SEC no-action letter: Jilin Chemical Industrial Company Limited — SEC — US

Home | Previous Page

Securities Exchange Act of 1934 Rule 14d-4(d); Rule 14d-6(c)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549-0303

December 21, 2005

Via Facsimile and U.S. Mail

Bonnie Greaves George Karafotias Shearman & Sterling LLP Broadgate West 9 Appold Street London, EC2A 2AP United Kingdom

Re: Tender Offer by PetroChina Company Limited for H Shares of Jilin Chemical Industrial Company Limited

Dear Ms. Greaves and Mr. Karafotias:

We are responding to your letter dated December 21, 2005 to Brian V. Breheny and Christina Chalk, as supplemented by telephone conversations with the staff of the Division of Corporation Finance, with regard to your request for no-action relief. Our response is attached to the enclosed photocopy of your letter to avoid having to recite or summarize the facts set forth in your letter. Unless otherwise noted, capitalized terms in this letter have the same meaning as in your letter.

Based on the representations in your letter dated December 21, 2005, but without necessarily concurring in your analysis, the staff of the Division of Corporation Finance of the United States Securities and Exchange Commission (the "Commission") will not recommend that the Commission take enforcement action pursuant to Rule 14d-4(d) or Rule 14d-6(c) if PetroChina terminates the Initial Offer Period or any extension thereof and thereby terminates withdrawal rights before the scheduled expiration of such period, so long as at the time withdrawal rights terminate: (i) the Initial Offer Period has been open for at least 20 US business days, (ii) all conditions to the H Share Offer have been satisfied or waived, and (iii) the procedural and disclosure protections described in your letter are provided in the H Share Offer. We also note the representation in your December 21, 2005 letter that you are not seeking relief to permit the early termination of withdrawal rights during any extension required under the provisions of Regulation 14D or 14E under the Exchange Act or under the Hong Kong Code and that no relief is requested or granted for the A Share Offer.

The foregoing no-action position is based solely on the representations and the facts presented in your letter dated December 21, 2005, as supplemented by telephone conversations with the staff. The relief is strictly limited to the application of the rules listed above to this transaction. You should discontinue this transaction pending further consultations with the staff if any of the facts or representations set forth in your letter change.

We also direct your attention to the anti-fraud and anti-manipulation provisions of the federal securities laws, including Section 10(b) of the Exchange Act, and Rule 10b-5 thereunder. The participants in this transaction must comply with these and any other applicable provisions of the federal securities laws. The Division of Corporation Finance expresses no view on any other questions that may be raised by the proposed transaction, including but not limited to, the adequacy of disclosure concerning and the applicability of any other federal or state laws to the proposed transaction.

Sincerely,

Brian V. Breheny Chief, Office of Mergers and Acquisitions Division of Corporation Finance

Enclosure

Incoming Letter:

December 21, 2005

bgreaves@shearman.com

+44 (0)20 7655 5550 george.karafotias@shearman.com +44 (0)20 7655 5576

Brian V. Breheny, Esq. Chief, Office of Mergers and Acquisitions Securities and Exchange Commission 100 F Street, N.E. Washington D.C. 20549 USA

Christina Chalk, Esq. Special Counsel, Office of Mergers and Acquisitions Securities and Exchange Commission 100 F Street N.E. Washington D.C. 20549 USA

Voluntary Conditional Offers for A Shares and H Shares of Jilin Chemical Industrial Company Limited

