1. Project background

In 2019, China's oil reserves reached 3.6 billion tons, ranking 13th in the world, but China's total crude oil imports reached a record high of 505.72 million tons, 

of which Saudi Arabia  and Russia are the main import sources, and the dependence on crude oil imports is still high. At the same time, in 2019, domestic oil 

production stopped falling and rebounded, showing a good development trend, by the first half of 2020, the production of crude oil 97.15 million tons, an

 increase of 1.7%, followed by the continuous improvement of oil extraction technology and China's increase in domestic oil and gas exploration and development, 

crude oil production rebounded significantly.

At present, China mainly focuses on the development of onshore oil and gas resources, and the development of offshore resources is relatively small. According

 to the data of the  National Bureau of Statistics, from 2010 to 2015, the change of China's crude oil production showed a slight growth trend; Since 2016, crude 

oil production has dropped significantly. 

In 2019, China's crude oil production was 191.014 million tons, an increase of 0.8% year-on-year, and oil production stopped falling and rebounded, showing a

 good momentum of development, which played a key role in curbing the excessive increase of China's oil and gas imports. In the first half of 2020, China produced 

97.15 million tons of crude oil, up 1.7%year-on-year and 0.7 percentage points slower than in the first quarter. Subsequently, with the continuous development of 

oil exploitation technology and China's increase in domestic oil and gas exploration and development, crude oil production will rebound significantly.

There are 19 provinces and cities in China exploiting crude oil, and Shaanxi has become a province with a large output of crude oil, reaching 35.432 million tons in 

2019, mainly distributed inYulin, Yan 'an, Tongchuan and other areas, located in the famous "treasure basin" Ordos Basin, which is rich in oil and gas resources and

 contains a large number of coal-bed gas, laying a solid foundation for Shaanxi to become a major oil and gas province.

The company is located in the high-end chemical Industrial Park in Binzhou City, Xianyang, Shaanxi Province, with flat terrain, convenient transportation and complete 

supporting resources such as water, electricity, gas and sewage treatment. We can help enterprises develop rapidly with the help of park resources, and strive to become 

a new high-quality environmental protection chemical manufacturing enterprise with unique natural resources.

2. Project situation

(1). Basic construction of the project

Project name: Wande petrochemical auxiliary production project

Project Address: Xinmin, Binzhou City, Xianyang City, Shaanxi Province (high-end chemical industrial Park)

Project Description: The project is committed to oil development services, the main business includes oilfield chemicals research and development, production, 

manufacturing, sales and  technical services as one of the high-tech enterprises, the project will become "the first northwest" high-tech oilfield auxiliary production 

enterprises.

(2). Real scene of project construction

The project is planned to use 29,245 square meters of land, with a total construction area of 22,118.7 square meters. The main construction contents are: 3 production

 workshops, 1 material warehouse, 1 office building, 1 technology research and development center, 1 power center, 1 automatic control center, and other public supporting 

facilities such as fire fighting.

3. Project progress

In March 2020, the company is located in Binzhou high-end energy chemical Industrial Park, Xianyang City, Shaanxi Province, with a total investment of 200 million yuan 

to build an annual output of 30,000 tons of mud material production line project, with a planned land area of 30,600 square meters and a total construction area of 

22,118.7 square meters. Advanced production    equipment can produce more than 100 kinds of products in the field of oilfield special chemicals. The production 

plant has a technology research and development center, analytical laboratory, product testing room and 3 production lines, equipped with advanced and perfect

 production equipment and production technology.

After the completion of the project, it can realize the production base of high-quality oilfield chemicals with high technical level, active operating mechanism, good

 enterprise efficiency, new process equipment, good land use, excellent ecological environment, strong driving ability, resource and energy recycling, close upstream

 and downstream connection and sustainable development, and will also become an important part of the development process of Shaanxi Wande Petroleum Technology Co., LTD.

At the same time, the company has established a complete set of scientific management system for employee recruitment, training and promotion, which has stimulated

 the enthusiasm and innovation  consciousness of employees. Companies adhering to the "drive local development, revitalize the national economy" business philosophy, 

with reasonable prices, perfect service, excellent products as the  service concept, to fine technology,

to full service, sincere cooperation, common development of the business philosophy, determined to build domestic excellent chemical enterprises.

