WorldReginfo - 545146f5-59f8-4f70-aa55-356176db2160 CONTENTS

REPORT DESCRIPTIONS

Reporting Scope: The entire National Offshore Oil Corporation (CNOOC) group of companies. 02 CHAIRMAN’S LETTER 26 BUSINESS 46 MANAGEMENT 72 LOOKING AHEAD TO 2016 Reporting Period: 04 PRESIDENT’S LETTER 28 Oil & Gas Exploration 48 Technology Innovation and Development 48 Management of Scientific 74 MILESTONES 2015 1 January 2015 - 31 December 2015 06 MAIN ACHIEVEMENTS 28 Oil & Gas Exploration Research Projects 78 GLOSSARY 08 ABOUT US Principles of Preparation: 29 Development & 49 Establishment of Scientific Production Research Platform 81 AGENCY DIRECTORY To meet the needs of stakeholders and the general public, by disclosing key information on the Company 10 CORPORATE GOVERNANCE 30 Unconventional Natural 49 Technology Innovation 84 FEEDBACK in a true, objective, timely and comprehensive manner. Gas Achievements 12 Resumes of the Board 49 Transformation of Alternative Reference: Members 31 Engineering & Technical Services Technology Achievements China National Offshore Oil Corporation is hereinafter also referred to as CNOOC, the Company, the 14 Operation of the Board 31 Oilfield Services 51 Management Innovation Corporation, “we”, “our” or “us”. 16 32 Offshore Oil Engineering 52 “Quality and Benefit Year” 17 Resumes of other Senior Services Activity Data Used in the Report: Management Personnel 33 Professional Technical All disclosed financial data or information related to the Company is the final accounting data audited by 53 QHSE 20 PERFORMANCE Services 53 Quality Management third parties. Unless otherwise specified, all amounts are expressed in Renminbi (RMB). HIGHLIGHTS 34 Refining and Marketing 54 Occupational Health 20 Report of Independent Information Sources: 34 Refining and 54 Operational Safety Public Accountants Petrochemistry The Company’s official documents, statistical reports and our subsidiaries’ fulfilment of responsibilities. All 57 Environmental Protection 21 Income Statement 36 Marketing information has been reviewed by our management, supervision department and the various subsidiaries. 60 Informatization Progress 22 Balance Sheet 37 Natural Gas and Power 60 Enhancing Fundamental Language: 24 Cash Flows Statement Generation Capabilities This report is published in both Chinese and English. In case of discrepancies, the Chinese version shall 25 Notes to Annual 39 Financial Services 61 Promoting In-depth Financial Statements prevail. 42 Internationalization Integration of Informatization (excerpt) 42 Business Overseas and Industrialization Accessibility: 45 International Trade 61 Supporting Overseas This report is available in print and electronic formats. The digital version can be downloaded from Development the Company’s website at www.cnooc.com.cn. To obtain a print version of the report, please email 62 Human Resource Management [email protected]. 62 Employee Salary and Benefits 63 Career Development 63 Professional Expertise 64 Employee Training 66 Corporate Culture 66 Culture Promotion 68 Brand Promotion 68 Cultural & Sports Activities 69 Corporate Citizenship ABOUT THE COVER 69 Social Humanitarian “COSL Prospector” Drilling Platform Engagement 70 Integration into Community 71 Voluntary Services WorldReginfo - 545146f5-59f8-4f70-aa55-356176db2160 02 CHINA NATIONAL OFFSHORE OIL CORP. CHAIRMAN’S LETTER / 2015 ANNUAL REPORT 03

CHAIRMAN’S LETTER

Significant breakthroughs had been achieved in overseas exploration. The Company’s overseas oil & gas types and layout became more diversified, with business covering over 30 nations and regions. Overseas asset is 37.2 percent of the Corporation’s total asset. With the value orientation of “innovative management, highlighting outcome”, it pushed forward integration with Nexen, and therefore effectively raised efficiency of overseas oil and gas field. CNOOC deepened innovation of institutional mechanism reform, accelerated the construction of modern enterprise system, and endeavored to build corporate governance structure which could match international top energy company. The Company achieved important results in industrial structure optimization, and greatly enhanced the Company’s development momentum and vitality. Through constant implementation of “Quality and Benefit Year” activity, the Company had noticeable results in lower costs and better outcomes, which played a crucial role in responding to lower oil price. In-depth reform on personnel system was conducted, including leadership training, selection and communication, implementing Youth Science and Technology Talent Project, with the aim to realize the Company’s talent strategic replacement.

In 2016, the Company will continuously face the low oil price circumstance, slowed down global economic recovery, international financial crisis influence, complicated geopolitics relationship and increased external instable factors. We will keep clear mind, comprehensively check and handle the deep changes of internal and external environmental conditions, clear about industry new trend, seize the new opportunities of reform, and insist to focus on improvement of development quality and performance. In development motivation, we will transfer from scale and speed driving to quality and profit driving; in development ability, we will transfer from building resources barrier to raising market competitive ability; in development strategy, we will transfer from determining sales based on production under shortage economy to providing effective supply under surplus economy. There will be more emphasis on quality performance, pushing forward reform, and dedicating to establish an international top energy company with Chinese characteristics.

2016 is the opening year of China’s “13th Five-Year Plan”. The Company enters the important period of constructing international first class energy company with Chinese characteristics. In accordance with five development ideas “innovation, coordination, green, open, sharing”, we will constantly deepen “Quality and Benefit Year” activity, strengthen ability of developing quality benefit, further undertake reform innovation, push the company forward, therefore to realize sustainable development that has quality and benefit. We will fully apply the forward thinking of periodic law to positively cope with climate change, and to make efforts on green & low carbon development. We are going to deeply plough “the Dear all, Belt and Road Initiative”, trying to expand international cooperation space. We will continue to firmly establish the core First of all, I would like to take this opportunity, on behalf of the Board of Directors and all employees of CNOOC, to value principle of “safety first, environment utmost, people oriented and equipment intact”, to promote environmental express our heartfelt gratitude to all who have cared for and supported us all these years. protection work and realize intrinsic safety. We will push forward various reform measures, enhance enterprises’ vitality and competitiveness, and positively work on to realize the planning objective of the “13th Five-Year Plan”. Over the past year, operating revenue, total profit, net profit and tax fees payment of the Company were RMB 426.08 billion, 45.07 billion, 41.27 billion and 82.14 billion Yuan respectively. The Company’s total asset was RMB 1,162.38 billion Dear Friends, in the new year, let us hold hands together to start a new journey, undertake solid efforts on constructing Yuan at the year end. CNOOC’s comprehensive strength and social influence had been further enhanced, stepping into a international top energy company with Chinese characteristics, and ultimately make great contribution to global energy new stage. CNOOC’s ranking among Global Top 500 Enterprises in the Fortune magazine rose to the top 72 in 2015, 90 transformation. places higher compared to 5 years ago, when in 2011 it was ranked top 162.

Throughout the year, CNOOC produced a total of 79.70 million tons of crude oil, and 25.0 billion cubic meters of natural gas, and particularly, a breakthrough of 100 Mtoe was made. The receiving capacity of LNG reached 27.8 million tons. It became the third largest LNG long term contract holder, continuously keeping pioneer place in the industry. The Company attached great importance to planning the international and domestic markets as a whole, continuously Chairman Yang Hua developing foreign cooperation in a further step, and improving its internationalized business management ability. April 21, 2016 WorldReginfo - 545146f5-59f8-4f70-aa55-356176db2160 04 CHINA NATIONAL OFFSHORE OIL CORP. PRESIDENT’S LETTER / 2015 ANNUAL REPORT 05

PRESIDENT’S LETTER

domestic crude oil, and 14.4 billion cubic meters of natural gas (including 870 million cubic meters of CBM). At overseas, it produced 31.97 million tons of crude oil and 10.7 billion cubic meters of natural gas. Professional technology service competitiveness had been further enhanced and good outcomes were obtained in exploring the international market. The values of midstream and downstream increased, making contributions for balancing oil price fluctuation. Financial sector showed good performance and many financial enterprises’ profits set a new record. The Company’s key projects have been pushed forward, engineering efficiency was further enhanced, the management quality of major projects continued to be improved, and cooperation on international capacity and equipment manufacturing took place in a further step. Safety and environmental protection situation was generally stable. Special treatment of was pushed forward. Energy saving and emission reduction achieved remarkable results. In addition, the scientific development ability was continuously strengthened. “Key Technology Application of Offshore Heavy Oil Polymer Flooding” was awarded the second prize of National Science and Technology Progress. The Company had independent R&D and mastered 12 key technologies including rotary steering drilling, chemical flooding of heavy oil and etc. Its marketing and specialization ability had been strengthened further. Through reform innovation, cost reduction & efficiency improvement and compliance operation, the “12th Five-Year Plan” realized satisfactory completion.

In 2016, world economy still keeps slow recovery, and global crude oil market has loose supply & demand in general, international oil price difficultly presents substantial rise. Domestic product oil market’s supply is larger than demand, natural gas consumption’s growth slows down, oil refining and chemical fertilizer industries have larger on neutralization of excessive production capacity, and there is more intense industry competition. Therefore, we need to seriously analyze the development situation, positively join into “the Strategy of Maritime Power”, “the Belt and Road Initiative”, “the integration of , Tianjin and Hebei”, the revolution of energy production and consumption, as well as implement China’s “13th Five-Year Plan” energy planning. We will conduct planning implementation and whole year’s tasks positively. We will improve and consolidate upstream business and push forward economic and high-efficiency oil & gas exploration and production; we will further develop coordinated development of various sectors, improve oil quality and develop products’ marketing; we will further develop natural gas market, and positively promote in-depth integration of product, trade and finance, and be resistant to industry cycle fluctuations; we will continue to deepen reforms and “Quality and Benefit Year” activity, and improve our business management level; we will strictly perform safety and environment Dear all, protection work, and strengthen risk management and legal operation; we will make greater efforts to drive innovation and fortify our industrial competitiveness. 2015 is not an ordinary year for CNOOC. Facing the severe challenge of low oil price and complicated external situation, we have dealt with it positively and completed the whole year’s task well. Throughout the year, CNOOC produced a Seeking for survival in the reform, and achieving development through innovation. Facing increasingly severe total of 79.70 million tons of crude oil, and 25.0 billion cubic meters of natural gas, and particularly, a breakthrough of circumstances and unprecedented challenges, China’s “13th Five-Year Plan” will be our guidance in scientifically 100 Mtoe was made. The Company processed 32.60 million tons of crude oil, produced 7.73 million tons of product oil, recognizing new situation. We will have firm confidence, strive to work, deepen reform, and undertake continuous and imported 13.16 million tons of LNG, the output of natural gas power was 22.3 billion kWh. Through the whole year, innovation. We will highlight quality effectiveness, ensure the completion of this year’s targets, as well as realize bright the Company realized energy saving of 308 thousand tons of standard coal, and comprehensive energy consumption beginning phase of the “13th Five-Year Plan”. of 0.2731 tons of standard coal per RMB 10,000 Yuan turnover, and emissions of major pollutants generally keep decline trend.

