Dear Shareholders,

On behalf of the Board of Directors of Sinopec Oilfield Service Corporation, I would like to express my sincere gratitude to our shareholders and people from all walks of life for your interest and support to the Company.

In 2024, facing the severe and complex market situation, the Board of Directors of the Company united and led the management and all employees to overcome difficulties and continued to work diligently. By anchoring to the goal of high-quality development, making every effort to optimize the production and operation organization, strengthening reform and innovation, coordinating and optimizing resources, the Company achieved steady growth in operating results. According to the Chinese Accounting Standards for Business Enterprises, we realized consolidated operating revenue of RMB81.1 billion, representing a year-on-year increase of 1.4%, it was the best level achieved since the 13th Five-Year Plan. The non-production expenses decreased by 13.4% year-on-year, and net profit attributable to shareholders of the Company was RMB630 million, representing a year-on-year increase of 7.2%.

Firstly, the core functions were effectively performed. Bearing in mind the primary duties and responsibilities, in the practice of serving national strategies and ensuring energy security, the Company effectively promoted the improvement of technical capabilities, the upgrading of core equipment and the transformation of production organization model, so as to help Sinopec proving the first domestic shale gas field exceeding one trillion cubic meters and its oil and gas production equivalent hit record high level. For the full year, the average daily efficiency of 3D seismic acquisition increased by 3.9%, the average drilling cycle was shortened by 5.6%, the time efficiency of complex faults was reduced by 12%, the fracturing efficiency increased by 10.7%, 478 wells achieved “daily progress of thousand meters”, more than 50 wells achieved “daily progress of a mile”, "one-trip drilling" technology was implemented on a scale of over 1,300 well-times. The integrated ground engineering promoted standardized design, standardized procurement, factory prefabrication and modular construction, and the "four improvements" and "five transformations" achieved obvious results. We had fully undertaken and participated in deep ground engineering, Fuling shale gas field, million-ton CCUS project, geothermal development and utilization, the construction of the Shengli Jiyang shale oil national demonstration zone and the Kuche green hydrogen demonstration project, which were honored as the top ten achievements of Sinopec's high-quality developments.

Secondly, the market structure was optimized and upgraded. Pursuant to the strategies of refining the Sinopec market, making profits in the domestic and external markets, and expanding the overseas market, the high-quality large-scale market and the light-asset technical service market were expanded proactively. The value of new contracts signed throughout the year reached RMB91.2 billion, representing a year-on-year increase of 10.7%, hitting a new record high level, of which the new contract value signed in domestic external markets was RMB44.2 billion, representing a year-on-year increase of 36.4%, and the share of external market shot up to a historical high level of 48.5%. By giving full play to integrate advantages, the Company successfully renewed related party transaction agreements with the largest shareholder, China Petrochemical Corporation, for three years in respect of mutual supply of products, comprehensive services, engineering services and technological research and development, the base for efficacy creation was strengthened, ensuring stable expectations for sustainable development of the Company. Many domestic and external markets voluntarily withdrew from the long-term ineffective, heavy-asset and inefficient businesses, and further shifted their focus to PetroChina, CNOOC and the national pipeline network, and the contracts awarded by the national pipeline network exceeded RMB10 billion for the first time. In the overseas market, the Company successfully won the bid of the Southern Kuwait Drilling Contract Project for works on 212 wells, and the Company accelerated to "go overseas" in terms of technical services and high-end businesses such as well logging, cementing, drilling fluid and reservoir services, generating revenue of RMB18.23 billion for the year.

Thirdly, momentum for reforms and innovations was strong. Reforms, deepening and upgrading actions were vigorously promoted, and optimization of resources was expanded and extended to the whole chain at all levels in all elements such as the organizational structure, team structure and equipment structure, and the gravity of work was promoted to focus on value creation and the flow of resources to value creation. By adopting measures such as elimination of project employees, switching from outsourcing to self-operation, and undertaking external contracting business, 271 institutions and 124 teams were optimized and less pressurized, organizational operating expenses reduced by RMB150 million on a year-on-year basis, while revenue from undertaking external contracting business increased by RMB186 million year-on-year. An asset operation branch company was established to promote the precise allocation of incremental assets, the effective revitalization of existing assets and the rapid liquidation of depleted assets, direct creation efficiency and optimization resulted in cost reduction by RMB230 million. Continued efforts were exerted to promote the establishment of a world-class technology-leading oilfield service company, the research and development expenditure for the full year reached RMB2.25 billion with an investment intensity of 2.8%. We won 15 science and technology awards of provincial and ministerial levels, filed applications for 1,034 patents and 779 patents were authorized, the number of patent applications ranked first among companies of the China Petrochemical Corporation. New breakthroughs were achieved in technological applications for overcoming difficulties in the areas of intelligent node acquisition, ultra-deep well drilling and completion, rotary geo-steering, high-temperature and high-pressure well logging and electric fracturing. The deepest geothermal exploration well in China was drilled in Hainan, supporting 8,000-meter deep well in Shunbei and the drilling cycle was controlled within 100 days.

Fourthly, the ESG level has been steadily improved. Green enterprise initiatives were solidly carried out, accelerating the electric transformation of oil and gas exploration and development engineering equipment and the development of low-carbon technologies. The domestic electric drilling rigs completed 66.2% of drilling footage, and electric drive fracturing accounted for 41.6%, reducing carbon emissions by 1.656 million tons on a year-on-year basis. Energy efficiency improvement plan deepened implementation, on-site energy efficiency management was strengthened, energy-saving and clean production technological measures were applied, resulted in a reduction of 11% in the consolidated energy consumption per RMB10,000 of industrial production output throughout the year. Emerging markets such as geothermal power, wind power, photovoltaics, hydrogen energy and CCUS were developed vigorously. With active participation in rural revitalization and social welfare activities, rural poverty alleviation products of RMB33.10 million were purchased and RMB3.214 million were donated for education purpose.

