INTERNSHIP SUMMARY PAPER

Final Report of My Internship Summary

Sino Saudi Gas Limited (SSG)

Submitted by: Su Zongfu

October 31, 2007

Sino Saudi Gas Limited Final Report of My Internship Summary Su Zongfu

CONTENTS

Part One: Internship Program............................................................................................1

1.1 Internship Purpose ..................................................................................................1

1.2. General Program ....................................................................................................1

1.3. Department internship program ..............................................................................1

Part Two: Internship General Information ........................................................................3

2.1 Places of my internship............................................................................................3

2.2 About SSG and its Activities ....................................................................................3

2.3 Internship General Information ................................................................................5

Part Three: Internship in Different Departments ..............................................................6

3.1 Geophysical Department .........................................................................................6

3.1.1 Seismic Data Acquisition (Field Internship)....................................................6

3.1.2 Seismic Data Processing (Office Internship) ...............................................15

3.2 Administration Department ....................................................................................16

3.2.1 Job Description............................................................................................17

3.2.2 Minutes of Management Team Meeting.......................................................17

3.2.3 Weekly Meeting Schedule ...........................................................................17

3.3 Exploration Department .........................................................................................19

3.3.1 Getting to Know about the Scope of Work...................................................19

3.3.2 All Kinds of Reports .....................................................................................20

3.3.3 Operational activities in Exploration Department .........................................22

3.3.4 G&G Study ..................................................................................................23

3.4 Drilling Department ................................................................................................25

3.4.1 Getting to Know the Scope of Work.............................................................26

3.4.2 Office Internship ..........................................................................................27

3.4.3 Field Internship ............................................................................................30

Part Four: Internship Self-Evaluation .............................................................................31

4.1 Improvement of Language Skills ...........................................................................31

4.2 Improvement of Work Competence .......................................................................32

4.3 Improvement of Communication Ability..................................................................32

4.4 Understanding of Overseas Project Management .................................................32

Acknowledgement ............................................................................................................33

Annex 1: Sample of Management Team Meeting Minutes.............................................34

Annex 2: Sample of Daily Operation Meeting Minutes ..................................................37

Annex 3: Sample of Communication Meeting Minutes .................................................39

I


Part One: Internship Program

1.1 Internship Purpose

To learn about the management of an overseas oil and gas project and to

know about the function and operation of each department.

To provide us with opportunities to gain work experience and work on real

geologic problems and applications.

To get used to the overseas living and working environment as soon as

possible.

1.2. General Program

To transfer one department to another in one year.

Firstly trained in geophysical department, then transferred to exploration

department, and then to drilling department.

To take one month off after working three months overseas.

1.3. Department internship program

Geophysical department

To know about the framework of geophysical department and the regulation

and procedure of geophysical project management.

To participate in compiling and analyzing of periodical geophysical report.

To learn about how to compile the annual plan and budget.

To know about how to set up a project and bid.

To learn about the flow of seismic acquisition, process, and interpretation.

To participate in the operation of workstation.

To share the geological data with other colleagues.

To gain work experience on the wellsite.

1


Exploration department

To know about the regulation and procedure of exploration project

management.

To participate in compiling and analyzing of daily, monthly and annual report.

To learn about how to compile the annual exploration plan and budget.

To understand the discipline and procedure of seismic arrangement and

wellsite deployment.

To know about how to set up an exploration project and bid.


Drilling department

To know about the framework of drilling department and the regulation and

procedure of drilling project management.

To participate in compiling and analyzing of daily, monthly and annual drilling

report.

To learn about how to compile the annual drilling plan and budget.

To know about how to set up a drilling project and bid.

To learn about how to deal with the technical problems while drilling.

To understand the drilling process and flow chart.

To share the geological data with other colleagues.


Administration department

To know about the framework of administration department and the

regulation and procedure of management.

To understand the Human Resource policy.

To learn about how to check, summarize and report the annual plan and

budget.

To know about the regulation and procedure of contract management.

To learn about daily work of public affairs.

To learn about how to write document and compile regulation of company.

2


Part Two: Internship General Information

2.1 Places of my internship

My internship places not only include the office but also the field site of seismic

data acquisition, the wellsites in Block B, and SSG yard (Fig.1-Fig. 4).

Fig.1 SSG office building Fig.2 Field site of seismic data acquisition

Fig.3 Wellsite in Block B, KSA – FRAS-0001 Fig.4 Wellsite in Block B, KSA – ATNB-0002

2.2 About SSG and its Activities

Sino Saudi Gas Limited (SSG), incorporated on February 18th, 2004 in British

Virgin Islands, is a joint venture between Sinopec International Petroleum

Exploration and Production Corporation (SIPC) and Saudi Arabian Oil Company

(Saudi Aramco) formed for the purpose of funding, manning and conducting the

exploration for and the appraisal, development, production, sales, processing

and transmission of, Non-Associated Gas, NGL and field Condensates and

3


related products in the Kingdom and undertakes the performance of the

upstream Company’s obligations in the Upstream Agreement.

During the first exploration phase, two major kinds of exploration activities will be

carried out in accordance with the minimum work commitment stipulated in the

Upstream Agreement, consisting of 13,000km line of 2D seismic and seven (7)

exploratory wells. The overall planning schedule for the first exploration phase is

summarized in table 1.

Table 1 Five-year Exploration Work Program in Block B (Updated in July, 2007)

Rig189 F

Rig 190

Rig 189 T&F

Rig 190 F

Rig 189 T&F

Rig 190

Rig 189

Drilling 8th Exploration Well (MKSR-0003,Spud in:Jan., 2009) Rig 190

Rig 189 Rig 190 Third Rig

Exploration Activity2004 2005 2006 2007 2008 2009

2 3 4 1 2 1 23 4 1 2 3 4 1

2D Seismic Exploration (6096 km)

3 4 1 23 4

2D Seismic Exploration (Infill Program1370 km)

3D Seismic Exploration (948 sq.km) (Deadline: Feb.,2007)

3D Exploration (382 sq.km) in Qasba Area

3D Exploration (600 sq.km) in Sheeh Prospect

G&G Study Projects

Drilling: 1st Well(SHEH-2 Spuded in Nov.17,2005.)

Drilling: 2nd Well(HDDH-2 Spuded in Jan.26,2006)

Drilling: 3rd Exploration Well(ATNB-0001 &0002, Spud in: Dec,2006)

Final Evaluation for the First Exploration Phase

Regend

Drilling: 4th Exploration Well(FRAS-0001 ,Spud in: Feb,2006)

Drilling: 5th Exploration Well(MKSR-0002,Spud in: Dec,2007)

Drilling: 6th Exploration Well(QSBA ,Spud in: Jan,2008)

Drilling 7th Exploration Well (BRIK-1 or HAMA-1, Spud in:Sep, 2008)

The following is the SSG Organizational Structure Chart:

BOD

CEO Secretary

CFO COO CHRO

ProcurementInternal Security Administration

Auditor

Controller

Budget

Manager

Manager

HSE

Manager

Exploration

Manager

G.O.D

Manager

Drilling

Manager

Manager

Public

Manager

HR

Manager

L & C

Manager

4


2.3 Internship General Information

The principle internship goal is to provide us with an opportunity for a gradual transition from the University setting into an actual work setting. In some cases, this transition may be difficult, and, in most cases, involves testing theory against practice and providing us with the opportunity to determine our own strengths and areas for needed improvement. If this transition is made with actual project, we will find greater strength and confidence in what we are doing. Thus, it is our great honor to have this opportunity to have this internship in SSG decided by Human Resources Department of SIPC and to learn with actual overseas project and to adapt ourselves more realistically to the professional life we are about to enter after the internship. A second goal of the internship is to provide us with the opportunity to experience work in a variety of different departments with distinct specialties. This experience helps us to determine if the area is well suited for our interests and talents.

As per the arrangement program designed by HR Department of SSG, I have the opportunity to experience work in different departments, especially in all three operational departments which are Geophysical, Exploration, and Drilling department, giving me a systematic understanding on the operation of the gas project in the Kingdom of Saudi Arabia (KSA). Meanwhile, I was given a chance to get work experience in Administration Department for a short time, which helped me establish a better understanding on what they do and what functions they are to the Company. The actual program of my internship arrangement is shown as in Table 2.

