CNOOC Contracts Drillship Energy Searcher

- CNOOC Contracts Drillship Energy Searcher

Monday, September 12, 2011
Northern Offshore, Ltd.

Northern Offshore, Ltd. on Sunday announced that CNOOC Palung Aru Ltd. ("CNOOC") has awarded a contract for the drillship Energy Searcher. The contract is for one well offshore Indonesia and has an expected duration of from 60-90 days, including travel time from and back to Singapore. Commencement is expected during October 2011. The estimated contract value for the program is from US$18-25 million, including mobilization fees.

Gary W. Casswell, Northern Offshore's president and CEO, said, "We are pleased with CNOOC's award of this contract for the Energy Searcher, and look forward to a successful drilling program. We remain optimistic of increasing activity in the region and are ready to get the rig back to work following its major shipyard and equipment refurbishment project."

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CNOOC Okays ConocoPhillips' Plans for Depressurizing and Sealing

- CNOOC Okays ConocoPhillips' Plans for Depressurizing and Sealing

Monday, September 12, 2011
CNOOC Limited

CNOOC Limited (the "Company") announced that State Oceanic Administration of People's Republic of China ("SOA", according to its decision on September 2, 2011, required ConocoPhillips China Inc ("COPC"), the Operator of Penglai 19-3 oil field to, on the condition of imposing no further environmental damage, develop an effective plan for fluid discharge and depressurization ("Depressurization Plan") in order to ensure safety of the field, protect the reservoir as well as reduce reservoir pressure. In addition, the Operator is required to develop a drilling plan for sealing seep sources ("Sealing Plan"). Those Plans should receive approval from China National Offshore Oil Corporation ("CNOOC").

On Sunday, CNOOC announced that it has approved such Depressurization Plan and Sealing Plan.

According to the Depressurization Plan, a number of wells in the field will be restarted to discharge the fluid from the reservoir and to reduce the pressure. The Plan will be implemented step by step. The general principle for depressurization established in the Plan is to discharge fluid and reduce pressure from the wells located at the high pressure zones or near the natural fault.

According to the Sealing Plan, the Operator will carry out the drilling activities and other related operations on six wells in the area of Platform B and C, as additional measures for sealing seep sources.

CNOOC requires the Operator to strengthen its monitoring of the dynamic reservoir condition, in particular the reservoir pressure during the process of fluid discharge and depressurization. Such monitoring results need to be reported to CNOOC in a timely manner. For the Sealing Plan, CNOOC also requires the Operator to ensure the safety of relevant operations.

As the non-operator, the Company will continue to assist COPC to ensure the implementation of those Plans.

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CNOOC Sees 51% Increase in YOY Profit

- CNOOC Sees 51% Increase in YOY Profit

Wednesday, August 24, 2011
CNOOC Ltd.

CNOOC announced its interim results as of June 30, 2011.

The Company's total net oil and gas production amounted to 168.7 million barrels of oil equivalent (BOE), representing an increase of 12.9% year-on-year (YOY). This is mainly attributed to: firstly, the new oilfields and development wells which continued to introduce new momentum to the Company's production; secondly, production contributions from newly acquired projects since 2010; and thirdly, the composite decline rate of producing oil and gas fields which has remained low through comprehensive adjustment measures.

Meanwhile, international oil prices fluctuated sharply, although generally, it sustained at a high level. Having benefited from this, the Company's realized oil price reached US $108.16/barrel, 40.8% higher than that of the same period last year. The Company's realized gas price was US $4.92/mcf, increasing 15.5% YOY.

Due to stable oil and gas production growth, as well as higher realized prices, the Company's oil and gas sales revenue for the first half of the year surged 45.0% YOY to RMB97.03 billion. Despite escalating prices of oilfield services and raw materials, the Company's production cost has remained at a low level mainly due to cost savings and efficiency enhancement. The seasonality factor has also lowered the production cost. During the first half of 2011, our operating cost was down 3.8% from 2010 average of US $7.28 to US $7.00 per barrel. The Company recorded net profit of RMB39.34 billion ($5.06B), representing a significant increase of 51.4% YOY.

