SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 6-K
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REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 OF
THE SECURITIES EXCHANGE ACT OF 1934
For March 16, 2004
CNOOC Limited
(Translation of registrant's name into English)
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65th Floor
Bank of China Tower
One Garden Road
Central, Hong Kong
(Address of principal executive offices)
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(Indicate by check mark whether the registrant files or will file annual
reports under cover Form 20-F or Form 40-F)
Form 20-F X Form 40-F
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(Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of
1934.)
Yes No X
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(If "Yes" is marked, indicate below the file number assigned to the registrant
in connection with Rule 12g3-2(b): N/A.)
CNOOC 2003 ANNUAL RESULTS ANNOUNCEMENT
CNOOC Limited (CHINESE CHARACTERS)
(Incorporated in Hong Kong with limited liability)
2003 Annual Results Announcement
CHAIRMAN'S STATEMENT
Thanks to the trust and support of our shareholders, the Company has developed
rapidly since its listing three years ago, achieving enviable results. In
October 2003, our former Chairman and Chief Executive Officer Mr Wei Liucheng
left the Company to assume a senior government position. I wish to take this
opportunity to express our sincere gratitude to Mr Wei for his invaluable
contributions to the Company.
I also wish to pledge that I will continue to work with the senior management
to pursue the established goals of the Company: to maintain our development
strategies, to spearhead the Company's stable, long-term growth and to
maximize shareholders' value.
2003 was a politically and economically turbulent year. The operating
environment of the industry was presented with many challenges, however, due
to strong oil demand and persistent strength in international oil prices, the
Company has continued to achieve satisfactory results. Through our exploration
efforts, the Company achieved significant increases for our oil and gas
reserves. The Company's net profit for the year also reached a new historical
height of RMB11,535.5 million, due to the continued start-up of new projects,
stable production growth and prudent cost management. Return on equity hit
26.4%.
Due to the Company's prudent financial policies and strong financial position,
Moody's has upgraded the Company's credit rating from Baa1 to A2, creating a
basis for the Company's low cost funding in the future.
During the year under review, the Company capitalized on the low interest rate
environment of the international market and successfully issued a tranche of
USD200 million 10 year bonds and a tranche of USD300 million 30 year bonds,
improving the Company's capital structure.
Looking forward, the Company's core strategies will remain unchanged in the
future. Working with the management, we will continue to maintain production
and reserves growth, further develop our natural gas business, maintain
prudent financial management policies and competitive cost structure and
ensure the Company's long-term growth in order to maximize shareholder's
returns.
Being an upstream E&P company, it is very important for us to find more oil
and gas reserves through exploration activities. As such, the Company intends
to apply the latest technology offshore China, with Bohai Bay and various high
potential areas being the Company's major exploration focus. We will continue
to strengthen cooperation with foreign oil companies offshore China and
advance exploration into deep-water area. While we focus our reserve and
production growth offshore China, we will continue to seize new opportunities
to acquire quality oil and gas assets overseas.
With a large base of proved undeveloped reserves, the Company has already
lined-up a pipeline of development projects. We expect this pipeline of
development projects will continue to bring stable production growth for the
Company beyond 2005.
Natural gas (including LNG) will become a major driving force for the
Company's growth. In 2003, the significant gas discoveries of Panyu 30-1 and
Panyu 34-1 in South China Sea, have laid a solid foundation for the supply of
1
natural gas to the booming Pearl River Delta region. We will also capitalize
on the vast opportunities arising from our parent company's LNG projects in
China's South East coastal areas. Following the acquisition of interests in
the Indonesian Tangguh Projects and the Northwest Shelf Project in Australia,
we have also signed an agreement with the participants of the Australia Gorgon
project to explore the opportunity to cooperate in the project. In 2003,
offshore China's second largest gas field, Dongfang 1-1 (phase I), commenced
production early than expected, and is already supplying gas to Hainan
Province. This marks a new milestone for the Company's natural gas strategy.
In comparison with our peers, we continue to have an edge in terms of our cost
structure. Despite this, we will continue to strengthen our management and
improve operating efficiencies. We will also look for breakthroughs in certain
crucial technological fields. We expect to reduce our cost through management
and technological innovation so as to maintain our competitive cost structure.
The Company will continue to maintain its prudent financial policies and
investment strategies to maintain the Company's competitive cost structure as
well as its healthy financial position.
People are our most important assets. Strengthening our human resources
development and creating a highly efficient executive team has been a major
focus of the management over the years. In 2003, we successfully carried out
reforms in employment and remuneration systems, This will help advocate
friendly competition, encourage creativity, and provide a solid platform for
the intellectual development of each and every one. As a people-oriented and
caring company, we have tried to create a conducive environment whereby
everyone's hard work and creativity can be fully developed and realized and
that the operating goals of the Company can be best achieved.
A desire to protect and improve health, safety and the environment has always
been among the Company's established objectives. During 2003, we were able to
maintain our excellent record in these areas with zero records in both "number
of days away" and casualty rates. During the SARS epidemic, the Company's
management placed great emphasis on combating the disease with appropriate and
effective measures. Our comprehensive health, safety and environment systems
helped to successfully control the spread of the disease with not a single
case of infection recorded among our staff and their families. We have been
encouraged to continue and improve on our established HSE policies.
The Company has built up quality assets, a tremendous team of staff and
excellent development potential. However, we should not be complacent. While
maintaining our growth record, we will embark on a new development platform,
accelerate the pace of our development, increase our earning potential and
improve the quality of our projects in order to create even better value for
our shareholders. These are the operational concepts which the management and
I are committed to implement and we shall work hard to realize such goals.
In appreciation of the support of our shareholders, the Board of Directors has
recommended a final dividend of HK$0.12 and a special dividend of HK$0.18 in
view of the year's remarkable performance, and a healthy financial position.
During 2003, we distributed a total of HK$0.62 to our shareholders in the form
of interim, final and special dividends.
After more than a century of fabulous growth, the world petroleum industry is
experiencing some far-reaching changes. As one bright spot in the world
economy, China has continued to maintain its growth momentum, triggering an
increase in the global demand for oil. According to statistics, China is now
the second largest country in terms of oil consumption, offering ample
development opportunities for oil production companies in China.
2003 was a year of change and remarkable performance for CNOOC Ltd. The year
2004 continues to present challenges, but we are confident that, through
implementation of our established strategies, we will be able to fulfill the
Company's stated objectives, creating healthy returns and increased value for
our shareholders, and harmonizing the development of our shareholders, staff
and the community.