Table 2 Actual Program of My Internship Arrangement

Department Time Office mentor Site mentor Manager

Geophysical Nov.17,2006-Jan. 25,2007 Li Weizhong Sun Changfu Saleh

Administration Jan. 25,2007-Feb. 8,2007 Zhang Wei — Zhang Wei

Exploration Mar. 11,2007-Jun. 4,2007 Liu Wen — Zhang Shenggen

Drilling Jul. 4,2007-Sep. 30, 2007 Qin Jiang Chen Yuesheng An Benqing

February 9, 2007-March 10,2007

June 5, 2007-July 3, 2007 Vacation time

October 1, 2007-October 31, 2007

5


Part Three: Internship in Different Departments

3.1 Geophysical Department

In Geophysical Department, my internship was divided into two phases: the first

phase is field internship for observing seismic data acquisition and obtaining the

field site experience and the second phase is office internship for learning the

basic thought and method of seismic data processing in workstation.

3.1.1 Seismic Data Acquisition (Field Internship)

From December 5th to December 19th, 2006, I had a Geophysical Internship in

Qasba 3D Full Fold Area in Block B, KSA. I worked with Supervisor Mr. Michael

and Party Manger of SSG Crew4 Mr. Zhao Peiye in the Qasba 3D worksite and

camp during those two weeks (Fig.5, Fig.6).

Fig.5 With Geophysical Supervisor, Michael Fig. 6 With Party Manager Crew4, Zhao Peiye

3.1.1.1 Field Internship Program

Item Contents Estimated

Day(s)

1 clear about the objectives/purposes for my professional internship 1

2 be familiar with the organizational structure and functions of each of the

operating units/departments within the SSG crew4 working for SSG 1

3 go to the field and know about how to do the field survey 2

6


4 learn about the procedures of seismic data acquisition 3

5 know about lay out of geophones and principle of vibroseis 3

6 know about how to output the seismic signals 2

7 understand the procedures of QC processing 1

8 summarize my internship and know about what my greatest

accomplishment was in this two-week internship experience 1

3.1.1.2 Organizational structure of SSG Crew 4

3.1.1.2.1 Camp Location

Qasba 3D Camp Coordinates: Latitude N 21°32′20.7″

Longitude E 47°21′38.5″ (Fig.7)

Fig.7 Overall Perspective of Qasba 3D Camp in Block B, KSA

3.1.1.2.2 Personnel

27 senior staffs and 311 junior staffs were in camp during the time of my staying.

3.1.1.2.3 Structure

The SSG Crew 4 is directly led by the Party Chief and is authorized to execute daily routine by the Party Manager. It mainly includes three departments: HSE, Logistic, and Operation. Each department also includes several functional units. For example, the Operation department includes Surveyor Crew, Observer Crew, and Vib-Mechanic Crew. See the below organizational structure chart (Fig.8) for more details.

7


Fig.8 Organizational structure of SSG Seismic Crew 4

3.1.1.3 Purpose of My Two-Week Geophysical Field Internship

To learn about the Field Acquisition Management System. To know about the function and operation of each department/unit in a

seismic crew. To provide me as a layman about geophysics with this great opportunity to

gain work experience and work on real seismic data acquisition problems and applications.

4.1.1.4 Description of Geophysical Field Internship Experiences

My internship in the SSG Block B Qasba 3D Full Fold Area focused on

understanding the overall process of geological prospecting, knowing about the

procedures of 3D seismic data acquisition, and learning about related

geophysical concepts.

Understanding the overall process of geological prospecting

For a geological prospecting, the first thing comes to us is supposed to be the

prospecting program, which is usually completed by geophysicists. Then the

seismic crew receives the program from the client in the form of lines on a map

8


which indicates where seismic data are to be obtained. For the seismic crew, the

first job that they should do is the field survey (Fig.9), which is considered as the

basis of each fieldwork.

Fig.9 the field surveyors were surveying (Taken in Dec.16th, 2006)

Once the preliminary operations have been completed, the surveyor crew is

supposed to determine the positions and elevations of both the source points

and the receiver points, the jug hustlers (Fig.10) lay out the lines in their proper

locations to be shot and the diggers (Fig.11/Fig.12) dig holes and lay out all the

geophones with certain required depth and in a certain reasonable pattern and

connect them into the cables, and at last the observer crew tests and adjusts the

amplifiers and other units of the recording system and tests the cables for

continuity to ensure that all geophones are connected.

Fig.10 the jug hustlers were laying out the lines (Taken in Dec.11th, 2006)

When all these jobs have been finished, seismic data acquisition can be

9


started by the vib-mechanic (Fig.13) crew. Usually there is a recording truck

(Fig.14) connecting to the seismic cable with a traverse line (Fig.15) marked by a

row of red flags at a convenient location such as the intersection of a road and

the seismic line. The final results produced by the recording truck are recording

tapes. Then these tapes are delivered to a data processing center (QC Office) to

check the correction of the acquisition data. This procedure calls seismic data QC processing. After this, the formal seismic data processing can be handled.

The end result of the data processing is usually record sections from which a

seismic data interpretation can be made. Through the integrated study by

geologists, geophysicists and drilling engineers, a location of drilling well can

be finally decided. So this is what I think of the overall process of geological

prospecting that I figured out through this internship experience (Fig.16).

Fig.11 the diggers were laying out geophones (Taken in Dec.7th, 2006)

Fig.12 I, digging a hole and burying a geophone (Taken in Dec.7th, 2006)

10


Fig.13 the vibrators were working (Taken in Dec.13th, 2006)

Fig.14 The recording truck were in use (Taken in Dec.13th, 2006)

11


Fig.15 The traverse line in the worksite (Taken in Dec.13th, 2006)

Fig.16 The overall process of geological prospecting

(Designed by Su Zongfu, December 17th, 2006)

Knowing about the procedures of 3D seismic data acquisition

Through this experience, I am quite clear to know about what the procedures are

in a 3D seismic data acquisition:

Plugging in the marker flags

Laying out the lines

Digging the holes and laying out the geophones

12


Producing seismic waves by the vibrators

Receiving seismic waves by the geophones

Sending to the recording truck and being written in the tapes

Learning about some geophysical related concepts

Through the two-week internship, I have learned about these following

geophysical related concepts and have kept them in my mind.

Geophone arrays: means a group of geophones which are connected

together in a certain reasonable pattern.

Vibroseis arrays: means four or five vibrator vehicles vibrating in a line

at a constant space (Qasba 3D using five vibrator vehicles).

Receiver lines: means the lines of geophone arrays’ stretching direction

(there are 49 receiver lines in Qasba 3D and the stretching direction is

NW-SE).

Source lines: means the lines of vibroseis arrays’ stretching direction,

which is perpendicular to the receiver lines (there are 276 receiver lines

in Qasba 3D and the stretching direction is SW-NE).

Swath: means the strip zone between two adjacent receiver lines (there

are 48 swaths in Qasba 3D).

The maximum Offset: means the distance from the vibroseis to the

most distant live geophone station.

The minimum Offset: means the distance from the vibroseis to the

nearest distant live geophone station.

Receiver points: means the center positions of the geophone arrays

(there are 2,7048 receiver points in Qasba 3D).

Source points: means the unique vibroseis in the vibroseis arrays

(there are 5,5200 receiver points in Qasba 3D).

FDU: “Field Digitizing Unit”, an instrument used to collect seismic waves

and transform to digital signals.

COG: “Center of Gravity”, a point of the average location of the weight of

an area.

3.1.1.5 Geophysical Field Internship Evaluation

I accomplished considerably more than what I had laid out in my internship

13

http://www.grc.nasa.gov/WWW/K-12/airplane/wteq.html


program within two weeks mainly due to the following circumstances:

My colleague (Sun Changfu) helped me point out what I should learn in this

internship during his staying days in the camp.

The Party Manager (Zhao Peiye), the Supervisor/Consultant (Michael) and

all the staffs of SSG Crew 4 were open, friendly, and very encouraging to me,

helping me get accustomed to the working conditions and environment

quickly.

Michael was always picking me up when he went to the field worksites for

checking (Fig.17/Fig.18), and he was always patient to explaining everything

to me.

