China Oilfield Svcs Develops New Surface Acquisition System

China Oilfield Services Limited's R&D Department has successfully developed a new generation of the Surface Acquisition System (SAS) for well surface data collection and processing. The Company has already received an order for one unit from the Paris headquarters of Geoservices S.A.

The SAS-IT is the upgraded version of the former SAS system developed by COSL in 1997. Its enhanced functionality includes double separators in serial or parallel, IE based remote monitoring and database oriented data management. The birth of the SAS-IT system marks the end of the manual operation period in well surface data collection and verification. It signals a new chapter of data services where precise data acquisition is the norm rather than the exception. It significantly reduces the risk of wasting resources as a result of imprecision and dramatically lowers overall operating costs. In 2002, the SAS-IT system received official recognition and was included in the book of "New Chinese Corporate Records". The former system has been served for approximately 150 wells in fields over regions such as Xinjiang Province, offshore China and Vietnam since 1997.

The first SAS-IT unit has been fully tested and will be delivered to Geoservices S.A. in early February. The second and third units will be dispatched to the China-French Geoservices Co. operations in the Bohai Bay and Vietnam.

COSL's SAS-IT system will be distributed through the broad international sales network of Geoservices S.A. to the global market and will be marketed in connection with the French Geoservices Company's own surface acquisition equipment. COSL owns the intellectual property rights to the system. The Company serves as an authorized distributor of the product and provides long-term equipment support to users.

Mr. Yuan Guangyu, COSL's President and Chief Operating Officer, said, "Historically, the oil and gas industry's research and development of monitoring equipment has been dominated by a few international players. After years of research and development, the SAS-IT technology has reached maturity, and has achieved the highest international standards. The selling of the system to an international peer is indeed a milestone for COSL's R&D efforts in the area of well data collection and monitoring equipment. The advantages of this technology will enable us to further reduce the operating costs and increase our profit margin. It will also help us diversify our revenue streams and improve our operating model. We shall continue to pursue high quality research and development activities as a way to reinforce our leading position, improve client services and provide even better returns for our shareholders."