On September 9th, ZPEC received the "Response to the Review and Recordation of Mineral Resource Reserves" issued by the Ministry of Natural Resources of the People's Republic of China in the "New Report on the Newly Increased Proved Reserves of Petroleum and Natural Gas in the Neogene Jidike Formation in Block Wen 7 of Wenbei Oilfield" in Xinjiang.  ZPEC became the first private enterprise to pass the review of the proved reserves report of oil and gas blocks in the new round of oil and gas exploration reform in China, marking the success of ZPEC’s domestic transformation.

In the eyes of experts, this is a milestone event in the national oil and gas reform, in that the monopoly in the oil and gas exploration field by state-owned enterprises was broken. With the introduction of market competition mechanisms, private enterprises have become a new force that stimulates market vitality and stimulates the development of the oil and gas industry chain. The newly approved area of proven reserves for ZPEC is located in the Wenq7 Block of Wenbei Oilfield on the north side of the F1 fault zone in the Wensu Bulge, Keping Uplift, Wensu County, Tarim Basin, Aksu, Xinjiang. The new oil-bearing area is 8.39 square kilometers. The proved geological reserves of crude oil were 30.11 million tons, the newly added gas-bearing area was 2.23 square kilometers, and the proven geological reserves of natural gas were 449 million cubic meters.

For a long time, only a few state-owned oil companies such as PetroChina, Sinopec, and CNOOC have qualified for oil and gas exploration in China, while the liberalization of upstream areas of the oil and gas industry had been attracting attention. In May 2017, the Central Committee of the Communist Party of China and the State Council issued the "Several Opinions on Deepening the Reform of the Petroleum and Natural Gas System", allowing market entities that meet the access requirements, and obtained qualifications, to participate in conventional oil and gas exploration and exploitation. In July 2019, the "Special Administrative Measures for Foreign Investment Access (Negative List) (2019 Edition)", issued by the National Development and Reform Commission and the Ministry of Commerce, removed the restriction that foreign investment in oil, natural gas, and coalbed methane exploration and exploitation was limited to joint ventures and cooperation .

With the acceleration of oil and gas reforms, more and more companies hope that policies will be implemented as soon as possible and allow participation in the upstream exploration and development of the oil and gas industry in a fair and open manner. On January 23, 2018, for the first time, the state conducted a pilot reform of the oil and gas exploration and mining system in Xinjiang, a major energy province, and publicly listed the prospecting rights for five oil and gas exploration blocks. Among the three companies that successfully bid, Shenergy Co., Ltd. and Xinjiang Energy Petroleum and Natural Gas Co., Ltd. both belong to a local state-owned enterprise. ZPEC was the only private enterprise. ZPEC finally won the prospecting right of 1086.264 square kilometers in Wensu block of Tarim Basin for a price of $13.2 million USD.

Subsequently, ZPEC quickly carried out the first phase of 3D seismic acquisition in an area of about 1/3 of the survey area. Relying on the advantages of integrated drilling engineering services and equipment manufacturing, three key oil and gas blocks were discovered one after another. From April 2019 to April 2020, 15 risk exploration wells, pre-exploration wells, and appraisal wells were drilled in Wen 7 block successively, and fine seismic, geology, oil reservoir, reservoir, logging, and other geological research work was carried out. A major breakthrough was achieved, creating the extremely rare "ZPEC speed” of "breakthrough in one year, construction in two years, and commissioning in three years" in the domestic oil and gas industry. According to the exploration progress, in May 2020, the company submitted to the Ministry of Natural Resources a new report on the proved reserves of oil and natural gas in Block Wen 7 of Wenbei Oilfield.

Since the beginning of this year, the Ministry of Natural Resources has successively issued Documents No. 7, No. 26, and No. 966, revising important documents such as reserve classification, reserve calculation specifications, and reserve preparation specifications, further simplifying the approval procedures, and changing the approval system to a filing system. Since this is the first time in the new round of oil and gas reform in the country, a private company that has won the bid has submitted a reserve declaration, which is related to major oil and gas discoveries. The Ministry of Natural Resources attaches great importance to it, and organized an on-site reserve verification expert team to conduct on-site due diligence and verification in Block Wen 7 of Aksu Wenbei Oilfield from June 19 to 20, 2020. From July 9 to 10, 2020, The Natural Resources Ministry of Oil and Gas Reserves Review Office selected 9 outstanding experts with rich professional experience to form the review team and conducted the review in strict accordance with various filing procedures. During the review, oil and gas reserves expert Guogan Wu said that the discovery of reserves in Wen 7 block of Wenbei Oilfield is very meaningful. First, our country has made important achievements in promoting upstream oil and gas system reform and promoting marketization. Second, there are large-scale reserves and oil reservoirs, with shallow burial and good productivity, it is generally a very good oil field.

ZPEC’s Headquarters are located in the Lingang New Area of the Shanghai Free Trade Zone. With the implementation of underground oil and gas resources in Block Wen 7 of Wenbei Oilfield in Xinjiang and the large-scale development of proven reserves, it will greatly improve the company's sustained profitability and risk resistance ability. According to the established plan, the company will promote the development of industrial chains in Shanghai and its surrounding areas, such as intelligent, automated oil and gas equipment manufacturing, and integrated drilling and completion services.  Through the development of upstream oil and gas exploration blocks, forming a domestic and foreign cycle that complements each other, ZPEC strives to inject new impetus into boosting local economic and social development.