Fig.17 Michael in the worksite, checking the buried depth of geophones

I myself was full of curiosity about the field seismic data acquisition and all

the new things.

I took notes every time I went to the worksites and wrote down what I

learned and what I didn’t know.

I asked technicians for consultation or looked up in the internet or referred to

the related books on my own initiative when problems came to me.

14


Fig.18 Michael in recording truck, checking the reason of bad channels

3.1.2 Seismic Data Processing (Office Internship)

After the field internship, I got the general idea about seismic data acquisition

and learned some related geophysical concepts and definitions which help me

go for the second phase of my internship in Geophysical Department quickly and

easily. In the second stage, I learned the basic steps of seismic data processing

using the ProMAX software installed in the environment of Geoframe by the

guidance of Mr. Li Zhenjiang from Branch of ZHYJX, Saudi Arabia.

For almost one month, I stayed in the QC Center in the fourth floor of SSG office

and learned the basic exercises of ProMAX User Interface. I realized that the

following nine steps must be executed for the basic seismic data processing:

Step 1: Segdin

Step 2: Geometry

Step 3: Lab and Display

Step 4: QC

Step 5: Deconvolution and Display

Step 6: Elevation Static Calculation

Step 7: Velocity Analysis (Fig. 19)

Step 8: Stack and Display

15


Step 9: Residual Static

In the above each step, there are many processing flows included. Take Step 4

as an example, we must input disk data, choose trace length, mark trace display

label and set the parameters for trace display. After setting all these processing

flows, then click “Execute” to finish this step. Each step has a consequential

relationship with the previous step.

Fig.19 velocity analysis

3.2 Administration Department

Although it was a short time for me to have the internship in Administration

Department, I still made great progress. Not only did I broaden my field of vision

from operational department to non-operational department, but also had the

chance to understand the policies and regulations of SSG thoroughly. During

that period, I was mainly responsible for the following three jobs: editing and

compiling Job Description and taking part in the communication meeting, writing

minutes of management team meetings, and arranging weekly meeting

schedule. These work experiences greatly enriched my internship life, quickly

improved my English writing ability, and made me understood Company’s

activities clearly.

16


3.2.1 Job Description

Each department has its own job description. And each position has its own job

description as well. Establishing Job Description is one of SSG’s great acts in

the management of Company. Four (4)

management team leaders including

CEO, COO, CFO, and CHRO, and

twelve (12) functional departments

including Geophysical, Exploration,

Drilling, Procurement, HSE,

Administration, HR, Legal &

Contracting, Public Affairs, Financial,

and Budget Department were involved.

In the Job Description, it basically

includes main function and work scope,

department’s framework chart, each

position’s basic function and minimal

requirements. My job was to edit and

compile the whole document and to participate in the management team

meeting discussing on the approval of each department’s Job Description.

3.2.2 Minutes of Management Team Meeting

When I was in Administration Department, I was responsible for writing minutes

of management team meeting for five (5) times as the meeting secretary and

finished two (2) integrated minutes with the great support and kind help of SSG’s

leaders and colleagues. One minute was on the approval of Job Description by

MT, and the other was on the 2006 implementation and budget analysis and

2007 AWPB. (See Annex 1)

Attending the MT meetings and acting as meeting secretary made me have a

clear perception and understanding of SSG’s routine work and general

framework of Company’s management. Meanwhile, writing minutes in English

greatly improved my writing ability and literary talent, which I think is one of the

abilities that I need to be improved and strengthened.

17


3.2.3 Weekly Meeting Schedule

Besides in charge of job description and minutes of management team meeting,

the third job that I involved in was arranging every weekly meeting schedule

before a new week coming. Usually I would send an email to all departments

and ask them to send me their departments’ meeting arrangements for next

week at the end of a week. When the new week came, I would send by email or

print out the weekly meeting schedule that I had arranged in weekends to CEO

for approval. If there was no any problem, I would send the final version of SSG

– MEETING SCHEDULE to the header of each department so as for reminding

them time and subject of each meeting. (See Table 3)

Table 3 SSG Weekly Meeting Schedule Date: Jan. 27, 2007

Names ProponentDep.

1 MT meetingSaturday

Jan. 27, 2007at 9:00 am

ConferenceRoom # 100 Job description CEO

MT Members,Administration,Public Affairs,

HR,Contracting,Procurement

2 CPTC meetingSaturday

Jan.27, 2007at 2:00 pm

conferenceRoom # 100 (Canceled) G.O.D CPTC

Chairman CPTC MembersFan yang(Meeting

Secretary)

3 MT meetingSunday

Jan. 28, 2007at 9:00 am


MT Members,Financing,

Plan & Budget,Security

4 HSE TrainingMonday

Jan.29,2007at 9:00 am

ConferenceRoom # 100 Application training on HSE MS HSE COO

Managerabove

5 MT meetingTuesday

Jan. 30, 2007at 9:00 am


MT Members,Exploration,

G.O.D

6 HSE MSAcceptance

TuesdayJan.30, 2007at 2:00 pm

ConferenceRoom # 100

HSE MS verification andacceptance HSE COO SIPC Delegation,

MT Members

7Technical

CommunicationMeeting

Tuesday

Jan.30,2007at 2:00 pm

ConferenceRoom # 100 (Canceled) COO

Managers ofAll OperationDepartments

8 MT meetingWednesday

Jan. 31, 2007at 9:00 am


MT Members,Drilling Dep.

HSE

9 CommunicationMeeting

WednesdayJan.31,2007at 2:00 pm

ConferenceRoom # 100 (Canceled) COO MT mumbers and

above Manager

Topics

Department: Admin .

No. Name ofMeeting

RequiredDate & Time

RequiredVenue Host Required

Attendees Note

18


3.3 Exploration Department

In Exploration Department, my internship was from March 11, 2007 to June 4,

2007, which was almost three months. During the short time, I was trained and

improved from the following aspects: getting to know about the scope of work,

being responsible for all kinds of operational reports, learning about the

operational activities and new technology being applied in actual drilling wells.

3.3.1 Getting to Know about the Scope of Work

Exploration Department is one of the most important departments in the three

operating departments, which involves the company’s annual plan and strategic

targets through scientifically and effectively managing exploration projects. The

detailed scope of work is as follows: Be in charge of drafting and amending Company’s five year exploration work

program submitted to Management Team and Board of Directors for approval.

Be in charge of drafting and adjusting Company’s annual exploration work program submitted to Management Team and Board of Directors for approval.

Be in charge of making annual exploration scientific research plan and managing geological, geophysical and drilling study projects.

Be in charge of drawing up deployment programs of geophysical (and geochemical) exploration, drilling, mud logging, well line logging and formation test, and submitting them to Management Team for approval.

Be in charge of designing geological programs for engineering projects of geophysical (and geochemical) exploration, drilling, formation test and so on, and submitting them to Management Team for approval.

Be in charge of editing daily, weekly, monthly, quarterly and annual reports for exploration activities, and submitting them to the Shareholders (SIPC and Saudi Aramco) and the MinPet (the Ministry of Petroleum and Mineral Resources). Weekly report must be confirmed by exploration manager, monthly report by COO, quarterly and annual report by CEO.

Be in charge of regular maintenance of the equipments, upgrading and updating of hardware and software in the Center of exploration data

19


interpretation. Be in charge of interfiling and arranging geological and technical data. Be in charge of constituting management system of Exploration Department. Participate in invitation and assessment of bids for exploration activities,

cooperating with Contract Department and Procurement Department, and take charge of drafting tender plan and technical evaluation criterion, technical assessment and clarification, and contract management of the following engineering projects: mud logging, wire line logging, formation test and so on.

Organize the check and acceptance of exploration scientific research achievements together with Planning Department and Contract Department.

Participate in employing personnel of Exploration Department with Human Resource Department, and be in charge of personnel administration in the Department.

Be responsible for implementing other works required by Company.

Whatsoever, knowing about the scope of work helped me get used to doing and participating in all kinds of routine work during my internship in Exploration Department as quickly as I could, which is a great guidance to me.

