CNOOC To Focus On Increasing Production in 2003

"Our 2003 core strategy remains unchanged. We will continue to focus on growing production, adding reserves through exploration and opportunistic acquisitions, producing solid returns and developing natural gas business" said Mr. Wei Liucheng, Chairman and Chief Executive Officer.

CNOOC's target net production volume in 2003 is 134 - 138 million BOE (barrels of oil equivalent), another healthy increase after a historic production growth in 2002. Two major development projects are scheduled to be on stream in year 2003. The Indonesian assets are expected to continue to deliver.

In addition to active exploration efforts offshore China, the Company is also looking for opportunities to add reserves from acquisitions. Acquisitions of equity interests in NWS and Tangguh projects will provide visible natural gas reserves additions to CNOOC in 2003.

Natural gas (including LNG) will continue to be one of CNOOC's core business priorities and is the key for the Company's future growth. Acquisitions of equity interests in NWS and Tangguh projects, which will supply China's two pioneer LNG terminals, can certainly enhance CNOOC's dominance in coastal China gas market.

The Company's total exploration and development capital expenditure in 2003 is estimated to be US$1,400 ¨C 1,550 million. PSC partners are expected to invest additional US$150 - 250 million in exploration offshore China.

CNOOC will continue to optimize financial performance by maintaining cost competitiveness and financial prudence, improving capital structure and increasing returns. "In 2003, we will take advantages of favorable market conditions to improve the Company's capital structure and increase returns," commented Mark Qiu, Chief Financial Officer and Senior Vice President.

In 2003, a total of 12 development projects are expected to be under active construction. "We expect a stable growth in year 2003. We have a full investment pipeline to support profitable growth and maintain the sustainability of our business," commented Mr. Zhou Shouwei, President of the Company.