In the area of exploration, the Company made 6 new discoveries and 18 successful appraisal wells. The first commercial discovery of Wushi 17-2 was made in Wushi Sag in the Western South China Sea. In terms of rolling exploration, two new discoveries Qinhuangdao 33-2 and Qinhuangdao 33-3 were made following the discovery of Qinhuangdao 33-1 South last year in the Shijiutuo uplift area.

Since the beginning of the year, the Company has further expanded its investments in shale oil and gas play and oil sands of North America, through the acquisition of a 33.3% interest in Chesapeake's Niobrara project and the acquisition of OPTI Canada Inc. In addition, we successfully acquired a one-third interest held by Tullow Oil in each of Exploration Areas 1, 2 and 3A in Uganda.

The Company has kept a good track record on health, safety and environmental protection (HSE) since established more than a decade ago. However, the oil spill incident of Penglai 19-3, an oilfield operated under production sharing contract in Bohai Bay, posed HSE challenges to the Company. This incident has made certain impact on the marine environment. Being a responsible energy company, we will continue to urge and assist ConocoPhillips China Inc., the operator of the Penglai 19-3 oilfield, to complete the cleanup work in a timely manner and to minimize the impact on the marine environment.

In addition, due to the combination of the progress of acquisition project and the impact from the oil spill incident, we reset the Company's annual production target at 331-341 million BOE.

Mr. Wang Yilin, Chairman of the Company said, "The outstanding results for the first half of 2011 demonstrated our operating and management capabilities. At the same time, we faced a challenge posed by the oil spill incident occurred at Penglai 19-3 oilfield and we felt deeply sorry about it. The Company has already started performing inspection on the major facilities, equipments and production operations of all our oilfields, and reinforcing our risk management measures, to avoid similar incidents happening in the future."

Mr. Yang Hua, Chief Executive Officer of the Company commented, "Since the beginning of the year, the Company has increased its investments in unconventional energy through the acquisition of shale oil and gas and oil sands projects, building an important resource base for the future. Year 2011 is a year of steady growth for the Company. In the second half of the year, the Company will continue to progress steadily to lay a solid foundation for the Company's long term development."

In the first half of the year, the Company's basic earnings per share reached RMB0.88. In order to share our outstanding results with shareholders, the board has declared an interim dividend of HK $ 0.25 per share (tax inclusive).

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CNOOC: Additional OBM Identified at Bohai Bay

- CNOOC: Additional OBM Identified at Bohai Bay

Friday, August 12, 2011
CNOOC Ltd.

CNOOC announced that, according to the latest statement by ConocoPhillips China Inc (COPC), the Operator of Penglai 19-3 oil field, more oil-based drilling mud (OBM) on the sea floor was identified. This addition brings the revised volume of OBM on the seabed to 400 cubic meters (2,500 barrels). The volume of oil released to the sea surface remains at 114 cubic meters (717 barrels). The total volume of fluids spilled from the incident amounts to 514 cubic meters (3,217 barrels) of oil and OBM and exceeds 240 cubic meters (1,500 barrels) as originally estimated by the Operator.

After the incident occurred, COPC has deployed substantial resources for oil recovery and cleanup work. According to COPC, its response personnel has recovered 269 cubic meters (1,700 barrels) of OBM from the seabed near the Penglai 19-3 C platform, and approximately 70 cubic meters (440 barrels) of oil/water mix from the sea surface to date.

As the non-operator, the Company has also fully utilized its resources and personnel to assist COPC on shoreline protection activities with 111 people walking approximately 3,289 kilometers of shoreline and 19 vehicles patrolled approximately 48,645 kilometers of shoreline along the Bohai Bay area by August 11.

In order to meet the requirements set by the State Oceanic Administration, the Company will continue to urge and assist COPC to stop the leaks and complete the cleanup work by the end of August, so as to minimize the impact of the oil spill incident on the marine environment.

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Production Resumed at CNOOC's BoZhong Oilfileds

- Production Resumed at CNOOC's BoZhong Oilfileds

Monday, July 25, 2011
CNOOC Ltd.

CNOOC announced that, BoZhong 28-2 South (BZ 28-2S) oilfields which suspended operation in this April due to a malfunction occurred on the Single Point Mooring System, has restarted production.