3.3.2 All Kinds of Reports

As for me, I was responsible for writing and editing daily, weekly, monthly, quarterly, half annual and annual reports on exploration activities. Doing these jobs not only enriched my work experiences in Exploration Department, but also broadened my professional range. I think they are the base of all the operating activities and help me understand the relationship between theory and practice.

Daily report reflects the exploration and drilling activities happened in the

previous day. In every daily morning operating meeting starting from 8:00am

hosted by COO, all the related staffs from Exploration Department and Drilling

Department get together and discuss on the work progress and problems for

wells being drilled. Consequently, daily report undoubtedly becomes a “window”

of learning about the activities happened in wellsites. Every morning when I got

to my office, firstly I would download all the daily report files including DGR, DDR,

DMR, and so on being sent from wellsites, and then I would check if there are

any errors or missing files. What I need to do was to summarize and compile the

20


major activities happened in the previous day based on the daily report from

wellsites. After sending the English version daily report, I would do some

translation and send the Chinese version daily report to the assigned persons in

SIPC.

Weekly report is a summary of operating activities happened in one week, based

on the daily reports. It usually includes two parts: work progress in the week and

work plan for the next week. Thus guarantee the work continuity and let us

recognize our work target.

Monthly report is a summary of operating activities happened in one month,

based on the weekly reports. The format is the same as that of weekly report. It

is usually submitted before 4th of next month.

Quarterly report is a summary of operating activities happened in three

continuous months, based on the monthly reports.

Half annual report is a summary of operating activities happened in a half year,

based on the quarterly reports. It is actually a mid-year report.

Annual report is a summary of operating activities happened in a whole year,

based on the half annual reports.

As per the requirement of two shareholders, the definite submitting date of all

kinds of operation reports is as follows:

No. Report type Submitting date

1 Daily Report Next day

2 Weekly Report Next Monday

3 Monthly Report Before 4thof next month

4 Quarterly Report Before 10th of next quarter

4 Half Annual Report Before 10th of July

5 Annual Report Before 20th January of next year

After writing, editing and sending these reports, I understand what the drilling

workers are doing in the wellsites, what progress they are making and why these

routine jobs are so important to guide our Company’s daily activities. I learned a

lot from these experiences in Exploration Department.

21


3.3.3 Operational activities in Exploration Department

3.3.3.1 Mud Logging, Wireline Logging and Coring

Mud logging, wireline logging and coring in Well ATNB-0002

By 6:00 am, July 1, 2007, the hole depth of ATNB-0002 is 13,443ft, which is 223ft into Khuff Formation. Mud logging service has been properly carried out by the contractor GeoService Company. The data including engineering, drilling fluid, gasometry, cutting, fluorescence logging and formation pressure were acquired. Several weak gas show intervals were detected in Arab Formation and Khuff Formation.

The first run of wireline logging was carried out in 16” hole with interval 4,096-12,014.5 ft was commenced on June 1st. The second run of wireline logging was completed in 12” hole with interval 12,024~14,436 ft on July 12-13. The logging data interpretation of two runs has been completed. No significant hydrocarbon zone was found in this interval.

The first core in ATNB-0002 was cut from 13,413 ft to 13,436.5 ft, and 22.9 ft were recovered with 97.45% recovery. Dull yellow fluorescence was observed from 13,413 ft to 13,417.9 ft, and spotty pale yellow fluorescence was observed from 13,432.9 ft to 13,435.9 ft.

Mud logging in Well FRAS-0001

By 6:00 am, July 1, 2007, the depth of well FRAS-0001 is 12,800 ft, which is 35 ft into Minjur Formation.

Mud logging service has been properly carried out by the contractor GeoService Company. The data including engineering, drilling fluid, gasometry, cutting, fluorescence logging and formation pressure were acquire. Several weak gas show intervals were detected in Arab, Jubaila, Hanifa and Dhruma Formation.

The first run of wireline logging was completed in 16” hole with interval 7,768-12,990 ft. The logging data interpretation has been completed. A suspicious gas zone was interpreted in 11,797-11873ft (Jurassic Hanifa Formation). Further research on the possibility of hydrocarbon bearing in this interval is still ongoing.

22


3.3.3.2 Application of LWD

The logging while drilling (LWD) service has been contracted with Schlumberger via competitive tender. LWD was applied while drilling through Unayzah A and B formation.

3.3.3.3 New Well Allocation

Well proposal for the exploration well in Mukassir 3D area (5th exploration well in the 1st exploration phase) was proposed by the G&G study groups, and approved in early August after thorough discussion with experts from both Shareholders.

Well proposal for the exploration well in Qasba 3D area (6th exploratory well in the 1st exploration phase) will be done in the early of October.

3.3.4 G&G Study

During the near three months when I was trained in Exploration Department, I also participated in the G & G study and learned from the geological technical support team from Overseas Central Institute, PEPRIS, and Southwest Research Institute. Eleven (11) G&G study projects listed in the table below have been arranged and commenced during the first half year of 2007.

No. Project Planned Period Adjusted Period

1 Near surface modeling 2006.10-2007.12 2007,04-2007,12

2 Velocity modeling in Block B 2006.10-2007.12 2007,04-2007,12

3 3D Seismic Data Interpretation in Mukassir Area

2007,02-2007,06 2007,04-2007,08

4 Special processing of 3D seismic data in Mukassir Area

2007,04-2007,07 2007,04-2007,08

5 Research of Paleozoic Hydrocarbon Evolution and Pool-Forming Conditions in Block B

2007,04-2007,12 2007,04-2007,03

6 Third Phase of Trap Evaluation and Well Proposals in Block B

2007,01-2007,12 2007,03-2007,12

7 Paleozoic Sedimentary System in Mukassir Area

2007,04-2007,07 2007,04-2007,08

23


8 Research of Paleozoic Reservoir Characteristics in Block B

2006,07-2007,06 2007,07-2007,08

9 Geological Integrated Research of the 3rd and 4th Exploration Wells During and Post-drilling.

2006,11-2007,12 2007,02-2007,12

10 Reservoir Stimulation Research of Ordovician Sarah Fm. and Carboniferous Unayzah Fm

2007,01-2007,11 2007,03-2007,12

11 Reserve Appraisal and Economic Analysis of Gas Fields in Block B

2007,04-2007,12 2007,04-2007,12

The progress of the G&G study projects by end of June, 2007 is as follows:

“Near surface modeling” and “Velocity modeling in Block B”

Completed technical designs for the projects and finished data collecting. Data analyzing is ongoing.

3D Seismic Data Interpretation in Mukassir Area

Seventeen (17) requested horizons have been picked out, and the analyses of fault assemblage and structure evolution are still ongoing. Workshop on “Mukassir 3D seismic data interpretation” has been arranged on July1.

Special processing of 3D seismic data in Mukassir Area

Impedance inversion and attribute analysis of the whole 3D area (948 km2) are being commenced, and the results will be used in well justification in Mukassir prospect.

Research of Paleozoic Hydrocarbon Evolution and Gas Pool Formation Condition in Block B

Distribution map of Qusaiba Hot Shale has been updated.

Modeling of Burial history, thermal history, hydrocarbon generation history and expulsion history of the newly drilled two wells (SHEH-0002 and HDDH-0002) and Well Mukassi-1 have been updated.

Third Phase of Trap Evaluation and Well Proposals in Block B

Main work was commenced in the reservoir prediction around Sheeh structure by using the newly obtained data, such as VSP, wireline logging data and reservoir properties.

Paleozoic Sedimentary System in Mukassir Area

Sub-facies analysis of target Paleozoic reservoirs is carrying on by using the abundant information of Mukassir 3D seismic data, such as wave form, phase

24


and reflector line ups and other attributes, based on framework of regional sedimentary facies.

Research of Paleozoic Reservoir Characteristics in Block B

Paleozoic reservoir characterizations of the two drilled wells: SHEH-0002 and HDDH-0002 are still ongoing and will be finished by end of August, 2007.

Geological Integrated Research of the 3rd and 4th Exploration Wells during and Post-drilling

The prediction of the depth of formations and abnormal pressures, and the depths of coring, wireline logging decisions have been made from the spud-in date of the two wells.

Wireline logging data interpretation has been carried out after the data was acquired.

