Jutal Oil Services unit inks HK$1.21bn deal

Penglai Jutal embarks on South China sea deepwater natural gas and Australian mining projects.

Jutal Offshore Oil Services Limited (“Jutal Oil Services”), a leading Chinese integrated engineering, fabrication and technical services provider in the oil and gas industry, announced Thursday that Penglai Jutal Offshore Engineering Heavy Industries Co., Ltd. ("Penglai Jutal”), the Group’s 30%-owned [joint venture] company, has entered into three construction agreements to undertake an offshore gas platform substructure construction for the South China Sea deepwater natural gas project and to manufacture two mining machinery modules used in Australia. The projects are to be completed within 18 months. The total value of the works under the agreement is approximately RMB992 million (approximately HK$1.21 billion), according to a Jutal Oil Services report.

Penglai Jutal is a Sino-foreign joint venture based in Penglai City, Shandong Province, mainly engaging in the design, manufacturing, installation and maintenance of offshore oil and gas production and development facilities, port machinery, petrochemical equipment and steel structures, as well as providing offshore after-service, port and stack yard services. In 2009 and 2010, Penglai Jutal contributed more than RMB 41 million and RMB 42 million respectively in profit to the Group.

Mr Wang Lishan, Chairman of Jutal Oil Services said, “The temporarily deferred customer orders of Penglai Jutal in the first half year have led to a decline in its profit contribution to the Group in the first half. Yet, the projects which we secured under these agreements and other possible upcoming projects would help Penglai Jutal pick up its development progress in 2012 and thereafter. It is expected the contribution from these projects is to be booked in 2012 and 2013 and become robust growth drivers for the Group.”