CNOOC To Acquire Interest in NWS Gas Project

CNOOC Limited has received an offer to acquire an interest in the upstream production and reserves of Australia's North West Shelf Gas Project. Under the terms of the offer, the Company would also assume a 25% interest in the China LNG Joint Venture, which will be established to supply LNG from the NWS Gas Project to the Guangdong LNG terminal.

The preliminary terms envisage the Company paying approximately US $320 million to purchase an approximate 5% interest in the upstream reserves of the NWS Gas Project, assuming certain minimum levels of natural gas supplied to the Guangdong LNG terminal and the payment by the CLNG JV parties of a tariff comprising a component for both past and future capital and operating expenditure for access to NWS Gas Project infrastructure.

The Company's minimum estimated share of reserves would be approximately 1.1 trillion cubic feet of natural gas, and the Company's share of natural gas and associated liquids equates to approximately 210 million barrels of oil equivalent.

"The acquisition of a material stake in CLNG JV and the upstream production and reserves offers the Company immediate access to a world-class gas project with world-class partners. CNOOC Limited's participation, meanwhile, helps ensure a safe, reliable, and potentially growing supply of natural gas from Australia to the rapidly growing market in China," commented Mr. Wei Liucheng, Chairman and CEO of CNOOC Limited.

The Company considers the offer to be strategically and economically attractive and complementary to its natural gas strategy. The Company will actively discuss terms of agreements with offering partners and strive to reach final and definitive agreements in a timely manner.