CNOOC Pushes E&P, Increases Budget for 2008

CNOOC Limited announced its business strategy and development plan for 2008.

The targeted net production of CNOOC Ltd. in 2008 is 195-199 million barrels of oil equivalent (BOE) (with WTI at US$70.0/barrel), compared with the estimated net production of 169-171 million BOE (with WTI at US$72.2/barrel) for 2007.

During the year, ten new projects are expected to come on stream, including major offshore China projects such as platform B, D, E of Penglai 19-3 phase II, Wenchang oilfields and Xijiang 23-1.

In 2008, carrying on the exploration successes in 2007, the Company will further enhance its exploration activities. The Company's exploration program will continue to focus on offshore China, where more drilling activities and seismic data collection work will be conducted during the year. In the meantime, the Company and its PSC partners will organize exploration campaigns aiming at the deepwater blocks. The Company expects to achieve a reserve replacement ratio (RRR) of over 100% in 2008.

In 2008, the Company's total capital expenditure is expected to increase to US$5.24 billion, representing an increase of 43.7% year on year. Due to the intensive exploration and development activities, the Company's exploration capital expenditure is anticipated to reach US$1.04 billion while capital expenditure on development activities is expected to increase to US$4.15 billion. The Company expects that these capital expenditures will provide strong support to its reserves and production growth in 2008 and in the next few years.

"We will take advantage of the high oil price environment and speed up our operations. We will also maintain the prudent financial discipline in the face of industry cost escalations, in order to continue a sustainable and profitable growth," Mr. Yang Hua, Executive Vice President and CFO of the Company commented.

Mr. Fu Chengyu, Chairman and Chief Executive Officer of the Company said, "For CNOOC Ltd. 2008 is a new exciting year with rapid growth in production. I am confident that with new projects and active exploration and development programs, the quality and quantity of our assets will be further optimized, bringing better return for the shareholders."

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