4. Project highlights

（1）.Technology + service advantage. With technology as the core, quality as the life, market-oriented and high-quality service as the purpose, the project has created

 significant economic and social benefits for the survival and development of the company, and has been recognized and praised by the majority of users. The company has

 complete supporting facilities, relying on advanced production  and testing equipment and excellent technical force, to ensure high-quality product quality.

（2）. Product advantages. The company relies on high-quality products, perfect market technical services and scientific testing means, and manages by quality, HSE and

 service standardization requirements,and has developed five series of drilling mud, fracturing, cementing, oil recovery and water purification materials, a total of more than 

100 products. Now the main production  of products can meet the national, industry and enterprise standards, products can be according to the requirements of domestic

 and foreign customers to provide  order-type product production and processing services.

（3）. Team advantage. The management team of the company, especially the core management team, has rich industry experience in the industry, has a deep understanding 

of the characteristics of the industry,

and has an accurate grasp of the development of the industry; The company has hired professors and industry experts from Xi 'an Petroleum Institute, Northwest University,

 Xi 'an Institute of Technology and  other scientific research institutions, and jointly developed a series of new products such as drilling, fracturing, cementing and oil recovery.

（4）. Future planning. After the completion of this project, it will become a petrochemical auxiliary enterprise with large scale, full range of products and high automation level in 

Northwest China.

5. Product overview

Our products are divided into five categories: mud materials, cementing materials, oil production materials, fracturing materials and water treatment materials.

The mud material is the material added in the drilling operation to clear the well hole, cool the drill bit, circulate out the drilled cuttings, improve the drilling rate, 

protect the well wall, etc. Cementing material isthe material added in a construction project where casing is run into a well and cement is injected into the annular 

space between the hole and casing. Oil production materials are materials added to increase oilwell and oil recovery efficiency cost-effectively. Fracturing materials 

are materials that artificially crack the formation, improve the flow environmentof oil and gas in the underground, and increase the production of oil and gas Wells. 

Water treatment material is an additive used in sewage treatment, which significantly improves the settling effect and achieves the purpose of solid-liquid separation

The factory has three main production lines

1# workshop main products: lignite resin, sulfonated phenolic resin SMP-1, SMP-2, SMP-3, JS-9, KFT-1, KFT-2, etc., the annual output can reach 8,000 tons, gross

 profit is about 35%.

Part of the workshop equipment display:

2# workshop main products: polyacrylamide potassium salt, polyacrylamide,FA-367,80A-51, polymer coated inhibitor and other polymer, the annual output can reach 

10,000 tons, gross profit is about 38%.

Part of the equipment display in Workshop :

3# Workshop main products: cellulose HV-CMC/LV-CMC/PAC-HV/PAC-LV, annual output of up to 6 thousand tons, gross profit of about 40%.

After the completion of this project, it can also produce about 6 thousand tons of other chemical additives every year.

Part of the equipment display in the workshop:

6. Detailed introduction of main products

(1) Lignite resin SPNH: It is a multi-component copolymerization fluid loss reducer composed of humic acid, phenol, formaldehyde, etc. It has excellent high 

temperature resistance and good salt resistance, and has certain viscosity reducing effect, and is suitable for various fresh water and salt water drilling fluid systems.

Product performance and features: 1. It plays an important role in consolidating shaft wall and preventing collapse and sticking. 2. Effectively reduce the high 

temperature and high pressure fluid loss. 3. Good solubility, the treatment agent will not increase the viscosity of drilling fluid while reducing filtration loss. 4.

 It can be used in deep Wells with high formation temperature and ultra-deep Wells, resistant to temperature up to 220℃.

(2) sulfonomethyl phenolic resin for drilling fluid SMP:It is the product of condensation and sulfonation reaction of phenol, formaldehyde, and sodium sulfite 

under certain conditions. It is divided into type 1 products (SMP-1), type 2 products (SMP-2) and type 3 products (SMP-3), SMP-1 is used in fresh water and 

salt water systems, and the temperature resistance is about 160℃. SMP-2 is  used in high-concentration brine systems with a temperature resistance of about

 180 ° C, and SMP-3 is used in saturated brine systems with a higher temperature resistance. Usually 2-5% is added to the drilling fluid.