Over the past year, CNOOC achieved relatively big progress in various businesses. Oil & gas exploration and development scored good results again, and had 14 exploration discoveries domestically, and successfully evaluated 20 oil and gas tectonism. Overseas exploration made several great breakthroughs and there were new discoveries in Algeria and Nigeria. It successfully evaluated 3 oil and gas tectonism and obtained important progress in unconventional President Liu Jian tight gas exploration domestically. Oil and gas production had shown steady increase. It produced 47.73 million tons of April 21, 2016 WorldReginfo - 545146f5-59f8-4f70-aa55-356176db2160 06 CHINA NATIONAL OFFSHORE OIL CORP. MAIN ACHIEVEMENTS / 2015 ANNUAL REPORT 07

Total Assets Operating Revenue MAIN (Unit: RMB billion Yuan) (Unit: RMB billion Yuan)

1,162.4 426.1 ACHIEVEMENTS 2015 2015 1,119.4 611.6 2014 2014

1,041.7 590.1 2013 2013

Total Profit Net Assets (Unit: RMB billion Yuan) (Unit: RMB billion Yuan)

45.1 669.2 2015 2015

105.2 643.9 2014 2014

101.4 576.1 2013 2013

Capital Investment Taxes & Bonuses (Unit: RMB billion Yuan) (Unit: RMB billion Yuan)

105.7 82.1 2015 2015

155.0 114.3 2014 2014

250.5 129.0 2013 2013

1.2%

13.7% 10.3% 14.6% 26.4% 11.6% Total Operating Total 37.7% 18.5% Assets 50.3% Revenue Profit in 2015 in 2015 in 2015

24.4% 62.2% 29.2%

■ Upstream ■ Upstream ■ Upstream ■ Mid- and downstream ■ Mid- and downstream ■ Mid- and downstream ■ Engineering technologies and services ■ Engineering technologies and services ■ Engineering technologies and services ■ Others ■ Others ■ Others WorldReginfo - 545146f5-59f8-4f70-aa55-356176db2160 08 CHINA NATIONAL OFFSHORE OIL CORP. MAIN ACHIEVEMENTS / 2015 ANNUAL REPORT 09

ABOUT US

China National Offshore Oil Corporation (“CNOOC”), the largest offshore oil & gas producer in China, is a mega state- owned company operating directly under the State-owned Assets Supervision and Administration Commission of the State Council of the People’s Republic of China (hereinafter referred to as “SASAC” in the Report). Our Vision The Company was founded in 1982 and is headquartered in Beijing. After 30 years of reform and development, CNOOC has become an international energy company with highlighted main industry, complete industrial chain, and operations covering Energy for All more than 40 countries and regions. The Company has formed oil & gas exploration and development, engineering & technical services, refining and marketing, natural gas and power generation, financial services — five main business segments, and its sustainable development capacity has been significantly improved. In 2015, the Company ranked 72nd among the Global top 500 Enterprises in the Fortune magazine, 7 places higher compared with that in 2014; ranked 32nd Development Goals among the world’s largest 50 oil companies in the Petroleum Intelligence Weekly magazine, lower one place compared with Develop into a world class energy company by 2020 that in 2014. By the end of 2015, The Company’s Moody’s rating is Aa3, with a stable outlook; Standard & Poor’s rating is Develop into a global leading energy company by 2030 AA-, with a stable outlook.

Main Business Corporate Philosophy Development Principles People-oriented, responsibilities, win-win Cooperation, sustainable growth, benefits, credibility, innovation and differentiation

Oil & Gas Exploration and Development ◆ Exploration ◆ Development Core Development Strategies ◆ Production Synergetic development strategy Technology-driven strategy Financial Services Talent development strategy ◆ Finance Company Engineering & ◆ Trust Technical Services Cost effective strategy ◆ Insurance ◆ Oilfield Services Low-carbon green strategy ◆ Financial Investment & ◆ Offshore Oil Strategic Investment China National Engineering Services ◆ Finance Leasing Offshore Oil ◆ Professional Services Corporation (CNOOC)

Natural Gas and Power Generation ◆ LNG Receiving Terminals Refining and Marketing ◆ Natural Gas Pipelines ◆ Oil Refining ◆ Natural Gas-fired Power Generation ◆ Petrochemistry ◆ Urban Gas Supply ◆ Chemical Fertilizer ◆ Vehicle/Vessel Gas ◆ Business Development & ◆ Natural Gas Liquefaction Marketing and Distribution WorldReginfo - 545146f5-59f8-4f70-aa55-356176db2160 10 CHINA NATIONAL OFFSHORE OIL CORP. CORPORATE GOVERNANCE / 2015 ANNUAL REPORT 11

CORPORATE GOVERNANCE

Director Adjustments

In 2015, as decided by the Central Government and SASAC, the Board members and the session times were adjusted. The State Council issued the “Notice on Yang Hua, Wang Yilin’s appointment and removal” (G. R. Zi [2015] No. 125) on May 14, 2015, appointed Yang Hua as CNOOC chairman, and removed Wang Yilin’s post of CNOOC chairman.

SASAC issued “Notice on Liu Jian’s Appointment” (G. Z. R. Zi [2015] No. 97) on August 20, 2015, appointing Liu Jian as director of CNOOC. The State Council issued “Notice on Approval of Liu Jian as CNOOC President” (G. R. Zi [2015] No. 192) on September 5, 2015, agreeing Liu Jian as CNOOC president.

SASAC issued “Notice on Appointing Four Persons Including Boon Swan Foo as CNOOC outside directors” (G. Z. R. Zi [2015] No. 39) on April 13, 2015, appointing Boon Swan Foo, Zhang Chengjie, Xia Dawei, Ju Zhanghua as outside directors, with duration of employment until January 2018. The term of office of the Company’s outside director Yan Biao expired in January 2015.

SASAC Board pilot office sent to the Company “Reply Letter on CNOOC Board of Directors Session Times Change Related Issues” (Board Office [2015] No. 11) on June 3, 2015, approving the CNOOC Board of Directors change from the first session to the second session.

At present, the Company has a total of seven board members, including Chairman Yang Hua, Director and President Liu Jian, Outside Directors Boon Swan Foo, Zhang Chengjie, Xia Dawei, Ju Zhanghua and Employee Director Chen Wei.

SASAC

Board of Directors Board of Supervisors

Front row (middle): Yang Hua, Chairman, Party Leadership Group Secretary Senior Management

Front row (right): Liu Jian, Director, President, Vice Secretary of Party Leadership Group

Front row (left): Zhang Chengjie, Outside Director Strategic Development Remuneration and Nomination Committee Audit Committee Back row (second from right): Boon Swan Foo, Outside Director Committee Assessment Committee

Back row (second from left): Xia Dawei, Outside Director Director: Yang Hua Director: Yang Hua Director: Zhang Chengjie Director: Xia Dawei Members: Members: Members: Members: Back row (first from right): Ju Zhanghua, Outside Director Liu Jian, Boon Swan Foo, Zhang Chengjie, Xia Dawei Boon Swan Foo, Boon Swan Foo, Zhang Chengjie, Xia Dawei Ju Zhanghua Ju Zhanghua Back row (first from left): Chen Wei, Employee Director WorldReginfo - 545146f5-59f8-4f70-aa55-356176db2160 12 CHINA NATIONAL OFFSHORE OIL CORP. CORPORATE GOVERNANCE / 2015 ANNUAL REPORT 13

Resumes of the Board Members Zhang Chengjie Outside Director

Born in June 1953, Mr. Zhang Chengjie had served as Deputy Secretary of the CPC of North China Electric Power Institute, Yang Hua Vice President of North China Electric Power University (NCEPU), Secretary of CPC of NCEPU Baoding, Deputy Secretary of Chairman and Party Leadership Group Secretary the CPC and Secretary of Discipline Inspection Commission of NCEPU. Mr. Zhang was then appointed as Deputy Director Born in May 1961, Mr. Yang Hua graduated from China University of Petroleum (the former East China Petroleum Institute) and Party Branch Secretary of HR Department of State Power Corporation of China, Director of HR Department, Assistant with a Bachelor of Science degree in Petroleum Engineering in August 1982. He received an MBA degree from Massachusetts President, Vice President and Party Leadership Group Member of China Guodian Corporation. Mr. Zhang was appointed as Institute of Technology in May 2004. He is a Sloan Fellow of MIT and professor-level senior economist. Mr. Yang joined Outside Director of CNOOC in April 2014. CNOOC in August 1982 and had served in a number of positions including Manager of Field Development Department of CNOOC Research Center, Deputy Chief Geologist and Deputy Director of Overseas Development Department of CNOOC, President of Overseas Oil & Gas Corporation Ltd., and Senior Vice President, Chief Financial Officer and EVP, President, CEO, Xia Dawei Vice Chairman of CNOOC Limited, and Assistant President of CNOOC. In April 2010, Mr. Yang served as Vice President and Outside Director Party Leadership Group Member of CNOOC. In August 2011, he served as CNOOC Director, President and Party Leadership Born in 1953, Mr. Xia Dawei graduated from Changchun University of Technology with a Bachelor of Science degree in Group Member. In April 2015, he took positions of Chairman of the Board of CNOOC and Party Leadership Group Secretary. Engineering Management in 1982 and received Master’s degree in Industrial Economics from Shanghai University of Finance In May 2015, he served as Chairman of China National Offshore Oil Company Limited. and Economics in 1985. Mr. Xia started his career in 1969, and had been a visiting researcher at Osaka City University, Dean of the School of International Business Administration, Assistant President, Vice President and Executive Vice President of Liu Jian Shanghai University of Finance and Economics successively. Mr. Xia is currently President and Party Secretary of Shanghai National Accounting Institute. He is a professor and an instructor for doctoral candidates of Shanghai National Accounting Director, President, Vice Secretary of Party Leadership Group Institute and an honorary professor of the Chinese University of Hong Kong. Mr. Xia also holds posts including Vice President Born in March 1958, Mr. Liu graduated from Huazhong University of Science and Technology with a Bachelor of Science of Chinese Industrial Economic Association, consultant of China Accounting Standards Committee of the Ministry of Finance, degree in Marine Internal Combustion Design in January 1982 and received his MBA degree from Tianjin University in 2000. member of the Corporate Internal Control Standards Committee of the Ministry of Finance and member of the Expert Mr. Liu Jian is a professor-level senior engineer. Mr. Liu joined Marine Petroleum Exploration Bureau in 1982 and successively Committee for Listed Companies of Shanghai Stock Exchange. Mr. Xia assumed Outside Director of CNOOC in February 2012. served as Section Chief, Vice Director of Maintenance Center, Vice Mine Director. Since January 1994, he served as Vice Manager of Oil Production Company, Director of the Production Department of Bohai Corporation, Manager of Oil Production Company, and President of China Offshore Oil Co., Ltd. In July 1999, he was appointed as Deputy President of Ju Zhanghua Tianjin Branch of CNOOC (China) Limited. In April 2001, he was successively appointed as Deputy President of Outside Director Branch of CNOOC (China) Limited and later President and Party Committee Secretary of Zhanjiang Branch. Since April 2003, he successively served as Senior Vice President of CNOOC Limited, President of the Development and Production Mr. Ju Zhanghua was born in September 1949. He was previously a Vice President of China Huaneng Group and a Member Department of CNOOC Limited, and Executive Vice President of CNOOC Limited. In November 2006, Mr. Liu was appointed of the CPC Huaneng Committee. Before that, he served in many positions in the company, including Deputy Manager of as Assistant President of CNOOC. From January 2009 to September 2010, he also served as Vice Chairman of the Board, Administration Department, Manager of Securities and Financing Department, and Manager of Administration Department Chief Executive Officer, and Party Secretary of China Oilfield Services Limited. In April 2010, Mr. Liu was appointed as Vice of Huaneng International Power Development Corporation. He became Manager of General Administration Department and President and Party Leadership Group Member of CNOOC; in September of the same year, he served as Chairman and Assistant President of Huaneng Group before he was appointed as Vice President of the company. Mr. Ju was appointed as Party Secretary of China Oilfield Services Limited, and resigned from the CEO post. Since November 2010, he has also Outside Director of CNOOC in April 2015. served as Chairman of the Board of China Offshore Oil Engineering Co., Ltd. In August 2015, he held post of CNOOC Director, President and Vice Secretary of Party Leadership Group. Chen Wei Employee Director