We are writing on behalf of our client, PetroChina Company Limited ("PetroChina"), a joint stock company organized under the laws of the People's Republic of China (the "PRC"). PetroChina currently owns 67.29% of the share capital of Jilin Chemical Industrial Company Limited ("Jilin"), a joint stock company organized under the laws of the PRC. On October 31, 2005, PetroChina announced its intention to make separate offers to acquire all of the outstanding shares of Jilin not already owned by PetroChina and parties acting in concert with it pursuant to (i) a possible voluntary conditional offer for all of the outstanding domestic invested shares, par value RMB1.00 per share (the "A Shares"), of Jilin (the "A Share Offer") and (ii) a possible voluntary conditional offer for all of the outstanding overseas listed foreign invested shares, par value RMB1.00 per share (the "H Shares"), of Jilin, including all of the outstanding H Shares represented by American depositary shares (the "Jilin ADSs") of Jilin, each of which represents 100 H Shares (the "H Share Offer"). PetroChina is offering cash consideration in the amount of RMB5.25 per share to holders of A Shares in the A Share Offer, HK$2.80 per share to holders of H Shares in the H Share Offer and HK$280 for the H Shares represented by each Jilin ADS.

The commencement of the H Share Offer and the A Share Offer was subject to the satisfaction or, if permissible, waiver of certain specified pre-conditions. The A Share Offer is also subject to the H Share Offer becoming unconditional. On November 16, 2005 (the "Commencement Date"), PetroChina announced that all of the pre-conditions had been satisfied or waived and commenced the H Share Offer by mailing the Composite Document (as defined below) to holders of H Shares.

We hereby request confirmation from the Staff of the Division of Corporation Finance (the "Staff") that it will not recommend that the Securities and Exchange Commission (the "SEC") take any enforcement action against PetroChina pursuant to Rule 14d-4(d) or Rule 14d-6(c) under the Securities Exchange Act of 1934, as amended (the "Exchange Act") if it terminates the Initial Offer Period (as defined herein) or any voluntary extension thereof and thereby ends withdrawal rights prior to the scheduled expiration of such period, so long as (i) the Initial Offer Period has been open for at least 20 U.S. business days and (ii) all conditions of the H Share Offer have been satisfied or waived. 1 PetroChina will issue a press release and publish a newspaper advertisement in a newspaper of national circulation in the United States five U.S. business days prior to the date of the H Share Class Meeting (as defined herein), informing holders of H Shares and Jilin ADSs that, if the Delisting Condition (as defined herein) is satisfied at the H Share Class Meeting, the Initial Offer Period will terminate as soon after the date of the H Share Class Meeting as the Minimum Condition (as defined below) is satisfied and advising holders of H Shares and Jilin ADSs that wish to withdraw their acceptances of the H Share Offer to do so before December 31, 2005, the date of the H Share Class Meeting, to ensure that their withdrawal is timely. PetroChina will also file a copy of such press release and newspaper advertisement with the SEC.

PetroChina is not seeking relief to permit the termination of withdrawal rights during any extension required by the provisions of Regulation 14D or 14E under the Exchange Act or by the Hong Kong Code. PetroChina is also not seeking any relief with respect to the A Share Offer, which is being made in reliance on the Tier I exemption afforded by Rule 13e-4(h)(8) under the Exchange Act.

PetroChina has provided us with, and has authorized us to make, the factual representations about it and Jilin set forth in this letter.

I. Background Information

PetroChina

PetroChina is engaged in a broad range of petroleum and natural gas related activities, including the exploration, development, production and sale of crude oil and natural gas; the refining, transportation, storage and marketing of crude oil and petroleum products; the production and marketing of basic petrochemical products, derivative chemical products and other chemical products; and the transmission and storage of crude oil, refined products and natural gas as well as sales of natural gas. PetroChina is one of the largest companies in the PRC in terms of sales and is the PRC's largest producer of crude oil and natural gas. Substantially all of PetroChina's crude oil and natural gas reserves and production-related assets are currently located in the PRC. In the year ended December 31, 2004, PetroChina had total revenue of RMB 388.6 billion (US$47.0 billion) and net income of RMB 102.9 billion (US$12.4 billion).

