Honghua Group Ltd (HH) has entered into an oilfield services agreement worth approximately US$26.0 million (approximately HK$201.5 million) with an Iraqi client in early July. Pursuant to the oilfield services agreement, HH will provide drilling services using two rigs which are expected to gradually begin operations in August and September 2015. In addition, the oilfield services agreement also includes the subsequent optional drilling services provided by HH.
Mr. Zhang Mi, Chairman of HH commented, "By virtue of our high quality and self-developed drilling equipment, experienced oilfield services team, and HH's excellent sales record of land drilling rigs in the Middle East region, HH is able to further expand its oil and gas engineering services business and consolidate its leading position in the Middle East market. We will continue to expand the business layout from equipment manufacturing to engineering services by taking the drilling business as the core, and to capture the enormous opportunity rising from the recovery of the global oil market in the future. Looking ahead, HH will strive to strengthen technological innovation and service quality, further reinforce the main international market layout in the Middle East, Russia and South America, as well as to promote the synergy between strategic business segments, thus to provide significant momentum for HH's long-term steady development."