Boon Swan Foo Born in January 1958, Mr. Chen Wei graduated from China University of Petroleum (the former East China Petroleum Institute) Outside Director with a Bachelor of Science degree in Petroleum Engineering in 1982 and received an MBA degree from Tsinghua University in Born in 1955, Mr. Boon Swan Foo holds an MBA from the National University of Singapore. He served as CEO of ST Marine & ST 2002. He is a professor-level senior engineer. Mr. Chen started to work in 1976 and joined CNOOC in 1984. He successively Aerospace, CEO & Deputy Chairman of ST Engineering Ltd, Managing Director of Singapore Agency for Science, Technology assumed a number of positions including Vice Director of Development Department, Vice Director of Overseas Department, and Research, Chairman of Exploit Technologies Private Limited, Director of China-Singapore Suzhou Industrial Park Vice Director of Information Department at CNOOC Research Center and then Vice Director of CNOOC Research Center, Development Co., Ltd., Chairman of Singapore Changi Airport Enterprise Pte Ltd. Mr. Boon is Chairman of Global and General Manager of the Human Resources Department of CNOOC. In January 2002, Mr. Chen was appointed as Senior Investments Limited and Allgrace Investment Management Private Limited, Director of Shin Corporation Plc, MIH Holdings Vice President of CNOOC Limited. He also served as General Manager of the Administration Department of CNOOC Limited, Limited (South Africa) and Singbridge International Singapore Pte Ltd, Outside Director of Dongfeng Motor Corporation, General Manager of the Human Resources Department of CNOOC Limited, Director and Party Leadership Group Secretary Senior Advisor to Temasek Holdings (Private) Limited, Advisor to ST Engineering Ltd., Outside Director of China Huadian of CNOOC Research Center, General Manager of the Technology Development Department of CNOOC, President and Party Corp. Mr. Boon also holds an Adjunct Professorship at the Nanyang Technological University. Mr. Boon assumed Outside Leadership Group Secretary of CNOOC Research Institute. In February 2012, Mr. Chen assumed Employee Director of CNOOC. Director of China National Offshore Oil Corporation in February 2012. Since March 2013, he has served as Assistant President of CNOOC, and Executive Vice President of CNOOC Limited. WorldReginfo - 545146f5-59f8-4f70-aa55-356176db2160 14 CHINA NATIONAL OFFSHORE OIL CORP. CORPORATE GOVERNANCE / 2015 ANNUAL REPORT 15

Operation of the Board

Board Meeting

Session Time Approved proposal

It has examined and approved four proposals, namely annual budget for production and construction plans 2015, annual operating budget 2015, 18th Meeting of the First The meeting was held on annual financing plan 2015, annual Tibet poverty alleviation and public Session of Board of the spot in January 20 welfare donation plan 2015, listened to the Board meeting resolutions Directors implementation and amendments to the safety and environmental protection law.

It has examined and approved eight proposals, namely annual final accounting plan 2014, annual profit distribution plan 2014, annual internal control evaluation report 2014, proposal concerning 2015 recruitment 19th Meeting of the First for the financial audit institution, annual general manager work report session of Board of April 22 held on the spot 2014, Board of Directors work report 2014, and adjustment of members Directors of remuneration and appraisal committee, audit committee of the board, listened to board meeting resolution implementation, the Company’s main The 8th meeting of the second session of CNOOC Board of Directors production and operation results in the first quarter of 2015 and impact of low oil prices, a total of 3 reports.

It has examined and approved three proposals, namely no longer Special Committee Meeting 1st Meeting of the appointing Mr. Yang Hua as president of the Company, position May 7 held by Second Session of the adjustment of members and director of the Strategic Development communication means In 2015, the Strategic Development Committee of the Board held three meetings, and the Audit Committee held four meetings. Board of Directors Committee of the Board of Directors, board nominating members and director of the Committee. The first meeting of Strategic Development Committee of the Board was held on January 20, 2015, which studied the

It has examined and approved two proposals, namely listing of CNOOC Company’s annual budget for production and construction plan 2015, annual operating budget 2015, annual financing plan Energy Technology & Services Limited and China United Coalbed 2nd meeting of the 2015, a total of three proposals, and formed deliberations to submit to the Board of Directors for approval. Methane Corporation, Ltd., listened to four reports, namely implementation second session of the July 14 held on the spot of the last board meeting resolutions, the Company’s production, Board of Directors The second meeting of Strategic Development Committee of the Board was held on October 20, 2015, which listened to the operation, increased shares holding of listed companies in the first half of 2015. progress of the Company’s “13th Five-Year Plan”.

3rd Meeting of the It has examined and approved two proposals, namely the appointment The third meeting of Strategic Development Committee of the Board was held on December 16, 2015, which discussed August 25 held by remote Second Session of the of Mr. Liu Jian as president of the Company, deciding Mr. Liu Jian as communication means the Company’s “13th Five-Year Plan” development plan, annual planned budget in production & construction in 2016 and Board of Directors member of the Strategic Development Committee of the Board. operation budget in 2016, annual financing plan in 2016, a total of three proposals, deliberations have been formed and 4th Meeting of the September 17 held by reported to the Board of Directors. It has examined and approved the proposal of no longer appointing Mr. Second Session of the remote communication Wang Jiaxiang as deputy vice president of the Company. Board of Directors means The first meeting of Audit Committee was held on January 19, 2015, which listened to the Company’s 2014 annual internal

It has examined and approved the annual work plan of the Board in 2016, audit work and 2015 internal audit plan, risk management system construction situation, pipeline safety management, 5th Meeting of the and four reports have been heard at the meeting, namely implementation the influence of US shale gas revolution and hydrocarbon exports on the Company, impact of floating LNG technology Second Session of the October 20 held on the spot situation of the Board meeting resolution, the Company’s production, Board of Directors development on the Company and the Company’s strategy, the Curtis project cost and progress, the comparison and operation, refining industrial reform in the first three quarters of 2015. analysis of CBM and SNG project, a total of seven reports. 6th Meeting of the November 6 held by remote It has examined and approved the proposal of implementation of the Second Session of the The second meeting of Audit Committee of the Board was held on April 21, 2015, which listened to a presentation on the communication means Company’s refining industrial reform plan. Board of Directors Company’s 2014 annual accounts auditing by external audit institutions, and discussed the Company’s final accounts program

7th Meeting of the November 18 held by 2014, the Company’s profit distribution plan 2014, internal control assessment report 2014, and proposal concerning 2015 It has examined and approved the proposal of carrying out company Second Session of the remote communication recruitment for the financial audit institution. Deliberations have been formed and reported to the Board of Directors. capital verification work. Board of Directors means The third meeting of Audit Committee of the Board was held on July 14, 2015, which listened to reports of internal control It has examined and approved five proposals, namely the “13th Five Year Plan” development planning, production and construction planned system construction situation of COSL and CNOOC Gas & Power Group Ltd. 8th Meeting of the December 16 held on the budget 2016, annual operating budget 2016, annual financing plan 2016, Second Session of the spot annual Tibet poverty alleviation and welfare donation plan 2016, a report The fourth meeting of Audit Committee of the Board was held on December 17, 2015, which listened to the Company’s Board of Directors was heard at the meeting, namely the implementation of the resolutions implementation of management recommendations from external audit institution, 2015 annual internal audit work and 2016 of the board meeting. annual internal audit plan, risk management system construction, a total of three reports. WorldReginfo - 545146f5-59f8-4f70-aa55-356176db2160 16 CHINA NATIONAL OFFSHORE OIL CORP. CORPORATE GOVERNANCE / 2015 ANNUAL REPORT 17

Risk Management Resumes of other Senior Management Personnel

Compliance Operations

The Company continues to strengthen risk management, and actively foster a culture of compliance, practice according to system and procedures becomes the fundamental law of the Company’s operations, and compliance operation and risk management concepts are deeply rooted.

To effectively prevent risks and strengthen compliance operations, the Company relies on three lines of defense constituted by functional departments and business units management, risk management office and auditors, takes reference to COSO (Committee of Sponsoring Organizations of the Treadway Commission) “Enterprise Risk management-Integrated Framework”, with “strategy, operation, reporting and compliance” requirements as goals, develops risk management planning, risk identification, , risk response strategy and execution, inspection and evaluation, continuous process improvement. It integrates risk management concept into the internal control system and significant risk , and “closed loop” management for risk prevention and control is gradually formed, with various business units, risk Wu Guangqi Li Hui Vice President, Vice President, management organization, internal oversight institutions as the main responsibility subjects, to promote full participation, Party Leadership Group Member Party Leadership Group Member entire process control and all-round supervision.

Internal Audit

The company’s internal audit work, with problems and risks as guidance, improvement of quality and benefit as the center, to promote development, control risks, reduce costs as the goal, constantly improves the audit organization system, highlights the audit focus, deepens audit transformation, and improves audit value, to better promote the Company’s compliance with laws and regulations, sound management and prudent operations. By 2015, the Company has implemented internal audit of 396 items, and proposed 1,406 audit findings, 793 audit recommendations. An investment project construction cost of RMB 96.87 million yuan was saved after audit, and joint account book audit USD 7.04 million was excluded. At present, the Company’s internal control operation is in good condition, comprehensive risk management system continues to be effective.

Lv Bo Li Fanrong Wu Mengfei Anti Corruption Vice President, Vice President, Chief Financial Officer, Party Leadership Group Member Party Leadership Group Member Party Leadership Group Member The Company continues to carry out anti-corruption deeply. Under the unified leadership of the Company’s management level, we establish and improve a multi-sector participated coordination mechanism, to form overall of anti-corruption, and build a strong line of defense of corruption punishment and prevention. We improve monitoring mechanism setting, set up separate department responsible for supervision of headquarter and main subordinate units, to strengthen the Wu Guangqi Company’s overall audit work force. By 2015, the Company has received 1,056 (times) of all kinds of letters and visits, Vice President, Party Leadership Group Member adhering to the “strict and tight, invigorate early and small”, gives resolute and serious treatment to any breach of the law and the Company’s relevant provisions. Born in August 1957, Mr. Wu Guangqi is a professor-level senior economist, Certified Senior Enterprise Risk Manager. Mr. Wu graduated with a Bachelor of Science degree from the University of China and was a master of Party and Government Administration from the Party School of the Central Committee of CPC. He also held a Master’ degree in Management from China University of Petroleum and a Doctor’s degree in Management from Huazhong University of Science and Technology. Mr. Wu Guangqi joined CNOOC in 1982 and served as the Party Committee Secretary and Vice President of CNOOC Petro Tech Services, Party Committee Secretary, Discipline Inspection Secretary and Chairman of Labor Union of CNOOC Research Center, Party Committee Secretary of Beijing area and Director of Ideological and Political Department of CNOOC, Assistant President of CNOOC. In 2002, Mr. Wu was transferred and appointed as a temporary leading position by the Organization Department of the Central Committee of the CPC as the Deputy Director WorldReginfo - 545146f5-59f8-4f70-aa55-356176db2160 18 CHINA NATIONAL OFFSHORE OIL CORP. CORPORATE GOVERNANCE / 2015 ANNUAL REPORT 19