Currently the operation in BZ 28-2S oilfields is running smoothly. The production capacity of the oil fields has recovered to the level before the incident, reaching approximately 39,000 barrels of oil per day.

In April 2011, due to rough sea conditions, a malfunction occurred on the single point mooring system of the Floating, Production, Storage and Offloading (FPSO) vessel Haiyangshiyou 102 serving in BZ 28-2S oilfields. Operations were immediately shut down at the oilfields.

After the incident, the Company worked out a recovery plan of the oilfields and implemented it in a timely manner.

BZ 28-2S oilfields, located in Bohai Bay, are composed of four fields, including BZ 28-2 S, BZ 28-2 SN, BZ 34-1N and BZ 29-4. The Company owns 100% interest of the oilfields and acts as the operator.

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CNOOC Extends Oil Sands Presence with $2.1B Deal

- CNOOC Extends Oil Sands Presence with $2.1B Deal

Wednesday, July 20, 2011
CNOOC Ltd.

CNOOC has entered into an Arrangement Agreement to acquire OPTI Canada Inc ("OPTI"). The aggregate value of the consideration of the transaction is approximately US $2.1 billion, which includes aggregate cash consideration of US $1.25 billion payable to the holders of the OPTI shares (US $34 million) and the Second Lien Noteholders (US $1.216 billion). In addition, due to a change in control of OPTI as a result of the transaction, OPTI will be required to offer to repay the holders of its outstanding First Lien Notes (US $825 million in principal amount) pursuant to the indentures governing the First Lien Notes. The transaction will be effected by way of a plan of arrangement through concurrent proceedings under the Companies' Creditors Arrangement Act (Canada) and the Canada Business Corporations Act.

The proposed transaction must be approved by the Second Lien Noteholders at a special meeting that is expected to be held in September,2011. Noteholders representing approximately 55.2% of the principal amount of the Second Lien Notes have executed support agreements pursuant to which, among other things, they have agreed to vote in favour of the transaction.

The proposed transaction is also subject to certain terms and conditions, including, among other things, applicable government and regulatory approvals by the relevant authorities in Canada and the People's Republic of China, and Canadian court approval. The transaction is expected to be completed in the fourth quarter of 2011. Upon completion of the transaction, OPTI will become an indirect wholly-owned subsidiary of the Company, and all of the Second Lien Notes will be transferred or assigned, directly or indirectly, to a subsidiary of the Company. All existing options, warrants and other rights to purchase OPTI shares will be cancelled.

The principal asset of OPTI consists of a 35% working interest in the Long Lake and three other project areas located in the Athabasca region of northeastern Alberta. Long Lake project includes steam assisted gravity drainage ("SAGD") Operation and an Upgrader. Nexen Inc. ("Nexen"), a Canadian-based global energy company, holds the remaining 65% and is the sole operator. The Long Lake SAGD Operation is expected to have through-put rates of approximately 72,000 barrels per day of bitumen at full production. It is anticipated that the Long Lake Upgrader will ultimately produce approximately 58,500 barrels per day of products, primarily Premium Sweet Crude (PSCTM).

As disclosed in OPTI's disclosure documents filed with securities regulatory authorities in Canada, OPTI's working interest share, before royalties, of raw bitumen reserves and resources on its oil sands leases is estimated to be 195 million barrels of proved reserves, 534 million barrels of probable reserves, 1,100 million barrels of contingent resources and 335 million barrels of prospective resources. These reserves and resources are estimated to be sufficient to support approximately 430,000 barrels per day (150,000 barrels per day net to OPTI) of bitumen production.

Mr. Yang Hua, Chief Executive Officer of the Company stated, "The transaction strengthens our Canadian presence in the oil sands business. We believe that upside potential of the assets will facilitate local energy supply and our production growth in the long term.

"We are pleased to expand our presence in the oil sands business after our successful investment in MEG. We believe that the upside potential of the acquired assets will benefit the shareholders of CNOOC Limited."

Mr. Li Fanrong, President of the Company said, "We look forward to working with our new partner Nexen, to optimize value from the Long Lake Project and the three other jointly owned oil sands leases."

