CNOOC Announces 2001 Results

CNOOC Limited announced its annual results for the 12 months ended December 31, 2001. In the past year, the Company generated revenue of Rmb 20.8 billion (USD2.5 billion), while net profit totaled Rmb 8 billion (USD 966.6 million) for the same period. Despite a 17.3% year-over-year decrease in realized oil prices, oil and gas sales fell only 6.7% to Rmb 17.6 billion (USD2.1 billion), helped by a 9.2% year-over-year production increase. Daily production in 2001 was 261,379 barrels of oil equivalent ("BOE").

EBITDE, a key industry financial benchmark, decreased 6.2 percent to Rmb 14.4 billion (USD1.7 billion). A more than 50% increase in the Company's tax provision due to the expiration of a tax holiday also hit the bottom line. Net income totaled Rmb 8 billion (USD 966.6 million), a 23% decrease from 2000 levels. Pre-tax operating cash flow in 2001 reached Rmb 14.0 billion (USD1.7 billion), still in line with that of last year.

"2001 was a milestone year for CNOOC Limited. We entered the international capital market with the listing of our shares on the Hong Kong and New York stock exchanges and made material progress in our development plans offshore China," said Wei Liucheng, Chairman and Chief Executive Officer. "Going forward we will continue to exercise the same principles and discipline that have been the driving force behind the success of the Company."

"Although the decrease in global oil prices had a negative impact on our financial results, they do not overshadow our operational achievements in 2001," said, Fu Chengyu, President and Chief Operating Officer. "We have realized our targets for annual production, reserves replacement, production costs, and our exploration and development programs."

In 2001, the Company achieved annual production of 95.4 million BOE while maintaining its low cost structure. There were also seven discoveries in Bohai Bay, Eastern South China Sea, and Western South China Sea. With ten successful appraisal wells drilled in 2001, the Company achieved a reserve replacement ratio of 131%. CNOOC Limited expects these new fields to support sustainable and cost-efficient growth in production, through field development projects, and in reserves, through follow-on appraisal well drilling. As of December 31, 2001, net oil and gas reserves totaled approximately 1.8 billion BOE.

"The Company has also maintained its solid financial position in 2001 through prudent financial planning and cost control," said Mark Qiu, Chief Financial Officer and Senior Vice President. "Aside from the performance of our share price, the market's belief in our financial strength has been evidenced by our successful debut international bond issue in this month. The Company's financial strength will provide us with the flexibility needed to implement our strategic goals in 2002 and beyond."

"2002 should also be an exciting year for CNOOC Limited as we continue to make progress in exploration and development offshore China and integrate our recently announced acquisition in Indonesia," Mr. Wei Liucheng said. "Long-term opportunities are also anticipated for the development of the natural gas business in China and we continue to focus on extending our competitive position in coastal China markets."

The Board of Directors recommended a HKD 15 cent per share year-end dividend. Pending shareholder approval, the final dividend is payable on June 19th.