of the Engineering and Construction Department of China Three Gorges Project Corporation. In August 2004, he served Li Fanrong as CNOOC Party Leadership Group Member, and Party discipline inspection team leader. In June 2005, he served as Vice President, Party Leadership Group Member Director and Regulations Director of CNOOC Limited. In December 2011, he served as CNOOC Deputy General Manager Born in October 1963, Mr. Li Fanrong graduated from Jianghan Petroleum University with a Bachelor of Science degree and Party Leadership Group Member. Since December 2012 till now, he has served as Chairman of CNOOC Infrastructure in Oil Production Engineering, and later received an MBA degree with merit from Cardiff Business School in UK. He is a Management Limited, Chairman of China Ocean Oilfields Services (Hong Kong) Limited. Mr. Wu has also served as Director professor-level senior engineer. Mr. Li joined CNOOC in 1984. From August 1984 to January 1990, he served as petroleum of China Institute of Internal Audit, Director of Asia Association of Risk and Crisis Management, Deputy Director of China engineer in CNOOC Nanhai East Corporation. From 1990 to 1995, he worked in ACT Joint Operators Group offshore Risk Management Federation, Director of China Soong Ching Ling Foundation, Director of China Women’s Development production platform, and has successively served as production supervisor, platform manager and others. From 1990 to Foundation and Deputy President of China Association of Oceanic Engineering. 1995, he served as a Production Supervisor and a Platform Manager of the ACT (Agip-Chevron-Texaco) Operators Group. From 1995 to 2005, he successively served as Production Department Manager of Liuhua Oilfield, General Manager of joint operation group of CNOOC/Statoil of 17/22 contract area, Deputy General Manager of CNOOC (China) Limited Li Hui Branch and concurrently served as the Chinese Chief Representative of CACT (CNOOC-Agip-Chevron-Texaco) Operators Vice President, Party Leadership Group Member Group. In November 2005, he held post of General Manager of Development and Production Department, CNOOC Limited. Born in October 1963, Mr. Li Hui obtained a Bachelor’s degree in foreign trade from University of International Business From February 2007 to January 2009, he served as President and Party Committee Secretary of CNOOC (China) Shenzhen and Economics in August 1987, he is a senior international business engineer. From August 1987 to January 2000, Mr. Li Branch. In January 2009, he was appointed as CNOOC Assistant President. In February 2009, he concurrently served as Hui served in a number of positions in China National Metals & Minerals Import & Export Corp., including Deputy General General Manager of CNOOC Energy Technology & Services Limited. April 2010, he served as CNOOC Vice President and Manager of the trade unit and President of its South American unit. Meanwhile, Mr. Li also served as Deputy General Party Leadership Group Member. In September 2010, he concurrently served as President of CNOOC Ltd. Since November Manager of Beijing Economic-Technological Development Area from August 1998 to January 2000. From January 2000 2011, he has concurrently served as CEO of CNOOC Ltd. In February 2013, Mr. Li concurrently served as Chairman of to April 2010, Mr. Li served in Sinochem Group (named China National Chemicals Import & Export Corp. until October Nexen. In May 2015, he concurrently served as Chairman of the International Company of CNOOC Ltd. 2003). Meanwhile, he has served as Deputy Director of the oil center, Corporation General Manager Assistant, etc.; in May 2001, he was appointed as Deputy General Manager of China National Chemicals Import and Export Corporation and Party Leadership Group Member, and concurrently served as Director of the oil center, General Manager of Sinochem Wu Mengfei International Oil Co. In April 2010, Mr. Li was appointed as a Vice President and a Party Leadership Group Member of Chief Financial Officer, Party Leadership Group Member CNOOC. Since May 2011, he has also served as Chairman of the Board of China BlueChemical Ltd. And since November Born in June 1955, Mr. Wu Mengfei received a Bachelor of Science degree in chemical industry instrument and automation 2013, he assumed the position of Chairman of the Board of China Petrochemical Import & Export Co., Ltd. In December from China University of Petroleum (the former East China Petroleum Institute), a master’s degree in Petroleum Management 2015, he concurrently served as Chairman of CNOOC Gas & Power Group Co., Ltd. and Engineering from Beijing Graduate School of China University of Petroleum. He also received an MBA degree from the Sloan School of Management at MIT as a Sloan Fellow. Mr. Wu joined CNOOC in 1988 and served as President of the Planning and Capital Department of CNOOC, Senior Vice President and Chief Financial Officer of CNOOC Limited, Chief Lv Bo Financial Officer and Executive Vice President of China Oilfield Services Limited. Since October 2005, he has held the post Vice President, Party Leadership Group Member of CNOOC Chief Financial Officer. Since December 2011, he has served as Party Leadership Group Member of CNOOC. He Born in November 1962, Mr. Lv Bo received a Bachelor of Science degree in Management from China University of Mining also serves as Chairman of CNOOC Insurance Ltd., CNOOC Investment Co., Ltd., CNOOC Finance Co., Ltd., and Zhonghai and Technology and an MBA degree from China Europe International Business School in September 2005. Since 1985, Trust Co., Ltd, and CNOOC International Lease Finance Company. he worked in the Ministry of Coal Industry, the Ministry of Energy and the Organization Department of the Communist Party of China Central Committee and served in a number of positions, including a Vice-Director-level official in the Personal and Labor Department of the Ministry of Energy, Vice Director and Director of the First Office of Economic and Technology Officials Bureau of the Organization Department of the Central Committee of the CPC, Director of the First Office of the Fourth Officials Bureau and Director of the Second Office of the Fifth Officials Bureau of the Organization Department of the Central Committee of the CPC. Mr. Lv joined CNOOC in 2002 and in the year he was appointed as Director of the Human Resources Department of CNOOC. In November 2006, Mr. Lv became an Assistant President of CNOOC. In November 2007, he was appointed as Party Leadership Group Member of CNOOC. In October 2008, he concurrently served as Party Secretary directly under CNOOC. In April 2010, he took office of CNOOC Vice President and Party Leadership Group Member. In December 2012, he concurrently served as Chairman of CNOOC Energy Technology & Services Co., Ltd. In May 2015, he concurrently served as President of CPC CNOOC Party School. WorldReginfo - 545146f5-59f8-4f70-aa55-356176db2160 20 CHINA NATIONAL OFFSHORE OIL CORP. PERFORMANCE HIGHLIGHTS / 2015 ANNUAL REPORT 21

PERFORMANCE HIGHLIGHTS Income Statement For the year ended 31 December 2015 Unit: RMB million REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS Items Period Prior Period 1. Total revenues 426,079 611,600 D.H.S.Z. [2016] No.004855 Inc: Operating revenue 423,209 608,635

△Interest income 1,603 1,795

△Premiums earned 404 376 To the Shareholders of CNOOC: △Fees and commissions income 862 794 We have audited the accompanying financial statements of CNOOC (the “Company”), including consolidated balance 2. Total costs 397,587 523,728 sheets and balance sheets of the parent company as of 31 December 2015, consolidated income statements and income statements of the parent company, consolidated cash flow statements and cash flow statements of the parent company, Inc: Operating costs 326,064 452,800 consolidated statements of changes in equity and statements of changes in equity of the parent company, for the year △Interest expenses 8 3 ended 31 December 2015, and other explanatory information. △Fees and commissions expenses 2 1

△Net expenses of claim settlement 135 143

Management’s responsibility for the financial statements △Net provision for insurance contracts service 51 -24

Management is responsible for the preparation and fair presentation of these financial statements in accordance with △Reinsurance expenses -4 10 Financial Reporting Standards issued by the Chinese Accounting Standards Board, and for such design, implementation Business taxes and surcharges 29,471 30,437 and maintenance of internal control as management determines it necessary to enable the preparation of financial Selling expenses 3,745 3,802 statements that are free from material misstatement, whether due to fraud or error. Administrative expenses 14,254 13,965 Auditors’ responsibility Finance expenses 8,989 3,841 Our responsibility is to express an opinion on these financial statements based on our procedures, which were conducted Impairment on assets 4,927 7,189 in accordance with “China Standards on Auditing”. Those standards require that we comply with ethical requirements and Other costs and expenses 9,943 11,562

plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material Add: Gain from fair value changes ( “-” for loss) 215 -71 misstatement. Investment income ( “-” for loss) 12,121 10,008

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial △Gain on foreign exchange ( “-” for loss) 49 22 statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material 3. Operating profits ( “-” for loss) 40,877 97,831

misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditors Add: Non-operating income 5,862 8,176 consider internal control relevant to the entity’s preparation and fair presentation of the financial statements which is in Less: Non-operating expenses 1,667 805 order to design audit procedures that are appropriate in the circumstances but isn’t aimed at expressing an opinion on the 4. Profit before tax ( “-” for loss) 45,073 105,202 effectiveness of the internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the Less: Income tax 3,806 26,029 financial statements. 5. Net profit ( “-” for loss) 41,266 79,173

Net profit attributable to parent company 28,959 52,943 We believe that the audit evidence we have obtained in our audits is sufficient and appropriate to provide a basis for our audit opinion. *Profit attributable to minority shareholders 12,307 26,230 6. Other comprehensive income after tax: 7,230 -1,862

Opinion Comprehensive income not to be reclassified as profit or loss 239 -296 In our opinion, the financial statements of CNOOC give a true and fair value of the state of affairs of the Company and of the Comprehensive income to be reclassified as profit or loss 6,992 -1,565

parent company as of 31 December 2015, and the consolidated results of their operations and cash flows of the Group and 7. Other comprehensive income 48,496 77,311 of the parent company as of 31 December 2015, in conformity with “Accounting Standards for Business Enterprises”. Total comprehensive income attributable to parent company 33,540 51,747

Da Hua Certified Public Accountants *Total comprehensive income attributable to minority shareholders 14,956 25,564 Beijing, the People’s Republic of China Notes: * items for use in consolidation; △ items for financial entities only. 21 April 2016 WorldReginfo - 545146f5-59f8-4f70-aa55-356176db2160 22 CHINA NATIONAL OFFSHORE OIL CORP. PERFORMANCE HIGHLIGHTS / 2015 ANNUAL REPORT 23

Balance Sheet Balance Sheet (continued)

As of 31 December 2015 Unit: RMB million As of 31 December 2015 Unit: RMB million

