CNOOC Limited Reveals Long Term Strategy

CNOOC Limited announced its business strategy and development plan to achieve sustainable growth for years beyond 2005.

"Our core and winning strategies remain unchanged. This management will continue to focus on production and reserves growth, develop and expand natural gas business and maintain financial discipline to deliver satisfactory returns to shareholders", said Fu Chengyu, Chairman and Chief Executive Officer.

The Company has a target to achieve a 15% CAGR of production from 2000 to 2005. Its target net production volume is planned to grow at CAGR of 8-12% from 2006 to 2010, reaching 265-305 BOE (barrels of oil equivalent) by 2010. The company will also start several new exploration initiatives to capture the upside potential offshore China. Offshore China!/s shallow water area will remain to be the major area for reserves increase, as Bohai Bay is the key basin.

The Company's total estimated exploration and development capital expenditure will be approximately US$1.9 billion per year for years beyond 2005.

Thirteen major development projects are scheduled to be on stream between years 2004 and 2005. Overall, twenty-five to thirty new fields will be developed between years 2004 and 2008. "We expect a stable and sustainable growth in years beyond 2005. We have a full development pipeline and active exploration program to support this growth", said Zhou Shouwei, President of the Company.

Natural gas (including LNG) will be one of the Company's growth engines. The Company strives to maintain its dominance in supplying to the most attractive natural gas markets in China. CNOOC Limited will also seek to work together with its parent to develop gas-power business in coastal China to capture the unique China energy opportunity.

The Company will continue to keep its conservative financial practices and strict investment discipline, maintaining cost competitiveness and financial prudence. "Our return-driven financial management and dividend policy are designed to provide satisfactory returns to shareholders", commented Mark Qiu, Chief Financial Officer and Senior Vice President.