Product properties and features: As a deep well mud treatment agent, sulfonomethyl phenolic resin has good water loss at high temperature and pressure, 

strong salt resistance, low viscosity effect, and can be used to prepare high-density drilling fluids.

(3) Polyacrylamide This product is made of acrylic acid, acrylamide, alkali and other polymerization under the action of the initiator, is a large molecular chain 

polymer, soluble in water, insoluble in most organic solvents,with good flocculation. The cuttings can be wrapped so that the cuttings are not easily dispersed

 into the water-based drilling fluid, and the cuttings can be separated from the mud by the vibrating screen to achieve the

purpose of removing harmful solid phase in the mud. Polyacrylamide also has a good wear resistance effect, which can significantly reduce the wear resistance

 between the rotating drill pipe  and the well wall and the wear resistance of solid particles and solid particles in the mud, which is shown in reducing the

 drilling torque and circulating pump pressure. Polyacrylamide can also be used as an additive for sewage treatment and coal washing.

Main properties and functions:

1. Oil field chemical additives, thickening agent, coating agent, anti-swelling agent, acidizing thickening agent. 

2. Sludge dehydration. 

3. Flocculant for water treatment. 

4. Reinforcing agents  and other auxiliaries for papermaking.

(4) polyacrylamide potassium salt

This product is made of acrylic acid, acrylamide, potassium carbonate and other polymerization under the action of the initiator, is an organic cationic polymer,

 non-toxic and non-corrosive wall stabilizer, not easy to produce

dust, easy to dissolve in water, the product has the inhibition of mud shale and drilling debris dispersion, both reduce water loss, improve rheology and increase

 lubrication and other properties. Suitable for all kinds of mud  systems,

Product properties and features:1. Inhibit shale dispersion. 2. Anti-slump filtration. 3. The lifting effect is obvious.

(5) The zwitterionic polymer coating agent FA-367 is a water-soluble polymer composed of a variety of anionic, non-ionic and organic cationic monomers. It is

 easily soluble in water, and mainly plays a role in inhibiting thefragmentation of cuttings and increasing the viscosity of drilling fluid. Its coating inhibition ability 

is quite strong, and it has a strong capacity to resist rock  powder pollution. It is easy  to purify the polluted rock powder, which  can reduce the content of 

submicron particles in the system, and is conducive to improving the drilling rate and protecting the rock formation.

The main properties and features of the product are :

1. It has a good flow pattern improvement, improves the dynamic plastic ratio of drilling fluid, and improves the ability of borehole purification. 

2. Effectively reduce the fluid loss. 

3. Can significantly increasethe viscosity of  fluid, with flocculation, coating effect. 

4. Inhibit shale dispersion, stable performance and long maintenance time. 

5. Suitable for a variety of drilling fluid systems, with good salt, calcium,magnesium resistance.

(6) HV-CMC and PAC-HV are linear polymers made from natural cellulose by alkalization, etherification, washing, drying and crushing. This product 

is white or slightly yellow fibrous powder, with hygroscopicity, odorless, tasteless, non-toxic, insoluble in acid, alcohol and organic solvents, easy to 

disperse in water to form colloidal solution tackifier effect is good. It can be used as a fluid loss reducer, suspension agent, thickening 

agent andplugging agent for water-based drilling fluid. It can form a thin and firm filter cake with low permeability on the well wall, reduce water 

loss, and resist salt to saturation. It can be widelyused in various  water-based drilling  fluid systems, with good suspension effect and significant water

 loss  reduction effect.

Main properties and features of the product :

1. Inhibit shale dispersion. 

2. Effectively reduce the high temperature fluid loss.

 3. It has a good viscosification effect.

 4. Used in the construction industry, textile industry and paint industry.

 5. Used in the food industry.

(7) Low viscosity PAC is a cellulose polymer of high quality, low molecular weight and low viscosity. The mud fluid prepared with this product has good water loss. 

It is widely used in oil drilling, especially in salt Wells andoffshore oil drilling. LV-CMC is an excellent fluid loss reducer used in drilling fluids, which can be widely

 used in various water-based drilling fluids. It has good suspension effect and stable emulsification effect, and remarkable water loss reduction effect, and the

 formed filter cake is smooth and tough. It can also be used in the paint, textile and food industries.

