CNOOC LIMITED 中国海洋石油有限公司 Mid-Year Review Analyst Briefing. August 19, 2010

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1 CNOOC LIMITED 中国海洋石油有限公司 2010 Mid-Year Review Analyst Briefing August 19, 2010

2 This presentation includes forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995, including statements regarding expected future events, business prospectus or financial results. The words believe, intend, expect, anticipate, project, estimate, plan, predict and similar expressions are intended to identify such forward-looking statements. These statements are based on assumptions and analyses made by us in light of our experience and our perception of historical trends, current conditions and expected future developments, as well as other factors we believe are appropriate under the circumstances. However, whether actual results and developments will meet our expectations and predictions depend on a number of risks and uncertainties which could cause our actual results, performance and financial condition to differ materially from our expectations, including those associated with fluctuations in crude oil and natural gas prices, our exploration or development activities, our capital expenditure requirements, our business strategy, the highly competitive nature of the oil and natural gas industries, our foreign operations, environmental liabilities and compliance requirements, and economic and political conditions in the People s Republic of China. For a description of these and other risks and uncertainties, please see the documents we file from time to time with the United States Securities and Exchange Commission, including our 2009 Annual Report on Form 20-F filed on April 23, Consequently, all of the forward-looking statements made in this presentation are qualified by these cautionary statements. We cannot assure that the actual results or developments anticipated by us will be realized or, even if substantially realized, that they will have the expected effect on us, our business or our operations. 2

3 Agenda Overview Solid Operating Results Strong Financial Performance Outlook 3

4 Overview

5 Mid-Year Summary Successful exploration program 9 new discoveries, 7 successful appraisals and breakthrough in new areas Strong production growth Net production of mm boe, up 40.8% YoY 4 new projects started production Robust financial performance Net profit of RMB billion, an increase of 109.6% YoY Strict control of production cost Opex down 15.3% from 2009 All-in cost was US$23.85/boe Continuous high dividend payments Interim dividend of HK$0.21 per share HSE performance continues to lead the industry 5

6 Highlights 1H H 2009 % Change Oil and gas sales (RMB mm) 67,639 32, % Net profit (RMB mm) 25,988 12, % EPS (RMB) Dividends per share (HK$) Net production (mmboe) % Realized oil price (US$/bbl) % Realized gas price (US$/mcf) % 6

7 Solid Operating Results

8 Robust Production Growth 300 (mm boe) H H US$75.0 Oil Gas Given the strong production performance in 1H 2010, we are confident to achieve 2010 production target 8

9 Net Production Leading Peers 1H 2010 Production & Change (YoY) mm boe Production Change % CNOOC OXY APC DVN APA CNQ ECA EOG TLM 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% -5% -10% Source: Company disclosure 9

Production by Areas Net Production 1H 2010 1H 2009 %Change Production Summary Crude Oil & Liquids

0 24.4-13.7% East China Sea 0.007 0.006 2.5% Overseas 17.0 7.6 122.1% Subtotal 120.3 87.3 37.

8% Eastern South China Sea 23.2 6.4 263.5% East China Sea 1.0 1.1-6.3% Overseas 63.6 40.7 56.

8% Malacca Strait PSC 0 100 200 300 km Indonesia Australia Nigeria Guangzhou Western South China Sea Hong

10 Production by Areas Net Production 1H H 2009 %Change Production Summary Crude Oil & Liquids (mmbbls) Bohai Bay % Western South China Sea % Eastern South China Sea % East China Sea % Overseas % Subtotal % Natural Gas (bcf) Bohai Bay % Western South China Sea % Eastern South China Sea % East China Sea % Overseas % Subtotal % Total Production (mmboe) % Malacca Strait PSC km Indonesia Australia Nigeria Guangzhou Western South China Sea Hong Kong Beijing Qingdao Fuzhou Xiamen Bohai Bay Shanghai China Eastern South China Sea Philippines East China Sea Korea Net production continues to rise in 1H 2010, especially in Bohai Bay and Overseas. 10

Production Growth Drivers (mmboe) New fields on stream in 2009 and 2010 Outperforming producing fields 170 150 130 110 105.8 +40.7 Producing fields + 10.1 +2.9 149.0-10.

11 Production Growth Drivers (mmboe) New fields on stream in 2009 and 2010 Outperforming producing fields Producing fields Acquisition: Bridas 70 1H 2009 New fields Bridas Infill drilling & other projects Decline 1H 2010 Major fields contributed to production growth (million boe) PL19-3 II: +6.7 BZ28-2S: +4.7 JZ25-1S: +3.4 LD27-2: +2.3 PY30-1: +3.0 SZ36-1: +1.7 LD4-2/5-2: +1.4 BN Gas: +1.1 Tangguh: +2.3 New fields Producing fields Acquisition Akpo: +8.5 Bridas:

Major Development Projects Bozhong 3-2 Commencement of production announced in Q1 Bozhong 19-4 Commencement of production announced in Q3 Jinzhou 25-1 Construction of Topside

