CNOOC to Build LatAm Foothold with Bridas JV

CNOOC announced that the Company proposes to form a 50%/50% joint venture with Bridas Energy Holdings in Bridas Corporation for a consideration of approximately USD3.1 billion in cash. In this connection, CNOOC International Limited, a wholly owned subsidiary of the Company, entered into the relevant transaction documents with BEH on March 13, 2010. The JVCo is currently a wholly owned subsidiary of BEH and could have its name changed after transaction completion. The transaction will be funded from the internal resources of the Company.

Completion of this transaction is conditional on, amongst others, necessary government and regulatory approvals of People's Republic of China, and is expected to take place in the first half of 2010.

Upon completion of the transaction, the Company and BEH will each hold a 50% interest in Bridas, and will jointly make management decisions. Currently, Bridas, through its affiliates (including a 40% interest in Pan American Energy LLC), has oil and gas exploration and production activities in Argentina, Bolivia and Chile.

This transaction is aligned with the Company's growth strategy by expanding its reach into Latin America and establishes a foundation for future growth in the region and other countries.

Based on relevant 2009 statistics and on a proportionate basis, it is expected that, upon completion of the transaction, proven reserves and average daily production of the Company will be increased by 318 million barrels of oil equivalent and 46 thousand BOE respectively.

Chairman and Chief Executive Officer Mr. Fu Chengyu said, "BEH is one of the foremost companies in Argentina and a pioneer in the oil and gas industry. This joint venture is aligned with our philosophy of seeking partnerships to expand our global footprints. I trust this investment will bring value to our shareholders both in short term and long run."

Commenting on the joint venture, President Mr. Yang Hua said, "Bridas, with a world-class oil and gas asset portfolio, is a very good beachhead for us to enter Latin America. Through this transaction, we'll establish a fair presence in this region, which will further enable the Company's production and reserve growth in the future."