Sinopec Oil Services (01033) subsidiary plans to acquire 50% of the shares in the Mexican DS company and 0.01% interest in the EBANO project held by D&S

Zhitong Finance App News, Sinopec Oil Service (01033) announced that DS Mexico is a joint venture under the Company. The Company's wholly-owned subsidiary, China Engineering Corporation and DIAVAZ each hold 50% of its shares. Their main business is as operators of the EBANO project and responsible for crude oil production activities in the EBANO oil field. According to the “EBANO Oilfield Exploration and Development Contract” (hereinafter referred to as “CEE”) signed between Mexican DS and the Mexican National Hydrocarbons Commission (currently merged into the Mexican Ministry of Energy), Mexican National Petroleum Company (PEMEX), and D&S, which are still in effect, Mexico's DS, Mexican National Petroleum Company, and D&S respectively hold 54.99%, 45%, and 0.01% of the EBANO project under CEE.

China Engineering and its Mexican subsidiary intend to acquire 50% of DIAVAZ's shares in Mexican DS (hereinafter referred to as the “underlying shares”) and 0.01% interest in the EBANO project under CEE held by D&S (hereinafter referred to as the “underlying project interest”) at a price of 4 million US dollars, and will invest an additional US$212 million (including disposal fees) in the EBANO (EBANO) oil field project in Mexico in installments after the acquisition is completed.

DS is currently operating the EBANO oilfield project as the operator. The EBANO oil field is located in the Tanmi Basin in the central part of the Gulf of Mexico. It covers an area of 1,569 square kilometers. It was discovered in 1903. It is a fracture-porous carbonate heavy oil reservoir. The currently developed layers are the Upper Cretaceous KSF layer and the KAN layer, which are buried 350 to 750 meters deep. Based on the evaluation of existing two-dimensional and three-dimensional seismic data, the structure, reservoirs, fluids and reserves of the old oil field were implemented, the petroleum geological reserve was 4.92 billion barrels (about 743 million tons), and the overall extraction level of the oil field was 6.84%; according to the description of well data and calculation using seismic properties, the lower KTS layer (buried at a depth of 760 to 1140 meters) has oil resources of about 351 million barrels (about 53 million tons); the deeper Luo strata also have exploration potential. The EBANO Oilfield Development Plan has been postponed several times due to continuous losses of the partner DIAVAZ, which has experienced operational difficulties and is unable to make equal investments. In the implementation of this transaction, China Engineering Corporation will acquire shares in DS held by DIAVAZ, and use Sinopec's integrated geological engineering technology, the operational experience and international team accumulated over 20 years in Mexico to further explore the oilfield resources and value of the EBANO project and optimize the company's business layout in the Mexican market.

After the acquisition is completed, Sinogong and its Mexican subsidiary will respectively hold 99% and 1% of the shares in the Mexican DS Company and will indirectly obtain 55% of the EBANO project under CEE through Mexican DS. Mexico DS will be included in the scope of the Company's consolidated statements.