CNOOC Reports a 35.4% Growth in Oil & Gas Revenues

CNOOC Limited announced its annual results for the 12 months ended December 31, 2002. In the past year, the Company generated oil and gas revenues of Rmb 23.8 billion (USD 2.9 billion), an increase of Rmb 6.2 billion (USD 751 million), or 35.4%, from 2001. Significant revenue growth was mainly attributable to 32.6% year-over-year production increase, the highest in the company's history. Daily production in 2002 was 346,639 barrels of oil equivalent (boe). Net profit totaled Rmb 9.2 billion (USD 1.1 billion), an increase of Rmb 1.3 billion (USD 154 million), or 16.0% from 2001. The reported net profit exceeded the consensus forecast of Rmb 8.85 billion made by 22 research analysts surveyed by I/B/E/S. The Board has authorized a HKD 0.15/share (approximately Rmb 0.159/share) normal dividend and a HKD 0.15/share (approximately Rmb 0.159/share) special dividend.

"2002 was another spectacular year for CNOOC Limited. The Company had the highest production growth in its history and generated very strong earnings through production volume increases and well-controlled costs," said Wei Liucheng, Chairman and Chief Executive Officer.

In 2002, the Company achieved annual production of 126.5 million boe while maintaining its low costs structure. The Company's all-in production costs offshore China was US$8.48 per boe. There were also thirteen discoveries and three new fields came on stream. Through successful drilling and opportunistic acquisitions, the Company achieved a reserve replacement ratio of 281%. As of December 31, 2002, net oil and gas reserves totaled approximately 2.0 billion boe. "We have met and exceeded our targets for annual production, reserve replacement, production costs, and exploration and development programs," commented Zhou Shouwei, President of the Company.

CNOOC Limited also made three sensible and opportunistic acquisitions during the year. "These acquisitions brought the company with immediate value enhancing production increase and material reserve additions, and rendered reserve visibility to our natural gas business, especially the leadership position in China's coastal LNG market," commented Mark Qiu, Chief Financial Officer and Senior Vice President, "Prudent and well executed acquisitions resulted in quality asset growth and low cost entry into additional hydrocarbon-rich basins. We have been leveraging on the Company's financial strength and flexibility to maximize value for shareholders and other stakeholders."

"We will continue to focus on lengthening Company's growth horizon and positioning the Company for an even brighter future," added Wei Liucheng, "I am convinced that we are on the right track to create a premier E&P platform with an offshore China focus. I would like our shareholders and other stakeholders to benefit from the Company's continuous growth in many years to come."

The Board of Directors has approved a year-end dividend of HKD 30 cents per share, a normal dividend of HKD 15 cents and a special dividend of HKD 15 cents per share, which together with the interim dividend of HKD 11 cents per share, will give a total of HKD 41 cents per share. "The special dividend is an extra-bonus to our shareholders due to a strong realized oil price and the excellent financial performance. E&P investors should be able to share the upside of commodity prices movement," commented Mark Qiu.

CNOOC Limited has interests in 45 crude oil and gas properties in four major producing areas: Bohai Bay, Western South China Sea, Eastern South China Sea and East China Sea. The Company is a major oil and gas company in China with slightly over 1,000 employees. The Company has become the largest offshore producer in Indonesia after the acquisition of Indonesian assets.