7. Market analysis

(1) The main market distribution of the company's products is as follows:

1. Qingyang market is mainly dominated by private enterprises;

2. Yulin Jingbian market is mainly dominated by private enterprises;

3. Inner Mongolia's Wushen Banner market is mainly dominated by private enterprises;

4, Sinopec supplier wholesale;

5. Wholesale of petrochina suppliers;

6. Sinopec North and East China Market, Zhongyuan Oilfield, etc.;

7. Petrochina Bohai drilling, Tuha Oilfield, etc.;

8, Shanxi gas non-standard product development of private market;

9. Northern Shaanxi regional market and Yanchang Oilfield.

(2) The main distribution of the company's current customers is as follows:

1. Customer groups in Henan and Shandong dominated by Sinopec wholesale customers;

2. Customer groups dominated by CNPC wholesale customers in Hubei;

3, Shaanxi, Gansu, Mongolia to Changqing suppliers as the leading customer groups;

4. The Yanchang oilfield block is dominated by drilling companies.

(3) Target market

1, Changqing oilfield is mainly distributed in: Qingyang, Yulin, Wushen Banner;

2. Sinopec North China market is mainly distributed in: Northern Ordos, Korla, Xinjiang and other regions;

3, CNPC Bohai drilling is mainly distributed in: northern Shaanxi, Northeast Songyuan, Xinjiang and other regions;

(4) The current competitors of the company's main products are as follows:

1. Competitive suppliers of cellulose: Hebei Chengyuan, Chongqing Lihong, Jiangyin Hengda;

2. Competitive supplier of polymer potassium salt: Puyang Sanli, Dongying Noor;

3. Competitive suppliers of lignite and phenolic resin: Wugou Shengshiyuan, Zhengying and Longchi.

8. Advantages of the Company:

Shaanxi Wande Petroleum Technology Co., Ltd. is located in Xinmin high-end energy Industrial Park, Binzhou City, Xianyang City, Shaanxi Province. 

The factory has the following advantages:

Steam advantage: The northeast side of the production plant is Shaanxi Weihe Chemical Plant, which can provide our company with steam, low price 

and sufficient steam, providing basic guarantee for production and operation.

Location advantage: The production site is located in the high-end energy park, which can radiate to the center of each oil field, and has a unique

 geographical advantage. Convenient transportation provides guarantee for the transportation of materials and products.

Government support:Our company is a key project of attracting investment in Binzhou City, and the government gives strong support, including

 policy aspects and taxation aspects (high-tech enterprise subsidies, discount interest, etc.).

Product advantage: The total investment of the company is 200 million yuan, and the land acquisition is 80 mu. It will be built into an oilfield auxiliary 

production enterprise with large scale, full range of production productsand high degree of automation in the northwest region of China. Our company

 can produce high-quality products in line with national, industry and enterprise standards, and provide customers with one-stop continuous service.

Network resources: The chairman of the company has been engaged in the oilfield industry for more than 30 years, and understands the market situation 

of the entire industry, the market demand for

 products, and the accurate positioning of the company's main products in the market. I am familiar with the operation of the oil industry, the number 

of drilling RIGS, the distribution, the system architecture, etc., and have a wide range of good interpersonal relationships.

Technical advantages: The company has research and development, testing, training teams, and establish long-term cooperation and exchanges with 

research institutes and many universities to jointly promote the continuous innovation of product technology.

9. Enterprise future planning

1. Take Changqing Oilfield private drilling company and mud technical service as the key main line, and gradually expand the target customers and

 products;

2, not connected to the network non-standard products processing mode, Shanxi gas market as auxiliary sub-trunk, increase market share and share;

3. Publicity and promotion of existing oilfield chemical additives products and continuous tracking services to further improve the company's visibility 

in the industry;

4. Expand the company's publicity and promotion of CNPC's additional products, laying a solid foundation for the company's main products to enter

 CNPC market faster, better and more;

5. Regularly train the performance and indicators of the company's main products, so that the sales staff can improve their business knowledge and

 business ability; At the same time, it is also necessary to understand the current market prospects and market demand of the industry, so as to develop

 the market, develop and find customers with a goal;

6, in-depth understanding of the international market, as soon as possible to the company's main products into the international market, improve the 

company's international brand awareness;

7, the company has developed a three-year plan: one year to achieve annual output value of 150 million, the second annual output value of 300 million, 

the third annual output value of 500 million, and strive to be listed in three years.