Exhibit 10.8


 


Contract Registration No.: DGYT-2006-JS-003


 


PetroChina Dagang Oil Field
Company


 


Technical Services Contract


 


	
  Party
  A (Entrustor):

  	
  PetroChina
  Dagang Oil Field Company

  
	
   

  	
   

  
	
  Handling
  Unit:

  	
  No. 1
  Oil Recovery Plant

  
	
   

  	
   

  
	
  Party
  B (Entrustee):

  	
  Tianjin
  New Highland Science Development Co., Ltd.

  



 


Place of
Execution: No. 1 Oil Recovery Plant, Dagang Oil Filed


 


Date of Execution:
January 1, 2006


 


Period of
Performance: January 1, 2006 to December 31, 2010


 


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Table of Contents


 


Article 1 General
Provisions


 


Article 2 Objectives,
Scope and Form of Technological Services


 


Article 3 Term,
Place and Modality of Performance of the Agreement


 


Article 4 Modality
of Operations


 


Article 5 Specific
Requirements


 


Article 6 Working
Conditions and Cooperation Matters


 


Article 7 Remuneration
and Taxes


 


Article 8 Modality
and Time of Settlement


 


Article 9 Breach
of Contract Liabilities and Damages


 


Article 10
Termination and Renewal of Contract


 


Article 11
Force Majeure


 


Article 12
Applicable Law and Dispute Resolution


 


Article 13  Miscellaneous


 


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THIS AGREEMENT is entered into by and between:


 


Party A (Entrustor) :  PetroChina Dagang Oil Field Company (No.1 Oil
Recovery Plant) (“Party A”), an enterprise affiliated with PetroChina, a joint
stock company organized under the laws of the People’s Republic of China; and


 


Party B (Entrustee):  Tianjin New Highland Science Development Co., Ltd.
(“Party B”), a limited liability company organized under the laws of the People’s
Republic of China.


 


Article 1                                                 General Provisions


 


Pursuant to the Contract Law of the People’s
Republic of China and relevant laws and regulations, and based on the
principles of fairness, equality, reciprocal advantage and benefit, respective
ownership of responsibility, and common development, Party A and Party B hereby
enter into the following by mutual consultation and agreement with regard to
the technological services matters in respect of Block No. 4, Area 2, and
Block No. 6, Area 2 of Dagang No. 1 Oil Recovery Plant.


 


Article 2                                                 Objectives, Scope and Form of Technological Services


 


2.1           Party
A shall make available to Party B 178 oil wells and 53 water injection wells on
Block No. 4, Area 2, and Block No. 6, Area 2.


 


2.2           Party
B shall carry out oil recovery in the blocks specified herein by applying the
MD filming oil displacement technology and other novel processes, continuously
improve development efficacy and ensure realization of enhanced and high production
on such specified blocks, to the effect that the pre-set production targets of
Party A and the oil output enhancement purposes shall be achieved.


 


2.3           Form of
Technological Service: Onsite Technological Service


 


2.4           Preset
Oil Production Target to be Met by the Technological Service: Delivery of an
annual crude oil production of 264,330 tons during the term of performance of
the Agreement


 


Article 3                                                 Term, Place and Modality of Performance of the Agreement


 


3.1           The
term of this Contract shall begin as from January 1, 2006 and end as of December 31,
2010.


 


3.2                                 The place of performance shall be Block No. 4, Area 2, and Block No. 6,
Area 2 of PetroChina Dagang Oil Field Company.


 


3.3                                 The modality of performance shall consist in onsite oil recovery
production and new technology implementation to be effected by Party B at the
sites specified herein.


 


Article 4                                                 Modality of Operations


 


4.1           Party
B shall assume the operating costs of the technological services for the blocks
specified herein, including without limitation the purchase and installation of
instruments, 


 


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equipment and MD filming materials required for
such technological services, construction expenses, and the wages of relevant
personnel. Party A will make appraisals only in accordance with the oil
production targets preset for relevant blocks and will pay remuneration on the
basis of the volume of the actually recovered crude oil.


 


4.2           Party
B shall carry out oil recovery on the blocks specified herein by applying the
MD filming oil displacement technology and other novel processes.


 


4.3           The
oil volume gauging shall be handled by Party A, but under the monitoring of
Party B.


 


4.4           Party
B shall solely assume all investment risks hereunder, including all fire
prevention, safety, environmental penalty and other legal liabilities that may
arise after the putting into operation of relevant projects.


 


Article 5                                                 Specific Requirements


 


5.1           During
the course of production, Party B shall in accordance with the actual
production needs put in place assets and equipment related to production,
safety and environmental protection.


 


5.2           Party
B shall be obligated to provide free training to onsite operating personnel of
Party A.


 


5.3           During
the course of Party B’s onsite production, Party A shall take charge of the safety
and environmental protection matters of the blocks specified herein as well as
relevant relationship coordination work with local authorities, provided that
Party B shall abide by all rules and procedures of Party A, accept onsite
supervision by the safety supervision personnel of Party A, maintain the
on-site environmental condition of the blocks under project implementation, and
assume the safety and environmental protection liabilities in relation to such
blocks.


 


Article 6                                                 Working Conditions and Cooperation Matters


 


6.1           Party
A shall provide Party B with relevant geological materials of the blocks
specified herein, and Party B shall custody such materials with care and
maintain them in confidence.


 


6.2           During
the term of this Agreement, Party B will not be responsible for the road
construction and maintenance expenses.


 


6.3           During
the term of this Agreement, if Party B desires to terminate this Agreement
earlier, it shall provide a one month’s notice to Party A and shall complete
relevant hand-over procedures.