Topside underway China Bohai Bay Bozhong 29-4 Commencement of production announced in Q3 East China Sea Weizhou 11-1E Commencement of production announced in Q1 Western South

12 Major Development Projects Bozhong 3-2 Commencement of production announced in Q1 Bozhong 19-4 Commencement of production announced in Q3 Jinzhou 25-1 Construction of Topside completed Luda 32-2 Ready for production Weizhou 6-8 Construction of Topside underway Caofeidian 18-1 Commencement of production announced in Q1 Bozhong 26-3 Construction of Topside underway China Bohai Bay Bozhong 29-4 Commencement of production announced in Q3 East China Sea Weizhou 11-1E Commencement of production announced in Q1 Western South China Sea Eastern South China Sea Huizhou 25-3 Came on stream in Q2 Scheduled for 2009 but delayed by typhoon In the first half of the year, 4 new projects came on stream. 12

13 Exploration Activities Exploration Wells Offshore China (Independent) Seismic Data 2010 Planned 1H 2010 Completed Work in Progress 2D Seismic (km): 19,085 (Independent 19,085 km) 3D Seismic (km 2 ):5,075 (Independent 4,452 km 2, PSC 207 km 2, Overseas 416 km 2 ) Successful + uncertain wells Wildcat Appraisal Subtotal Offshore China (PSC) Wildcat Appraisal Subtotal Overseas Success rate of independent exploratory wells in offshore China reached 40-64%. 13

14 Oil and Gas Discoveries/Appraisals Discoveries/Appraisals 9 discoveries PL9-1 KL6-4 QHD33-1S BZ34-1W EP24-2 LH16-2 WZ12-1S WZ12-1W LH29-1(PSC) 7 appraisals KL10-1 QK18-1 WZ12-2 WZ11-2 HZ25-8 LH29-1(PSC) LH34-2(PSC) WZ11-2 WZ12-1S Indt. Discovery PSC Discovery Indt. Appraisal PSC Appraisal km WZ12-1W Western South China Sea QK18-1 China Guangzhou HZ25-8 WZ12-2 QHD33-1S Beijing Tianjin BZ34-1W EP24-2 Hong Kong KL10-1 Shanghai Eastern South China Sea Bohai Bay LH16-2 LH34-2 KL6-4 LH29-1 LH29-1 PL9-1 East China Sea 14

for Bohai Bay Kenli 6-4 Mid-sized discovery Pay zones of 101

15 Breakthrough in New Areas Bohai Bay Penglai 9-1 Significant discovery Pay zones of meters Open up a new prospect for Bohai Bay Kenli 6-4 Mid-sized discovery Pay zones of 101 meters Breakthrough in Laidong-Miaonan area KL 6-4 PL

trough Liuhua 16-2 Mid-sized discovery Oil pay zones of 67

16 Breakthrough in New Areas South China Sea Enping 24-2 Mid-sized discovery Oil pay zones of 138 meters First discovery in Enping trough Liuhua 16-2 Mid-sized discovery Oil pay zones of 67 meters Open up oil exploration in Baiyun trough LH16-2 EP 24-2 LH

Disciplined Acquisitions Missan in Iraq:

accepted by the oil industry Panyu 4-2/5-1 in

with experienced local partner to enter into

with growth potential M&A activities are

17 Disciplined Acquisitions Missan in Iraq: Resource rich area Fiscal regime and economics accepted by the oil industry Panyu 4-2/5-1 in offshore China: Core area Low risk Bridas: JV with experienced local partner to enter into South America Sizable reserves and production with growth potential M&A activities are value-driven and disciplined, and in compliance with our growth strategy. 17

18 Solid HSE Performance One of our top priorities since established Strictly follow the HSE standards Incidents closely monitored and effectively handled No major accident in the past 10 years 1H H 2009 Rate of Recordable Cases (per 200,000 man hours) Rate of Lost Workdays Cases (per 200,000 man hours) 18

19 Proactive Response to Emergency Suizhong CNOOC Oil Spill Response Bases Tanggu Longkou 7 Emergency Response Bases in offshore China, 7 more in planning Close cooperation with professional contractors Zhuhai Shenzhen Huizhou Frequent equipment inspections Emergency procedure drills Constant communication with the regulatory bodies Weizhou Island 19

20 Strong Financial Performance

21 Key Financial Items - Consolidated (m m RMB) H H 2009 Change % REVENUE Oil and gas sales 67,639 32, % Marketing revenues, net Other income Revenue subtotal 68,325 33, % EXPENSES Operating expenses 6,911 5, % Taxes other than income tax 3,370 1, % Exploration expenses 1, % DD&A 12,642 6, % Special Oil Gain levy 7,984 1, % SG&A 1, % Others % Expenses subtotal 34,452 16, % Interest income % Finance cost (440) (252) 74.6% Exchange gains, net % Investment income, net % Share of profits of associates % Non-operating expenses, net 13 (19) % PROFIT BEFORE TAX 34,476 16, % Income tax 8,488 4, % PROFIT FOR THE PERIOD 25,988 12, % 21

