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This agreement (this “Agreement”) is entered into by and among the following parties on March 25,2010 in Beijing:Party A: China National Petroleum Corporation, a state-owned enterprise established and existingunder the laws of the People’s Republic of China (“PRC”), with its registered office at Liupukang,Xicheng District, Beijing;Party B: PetroChina Company Limited, a joint stock company established and existing under the PRClaw, with its registered office at 16 Ande Road, Dongcheng District, Beijing; andParty C: China Petroleum Finance Company Limited, a company with limited liability established andexisting under the laws of the People’s Republic of China, with its registered office at 5 GulouwaiDajie, Xicheng District, Beijing.For purpose of this Agreement, Party A, Party B and Party C, shall collectively be referred to asthe “Parties” and each a “Party”. Upon friendly negotiation, the Parties reach an agreement withrespect to Party B’s increase of its investment in cash to Party C.NOW THEREFORE, for purpose of specifying the rights and obligations of the Parties, the Partieshereby enter into this Agreement.**Article 1 Definitions**“**Capital Increase**” means the contribution of RMB 9.618 billion in cash by Party B to subscribe forParty C’s additional registered capital in the amount of RMB 2.441 billion, with the rest amount ofRMB 7.177 billion to be recorded as the capital reserve of Party C.“**Base Date**” means the audit and valuation base date for this Capital Increase, which is June 30,2009.“**Contingent Liabilities**” means liabilities of Party C resulted from any of its discountedcommercial acceptance bills, any pending litigation or arbitration, any administrative penalties,claims or the assumption of any guarantee provided for any third party.“**Asset Valuation Report**” means the Asset Valuation Report on the Capital Increase Project of ChinaPetroleum Finance Company Limited numbered Zhong Feng Ping Bao Zi (2009) No. 021 issued by BeijingZhongfeng Asset Valuation Co., Ltd. on December 10, 2009.“**Closing Date**” means the date determined in accordance with Article 4.1 of this Agreement on whichParty B pays the amount of the additional capital contribution to Party C upon the satisfaction ofthe conditions precedent to the Capital Increase.“**Transitional Period**” means the period from the Base Date to the Closing Date.“**Day**” means a calendar day.“**Business Day**” means any day that is not a Saturday, a Sunday, a PRC public holiday or any otherday on which banks are required or authorized by PRC law to be closed.“**RMB**” means Renminbi.**Article 2 Capital Increase**
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2.1 The Parties agree that the total amount of the additional capital contribution invested byParty B shall be RMB 9.618 billion, of which RMB 2.441 billion shall be recorded as the registeredcapital and RMB 7.177 billion shall be recorded as the capital reserve, and Party B shall make allsuch contribution in cash.2.2 The pricing of the Capital Increase shall be determined by the Parties through consultation onthe basis of fairness and equality, by reference to Party C’s total shareholders’ interests as ofthe Base Date and the total amount of registered capital of Party C prior to the Capital Increase,in each case, set forth under the Asset Valuation Report.2.3 Upon the completion of the Capital Increase, the registered capital of Party C will beincreased from RMB 3 billion to RMB 5.441 billion, and the shareholding percentage of Party A andParty B will be respectively changed from 92.5% to 51% and 7.5% to 49% respectively.**Article 3 Condition Precedent to the Capital Increase**3.1 Party B shall pay Party C the amount of additional capital contribution upon the satisfactionof the following conditions precedent:3.1.1 The Capital Increase has been effectively approved by the internal competent decision-makingauthority of both Party A and Party B;3.1.2 The Capital Increase, including, but not limited to (i) the capital increase proposal; (ii)change of the registered capital, shareholding structure and amendment of the articles ofassociation; and (iii) any other matters related to the Capital Increase, has been effectivelyapproved by the internal competent decision-making authority of Party C;3.1.3 The Capital Increase has been approved by the competent banking regulatory authority;3.1.4 The covenants, representations and warranties made by the Parties hereunder shall be true andaccurate.3.2 The Parties shall make best efforts to satisfy the above conditions precedent as soon aspossible, and shall timely notify the other Parties of the progress of such conditions precedentduring the process of achieving the same. Each of the Parties agree to provide with other Partiesdocuments and materials reasonably required by such other Parties in the performance of theirobligations under the conditions precedent.**Article 4 Contribution of Additional Capital, Capital Verificationand Registration of the Changes with AIC**4.1 Party B shall remit the amount of additional capital contribution in a lump sum to the accountdesignated by Party C within fifteen (15) Business Days from the satisfaction by Party B of theconditions precedent hereunder.4.2 The Parties agree that upon the remittance by Party B of the amount of additional capitalcontribution, Party C shall be responsible to retain an accounting firm with required qualificationto conduct capital verification and issue a capital verification report within three (3) BusinessDays from the date the designated account of Party C receives the amount of additional capitalcontribution from Party B.
