SINOPEC SSC (01033) subsidiary intends to acquire a 50% stake in the Mexican company DS and 0.01% interests in the EBANO project held by D&S company.

SINOPEC SSC (01033) announced that Mexican DS Company is a subsidiary joint venture of the company, with its wholly-owned subsidiary, Guogong Company, and DIAVAZ each holding a 50% stake. The main business is to act as the operator of the EBANO project, responsible for crude oil production activities in the EBANO oil field. According to the valid "EBANO Oil Field Exploration and Development Contract" (hereinafter referred to as "CEE") signed by Mexican DS Company, the Mexican National Hydrocarbons Commission (now merged into the Mexican Ministry of Energy), PEMEX, and D&S Company, Mexican DS Company, PEMEX, and D&S Company hold 54.99%, 45%, and 0.01% interests in the EBANO project under the CEE, respectively. Guogong Company and Guogong Mexico subsidiary plan to acquire the 50% equity of Mexican DS Company held by DIAVAZ (hereinafter referred to as "target equity") and the 0.01% interest in the EBANO project under CEE held by D&S Company (hereinafter referred to as "target project interest") at a price of $4 million. After the acquisition is completed, they will invest an additional $212 million (including abandonment costs) in phases into the EBANO oil field project in Mexico. DS Company currently operates the EBANO oil field project. The EBANO oil field is located in the central Tammi Basin on the west coast of the Gulf of Mexico, covering an area of 1,569 square kilometers. It was discovered in 1903 and consists of fractured-porous carbonate reservoirs of heavy oil, with the current developed formations being the Upper Cretaceous KSF and KAN layers, buried at depths of 350 to 750 meters. Based on evaluations of existing 2D and 3D seismic data, the structural, reservoir, fluid, and reserve confirmations of the old oil field area indicate geological oil reserves of 4.92 billion barrels (approximately 743 million tons) and an overall oil recovery factor of 6.84%. According to exploration well data descriptions and seismic attribute calculations, the oil resource in the lower KTS layer (buried at depths of 760 to 1,140 meters) is approximately 351 million barrels (about 53 million tons); deeper Jurassic strata also have exploration potential. Due to the continuous losses and operational difficulties faced by the partner DIAVAZ, the development plan for the EBANO oil field has been delayed multiple times. With the implementation of this transaction, Guogong Company will purchase the equity of DS Company held by DIAVAZ, leveraging the integrated technological advantages in geological engineering from China Petroleum & Chemical Corporation, along with 20 years of operational experience in Mexico and an international team, to further tap into the oil field resources and value of the EBANO project, optimizing the company's business layout in the Mexican market. Once this acquisition is completed, Guogong Company and Guogong Mexico subsidiary will hold 99% and 1% equity in Mexican DS Company, respectively, and indirectly obtain a 55% interest in the EBANO project under CEE through Mexican DS Company. Mexican DS Company will be included in the consolidated financial statements of the company.