Sino Oil and Gas to Enter New JV, China

Sino Oil and Gas to Enter New JV

Oil and gas company, Sino Oil and Gas Holdings Limited announced that the Company has entered into a memorandum of understanding (MOU) with a Canadian-based oil and gas service company.

The MOU sets out the preliminary terms in relation to the formation of a Proposed JV with the Possible JV Partner, the principal activities of which will be the provision of oil and gas services in the PRC, with a focus on the natural gas sector, including conventional gas and unconventional gas. The proposed total investment of the Proposed JV will be RMB 40 million.

Under the MOU, the Proposed JV will be owned beneficially as to 60% by Sino Oil and Gas Holdings and 40% by the Possible JV Partner. The Proposed JV will participate in the Company’s existing coalbed methane (CBM) project in Sanjiao and will also explore the opportunities in participating in other oil and gas projects in the market.

The Possible JV Partner is principally engaged in the provision of oil and gas field development technical services in Canada. It is dedicated to building up an integrated service capacity covering the whole process of drilling, well completion, down-hole operation and oil production. The major strength of the Possible JV Partner’s services include logging while drilling, geo-steering, and directional well drilling services in the drilling technology cluster, all of which are enhancement technologies that can effectively increase oil and gas output.

Sino Oil and Gas Holdings Chief Executive Officer Mr. Xu Zucheng said: “Our Sanjiao CBM block, located in the Erdos Basin which is a relatively complex geological environment, has more sophisticated demand for advanced development technologies, especially for horizontal well drilling.

“We therefore see a niche and necessity to build up our own oil and gas service team and introduce more advanced technology to serve the operation of the Sanjiao Block as well as other oil and gas blocks in the market. The Proposed JV will not only increase the efficiency and effectiveness of our own operation in Sanjiao but also has the potential to grow into a new revenue driver for the Group in long run.”

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LNG World News Staff, December 07, 2012; Image: Sino Oil and Gas