Exhibit
10.5


 


Technical Services Contract


 


Party A:  PetroChina Liaohe Oil Field Company


 


Handling Unit:  Huanxiling Oil Recovery Plant


 


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


 


Place of
Execution: Panjin City, Liaoning Province


 


Date of Execution:
January 1, 2007


 


Term of
Performance: January 1, 2007 to December 31, 2010


 


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THIS AGREEMENT is entered into by and between:


 


Party A 
:  Huanxiling Oil Recovery Plant
of PetroChina Liaohe Oil Field Company


 


Responsible Person: Liu Weishen


 


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


 


Legal Representative (Responsible Person): Liu
Fengkai


 


Pursuant to the Contract Law of the People’s
Republic of China and relevant laws, 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 2-14-16 of Huanxiling Oil
Field.


 


Article 1                                                 Conditions Precedent to Cooperation


 


1.1           Party
B shall within the term specified herein implement nano MD filming oil
displacement (“MD Filming Oil Displacement”) in respect of 120 oil or water
wells (110 oil wells; 10 water wells) on Block 2-14-16 of Huanxiling Oil Field.


 


1.2           Party
B shall apply MD Filming Oil Displacement and its related technologies and
shall develop feasible implementation plans, which shall be implemented upon
approval by Party A.


 


Article 2                                                 Modality of Operation


 


2.1           Party
B shall be responsible for the technology plans, the development of MD Filming
Oil Displacement measures and the onsite implementation.


 


2.2           Crude
oil gauging shall be effected by using the existing separator gauging method of
Party A, shall be handled by Party A under the monitoring of Party B and shall
be subject to acceptance by both parties.


 


2.3           Oil
well sampling, water content testing and production reporting shall continue to
be dealt with in accordance with the existing operating procedures of Party A,
shall be handled by Party A under the monitoring of Party B and shall be subject
to acceptance by both parties.


 


Article 3                                                 Implementation Requirements


 


3.1           The
MD Filming Oil Displacement design plan to be implemented by Party B in respect
of the blocks specified herein shall be subject to approval and consent of
Party A before its implementation.


 


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3.2           During
the course of Party B’s onsite implementation, 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
and strengthen its responsibilities for the safety and environmental protection
of such blocks.


 


3.3           During
the course of the implementation, Party B shall comply with specific
requirements of Party A regarding fire prevention, safety, environmental
protection, etc.


 


Article 4                                                 Cooperation Parameters


 


4.1           From
January 1, 2007 to December 31, 2010 the annual crude oil production
target for the 130 oil and water wells (110 oil wells and 10 water wells) on
Block 2-14-16 of Huanxiling Oil Field shall be 180,000 tons.


 


Article 5                                                 Working Conditions and Cooperation Matters


 


5.1           Party
A shall provide Party B with relevant geological materials of Block 2-14-16 of
Huanxiling Oil Field hereunder (including both dynamic and static materials),
and Party B shall custody such materials with care.


 


5.2           Party
B shall be responsible for organizing the onsite implementation of the MD
Filming Oil Displacement and purchasing the equipment required for MD Filming
Oil Displacement, the equipment required for the reparation and restoration for
use of certain decommissioned wells and like assets.


 


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


 


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


 


5.5           During
the term of this Agreement, if prodocution has been ceased due to reasons not
attributable to Party B, the oil production target will be reduced accordingly.


 


Article 6                                                 Term, Place and Modality of Performance of the Agreement


 


6.1           The
term of this Contract shall begin as from January 1, 2007 and end as of December 31,
2010.


 


6.2           The
place of performance shall be Block 2-14-16 of Huanxiling Oil Field of
PetroChina Liaohe Oil Field Company.


 


Article 7                                                 Remuneration and Taxes


 


7.1           During
the implementation of the project hereunder Party B shall receive a
remuneration to be calculated at RMB 680 per ton of oil, and the final
settlement under the Agreement shall be effected on the basis of the actually
achieved crude oil production.


 


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Article 8                                                 Modality and Time of Settlement


 


8.1           Remuneration
Payment : At the end of each month, upon verification of the oil production
volume by Party A and completion of the existing settlement procedures of Party
A, the remuneration shall be settled through a bank on the basis of the actual
oil production volume.


 


Article 9                                                 Breach of Contract Liabilities and Damages


 


9.1           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 disclosed as a
result of Party B’s failure to maintain the confidentiality of, and carefully
custody and utilize, the same.


 


9.3           If,
in violation of the provisions hereof, Party A fails to settle the relevant
remuneration within one month and thereby affects the production of Party B,
Party A shall timely pay up such remuneration within the following month,
failing which, it shall assume breach of contract liabilities by paying in
respect of such remuneration an interest equal to that applicable to bank
deposits of an equal term.


 


Article 10                                           Change and Termination of Agreement


 


10.1         Any
change to this Agreement shall obtain mutual agreement of the parties and will
not become effective unless effected in writing.


 


10.2         This
Agreement shall be terminated if:


 


10.2.1      the
term of this Agreement expires;


 


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


 


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


 


Article 11                                           Force Majeure


 


11.1         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.


 


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;
and extraordinary social events, such as strikes or war.


 


Article 12                                           Miscellaneous


 


12.1         Any amendment to this Agreement may
only be effected by a written agreement executed by the authorized
representatives of both parties.


 


12.2         If the parties reach any understanding
on any other technological service in respect of the same block, the parties
may separately enter into an agreement, which shall not affect the performance
of this Agreement.


 


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Article 13                                           Applicable Law and Dispute Resolution


 


13.1         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 Party A or
Party B may submit the dispute to Panjin City Arbitration Commission for
arbitration.


 


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Party A


 


PetroChina Liaohe Oil Field Company Huanxiling Oil
Recovery Plant (Seal)


 


 


	
  /s/ Liu Weishen

  	
   

  
	
   

  	
   

  
	
  (Name of
  Person-in-Charge)

  	
   

  
	
   

  	
   

  
	
  Name: Liu Weishen

  	
   

  



 


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Party B


 


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


 


 


	
  /s/ Liu Fengkai

  	
   

  
	
   

  	
   

  
	
  (Name of
  Legal Representative)

  	
   

  
	
   

  	
   

  
	
  Name: Liu Fengkai

  	
   

  



 


 


Date of Execution: January 1, 2007


 


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