CNOOC Begins Production at BZ 25 in Bohai Bay

CNOOC reports that the BZ 25-1/BZ 25-1S wells have come on stream successfully, producing about 16,000 barrels of oil per day from 52 wells with 32 additional wells being completed. Phase two production is expected to be on stream by early 2006.

BZ 25-1/BZ 25-1S is located in the east part of Bohai Bay in 20 meters of water, 127km southeast of Longkou City. Major production facilities include a single point mooring system (SPM), a floating production, storage and offloading facility (FPSO) and three wellhead production platforms for the first phase development.

Mr. Zhou Shouwei, President of the Company commented, ''So far we have brought five out of six scheduled development projects on line. Shareholders are benefiting from our performance.''

The Company is the operator with an 83.8% interest in the project. Chevron/Texaco owns the remaining 16.2% interest.