REGULATIONS CONCERNING ENVIRONMENTAL PROTECTION IN OFFSHORE OIL EXPLORATION AND EXPLOITATION

   Article 1. These Regulations are formulated for the purpose of implementing the Marine Environmental Protection Law of the People’s Republic
of China so as to prevent pollution damage to the marine environment by offshore oil exploration and exploitation.

   Article 2. These Regulations shall apply to all enterprises, institutions, operators and individuals engaged in offshore oil exploration and
exploitation in the sea areas under the jurisdiction of the People’s Republic of China, as well as the fixed and mobile platforms
and other related installations they use.

   Article 3. The competent authority in charge of the environmental protection in offshore oil exploration and exploitation shall be the National
Bureau of Oceanography of the People’s Republic of China, including its agencies, which is hereinafter referred to as “the Competent
Authority”.

   Article 4. While drawing up an overall development program for an oil (gas) field, an enterprise or operator shall draw up a Marine Environmental
Impact Statement and submit it to the Ministry of Urban and Rural Construction and Environmental Protection of the People’s Republic
of China. The said Ministry shall, in conjunction with the National Bureau of Oceanography and the Ministry of Petroleum Industry,
organize an examination of the Statement and take a decision on it in accordance with the provisions concerning environmental protection
in state capital construction projects.

   Article 5. A Marine Environmental Impact Statement shall consist of the following items:

(1) The name, geographical location and size of the oil filed;

(2) The natural environment and condition of marine resources in the sea area where the oil field is located;

(3) The types, composition, quantities and methods of disposal of the wastes that need to be discharged in the course of exploiting
the oil field;

(4) An assessment of marine environmental impacts: the possible effects of offshore oil exploitation on the natural environment and
marine resoures in the surrounding sea area; their possible effects on marine fisheries, shipping and other offshore activities;
and the environmental protection measures proposed to be taken to avoid and mitigate various adverse effects;

(5) The ultimately unavoidable effects and the extent and causes thereof; and

(6) Measures to prevent major oil-pollution accidents, including, among others, the preventional organization, personnel, technical
equipment, and communication and liaison.

   Article 6. An enterprise, institution or operator shall have the ability to meet emergencies with regard to the prevention and control of oil
pollution accidents, work out emergency plans, and be provided with oil-recovery facilities as well as oil enclosure and elimination
equipment and materials commensurate with the scale of offshore oil exploration and exploitation in which it is engaged.

When chemical dispersant is provided, its trademark and composition shall be reported to Competent Authority for approval.

   Article 7. The antipollution equipment for fixed and mobile platforms shall conform to the following requirements:

(1) There shall be oil-water separators;

(2) The production platforms shall have equipment for treatment of oily water, and the oil content of the discharged water after treatment
through such equipment shall conform to the national discharge standards;

(3) There shall be monitoring devices for oil discharge;

(4) There shall be recovery facilities for residual and waste oils;

(5) There shall be garbage-smashing equipment; and

(6) The above-mentioned equipment