FU CHENGYU
Chairman and Chief Executive Executives
Hong Kong, 15 March 2004
2
CONSOLIDATED INCOME STATEMENT (AUDITED)
Year ended 31 December 2003
(All amounts expressed in thousands of Renminbi, except per share data)
Notes 2003 2002
REVENUE
Oil and gas sales 5 28,116,831 23,779,294
Marketing revenues 6 12,398,661 2,377,469
Other income 434,781 217,052
---------------- ----------------
40,950,273 26,373,815
---------------- ----------------
EXPENSES
Operating expenses (4,512,809) (3,775,334)
Production taxes (1,238,598) (1,023,049)
Exploration expenses (848,072) (1,318,323)
Depreciation, depletion and amortisation (4,642,753) (4,019,532)
Dismantlement (167,326) (126,139)
Crude oil and product purchases 6 (12,295,238) (2,326,338)
Selling and administrative expenses 8 (1,212,523) (1,006,540)
Other (350,232) (30,866)
---------------- ----------------
(25,267,551) (13,626,121)
---------------- ----------------
PROFIT FROM OPERATING ACTIVITIES 15,682,722 12,747,694
Interest income 183,576 147,870
Interest expense 9 (354,940) (294,792)
Exchange gain/(loss), net (6,746) (113,814)
Short-term investment income 123,483 193,277
Share of profit of an associate 220,263 165,387
Non-operating income/(expenses), net 314,968 (71,379)
---------------- ----------------
PROFIT BEFORE TAX 7 16,163,326 12,774,243
Tax 10 (4,627,836) (3,541,416)
---------------- ----------------
NET PROFIT 11,535,490 9,232,827
================ ================
DIVIDENDS
- Interim 1,220,132 958,314
- Special interim 1,568,741 -
- Proposed final 1,050,460 1,307,408
- Proposed special final 1,575,691 1,307,408
---------------- ----------------
5,415,024 3,573,130
================ ================
EARNINGS PER SHARE
- Basic 11 RMB1.40 RMB1.12
---------------- ----------------
- Diluted 11 RMB1.40 RMB1.12
================ ================
DIVIDEND PER SHARE
- Interim RMB0.15 RMB0.12
- Special interim RMB0.19 N/A
- Proposed final RMB0.13 RMB0.16
- Proposed special final RMB0.19 RMB0.16
Notes:
(All amounts expressed in thousands of Renminbi, except otherwise stated)
3
1. CORPORATE INFORMATION
CNOOC Limited (the "Company") was incorporated in the Hong Kong Special
Administrative Region ("Hong Kong"), the People's Republic of China (the
"PRC") on 20 August 1999 to hold the interests in certain entities
thereby creating a group comprising the Company and its
subsidiaries.During the year, the Company and its subsidiaries
(hereinafter collectively referred to as the "Group") were principally
engaged in the exploration, development, production and sale of crude
oil, natural gas and other petroleum.
In the opinion of the directors, the ultimate holding company is China
National Offshore Oil Corporation ("CNOOC"), a company established in the
PRC.
2. PRINCIPAL ACCOUNTING POLICIES
The audited financial statements of the Group are prepared in conformity
with generally accepted accounting principles in Hong Kong ("Hong Kong
GAAP").
3. ACQUISITIONS
(i) During the year, the Company acquired from British Petroleum
("BP") an equivalent of 12.5% stake in the proposed joint venture
known as the Tangguh LNG Project of Indonesia ("Tangguh LNG
Project") for approximately US$275 million through the acquisition
of certain interests in production sharing contracts ("PSCs")
which was effective as at 1 January 2003 (the "Tangguh
Acquisition"). The Tangguh LNG Project comprises three PSC areas:
the Berau PSC, the Muturi PSC and the Wiriagar PSC. The Tangguh
LNG Project partners have signed a conditional 25-year Liquefied
Natural Gas ("LNG") Supply Contract (the "LNG Supply Contract") to
provide up to 2.6 million tonnes per annum of LNG to the Fujian
LNG terminal project in the PRC, beginning in 2007. The Company
completed the Tangguh Acquisition on 8 February 2003. CNOOC has an
equity interest in the Fujian LNG terminal project.
In addition, a repurchase agreement (the "Repurchase Agreement")
was entered into whereby put options and call options are granted
to the Company and the sellers, respectively, to sell or to
repurchase the interests in the above-mentioned PSCs. The options
are exercisable if:
(1) the LNG Supply Contract is terminated due to the
non-satisfaction of the conditions precedent to the LNG
Supply Contract on or before 31 December 2004; or
(2) the LNG Supply Contract is otherwise legally ineffective on
or before 31 December 2004.
The exercise prices of the options are determined based on
the original consideration paid plus adjustments stipulated
in the Repurchase Agreement.
The consideration paid of approximately US$275 million
(equivalent to approximately RMB2,276,578,000) and subsequent
cash calls paid are included as a prepayment in property,
plant and equipment as at 31 December 2003.
(ii) In addition, the Company increased its interest in Qinhuangdao
32-6, a PSC oilfield in Bohai Bay, from 51% to 75.5% by acquiring
the 24.5% interest of BP China Exploration and Production Company
for a cash consideration of US$150 million, plus working capital
adjustments .The acquisition was completed in July 2003.
(iii) The Company also acquired the remaining 49% interest in Liuhua
11-1, a PSC oilfield in South China Sea, from BP China Exploration
and Production Company and Kerr-McGee China Petroleum Limited, for
a total cash consideration of US$40 million, plus working capital
adjustments. The acquisition was completed in July 2003.
(iv) Pursuant to a conditional agreement dated 27 August 2001, the
Group finalised the agreement to acquire a
4
30% interest in certain oil and gas fields in the Xihu Trough in
the East China Sea of the PRC from CNOOC. The total consideration
of US$45 million was paid in 2001 and the transaction was
completed in August 2003.
(v) During the year, the Company invested RMB450 million in CNOOC
Finance Corporate Limited ("CNOOC Finance"), a share treasury
operation of its parent company, CNOOC and other affiliated group
companies. The Company's investment represents 31.8% share of the
registered capital of CNOOC Finance. The consideration was paid in
full on 31 December 2003.
4. PRODUCTION SHARING CONTRACTS
PRC
For production sharing contracts in the PRC, the foreign parties to the
contracts ("foreign partners") are normally required to bear all
exploration costs during the exploration period and such exploration
costs can be recovered according to the production sharing formula after
commercial discoveries are made and production begins.
