COSL Inks Deal for Four Module Rigs in the Gulf of Mexico

China Oilfield Services Limited has entered into agreements with GOIMAR S.A de C.V ("Goimar") for the construction works and subsequent provision of services for four module rigs in the Gulf of Mexico.

Pursuant to the contract, COSL shall be responsible for the investment and construction of the four module rigs, as well as the completion of mobilization, installation and rig-up. Each module rig will be employed for a term of three years. In accordance with the contract, two rigs will be leased together with COSL's operating staff. The construction of the four module rigs is expected to be completed in the second quarter of 2007.

Mr. Yuan Guangyu, CEO and President of COSL, said, "The Gulf of Mexico is the world's largest offshore oilfield area and is famous for active deep sea exploration. This project not only enables COSL to successfully tap into the traditional business areas of oilfield service providers in Europe and America, but also provides the Group with an opportunity to secure market share in the Gulf of Mexico, a region of utmost political and economic importance with abundant oil and gas reserve, as well as active oil and gas exploration and production."

Mr. Zhong Hua, Executive Vice President & Chief Financial Offer of the Group, added, "There are massive oilfield development projects in the Gulf of Mexico. The operation model of the oil rigs in this region is different from that in the PRC. With active oil and gas exploration in the Gulf of Mexico, the demand for module rigs continues to surge. The Group will expand the Mexican market via this collaboration and expedite the development of other business streams in the market."

GOIMAR, S.A de C.V is an oilfield services company in the Gulf of Mexico with more than ten years' experience in technical services. Its scope of services includes oil and gas services, electrical services and steel structures etc. Its service capacity ranges from the provision of soldering machines to large-scale services such as drilling platforms. It also supplies equipment like drilling platforms, electricity generators, barges, service vessels and cranes etc. and has close relationship with PEMEX.

China Oilfield Services Limited ("COSL", stock code: 2883) is the leading integrated oilfield services provider in the offshore China market. Its services cover each phase of offshore oil and gas exploration, development and production. Its four business segments are drilling services, well services, marine support and transportation services and geophysical services. COSL has been listed on the Main Board of the Stock Exchange of Hong Kong Limited since November 20, 2002. Since March 26, 2004, COSL's stocks can be traded by means of Level I unlisted American Depositary Receipts at OTC (over-the-counter) market in the United States. The ticker symbol is CHOLY.

As of June 30 2006, COSL operated 15 drilling rigs, including 11 jack-ups and three semi-submersibles while operating one leased jack-up rig. In addition, COSL owns and operates the largest and most diverse fleets in offshore China, including 68 support vessels and five oil tankers, one chemical vessel, seven seismic vessels, and four geotech survey vessels. It also has a vast array of modern facilities and equipment for logging, drilling fluids, directional drilling, cementing, well completion and well work-over services.

The majority of COSL's business activities are conducted offshore China, with the other activities extending to different regions of the world such as North and South America, the Middle East, offshore Africa and offshore Europe. COSL and its worldwide employees are dedicated to providing premier quality services, while adhering to the highest health, safety and environmental standards. COSL has obtained the ISO 9000 and ISM (International Safety Management) certifications. COSL also plans to obtain certifications under the ISO 14000 environmental management standard as well as the OSHA 18000 occupational health and safety standards.

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