The total consideration for the acquisition shall be settled in the following manner: (i) HK$120 million was paid in cash as a refundable deposit upon signing of the agreement; (ii) HK$615 million shall be satisfied by the issue of 427,083,333 new shares at HK$1.44 per consideration share; (iii) HK$480 million shall be satisfied by the issue of the convertible note at a conversion price of HK$1.44 per conversion share.

Dr. Hui Chi Ming, Chairman of Sino Union Petroleum & Chemical International Limited, said, “Given the continuous growth in the worldwide oil and gas consumption and rise in oil price, we are optimistic about the future development of oil exploration and exploitation business. The satisfactory results of the oil and gas reserve assessment performed by China University of Petroleum on oilfield block 2104 and the fact that the oilfield blocks nearby have successfully conducted commercial exploitation prove the bright prospect of oilfield block 2104. The acquisition favors our Group’s development as it not only increases our oil reserve and investment in the oil and gas exploitation and operation in Madagascar, it also creates synergy to the oil exploration and exploitation business in the oilfield block 3113 in Madagascar our Group acquired earlier.”

The acquisition shall be approved by the shareholders at the Special General Meeting to be held on 28 March 2008.

About Sino Union Petroleum & Chemical International Limited (SEHK code: 0346)

Sino Union Petroleum & Chemical International Limited is principally engaged in the sale and distribution of polyurethane materials and petroleum products as well as oil exploration and exploitation in Madagascar. Sino Union has a 100% interest in oilfield block 3113 in Madagascar. It is vested with the rights to engage in exploration and operation for oil for 30 years and gas for 35 years as well as to share profits based on contracts.

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