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China ZhenHua Oil Co., Ltd. ADD: F14, Ocean Plaza No.

158, Fu Xing Men Nei Street Xicheng District, Beijing P.R. China Post Code: 100031 TEL: (86-10) 6321 0088 FAX: (86-10) 6321 0199 6641 0365 6641 8766 E-mail: zhenhuaoil@zhenhuaoil.com Website: www.zhenhuaoil.com

Message from the President


Dear Friends,
Energy is the cornerstone, the lifeline of a nation's economy. As a China-based international company, ZhenHua Oil has been committed, since incorporation, to meeting ever growing domestic demand for energy. Over the years, ZhenHua Oil has given full play to its advantages in marketing, financing, petroleum operations and corporate governance to acquire oil and gas resources and develop jointly with partners upside potential. The Company has also been active in crude oil and oil products trading. As the outcome of constant and strenuous effort, ZhenHua Oil has achieved rapid growth; meanwhile, it has assembled a complete industry chain, ranging from E&P abroad, to research, to international oil trading, to petroleum logistics, and to refining. Throughout the over-100-year history of the oil industry, the growth of an oil company has usually been due to the prosperity of an emerging oil consuming market. Chinas booming economy and surging energy demand have provided the historical context for ZhenHua Oils growth. Looking toward to the future, ZhenHua Oil will stay based in China but keep a global perspective in pursuing mutually beneficial cooperation, sharing with partners in the benefits of development and working together for a better future.

Liu Yijiang President

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Company Profile
China ZhenHua Oil Co., Ltd. (hereinafter referred to as ZhenHua Oil) is a wholly owned subsidiary of China North Industry Corporation (NORINCO). As a state-owned enterprise, it is authorized by Chinas central government to engage in petroleum E&P abroad, global oil trading, and domestic investment in refineries, storage tank farms and logistics. ZhenHua Oil is one of the six Corporate Coordinators of resource development abroad designated by Chinas National Development and Reform Commission (NDRC), a member of the Sino-Kazakstan, Sino-Venezuela, Sino-Kuwait and Sino-Russia Intergovernmental Cooperation commissions, and one of the major state owned enterprises that carry out national policy for outbound investment. ZhenHua Oil is striving to cultivate a competitive edge and distinctive mechanisms in market development, technical innovation, field operations and capital deployment. Zhenhua Oils staff is committed to the corporate goal laid out in the 12th Five-Year Plan (2011-2015), of boosting abroad its OOIP to 1.35 billion tons of oil equivalent, annual gross output to 10 million tons of oil equivalent, and trading volume to over 30 million metric tons to realize annual sales revenue of US$ 20 billion. Since incorporation in 2003, ZhenHua Oil has grown by leaps and bounds in various respects. At a relatively young age the company has registered the following achievements: acquisition of 6 oil and gas projects as well as 1.1 billion tons in original oil in place (OOIP) and over 8 million tons in gross annual production; a trading volume in crude and oil products of 20 million tons annually and sales revenue of over US$15 billion; a wide marketing and information network of branches and offices in a dozen countries; a highly select, talented, and internationalized research and management team.

Sales Revenue from 2006 to 2011 (Unit: RMB 100,000,000 Yuan)

800 700 600 504 500 400 300 200 100 71.4 190 118.4 260

731

2006

2007

2008

2009

2010

2011

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Administration Dept. Board of Supervisors


Strategy & Planning Dept. Human Resources Dept. Al-Waha Petroleum Co., Ltd. Finance & Accounting Dept. Oriental Oil Company Limited KuatAmlonMunai Joint Venture LLP

Legal Affairs Dept. Senior Management Board of Directors


New Ventures Dept.

North Petrol Operating Inc.

China ZhenHua Oil Research Center (Chengdu) Exploration & Development Dept.

China ZhenHua Oil Co., Ltd. (Pakistan)

North Petroleum International Company Limited Production & Operation Dept.


Oil & Gas Surface Facility Dept. Trading &Development Dept. ZhenHua (Yingkou) Petroleum Logistics Co., Ltd.

Dalian North Petroleum Logistics Co., Ltd.

Trading & Operation Dept.