Items Closing Balance Opening Balance Items Closing Balance Opening Balance

Current Assets: Current liabilities: Cash and bank 109,810 97,001 Short-term borrowings 73,740 67,860 Financial assets at fair value through profit and loss 6,066 1,314 △Deposits and placements from other financial institutions 338 272 Derivative assets 526 47 Financial liabilities at fair value through profit and loss 207 79 Notes receivable 2,873 3,000 Derivative liabilities 483 332 Accounts receivable 31,067 37,667 Notes payable 1,359 817 Advances to suppliers 10,666 10,204 Accounts payable 51,074 70,974 △Reinsurance premium receivable 277 287 Advances from customers 8,490 6,025 △Reserve receivable for reinsurance 1,931 1,755 Employee benefits payable 9,923 12,119 Interests receivable 1,289 1,004 Taxes and surcharges payable 11,762 16,711 Dividends receivable 87 123 Interests payable 2,207 1,895 Dividends payable 92 54 Other receivables 10,270 17,497 Other payables 14,227 12,580 Held-for-sale assets 28,141 31,546 △Reinsurance amounts payable 227 212 Current portion of non-current assets 2,499 1,688 △Reserve of insurance contract 2,496 2,256 Other current assets 16,530 15,674 Current portion of non-current liabilities 13,687 7,009 Total current assets 222,032 218,807 Other current liabilities 632 707 Non-current assets: Total current liabilities 190,943 199,902 △Loans and advances 2,520 2,289 Non-current Liabilities: Available-for-sale financial assets 84,594 70,136 Long-term borrowings 57,905 52,919 Held-to-maturity investments 21,009 24,437 Bonds payable 167,745 134,778 Long-term accounts receivables 4,302 983 Long-term payable 3,051 3,061 Long-term equity investments 45,293 43,044 Long-term employee benefits payable 322 302 Investment property 168 441 Grants payables 257 296 Fixed assets-original cost 288,573 253,179 Estimated liabilities 51,496 55,196 Less: Accumulated depreciation 97,750 86,525 Deferred income 5,185 5,430 Fixed assets-original cost net of depreciation 190,823 166,654 Deferred tax liabilities 16,304 23,475 Less: Provision of impairment of fixed assets 5,606 5,374 Other non-current liabilities 3 3 Fixed assets-net value 185,216 161,279 Total Non-current Liabilities 302,266 275,461 Construction in progress 58,674 63,935 Total Liabilities 493,210 475,363 Construction materials 2,303 1,144 Equity: Fixed assets pending for disposal 20 36 Paid-in capital 113,737 110,408 Oil and gas assets 457,543 463,779 Capital reserve 31,593 31,490 Intangible assets 18,129 17,683 Other comprehensive income -7,291 -11,873 Development disbursements 17 107 Specialized reserves 945 840 Goodwill 18,263 18,148 Surplus reserves 23,354 20,359 Long-term prepaid expenses 4,370 3,760 Retained earnings 319,277 308,224 Deferred tax assets 28,901 19,545 Equity attributable to parent company 481,615 459,448 Other non-current assets 9,027 7,513 *Minority interests 187,559 182,253 Total non-current assets 940,351 898,257 Total owner’s equity 669,174 641,701 Total assets 1,162,383 1,117,064 Total liabilities and owner’s equity 1,162,383 1,117,064

Notes: * items for use in consolidation; △ items for financial entities only. Notes: * items for use in consolidation; △ items for financial entities only. WorldReginfo - 545146f5-59f8-4f70-aa55-356176db2160 24 CHINA NATIONAL OFFSHORE OIL CORP. PERFORMANCE HIGHLIGHTS / 2015 ANNUAL REPORT 25

Cash Flows Statement Notes to Annual Financial Statements (excerpt)

For the year ended 31 December 2015 Unit: RMB million 1. Company Profile Items Current Period Prior Period China National Offshore Oil Corporation (“CNOOC”, the “Company”) is a state-owned oil company established on 15 1. Cash flows from operating activities February 1982 with the approval of the State Council of the People’s Republic of China. According to the “Regulations of Cash received from sales and services 452,175 647,351 △Net increase in deposits and placements from financial institutions 66 81 the People’s Republic of China Concerning the Exploitation of Offshore Petroleum Resources in Cooperation with Overseas △Cash received from premiums of original insurance contracts 1 1 Partners” promulgated by the Chinese State Council, the Company is granted an exclusive right of taking charge of the △Net amount of reinsurance business 1,519 824 business of exploiting oil and natural gas resources in cooperation with overseas partners offshore from the People’s △Cash received from interests, fees and commissions 2,039 2,326 Republic of China. Meanwhile, the Company is an investment institution authorized by the state. Taxes and surcharges refunds 3,505 3,866 Other cash receipts related to operating activities 14,082 6,197 2. Basis of Preparation Total cash inflows from operating activities 473,387 660,646 Cash paid for goods and services 252,455 387,545 The financial statements of the Company have been prepared in accordance with the going concern basis and the △Net increase in loans and advances 1,199 -1,454 “Accounting Standards for Business Enterprises” -Basic Standard issued by the Ministry of Finance on 15 February 2006 △Net increase in deposits with central banks and other financial institutions -3,073 1,360 and other relevant accounting standards and regulations. △Cash paid for claim settlements on original insurance contracts 723 636 △Cash paid for interests, fees and commissions 9 5 CNOOC Limited, China Ocean Oilfields Services (Hong Kong) Limited, CNOOC Insurance Limited and other overseas Cash paid to and for employees 25,519 30,729 subsidiaries of the Company adopt accounting standards of their registration countries. The consolidated financial Taxes and surcharges cash payments 77,879 127,527 statements have been adjusted according to relevant standards. Other cash payments related to operating activities 16,864 11,357 Total cash outflows from operating activities 371,575 557,706 Net cash flows from operating activities 101,812 102,940 3. Principal Accounting Policies 2. Cash flows from investing activities: (1) Accounting period Cash received from withdraw of investments 210,302 181,345 The accounting period starts on 1 January and ends on 31 December. Cash received from investment income 9,813 7,619 Net cash received from disposal of fixed assets, intangible assets and 852 2,177 (2) Recording currency other long-term assets Net cash received from disposal of subsidiaries and other business units -270 9 The recording currency of the Company is RMB. The recording currency of overseas subsidiaries is currency of the primary Other cash receipts related to investing activities 20,234 4,922 economic environment in which the enterprise operates. The Group’s financial statements are presented in RMB. Total cash inflows from investing activities 240,931 196,071 Cash paid for fixed assets, intangible assets and other long-term assets 85,652 113,053 (3) Accounting and Measurement Basis Cash payments for investments 225,993 190,595 In accordance with related regulations of the “Accounting Standards for Business Enterprises”, the accounting of the Group Net cash paid for acquiring subsidiaries and other business units 50 99 is based on accrual basis. The financial statements of the Group, except some financial instruments, have been prepared Other cash payments related to investing activities 23,104 4,332 under historical cost. Held-for-sale non-current assets are measured by the lower of fair value subtract estimated expenses Total cash outflows from investing activities 334,799 308,079 and original book value when met conditions of held-for-sale. Provision for impairment should be calculated according to Net cash flows from investing activities -93,868 -112,008 relevant standards if assets are impaired. 3. Cash flows from financing activities: Cash received from investments by others 5,493 12,639 Cash received from borrowings 274,223 316,389 Other cash receipts related to financing activities 14,903 21,557 Total cash inflows from financing activities 294,619 350,584 Cash repayments for debts 242,875 303,659 Cash payments for distribution of dividends, profit and interest expenses 35,158 27,669 Other cash payments related to financing activities 20,321 14,273 Total cash outflows from financing activities 298,353 345,601 Net cash flows from financing activities -3,735 4,984 4. Effect of foreign exchange rate changes on cash and cash equivalents 789 -146 5. Net increase in cash and cash equivalents 4,999 -4,230 Add: Beginning balance of cash and cash equivalents 79,845 84,074 6. Ending balance of cash and cash equivalents 84,844 79,845

Notes: △ items for financial entities only. WorldReginfo - 545146f5-59f8-4f70-aa55-356176db2160 26 CHINA NATIONAL OFFSHORE OIL CORP. BUSINESS / 2015 ANNUAL REPORT 27

BUSINESS

Oil & Gas Exploration and Development Engineering & Technical Services Refining and Marketing Natural Gas and Power Generation Financial Services Internationalization WorldReginfo - 545146f5-59f8-4f70-aa55-356176db2160 28 CHINA NATIONAL OFFSHORE OIL CORP. BUSINESS / 2015 ANNUAL REPORT 29

OIL & GAS EXPLORATION AND DEVELOPMENT

CNOOC always puts oil & gas exploration and development high on its agenda in an innovative manner to stabilize and further its business development. Guided by the idea of “seeking for new medium and large-scale oil & gas fields”, CNOOC makes extensive breakthroughs in the oil & gas exploration both at home and abroad, and takes the initiative to fulfill the responsibility of supplying oil & gas so as to continuously satisfy people’s ever- increasing consumption demands for petroleum and natural gas.

Oil & Gas Exploration South China Sea, “Lingshui 18-1” was found, and “Lingshui 25-1” oil and gas bearing structure was evaluated. In 2015, the Company focuses tremendously on the ● Remarkable results were achieved in the rolling Platform Oilfield exploration and development of new medium and large exploration based on the production facilities in the Bohai oil & gas fields. Through innovations in knowledge, Sea, where “Bozhong 34-1 North” oil and gas bearing technology and management, the Company actively structure was evaluated successfully. The integration of structures, carrying out the evaluation of reserves, and successively put into production. In addition, joint faced the severe condition of low oil price, achieved fruitful exploration and production was carried out in the Wushi achieving valuable exploration; optimizing management development project of second period adjustment “Weizhou exploration results, and made significant progress in Depression in the western South China Sea to search process, and improving operation efficiency. We also 11-4 North” and “Weizhou 12-2” oilfield have been put into domestic coastal waters, and overseas. the high-abundance quality reserve and enhance the optimized operation organization, so as to improve our production in the beginning of 2016. CNOOC proactively carried out exploration strategy in development value in the area, and “Wushi 17-2” and executive ability. Meanwhile, the Company strengthened In 2015, the Company’s development and production China’s seas, with constantly full exploration workload. The several surrounding oil and gas bearing structures were operation site management, pushed forward the integration operation was under tremendous pressure of constantly Company completed 2D seismic survey 13,000 kilometers evaluated. of exploration and development, enhanced exploration depressed international oil price. Therefore, on the premise through self-management, 3D seismic survey about management overseas, so as to achieve effective control in The above fruits in the exploration have further consolidated of ensuring production safety, the Company successively 16,500 km2 through self-management & international exploration cost and significantly increase the exploration the Company’s key position and proved the Company’s fulfilled the annual development & production tasks based collaboration, and drilled 123 exploratory wells. CNOOC efficiency and profits. unique advantage in China’s seas. on the core of improving the efficiency and reducing the achieved fruitful exploration results, in which the Company cost. made 14 new discoveries, and successively evaluated In overseas exploration, the Company continued to Development & Production 20 oil & gas containing structures, with the exploration implement the strategy of “highlighting major fields ● CNOOC’s early-stage projects focus on benefit, rapidly success rate of self-managed exploratory wells reaching and optimizing investment portfolio”, and adhere to the Under disadvantages of constantly decreasing crude reducing the development investment. The Company 45-67%. sustainable development. The new oil & gas finding oil price and limited release of natural gas production effectively reduces the investment scale through overseas were made in REZ, Algeria and Ukot South, capacity, the Company elaborately organizes operation optimization in design and investment. ● The highly effective evaluation has been completed in Nigeria. In addition, the Company successfully evaluated resources, and acquires positive progress in engineering three medium and large oil & gas fields, e.g. “Caofeidian ● CNOOC strictly controls the quality of geological 3 oil & gas containing structures, e.g. MAS and OGB in construction, so as to achieve outstanding performance 6-4”, “Lvda 16-3/16-3 South” and “Bozhong 34-9” with high reservoir concepts to upgrade the resistance of projects to Algeria and Libra in Brazil. All the achievements proved in development & production and make a historical content of light oil. risk, ensuring realization of various development indexes of favorable development in exploration overseas. breakthrough in oil and gas production. adjustment wells, comprehensive adjustment projects, and ● A good effect has been achieved in the rolling and Through technological innovations, the Company In 2015, the Company produced 79.7 million tons of new oil & gas fields. extension exploration in the northern slope of eastern continued to make breakthroughs in exploration technology crude oil and 25.0 billion cubic meters of natural gas sag of the Baiyun Depression in the eastern South China ● CNOOC establishes long-effect mechanism through bottleneck, and succeeded in operation technologies (including CBM), with annual oil and gas production Sea, and “Liuhua 20-2” and “Liuhua 21-2” oilfields were special control of cost, and controlling of operation cost such as full diameter tri-barrel coring, heavy oil sampling exceeding 100 Mtoe for the first year. As of the end of 2015, found, which significantly enhanced the overall benefit of achieved remarkable results. The Company reduced price in Bohai Sea, geological logging and well logging in high comprehensive adjustment project of “Jinzhou 9-3” oilfield, exploration and development in the area. for the service and supply by making full use of market and pressure wells in 2015. Besides, CNOOC comprehensive adjustment project of “Bozhong 28/34” mechanism. ● A breakthrough has been made in the east-west actively optimized exploration investment portfolio, so as oilfield group, “Kenli 10-1” oilfield, first period adjustment extension exploration and the extension exploration in new to improve exploration success rate and capitalization project of “Dongfang 1-1” gas field, and comprehensive ● CNOOC effectively controls the quantity of projects layers in the central canyon watercourse in the western rate; while optimizing exploration projects, adjusting adjustment project of “Lvda 10-1” oilfield have been through projects optimization, budget control and process WorldReginfo - 545146f5-59f8-4f70-aa55-356176db2160 30 CHINA NATIONAL OFFSHORE OIL CORP. BUSINESS / 2015 ANNUAL REPORT 31