After the initial exploration stage, the development and operating costs
are funded by the Group and the foreign partners according to their
respective participating interest.
The Group has the option to take a participating interest as mutually
agreed by both participants in a production sharing contract and may
exercise such option after the foreign partners have independently
undertaken all the exploration risks and costs and made viable commercial
discoveries.
After the Group exercises its option to take a participating interest in
a production sharing contract, the Group accounts for the oil and gas
properties using the "proportional method" under which the Group
recognizes its share of development costs, revenues and expenses from
such operations based on its participating interest in the production
sharing contract. The Group does not account for either the exploration
costs incurred by its foreign partners or the foreign partners' share of
development costs and revenues and expenses from such operations.
Part of the Group's annual gross production of oil and gas in the PRC is
distributed to the PRC government as settlement of royalties which are
payable pursuant to a sliding scale. The Group and the foreign partners
also pay a production tax to the tax bureau at a pre-determined rate. In
addition, there is a pre-agreed portion of oil and gas designated to
recover all exploration costs, development costs, operating costs
incurred and related interests according to the participating interests
between the Group and the foreign partners. Any remaining oil after the
foregoing priority allocations is first distributed to the PRC government
as government share oil on a pre-determined ratio pursuant to a sliding
scale, and then distributed to the Group and the foreign partners based
on their respective participating interests. As the government share is
not included in the Group's interest in the annual production, the net
sales of the Group do not include the sales revenue of the government
share oil.
The foreign partners have the right either to take possession of their
allocable remainder oil for sale in the international market, or to
negotiate with the Group to sell their allocable remainder oil to the
Group for resale in the PRC market.
Overseas
The Group and the other partners to the production sharing contracts in
Indonesia are required to bear all exploration, development and operating
costs according to their respective participating interests. Exploration,
development and operating costs which qualify for recovery can be
recovered according to the production sharing formula after commercial
discoveries are made and production begins.
The Group's net interest in the production sharing contracts in Indonesia
consists of its participating interest in the properties covered under
the relevant production sharing contracts, less oil and gas distributed
to the Indonesian government and the domestic market obligation.
5
5. OIL AND GAS SALES
2003 2002
RMB'000 RMB'000
Gross sales 30,556,967 26,086,646
Royalties (478,454) (464,113)
PRC government share oil (1,961,682) (1,843,239)
---------------- ----------------
28,116,831 23,779,294
================ ================
6. MARKETING PROFIT
2003 2002
RMB'000 RMB'000
Marketing revenues 12,398,661 2,377,469
Crude oil and product purchases (12,295,238) (2,326,338)
---------------- ----------------
103,423 51,131
================ ================
7. PROFIT BEFORE TAX
The Group's profit before tax is arrived at after (crediting)/charging:
2003 2002
RMB'000 RMB'000
Crediting:
Interest income on bank deposits (183,576) (147,870)
Interest income on investments (28,752) (52,739)
Dividend income on investments (46,140) (76,633)
Realised gains on investments (27,088) (26,940)
Unrealised gains on investments (21,503) (36,965)
---------------- ----------------
Short term investment income (123,483) (193,277)
---------------- ----------------
Charging:
Auditors' remuneration 5,790 4,500
Staff costs
-Wages, salaries and allowances 393,165 390,376
-Labour costs paid to contractors 542,292 660,029
-Pension scheme contributions and termination benefits 95,147 53,392
Depreciation, depletion and amortisation 4,643,364 4,032,970
Less: Amount included in inventories (611) (13,438)
---------------- ----------------
4,642,753 4,019,532
---------------- ----------------
Operating lease rentals 72,708 54,157
Loss on disposal of property, plant and equipment 21 85,202
Repairs and maintenance 608,603 521,561
Research and development costs 165,793 167,354
6
8. SELLING AND ADMINISTRATIVE EXPENSES
2003 2002
RMB'000 RMB'000
Salary and staff benefits 393,165 390,376
Utility and office expenses 90,801 100,502
Transportation and entertainment 74,218 64,319
Rentals and maintenance 107,310 75,738
Management fee 219,771 151,860
Selling expenses 30,686 38,548
Provision against inventories 8,745 -
Other 287,827 185,197
---------------- ----------------
1,212,523 1,006,540
================ ================
9. INTEREST EXPENSE
2003 2002
RMB'000 RMB'000
Interest on bank loans which are:
- wholly repayable within five years 81,539 177,156
- not wholly repayable within five years - -
Interest on long term guaranteed notes 391,005 215,028
Other borrowing costs 34,933 12,426
---------------- ----------------
Total interest 507,477 404,610
Less: Amount capitalised in property, plant and equipment (245,783) (187,714)
---------------- ----------------
261,694 216,896
Other finance costs:
Increase in discounted amount of provisions arising from
the passage of time 93,246 77,896
---------------- ----------------
354,940 294,792
================ ================
The interest rates used for interest capitalisation represented the cost of capital from raising the
related borrowings and varied from 4.1% to 9.15% per annum for the year ended 31 December 2003.
10. TAX
2003 2002
RMB'000 RMB'000
Overseas income taxes
- Current 654,988 406,493
- Deferred (179,134) 26,094
PRC enterprise income tax
- Current 3,623,157 2,786,938
- Deferred 528,825 321,891
---------------- ----------------
Total tax charge for the year 4,627,836 3,541,416
================ ================
7
11. EARNINGS PER SHARE
The calculations of basic and diluted earnings per share are based on:
2003 2002
RMB'000 RMB'000
Earnings
Net profit used in the basic and diluted earnings per share calculations 11,535,490 9,232,827
2003 2002
Number of shares
Weighted average number of ordinary shares in issue during the year used
in basic earnings per share calculation 8,214,165,655 8,214,165,655
Weighted average number of ordinary shares assumed issued at no
consideration on deemed exercise of all share options outstanding
during the year 7,902,164 5,119,729
------------------ -----------------
Weighted average number of ordinary shares used in diluted earnings per
share calculation 8,222,067,819 8,219,285,384
================== =================
Management Discussion & Analysis
Outlook
The global economy has finally bottomed out in 2003 and is on the way to
recovery. We expect that the pick up will be strengthened in 2004 and the
global economy will return to a positive trajectory. However, fragility exists
in developed economies and the risk of terrorist attacks in the world are both
reasons for our prudent expectations for global economic development in 2004.
