E-Procurement Transaction Rules

The Regulations hereby constitute the regulations to be abided by the E-Procurement members to conduct trading transactions by using the E-Procurement platform. The E-Procurement platform of Energyahead website (hereinafter to be referred as “the Site”) provides a systematic tool which enables PetroChina and its procurement subsidiaries (hereinafter to be referred as “PetroChina’s procurement units”) to conduct online procurement of products and materials from the selected suppliers (hereinafter to be referred as “suppliers”).

Throughout the entire trading process, both buyers and suppliers (every “PetroChina’s procurement unit and its related suppliers) must strictly abide the following operational procedures and regulations stipulated in the trading rules.

1.Procurement Execution Regulations

1. All suppliers are tied in through the entire workflow processes including selecting, inviting tenders, training and integrating, which generates the E-Procurement product catalogs.
2. PetroChina procurement units scan the E-Procurement product catalogs from the Site, select what they need to procure, and generate a procurement application plan. The procurement application plan will have to go through an internal approval process of PetroChina procurement units to finalize the material procurement implementation plan. The material procurement implementation plan is an offer issued to relevant suppliers by PetroChina procurement units, which shall be transmitted to relevant suppliers by e-mails. If failures occur in the e-mail system, telephone or fax transmissions can be used to replace e-mails. However, after the problem is removed, PetroChina procurement units and relevant suppliers shall conduct trading according to the trading regulations based on the material procurement implementation plan and the replies from suppliers. The Site shall collect commission fee according to the standards and procedures stipulated in this regulation.
3. Once received the material procurement implementation plan, suppliers are obligated to promptly respond to the plan by choosing to fully or partially accept the plan, or to refuse the plan.

1. When a supplier replies to fully accept the plan, the Site recognizes the trading as valid, and will therefore collect commission fee according to the plan.
2. When a supplier replies to partially accept the plan, and if the PetroChina procurement unit agrees with the replies from the supplier, the plan shall be amended accordingly. When the amended material procurement implementation plan is given to the supplier, the Site recognizes the trading as valid, and shall collect commission fee based on the amended plan.
3. When a supplier replies to partially accept the plan, and if the PetroChina procurement unit does no agree with the replies from the supplier, the supplier shall be informed that the plan is no longer valid. The Site shall then recognize the trading as invalid, and therefore charge no commission fee.
4. When a supplier replies to refuse the plan, the material procurement implementation plan ceases to be effective. The Site recognizes the trading as invalid, and therefore charges no commission fee.
5. If a supplier fails to respond to a material procurement implementation plan after three days upon receiving the plan, the supplier is recognized to have refused the plan, and the plan ceases to be effective. The Site then recognizes the trading as invalid, and therefore charges no commission fee.

4. According to the specific reply from a supplier to a material procurement implementation plan issued by PetroChina procurement units, which can be a full or a partial acceptance or a refusal of the plan, the commission rates payable by the supplier will be adjusted in accordance with the changes amended in the material procurement implementation plan.
5. After each trading becomes valid, the E-procurement system shall generate a product procurement contract (hereinafter to be referred as “procurement contract”). PetroChina procurement units shall be responsible to print out the procurement contract, and have the contract signed and stamped by both PetroChina procurement units and the suppliers. However, regardless a written procurement contract being signed or not by PetroChina procurement units and the suppliers, the Site retains the right to collect commission fee.
6. After the procured products and materials are inspected in acceptable quality and warehoused, PetroChina procurement units shall amend the status of the material procurement implementation plan as “Goods Received.”

2.Rules on Payment of Trading Commission Fee

1. When the trading specified in the above Clause 3 of Article 1 becomes valid, the relevant suppliers of PetroChina procurement units shall pay commission fee to the Site. The amount of commission fee is calculated according to the specified types and quantities of the products and materials to be procured according to the material procurement implementation plan agreed between PetroChina procurement units and the suppliers, and the application commission fee complies fully with the regulations stipulated in the Energyahead Website Service Fee Table.
2. When a supplier replies to fully accept the material procurement implementation plan issued by PetroChina procurement units, the system shall indicate that the material procurement implementation plan has been accepted by the supplier and the system automatically record the rates and amounts of the commission fee.
3. When a supplier replies to partially accept the material procurement implementation plan issued by PetroChina procurement units, and after PetroChina procurement units give the supplier an amended material procurement implementation plan, the Site shall indicate the amended status of the material procurement implementation plan, and the system calculates the amount of commission fee payable based on the amendments agreed.
4. The Site shall settle the accounts of commission fee payable by suppliers on a monthly basis, and shall provide suppliers payment notices and a monthly statement of the monthly commission fee. Within 10 days upon receiving the above payment notices, suppliers shall pay the commission fee to the Site according to the terms agreed by the two parties. The Site shall issue receipts to suppliers within 10 days after receiving the payments on commission fee.
5. For whatever reasons, if PetroChina procurement units do not actually procure the materials as specified in the material procurement implementation plan based on which the Site has calculated the amount of commission fee, for example, the suppliers fail to deliver the goods, or the suppliers have delivered the goods which are found not in accordance with the specifications stated in the plan, or PetroChina procurement units request a refund on the procured commodities, the Site shall retain the right to collect the commission fee from the suppliers, and the suppliers shall pay commission fee to the Site according to the relevant rules stipulated in the trading regulations.