management, achieving remarkable effect in control of production of single well in the northern Shizhuang Area production capital expenditure. Meanwhile, the Company and increasing gas wells month by month, with gas transforms the assessment mechanism, and gives full play produced in 65% of exploratory wells. Three main reserves to the affiliates’ activeness to control the cost. areas have been formed in the Shanxi-Shaanxi Gas Field, ENGINEERING & TECHNICAL SERVICES including the reserves areas in southern Qinshui Basin In 2015, a breakthrough was made both in domestic and Engineering & technical services sector is the solid foundation for the sustainable development of the oil & gas mainly with CBM, the eastern margin of the Ordos Basin overseas oil & gas production. The domestic production mainly with tight gas, and the middle area of Shanxi mainly business. The Company adhered to “reducing cost and improving efficiency through safe, quality and highly reached 47.73 million tons of oil and 14.4 billion cubic with CBM. The Company enhanced research and delicacy efficient operation, overall promotion of management, and ”, highlighted technology innovation, and meters of natural gas (including CBM). The overseas management, so as to steadily improve yields of single enhanced equipment capacity, so that technical level was significantly improved, important breakthrough was production reached 31.97 million tons of crude oil and 10.7 wells. On December 10, 2015, the Linxing Pilot Area was achieved in operation capacity, international competitiveness and influence was enhanced in 2015. billion cubic meters of natural gas. put into production, realizing high effect integration of exploration and development with exploration discovery Unconventional Natural Gas and construction of pilot area in current year, and being put into production in next year. In 2015, the Company realized Oilfield Services customer’s recognition with high quality management and good image of team, and signed merely 2 offshore drilling Development and utilization of unconventional natural gas CBM utilization equivalent to 870 million cubic meters, China Oilfield Services Limited (COSL), with over 50 contracts in Indonesia, increasing the market share from is of strategic significance to optimizing energy structure increasing by 35.0% compared to that of last year. years’ experience in offshore oil & gas exploration, zero to one third again; in America, “COSL Hunter” won the and ensuring energy supply. CNOOC carries out the Actively coping with the serious challenge like variation of development and production, is mainly engaged in bidding of PEMEX’s operation project in the Gulf of Mexico, research on the global trend of developing unconventional global natural gas demand and supply, rapidly decreasing four businesses, including services of geophysical and COSL became one of largest drilling contractors in the natural gas resource, adheres to “integration of exploration natural gas price and profitability of unconventional prospecting, well drilling, oilfield technology and ship, in the Gulf of Mexico; in Russia, COSL signed the letter of and development, production and sale, self-development gas industry, the Company comprehensively and and owns the offshore oil service facility group, providing intent of applying drilling platforms in Sakhalin project after and overseas cooperation, and tight gas and CBM”, and deeply explored the potential, reduced the cost in gas operation service not only for single business, but Rosneft’s Magadan drilling project. actively promotes the exploration and development of transportation through optimizing the plan and design also for bundled services of bundled contract. COSL unconventional natural gas according to the development COSL’s scientific achievements showed up densely. of surface gathering engineering, improved production extends its service area to Asia-Pacific, the Middle East, guideline of “developing CBM, strengthening tight gas, and COSL’s independently developed LWD logging system efficiency through strengthening fine management of gas America and Europe, covering over 30 countries and exploring shale gas”. and rotary steering system were applied in oilfields like wells and reducing maintenance cost, and reduced the regions; constantly enhances equipment capacity, with “Chengbei”, “Caofeidian”, and “Lvda” in the Bohai Sea; Depending on technological progress, the Company cost of exploration and development through cooperation, technological fruits constantly emerging, and substantially a breakthrough was made in series of well completion continued to increase efforts on exploration and development, and service marketization in 2015. promoting international operation level; has been listed as technologies, which has broken the overseas technical accelerated the development of unconventional natural one of the largest comprehensive offshore oilfield service monopoly for 10 times consecutively, completely gas industry, and strived to create a new growth potential. providers in the world. realizing industrialized well completion business; COSL Following the guideline of “focusing on the key blocks to COSL steadily enhances the deepwater operation achieved overall breakthrough in the deepwater, ultra- explore and invest”, CNOOC’s domestic exploration of capacity. “Hai Yang Shi You 981” completed its first deepwater, high temperature and pressure, and high unconventional resources focused on tight gas, highlighted overseas deepwater operation in the Bay of Bengal, and sulfur-bearing fields, drilling and well completion fluids, the exploration of tight gas dessert-zone, and some high- created a record of operation well depth of deepwater and well cementation technological service, and was production exploration wells were put into pilot production semi-submersible drilling platforms in Asia with total depth in the same year. CNOOC successfully implemented of 5,030m; “COSL Prospector”, the seventh deepwater horizontal wells drilling and staged fracturing in the tight semi-submersible drilling platform, completed operation gas field onshore for the first time. Geo-Steering Drilling of three wells in the Liwan Area; “COSL Pioneer” Platform and Preset Sliding Sleeve Multistage Fracturing Completion was awarded by Statoil’s first honorary title of “Perfect Technology were successfully applied in these wells, which Well”; sixteen deepwater vessels like “Hai Yang Shi You laid a good foundation for tight gas reservoir development. 691” were successfully delivered, effectively upgrading In 2015, the Company made breakthroughs in exploration COSL’s support and service capacity in deepwater of new layers in the Linxing Area, with a new record of operation. testing production, achieved remarkable fruits of self- managed exploration in Linxing, with a large potential of COSL vigorously expands the overseas market. In Asia- tight gas resource; succeeded in testing in Benxi Formation Pacific, “Hai Yang Shi You 718” won the bidding of Shell’s in the southwest Shenfu Area, and found a new exploration project of 10,580 km 2D seismic survey in New Zealand; area in the southeast area and a favorable CBM resource after competing with several international and local potential in Shengfu Area; obtained steadily increasing contractors, COSL Indonesian Drilling Company won COSL deepwater operation site WorldReginfo - 545146f5-59f8-4f70-aa55-356176db2160 32 CHINA NATIONAL OFFSHORE OIL CORP. BUSINESS / 2015 ANNUAL REPORT 33

of large-scale float-over operation, making several new COOEC made breakthrough in key technologies. In 2015, of oilfield; the CNOOC Tianjin Chemical Research & records, and construction and installation project of Asian COOEC completed FEED design of China’s first tension Design Institute kept strong developing trend, with the largest 220 kV offshore booster station, undertook FPSO leg platform project; mastered the new key technologies profit exceeding RMB 100 million Yuan for two years international long-distance towage for the first time, and like barrier-free transformation of single-double node consecutively, the CNOOC CPCIRI’s profit exceeded completed the projects like offshore installation of WHPA pipeline, underwater regional dry welding; PAUT RMB 100 million Yuan for the first time, increasing by jacket in “Kenli 10-4”, and submarine pipeline laying of technical qualifications reached domestic highest level. 76% compared to the previous year; the Marketing & general engineering in “Enping 23-1” oilfield group. Meanwhile, several technological achievements like natural Service Company and the Catering Company kept the gas compressor, central control system, and T-shape stable profitability level through expanding new market COOEC achieved the remarkable effect in international sacrificial anode were promoted and applied, creating the and strict budgeting; the overseas business kept strong projects. In 2015, COOEC operated 7 international projects favorable economic benefit. momentum, with profit increasing by 27% compared to the like Ichthys and Yamal simultaneously. In the Ichthys previous year; the oilfield chemical products developed by project, 8 modules were delivered at the pace of “one COOEC was further recognized by the capital market. In Engineering Technologies Company were applied in the month for one vessel” and with the record of zero-delay 2015, under extreme difficulty, COOEC was awarded title Middle-East and Asia-Pacific; Logistics Company achieved of construction period and 15 million safe man-hours; the “Top 100 Listed Companies Most Respected by Investors a breakthrough in overseas business of oil supply. Yamal project was awarded “Excellent Contractor” with in China” and “Top 10 Valuable Listed Companies in COOEC module installation site safety and zero-accident within 10 million man-hours; the Main Board of China” with second highest total profit in CNOOC Energy Technology & Services Limited actively Nyhamna project was successfully delivered according COOEC’s history. COOEC ranked among the 237th in the carried out the overseas cooperation, established the highly regarded by domestic and overseas customers with to European construction standards; the continental list of China’s Top 500 Enterprise, 8 higher than 2014. Deepwater System Company with MSP/DRILEX, having favorable application effect of main technologies. construction of the Zawtika 1B project was completed; the a good start in terms of deepwater system facilities and BSP project, and the BD project in Indonesia were operated integrated service, and signed contacts with Jereh and COSL enhanced corporate image. In 2015, COSL was according to plan; “Lanjing” Crane Ship, “Lanjiang” Vessel, Professional Technical Services French SBM to carry out close cooperation overseas. selected as constituent stock of the “Hang Seng A-Stock and “Hai Yang Shi You 289” Drilling Platform won a good Industrial Leading Index” for the first time; COSL continued CNOOC Energy Technology & Services Limited highlights CNOOC Energy Technology & Services Limited vigorously reputation for overseas operation. to be selected as a constituent stock of the Hang Seng specialization development principle, speeds up promoted innovation in technologies, invested RMB 780 China A Corporate Sustainability Benchmark Index for COOEC made progress in market exploitation. In 2015, industrial shaping, and exerts itself to build an industrial million Yuan in development & research, established 159 two consecutive years. During evaluation activity of “2015 COOEC signed 207 contracts of domestic projects system suitable for the special company development new sci-tech projects. The scientific research project Asian Executive Team”, COSL was awarded altogether six accumulatively, and won the bidding of 9 international requirements through integration with resource, “Development and Application of Package Technology of honorable titles such as “the Most Honored Company in projects, among which 7 contracts were signed. The organization and industry, and structural optimization. With High Efficiency and Environmental Protection Aromatic Asia”. FPSO P67/P70 project realized direct contract of large- unique “technology+service+product” business mode, Hydrocarbon”, which the CNOOC Tianjin Chemical scale project in the South American area and direct CNOOC Energy Technology & Services Limited supports Research & Design Institute joined in, received the grand signature of overseas FPSO delivery contract for the first production with services, drives service with products, and prize of the State Scientific and Technological Progress Offshore Oil Engineering Services time. promotes industrial progress with technologies. In this way, Awards. The Engineering Technologies Company achieved it has formed four core business sectors, including energy a significant breakthrough in well completion sand control COOEC champions its efforts to reduce the cost, increase COOEC achieved fruitful research results of scientific technological service, FPSO & shipping management, technology, marking that CNOOC is the third company the profit, and improve the service in the offshore oil, research projects. In 2015, COOEC carried out 70 major logistics & marketing service, and safety and environmental completely mastered the system sand control technology gas and LNG projects in a practical and detailed way to scientific research projects, and received 148 patents and protection & energy saving, and become a productive internationally. The Pipeline Company actively advanced reinforce its EPCI (engineering, procurement, construction, 22 softwares accepted. Eight sci-tech achievements like services corporate with sustainable development capacity, “new materials, technique and methods; simplification, installation) capability in the offshore oil engineering “Research on DP float-over technology and its Application which provides “one stop” service in upstream, middle standardization and localization”, and its individually industry within the Asia-Pacific region. in South China Sea” won the provincial-level award and stream and downstream of oil & gas industry. developed BHC fast spiral casing was widely applied in the CNOOC’s award, and 6 research results like “Innovative In 2015, COOEC’s workload decreased slightly compared Bohai Oilfield. Design and Engineering Application of Underwater Safety CNOOC Energy Technology & Services Limited achieved with the historical peak, but the proportion of international Isolation System” were awarded the provincial-level award the goal of maintaining growth under pressure of operation. projects is the highest in history. COOEC implemented 30 by the industrial association. COOEC issued a construction In 2015, CNOOC Energy Technology & Services Limited medium and large-scale engineering projects, completed method, 7 provincial-level methods, 8 CNOOC standards was under great pressure because of constantly low oil 192,000 tons of processing steel, invested 15,600 vessel like Code of Acceptance of Construction Quality of Jacket price, made every effort to promote increasing-revenue days, overall completed 142 milestone points of projects, Engineering and Code of Acceptance of Construction and reducing-expenditure based on compliance operation, and completed engineering machinery accumulatively 184 Quality of Submarine Pipeline Engineering, and special and completed annual operation goal. The Oil Production days ahead. standardization technological system document of Skid- Company effectively operated various offshore facilities, COOEC achieved the breakthrough in operation capacity mounted Technology Electric Actuation Reciprocating a series of new facilities like “Hai Yang Shi You 118” were and efficiency. In 2015, COOEC completed 3 projects Compressor. put into production, and play the main role in production WorldReginfo - 545146f5-59f8-4f70-aa55-356176db2160 34 CHINA NATIONAL OFFSHORE OIL CORP. BUSINESS / 2015 ANNUAL REPORT 35

