Bohai Bay is located in the northeastern part of China. It is the most important oil and gas producing area for the Company and also a main area for exploration and development. The operation area in Bohai Bay is mainly shallow waters with a depth of 10 to 30 meters.

By the end of 2009, the net proved reserves in this region reached 1,159 million BOE, accounting for 43.6% of the Company’s total. The average daily production in this area amounted to 267,079 BOE.