Corporate

Structure

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Upstream Business

K&B Oilfield in Kazakhstan Ahdeb Field in Iraq Gbeibe Oilfield in Syria Chauk and Yenangyaung Oilfields in Myanmar Pakistan Exploration Project New Ventures Development

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K&B Oilfield in Kazakhstan


The K&B Oilfield located in the Turgai Basin in south central Kazakhstan has an OOIP of 489 million barrels (or 64.78 million tons) and annual production of around 5.63 million barrels (746,000 tons). ZhenHua Oil holds a 75% equity stake in the K&B Oilfield.

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Ahdeb Field in Iraq


Iraqs Ahdeb Field, located 180 kilometers southeast of Baghdad, has an OOIP of 3.81 billion barrels (or 550 million tons). The field came on-stream on June 21st, 2011. The annual production is around 45.2 million barrels (or 6.5 million tons). Production is expected to plateau at 160,000 bopd. ZhenHua Oil holds a 37.5% equity stake in the Ahdeb Field.

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Gbeibe Oilfield in Syria


The Gbeibe Oilfield, located in northeast Syria, has an OOIP of 2.22 billiion barrels (or 328 million tons). The annual production is around 4.40 million barrels (or 650,000 tons). ZhenHua Oil has a 35% equity stake in the Gbeibe Oilfield.

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Pakistan Exploration Project Chauk and Yenangyaung Oilfields in Myanmar


The Chauk and Yenangyaung oilfields are located in central Myanmar and are enhanced oil recovery projects. The OOIP is 1.37 billion barrels (or 182 million tons) and annual production is around 950,000 barrels (126,000 tons). ZhenHua Oil has a 40% equity stake in the Chauk and Yenangyaung oilfields. The Pakistan Exploration Project includes two blocks, Baska and Bahawalpur East. The Baska Block, located in central Pakistan, covers 2,442 square kilometers with gas already discovered in one of the 6 traps. The Bahawalpur East Block, located in eastern Pakistan, covers 2,496 square kilometers with 5 traps identified. ZhenHua Oil has a 51% equity stake in the two concessions.

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New Ventures Development


To achieve rapid and sustainable growth, Zhenhua Oil gives top priority in its corporate development strategy to acquisition of more new E&P ventures. ZhenHua Oil is constantly on the lookout to improve its information platform and acquisition techniques and procedures as well as risk management systems. An acquisition team comprised of various specialists has been built up to conduct the entire acquisition process from information capture, to evaluation, to SPA negotiation, to transaction completion. In the 2011-15 period covered by the 12th Five-Year Plan, ZhenHua Oil will continue its new ventures policy, giving priority to oil with increasing importance to gas, focusing onshore without neglecting offshore, and underlining its preference for large percentage shareholding while relying on small equity participation only occasionally as an exception. Basing itself in strategic regions like the Middle East, Central Asia, and North and West Africa, but not neglecting opportunities in Southeast Asia and South America, the Company in its new ventures criteria will continue to place priority onshore, on oil and gas production assets with sizable output and reserve scale and on acquisition of more oil and gas resources abroad through flexible strategies and appropriate operator arrangements. ZhenHua Oil will endeavor to realize the strategic objectives of the 12th Five-Year Plan of acquiring one or two medium-sized oil fields to achieve an equity production of 1.5 million to 2 million tons of oil equivalent.

1. Contract Signing for the Iraq Project 2. SPA Signing for the Kazahkstan Project 3. Concession Signing for the Pakistan Project 4. SPA Signing for the Myanmar Project

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Charter Business

Oil Trading

Refining Sector

Petroleum Logistics

Middle and Downstream Businesses


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Oil Trading
ZhenHua Oils oil trading focuses on import and entrept of crude oil, fuel oil and petrochemical products. Its trading volume and revenue place Zhenhua Oil among Chinas top oil trading companies. ZhenHua Oil has long-term business relations with UNIPEC, ChinaOil, Mercuria, BP, Shell, Total and the NOCs of major oil-producing countries. Its crude trading benefits from a comprehensive marketing and risk management capability. The Company has a well established presence in both international and domestic oil markets. ZhenHua Oil has established a sound marketing network covering oil producers like Iraq, the UAE, Saudi Arabia, Russia, Brazil, Angola, Nigeria, Kazakhstan, Kuwait, Singapore, Venezuela, the Congo, and Oman.