In 2025, the Company will adhere to the general principle of seeking progress while maintaining stability, fully, accurately and comprehensively implement the new development philosophy, and focus on tackling difficulties and creating efficiency, market development, technological innovation, reform and optimization, risk prevention and control, to promote high-quality development in an all-round manner so as to accelerate the pace of building a world-class technology-leading oilfield service company, complete the targets and tasks of the 14th Five-Year Plan with high quality and laying a solid foundation for a good start for the "15th Five-Year Plan".

Firstly, the Company will accomplish the annual targets and tasks with high quality. 2025 is the final year of the 7-year action plan for increasing oil and gas reserves and production and the development plan of the 14th Five-Year Plan. It is of great significance to do a good job throughout the entire year. The Company will acquire deep understanding and fully grasp the new trend of energy market changes, strengthen strategic prediction, enhance adaptability and do well in various tasks to promote the transformation of positive factors in all aspects into actual development achievements, and strive to achieve reasonable growth in the effective improvement of production and operation quality and quantity. The annual planned amount of newly signed contracts will be RMB83.5 billion, the operating cost per RMB100 of revenue will be controlled within RMB92.4. The "one profit and five rates" will accomplish "steady growth of total profits and continuous optimization of five rates" to achieve a high-quality conclusion of the 14th Five-Year Plan.

Secondly, we will coordinate and fight the "five major battles". In 2025, the Company will firmly uphold the concept of "important participants in oil and gas reservoir operations" to strengthen support and protection for exploration and development. The concept of "value creation for full-chain and full-elements" will be firmly upheld to accelerate the improvement of low-cost competitiveness, and the concept of "science and technology is the primary productive force" will be firmly upheld for striving to create a new pole of growth in benefits, and the concept of "all accidents are avoidable" will be firmly established to consolidate the foundation of safe production. Efforts will be stepped up to optimize resources in all elements, reduce costs and fees throughout the process, and tap potential and increase efficiency throughout the chain. We will fight the "five major battles" of safety and fundamental governance, support and protection, market development, optimization of resources, and cost control and fee reduction, striving to achieve the goals of tackling tough problems and creating benefits, and make contributions in petroleum engineering to safeguard national energy security.

Thirdly, we will prepare the planning for the "15th Five-Year Plan" scientifically. In 2025, the Company will adhere to strategic guidance to prepare the development planning for the "15th Five-Year Plan" with high quality to focus on the strategic positioning of building a world-class technology-leading oil service company. By planning the "high-end, green, intelligent and international" development paths systematically, we will strive to enhance quality, transform and upgrade towards low-cost, light-asset, and high-value development, vigorously cultivate new advantages of integrating new businesses such as "wind, solar, hydrogen and heat storage" with traditional oil service industry, and actively explore the future development layout of new industries, to accelerate the move towards "light-asset oil service", "green oil service" and "smart oil service".

Fourthly, the Company will continue to improve corporate governance capability by thoroughly implementing the requirements of deepening the reforms of the Supervisory Committee, revising and improving the governance systems such as the Articles of Association, the Rules of Procedure for the Shareholders' Meeting and the Rules of Procedure for the Board of Directors, to consolidate the institutional foundation for standard governance. The internal supervision system will be further optimized to strengthen supervision on the responsibilities of the Audit Committee and coordinate the relevant functions of the Supervisory Committee to ensure that the Audit Committee will be able to fully exercise its supervisory role to protect the interests of shareholders and businesses. The guidelines to internal control authority will be revised to clarify the boundaries of power and responsibility of governance bodies such as the Party Committee, the Board of Directors and the management, so as to continuously improve the Company's governance mechanism with respect to legal rights and responsibilities, transparency in power and responsibility, coordinated operations and effective checks and balances, so as to continue improving the Company's level of standardized operations.

Fifthly, we will continue to improve the level of ESG management. By actively implementing the new development concepts, continuously integrating ESG governance with operational management and enhancing sustainable development capability, overall enhancement to economic, environmental and social performances will be promoted. By adhering to the orientation of building a green enterprise, increasing upgrading and transformation efforts in the electrification of equipment, strictly controlling environmental risks caused by wastewater pollution, solid and hazardous waste pollution and air pollution, reducing pollution at source and reducing consumption of resources, we will strive to achieve high quality corporate development and coordinated progress in ecological and environmental protection. Active efforts will also be dedicated to public welfare and charitable activities such as poverty alleviation, rural revitalization, caring and education assistance, to make contributions to the community and pursue harmonious coexistence between enterprises and society.

Dear shareholders, the race of a thousand sailing ships has started, those who advance bravely will win the competition. In the new year, we will follow the development ideas, goals and tasks determined by the general meeting of shareholders, with the joint efforts of all employees and the strong support of various sectors of society, to fully serve and safeguard national energy security, comprehensively coordinate development and security, make full use of both international and domestic markets and their resources and accelerate the cultivation and creation of new quality productivity to speed up the building of a world-class leading oil service company, strongly elevate the Company's high-quality development to a new level and create greater value for shareholders and society.

Wu Baizhi
Chairman
Beijing, China
18 March 2025