On January 13^th, ZPEC’s cumulative daily output of crude oil from the two oil fields in Wensu Xinjiang and Tenge Kazakhstan, exceeded 500 tons. As the first domestic private enterprise with approved reserves, ZPEC and its shareholding companies are accelerating its upstream oil and gas industry presence. The business layout and the development against the trend in the epidemic situation have provided an ability to sustain profitability and anti-risk capabilities through the exploration and development business, laying the foundation for long-term and steady development in the future.

In 2021, ZPEC and ZPEC Holding Company have issued 175,000 tons of crude oil and 300,000 tons of crude oil work in the two oil fields in Wensu and Tenge. This winter and next spring will further set off a wave of exploration and development of oilfield blocks.  The first is to carry out a battle to capture oil and increase production in the Wensu Block in Xinjiang to ensure that seven drilling rigs are running at full power to drill more wells, that all oil production wells are opened, and that exploration and block development are simultaneously promoted to form oil and gas production capacity as soon as possible. To complete the reporting of new reserves and the succession of production, and to strive to build a crude oil production capacity of 300,000 tons this year, the second is to further increase the development of the Tenge Oil Field with equity participation. At present, the oil field has identified twelve developmental well groups and deployed five wells on the basis of ensuring that two drilling rigs start drilling as soon as possible.  It is planned to add three more drilling rigs to accelerate the pace of production capacity construction and to strive to produce 300,000 tons in 2021.

2020 was a critical year for ZPEC to transform from an oil service company to an oil production company. Although the sudden epidemic and low oil prices have affected the overall deployment, the Wensu Block in Xinjiang has made a series of new breakthroughs in reserve declarations, capacity construction, and crude oil production. On September 9^th, 2020, the Wenbei Oilfield Wen7 Block Reserve Report was approved by the Ministry of Natural Resources, adding 30.11 million tons of proven crude oil and 449 million cubic meters of natural gas.  ZPEC became the first private enterprise company in China to be approved for conventional oil and gas reserves. Last year, ZPEC produced 45,000 tons of oil in Wensu. In addition to the Wen7 block, the Hongqipo Oilfield and Saike Oilfield, which have completed three-dimensional seismic acquisition, also made major discoveries with 709 square kilometers of prospecting rights to be fully explored. The region has also successively obtained high-yield industrial oil streams with huge potential for future growth.

In 2020, the company’s shareholdings in the Tenge Oilfield had also achieved both volume and efficiency. The block is located in the oil and gas enrichment zone of Kazakhstan’s second largest petroliferous basin, close to the giant oilfield Ujin Oilfield, owned by ZPEC. In February 2020, the Ministry of Natural Resources of Kazakhstan approved the Tenge Oilfield with 65.44 million tons of crude oil reserves and 24.34 billion cubic meters of natural gas reserves. In 2020, it had produced 100,000 tons of oil and 11.8 million cubic meters of gas. The oil field has many advantages such as shallow oil layers, abundant reserves, high production, and perfect infrastructure. Thus, it had entered the stage of increasing production. The cost advantage of barrels of oil less than US$35 makes subsequent developmental potential huge.