discharged employees in 2000 and RMB 1,035 million as accrued expenses for our workforce reduction in 2001, and RMB 2,364 million related to the write-off of certain inefficient refining and chemical units and facilities.
　　Taxes Other than Income Taxes. Taxes other than income taxes increased 28.7% from RMB 10,278 million for the year ended December 31, 1999 to RMB 13,230 million for the year ended December 31, 2000. This increase was due primarily to increases in sales income and increases in sales volume in our chemicals and natural gas segments, which cause increases in relevant taxes.
　　Income From Operations. Income from operations increased 82.9% from RMB 46,900 million for the year ended December 31, 1999 to RMB 85,759 million for the year ended December 31, 2000.
Net Exchange Gain (Loss). Net exchange gain increased from a loss of RMB 2,233 million for the year ended December 31, 1999 to a gain of RMB 1,172 million for the year ended December 31, 2000. The net exchange gain was due to a depreciation of the Japanese Yen against Renminbi and prepayment of a portion of our Japanese Yen denominated borrowings.
　　Net Interest Expense. Net interest expense decreased 33.9% from RMB 8,264 million for the year ended December 31, 1999 to RMB 5,464 million for the year ended December 31, 2000. This decrease was due primarily to a reduction in our total borrowings as a result of the prepayment of certain loans, the replacement of higher interest rate loans with lower interest rate loans and a decrease in the weighted average effective interest rate of our total borrowings .
　　Income Before Income Taxes. Income before income taxes increased 124.6% from RMB 36,531 million for the year ended December 31, 1999 to RMB 82,051 million for the year ended December 31, 2000.
Income Taxes. Income taxes increased 187.0% from RMB 9,403 million for the year ended December 31, 1999 to RMB 26,985 million for the year ended December 31, 2000 due primarily to an increase in income before income taxes. Such increase in our income tax was partially offset by our consolidated tax reporting status, which was not available to us prior to the incorporation of the Company.
Net Income. Net income increased 104.6% from RMB 27,001 million for the year ended December 31, 1999 to RMB 55,231 million for the year ended December 31, 2000.
　　Liquidity and Capital Resources
　　In 2000, the Group's primary sources of funding were cash provided by operating activities, short-term and long-term borrowings, cash and cash equivalent, and cash proceeds from the issue of new shares. The Group's funds were primarily used for capital expenditure, repayment of short-term and long-term borrowings and distributions to CNPC.

　　* Note: Taking into account the inclusion of investments relating to geological and geophysical exploration expenditure, the capital expenditures relating to our exploration and production segment for 1999 and 2000 would have been RMB 36,059 million and RMB 42,968 million, respectively.

　　Business Operating Review
　　The American Depositary Shares ("ADSs") and H shares of the Company were listed on the New York Stock Exchange (the "NYSE") and the HKSE on April 6, 2000 and April 7, 2000 respectively.　　
n the 12 months ended December 31, 2000, the Company produced 765.4 million barrels of crude oil and 505.3 billion cubic feet of marketable natural gas, representing an average production of approximately 2.10 million barrels of crude oil and approximately 1.38 billion cubic feet of marketable natural gas per day and sold 719.2 million barrels of crude oil and 480.5 billion cubic feet of natural gas. Approximately 71% of the crude oil of the Company sold in 2000 were sold to its refineries.
　　In the 12 months ended December 31, 2000, the Company's refineries processed 547 million barrels of crude oil or an average of 1.50 million barrels per day. Approximately 93% of the crude oil processed in the Company's refineries were supplied by the exploration and production segment of the Company. As of December 31, 2000, the retail distribution network of the Company included 4,683 service stations owned and operated by the Company, 3,600 service stations wholly-owned by CNPC itself or jointly owned by CNPC with third parties and to which the Company provides supervisory support and approximately 3,067 franchise service stations owned and operated by third parties with which the Company has long-term gasoline supply agreements.
　　In the 12 months ended December 31, 2000, the Company produced approximately 1.50 million tons of ethylene, approximately 1.85 million tons of synthetic resin, approximately 0.30 million tons of synthetic fibres, approximately 0.22 million tons of synthetic rubber, and approximately 3.11 million tons of urea.
　　The natural gas segment is the Company's core business segment for development. In the 12 months ended December 31, 2000, the Company sold 480.5 billion cubic feet of natural gas and 391.0 billion cubic feet was sold through the Company's natural gas segment.
　　Future Plans and Prospects
　　Apart from working on present restructuring and management, the Company also focuses on its on-going and steady development in the long term. The Company has formulated a development strategy, which aims to speed up the development of our core businesses, reduce costs and pursue technological innovation and on-going restructuring.
　　By making full use of the Company's advantage in terms of oil and gas reserves, the Company will strive to secure its leading position in China's oil and gas industry and continue to increase its oil and gas reserves. In particular, the Company will speed up the development of the natural gas segment and the construction of pipelines, thereby turning the Company's advantage in resources into an advantage in the terms of markets. At the same time, the Company will speed up the restructuring of the refining and marketing segment and keep increasing its resistance to risks by further integrating its upstream and downstream businesses.
Final Dividend and Closure of Register of Members
　　The Board of Directors recommends the payment of a final dividend of RMB 0.082315 per share which is calculated on the basis of 45% of the net profit for the 12 months ended December 31, 2000 and after deducting the interim dividend for 2000 which was paid on October 5, 2000. The proposed final dividend is subject to the approval by the shareholders at the annual general meeting to be held on June 8, 2001. The final dividend of RMB 0.082315 (inclusive of applicable tax) will be paid to shareholders whose names appear on the register of members by close of business on June 7, 2001. The register of members will be closed from May 9, 2001 to June 8, 2001 (both days inclusive) during which period no share transfer will be registered. All instruments of transfer and the relevant share certificates should be lodged with Hong Kong Registrars Limited before 4 p.m. on May 8, 2001, in order for the share transfers to be registered.
　　According to article 149 of the articles of association of the Company, dividends payable to shareholders are declared in RMB. Dividends payable to holders of State-owned shares shall be paid in RMB while dividends payable to holders of H shares shall be paid in the local currency of the place of listing. The final dividend payable to holders of H shares shall be paid in Hong Kong dollars and shall be calculated according to the average closing rates for RMB to Hong Kong dollars as announced by the People's Bank of China for the week before June 8, 2001, that is the date of the annual general meeting at which the dividend will be declared.
The final dividend will be paid on or about June 22, 2001.

