Sinopec Signs Agreement to Exploit Oil and Gas Fields in Guizhou

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Researched by Industrial Info Resources (Sugar Land, Texas)--Sinopec Southwest Oil and Gas Company (Chengdu, Sichuan), a regional subsidiary of China Petroleum & Chemical Company Limited (NYSE:SNP) (Sinopec) (Beijing), signed the Strategic Cooperation Agreement with the Government of Zunyi City to jointly develop oil and gas resources in southwestern China's Guizhou province on June 8, 2009.

According to the agreement, Sinopec Southwest Oil and Gas Company will enhance fundamental geologic research and study the accumulation of oil and gas in the Chishui region of Zunyi City, fulfill the objective on exploration optimization and attempt to start exploitation of the Chishui gas field within one to three years.

The government of Zunyi City will strengthen the cooperation between government and enterprise, combining road construction with oil and gas exploitation in the region, according to Xiaoguang Wang, Mayor of Zunyi City.

As reported, Sinopec Southern Exploration Company (Chengdu), another regional subsidiary of Sinopec, also reached the framework agreement on strategic cooperation with the government of Zunyi City. Both parties will strengthen cooperation in the exploration of oil and gas fields in the Renhuai District of Xishui City, Guizhou province, on the same day.

The Chishui region in Zunyi City is rich in oil and gas resources and has sound prospects for exploitation and development. However, oil and gas exploration and development is a highly risky industry, which not only requires huge investments, but also is complicated in its assessing procedure. Sinopec started oil and gas exploration in the Chishui region at the beginning of the 1960s. Currently, Sinopec's natural-gas output in the Chishui region is 12 million cubic meters per year.

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