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(Stock Code: 603)

ANNOUNCEMENT

This announcement is made by the Company pursuant to Rule 13.09(2) of the Listing Rules and the Inside Information Provisions under Part XIVA of the SFO.
The Board is pleased to announce that on 21 August 2014, CCNG and Wuxi-Xinyi Industrial Park Management Committee entered into the Exclusive Operating Right Agreement, pursuant to which Wuxi-Xinyi Industrial Park Management Committee has agreed to grant to CCNG an exclusive concession right for operation of gas business in the geographical areas of the concession right for a term of 30 years.
Through the use of the piped gas exclusive operating right, the Group will further develop its domestic gas market, strengthen and expand its market share of domestic natural gas business.
This announcement is made by China Oil And Gas Group Limited (the "Company", together with its subsidiaries, the "Group") pursuant to Rule 13.09(2) of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the "Listing Rules") and the Inside Information Provisions under Part XIVA of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) (the "SFO").

EXCLUSIVE OPERATING RIGHT AGREEMENT

The board (the "Board") of directors (the "Directors") of the Company is pleased to announce that on 21 August 2014, the Company through its subsidiary, 中油中泰燃氣投資集團有限公司 (China
City Natural Gas Co. Limited*) ("CCNG"), entered into the Exclusive Operating Right Agreement ("Exclusive Operating Right Agreement") with Wuxi-Xinyi Industrial Park Management Committee ("Industrial Park Management Committee") in Xinyi City, Jiangsu Province, China, pursuant to which Wuxi-Xinyi Industrial Park Management Committee has agreed to grant to CCNG an exclusive concession right for operation of gas business in the geographical areas of the concession right (including the existing and future planning areas) for a term of 30 years. Upon expiry of the term of the concessive right, CCNG has the priority to renew the Exclusive Operating Right Agreement with Industrial Park Management Committee.

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Pursuant to the Exclusive Operating Right Agreement, CCNG can operate the businesses of natural gas pipelines, gas used by modified vehicles, gas used by modified ships, compressed natural gas and liquefied natural gas filling stations, sales and wholesale of natural gas; construction of city natural gas pipeline network and supporting facilities; and supply of gas transmission and equipment and materials.

GENERAL

The Group is principally engaged in natural gas investment and energy related business, and has invested and set up 109 gas projects in 13 different provinces and one autonomous region in China and holds 61 city-gas exclusive concession rights.
Wuxi-Xinyi Industrial Park is located at the south west of the new long railway of Xinyi City, the east of Shu River, the north of Xu Lian highway. Wuxi-Xinyi Industrial Park mainly produces stones, plastic tubes, glass, pharmaceuticals, and machinery and equipment, energy consumption is mainly in coal, electricity, fuel oil and natural gas, and thus has a broad natural gas utilization market.
By entering into the Exclusive Operating Right Agreement can further regulate the concession activities of piped gas within the areas of Wuxi-Xinyi Industrial Park, strengthen market supervision and protect public interest and public safety.
Furthermore, through the use of the piped gas exclusive operating rights, the Group will further develop its domestic gas market, strengthen and expand its market share of natural gas business, so as to enhance the Group's position in the domestic market. The Board considers that the entering into the Exclusive Operating Right Agreement is a major step forward to the gas market in China.
By Order of the Board

China Oil And Gas Group Limited Chan Yuen Ying, Stella Company Secretary

Hong Kong, 21 August 2014

As at the date of this announcement, the Board comprises four executive Directors, namely Mr. Xu Tie-liang (Chairman and Chief Executive Officer), Mr. Zhu Yuan, Ms. Guan Yijun and Mr. Cheung Shing; and three independent non-executive Directors, namely Mr. Li Yunlong, Mr. Shi Xun-zhi and Mr. Wang Guangtian.

* for identification purposes only

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