Singapore, 9 December 2004 - The Company wishes to clarify the report made by AFX on 8 December 2004 entitled "CAO's parent to set up firm to take over jet fuel import".

The statement that cited Shanghai Securities News saying that "China Aviation Oil Holding Company (CAOHC) is preparing to set up a new trading arm to take over the jet fuel import business of troubled unit China Aviation Oil (Singapore) Corp (CAO)" is incorrect.

It is the Company that has taken steps to set up a new wholly owned subsidiary to carry on the jet fuel procurement business, as per our announcement yesterday.