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Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement. (Stock Code: 603) SUCCESSFULLY WON THE BID OF THE PIPED GAS CONCESSION RIGHT PROJECT IN SOUTHEAST REGION OF DAFENG DISTRICT, YANCHENG CITY, JIANGSU PROVINCE The board (the “Board”) of directors (the “Directors”) of China Oil And Gas Group Limited (the “Company”, together with its subsidiaries, the “Group”) is pleased to announce that the Company was informed on 5 May 2017, 江蘇省鹽城市大豐區住房和城鄉建設局 (the Housing and Urban- Rural Development Committee of Dafeng District, Yancheng City, Jiangsu Province*) (the “Development Committee of Dafeng”) has already publicly announced that 濱州中油燃氣有限責 任公司 (Binzhou China Oil and Gas Company Limited*) (“Binzhou COG”), a subsidiary of the Group, has successfully won the bid of the piped gas concession right project in southeast region of Dafeng District, Yancheng City, Jiangsu Province, the People’s Republic of China (the “PRC”). Pursuant to which the Development Committee of Dafeng agreed to grant Binzhou COG the piped gas concession right and the parties will sign the concession right agreement in the near future. Reference is made to the announcement of the Company dated 7 April 2017 relating to the successfully won the bid of the concession right in Fanshui County, Baoying Township, Jiangsu, the PRC, the Board is also pleased to announce that the concession right agreement in respect of the piped gas concession right in Fanshui County was signed on 27 April 2017 for a term of 30 years ending on 26 April 2047. GENERAL The Group is principally engaged in natural gas investment and energy related business, and has invested and set up 117 gas projects in 15 different provinces and autonomous region in China and holds 72 city-gas exclusive concession rights. Dafeng District is located at the eastern coast of Jiangsu province, to the north of Yancheng City and at the junction of Dongtai City and Xinghua City. Dafeng District is located at a superiority area with its Dafeng port being a first class national open port and an important node for the development of the coastal area of Jiangsu. The southeast region of Dafeng District is next to the Dafeng port, - 1 - including Daqiao Township, Caomiao Township, Wanying Township, Dazhong Farm and Dongbatou Farm, with an aggregate area of nearly 550 square kilo meters. Currently, there are approximately 200 industrial enterprises above designated size. In recent years, Dafeng District has maintained rapid economic growth with the GDP increasing at an annual rate exceeding 11%, forming an industrial system with high and new technology industry at the leading position, modern service industry, advanced manufacturing industry and modern agriculture developing simultaneously. Meanwhile, as a nationally well-known ecologically-civilized city, the government of Dafeng District emphasized the strategy of energy conservation and emission reduction as well as developed clean energy usage policy, which led to a significant need for clean energy, such as natural gas. Facing with the fact that clean energy is getting more popular, the Group seized the opportunities to conduct investigation and research on the natural gas market of Dafeng District and has, leveraging on its own advantages, successfully won the bid of the piped gas concession right project in southeast region of Dafeng District, Yancheng City. With the piped gas project in southeast region of Dafeng District, the Group’s covering area of the gas pipes in main districts of Jiangsu and surrounding projects has been further expanded, which would connect more customers and provide clean natural gas energy to them. Meanwhile, through the urban piped gas concession rights, the Group will further develop its domestic gas market, strengthen and expand its market share of domestic gas business, so as to enhance the Group’s position in the domestic market. The Board considers that the concession right in southeast region of Dafeng District, Yancheng City, Jiangsu Province 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,5 May 2017 As at the date of this announcement, the Board comprises four executive Directors, namely Mr. Xu Tieliang (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 Xunzhi and Mr. Wang Guangtian. * for identification purposes only - 2 - .