Shipbuilder Rongsheng said it will issue 1.4bn shares to New Continental Oil & Gas, which indirectly operates four Kyrgyzstan oilfields involving the national oil company.
“Given the relatively adverse market conditions for shipbuilding industry for the time being, the acquisition can assist the group in diversifying operations and broadening its source of revenue, and promoting the group’s transformation to a comprehensive heavy industry player in the energy industry,” Rongsheng said.
It added that with business activities involving oil exploration projects, the company expects to enhance its profit margins and competitiveness, which in turn help to alleviate the periodic effects from the shipbuilding business.
Feasibility assessment has determined that the petroleum exploration area in the Fergana Valley where the oilfields are located holds crude oil reserves amounting to 276m tonnes in aggregate.
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