PetroChina's share capital comprises state-owned shares, all of which are held by China National Petroleum Corporation, and H Shares, par value RMB1.00 per share (the "PCH Shares"). PCH Shares are currently listed on The Stock Exchange of Hong Kong Limited ("HKSE ") and American depositary shares of PetroChina, each of which represents 100 PCH Shares, and the PCH Shares underlying the American depositary shares are listed on the New York Stock Exchange, Inc. (the "NYSE"). According to PetroChina's Annual Report on Form 20-F for the year ended December 31, 2004, it is a "foreign private issuer" as defined in Rule 3b-4(c) under the Exchange Act and a reporting company for purposes of United States federal securities laws.

Jilin

According to Jilin's Annual Report on Form 20-F for the year ended December 31, 2004, filed with the SEC on May 19, 2005 ("Jilin's 2004 Form 20-F"), Jilin is one of the largest producers of basic chemicals and chemical raw materials, and one of the largest diversified chemical enterprises in the PRC. Jilin is also one of the largest producers of ethylene in the PRC, accounting for approximately 10% of China's ethylene production in 2004. Jilin's principal businesses consist of the production of petroleum products, petrochemical and organic chemical products, synthetic rubber, chemical fertilizers and inorganic chemical products, and other chemical products. In the year ended December 31, 2004, Jilin had total revenue of RMB 31.9 billion (US$3.8 billion) and net income of RMB 2.5 billion (US$307 million).

According to Jilin's 2004 Form 20-F, it is a "foreign private issuer" as defined in Rule 3b-4(c) under the Exchange Act and is a reporting company for purposes of United States federal securities laws.

According to the Articles of Association of Jilin, dated May 20, 2005 (the "Articles"), the share capital of Jilin comprises domestic shares consisting of 2,396,300,000 state-owned shares, all of which are held by PetroChina, 200,000,000 A Shares and 964,778,000 H Shares. 2 The A Shares are listed on the Shenzhen Stock Exchange, the H Shares are listed on the HKSE, and the Jilin ADSs and the H Shares underlying the Jilin ADSs are listed on the NYSE. The state-owned shares and the A Shares are not registered with the SEC under the Exchange Act. The H Shares are registered with the SEC pursuant to Section 12(b) of the Exchange Act. 3

II. Laws and Regulations Applicable to the H Share Offer

The H Share Offer is subject to the laws and regulations of a number of jurisdictions. We have been advised by Freshfields Bruckhaus Deringer, Hong Kong counsel to PetroChina ("Freshfields"), that the H Share Offer is subject to the requirements of the Hong Kong Code on Takeovers and Mergers (the "Hong Kong Code") and the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the "HKSE Rules"), and is subject to regulatory oversight by the Hong Kong Securities and Futures Commission (the "SFC") and the HKSE. The H Share Offer is also subject to the requirements of U.S. federal securities laws, including Rule 13e-3 under the Exchange Act and Regulations 14D and 14E under the Exchange Act as they apply to offers that are eligible for the Tier II exemption provided under Rule 14d-1(d) under the Exchange Act.

Pursuant to rules adopted by the SEC relating to cross-border tender and exchange offers, business combinations and rights offerings relating to the securities of foreign companies, (Release Nos. 33-7759, 34-42054) (the "Cross-Border Rules"), the availability of Tier I and Tier II exemptive relief must be determined on a class-by-class basis. PetroChina conducted a look-through analysis with respect to the H Shares in Hong Kong, the PRC and the United States in accordance with the procedures set forth in Section 329 of the Hong Kong Securities and Futures Ordinance. PetroChina was thereby able to obtain information on the beneficial ownership of approximately 96% of the H Shares, including the H Shares represented by Jilin ADSs. Based upon this analysis, PetroChina has determined that, as of October 17, 2005 (the 30 th day before the Commencement Date), U.S. holders held approximately 13.10% of the H Shares, including the H Shares represented by Jilin ADSs. Accordingly, PetroChina believes that the H Share Offer is eligible for the Tier II exemption pursuant to Rule 14d-1(d) under the Exchange Act.

