Recon Announces Investment to Expand Services for Oily Sludge Market in Yumen Oilfield
BEIJING, Nov. 7, 2017 /PRNewswire/ -- Recon Technology, Ltd. (NASDAQ:RCON), ("Recon" or the "Company"), a China-based independent solutions integrator in the oilfield service, electric power and coal chemical industries, today officially announced the completion of its investment in a new subsidiary, Gansu BHD Environmental Technology Co., Ltd ("Gansu BHD"), which focuses on oilfield sewage treatment and oily sludge disposal projects. The Company now owns 51% of Gansu BHD. With this investment in place, the Company offers a full complement of environmental protection services and products, including R&D, chemical agent production, equipment design, construction and implementation of projects and services, and will also materially enhance the Company's competitiveness in bidding for larger projects.
Gansu BHD has purchased a 26,235.59 square meter land usage right for 50 years in Yumen city, Gansu province China to construct a comprehensive disposal treatment project with an annual processing capacity of 60,000 tons of oily waste ("Project"). With the Project finished, Gansu BHD will be a leading large scale processing project in China. The company expects this project to be operational by June 2018, and will mainly work for Yumen Oilfield Company, China's first petroleum production base and also a PetroChina Co., Ltd. ("PetroChina") subsidiary, to process its oily sludge and sewage. Annual revenue to be generated by the Project is estimated to be over RMB 50 million.
Management Commentary
"The establishment of Gansu BHD is a crucial step of Recon's development strategy, accelerating Recon's transformation from a simple vender to an integrated engineering project and service provider in China's oilfield environmental protection industry," said Mr. Guangqiang Chen, director and CTO of Recon Technology, "Yumen oilfield is located in the west part of Hexi Corridor and south of Qilian Mountain. It's been over 80 years since its first drill, and massive oily waste induced from drilling, transportation and refining process have been recurring problems for Yumen oilfield and its affiliates. The launch of China's new environmental law and enhanced environmental enforcement have created great need for new methodologies and more economical processes. Yumen oilfield system produces tens of thousands of tons of oily waste, not to mention previously accumulated waste dumped in landfills. Based on the requirement of Yumen oilfield and Gansu BHD technical advantage, Recon resolution stood out among several completions with other local companies and won appreciation from Yumen oilfield. All these have been a solid support of our expansion into oily sludge market and invest heavily into this project. Further, we expect that companies with leading technical and service capability like Recon will enjoy increased negotiating power while the industry is relatively immature."
"Recycling and processing of oily sludge will not merely eliminate pollution caused by oily waste and improve oilfield environmental quality to fulfill social benefit and environment benefits; it will also recycle more than 80% of crude oil included in the waste, creating economic returns directly", said Mr. Chen.
Mr. Chen continued, "China's oilfield environmental protection industry, especially oily sludge disposal and treatment segment is still at its early stage, and no effective beneficiation technique is mature yet. Moreover, the industry currently lacks discharge and disposal standards for oily sludge. Historically, neglect in processing oily waste resulted in landfilling and abandonment of waste on site, causing serious harm to local groundwater and soil. As the central government has given great importance to soil remediation, Recon believes this is a unique opportunity to leverage its technical capabilities and experience in the oilfield production industry and to further enhance its leading position in China's oilfield environmental protection industry for the benefit of shareholders' interests."
About Yumen Oilfield Company
Yumen Oilfield Company is a subsidiary of PetroChina Co., Ltd., located in Yumen City, Gansu Province. It is China's first petroleum production base, and has been in development since 1939.
About Recon Technology, Ltd. (NASDAQ: RCON)
Recon Technology, Ltd. is China's first listed non-state owned oil and gas field service company on NASDAQ. Recon supplies China's largest oil exploration companies, Sinopec (NYSE: SNP) and CNPC, with advanced automated technologies, efficient gathering and transportation equipment and reservoir stimulation measure for increasing petroleum extraction levels, reducing impurities and lowering production costs. Through the years, RCON has taken leading positions on several segmented markets of the oil and gas filed service industry. RCON also has developed stable long-term cooperation relationships with its major clients, and its products and services are also well accepted by clients. For additional information please visit: www.recon.cn .
Company Contact
Liu Jia, CFO
Recon Technology, Ltd.
+86 (10) 8494-5799
[email protected]
SOURCE Recon Technology, Ltd.
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