Dr. Hui Chi Ming, Chairman of Sino Union pointed out during the media briefing after the Special General Meeting, “The progress of 3113 oilfield block in Madagascar is undergoing smoothly. Preliminary exploration, well drilling and delivery check have been completed and it is now at an early exploitation stage. We plan to start trial run in June this year and commence production in July with target daily oil production of 8,000 to 15,000 barrels. Assuming a daily production of 15,000 barrels, total cost of each barrel is estimated to be US$12. In addition, our Group will have an approximately 80km-offshore oil pipeline lain out by June this year to contain the transportation cost. As our Group is debt free, we plan to finance via various channels including new strategic investors, oil futures and bank financing.”

“The Group is now discussing with Shaanxi Yanchang Petroleum Industry Group Corporation and a Hong Kong Gas Company regarding the possibility of investment cooperation in Madagascar oilfields.”

On 3 November 2007, Sino Union acquired a 54% controlling interest of Madagascar Petroleum International Limited (“MPIL”) from Dr. Hui Chi Ming, Chairman and controlling shareholder of MPIL, at total consideration of 1.215 billion. MPIL is entitled to the exploration, operation and profit sharing rights of oil and natural gas at Oilfield Block 2104 for 30 years and 35 years respectively. The acquisition will greatly increase Sino Union’s asset value and extraordinary gain in profit. As at 12 February 2008, the valuation of Madagascar oilfield 2104 reaches HK$5 billion.

Dr. Hui, said, “After the acquisition of the controlling shares, Sino Union will carry out 2D seismic processing on oilfield block 2104 to ascertain the geological structure in the first half of year 2008, preparing for drilling wells and oil exploitation. We will commission China National Petroleum Corporation BGP and Chinese University of Petroleum to perform further oilfield exploration and research & development work on oilfield block 2104 for drilling wells and oil exploitation in the latter half of this year.”

Besides, Sino Union studied the seismic processing results and explanatory analysis conducted by China National Petroleum Corporation BGP on the Group’s wholly-owned Madagascar oilfield 3113 and outlined the well-drilling plan. The Group has now arranged state-owned large well-drilling company to start well drilling and oil exploitation work. Trial oil production is anticipated in June 2008. In the assessment done by the internationally renowned professional oil assessment institute-Netherland Sewell & Associates, the oil reserve of oilfield 3113 is cautiously estimated as 270,000,000 tons (2 billion barrels).

The Republic of Madagascar has entered into the row of oil-producing nations with successful oil production. The Madagascar government had sold 19 of the 20 petroleum blocks in possession and retained 1 for its own. Dr. Hui Chi Ming’s connected Hong Kong Companies acquired 4 out of the 19 sold-out blocks and the rest were acquired by companies in United States, Britain, Canada and so on.

For the 6 months ended 30 September 2007, the Group recorded profit after taxation of HK$4,440,000,000, which was 1,080 times of last year.

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.

About oilfield Block 3113

The oilfield Block 3113 at Madagascar has rich oil reserves with developable area of over 4,800 square kilometers at its petroleum plays. The oilfield mainly produces light oil and natural gas. Until now, the Group has already completed drilling of eight wells and all of them were found to have oil and gas sources.

About oilfield Block 2104

The Madagascar oilfield Block 2104, which has a total area of 20,100 square kilometers (equivalent to 20 times the total area of Hong Kong), is one of the largest oilfields in Africa. Sino Union has already completed drilling of 5 exploration wells of depth ranging from 67.5 meters to 2,153 meters. Three of the wells, which are of depth ranging from 450 meters to 2,153 meters, were found to have oil and gas resources. According to the geological evaluation report by the experts of the Chinese University of Petroleum, oilfield 2104 has enormous exploration and operation value as it contains 490 million tons of potential oil resources and 66.24 billion cubic meters of natural gas.