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Total Takes CNOOC Stake Offshore Qatar

- Total Takes CNOOC Stake Offshore Qatar

Monday, May 30, 2011
Total S.A.

Total announced that it has signed an agreement with CNOOC Middle East (Qatar) Limited, a wholly-owned subsidiary of CNOOC International Limited, to acquire a 25% interest in Qatar's Block BC (pre-Khuff) exploration license. CNOOC Middle East (Qatar) Limited will continue to be the operator with a 75% interest.

Located 130 kilometers east of the Qatari coast, the offshore block covers an area of 5,649 square kilometers, with water depths ranging from 15 to 35 meters.

The Block BC Exploration and Production Sharing Agreement (EPSA), entered into with the Government of the State of Qatar, stipulates that 2D and 3D seismic surveys will be conducted and that at least three exploration wells will be drilled by 2014.

Commenting on Total's participation in the Block BC EPSA, His Excellency Dr. Mohammed Bin Saleh AI-Sada, Qatar's Minister of Energy and Industry said, "We would like to welcome our long time partner, Total, into the Block BC EPSA, and we wish them and CNOOC all success with the exploration activities, which we believe are always enhanced when quality companies such as Total and CNOOC join efforts."

"CNOOC thanks QP for its professional support during the execution since EPSA endorsement. Block BC is as one of its most important projects with QP, in addition to other cooperation," said Xiang Hua, Country Manager to Qatar. "We also welcome Total to join CNOOC in exploring Block BC in Pre-Khuff formation. We believe the partnership is combining strengths from both and will eventually lead to win-win operation towards commercial discovery."

"The farm-in transaction is another step forward in the partnerships forged with Qatar Petroleum and CNOOC, and reflects Total’s commitment to expanding its exploration and production operations in promising geological basins," stated Christophe de Margerie, Chairman and Chief Executive Officer of Total.

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CNOOC: Confident Will Achieve Full Year Output Target this Year

- CNOOC: Confident Will Achieve Full Year Output Target this Year

Friday, May 27, 2011
Dow Jones Newswires
by Yvonne Lee

CNOOC expects to meet its full-year output target despite the shutdown of four oil fields in the Bohai Bay last month due to a malfunction, Chief Executive Yang Hua said Friday.

Cnooc said in March it planned to raise crude-oil and natural gas output in 2011, targeting production of 355 million-365 million barrels of oil equivalent, up 8%-11% from 328.8 million barrels in 2010.

The company is also targeting oil and gas output growth at a compound annual rate of 6%-10% between 2011 and 2015.

In April, four of Cnooc's oil fields with a total production capacity of about 39,000 barrels a day were shut down following a malfunction at a vessel in the Bohai Bay caused by rough sea conditions.

Yang also said he expects the company to drill four to six deep-water wells in the South China Sea this year, and added that the company plans to accelerate oil exploration in deep-water wells over the next four years.

Copyright (c) 2011 Dow Jones & Company, Inc.

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CNOOC Ramps Up Production in 1Q11

CNOOC Ramps Up Production in 1Q11

Wednesday, April 27, 2011

CNOOC Ltd.

CNOOC announced its results for the first quarter of 2011.

During the period, the Company achieved a total net production of 85.2 million barrels of oil equivalent (BOE), representing an increase of 26.6% year-on-year (YoY).

For the first quarter of 2011, the Company made five new discoveries and successfully drilled six appraisal wells offshore China. Within the period, Jinzhou 25-1 project offshore China commenced production successfully. Other major projects were progressing as planned.

In the first quarter of 2011, the Company purchased a 33.3% undivided interest in Chesapeake's Niobrara project. In addition, the Company and Tullow Oil entered into agreements for the acquisition of its one-third interests in each of Exploration Areas 1, 2 and 3A in Uganda. The transaction is expected to be completed in the first half of 2011.

Benefiting from increased oil and gas production and higher realized prices, the total unaudited revenue of the Company amounted to approximately RMB48.51 billion for the first quarter of 2011, representing a significant increase of 59.1% YoY. During the period, the Company's average realized oil price rose 32.7% YoY to US $99.98 per barrel. The Company's average realized gas price was US $4.81 per thousand cubic feet, up 8.6% YoY.

