Orient Pet & Energy (GREY:OPEI)

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At least one VIE exists in the corporate structure

Orient Petroleum Group is engaged in two energy-related business segments in China, the wholesale distribution of finished oil products and the operation of retail gas stations.

Our wholesale business includes gasoline, diesel and methanol gasoline supplied to us by various petroleum distributors and refineries in Shaanxi Province. We maintain three sales offices in Shaanxi Province where the majority of our current customers are concentrated. We own one oil storage depot and lease another one, both located in Xi’an, the capital of Shaanxi Province. We also have access to a 7-kilometer dedicated railway line at one of our depots, which connects to state-owned railway. Tanker trucks deliver our products from our other depot throughout Shaanxi Province and beyond. We are one of 19 non-state-owned distributors in Shaanxi Province that are licensed to sell finished oil products. We distributed 211,476.61 metric tons, 178,997.61 metric tons and 141,686.83 metric tons of finished oil products in our fiscal years ended March 31, 2010, 2009 and 2008, respectively, and 55,194.02 metric tons and 52,152.10 metric tons in the three months ended June 30, 2010 and 2009, respectively. We plan to grow our wholesale business by expanding our distribution coverage of both existing and new markets.

We are also a retail distributor of all grades of gasoline and diesel. We plan to continue to expand our portfolio of retail gas stations through leasing arrangements or acquisitions, and are continuously looking for high-traffic locations within and outside of Xi’an.

We have been in the wholesale finished oil business for almost 20 years since the incorporation of our predecessor Xi’an Lianhu Petroleum Chemical Co., Ltd. in 1991

Last updated September 19, 2010