Although the international oil price remained strong in 2003, the trend is
dependent on the fundamentals of the global economy. Political and economic
events will definitely impact the oil price, resulting in adverse effects on
the Company's development. The Company primarily operates in countries in Asia
Pacific, such as China and Indonesia. The political stability and economic
dynamism within China, where most of the Company's operations are, will
provide the necessary opportunities for the Company to gear up its
development. Meanwhile, the management will continue to remain highly alert to
the Company's business environment, and will face the difficulties on the
grounds of prudence and progressiveness.
In 2003, we have overcome the SARS epidemic, successfully dealt with the
challenges faced in exploration and development, continued to maintain a
stable growth trend and achieved satisfactory results. In 2004, we will
maintain our advantages of being a low-cost company and focus on production
enhancement based on what we have achieved in the past few years. We will
continue to implement our prudent financial policy, look for opportunistic oil
and gas acquisitions and further expand the Company's natural gas business in
order to deliver satisfactory return for our investors.
In 2004, six oil and gas fields in coastal China will commence production,
allowing the Company to achieve its pre-set production target.
Given that the Company's balanced asset portfolios, progressive and
enthusiastic management team, prudent financial policies and healthy financial
position have already laid a solid foundation for our production and
development, the management expresses optimism over the business prospects in
2004.
Consolidated Net Profit
Our consolidated net income after tax was RMB11,535.5 million (US$1,393.6
million) in 2003, an increase of RMB2,302.7 million (US$278.2 million), or
24.9% from RMB9,232.8 million in 2002.
8
Revenue
Our oil and gas sales for the year 2003 were RMB28,116.8 million (US$3,396.9
million), an increase of RMB4,337.5 million (US$524.0 million), or 18.2% from
RMB23,779.3 million in 2002. The increase primarily reflects the rise in
global crude oil prices and our production level. In 2003, as a result of the
commencement of production in our new oil and gas properties as well as our
successful acquisition of a portion of interests in Liuhua 11-1 and
Qinhuangdao 32-6, our production volume increased compared to 2002. The
average net production volume per day was 356,729 barrels in 2003, compared to
346,639 barrels in 2002, an increase of 3%. With the higher-than-expected oil
price this year, our Indonesian oil and gas operations achieved a
lower-than-expected net production volume based on the Indonesian oil
production sharing contract, which affected the production volume growth. Our
crude oil sales prices are determined in accordance with international crude
oil prices. The international oil price in 2003 rose sharply compared with
2002. The average realised price for our crude oil was US$28.11 per barrel in
2003, an increase of US$3.76, or 15.4% from US$24.35 per barrel in 2002. The
average realised price of natural gas was US$2.87 per thousand cubic feet in
2003, a decrease of US$0.11, or 3.7%, from US$2.98 per thousand cubic feet in
2002. The decrease was due to the lower natural gas price of our Indonesian
properties and the Dongfang gas field which commenced production recently.
In 2003, our net marketing profit, which were derived from marketing revenue
less purchase cost of crude oil and oil products, were RMB103.4 million
(US$12.5 million), an increase of RMB52.3 million (US$6.3 million), or 102.3%,
from RMB51.1 million in 2002. Since we are one of the three companies that
have the right to sell crude oil in China, upon request by our partners, we
can purchase the oil of these partners for sale in China. However, our ability
to sell oil in China depends on our foreign partners, and, therefore, we
cannot control the amount of crude oil that we are able to sell for a specific
period.
Our other income, reported on a net basis, was derived from our other income
less corresponding costs. In 2003, the total other income was RMB84.5 million
(US$10.2 million), a decrease of RMB101.7 million (US$12.3 million) from
RMB186.2 million in 2002, resulting primarily from the decrease in project
management fees.
Expenses
Operating expenses
Our operating expenses were RMB4,512.8 million (US$545.2 million) in 2003, an
increase of RMB737.5 million (US$89.1 million), or 19.5%, from RMB3,775.3
million in 2002. The increase primarily resulted from operating expenses in
connection with the Indonesian oil and gas properties, which were based on a
full year's consolidated accounts as compared to the nine months contributions
in 2002, and the commencement of operations in new properties. Operating
expenses were RMB35.1 (US$4.25) per BOE in 2003, which were higher than
operating expenses of RMB30.3 (US$3.66) per BOE in 2002. The increase was, on
one hand, attributable to the higher operating expenses on a unit of
production basis for the Indonesian oil and gas properties, resulting from the
higher-than-expected oil price and lower net production, and its increased
weighting in the Company on an annual production basis. On the other hand, the
natural diminishing in old oilfield production and the higher maintenance cost
also resulted in the slight increase in unit cost.
Production taxes
Our production taxes for the year 2003 were RMB1,238.6 million (US$149.6
million), an increase of 21.1%, or RMB215.6 million (US$26.0 million) from
RMB1.023.0 million in 2002. The increase was due to increase in oil and gas
sales in 2003.
Exploration costs
Our exploration costs for the year 2003 were RMB848.1 million (US$102.5
million), a decrease of RMB470.2 million (US$56.8 million), or 35.7%, from
RMB1,318.3 million in 2002. The decrease primarily resulted from a higher
successful rate of exploration and drilling activities.
9
Depreciation, depletion and amortisation expenses
Our depreciation, depletion and amortisation expenses for 2003 were RMB4,642.8
million (US$560.9 million), an increase of RMB623.3 million (US$75.3 million),
or 15.5%, from RMB4,019.5 million in 2002. On a unit of production basis,
depreciation, depletion and amortisation expenses for the year 2003 were
RMB36.2 (US$4.37) per BOE, an increase of 12.0% compared to RMB32.3 (US$3.90)
per BOE in 2002. The primary reason for the increase was the higher weighting
for Indonesian oil and gas properties, which had a higher amortization cost,
and the increase in amortization cost resulted from the reserve adjustment of
some old fields.
Dismantlement
Our dismantlement costs for the year 2003 was RMB167.3 million (US$20.2
million), an increase of RMB41.2 million (US$5.0 million) from RMB126.1
million in 2002. The increase was primarily due to the increased dismantlement
costs resulting from the commencement of production at new oil and gas
properties. On a unit production basis, our dismantlement costs were RMB1.3
(US$0.16) per BOE, an increase of 30.0% compared to RMB1.0 (US$0.12) per BOE
in 2002. The increase was primarily due to an upward revision of the estimated
dismantlement costs and the increase in dismantlement costs resulting from the
reserve adjustment of some old fields.