For the first quarter of 2011, the Company's capital expenditure reached approximately RMB6.40 billion, representing an increase of 10.3% YoY.

Mr. Yang Hua, Chief Executive Officer of the Company commented, "We have recorded excellent first quarter results driven by our efficient operation and higher realized oil prices. Meanwhile, we have made great progress in overseas development, which will provide a strong support for our reserve and production growth in the future."

CNOOC: FPSO Malfunction Halts Oilfields in Bohai Bay

CNOOC: FPSO Malfunction Halts Oilfields in Bohai Bay

Friday, April 22, 2011
CNOOC Ltd.

CNOOC announced that a malfunction occurred on the single point mooring system of the Floating, Production, Storage and Offloading (FPSO) vessel Haiyangshiyou 102 serving in the Bohai Bay due to rough sea conditions. Operations were immediately shut down at the affected oilfields.

Till now, the Haiyangshiyou 102 FPSO has been safely secured and tugged to safe area. There were no injuries during the process and no oil spill was found. The Company is actively working on the recovery plan to resume production as early as possible.

The oilfields affected this time include Bozhong (BZ) 28-2 S, BZ 28-2 SN, BZ 34-1N and BZ 29-4. All of these four fields are owned and operated by the Company. The total production capacity was approximately 39,000 barrels per day.

The Company maintains appropriate insurance coverage of the operations related to the oilfields.

CNOOC Waves Goodbye to Board Chairman

CNOOC Waves Goodbye to Board Chairman

Friday, April 15, 2011
CNOOC Ltd.

CNOOC announced that Mr. Fu Chengyu has resigned as Chairman of the Board and non-executive director of the Company. Mr. Wang Yilin has been appointed as new Chairman of the Board and non-executive director of the Company. The aforementioned changes become effective from today.

Mr. Wang Yilin, the newly appointed Chairman of the Company commented, "With joint efforts of the Board, the management team and the entire staff, CNOOC Limited has grown into an outstanding company. In this new role, I will fulfill my duty with my best endeavor, to enhance the company's capability of value creation and sustainable growth. Meanwhile, on behalf the Board, I would like to thank Mr. Fu for his exceptional contribution to the development of CNOOC Limited."

Mr. Yang Hua, the Vice Chairman and CEO of the Company said, "Mr. Wang Yilin has abundant experiences in the oil and gas industry in China. With his leadership we will work more closely together to bring more value to our shareholders."

Tullow Sells Uganda Stake to Total, CNOOC for $2.9B

Tullow Sells Uganda Stake to Total, CNOOC for $2.9B

Wednesday, March 30, 2011
Tullow Oil plc

Tullow has signed Sale and Purchase Agreements (SPAs) with CNOOC and Total in respect of the sale of a one third interest to each party of the interests Tullow holds in Exploration Areas 1, 2 and 3A in Uganda. Tullow will retain a one third interest. The terms of the transactions include a total cash consideration payable to Tullow of US $2.9 billion.

With the signing of these SPAs, a key condition of the Memorandum of Understanding (MoU) agreed between Tullow, the Government of Uganda (GoU) and the Uganda Revenue Authority (URA) on March 15, 2011, has been satisfied. The next step is for Tullow to make certain tax related payments to the GoU, on receipt of which all relevant consents become final and the other provisions of the MoU become effective.

Under the MoU, Tullow and its new Partners, CNOOC and Total, have been granted new licenses over EA-1 and an onshore area of EA-3A and the partnership's rights to develop the Kingfisher discovery have been confirmed. A clear plan for the resolution of tax disputes on the various asset sales has been agreed by the GoU, the URA and Tullow.

Tullow and its Partners will now reactivate the significant program of exploration and appraisal drilling and progress their development plans for the basin which they will jointly present to the Government of Uganda for approval.

Commenting, Aidan Heavey, Chief Executive, said, "These agreements have secured the future of oil production in Uganda. Tullow, its partners and the Government of Uganda will now agree a development plan for the Lake Albert Rift Basin with a target of delivering production of at least 200,000 bopd and potentially much more as we continue to explore and appraise the basin. We are looking forward to working with CNOOC and Total, and continuing our strong relationship with the Government to bring the benefits of the oil to the people of Uganda."