REFINING AND MARKETING

The refining and marketing sector plays an important role in the industrial value chain and helps CNOOC stick to the market-oriented reform direction, realizes the scale economy effect, optimizes the structure of energy products, and develops into a world class energy company.

Refining and Petrochemistry operation level, improves technological and economic indexes, strives to reduce the cost for production & The refining business, the upstream sector of production operation and management; optimizes structure of product, and sales of petrochemical products and fertilizers, is the and increases the production of high benefit products like extension of the E&P. naphtha, aromatic hydrocarbon and aviation kerosene; steps up its efforts in processing of supplied materials Facing the severe market circumstance of slightly and export, actively expands overseas market, opened the decreasing growth rate of global energy consumption, Southeast Asian market, and exported 1.21 million tons of rapidly decreasing international oil price, “New Normal refined oil in 2015; steps up its efforts in expanding market, State” of Chinese economy, supply exceeding demand in keeps a close watch on the demand of terminal customers, Plant in Refinery refined oil and chemical products, the Company optimizes carries out several promotion activities, expands marketing the resource allocation, carries out the technological range, establishes strategic partner for product through operation, realized balance among production, supply and CNOOC China BlueChemical Ltd. focused on production research, emphasizes safe production, promotes fine multi-channels. The Huizhou Refinery processed crude marketing with processing crude oil 6.21 million tons and management, constantly strengthens fine management management, expands overseas market, establishes oil equivalent to 12.46 million tons in 2015, and kept high various oil products equivalent to 6.01 million tons. of facilities and operation, mobilized the production team strategic partner for product through multi-channels, and load stable production for six years consecutively, and through labor contest, realized long-term stable operation promotes increasing and sale of high-value-added product CNOOC Oil & Gas Development and Utilization Corp indexes like crude oil processing capacity, product output of all production facilities, and accumulatively produced and quality-upgraded product. achieved good results through overall planning and and comprehensive energy consumption all create a new 2.296 million tons of urea, 936,000 tons of phosphate and lowering cost-saving efficiency. A breakthrough was made The Company deepens the awareness of “putting quality in record. The first period project of the Huizhou Refinery compound fertilizer, 944,000 tons of compound fertilizer, in asphalt market, which was further expanded, with stable first position, reducing cost and improving efficiency, running was awarded FIDIC AWARD, the “Noble Prize” in the 1.561 million tons of methyl alcohol, and 4,000 tons of conditions of winning the bidding in traditional markets like the Company through an industrious way”, strengthens engineering consultation. Guided by the market demand, polyformaldehyde in 2015; the Basuoports realized the Sichuan, Hubei, Anhui, Ningxia, Gansu, Shaanxi, Shanxi, management of technical indexes, optimizes facilities the Daxie Petrochemical kept stable production and throughput of 13.69 million tons in 2015, hitting a new and Inner Mongolia, and historical breakthrough in the record. projects in , Yunan, Hainan and Guizhou. CNOOC’s brand influence keeps increasing, and “CNOOC CNOOC Shandong Haihua Group Co., Ltd. comprehensively 36-1” asphalt was applied in key projects like road strengthened production scheduling and control, actively reconstruction of 70th Anniversary of Victory of Chinese optimized operation mode, strengthened control during People’s Resistance against Japanese Aggression, and production, organized shutdown repair of sodium 2022 The Winter Olympics in Beijing & Zhangjiakou, and carbonate and chlor-alkali system and relevant system, exported Papua New Guinea, Equatorial Guinea and completed 408 repair projects, largely improved operation Burma, expanding CNOOC’s international popularity. capacity and level of facilities, and reduced consumption CNOOC signed the strategic cooperation protocol of base and saved cost for RMB 31.05 million Yuan; actively oil for lubricant with domestic and foreign giants of lubricant carried out transformation of emission reduction treatment, and set sub-brand of “Hydro Pure” lubricant. The Company reduced 1,845.3 tons of sulfur dioxide emission, 2,394.2 acquires positive progress in engineering construction, tons of nitrogen oxides emission, 0.8 tons of COD emission, and on May 9, the technological reconstruction project 155.1 tons of ammonia nitrogen; accumulatively produced of the Zhanjiang Company was launched successfully at 2.598 million tons of sodium carbonate and 2.134 million

500,000 tons deacidification facility of high acid crude oil of DCC Integration Unit in Daxie Petrochemical one time; the integrated project in Taizhou was advanced tons of crude salt, and supplied 1.24 billion kWh of power CNOOC Oil & Gas Development and Utilization Corp smoothly. and 8.3 million tons of steam. WorldReginfo - 545146f5-59f8-4f70-aa55-356176db2160 36 CHINA NATIONAL OFFSHORE OIL CORP. BUSINESS / 2015 ANNUAL REPORT 37

Marketing strictly controlled the quality of product, completed quality upgrade of national IV vehicle diesel firstly, ensuring 100% CNOOC Marketing Company adhered to the theme of of quality qualified rate of sale products. “deepening reform, enhancing self-improvement and NATURAL GAS AND POWER GENERATION motivating vitality”, enhanced marketing capacity, carried At present, CNOOC has established the refined oil out the activity of reducing cost and improving efficiency, marketing network covering Yangtze River Delta, the Accelerating the development of natural gas and power generation is not only in line with the national strategy and actively established marketing network of oil products Pearl River Delta and Bohai Rim area, and extending to of energy consumption structure adjustment, but also a practical way for the Company to carry out low in 2015; carried out regional co-ordination management, the middle area along Yangtze River, Beijing- carbon activity, respond to Paris Agreement, participate in “Energy Revolution”, supply clean energies and strengthened front-line planning and coordination, Railway, and Beijing–Kowloon Railway, set affiliated promote green development. Natural gas and power generation has become main sector of middlestream and optimized marketing network, and enhanced internal agencies in almost 20 provinces and municipalities like downstream and shows the greatest growth potential. management efficiency; strengthened control of cost, Beijing, Shanghai, Tianjin, Guangdong, Jiangsu, Zhejiang, refined analysis of logistic cost, and strictly controlled Hebei, Shandong, Hunan, Hubei and Sichuan, and the the loss during transportation; established multi-element overseas agency in Hong Kong. As of the end of 2015, supply-channels of resources, and opened the on-line CNOOC realized sale of refined oil and chemical product marketing of refined oil; explored differentiated developed equivalent to 15.76 million tons, including 12.07 million tons mode, and rapidly expanded the terminal network, of refined oil, and increased 167 service stations, the total improved the direct marketing capacity of refined oil; of service stations is 713.

LNG cargo ship of Curtis project in Australia

The natural gas plays the more important role as low carbon clean energy, and the demand of economic development and social progress on energy is still growing. During the “13th Five-Year Plan” period, the proportion of million tons natural gas in the primary energy consumption will continue to rise to above 13.16

10% by 2020. In addition, LNG plays the indispensable role in China’s energy Imported 13.16 million tons of LNG in 2015 supply system with its advantage of reserve and peak-load deployment in emergency.

The Company maintained a leading position in China’s LNG industry in 2015. The imported LNG reached 13.16 million tons, and the natural gas- fired generation capacity reached 22.3 billion kWh. 7 LNG receiving terminals 22.3 billion kWh were put into commercial operation, with receiving capacity of 27.80 million tons/year. The length of built-up onshore long-distance transport pipelines Generated 22.3 billion kWh of power in 2015 for the natural gas was accumulated to 4,309 km.

In terms of expanding market, the Company established management system of resource purchase and sale; promoted pilot reform of sale mode, carried out the strategies of initiative marketing, emphasis on marketing channel and CNOOC’s service station cooperation for win-win, directly faced terminal customers of LNG; enlarged market share of deep sea natural gas in market in Guangdong. In terms of layout of market, the Company basically completed the industrial layout in the coastal region, had obvious superiority in station & line and harbor location, and established complete industrial chain in some areas; actively conducted WorldReginfo - 545146f5-59f8-4f70-aa55-356176db2160 38 CHINA NATIONAL OFFSHORE OIL CORP. BUSINESS / 2015 ANNUAL REPORT 39

gradually enhanced the stability of generation sets, carried out production, became the CNOOC’s first plant supplying heat outside, and made the calorific value measurement deal with Trade Company in the electronic platform FINANCIAL SERVICES of Shanghai Oil & Center, and the deal is Based on the Company’s industrial development, our financial services focus on the combination of industry and the first calorific value measurement deal publicly traded in spot trading platform in China. Fujian Putian Power Plant finance, strengthen the risk control, actively innovate financial products and service modes, expand the service operated the generation sets steadily at safe condition, network, optimize information system, strive to improve our financial service brand, and keep the quality of achieved good results in safe production, and created a financial capital and profitability constantly increased. new record of consumption reduction indexes.

