Developing new energy is our important strategy. Moreover, developing and utilizing unconventional hydrocarbon resources to replace and supplement traditional options and increasing the effective supply of oil and gas have been included in our development plan. As a result, the Company established an industry-leading bioenergy research team and a new energy management department and put together a development plan. By the end of 2007, much important interim progress had been achieved.

— Coal-bed gas development began to take shape. PetroChina has set up a coal-bed gas laboratory – the most advanced in China – which holds three national patent technologies including coal-bed hydraulic fracturing, wireline coring and quick desorption of coal-bed gas. We launched the pilot coal-bed gas development in Qinshui Basin, Shanxi Province,where 600 coal-bed gas wells have been drilled with an annual production of 500 million m³.

Additionally, a 3 billion m3/year coal-bed gas processing plant is currently under construction, which will be the largest in China. 200 equity coal-bed gas wells operating in the form of cooperatives, with an annual production of 150 million m³ are present.

— Geological surveys and resource assessment were conducted on oil shale and oil sands.

— Ethanol gasoline sales covered 50% or more in market shares throughout China. By the end of 2007, we had established 88 ethanol gasoline distribution centers and reconstructed 5777 service (gas) stations in 9 provinces, including Jilin and Shandong, with accumulated sales of ethanol gasoline increasing to 17 million tons and accounting for over 55% of annual sales in China.

— An integrated project - “Biodiesel from Wood” was initialized. In 2007, we set up 68,000 hectares of source wood bases. A 60,000-ton/year biodiesel industrialization demonstration project is under active construction in Nanchong, Sichuan Province, which is expected to start operation by the end of 2008.

— The evaluation, development and utilization of geothermal, wind and solar energy were promoted. Pilot projects related to the comprehensive utilization of geothermal energy were conducted in the Huabei Oilfield, where geothermal energy was effectively used for the power generation, heating and heat tracing of oil transportation.