Exhibit 10.7


 


Agreement on Equipment and Oil-displacing
Technological Support


 


Party A:         Tianjin New
Highland Science Development Co., Ltd.


 


Party B:          Hanyu Petroleum Technological
Development (Xinglongtai District, Panjin City) Co., Ltd.


 


Pertinent to
the Technical Service Contract (“Contract”) signed by and between Party A and
Huanxiling Oil Extraction Plant of Liaohe Oil Field (“Huanxiling”), a
subsidiary of PetroChina, as of this date of January 1, 2007, Party A and
Party B entered into this Technical Service Subcontract (“Subcontract”) on this
date of January 25, 2007. The Subcontract enters into effect as of
February 5, 2007. In accordance with the provisions under Article 5
of the Subcontract, with regard to the subject matter of subcontracting
technical services described in the Contract, Part A and Party B shall
specify the contents of their cooperation as well as their rights and
obligations in relevant subsequent agreements to be signed into effect by and
between them. NOW THEREFORE, through friendly and consistent consultation, both
parties hereto agree as follows:


 


1.   In
accordance with the requirements of the aforementioned Contract and
Subcontract, as of November 25, 2005 through December 31, 2006, Party
A purchased and installed at Zone HUAN-2-14-16 of Huanxiling the oil field
facility and equipment required for providing petroleum engineering
technological services. The facility and equipment that Party A purchased and
installed prior to the signing of the Contract is necessary for the petroleum engineering
technological services previously intended to be included in the Contract.
THEREFORE, Party A agrees to allow Party B to use and operate the
aforementioned facility and technology, and Party B shall be responsible for
the corresponding management and maintenance work. Party A shall conduct
real-time supervision of the ways in which Party B uses the equipment and
facility.


 


2.   Party
A agrees to provide Party B with systematic technological support for
oil-displacing, and to send engineers for on-site technical guidance. Prior to
the end of June 2007, Party B shall be solely responsible for the purchase
of all necessary materials, except for the nano oil-displacing agent that Party
A determines to be necessary for nano oil-displacement. After the end of
June 2007, Party B shall be solely responsible for the purchase of all
materials.


 


3.   With
regard to the parties’ collaboration of subcontracting in accordance with the
aforementioned Contract, Party B agrees to fulfill the production volume as
specified in the Contract, and to calculate its payments to Party A at the rate
of 300 RMB/ton, on the basis of the actual volume of oil ultimately delivered.
The payments shall be deposited into the bank account designated by Party A
within ten (10) days after Party B completes the monthly verification of
oil production volumes with Huanxiling and prerequisite billing settlements.


 


4.   This
Agreement is signed in two (2) originals, with each party retaining one
(1). The Agreement is entered into effect as of the date set forth below.


 


1

















 


	
  Party A:

  	
  Tianjin
  New Highland Science Development Co., Ltd.

  
	
   

  	
   

  
	
   

  	
  (Seal)

  



 


 


	
  /s/ Liu
  Fengkai

  	
   

  
	
   

  	
   

  
	
  (Name of
  Legal Representative)

  	
   

  
	
   

  	
   

  
	
  Name: Liu
  Fengkai

  	
   

  



 


 


2

















 


	
  Party B:

  	
  Hanyu
  Petroleum Technological Development (Xinglongtai District, Panjin City)
  Co., Ltd.

  
	
   

  	
   

  
	
   

  	
  (Seal)

  



 


 


	
  /s/ Du
  Xiaoping

  	
   

  
	
   

  	
   

  
	
  (Name of
  Legal Representative)

  	
   

  
	
   

  	
   

  
	
  Name: Du
  Xiaoping

  	
   

  



 


 


3