Petromin welcomes Xinjiang development initiative

2010-05-27 10:02 ET - News Release

Dr. A Ross Gorrell reports

PETROMIN CEO COMMENTS IN RESPONSE TO THE FAVORABLE NEW ECONOMIC POLICY ANNOUNCED BY THE CENTRAL GOVERNMENT OF CHINA

Petromin Resources Ltd.'s chief executive officer has commented in response to the favourable new economic policy announced by the central government of China.

"I was pleased to see the recent announcement regarding the huge economic development initiative in Xinjiang Uygur Autonomous Region (Xinjiang) of China. Through our significant investment in TerraWest Energy Corp., PTR is one of the few foreign energy players in the Junggar Basin of Xinjiang. PTR welcomes the economic initiative announced by the Chinese central government on May 21st and it is my personal view that the proposed increases in infrastructure construction and other steps to accelerate economic development, including energy resource development, will achieve positive results for the region," said Dr. Gorrell, chief executive officer and co-chairman of Petromin Resources Ltd.

Dr. Gorrell was commenting following the issuance of policy statements relating to Xinjiang by the president of China at a working conference held in Beijing last week. The specific regional focus of the economic policy is considered unprecedented in China.

Dr. Gorrell went on to say: "TWE is advancing an important unconventional natural gas project in Xinjiang. Various commentators within China, including Xinjiang University of Finance and Economics, see the new initiative to be positive in support of development, and I have noted that Chinese equity markets immediately reflected support for Xinjiang-based corporations and projects which I interpret to be a positive reception of the new policy. I also see the new initiative as acknowledging the great resource potential of the region. Chinese policy already provides substantial support for coalbed methane development, and looking ahead I would expect to see new coalbed methane projects announced for Xinjiang."

The central government of China announced the new economic development policy following a three-day top-level working conference on Xinjiang economic development held May 17 to19 in Beijing. The meeting was attended by both the president and premier of China and various top ministerial officials. Recent market news reported by Bloomberg and other financial sources indicate energy and chemical industry corporations listed on the Shanghai Stock Exchange (SSE) and based in or with projects in Xinjiang rose sharply on the basis of the announcement of the economic development initiative and China's plans to spend 50-billion yuan ($7.3-billion U.S.) to expedite coal, power and pipeline construction in the region.

TerraWest Energy Corp. holds a 47 per cent interest in a coalbed methane production sharing contract covering 653 square kilometres (255 sqare miles; 163,200 acres) located adjacent to Urumqi, the capital city of Xinjiang. The PSC was executed in December, 2005, with China United Coalbed Methane Corp., Ltd. (53 per cent) and is currently administered by PetroChina Coalbed Methane Co. Ltd.