CNOOC Reports on Successes in Bohai Bay

CNOOC Limited's Production Sharing Contract partners have recently found success with their appraisal well drilling programs in Bohai Bay, China. Located adjacent to Tianjin and approximately 124 miles from Beijing, Bohai Bay has been an active area for oil discoveries over the last two years. As a follow-on to such discoveries, a number of appraisal wells are being drilled in 2001.

Kerr-McGee, CNOOC Limited's PSC partner, recently drilled two successful appraisal wells in two of its Caofeidian ("CFD") fields in Bohai Bay. The appraisal wells were drilled in field CFD 11-1 of Block 04/36 and in the field CFD 12-1 of Block 05/36. CNOOC Limited has a 51% participating interest in both of the fields.

Well CFD 11-1-4, the third appraisal well in the CFD 11-1 discovery, was spudded in late February of this year. It is located between CFD 11-1-1 and CFD 11-1-2, 2 km and 1.8 km from the two wells, respectively. The well was drilled to 5,052 feet, with similar pay to other wells drilled in this field. Additional appraisal wells are planned this year, so as to evaluate the reserves for development of the discovery.

Well CFD 12-1-3, the second appraisal in the CFD 12-1 discovery, was spudded in March of this year. It is 1 mile east of CFD 12-1-1 and 3 miles from CFD 12-1-2. The well was drilled to 7,217 feet. Coring and testing are currently being performed in a sidetrack hole. Additional appraisal wells are planned this year, in order to evaluate the reserves for development of the discovery.

Another of CNOOC Limited's PSC partner, Chevron, has also been active in the Bohai Bay. Encouraged by the results of their drilling campaign in this area late last year, Chevron has contracted the China Offshore Oil Southern Drilling Company's jack-up rig the Nanhai I for further drilling. They plan to drill at least three follow-up appraisal wells in the area, beginning in September, 2001. CNOOC Limited has an option to back-in to the fields for up to a 51% participating interest at no cost. The recent successes of the appraisal wells further prove the prospect of Bohai Bay.


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