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At 9 am on April 19th, 2016, Mongolia Xinyi Energy Co., Ltd. and the Mongolian National Petroleum Bureau oil exploration "Dariganga Block 24" production sharing renewal contract signing ceremony was held as scheduled in Ulaanbaatar, Mongolia. The Minister of the Ministry of Mining of Mongolia, Director of the Petroleum Bureau, Chairman Wang Zhengquan of HPMM, Hu Hongyu, General Manager of Mongolia Xinyi Energy Co., Ltd., Zhao Lin, General Manager of LHDC and other relevant department leaders attended the signing ceremony. The signing ceremony was presided over by Buren, Director of the Mongolian Petroleum Bureau.

At 9:18 in the morning, under the witness of dignitaries and guests from China and Mongolia, Hu Hongyu, General Manager of HPMM Mongolia Xinyi Energy Co., Ltd., and Buren, Director of Mongolia’s National Petroleum Administration, signed the production sharing renewal contract between parties for petroleum exploration "Daganga block 24". Mongolia also issued the decision to approve the transfer of rights and obligations of the oil exploration "Dariganga 24 Block" production sharing contract. The guests presented together toasted to congratulate this great moment.

After the signing of the contract, the Minister of the Ministry of Mines of Mongolia pointed out in his speech: In the case of the annual mining volume of Mongolia's petroleum industry is gradually increasing, HPMM Group's participation as a Chinese investor was exciting, and it is hoped that both parties will work in accordance with the terms of the contract. He said: Mongolia signed three production sharing contracts last year. This time the powerful HPMM Group in China’s oil industry entered Mongolia. This would promote the progress of Mongolia’s oil industry, and it would also bring surprises for Mongolia’s oil industry’s development.

In his speech, Hu Hongyu, general manager of Mongolia Xinyi Energy Co., Ltd. thanked the Mongolian government, the Ministry of Mines, and the Petroleum Bureau for their trust and the large amount of work they have done in signing contracts. At the same time, he gave a detailed explanation and introduction of the project cooperation. During the implementation of the project, the relevant laws of Mongolia will be followed, environmental protection and backfilling will be done well, and a large number of local labor will be recruited to make due contributions to local economic development.

The "Dariganga Block 24" oil block is located in Sukhbaatar Province, Mongolia, bordering our Inner Mongolia Autonomous Region, with Block 20 in the east, Block 22 in the north, and Block 23 in the west. The block area is about 17,000 square kilometers.

In 2015, the Mongolian Petroleum Administration took the lead in submitting the application, and the petroleum exploration "Dariganga Block 24" project approved by the Mongolian State Council and the Ministry of Mines was transferred to Xinyi Energy Co., Ltd. Mongolia Xinyi Energy Co., Ltd. is a 100% holding company of HPMM Group, and it is expected to invest USD 25 million in 4 years.

The entry of Mongolia Xinyi Energy Co., Ltd. in Mongolia is another major strategic deployment of HPMM. It aims to complete the mission of petroleum exploration operations in Mongolia. It not only opens a new chapter in HPMM’s petroleum exploration and development, but also will play a positive role in improving the quality of life of local residents in Block 24 of Dariganga.

In the afternoon, the chairman of the Group Wang Zhengquan met with Mongolian Prime Minister Qi Saihan Bilig. Chairman Wang Zhengquan introduced the development plan of HPMM Group and the operation of the oil exploration "Dariganga 24 Block" project carried out by Mongolia Xinyi Energy Co., Ltd. in Mongolia. Premier Saihan Billig expressed his warm welcome to Mongolia Xinyi Energy Co., Ltd. for entering Mongolia, and sincerely expressed his strong desire to actively and friendly exchanges with HPMM Group and vigorously promote project cooperation. Premier Saihan Billig He spoke highly of HPMM, saying that Mongolia would encourage and support the development of the project in the future.

Mongolia is a country along the "One Belt and Road" adjacent to our province. Strengthening China-Mongolia cooperation is a key link in the realization of the "One Belt and Road" strategy. As a close neighbor of China, Mongolia is also full of expectations. In 2013, the Mongolian government proposed the construction of the "five major corridors" connecting China, Mongolia, and Russia, including railways, highways, oil, electricity, and natural gas. Mongolia has been recognized as an oil mining country. The resources are abundant and the prospects for exploration and development are very good. It is an oil exploration area that many countries strive for; the closest distance between the discovered oil fields and the China-Mongolian border is less than 90 kilometers, transportation is convenient, and domestic oil demand is increasing. Security strategy, alleviating energy shortage, promoting economic development, and ensuring national security are of great significance.

HPMM Group is a large-scale and key equipment manufacturing enterprise in China, a pioneer in the “One Belt and Road” initiative, and shoulders an important historical mission. As China’s advantageous industry combined with Mongolia’s development needs, it has not only strengthened the endogenous driving force for Mongolia’s economic development, but also has taken a solid step towards ensuring our country’s energy security and expanding overseas oil markets for companies to realize the “One Belt and Road” economic belt construction is of great significance.

To "seize opportunities and respond to challenges", HPMM and Mongolia have joined forces to jointly create a new world in the petroleum exploration industry.

Hu Hongyu of Mongolia Xinyi Energy Co., Ltd.