Selling and administrative expenses
Our selling and administrative expenses for the year 2003 were RMB1,212.5
million (US$146.5 million), an increase of RMB206.0 million (US$24.9 million),
or 20.5%, from RMB1,006.5 million in 2002. The primary reason for the increase
was the selling and administrative expenses incurred in connection with the
Indonesian oil and gas properties. On a unit of production basis, selling and
administrative expenses were RMB9.4 (US$1.14) per BOE in 2003, an increase of
16.0% from RMB8.1 (US$0.98) per BOE in 2002. The increase was primarily
attributable to the higher selling and administrative expenses on a unit of
production basis for the Indonesian oil and gas properties, resulting from the
higher-than-expected oil price and lower net production, and its increased
weighting in the Company on an annual production basis. Our selling and
administrative expenses in China in 2003 were RMB6.6 (US$0.8) per BOE, in line
with the previous year.
Net interest expense/income
Our net interest expense for 2003 was RMB171.4 million (US$20.7 million), in
line with the net interest expense of RMB146.9 million in 2002.
Exchange Gain/Loss, net
Our exchange loss for 2003 was RMB6.7 million (US$0.8 million), a decrease of
RMB107.1 million (US$12.9 million) when compared with an exchange loss of
RMB113.8 million in 2002. The loss in 2002 was mainly attributable to exchange
rate fluctuations related to our yen-denominated loans. Since we have prepaid
a large portion of yen-denominated loans on 27 December 2002, and the
outstanding amount of our yen-denominated loans is hedged using foreign
currency swaps, we do not expect similar exchange gains or losses for that
portion. Therefore, the exchange gain or loss this year was primarily
attributable to the exchange gain generated from day-to-day operating
activities.
Short-term Investment Income
Our short-term investment income for 2003 was RMB123.5 million (US$14.9
million), a decrease of RMB69.8 million (US$8.4 million) or 36.1% from
RMB193.3 million in 2002. The decrease was primarily due to a decline in
short-term investment return in 2003.
Share of Profit of an Associate
Our share of profit of an associate for the year 2003 was RMB220.3 million
(US$26.6 million), an increase of RMB54.9 million (US$6.6 million), or 33.2%,
from RMB165.4 million in 2002. This item reflected our share of profit
generated by Shanghai Petroleum and Natural Gas Company Limited , our
associated company. This company
10
experienced an increase of profit in 2003 resulting from an increase in output
and oil prices.
Non-operating Income/Expenses, Net
Our net non-operating income for the year 2003 was RMB315.0 million (US$38.1
million), compared to non-operating expense for the year 2002 of RMB71.4
million. In 2003, the net non-operating income was mainly due to the tax
refund from re-investment.
Tax
Our taxation for the year 2003 was RMB4,627.8 million (US$559.1 million), an
increase of RMB1,086.4 million (US$131.3 million) or 30.7% from RMB3,541.4
million in 2002. The primary reason for the increase was the increase in
profit before tax. The effective tax rate for 2003 was 28.6%, slightly higher
than the effective rate of 27.7% in 2002.
Cash Generated from Operations
Net cash generated from operations in 2003 amounted to RMB17,818.7million
(US$2,152.8 million), an increase of RMB3,076.7 million (US$371.7million), or
20.9%, from RMB14,742.0 million in 2002.
The increase in cash was mainly due to an increase in profit before tax of
RMB3,389.1 million (US$409.5 million), an increase in depreciation, depletion
and amortisation expenses of RMB623.2 million (US$75.3 million), an increase
in dismantlement costs of RMB41.2 million (US$5.0 million), provision for
inventory obsolescence of RMB8.7 million (US$1.1 million), and a decrease in
short-term investment income and amortisation of discount of long-term
guaranteed notes of RMB75.0 million (US$9.1 million), a increase of net
interest expense of RMB24.4 million (US$3.0 million).
The increase of cash flow was partially offset by an increase of income tax of
RMB 668.6 million (US$ 80.8 million), our share of income of an associate of
RMB54.9 million (US$6.6 million) growth, a decrease of unpaid exchange loss of
RMB107.1 million (US$12.9 million), and a decrease in loss on disposal and
write off of property, plant and equipment of RMB398.0 million (US$48.1
million).
In addition, operating cash flow was increased due to the decrease of working
capital, mainly due to the increase in current liabilities from operating
activities of RMB935.0 million (US$113.0 million), and a simultaneous decrease
in current assets from operating activities excluding cash and bank balances
of RMB800.7 million (US$96.7 million).
Capital Expenditures and Investments
The cash outflow from investing activities in 2003 was RMB 9,512.6 million
(US$1,149.3 million), a decrease of RMB 2,211.0 million ( US$ 267.1 million)
from RMB 11,723.6 million in 2002.
In line with our use of the successful efforts method of accounting, total
capital expenditures and investments primarily include successful exploration
and development expenditures. Total capital expenditures were RMB12,372.5
million (US$1,494.8 million) in 2003, an increase of RMB805.6 million (US$97.3
million), or 7.0%, from RMB11,566.9 million in 2002. Capital expenditures in
2003 mainly comprised RMB524.0 million (US$63.3 million) for capitalised
exploration activities, RMB7,747.6 million (US$936.0 million) for development
activities, and RMB4,100.9 million (US$495.5 million) for acquiring oil and
gas properties (Tangguh, acquisition of Qinhuangdao 32-6 and Liuhua 11-1
interests). Our development expenditures in 2003 related principally to the
development of Bozhong 25-1, Bonan, Weizhou 12-1 North, Dongfang 1-1,
Caofeidian and Panyu 4-2/5-1, Huizhou 19-2/19-3 oil and gas fields.
We increased our investment in associated company of RMB 450.0 million (US$
54.4 million). This cash outflow was partially offset by a decrease in time
deposits with maturities over three months and short-term investment, which
were RMB2,367.0 million (US$286.0 million) and RMB942.9 million US$113.9
million) at the year end respectively.
11
Financing Activities
We had net cash outflows from financing activities of RMB1,744.9 million
(US$210.8 million) in 2003, resulting primarily from our repayment of RMB336.9
million (US$40.7 million) in bank loans, dividend distributions of RMB5,403.7
million (US$652.8 million). This cash outflow was partly offset by net cash
inflow of RMB3,995.8 million (US$482.8 million) resulting from our May 2003
offering of US$200 million in 4.125%10-year guaranteed notes and US$300
million in 5.5% 30-year guaranteed notes.
The following table summarises the maturities of our long-term debt
outstanding as of 31 December 2003.
