CNPC to Focus Exploration Efforts to the North and West

Over the next three years China National Petroleum Corp. will focus its exploration efforts in the northern and western regions of China. According to Zhongguo Shiyou Bao, the official CNPC newspaper, reporting on the Group's 2003 prospecting meeting, the Songliao, Bohai Bay, Erdos, Junggar, Tarim, Qaidam, Jiuquan and Tuha basins all have potential to become strategic E&P targets, with each expected to hold over 100 million tons of reserves. Of the eight basins, five are located in northwestern China's Xinjiang Autonomous Region and Qinghai Province, while the other three are in the Inner Mongolia Autonomous Region, Liaoning Province and Bohai Bay respectively.

It is hoped that discoveries in these areas will gradually replace the depleted oilfields in eastern China. CNPC also hopes to discover natural gas reserves as well. The most promising areas are the Sichuan Basin in the southwest, the Erdos Basin in the north and the Tarim Basin in the west.

During the meeting, the senior management of CNPC also hoped that innovations in geological science as well as engineering technologies can be made in the next few years, especially when the Group's prospecting teams meet the testing geological conditions of the West, which includes the Gobi Desert and several mountain ranges.