Reservoir Stimulation Research of Ordovician Sarah Fm. and Carboniferous Unayzah Formation

Research of Fracturing Ordovician Sarah Fm. of SHEH-0002 is being done by Schlumberger and SIPC separately. Some of the research results have been used in the feasibility analysis of the Fracturing Engineering of Well SHEH-0002.

Reserve Appraisal and Economic Analysis of Gas Fields in Block B

Analysis of the commercial production margin of Paleozoic gas in Block B has been commenced.

Workshops with Shareholder experts

Two (2) workshops with experts from two shareholders on formation test and seismic data processing have been arranged, which have highly helped SSG improve next exploration activities.

Laboratory Analysis of samples from 3rd-6th wells carried out by KFUPM

Further source rock analysis and Paleontology analysis have been arranged, which will be carried out by KFUPM in 2007.

3.4 Drilling Department

In Drilling Department, my internship was divided into two parts: the office internship and the field internship. In office, I mainly learned about the scope of work and was responsible for managing all the drilling contracts and writing

25


minutes of daily operation meeting and coordinated with other colleagues to do some routine work as well. My field internship included working in yard, responsible for arranging the transportation of casings and related casing accessories, and going to wellsites. These experiences chastened my willpower, broadened my specialty scope and improved my work competence, helping me know about the property of drilling work, the function of drilling and the management of contractors.

3.4.1 Getting to Know the Scope of Work

Through scientific and effective drilling management, achieve the company’s long-term stratagem and annul work plan.

According to the company annul work plan, compile the starting plan and detailed budget of drilling item, and send to the management team for approval.

According to the drilling item’s geological design request, make drilling item’s work program, send to the management team for approval.

Make the pre-drilling construction plan including the road, well site and water well, to organize and manage the pre-drilling items.

In charge of the drilling item’s operation organization and harmonization; implement scheduling management, quality control and cost control.

In charge of completing the work plan and field conduct of completion, testing and abandon.

Coordinate with the contract and procurement department to affiliate the bid work. In charge of the drilling items’ invitation bid plan and contract management. In charge of making the assessment bids standard, technical assessment bids and technical clarification.

Organize the plan, contract and other management departments to give the drilling item finally check.

Coordinate with the exploration department to make the scientific plan management. In charge of managing the drilling type research items.

Coordinate with the exploration department to participate in managing the drilling engineering data.

Coordinate with the HR department to employ suitable person to drilling department, manage the personnel in drilling department include the drilling supervisor.

26


3.4.2 Office Internship

During the time of office internship in Drilling Department, I was mainly

responsible for managing the drilling contracts, writing the minutes of daily

operation meeting (English version), and data archiving work. At the same time, I

also learned about the management of supervisor and contractor to SSG.

3.4.2.1 Management of Drilling Contracts

When my internship was transferred from Exploration Department to Drilling

Department, Mr. Qin Jiang, the senior drilling engineer, kindly arranged me to be

familiar with all the drilling contracts and manage them well at the beginning, for

drilling contract is one of the most important parts of contractors’ management.

Therefore, I was seriously treating with this job handed over from Mr. Liu

Guangtian to me.

There are forty-six (46) contracts relating to drilling activities as of the end of

September, 2007. Each contract has an official contract number and contract

name. They are classified as: bit, wellhead, casing & tubing, casing accessories,

land rig, associated services, coring, downhole motor, reamer, other rental tools,

mud tank, water well and pre-drilling construction, freight forwarding, yard, and

manpower. In order that drilling superintendents and manager of Drilling

Department or other colleagues can be convenient to check the price of each

contract, I specially picked out the price list from each contract, booked them

together and made them into two volumes (See Table 4). Thus greatly save the

time and improve the work efficiency.

Through the management of drilling contracts, I learned about the format, the

general contents, and the key points of a contract. The expression of a contract

is rigorous and meticulous. They generally consist of two parts: the commercial

part and the technical part. The commercial part usually has a fixed format just

like the common contract, which includes general terms and conditions such as

definitions, interpretation, general obligations and rights, warranty, confidentiality

and publicity, price, invoices and payments, taxes and duties, indemnity,

insurance, termination, force majeure, government law and dispute solution,

etc. ; however, the technical part has a lot of knowledge and skills to be learned,

27


which requests us to have a profound and professional foundation in some

particular field when we negotiate with our contractors.

Table 4 List of Drilling contracts

No. Contract No. Contract Name Contract Company's Name

1 SSG 3-04-05/02Purchasing contract for provision of casing accessories with WeatherfordSR LTD.(2 copies)

Weatherford

2 SSG 3-05-05/01Purchasing contract for provision of well head with the Saudi CommercialImport Corporation

Saudi Commercial ImportCorporation

3 SSG 3-04-05/03APurchasing contract for provision of gas well casing supply with RashidTrading EST.

Rashid Trading EST.

4 SSG 3-04-05/03CPurchasing contract for provision of gas well casing supply with GenernalTechnology&Systems CO.LTD

Genernal Technology&SystemsCO.LTD

5 SSG 3-04-05/03DPurchasing contract for provision of gas well casing supply withAlgosaibi Trading Company

Algosaibi Trading Company

6 SSG 3-04-06/02APurchasing contract for provision of gas well casing supply with GenernalTechnology&Systems CO.LTD

Genernal Technology&SystemsCO.LTD

7 SSG 3-04-06/02BPurchasing contract for provision of gas well casing supply with RashidTrading EST.

Rashid Trading EST.

8 SSG 3-04-06/03Purchasing contract for provision of gas well casing supply with BeijingSino-dragons Technology Co.

Beijing Sino-dragonsTechnology Co.

9 SSG 3-03-05/01Contract for provision of water well drilling in Block B,KSA with HajjangDrilling Establishment(2 copies)

Hajjan Drilling Establishment

10 SSG 3-01-04/01ADay work contract for provision of land rig(Sinopec 189) fordrilling&work over operation in Block B.KSA with SIPSC

Sinopec InternationalPetroleum Services Co.

11 SSG 3-16-05/01 Freight forwarding contract in Block B,KSA Yusuf Bin Ahmed Kanoo

12 SSG 3-16-06/03 Contract for provision of mud centrifuges rental services Al-Rushaid Traiding Co.

13 SSG 3-02-06/01 Provision of construction of wellsite(s) and access road in Block B,KSAMofarreh M. Al-Harbi

Establishment

14 SSG 3-15-05/01Contract for provision of drill sterm test services in Block B,KSA(3copies)

Schlumberger

15 SSG 3-12-06/01 Contract for rental of turbine equipmentAl hugayet Contracting

Establishment

16 SSG 3-01-04/01B Provision of land rig for drilling and workover operation-190Sinopec InternationalPetroleum Services Co.

17 SSG 3-02-05/01 Provision of construction of well site and access roadMofarreh M. Al-Harbi

Establishment

18 SSG 3-20-05/02 Contract for envoirement impact assessment for exploratory drillingKing Fahd University of

Petroleum&Minerals

19 SSG 3-20-05/01 Provision of drilling supervision personnel-ETMEastern Trading&Maintenance

Company LTD

20 SSG 3-20-05/01 Provision of drilling supervision personnel-MASMohammed Saad Al-

Ghowainim&Partners Co.

21 SSG 3-08-05/01 Provision of casing running servicesAl Masaood Oil IndustrySupplies&Services Co.

22 SSG 3-20-06/01 Provision of manpower and supervision servicsDeveloping Channel Trading

Services

23 SSG 3-11-05/01 Provision of fluid engineering services and materials Al-Rushaid Traiding Co.

24 SSG 3-16-06/01 Provision of freight forwarding-worldwide worldwide logistics

25 SSG 3-05-05/01 Supplement Order to Purchasing contract for provision of wellheadThe Saudi Commercial Import

Co.

26 SSG 3-05-05/02 Provision of Xmas tree&tubing hanger supplyThe Saudi Commercial Import

Co.