III. Timing and Structure of the H Share Offer

General

On October 31, 2005, PetroChina made an initial public announcement of the H Share Offer, which included a description of the principal terms of the H Share Offer, including the consideration to be paid for the H Shares, the pre-conditions to making the H Share Offer and the conditions to the completion of the H Share Offer.

PetroChina made a further announcement on November 16, 2005 confirming that the pre-conditions had been satisfied or waived and that it was proceeding with the H Share Offer. On that date, a formal document in respect of the H Share Offer comprising the offer document and an offeree board circular (the "Composite Document") was dispatched to holders of H Shares. The Composite Document was prepared in accordance with the Hong Kong Code. In addition, PetroChina filed with the SEC the filings required by Rule 13e-3 and Regulation 14D under the Exchange Act in respect of the H Share Offer.

The H Share Offer is structured as a single offer made concurrently in Hong Kong and the United States and certain other jurisdictions where the H Share Offer may be legally extended. The H Share Offer is being made by PetroChina in the United States and by PetroChina's financial advisor in Hong Kong and in other jurisdictions. The H Share Offer has been structured so as to comply with the Hong Kong Code, the HKSE Rules, Rule 13e-3 under the Exchange Act and Regulations 14D and 14E under the Exchange Act as they apply to offers that are eligible for the Tier II exemption under Rule 14d-1(d).

The H Share Offer is subject to two conditions: the receipt of valid acceptances (which have not been withdrawn) in respect of not less than 66 2/3% in nominal value of the H Shares (the "Minimum Condition") and the adoption at a special meeting of holders of H Shares convened for that purpose (the "H Share Class Meeting") of resolutions approving the voluntary withdrawal of the listing of the H Shares from the HKSE (the "Delisting Condition"). Pursuant to the Articles of Association of Jilin, Jilin was required to give its shareholders 45 days' notice of the H Share Class Meeting. As notice of the H Share Class Meeting was mailed to holders of H Shares on the Commencement Date together with the Composite Document, the H Share Class Meeting will be held on December 31, 2005. It is expected that the Minimum Condition is likely to be satisfied on or shortly after the date of the H Share Class Meeting. If, however, the Minimum Condition has not been satisfied by 4:00 p.m. on January 6, 2006 (the "First Closing Date"), the H Share Offer will lapse unless extended by PetroChina.

The Composite Document provides that PetroChina has no intention to waive, and will not reduce, the Minimum Condition. Moreover, any such waiver or reduction would require the consent of the SFC. In that event, PetroChina would comply with the requirements set forth in Section II.B. of the Cross-Border Release.

The Composite Document also provides that PetroChina has no intention to waive the Delisting Condition, and any such waiver would require the consent of the SFC.

Initial Offer Period

Unless the H Share Offer has previously become or been declared unconditional, revised or extended, it will remain open for acceptances until the First Closing Date (the period from the Commencement Date until the H Share Offer has become or been declared unconditional or lapses or is withdrawn being the "Initial Offer Period"). Holders of H Shares will have the right to withdraw their shares throughout the Initial Offer Period. The Initial Offer Period may be extended for such additional periods as may be determined by PetroChina, except that it may not be extended beyond the 60 th day after the Commencement Date without the permission of the SFC. PetroChina will promptly issue an announcement of any extension to the Initial Offer Period stating the next closing date of the H Share Offer (any such subsequent closing date, together with the First Closing Date, a "Closing Date").

When all of the conditions to the H Share Offer have been satisfied or waived, PetroChina will make a public announcement, as required by the Note to Rule 15.3 of the Hong Kong Code, that the H Share Offer has become wholly unconditional. Under Rule 20.1 of the Hong Kong Code, the H Shares represented by acceptances of the H Share Offer received prior to the H Share Offer becoming, or being declared, unconditional shall be acquired by PetroChina when the H Share Offer has become, or has been declared, unconditional, and shall be paid for by PetroChina as soon as possible, but in any event within ten days of the date on which the H Share Offer becomes, or is declared, unconditional. As a result, withdrawal of such H Shares will thereafter no longer be possible. We are therefore requesting relief to terminate the Initial Offer Period and thereby end withdrawal rights when the H Share Offer becomes or is declared unconditional. Thereafter, the Subsequent Offer Period (as defined below) will commence in accordance with the Hong Kong Code.