　　New Share Issue and Share Capital Structure
　　The Company issued 15,824,176,000 H shares (including ADSs) in April 2000. At the same time, CNPC offered 1,758,242,000 shares of the shares held by it in the Company to the public. After the issue and offer, 17,582,418,000 shares of the Company are held by the public, representing 10% of the total share capital of the Company immediately after the issue. The net proceeds from the share issue amounting to RMB 20,337 million were intended to be used to fund the Company's capital expenditures and investments; to provide additional funds for general corporate purposes; and to repay short-term borrowings from third party financial institutions. The Company's ADSs and H shares were listed on the NYSE and the HKSE on April 6, 2000 and April 7, 2000 respectively.
　　The share capital of the Company in issue as fully paid or credited as fully paid as at December 31, 1999, amounted to 160,000,000,000 State-owned shares, with a par value of RMB 1.00 each. The share capital of the Company in issue as fully paid or credited as fully paid as at December 31, 2000 was 175,824,176,000 shares, with a par value of RMB 1.00 each. As at December 31, 2000, the share capital structure of the Company was as follows:

　　Purchase, Sale or Redemption of Securities
　　Apart from the issuance of the H shares and ADSs in April 2000 as aforesaid, the Company or any of its subsidiaries has not sold any other types of securities of the Company, nor has it purchased or redeemed any of the securities of the Company during the 12 months ended December 31, 2000.
Use of Proceeds from the Share Offer
　　In the period from April 10, 2000 to December 31, 2000, the Company has applied a total of RMB 20,337 million of the proceeds from the share offer. The proceeds have been applied in accordance with the manner disclosed in the prospectus of the Company. RMB 12,202 million has been used as capital expenditures and RMB 8,135 million has been used to repay bank loans.
　　Trust Deposits and Overdue Time Deposits
　　As at December 31, 2000, the Group did not have any trust deposits or irrecoverable overdue time deposits.
Staff Quarters
　　On September 6, 2000, the Ministry of Finance issued a directive regarding issues on the financial treatment concerning the reform of corporate staff quarters system (Cai Qi 2000 No. 295), which was implemented on the date of issuance. The Company has examined the directive and concluded that the relevant policies will not have any material financial impact on the Group.
　　Workforce Reduction Plan
　　As at December 31, 2000, the total number of employees of the Company was 441,000. In 2000, the Company reduced the number of employees by 38,400 by means of one-off payment. The actual expenditure for such reduction amounted to RMB 3,180 million. At the same time, the Company has confirmed a plan of reducing the number of employees by 13,900 in 2001 and the expenditure for such reduction is estimated to amount to RMB 1,035 million. This expenditure has been provided for in the profit and loss account of 2000 as accrued expenses. The actual number of employees to be reduced in 2001 and the total costs involved may differ from the figure anticipated in the plan for which accrued expenses have been made. It is estimated that as a result of the actual number of employees reduced in 2000, there will be a saving in expenditure of RMB 760 million per year.
　　Share Option Scheme
　　Share option schemes for members of senior management were deliberated and passed in a Board meeting and an extraordinary shareholders' meeting held on March 7, 2000 and April 6, 2000, respectively. The Company has started granting share options to members of the senior management. Upon exercise of these share options, members of the senior management will not receive any shares in the Company, but will, by way of stock appreciation rights, receive a monetary sum which is calculated on the basis of the share price of the H 　　shares listed on the HKSE.
　　Compliance with the Code of Best Practice
　　Following its listing of H Shares on the HKSE, the Company has complied with the Code of Best Practice contained in Appendix 14 to the Rules Governing the Listing of Securities on the HKSE.
　　Publication of results on the website of the HKSE and of the Company
　　The Company will submit to the HKSE a CD-ROM containing all the information as required under paragraphs 45(1) to 45(3) (both inclusive) of Appendix 16 to the Rules Governing the Listing of Securities on the HKSE and will publish such information on the website of the HKSE (website: http://www.hkex.com.hk), on or before April 30, 2001. This information will also be published on the website of the Company (website: 　　http://www.petrochina.com.cn).

By Order of the Board
Ma Fucai    
Chairman    

Beijing, China
April 23, 2001