27 SSG 3-04-06/01 Provision of casing accessories& liner hanger Weatherford

28 SSG 3-15-05/01Extension and Amendment of the Contract for Provision of Drill Stem TestServices in Block B, KSA

Schlumberger

29 SSG 3-18-06/01 Purchasing contract for provision of Gas Well Down Hole Motors Alashankou Tiandi

30 SSG 3-12-05/01 Provision of downhole motor and side track services Christensen Saudi Arabia

31 SSG 3-18-06/01 Purchasing contract for provisong of gas well down hole motorsBoertalamongolian AutonomousPrefecture Alashankou Tiandi

Track Co.LTD

Content--Volume One

28


No. Contract No. Contract Name Contract Company's Name

1 SSG 3-06-05/01A,B,C,D Provision of drilling bits-A,B,C,DAbdullah Alsuwaiket Trad&Cont

Est/Smith Bits

2 SSG 3-15-06/01A Contract with Smith on rental of reamers Smith

3 SSG 3-15-06/01B Contract with Weatherford on rental of reamers Weatherford

4 SSG 3-15-06/01C Contract with Smith on rental of drilling on gauge sub Smith

5 SSG 3-10-05/01Contract for provision of cementing services in Block B,KSA withHalliburton Energy Services INC.

Halliburton

6 SSG 3-13-05/01Contract for provision of coring services in Block B,KSA with HalliburtonEmergy Services

Halliburton

7 SSG 3-16-06/02 Contract for provision of cutting&rethreading services Aramco

8 SSG 3-19-06/01 Contract for tubing inspection services rezyat and almansoori

9 SSG 3-24-07/01 Provision of drilling fluid reserve tanksDeveloping Channel Trading

Services

10 SSG 3-04-07/01 Provision of 4 1/2" gas tubing supplyAL-Reziza Trading&contracting

Co.

11 SSG 3-13-06/01 Provision of Coring services in Block B,KSA Christensen Saudi Arabia

12 SSG 3-16-07/01AService Contract for Freight Forwarding Services and Customs ClearancesService

Al-OSAIS CONTRACTING CO.

13 SSG 3-16-07/01BService Contract for Freight Forwarding Services and Customs ClearancesService

MIDDLE EAST EST. FORTRANSPORTATION

14 SSG 3-25-07/01Provision of Underbalanced Drilling(Managed Pressure Drilling) Servicesin Block B, KSA

Weatherford

15 SSG 3-06-07/01E Purchasing Contract for Provision of Drilling Bits in Block B, KSAKasab International Trading

Est.

16 SSG 3-01-07/01Provision of Land Rig (1500HP) for Testing/Stimulation and WorkoverOperations in Block B, KSA

Sinopec InternationalPetroleum Services Co.

Content--Volume Two

3.4.2.2 Minutes of Daily Operation Meeting

From July 22, 2007 to September 26, 2007, I was independently and actively responsible for writing the minutes of daily operation meeting (English version) held at 8:00am in every morning from Saturday to Wednesday every week. Because the participants not only include the Chinese staff but also the Saudi staff, English becomes a necessary and universal language while discussing on every daily operational activities in the meeting. All the personnel in the meeting can only speak in English during the discussion.

As for me, I must understand what they were talking about, and then can I truly express the opinions or expressions of the participants in the minutes. At first, it was difficult for me to do it well because I could only understand a little part of what they were talking about. However, I got accustomed to it soon one week later because I strengthened the communication with the participants after meeting and learned English harder than before. Gradually, it became one of my habits in my work and I didn’t think it’s a difficult job for me to do. My excellent work was certificated and affirmed by SSG’s leaders and colleagues, which greatly enhanced my confidence. (See Annex 2)

Apart from the minutes of daily operation meeting, I also had the opportunity to

29


write the minutes of communication meet. (See Annex 3)

Through these precious experiences, I made great progress in the application of

English, meanwhile, I learned about SSG’s activities more than ever before and

understood the management of an overseas project better.

3.4.3 Field Internship

3.4.3.1 Going to Wellsites

From August 02, 2007 to August 05, 2007, I had the opportunity to go to two

wellsites (Rig 189 and Rig 190) with Mr. Chen Yuesheng, the drilling

superintendent for arranging the issue of well control requirements and checking

the potential problems. In the short four days, I mastered a lot of knowledge on

drilling engineering and understood the management of contractor or

subcontractor. I know the general workflow of drilling work.

With the guidance of Mr. Chen Yuesheng, I learned about the principle of BOP

control system and well control equipments. I understood the importance of well

control drill and BOP drill and responsibilities of all the different posts in well

control drill. The posts include tool pusher, driller, assistant driller, pipe pusher,

chief boll weevil, boll weevil, derrick hand, etc.

3.4.3.2 Working in SSG Yard

From August 11, 2007 to August 14, 2007, I was in place of Mr. Wu Xubo, the

procurement engineer, and worked in SSG old yard being responsible for

transportation of casings and casing accessories because he stayed overtime as

per the duration from his entrance into Saudi Arabia and had to have his

vacation. In those four days, I overcame a lot of difficulties such as hot weather,

heavy workload, and long distance from office to yard. Even though there were

so many difficulties I had encountered, I still finished all my work successfully

and satisfactorily. I had a great time working with Mr. Ajees, a coordinator from

World Wide Logistics Company, SSG’s contractor. I learned a lot from him

because he is a religious and hardworking person. Such work experience

improved my communication ability and work competence greatly. I am happy to

have had such a valuable chance to enrich my internship life.

30


Part Four: Internship Self-Evaluation

After the systematic internship in SSG, not only did I get a clearer picture of

operation activities and management of project at wellsite or field site, but I also

got a clearer understanding of the management thought for a company. To a

great extent, I successfully made great achievements in the aspects of oral

English and writing ability or literary talent, actual work competence and

professional skills, and communication capability. Furthermore, I got a stronger

understanding of overseas project management than ever before. I believe that I

will greatly benefit from all these valuable practices or work experiences in my

future career life.

4.1 Improvement of Language Skills

In SSG, there is a good environment of learning English. Firstly, most of the

documentation or data are written in English. Everyday I had to read a lot of

documents, thus practicing my reading ability. Secondly, I had many chances to

communicate with Saudi colleagues or other foreigners from SSG’s contractors,

such as the employees from Schlumberger, Weatherford, Halliburton, and

Christensen, etc. when I opened my mouth, I had to talk with them in English.

Maybe this is a passive way to learn English, but it is very useful and effective.

Thirdly, I had a lot of time to study English after work. I liked watching English

movies or TV play series when I was free at night. Doing this frequently

consolidated my English foundation and learning interest. Fourthly, I insisted on

recording meeting minutes and sending emails in English.

Consequently, compared with the level that I had before I went to SSG, my

English has been improved to a higher level. Anyway, I will keep on learning

harder after I finished the internship, because English is an international

language and a necessary tool of communication.

Sinopec Group is an integrated super-large energy and petrochemical company

with operational businesses of oil & gas exploration and production, refining,

chemical production and products marketing and distribution. And SIPC, a

wholly-owned subsidiary of Sinopec Group, is responsible for overseas

31


investment and management in the upstream and downstream sectors.

Therefore, as an employee of SIPC, a good command of English is very

important and necessary.

4.2 Improvement of Work Competence

SSG is a standardized management company. Nearly one year of internship and

work experience made me more confident than before, because I obtained a

great improvement of my work competence. I learned about the management

thought, spirit, policies and regulations, and bidding policies of a company.

Through this systematic internship, I consummated my minds and enriched my

career life. I can finish the work fairly well within my responsibility with my

energetic enterprise and great confidence.

4.3 Improvement of Communication Capability

A company is not someone’s company, neither several people’s, it is a team or a

group. Therefore, employees in a company must be involved in the regular and

frequent communication. SSG is a multi-cultured company, not only includes

Chinese, but also includes Saudis and other foreigners from other countries. So

the communications become very important in the work.

I often took active part in the communications with colleagues when I met with

problems at work. A lot of obstacles were overcome and many problems were

solved through communications. Colleagues in the same department need to be

communicated with, so do colleagues between different departments. I think my

internship is successful because I made a lot of good friends through

communication at work or in the usual life.

4.4 Understanding of Overseas Project Management

The management of an overseas project must have a powerful management

team with the outstanding leadership, a team with the well-educated employees,

and a way of modern management minds, which are my own understandings. I

believe that SIPC can manage all the overseas projects fairly well through the

‘Standardization Window’ of SSG’s management level.

32


Acknowledgement

First of all, I would like to thank SIPC for giving me such a valuable opportunity to have the internship in the overseas project – Sino Saudi Gas Limited (SSG). I truly realized the transition from university setting to work environment, which will greatly benefit to my career life in the future.