Debt maturities principal only
Original currency Total Total
-------------------------------------- RMB US$
Due by 31 December US$ JPY RMB equivalents equivalents
(In millions, except percentages)
2004 - 271.5 - 21.0 2.5
2005-2007 100.0 814.4 - 890.6 107.6
2008-2009 - - - - -
2010 and beyond 1,000.0 - - 8,276.7 1,000.0
Total 1,100.0 1,085.9 - 9,188.3 1,110.1
Percentage of total debt 99.1% 0.9% - 100.0% 100.0%
On 31 December 2003, our gearing ratio was 57.3%. Gearing ratio is calculated
as liabilities/equity.
Market Risks
Our market risk exposures primarily consists of fluctuations in oil and gas
prices, exchange rates and interest rates.
Commodity price risk:
We are exposed to fluctuations in prices of crude oil and natural gas, which
are commodities whose prices are determined by reference to international
market prices. International oil and gas prices are volatile and this
volatility has a significant effect on our net sales and net income.
Currency risk:
Our foreign exchange exposure gives rise to market risk associated with
exchange rate movements.
Substantially all of our oil and gas sales are denominated in Renminbi and
U.S. dollars. In the last ten years, the PRC government's policy of
maintaining a stable exchange rate and China's ample foreign reserves have
contributed to the stability of the Renminbi. Recently, there has been wide
expectation in the international market that the Chinese government will
deregulate the Renminbi exchange rate. However, the Chinese government has not
yet determined if or when the exchange rate will be deregulated. Currently,
the Renminbi exchange rate remains stable.
In case of any Renminbi exchange rate deregulation going forward, our existing
assets denominated in U.S. dollars will face book conversion risks from the
appreciation of Renminbi.
As we prepaid the majority of our yen-denominated loans in 2002, the balance
of our yen-denominated loans as of the end of 2003 was only 1.09 billion yen.
Currently, since this outstanding amount of our yen loans is hedged against
foreign currency swaps, we do not expect any exchange risks relating to
Japanese yen in the future.
12
Interest rate risk:
As of the end of 2003, all our foreign currency debts are at fixed interest
rates. To balance our overall debt interest structure and to reduce our
financial cost benefiting from the low interest rate market environment,
during the period from July to September 2003, we arranged for a plain vanilla
interest rate swap with three financial institutions by swapping the new
offering of US$200 million 10-year global guaranteed notes in 2003 into
floating interest rate. After the swap, we received fixed interest rate of
4.125% and paid floating interest rate at LIBOR -0.771% (weighted average
interest rate). During the first interest swap in November 2003, LIBOR was
only 1.2% approximately. Through the present swap, we managed to make interest
savings of US$2.02 million.
Based on the series of robust economic data announced by the US in late 2003,
we believed that the US economy had entered into a rapid growth period, with
interest rate taking an upward trend. In January 2004, we captured the
opportunity of significant drop of US treasury yield with the US's
announcement of the poor performance of certain economic data, and terminated
the above interest swap arrangement with net gains of US$10 million. This, in
addition to the interest savings of US$2.02 million for the year 2003,
resulted in cumulative net gains of US$12.02 million, representing the
reduction of interest rate of the US$200 million guaranteed notes from 4.125%
to 3.53%.
Significant Investments and Material Acquisitions
Our acquisition of interest in the Tangguh Project from BP was completed. With
effect from 1 January 2003, CNOOC became a partner with 12.5% interest in the
Tangguh Project.
On 15 May 2003, we entered into a purchase agreement with the partners of the
North West Shelf natural gas venture ("North West Shelf Venture") for the
acquisition of output and reserves interest of its upstream oilfields. CNOOC
Ltd will assume a 25% interest in the China LNG Joint Venture ("CLNG JV"), a
joint venture to be established within the North West Shelf Venture. The
acquisition price for this project was US$348 million. If the ultimate gas
supply of the Guangdong LNG project increases, the interest acquired by the
Company will increase and the consideration paid by the Company to acquire
such interests will also increase correspondingly. This acquisition project is
not yet completed.
On 24 October 2003, we entered into a new agreement with the venture
participants of the Gorgon project in Australia based on the MOU previously
entered into with them. According to that agreement, after the signing and
completion of the formal contract, CNOOC Ltd will acquire certain interest in
the Gorgon natural gas project.
The Company expects to fund the above two acquisitions principally from its
operating cashflow and funds raised from its issue of bonds.
SUPPLEMENTAL INFORMATION FOR NORTH AMERICAN SHAREHOLDERS
(All amounts expressed in thousands of Renminbi, except for share data)
The effects on net profit and equity of the above significant differences
between Hong Kong GAAP and US GAAP are summarized below:
Net Profit
2003 2002
RMB'000 RMB'000
(Restated)
As reported under Hong Kong GAAP 11,535,490 9,232,827
Impact of U.S GAAP adjustments:
- Reversal of additional depreciation, depletion and amortisation
charges arising from the revaluation surplus on land and buildings 9,156 9,156
- Equity accounting for the results of CNOOC Finance 30,913 10,663
- Unrealised holding gains from available-for-sale investments in
marketable securities (21,503) (36,965)
13
- Realised holding gains from available-for-sale marketable securities 27,088 26,940
- Additional dismantlement based on unit-of-production method - (197,079)
- Impact of income tax - 59,124
- Recognition of stock compensation cost (37,747) (19,144)
------------------ -----------------
Income before cumulative effect of change in accounting policy 11,543,397 9,085,522
Cumulative effect of change in accounting policy for dismantlement
liabilities 436,112 -
------------------ -----------------
Net profit under US GAAP 11,979,509 9,085,522
================== =================
Net profit per share under US GAAP
- Basic
Before cumulative effect of change in accounting policy for
dismantlement RMB1.41 RMB 1.11
Cumulative effect of change in accounting policy for dismantlement
liabilities RMB 0.05 -
------------------ -----------------
RMB1.46 RMB 1.11
================== =================
- Diluted
Before cumulative effect of change in accounting policy for
dismantlement liabilities RMB1.41 RMB 1.11
Cumulative effect of change in accounting policy for dismantlement
liabilities RMB 0.05 -
------------------ -----------------
RMB1.46 RMB 1.11
========================================
Net equity
2003 2002
RMB'000
RMB'000 (Restated)
As reported under Hong Kong GAAP 46,732,392 40,568,488
Impact of US GAAP adjustments:
- Reversal of revaluation surplus on land and buildings (274,671) (274,671)
- Reversal of additional accumulated depreciation, depletion and
amortisation arising from the revaluation surplus on land and
buildings 35,051 25,895
- Equity accounting for the results of CNOOC Finance 41,576 10,663
- Contribution from CNOOC in respect of CNOOC Finance - (450,000)
- Dividend distribution made by CNOOC Finance to CNOOC (41,576) -
- Cumulative adjustment for provision for dismantlement - (436,112)
------------------ -----------------
Net equity under US GAAP 46,492,772 39,444,263
================== =================
There are no significant GAAP differences that affect classifications within
the balance sheet or income statement but do not affect net income or
shareholders' equity.