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4.3 Upon the remittance by Party B of the amount of additional capital contribution to the accountdesignated by Party C, Party C shall, at its own expense, perform the required formalities withcompetent administration of industry and commerce (“AIC”) with respect to the registration of thecapital increase. Party A and Party B shall use their best efforts to cooperate with Party C tocomplete such registration as soon as possible.**Article 5 Capital Contribution Certificate and Shareholder Register**Party C shall issue new capital contribution certificates and prepare a new shareholder registerbased on the actual amount of capital contribution from Party A and Party B, in accordance with thePRC Company Law, other relevant laws and regulations and the provisions hereunder.**Article 6 Arrangements during the Transitional Period**6.1 The Parties agree that the losses and profits of Party C during the Transitional Period shallbe assumed by Party A and Party B based on the proportion of their respective shareholding in PartyC prior to the Capital Increase.6.2 The Parties agree that the losses and profits of Party C incurred after the Closing Date(including the Closing Date) shall be assumed by Party A and Party B based on the proportion oftheir respective shareholding in Party C after the Capital Increase.6.3 (i) Any Contingent Liabilities incurred prior to the Closing Date, and (ii) any operatinglosses incurred prior to the Closing Date which have not been provided against prior to the ClosingDate, shall be assumed by Party A and Party B based on the proportion of their respectiveshareholding prior to the Capital Increase.**Article 7 Representations and Warranties of the Parties**7.1 The Parties to this Agreement (i) are independent legal persons established and existing underthe PRC law; (ii) are not subject to any wind-up or dissolution under applicable laws, regulations,rules, regulatory documents or their respective articles of association; and (iii) have independentlegal standing and full civil capacity.7.2 The execution and performance by each of the Parties of this Agreement neither violate anylaws, regulations, rules or any governmental authorization or approval nor conflict with anycontract or agreement to which it is a party or its assets is subject.7.3 The execution and performance of this Agreement does not violate any other legal obligations ofeach of the Parties.**Article 8 Liability for Breach of Agreement**The Parties shall perform this Agreement in good faith. In case the purpose of this Agreementfails to be achieved due to any failure of either Party to perform its obligations hereunder, thedefaulting Party shall compensate the other Parties for any financial losses arising therefrom.
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**Article 9 Amendment**This Agreement may not be amended or modified except by an instrument in writing signed by theParties upon mutual agreement.**Article 10 Governing Law**The formation, effectiveness and construction of, and the resolution of the disputes in connectionwith this Agreement shall be governed by the PRC law.**Article 11 Dispute Resolution**Any dispute arising out of or in connection with this Agreement shall be resolved by the Partiesthrough friendly negotiation. In case of failure of such negotiation, either Party may refer suchdispute to China International Economic and Trade Arbitration Commission (the “CIETAC”) forarbitration in Beijing in accordance with the then effective arbitration rule of CIETAC. Thearbitral award shall be final and binding upon the Parties.**Article 12 Confidentiality**Except any disclosure required by laws, administrative regulations, governmental authorities or anyother regulatory authorities, neither Party may disclose this Agreement and any confidentialinformation to any third party without consent of other Parties, provided that the Parties maydisclose the same to their respective shareholders, counsel and financial advisor.**Article 13 Notification**13.1 All notices shall be in writing and shall be given by facsimile, email, mail or via personaldelivery to the Parties at the following addresses, together with sufficient explanation and/ordetails regarding the matters set forth therein.If to Party A:9 Dongzhimen North Avenue,