Secondly, I wish to express my sincere thanks to SSG’s leaders or management team members, who gave us the detailed and careful arrangement both in work and in life. They cared about our internship and concerned with our achievements all the time. I would like to express my gratitude to Mr. Wang Shicheng (CEO), Mr. Wu Haojie (COO), Mr. Feng Weimin (CHRO), Mr. Mohammed Al-Gahtani (CFO), Mr. Saleh Maghlouth (the original manager of G.O.D), Mr. Adil A. AlKhelaiwi (Manager of G.O.D), Mr. Zhang Shenggen (Manager of Exploration Department) and Mr. An Benqing (Manager of Drilling Department) for giving me great help. I would also like to thank and give credit to the following colleagues in SSG who guided and helped my internship: Mr. Zhang Wei (Anwar), Mr, Zhu Jianmin, Mr. Li Luwu, Mr. Chen Wei (Ted), Mr. Fan Yang, Ms. Wang Tianxue (Kelly), Mr. Mohammed Al-Eady, Mr. Li Weizhong, Mr. Li Jinxin, Mr. Sun Changfu, Mr. Hamad Al-Ahmadi, Mr. Adnan Alhashem, Mr. Liu Wen, Mr. Yang Pinrong, Mr. Yang Yunfeng, Mr. Yao Zongshan, Mr. Aboud Sakloua, Mr. Qin Jiang, Mr, Chen Yuesheng, Mr. Gao Shurong, Mr. Wu Xubo, Mr. Tu Yiqing, Mr. Mustafa Al-Humood, Mr. Rashid Bin Ali, Mr. Abdulaziz Turikistani, Mr. AdbdulSalam Qahtani, Mr. Gao Lin, Mr. Areif Al-Saiw, Ms. Ding Xiaojia (Mandy), Mr. Qasim Al-Saleh, Mr. Li Ruoyang, Mr. Gao Fawei, Ms. Liu Dandan, Mr. Sami Al-Mutairi, Mr. Jalal Talha, Mr. Hassan Alattas, Mr. Anwar M. Alramadan, Ms. Fahima Shabeeb, Mr. Fahad Al-Harbi, Ms. Iman Rabea, Mr. Reiadh Ismail, Mr. Fareed Al-Othman, Mr. Rafeek, Mr. Mohammed, Mr. Hassan, Mr. Kudu, Mr. Ramesh, Mr. Buddhi, Mr. Ahmad Nassir. Through thick and thin, they have always been my precious team mates, advisers, and above all, friends. I was thrilled working with all of them and sharing with them the pleasure of completing my internship successfully.

Undoubtedly, I would also like to give my sincere thanks to my wife Ms. Xue Yanmei for giving me great support, encouragement and help during my internship. She bore the heavy responsibility of our family when I was abroad.

33


Annex 1: Sample of Management Team Meeting Minutes

Date: 1:30 PM-4:30 PM of Jan. 31, 2007 Location: Conference Room #100, SSG Office, Third Floor, Al-Binali Building Hosted by: Mr. Wang Shicheng, CEO ---------------------------------------------------------------------------------------------------------- Attendees: a) Management Team

1. Wang Shicheng – CEO 2. Howard Wu Haojie – COO 3. Feng Weimin – CHRO 4. Mohammed Al-Gahtani – CFO 5. Saleh Al-Maghlouth — Manager, G.O.D 6. Zhang Shenggen –Manager, Exploration Operations Department 7. An Benqing –Manager, Drilling Operations Department

b) Others 1. Muneer –Former CFO 2. Anwar Zhangwei – Manager, Administration Department 3. Kelly (Wang) Tianxue – Manager, Budgeting & Planning Department 4. Hussain Al-Shwaikh–Auditor, Internal Audit Department 5. Su Zongfu – Meeting Secretary

---------------------------------------------------------------------------------------------------------

Subjects:

1. Implementation and budget analysis 2. Update 2007 AWPB exploration plan 3. The 8th BOD issue 4. Other Issues

----------------------------------------------------------------------------------------------------------

Contents:

As per Mr. Wang/CEO’s proposal, the following four topics were discussed in the MT communication meeting held from 13:30 to 16:30, Wednesday afternoon, which are Implementation and budget analysis reported by Ms. Wang Tianxue (Budgeting and Planning Department manager), Update 2007 AWPB exploration plan reported by Mr. Zhang Shenggen (Exploration Department manager), the 8th

BOD meeting issue, and the other issues arranged by Mr. Wang Shicheng (CEO).

1. Implementation and budget analysis

In this meeting, Ms. Wang Tianxue gave a detailed presentation about the implementation and budget analysis in 2006. She reported the following two parts to

34


the MT members: one is 2006 Capital Expenditure Accountability (Capex); the other is 2006 Operating Expenditure Accountability (Opex).

In her presentation, Ms. Wang showed the AWPB implementation (budget vs. actual) in the past year of 2006. She specifically reported the Capex items and Opex items which were over budget to the MT members. 1) Capex items which were over budget are: 3D seismic in Geophysical Department; HSE Management System in HSE Department.

2) Opex items which were over budget are: Insurance Program; Telecom Cost.

Then, reasonable explanations were given for the over budget items by Ms. Wang and all the MT members. After discussion and analysis, they gave the following justifications for each item which was over budget: For the 3D seismic, 3D data acquisition item should be separated into two budget

items: one is Mukassir 3D, the other is Qasba 3D. The Qasba 3D expenditure was planned for late 2006 to early 2007, but due to high production rate, the crew was able to complete 98% of the Qasba 3D program by December 31, 2006, resulting in earlier expenditure than planned.

For the HSE Management System, a $40,000 HSE work shop was in the Workshop budget included in G&G study.

For the insurance program, a rapid increase of population for the employees’ families resulted in the item was over budget.

For the telecom cost, the reason for it is the rapid increase of people, especially TSA in 2006.

2. Update 2007 AWPB exploration plan

In the meeting, Mr. Zhang reported the 2007 exploration work plan to the MT members. The main jobs will be focused on the well drilling and testing of ATNB-0002 and FRAS-0001. He gave the drilling schedules for the two wells, which are:

Well drilling of ATNB-0002 is scheduled to be spudded in early February and completed at the end of October, and testing is going to be from early November to the end of December in 2007, using Rig 189;

Well drilling of FRAS-0001 is also scheduled to be spudded in early February and completed well at the end of October, and testing is going to be from early November to the end of December in 2007, using Rig 190;

Meanwhile, in 2007, Exploration Department will continue to do G & G studies such as Research of Paleozoic Reservoir Characteristics, While and Post Analysis, 3D Seismic Data Interpretation and Trap Appraisal, Well Proposal and Geological Design of the 5th and 6th well, etc.

3. The 8th BOD issue

35


The 8th BOD meeting will be held in March 9th to 10th, 2007 in Chengdu, Sichuan Province of People’s Republic of China (PRC).

Mr. Wang/CEO requested that some related documentation should be prepared for the 8th BOD meeting. Mr. Howard is supposed to prepare for the technical activities presentation; Mr. Feng is responsible for the presentation of contracting and TSA; Mr. Yuan, Mr. Fan and Ms. Kelly will be responsible for the presentation of finance, legal & contracting, and budgeting & planning respectively; Mr. Wang/CEO also invited Mr. Muneer, our former CFO, to attend the 8th BOD meeting.

4. Other Issues

1) Mr. Mohammed/CFO presented several issues, which described as follows:

• The contractor (SIPSC) must provide insurance certificate that confirms that they’ve already insured for the $3 million for 3rd party liability as per contract. If contractor does not have insurance that means there will be no insurance coverage for the 1st $3 million and SSG will pay it if any thing happened. MT agreed that Mr. An will be assigned to have a communication meeting with the contractor to provide the Insurance certificate within 10 days.

Marsh asked SSG to prove that the new wells to be drilled in the same formation. This will make SSG eligible for 10% discount of the insurance;

Insurance for the plugged and abandoned wells which is 10% of the original insurance rate, MT agreed to have it for the first year;

Insurance for Deliberate Well Firing and Evacuation Expenses, each one will cost 3% in addition the drilling insurance rate while both will be 5% increase. This will be for all 3 wells together. MT agreed to go for this insurance as well.