(i) Revaluation of land and buildings
The Group revalued certain land and buildings on 31 August 1999 and 31
December 2000 and the related revaluation surplus was recorded on the
respective dates. Under Hong Kong GAAP, revaluation of property, plant
and equipment is permitted and depreciation, depletion and amortisation
are based on the revalued amount. Additional depreciation arising from
the revaluation for the year ended 31 December 2003 was approximately
RMB9,156,000 (2002: RMB9,156,000).Under US GAAP, property, plant and
equipment are required to be stated at cost. Accordingly, no additional
depreciation, depletion and amortisation from the revaluation is
recognised under US GAAP.
14
(ii) Short term investments
According to Hong Kong GAAP, available-for-sale investments in
marketable securities are measured at fair value and related unrealised
holding gains and losses are included in the current period's earnings.
According to US GAAP, such investments are also measured at fair value
and classified in accordance with Statement of Financial Accounting
Standards ("SFAS") No.115.Under US GAAP, related unrealised gains and
losses on available-for-sale securities are excluded from the current
period's earnings and included in other comprehensive income.
(iii) Impairment of long-lived assets
Under Hong Kong GAAP, impairment charges are recognised when a
long-lived asset's carrying amount exceeds the higher of an asset's net
selling price and value in use, which incorporates discounting the
asset's estimated future cash flows.
Under US GAAP, long-lived assets are assessed for possible impairment
in accordance with SFAS No.144, "Accounting for the impairment or
disposal of long-lived assets". SFAS No. 144 requires the Group to (a)
recognise an impairment loss only if the carrying amount of a
long-lived asset is not recoverable from its undiscounted cash flows
and (b) measure an impairment loss as the difference between the
carrying amount and fair value of the asset. SFAS No. 144 requires that
a long-lived asset to be abandoned, exchanged for a similar productive
asset, or distributed to owners in a spin-off be considered held and
used until it is disposed of.
SFAS No. 144 also requires the Group to assess the need for an
impairment of capitalised costs of proved oil and gas properties and
the costs of wells and related equipment and facilities on a
property-by-property basis. If an impairment is indicated based on
undiscounted expected future cash flows, then an impairment is
recognised to the extent that net capitalised costs exceed the
estimated fair value of the property. Fair value of the property is
estimated by the Group using the present value of future cash flows.
The impairment was determined based on the difference between the
carrying value of the assets and the present value of future cash
flows. It is reasonably possible that a change in reserve or price
estimates could occur in the near term and adversely impact
management's estimate of future cash flows and consequently the
carrying value of properties.
For the year ended 31 December 2003, there were no impairment losses
recognised under Hong Kong GAAP and US GAAP.
(iv) Stock compensation schemes
At 31 December 2003, the Company has three stock-based employee
compensation plans. Prior to 2003, the Company accounted for those
plans under the recognition and measurement provisions of APB Opinion
No. 25, "Accounting for Stock Issued to Employees", and related
interpretations. Since certain of the options granted under those plans
had an exercise price below the market value of the underlying common
stock on the date of grant, stock-based employee compensation costs of
Rmb2,755,000 and Rmb5,632,000 for year ended 31 December 2001 and 2002,
respectively, were reflected in previously reported results. During
2003, the Company adopted the fair value recognition provisions of FASB
Statement No. 123, "Accounting for Stock-Based Compensation", for
stock-based employee compensation. All prior periods presented have
been restated to reflect the compensation cost that would have been
recognized had the recognition provisions of Statement 123 been applied
to all awards granted to employees after 1 January 1995.
Weighted average fair value of the options at the grant dates for
awards under the schemes was RMB3.40 per share which was estimated
using the Black-Scholes model with the following assumptions: dividend
yield of 2.0%, an expected life of five years; expected volatility of
44%; and risk-free interest rates of 5.25%.Weighted average exercise
price of the stock options was HK$7.80 per share.
(v) Provision for dismantlement
Hong Kong GAAP requires the provision of dismantlement to be recorded
for a present obligation whether that obligation is legal or
constructive. The associated cost is capitalized and the liability is
discounted and accretion expense is recognised using the
credit-adjusted risk-free interest rate in effect when the liability is
initially
15
recognised.
On 15 August 2001, SFAS No. 143 "Accounting for asset retirement
obligation" was released and is effective for the fiscal years
beginning after 15 June 2002.SFAS No. 143 requires that the fair value
of a liability for an asset retirement obligation be recognised in the
period in which it is incurred if a reasonable estimate of fair value
can be made.The associated asset retirement costs are capitalised as
part of the carrying amount of the long-lived assets.Further, under
SFAS No. 143, the liability is discounted and accretion expense is
recognised using the credit-adjusted risk-free interest rate in effect
when the liability is initially recognised.
The company adopted SFAS No. 143 on 1 January 2003, which resulted in
an increase in net property, plant and equipment of RMB863,093,000, an
increase in the provision for dismantlement of RMB240,077,000, an
increase in retained earnings of RMB436,112,000 and an increase in
deferred income tax liabilities of RMB186,904,000 to recognise the
cumulative effect of retrospectively applying the new accounting
standard.
(vi) Acquisition of CNOOC Finance
Under HK GAAP, the Company adopted the purchase method to account for
the acquisition of 31.8% equity interest in CNOOC Finance in December
2003. Under the purchase method, the acquired results are included in
the consolidated results of operations of the Company from the date of
the acquisition.
As the Company and CNOOC Finance are under common control of CNOOC,
under US GAAP, the acquisition is considered to be a transfer of
businesses under common control and the acquired assets and liabilities
are accounted at historical cost in a manner similar to the pooling of
interests method. Accordingly, the consolidated financial statements
for all periods presented have been retroactively restated as if the
current structure and operations had been in existence since inception.
The cash consideration paid by the Company is treated as an equity
transaction in the year of the acquisition for US GAAP purpose.
Employees
We had 2,447 employees as at 31 December 2003.
To ensure the smooth implementation of our overseas strategy, we have
established an international human resources system to attract and retain our
management and technical talents.
