China-Chongqing-Yudong Block Memorandum of Understanding - PetroChina Co. Ltd. and Sunwing Energy Ltd.
MEMORANDUM OF UNDERSTANDING
Between
PETROCHINA COMPANY LIMITED
and
SUNWING ENERGY LTD.
TO CONDUCT
A JOINT FEASIBILITY STUDY
OF YUDONG BLOCK
Signed in Beijing on Feb. 13, 2001
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MEMORANDUM OF UNDERSTANDING (MOU)
Between
PETROCHINA COMPANY LIMITED
and
SUNWING ENERGY LTD.
TO CONDUCT
A JOINT FEASIBILITY STUDY
OF YUDONG BLOCK
FOR THE PURPOSES OF
A POTENTIAL PETROLEUM CONTRACT
PetroChina Company Limited (PetroChina) and Sunwing Energy Ltd. (Sunwing) have
the intent to conduct a Joint Feasibility Study (JFS) on the Yudong Block
located in Eastern Chongqing Municipality. This block is operated by the
Southwest Oil and Gasfield Company (SWOG) that is a subsidiary of PetroChina.
The purpose of conducting the JFS is to study the natural gas and oil reserve
potentials associated with this block and if considered feasible, the Parties
(PetroChina and Sunwing) will proceed to negotiate for a Petroleum Contract,
subject to prior approval (Approval) by the relevant department of the Chinese
government for this block to be open for foreign participation. The Parties
agree that:
1. The Parties will negotiate for the acquisition of a representative
data package for this block and adjacent areas.
2. SWOG and Sunwing will provide geological, geophysical and petroleum
engineering technical experts as agreed, to form a Review Team, led
by a coordinator appointed by Sunwing, to evaluate the data from this
block.
3. The Review Team will conduct the JFS, under terms of a Joint Study
Agreement (JSA) in Sunwing's Calgary or Bakersfield office and in the
SWOG Chengdu office as required. The JSA will be entered into
separately. Following the evaluation of the block, the Review Team
will prepare a report to the management of both companies and if
considered feasible, a Petroleum Contract would be entered into
between the Parties.
4. Both Parties agree that they will make available members of the
Review Team in a timely manner following the signing of this MOU or
JSA.
5. Both Parties agree that the Review Team should complete the
evaluation and prepare the final report within six (6) months
following the receipt of the data package(s) and necessary sorting
and cataloging of the same.
6. The entire cost of acquiring data, carrying out the JFS and
preparation of the final report, including travel and accommodation
related business expenses associated with SWOG technical specialists
assigned to the Review Team will be borne by Sunwing.
7. Unless otherwise agreed to by the Parties in writing, Sunwing will
have the exclusive right to negotiate with PetroChina for a Petroleum
Contract in this block for a period-of four (4) months (negotiation
period) after the receipt of the Approval from the relevant
department of the Chinese government and the completion of the JFS.
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8. This MOU is written and signed in both Chinese and English and they
have equal power. The Parties hold a copy each.
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<S> <C>
PETROCHINA COMPANY LIMITED SUNWING ENERGY LTD.
/s/ ZENG XING QIU /s/ ROBERT M. FRIEDLAND
------------------------------------------- -------------------------------------------
Zeng Xing Qiu Robert M. Friedland
General Manager, Co-Chairman
Foreign Cooperation
Administration Department
February 13, 2001 February 13, 2001
</TABLE>
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