Securities code: 600339 securities abbreviation: China Petroleum Engineering Corporation(600339) No.: pro 2022-002 China Petroleum Engineering Corporation(600339)
Announcement on signing EPCC general contract by subsidiaries
The board of directors and all directors of the company guarantee that there are no false records, misleading statements or major omissions in the contents of this announcement, and bear individual and joint liabilities for the authenticity, accuracy and completeness of its contents.
Important content tips:
1. Contract type and amount: EPCC general contract, with a contract amount of about 316 million US dollars (equivalent to 2.01 billion yuan).
2. Effective conditions of the contract: the contract shall come into force from April 1, 2022.
3. Contract performance period: 33 months (from the effective date of the contract to the completion of trial operation and reaching the production conditions), and the 12-month warranty period will be entered after the performance test is passed.
4. Impact on the current performance of the listed company: the performance of the contract does not have a significant impact on the total assets, net assets and net profit of the company this year. Due to the long performance period of the contract, the implementation of the contract will have a certain positive impact on the company’s operating revenue and total profit in the next three years.
5. Special risk warning: in the process of contract performance, if there are unforeseen factors such as economy and market or force majeure, it may affect the normal performance of the contract, and the majority of investors should pay attention to the investment risk. On February 3, 2022, our wholly-owned subsidiary Petrochina Company Limited(601857) Engineering Construction Co., Ltd. (hereinafter referred to as CPECC) and ExxonMobil Iraq Limited (hereinafter referred to as Emil) signed the EPCC general contract for West qurna-1 crude oil treatment project (hereinafter referred to as West Qurna OT2 & 3 project) at the Dubai Office of CPECC Middle East company, The contract amount is about US $315.96 million (equivalent to RMB 2.01 billion). The relevant contents are announced as follows:
1、 Main information of the project
In order to improve the crude oil production capacity of Iraq’s West gurna-1 oilfield, a new crude oil treatment facility is built next to the existing degassing stations DS6 and ds7, each of which can produce 105000 barrels / day of qualified crude oil, with a total new capacity of 210000 barrels / day (about 1050 tons / year). The scope of work includes: main systems such as oil, gas and water separation, desalination and dehydration, stabilization and export, as well as supporting facilities such as heat transfer oil, dosing, flare, instrument air, nitrogen, substation and control room.
2、 Introduction to the other party
The counterparty is ExxonMobil Iraq Limited, a subsidiary of ExxonMobil established in the Bahamas in 2001. The company’s main business is to provide oil field exploration and development technical services for ExxonMobil in Iraq. Its main office in Iraq is located in the main camp of West gulna-1 oil field in Iraq, There are offices in Baghdad, Basra, Iraq and Dubai, UAE, and the main person in charge is Mr. Taher Hamid.
3、 Main terms of the contract
Contract type and amount: EPCC general contract, with a contract amount of about US $315.96 million (equivalent to RMB 2.01 billion).
Time and place of contract signing: the contract was signed in Dubai Office of CPECC Middle East Company on February 3, 2022.
Effective date of the contract: the contract shall come into force from April 1, 2022.
Contract construction period: 33 months (from the effective date of the contract to the completion of trial operation and production conditions), and the 12-month warranty period will be entered after the performance test is passed.
Project implementation location: located in xigurna-1 oilfield, about 65 kilometers northwest of Basra, the capital of Basra province in southern Iraq.
Project settlement method: payment by milestone node.
4、 Impact on the company
The performance of the contract does not have a significant impact on the total assets, net assets and net profit of the company this year. Due to the long performance period of the contract, the implementation of the contract will have a certain positive impact on the company’s operating revenue and total profit in the next three years, and is conducive to the company’s further consolidation and expansion of oil and gas engineering business in Iraq and even the Middle East.
5、 Risk tips
CPECC under our company has rich experience in oil and gas field surface engineering construction, and the existing technology and resources can meet the implementation of the project. The market, policy, legal and safety risks of the project are relatively small. CPECC will effectively and comprehensively control the risks to ensure the safe, stable and efficient operation of the project.
During the performance of the contract, in case of unforeseen or force majeure factors such as social, economic, political, market and owner’s financing in the country where the project is implemented, it may affect the normal performance of the contract, and the majority of investors should pay attention to the investment risk.
6、 The relevant signature pages of the documents for future reference and the contract are hereby announced.
China Petroleum Engineering Corporation(600339) February 7, 2022