We have adopted three stock option schemes for our senior management since 4
February 2001, and granted options under each of the Schemes.
In 2003, in line with our development strategy, we carried out a systematic
and in-depth recruitment and remuneration system reform focusing on our
overall and future developments. To ensure the reform achievements, we further
enhanced the establishment and improvement of our internal human resources
system. During the year, we established a simple but effective employee
performance evaluation system emphasizing on the integration of the
individual's development objectives and the Company's operating targets, and
which was linked up with international employee performance evaluation
system.
Through the establishment and promotion of individual development schemes and
systems, we managed to organize and implement various specialized and
comprehensive management training courses. During the year, a total of 325
training courses in various areas were carried out, which were attended by
more than 6,980 participants.
At the same time, the Company attached great emphasis to the advanced
management training of senior management officers and management technique for
mid-level managers.
DIVIDENDS
The Board of Directors recommends the payment of a final dividend of HK$0.12
per share for the year ended 31 December 2003 and a special cash dividend of
HK$0.18 per share to shareholders whose names appear on the Register of
Members of the Company on 23 April 2004. These, together with the interim
dividend of HK$0.14 per share and the special interim dividend of HK$0.18 per
share, give a total of HK$0.62 per share for the year. The
16
proposed dividends are expected to be paid on 4 May 2004 following the
approval at the Annual General Meeting of the Company.
Audit committee
The audit committee of the Board of Directors of the Company has reviewed the
annual results of the Company for the year ended 31 December 2003.
PURCHASE, DISPOSAL AND REDEMPTION OF THE COMPANY'S LISTED SECURITIES
The Company and its subsidiaries did not purchase, dispose of or redeem any of
the listed securities of the Company during the year.
CLOSURE OF REGISTER OF MEMBERS
The Register of Members will be closed from 16 April 2004 to 23 April 2004
(both dates inclusive). In order to qualify for the dividends, all transfers,
accompanied by the relevant share certificates, must be lodged with the
Company's share registrar, Hong Kong Registrars Limited, at Rooms 1712-1716,
17th Floor, Hopewell Centre, 183 Queen's Road East, Wanchai, Hong Kong, not
later than 4:00 p.m. on 15 April 2004.
FORWARD-LOOKING STATEMENTS
Certain statements contained in this announcement may be viewed as
"forward-looking statements" within the meaning of Section 27A of the U.S.
Securities Act of 1933, as amended, and Section 21E of the U.S. Securities
Exchange Act of 1934, as amended. Such forward-looking statements involve
known and unknown risks, uncertainties and other factors, which may cause the
actual performance, financial condition or results or operations of the
Company to be materially different from any future performance, financial
condition or results of operations implied by such forward-looking statements.
Further information regarding these risks, uncertainties and other factors is
included in the Company's most recent Annual Report in Form 20-F filed with
the U.S. Securities and Exchange Commission (the "SEC") and the Company's
other filings with the SEC.
COMPLIANCE WITH CODE OF BEST PRACTICE
The Company has complied with the Code of Best Practice as set out by the Hong
Kong Stock Exchange in Appendix 14 to the Listing Rules throughout the year
ended 31 December 2003, except that the Non-executive Directors were not
appointed for a specific term, but are subject to retirement by rotation and
re-election at the Company's annual general meeting in accordance with the
Company's articles of association.PUBLICATION OF ANNUAL RESULTS ON THE
INTERNET WEBSITE OF THE STOCK EXCHANGE OF HONG KONG LIMITEDAll the information
required by paragraphs 45(1) to 45(3) of Appendix 16 to the Rules Governing
the Listing of Securities on The Stock Exchange of Hong Kong Limited will be
published on the website of the Stock Exchange in due course.
End
Notes to Editors:
CNOOC LIMITED - BACKGROUND
Incorporated in Hong Kong in August 1999, CNOOC Limited (SEHK: 883; NYSE: CEO)
is the dominant producer of crude oil and natural gas offshore China. CNOOC
Limited is also one of the largest independent crude oil and gas exploration
and production companies in the world.
As of December 31, 2003, its net proved reserves were 2.1 billion
barrels-of-oil equivalents and its net
17
production averaged 356,729 BOE per day.
CNOOC Limited is currently engaged in exploration, development and production
in 4 major areas offshore China, which covers Bohai Bay, Western South China
Sea, Eastern South China Sea and East China Sea. The Company is also one of
the largest offshore crude producer in Indonesia. The Company has about 2,447
employees.
CNOOC LIMITED - RELATIONSHIP WITH ITS PARENT COMPANY
CNOOC Limited, incorporated in Hong Kong, is a 70.6% held subsidiary of China
National Offshore Oil Corporation ("CNOOC"). CNOOC Limited is the sole vehicle
through which CNOOC carries out oil and gas exploration, development,
production and selling activities offshore China and internationally.
CNOOC, the parent company, is involved in the administrative, research, and
services functions for the China offshore petroleum industry as well as other
mid- or downstream petroleum projects.
*** *** ***
This press release contains statements that are not historical facts,
including statements about beliefs and expectations of the directors of CNOOC
Limited (the Company). These forward-looking statements are based on current
plans, estimates and projections, and therefore you should not place undue
reliance on them. Forward-looking statements speak only as of the date they
are made, and the directors of the Company undertake no obligation to update
publicly any of them in light of new information or future events.
Forward-looking statements involve inherent risks and uncertainties. You are
cautioned that a number of important factors could cause actual results to
differ materially from those contained in any forward-looking statement. Such
factors include, but are not limited to, changes in PRC economic, political
and social conditions as well as government policies.
*** *** ***
For further inquiries, please contact:
-------------------------------------------------------------------------------
Mr. Xiao Zongwei Ms Anne Lui/Ms. Maggie Chan/Ms. Carol Chan
CNOOC Limited Ketchum Newscan Public Relations
Tel: +86 10 8452 1646 Tel: 852-3141-8016/852-3141-8063/852-3141-8091
Fax: +86 10 8452 1441 Fax: 852-2510-8199
E-mail: xiaozw@cnooc.com.cn E-mail: anne.lui@knprhk.com
------------------- -------------------
carol.chan@knprhk.com
---------------------
maggie.chan@knprhk.com
----------------------
-------------------------------------------------------------------------------
18
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be issued on its behalf
by the undersigned, thereunto duly authorized.
CNOOC Limited
By: /s/ Cao Yunshi
-----------------------------
Name: Cao Yunshi
Title: Company Secretary
Dated: March 16, 2004
19