2) MT agreed that Mr. An will be assigned to have a communication meeting with SIPSC on the guard security issue in well site as they did not perform well as stipulated in the Contract, and if they continue the bad performance, SSG might stop the related payment of the violation of the Contract.;

3) Mr. Wang further pointed that Mr. An shall contact & follow up with SIPSC to provide the certificate of completion for each drilled well, such as SHEH-2, and HDDH-2.

Prepared by: Su Zongfu Administration Department

Sino Saudi Gas Limited Telephone extension: 256

E-mail:[email protected]

36

mailto:[email protected]


Annex 2: Sample of Daily Operation Meeting Minutes

Date：Monday, September 24, 2007

Hosted by：An Benqing (the acting COO) Attendees：

Wang Shicheng (CEO) Zhang Shenggen Gao Shurong Li Luwu Ding Xiaojia Yang Yunfeng Yang Pinrong Abdulaziz Turikistani Mustafa Humood Hamad Aboud Sakloua Jia Qingsu Shen Benke Wu Xubo Liu Youyi Xiao Chao Yang Shunhui Liu Meiqing Gao Lin Liu Guangtian Li Wei Su Zongfu

------------------------------------------------------------------------------------------------------- Drilling Activities:

ATNB-0002:

• Bottom hole depth is 1779ft at 6:00 am on Sep.24, 2007. • Footage is 0ft in the previous 24 hours. • Important events: POOH from 10000ft to 579ft, Flow check: Ok, Lay down 6

1/4'' Drilling Jar, POOH to Surface, Flow check: OK, Made up BHI Outer Core Barrels, Made up 8 3/8'' Core Head, Picked up inner Core Barrels, RIH Coring Tools with BHA with 5'' String to 14900ft, Filled up String every 30 stands.

• Formation: Silurian Qusaiba. • Lithology: 100% Sandstone with traces of Claystone. • Oil and gas shows: No fluorescence or crush cut. • Plan for next 24 hours: To Conduct Coring Operation and POOH.

FRAS-0001:

• Bottom hole depth is 16247ft at 6:00 am on Sep. 24, 2007. • Footage is 17ft in the previous 24 hours. • Important events: Drilled 8 3/8" bore hole from 16230 ft to 16247 ft with 100psi

back pressure by MPD System. Circulated to clean hole. Pulled out of hole to casing shoe with 850psi back pressure by MPD system. Spotted 96bbls of 117 PCF mud to balance the formation pressure. Pumped 30bbls of slug, shut in MPD choke and bled off pressure, opened choke and performed flow check. Retrieved MPD pipe plug and installed bell nipple. Continued pulling out of hole.

• Formation: Silurian Qusaiba. • Lithology: shale interbedded with sandstone and claystone.

37


• Oil and gas shows: None • Plan for next 24 hours: Finish pulling out of hole, lay down bit, make up BHA

with mud motor and new bit, run in hole, and drill ahead.

Work Progress and Arrangement Mr. Zhang Shenggen, the manager of Exploration Department, reports that

Exploration Department has submitted the proposal to adjust the TD (total depth) of well ATNB-0002 from 18375ft to 17977ft to complete well in advance and the next operational plan of this well is as follows: Cut 30ft core in Ordovician Sara sandstone from 17795ft to 17825ft. Drill ahead 152ft to the revised TD 17977ft. Run wireline logging (including FMI). Run VSP. Cut side wall cores based on the wireline logging data interpretation in

Mid Qusaiba Sandstone and Hotshale. Run 7" liner and cementing to TD. Preparation for test.

Exploration Department asks Geophysical Department to send a request to our contractor SIPSC, informing them to prepare for the vibrators which are needed for running VSP around October 5-6.

Mr. An Benqing said that Mr. Wu Haojie (COO) is very concerning about the operation of well ATNB-0002 and strengthens that we must pay attention to the problems that we may encounter in wireline logging, VSP logging and side wall coring and we need to prepare for the measures in advance once these problems happen, he also requests Drilling Department to pay attention to the cementing quality and prepare for the cementing program communicating with Halliburton Company.

Mr. Li Luwu, the manager of HSE Department, reports the HSE inspection of two wellsites, HSE situation is OK.

Prepared by: Su Zongfu Drilling Department

Sino Saudi Gas Limited

Telephone extension: 209


38



Annex 3: Sample of Communication Meeting Minutes

Date: September 17, 2007 Time: 10:00 a.m – 12:00a.m Venue: Conference Room #100, SSG Office, Third Floor, Al-Binali Building Hosted by: Mr. Wang Shicheng, CEO Attendees: a) MinPet Members

6. Adeeb Al-Khunaize 7. Ameen Al-Humaidi 8. Faleh Al-Qahtani 9. Fahad Al-Otaibi 10. Mohammed Assiri

b) SSG Members 11. Wang Shicheng - CEO 12. Mohammed Al-Gahtani - CFO 13. Zhang Shenggen – Manager of Exploration Department 14. An Benqing – Manager of Drilling Department 15. Tu Yiqing 16. Liu Guangtian 17. Li Wei 18. Su Zongfu- meeting secretary

Contents: Current Drilling Activities and Next Plan of ATNB-0002 and FRAS-0001

Mr. Wang Shicheng first warmly welcomed esteemed guests from Ministry of Petroleum and Mineral Resources (MinPet) to the company and expressed appreciation to MinPet for its support and assistance to the company. Then, he invited Mr. Zhang Shenggen to give the presentation about the current status of ATNB-2 and FRAS-1 wells and the next plan for drilling, wireline logging, coring and testing. In the presentation, Mr. Zhang briefed following major items:

The drilling progress for ATNB-2 well, including the drilling experience, current depth, coring program, wireline logging program. Good gas shows encountered in Mid Qusaiba sandstone and ignited three times during drilling after gas separation.

39


The next plan for well ATNB-2 will be (1) drilling to next casing point to the bottom of Hot Shale (about 80 ft pass the base QUSAIBA), (2) running wireline logging, including FMI logging; (3) taking side wall core samples for Hot Shale and Qusaiba Mid Sandstone (gas layer) if the side wall coring tools are available at the time, because the tools are outside the Kingdom nowadays and the mobilization shall be taken at least 10 days; (4) running 7’’ liner casing to the casing point; (5) resuming drilling into Sarah formation. If good gas shows encounter in Sarah formation, a bore-hole test will be carried out. Otherwise, the last 4 5/8’’ hole will be plugged; (6) the testing for Mid Qusaiba Sandstone gas intervals and other possible gas layers in Unayzah and Khuff will be tested after well completion.

The drilling progress for FRAS-1 well, including the drilling experience, current depth, coring program, wireline logging program. Good gas shows also encountered in Unayzah C sandstone and ignited once during circulation. However, the ROP is quite low, less than 3 ft/hr, which indicates that the sandstone is very tight. If good reservoir will be drilled, a DST will be conducted directly.

During presentation, experts from MinPet highly concerned about the gas shows and flare at ATNB-2, and asked whether SSG has the plan to do the bare-hole test in Mid Qusaiba sandstone. Since the bare hole from top Unayzah to current depth is more than 2500ft, and the Qusaiba member is shale dominated, for the safe of the borehole, SSG will do the well completion test. Furthermore, the ground services for testing need around ten days to be prepared. After presentation, other concerned topics such as the maximum thickness of mid Qusaiba sandstone, the whole thickness of Qusaiba member, height and duration of flares both at ATNB-2 and FRAS-1, sampling intervals from cuttings, coring program and sample analysis, as well as testing plans are warmly discussed between both sides. At last, Mr. Adeeb Al-Khunaize pointed out that it was the first time MinPet experts came to SSG for communication. He highly appraised the meeting results and hoped the communication meeting can be held on a regular basis. Mr. Wang thanked again to the MinPet guests for caring about the Company’s exploration progresses and expressed the willingness to communicate with MinPet more often and more actively.

Prepared by: Su Zongfu

Drilling Department

Sino Saudi Gas Limited

Telephone extension: 209


40


INTERNSHIP SUMMARY PAPER

Documents

Transcript of INTERNSHIP SUMMARY PAPER