The Composite Document provides that, subject to the receipt of the relief sought herein, the Initial Offer Period, and the right to withdraw acceptances, will terminate if the H Share Offer becomes or is declared unconditional after the date of the H Share Class Meeting but before the First Closing Date or, if the H Share Offer has been extended, before the expiration of the revised Closing Date. PetroChina will also issue a press release and publish a newspaper advertisement in a newspaper of national circulation in the United States five U.S. business days prior to the date of the H Share Class Meeting, informing holders of H Shares and Jilin ADSs that, if the Delisting Condition is satisfied at the H Share Class Meeting, the Initial Offer Period will terminate as soon after the date of the H Share Class Meeting as the Minimum Condition is satisfied and advising holders of H Shares and Jilin ADSs that wish to withdraw their acceptances of the H Share Offer to do so before the date of the H Share Class Meeting to ensure that their withdrawal is timely. PetroChina will also file a copy of such press release and newspaper advertisement with the SEC.

Subsequent Offer Period

Freshfields has advised us that, under Rule 15.1 of the Hong Kong Code, after an offer becomes or is declared unconditional, it must remain open for acceptances for at least 14 calendar days and may remain open for such longer period as the bidder deems appropriate (the "Subsequent Offer Period"). The Composite Document provides that the Subsequent Offer Period in respect of the H Share Offer will remain open for a period of 28 calendar days.

During the Subsequent Offer Period, acceptances (whether received before or during the Subsequent Offer Period) cannot be withdrawn. As required by the Hong Kong Code, payment for all H Shares in respect of which valid acceptances are received during the Subsequent Offer Period will be made within ten calendar days of acceptance.

IV. Discussion of Issues and Requested Relief

Under the Hong Kong Code, where an offer document and an offeree board circular are posted on the same day or are combined in a composite document, an offer must be open for acceptance for at least 21 calendar days. As in UK offers governed by the City Code on Takeovers and Mergers, the terms of such offer will usually prevent accepting shareholders from withdrawing acceptances, irrespective of whether they accepted the offer before or after the offer becomes or is declared wholly unconditional, until 21 calendar days after the date set as the first closing date. Once an offer is wholly unconditional, withdrawals are in any case not possible as shares in respect of which valid acceptances have been received become the property of the offeror when the offer becomes wholly unconditional or, if tendered during a subsequent offer period, at the time of acceptance.

In order to satisfy the requirements of the Exchange Act with respect to withdrawal rights, PetroChina has extended withdrawal rights to all holders of H Shares throughout the Initial Offer Period. As the earliest date on which the H Share Offer can become unconditional is the date of the H Share Class Meeting, holders of H Shares will therefore be able to withdraw their acceptances for a minimum of 45 calendar days. If the H Share Offer becomes unconditional after the date of the H Share Class Meeting but before the First Closing Date, the Initial Offer Period will be terminated on that date, thereby ending withdrawal rights.

If the H Share Offer has not become wholly unconditional by the First Closing Date, the H Share Offer will lapse unless extended by PetroChina. If PetroChina determines to extend the H Share Offer, it will make an announcement specifying the new Closing Date and the H Share Offer will remain open until the earlier of the new Closing Date and the date on which it becomes wholly unconditional. On either such date, the Initial Offer Period will terminate and withdrawal rights will end. PetroChina will not, however, declare the H Share Offer wholly unconditional before the expiration of any extension required by the provisions of Regulation 14D or 14E under the Exchange Act or by the Hong Kong Code.