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Refining Sector
ZhenHua Oil serves as an important link in NORINCO Groups petrochemical industry chain, supplying the feedstock to North HuaJin Chemical Industries Group Corporations refinery. With a capacity of 8 million tons integrating refining and petrochemical production, North HuaJin occupies an important position in the domestic petrochemical sector. Zhenhua Oils trading arm has supplied more than 20 million tons of crude oil to North HuaJins refinery over the past three years.

Charter Business
ZhenHua Oil has built up a charter business management system, including implementation rules and risk management measures. It has joined the International Tanker Nominal Freight Scale Association, set up a platform for cooperation between brokerage firms and shipping companies, and worked with well known domestic and foreign ship-owners. Tankers leased by the Company have tracks over the ports in Saudi Arabia, the UAE, Iraq, and Angola.

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Petroleum Logistics

ZhenHua Oil is expanding its oil logistics business. The Phase I 400,000 cubic meter storage tank farm in Dalian has been successfully commissioned. Another 300,000 cubic meter oil storage tank will be built as Phase II. The oil storage tanks built and leased by ZhenHua Oil at the ports of Dalian, Yingkou, and Qingdao have a total capacity of 3 million cubic meters.

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Operations and Management

Research Expertise Financial Operations HSE Management System Workforce Empowerment Corporate Culture
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ZhenHua Oil Research Center (Chengdu) is the Companys technical division for research, technical support and E&P consulting. The Center has strengthened its own research and innovation capabilities and integrated advanced external technical resources as well. For the exploration and development of Zhenhua Oils own oilfields, it does G&G study, reservoir engineering research, dynamic analysis, design and adjustment of the development program, specific technical campaigns, and so on. Its research and management capabilities have grown in the process. ZhenHua Oil is committed to building up an experienced technical support team with all the specialtists required and solid research ability. It intends to organize and carry out comprehensive geological and reservoir study, exploration and development design and adjustment, specialized technology research, and technical support for full life-cycle oilfield development, and thereby contribute to the expansion of the Companys E&P sector.

Research Expertise

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Financial Operations
ZhenHua Oil has extensive arrangements with a dozen domestic and foreign financial institutions, including China EXIM Bank, China Development Bank, Bank of China, Bank of Communications, China Construction Bank, Standard Chartered Bank, and Banque de I'Indochine, which have provided solid financing support for the Company's development. ZhenHua Oil has a combined credit line of more than US$5 billion to support trading, and this will naturally continue to rise with the Companys growth. In the 2011-15 period of the 12th Five-Year Plan ZhenHua Oil will expand and further diversify its financing sources and seek direct financing from capital markets to guarantee its rapid growth.

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HSE

HSE Management System

ZhenHua Oil is committed to conducting corporate affairs in a healthy, safe and environmentally friendly way. ZhenHua Oil is determined to abide by all applicable laws and regulations of host countries, and apply best industry practice in the conduct its operations. ZhenHua Oil treasures the health and safety of its employees and takes very seriously its responsibility to protect the environment and corporate property. It will keep improving performance of the HSE Management System to provide employees with a work environment of the least accidents and pollution. ZhenHua Oil will nurture good relationships with stakeholders on health, safety, security and environmental issues. ZhenHua Oil is committed to creating an ecologically harmonious environment in the communities where it operates.

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ZhenHua Oil treats employees as its most valuable resource and is intent on having its HR mechanism stress staff development and training as well as mutual development of employees and the Company. Consistently with the companys development strategy and practice of being selective and efficient, ZhenHua Oil has built a highly qualified staff expert in all petroleum specialties, global trading and project management. ZhenHua Oil will continue improving its management and subject-matter expertise already encompassing all petroleum specialties and marked by a high level of technical and management ability in its core business.

Workforce Empowerment
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Corporate Culture
Our vision:
Develop into an internationalized oil company that is world renowned and among Chinas foremost.

Thank you for your reading of this brochure. For more information, please refer to our website at

www.zhenhuaoil.com

Our mission:
Acquire oil and gas resources abroad and consistently supply oil products and related services to meet the growing demand for energy in China.

Our spirit:
People-oriented, collaborative and innovative, pioneering and ready to explore.

Our common values:


Responsibility, honor, loyalty, and efficiency.

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