Honghua Group and Baker Hughes Collaborate to Explore and Develop China's Unconventional Hydrocarbons Market

HOUSTON, Dec. 12, 2012 /PRNewswire/ -- Honghua Group Limited (HK: 0196), a leading global land drilling rig manufacturer, announced that it has signed a Memorandum of Understanding (MOU) with Baker Hughes, a leading supplier of oilfield services, products, technology and systems, to jointly provide integrated operation services and carry out research and sub-surface evaluation and engineering services for non-conventional oil and gas opportunities in the People's Republic of China. The two companies will jointly set up a research center for unconventional energy in Chengdu, Sichuan Province, China, which will be principally engaged in conducting shale oil and gas related research and consultancy services to support shale oil and gas development. The MOU signing ceremony happened on December 11, 2012 in Houston, Texas.

The strategic partnership will combine Baker Hughes' expertise in global project management, reservoir technology and product solutions with Honghua Group's strength in the production and servicing of petroleum equipment to provide integrated solutions in unconventional hydrocarbons to existing and potential customers.

Mr. Zhang Mi, Chairman of Honghua Group, said, "The development of unconventional hydrocarbons industry portends a major shift in the global energy market. The cooperation between the two industry leaders combines industry best practices, expertise and superior technology to provide the best integrated solutions in the market for oil and gas investors in China and around the world."

"Baker Hughes is very pleased to be working with Honghua to jointly conduct sub-surface research and evaluation for China's vast unconventional resources," said Art Soucy, President, Global Products and Services, Baker Hughes. "Both companies have considerable expertise and through this partnership, we will be able to develop innovative solutions for our customers."

Per the MOU, the two companies will invest in the development and testing of technologies and solutions that are applicable to China's unconventional hydrocarbons market. In addition, Honghua China and Baker Hughes Beijing, the subsidiaries of Honghua Group and Baker Hughes respectively, have agreed to start collaboration in the testing of 6,000 horsepower fracturing pump and sub-surface smart control system for coiled tubing drilling rig..

During the MOU signing ceremony, Honghua Group and Baker Hughes hosted an academic seminar on shale gas at the Southwest Petroleum University in Chengdu, Sichuan Province, which focused on China's complex geographical conditions and the opportunities and challenges in shale gas development in China. Stanford University professor and US government energy advisor Mr. Mark Zoback gave the keynote presentation at the seminar. Mr. Zoback is an internationally renowned geomechanics expert and a pioneer in the application of unconventional resource geomechanics. Mr. Zoback discussed the application of geomechanics in shale gas exploration, and technology solutions for shale gas exploration.

About Honghua Group:

Honghua Group Limited is a large-scale equipment manufacturer and drilling service provider, specializing in research, design, manufacture, and set-assembly of drilling rigs, offshore engineering, and oil & gas exploitation and production equipment. With its land drilling rig manufacturing base in Sichuan province, Honghua Group is the biggest exporter of drilling rigs in China, and one of the largest land drilling rig manufacturers in the world. For more information on Honghua, please visit http://www.hh-gltd.com/ or http://www.hh-america.com/.

SOURCE Honghua Group Limited