CNOOC Cites Strong Production Growth, Anticipates Busy Schedule in '09

CNOOC has announced its business strategy and development plan for year 2009.

The total targeted net production of the Company in 2009 is 225-231 million barrels of oil equivalent (BOE) (with WTI at US $60.0/barrel), compared with the estimated net production of 194-196 million BOE (with WTI at US $100.1/barrel) for 2008.

During the year, ten new projects are expected to come on stream, eight of which are located in offshore China. In overseas, OML130 in Nigeria and Tangguh LNG project in Indonesia will start production this year. These new projects are major contributors to the production growth in 2009.

In 2009, the Company will further enhance its exploration efforts. The Company's exploration activities will still focus on offshore China. We plan to drill 80 plus wells and acquire over 30, 000 kilometers 2D seismic and 9,200 square kilometers 3D seismic data independently in offshore China and overseas. The Company expects to achieve a reserve replacement ratio (RRR) of over 100% in 2009 through the intensive exploration program.

The Company anticipates a busy schedule in the engineering, development and production sector in 2009, with over 20 development projects under construction.

Our capital expenditures will provide strong support to the growth in 2009 and for the next few years. In 2009, the Company's total capital expenditure is planned to reach US $ 6.76 billion, representing an increase of 19.0% year on year, in which US $4.38 billion is budgeted for development, US $1.11 billion for exploration and US $1.12 billion for production.

"With the high level of unit cost in the industry, the Company will continue to exercise its stringent cost control. And as always, we will also carry out the established strategies to maintain our profitability and create more value for our shareholders," Yang Hua, Executive Vice President and CFO of the Company commented.

Fu Chengyu, Chairman and Chief Executive Officer of the Company said, "Although there's a downward fluctuation of oil price in the second half of 2008, we kept our business at stable pace. We are confident in a continuing production and reserves growth in 2009. Next year, our exploration and development activities will be further strengthened to facilitate our sustainable development in the future."