After the H Share Offer becomes wholly unconditional, the Initial Offer Period will end and the Subsequent Offer Period will begin. PetroChina will pay for all H Shares in respect of which valid acceptances are received during the Subsequent Offer Period within ten calendar days of acceptance, and acceptances received in respect of H Shares therefore may not be withdrawn after the Subsequent Offer Period begins.

Permitting PetroChina to terminate the Initial Offer Period will eliminate the uncertainty that would otherwise prevail if the H Share Offer were to be treated as if it were still conditional, when in fact it is not, and will enable holders of H Shares to receive their H Share Offer consideration at an earlier date. Further, under Rule 20.1 of the Hong Kong Code, the H Shares represented by acceptances of the H Share Offer received prior to the H Share Offer becoming, or being declared, unconditional shall be acquired by PetroChina when the H Share Offer has become, or has been declared, unconditional, and shall be paid for by PetroChina as soon as possible, but in any event within ten days of the date on which the H Share Offer becomes, or is declared, unconditional. As a result, withdrawal of such H Shares will thereafter no longer be possible. We are therefore requesting relief to terminate the Initial Offer Period and thereby end withdrawal rights when the H Share Offer becomes or is declared unconditional. Thereafter, the Subsequent Offer Period (as defined below) will commence in accordance with the Hong Kong Code.

We believe that the exemptive relief we are requesting with respect to the termination of the Initial Offer Period and withdrawal rights is consistent with the rationale underlying relief previously granted by the Staff. See e.g., UCB S.A. Offer for Celltech Group plc (May 19, 2004); Serena Software, Inc. Offer for Merant plc (April 13, 2004); Celltech Group plc Offer for Oxford Glycosciences plc (March 3, 2003); RWE Akteingesellschaft Offer for Innogy Holdings plc (March 22, 2002); Schlumberger Limited Offer for Sema plc (March 2, 2001); and Amerada Hess Corporation Offer for LASMO plc (December 13, 2000). Although the relief granted in each of those letters related to a voluntary extension period, the analysis is equally applicable to the Initial Offer Period. In addition, the H Share Offer will be open for a period well in excess of 20 U.S. business days and, as with those offers, withdrawal rights will not end until all conditions have been satisfied or waived.

V. Relief Requested

We hereby request confirmation from the Staff that it will not recommend that the SEC take any enforcement action against PetroChina pursuant to Rule 14d-4(d) or Rule 14d-6(c) under the Exchange Act if it terminates the Initial Offer Period or any voluntary extension thereof and thereby ends withdrawal rights prior to the scheduled expiration of such period, so long as (i) the Initial Offer Period has been open for at least 20 U.S. business days and (ii) all conditions of the H Share Offer have been satisfied or waived. 4 PetroChina will issue a press release and publish a newspaper advertisement in a newspaper of national circulation in the United States five U.S. business days prior to the date of the H Share Class Meeting, informing holders of H Shares and Jilin ADSs that, if the Delisting Condition is satisfied at the H Share Class Meeting, the Initial Offer Period will terminate as soon after the date of the H Share Class Meeting as the Minimum Condition is satisfied and advising holders of H Shares and Jilin ADSs that wish to withdraw their acceptances of the H Share Offer to do so before December 31, 2005, the date of the H Share Class Meeting, to ensure that their withdrawal is timely. PetroChina will also file a copy of such press release and newspaper advertisement with the SEC.

PetroChina is not seeking relief to permit the termination of withdrawal rights during any extension required by the provisions of Regulations 14D or 14E under the Exchange Act or by the Hong Kong Code.

In accordance with SEC Release 33-6269, we have enclosed an original and seven copies of this letter.

If you require any further information or wish to discuss these matters further, please call Bonnie Greaves at (+44-20) 7655-5550 or George Karafotias at (+44-20) 7655-5576.

