Recon Technology, Ltd. announced its subsidiary Nanjing Recon Technology Co., Ltd. (“Nanjing Recon”) won the bid to build the automation system for PetroChina Jidong Oilfield Company (“Jidong Oilfield”). The winning price is RMB 9.5 million (approximately $1.36 million) per year, for a three-year construction period from January 1st, 2020 to December 31st, 2022.
The current bidding price includes compensation for predetermined materials, services and other fees to compete each year’s project. Pursuant to the bidding document, the materials bought by Nanjing Recon will be reimbursed by Jidong Oilfield with a 20% discount of the predetermined price under some temporary circumstances, so the total consideration will be reduced accordingly. The Company expects that this reduction will not be material to the winning price.
The oil & gas industry is transitioning toward automation to minimize human labor in the oil & gas process. The automated oilfield receives data from numerous instrumented sources, runs the data through algorithms and simulation models, and makes decisions with or without humans in the decision loop.
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“Recon is one of the companies leading the digital transformation in the oilfields. Our automation system can help oilfields reduce more than 90% labor cost and enhance their production efficiency at the production site,” Mr. Shenping Yin, co-founder and CEO of Recon said. “We expect there is a 20% growth in our automation business this year. In order to maximize productivity, reduce costs, and minimize risks, we are continuously improving machine-learning algorithms and cloud-based software suite, meanwhile increasing adoptions of Internet of Things (IoT) in the oilfields.”
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