22 Contributors to Net Profit Changes Net profit increased by 109.6% YoY mainly due to production growth and higher realized oil price. 22

23 Net Profit Leading Peers 1H 2010 Net Profit US$ million 4,000 3,500 3,000 2,500 2,000 1,500 1, CNOOC OXY DVN APA CNQ ECA TLM APC EOG Source: Company disclosure 23

24 All-in Cost (US$/boe) All-in Cost H 2010 OPEX DD&A Dismantlement SG&A Taxes other than income tax All-in cost up 7.3% from 2009 Mainly due to DD&A growth Controllable items decreased Opex down 15.3% from 2009 SG&A down 11.0% from 2009 Production tax replaced by Taxes Other Than Income Tax Opex SG&A (US$/boe) (US$/boe) H H

25 All-in Cost and Opex Benchmark (US$/boe) All-in Cost DVN CNOOC APA EOG ECA APC TLM CNQ (US$/boe) Opex APC CNOOC DVN EOG APA ECA TLM CNQ 25

26 DD&A Analysis DD&A of US$11.75/BOE Up 21.8% from 2009 but still sitting on the low end among peers Mainly due to new fields that developed in high cost environment Lag between Capex and PD booking in certain projects (US$/boe) DVN OXY CNOOC APA EOG APC CNQ ECA TLM Source: Company disclosure 26

27 Industry Costs Under Pressure Industry costs remain at high level. Source: Bernstein Research 27

28 Profitability Leading Peers US$ EBT per BOE Benchmark Peers highest - Peers lowest -10 CNOOC Peers Average % 30% 10% Net Margin Benchmark Peers highest -10% -30% CNOOC Peers Average Peers lowest -50% Profitability leading the industry despite facing the pressure of cost increase. Source: Company disclosure in FAS69. Peers include APA, APC, DVN, EOG, ECA and TLM. 28

29 Capital Expenditure (US$ Million) 8,000 6,000 7,776 1,496 Cost savings through high efficiency More workload scheduled in 2H 2010 Delay by bad weather conditions 4,000 2,000 2, ,985 2, ,083 4,809 1,471 60% 50% 40% 30% Completion Rate Exploration wells vs. exploration Capex 52.8% % 33.3% 1H H B Exploration Development Production 10% 0% Wells Capex 29

Balance Sheet Movements Billion RMB Dec. 31, 2009 Cash and Cash equivalents, 22.6 Time deposits with maturity over three months, 20.9 Other current assets, 27.4 Non-current assets, 171.

30 Balance Sheet Movements Billion RMB Dec. 31, 2009 Cash and Cash equivalents, 22.6 Time deposits with maturity over three months, 20.9 Other current assets, 27.4 Non-current assets, Other liability, 49.6 Debt, 18.6 Equity, Jun. 30, 2010 Cash and Cash equivalents, 31.8 Time deposits with maturity over three Other current assets, 36.8 months, 8.2 Non-current assets, Other liability, 63.8 Debt, 28.3 Equity, Total assets mainly including: 31.82bn cash and cash equivalents; 8.2bn time deposits with maturity over three months; bn property, plant and equipment; 1.3bn intangible assets; 4.97bn investment in associates bn increased in equity, among which 25.99bn net profit of 1H 2010; Total Assets: bn bn 7.79bn dividend payment. Debt/(Debt+Equity) Ratio: 9.7% 12.9% 30

31 Change in Cash Position Million RMB Cash inflow (outflow) 1H H 2009 Net cash flow from operating activities 37,932 17,021 Net cash flow from investing activities (29,282) 10,257 Net cash flow from financing 353 (4,984) Net increase in cash 9,003 22,294 Change by exchange rate 206 (17) Cash & Equivalents at beginning of the period 22,615 19,762 Cash & Equivalents at end of the period 31,824 42,039 31

32 High Dividend Payment Proposed 2010 interim dividend of HK$0.21 per share: Dividend per share increased 5.0% YoY 31.5% (1) payout of net profit of 1H % (2) dividend yield Interim dividend payment will be approximately RMB8.18 billion (3), representing about 23.4% of cash balance, which will not affect cash flow requirements for operations Proposed Schedule: Record date: September 8 Book close period: September 3-8 Payment date: September 17 (1). (3) Exchange rate quoted as HK$1=RMB of August 6, 2010 (2) Based on closing share price of HK$13.52 as of August 6,

33 Outlook

34 Sustainable, Stable and Profitable Growth Reserves Continue to add reserves through exploration and acquisitions RRR: >100% Development 9 development projects scheduled to come on stream in 2010 Production Production target of mm boe Financial Management Maintain prudent financial policy HSE Maintain company-wide focus and high standard on HSE 34

CNOOC LIMITED 中国海洋石油有限公司 Mid-Year Review Analyst Briefing

CNOOC LIMITED 中国海洋石油有限公司 Mid-Year Review Analyst Briefing CNOOC LIMITED 中国海洋石油有限公司 2009 Mid-Year Review Analyst Briefing August 26, 2009 This presentation includes forward-looking statements within the meaning of the United States Private Securities Litigation