 


6.4           Upon
termination of this Agreement, all devices and instruments put in place by
Party B for the purpose of enhancing management or adapting to technological
advances as well as all process renovations and like production and process
inputs effected by Party B during the term of this Agreement shall belong to
Party B.


 


6.5           During
the term of this Agreement, all new technological results realized by Party B y
utilizing the technical materials and working conditions of Party A shall
belong to Party B.


 


6.6           All
new technological results realized by Party A by utilizing the work results of
Party B  shall belong to Party A.


 


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Article 7                                                 Remuneration and Taxes


 


7.1           All
of the commercial volume of crude oil achieved during the term of this
Agreement shall be owned by Party A. Party A shall on the basis of the actually
achieved commercial volume of crude oil pay to Party B the technological
service fee at an operation rate of RMB480/ton in accordance with this
Agreement.


 


7.2           Party
A and Party B shall each assume their taxes and assessments duly payable by
them during the rendering by Party B of the technological services to Party A.


 


Article 8                                                 Modality and Time of Settlement


 


8.1           Party
B will issue an invoice for monthly settlement on the basis of the commercial
volume of crude oil delivered by Party B.


 


8.2           The
settlement shall be effected at the latest within 3 months so as not to affect the
normal operation and production of Party B. The settlement of the year-end
balance shall be effected no later than the end of March of the following
year.


 


Article 9                                                 Breach of Contract Liabilities and Damages


 


9.1           Party
B shall solely assume responsibility for any damage to the production capacity
of relevant blocks arising as a result of any mistake in the oil recovery
production measures or materials provided by Party B.


 


9.2           Party
B shall assume all losses of Party A arising from the oil field development
materials and relevant data thereof provided by Party A being discolsed as a
result of  Party B’s failure to maintain
the confidentiality of, and carefully custody and utilize, the same.


 


9.3           If
Party B fails to meet the preset production volume specified herein, Party A
shall deduct, as a measure of penalty, from the service fee payable to Party B
an amount equal to the difference between the preset production volume and the
actual production volume multiplied by RMB50/ton.


 


Article 10                                           Termination and Renewal of Contract


 


10.1         This
Agreement shall be terminated if:


 


10.1.1      the
term of this Agreement expires;


 


10.1.2      the
two parties mutually agree to terminate this Agreement during the term hereof;


 


10.1.3      any
party hereto has lost the ability to perform this Agreement due to any force
majeure event set out herein;


 


10.1.4      the
court of Dagang District of Tianjin renders, pursuant to laws and regulations,
a judgment or ruling terminating this Agreement.


 


10.2         Renewal
of Agreement:


 


10.2.1      Three
months prior to expiry of this Agreement, the parties shall consult each other
as to the renewal of contract with respect to the blocks specified herein.


 


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10.2.2      Where
the conditions are equal, Party B shall have the right of first refusal to
renew the contract.


 


Article 11                                           Force Majeure


 


11.1         If,
as a result of any force majeure event, any party hereto fails to perform all
or part of its obligations hereunder, the performance of such obligation(s) shall
be suspended so long as it is prevented by such force majeure event.


 


11.2         Any
party affected by a force majeure event shall within the shortest possible time
notify the other party in writing of the occurrence of such force majeure event
and shall within 15 days from its occurrence deliver in person to the other
party an appropriate evidence showing the occurrence of such force majeure
event and its duration. The party whose performance of this Agreement has been
made objectively impossible or impracticable by the force majeure event shall
be obligated to use all of its reasonable efforts to remove or mitigate the
effect of such force majeure event.


 


11.3         Upon
occurrence of a force majeure event, the parties shall immediately decide
through friendly consultations on how to perform this Agreement. Upon cessation
or removal of the force majeure event or its effects, Party A and Party B shall
immediately resume the performance of their obligations hereunder. If any party
hereto has lost the ability to perform this Agreement as a result of the impossibility
of putting an end to or removing the force majeure event or its effects,
relevant contract termination provisions hereunder shall apply.


 


11.4         For
the purpose of this Agreement, the term “force majeure” means statutory force
majeure events, including earthquake, typhoon, floods and other acts of God;
certain governmental acts, such as the promulgation of new policies or laws or
the taking of administrative measures by the government or superior competent
authorities which results in the Agreement being incapable of performance; and
extraordinary social events, such as strikes or war.


 


Article 12                                           Applicable Law and Dispute Resolution


 


12.1         This
Agreement shall be governed by and interpreted in accordance with the laws of
the People’s Republic of China.


 


12.2         Any
dispute arising out of or in connection with this Agreement shall be resolved
by Party A and Party B through consultations, failing which, either of the
parties may submit the dispute to the court in Dagang for adjudication.


 


Article 13                                           Miscellaneous


 


13.1         This Agreement is made in Chinese.


 


13.2         This Agreement shall become effective
once it has been executed by, or affixed with a personal seal of, the
authorized representatives of Party A and Party B and affixed with the
respective special contracts seals of Party A and Party B.


 


13.3         This Agreement is made in four copies.
Party A and Party B shall each hold two copies.


 


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Party A


 


PetroChina Dagang Oil Field Company (Seal)


 


Handling Unit: No. 1 Oil Recovery Plant


 


 


	
  [Company
  Seal]

  	
   

  
	
   

  	
   

  
	
  (Name of Authorized Representative)

  	
   

  
	
   

  	
   

  
	
  Name:

  	
   

  



 


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Party B


 


Tianjin New Highland Science Development Co., Ltd.
(Seal)


 


 


	
  /s/Liu Fengkai

  	
   

  
	
   

  	
   

  
	
  (Name of Authorized Representative)

  	
   

  
	
   

  	
   

  
	
  Name: Liu Fengkai

  	
   

  



 


 


Date of Execution: January 1, 2006


 


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