Very truly yours,

Bonnie Greaves

George Karafotias

Enclosures

Brian V. Breheny, Esq Chief, Office of Mergers and Acquisitions Securities and Exchange Commission 100 F Street, N.E. Washington D.C. 20549

Christina Chalk, Esq

Special Counsel, Office of Mergers and Acquisitions Securities and Exchange Commission 100 F Street, N.E. Washington D.C. 20549

HONG KONG 11th floor Two Exchange Square Hong Kong

852 2846 3400

Direct T

852 2846 3425

852 2810 6192

Direct F

852 2810 6192

teresa.ko@freshfields.com

freshfields.com

富而德律師事務所香港中環交易廣場第2座11樓

電話

852 2846 3400

圖文傳真

852 2810 6192

doc id

HK321522 / 2+

our ref

TK 122342-0006

your ref

Dear Sirs

Voluntary Conditional Offers for A Shares and H Shares of Jilin Chemical Industrial Company Limited

We refer to the letter dated 21 December 2005 from Shearman & Sterling LLP (the Letter ) to you on behalf of PetroChina Company Limited ( PetroChina ). In the Letter, Shearman & Sterling LLP requests confirmation from the Staff of the Division of Corporation Finance that it will not recommend any enforcement action to the United States Securities and Exchange Commission ( SEC ) against PetroChina if it terminates the Initial Offer Period (as defined in the Letter) or any voluntary extension thereof and thereby ends withdrawal rights prior to the scheduled expiration of such period, so long as:

(i) the Initial Offer Period has been open for at least 20 United States business days; and

(ii) all conditions of the H Share Offer (as defined in the Letter) have been satisfied or waived.

We are acting solely as Hong Kong Counsel to PetroChina in connection with the H Share Offer and have consulted with Shearman & Sterling LLP with respect to the legal and regulatory requirements in Hong Kong and takeover practice in Hong Kong, in each case, applicable to the H Share Offer and relevant to the relief sought. This letter is rendered at your request solely in connection with the Letter and is limited to matters of Hong Kong law and practice. This letter is provided incidentally to, and in the ordinary course of, my practice of Hong Kong law in Hong Kong, does not purport to cover any aspects of US law

and without prejudice to my status as a "non-appearing foreign attorney" for purposes of SEC rules and practice.

We hereby acknowledge that we are Hong Kong Counsel to PetroChina in connection with the H Share Offer and that reference in the Letter to discussions with us regarding the legal and regulatory requirements in Hong Kong applicable to the H Share Offer and takeover practice in Hong Kong are correct. We have reviewed the Letter, and we believe the descriptions of the legal and regulatory requirements in Hong Kong applicable to the H Share Offer and of takeover practice in Hong Kong contained therein are accurate. The statements of Hong Kong legal and regulatory requirements and practice contained in the Letter consist of brief summaries only and should not be construed as a comprehensive description of all relevant issues.

Yours faithfully

Teresa Ko

End Notes

Although we do not believe that the termination of the Initial Offer Period or any extension thereof and termination of withdrawal rights prior to the scheduled expiration of such period would constitute a material change to the information previously published or sent or given to holders of H Shares and Jilin ADSs under Rule 14d-4(d) or Rule 14d-6(c), the Staff has advised us that they may view this as a material change, which would necessitate the requested relief.

As of October 26, 2005, the last trading day of the H Shares and the A Shares prior to the date of the initial announcement, the 2,396,300,000 state-owned shares held by PetroChina represented 67.29% of the issued share capital of Jilin. PetroChina does not own any A Shares or H Shares.

According to the Bank of New York, depositary for the Jilin ADSs, there were 63,749,200 H Shares underlying a total of 637,492 Jilin ADSs outstanding as of November 11, 1005, the latest practicable date prior to the printing of the composite document. The Jilin ADSs are listed on the NYSE

http://www.sec.gov/divisions/corpfin/cf-noaction/jilin122105.htm

Home | Previous Page

Modified: 01/13/2006