Progress was made in regional liquid sales market development. The No.1 line of LNG plant of Curtis project CNOOC Finance Co., Ltd. strived to overcome the negative influence First export station of Fujian LNG in Australia was put into production. Yuedong LNG inside and outside CNOOC, extended its financial service functions, and Receiving Terminal and engineering construction of wharf endeavored to provide services for key members of the Company in respect 117.9 billion Yuan the layout in the Yangtze River Delta, the Pearl River Delta was completed. Shenzhen LNG Receiving Terminal broke of high-quality accounting & foreign exchange and reliable credit support, and Bohai Rim area, with natural gas business distributed in the bottleneck in developing market; steadily promoted and kept the record of zero non-performing assets. Coordinating with Total asset reached RMB 117.9 billion 78 prefecture-level cities in 24 provinces; rapidly developed engineering construction in a safe and stable way. No.4 expansion of the Company’s industrial chains, CNOOC Finance Co., Ltd. Yuan, a year-on-year increase by 9.1% LNG filling business. By the end of 2015, the service tank in Guangdong Dapeng LNG Receiving Terminal, the extends its service to the areas where the Company’s coastal main business stations had been established in 60 prefecture-level cities in Gaolan Harbo- section of second period project were mainly located, covering 92% of the Company’s qualified affiliates; 19 provinces, with 200 gas stations. of Guangdong pipeline, and the launching section of expanded the service ranges of foreign exchange transaction to the new second period pipeline of Fujian LNG was completed. fields like USD leasing and loan, domestic transfer, cross-border foreign- Natural gas-fired generation capacity kept growing. exchange collection, playing the role in reducing foreign exchange fund cost billion Yuan Jiaming Electric Power CO., LTD. prolonged A breakthrough was made in core technologies of LNG. The 79.5 and comprehensive financial cost, and risk of control on exchange rate for large-scale repair of generation sets, optimized the Company mastered a series of internationally advanced the Company’s “going-out”; provided the reliable low cost fund guarantee The proprietary assets reached RMB planning for generation sets repair, reduced downtime, core technologies in fields like LNG storage tank, receiving for production and construction with self-managed credit and loan, and 79.5 billion Yuan, a year-on-year increase realized islanded operation of 9F generation sets in station, and large-scale, medium-scale and small-scale replaced the outside bank loan of some affiliates, reducing their financing by 21%. China for the first time, and established CNOOC’s first liquefaction, improved the design capability, gradually cost; seized the opportunities in market to realize new breakthrough in independently operated heat pipeline. Hainan Power established the system of technological innovation; income from investment; made detailed arrangement for the capital position, Plant’s generation sets were adapted to several fuels promoted the engineering transformation of key technologies and kept the interbank profit level. In recent years, it has rendered more like offshore gas, LNG and mixed gas, creating a record and sci-tech fruits like automatic receiving terminal and financial services to the Company and has rapidly developed in operation of most wide adaptation to fuels of gas turbine, and the large-scale storage tank. The self-owned technologies performance. CNOOC Finance Co., Ltd. completed the annual settlement billion Yuan standard of nitric oxide emission is stricter than national of large-scale storage tank were applied in Fujian LNG 1.55 amounted to RMB 2.84 trillion Yuan, a year-on-year increase by 2.93% environmental protection standards. Zhuhai Power Plant extension project and Tianjin LNG replacing project. in 2015 while the settlement and sale of foreign exchanges reached 392 The profit after provision amounted to RMB businesses and USD 3.17 billion. Besides, it annually provided RMB 159.3 1.55 billion Yuan, a year-on-year increase billion Yuan of proprietary credit loans and RMB 29.3 billion Yuan of entrust by 30.2% loans, the proprietary credit loan balance reached RMB 25.0 billion Yuan by the end of 2015, the average daily proprietary credit loan balance reached RMB 21.4 billion Yuan. Until December 31, 2015, the assets reached RMB 117.9 billion Yuan, a year-on-year increase by 9.1%, and the proprietary assets reached RMB 79.5 billion Yuan, a year-on-year increase by 21%. CNOOC Finance Co., Ltd. realized a profit after provision amounting to RMB 1.55 billion Yuan, a year-on-year increase by 30.2%, creating a record under normal operation since starting business.

Under the situations of constantly sliding macro economy, changeable policies, and continuously emerging industrial risk, Zhonghai Trust Co., Ltd. adheres to compliance and stable operation, accelerates strategic transformation and innovation in business, and maintains the profitability Hainan Yangpu Power Plant WorldReginfo - 545146f5-59f8-4f70-aa55-356176db2160 40 CHINA NATIONAL OFFSHORE OIL CORP. BUSINESS / 2015 ANNUAL REPORT 41

CNOOC Investment Co., Ltd. is authorized by CNOOC development”, reinforces the foundation, promoting to execute financial investment and strategic investment. innovation in business, and strengthens risk control, Through strengthening the management on strategy and creating a new favorable situation; actively innovates the equity value, it continued to run in good conditions in business model and expand inside and outside market association with its assets quality, equity operation and to cope with the severe conditions in market; emphasizes governance structure. In the beginning of 2015, it held fund management to ensure smooth operation of fund; 16 equities and managed 3 CNOOC’s private equity constantly strengthens management of internal control risk, investments. Based on strategies for holding equity and upgrades the professional level of legal management; established in the beginning of the year, aiming at various lays foundation for expanding overseas business by equity types and industry trend, it adopted different establishing the subsidiary in Hong Kong. In 2015, CNOOC operation strategies to keep holding, reduce holding, and International Lease Finance Company completed 26 drop out. As of the end of 2015, through equity dividend, leasing projects, with contract price amounting to RMB reducing holding of stocks and equity transfer, it saw a total 38.9 billion Yuan, of which RMB 29.0 billion Yuan attributing profit of RMB 3.59 billion Yuan. to internal projects, and RMB 9.9 billion Yuan to the external CNOOC International Lease Finance Company projects, achieved operation revenue of RMB 699 million adheres to the operation policy of “Relying on CNOOC, Yuan accumulatively, total profit of RMB 197 million Yuan, providing service for quality clients, operating legal and a year-on-year increase by 40.71%, and realized zero non- compliance business, maintaining sustainable and stable performing asset. Young employees of CNOOC Finance Co., Ltd.

at a higher level, with business indicators hitting a new Hong Kong capital market. At the end of 2015, Zhonghai record. As of the end of 2015, Zhonghai Trust Co., Ltd. Trust Co., Ltd. obtained the qualification in stock index managed trust asset balance of RMB 411.693 billion Yuan, futures business, making breakthroughs in capital market a year-on-year increase by 31.0%. Its operating revenue, businesses. Zhonghai Trust Co., Ltd. will capitalize the total profit and net profit reached RMB 1.590 billion, hedging function of stock index futures and develop trust 1.304 billion and 1.099 billion Yuan respectively, seeing products that center on neutral market strategies and have a year-on-year increase by 12.9%, 11.4% and 13.0% low risks and stable income, thereby offering clients safe respectively. Zhonghai Trust Co., Ltd. constantly enhances stable investment channels. the compliance risk identification, management and supervision in conducting business; promptly improves CNOOC Insurance Ltd. overall implements the Company’s business systems and standards based on supervisory development strategies and deployment, carries out policies; attaches importance to the timeliness and CNOOC’s policy of central insurance, makes full use of effectiveness of in-action and post-action risk control of professional function of risk control, fully play the role trust projects; fulfills its responsibilities as a trustee; and of balancing and reducing insurance costs, controlling protects investors’ legitimate interest and market stability. and diversifying risks for CNOOC, and facilitates the There was none of the trust project not to be honored development of relevant industrial segments. It actively as scheduled throughout the year, with zero in new non- expanded its insurance business, so as to provide performing assets for 12 consecutive years. On the CNOOC with strong support of insurance arrangements premise of controllable risk assurance, Zhonghai Trust for overseas projects located in politically sensitive areas. Co., Ltd. carries out business innovation and consolidates CNOOC Insurance effectively saved insurance cost for its advantages in asset securitization businesses, policyholders, sped up amortized compensation expenses; Zhonghai Trust Co., Ltd. discussed project witnessing an annual scale of RMB 22.934 billion Yuan assisted policyholders resume production, provided in the securitization of credit assets; gets successful in financing facilitation for various sectors of CNOOC, and establishing the “Zhonghai - Hong Kong Market Investment realized all-win. In 2015, its gross premium revenue and No.1 Series” QDII product and the first RQDII product. total profit reached a historically high level, providing The investment object includes the IPO, secondary market vigorous guarantee to the development of CNOOC’s main shares, bonds and structured notes, covering London and business. WorldReginfo - 545146f5-59f8-4f70-aa55-356176db2160 42 CHINA NATIONAL OFFSHORE OIL CORP. BUSINESS / 2015 ANNUAL REPORT 43

INTERNATIONALIZATION

CNOOC focuses on the noticeable benefits, sticks to deepening overseas cooperation, carries out the energy development along the line of “the Belt and Road Initiative” while constantly expanding the scale of business overseas, steadily upgrades management level, strives for economic production, and continues to enhance value of foreign asset, realizing sustainable development of business overseas.

Business Overseas COSL gradually promotes international progress. COSL has become one of the biggest drilling contractors in Gulf In 2015, we have a more diversified overseas oil and gas of Mexico; COSL’s drilling successfully entered Russian assets and distribution, with overseas business in over market. COSL achieved the only two bidding projects in 30 countries and regions, and construct several oil & gas Indonesia. The first North America Operational Supporting production bases overseas, with foreign assets accounting Base was constructed. “Hai Yang Shi You 981” completed for 37.2% of the total assets. In 2015, CNOOC signed its first overseas operation in Burma. “COSL Pioneer” Addendum No.1 to Memorandum of Understanding Platform was awarded by Statoil’s first title of “Perfect Well”. with Gazprom, the Significant Clause and Agreement of COSL’s business like drilling and oilfield chemistry was Enhancing Cooperation in Daya Bay with Royal Dutch awarded “Best Contractor Prize” by the clients many times. Shell. Our position in the Petroleum Intelligence Weekly COOEC constantly expanded the international market, (PIW)’s World’s Top 50 Oil Companies is 32nd. with 12 overseas branches, and was awarded the Annual CNOOC Ltd.’s international business achieved great Excellent HSE Management Prize by Japanese JGC results. CNOOC Ltd. ranked 4th in the Platts Top 250 Corporation in evaluation and appraisement of global Global Energy Company Rankings and 1st in the industry contractor. COOEC Qingdao Branch was awarded “Green” breakdown of Exploration and Production and the regional Standard Acceptance Certificate, which is the highest level, breakdown of Asia/Pacific Rim, was awarded by the by Royal Dutch Shell, and upgraded to level-A qualification Corporate Governance Asia journal the “2015 Best CSR”, of offshore oil engineering professional contract. “2015 Best Investor Relations Company”. In 2015, the CNOOC Energy Technology & Services Limited made a Company had 31.97 million tons of crude oil and 10.7 significant breakthrough in international market, and won billion cubic meters of natural gas overseas. By the end of the bidding of FPSO project in Indonesia. The oceanic the “12th Five-Year Plan” period, the overseas oil and gas ecological safety corridor across Indian Ocean-Middle production was 4.6 times and 2.6 times of that at the end East-Africa-Europe was constructed, and overseas centers of the “11th Five-Year Plan” period. and offices were established.

CNOOC Gas & Power Group Ltd.’s international operation created a new chapter. The company imported 13.16 million tons of LNG annually. The Curtis project in Australia was completed and put into production, which was CNOOC’s first world-class LNG production base.

CNOOC upholds the idea of “cooperation for win-win”. While sticking to “going-out”, CNOOC exerts more efforts in the foreign cooperation through “introducing-into”. It signed 5 foreign cooperation contracts in 2015.

The Curtis project in Australia WorldReginfo - 545146f5-59f8-4f70-aa55-356176db2160 A3

C18 B9

A18 B14 C21 D8 C1 B11 C20 B3 A9 D13

A12 D7

C16 D11

A14 B4 C2 D4 A7 B7 A16 D6 C13 C7 B12 C9 B5 D12 C10 D1 C19 C6 B10

B8 C14 D2 C15 C11 A4 A10

B1 A17 C17 D14 A5 A15 D3 A1 C4 C23 C22 A2 B6 D9 D15 A6

A11 C12

A19 D10

D5 C5 C8 C3 B2 A8

A13

A20 B13

2 5 8 10 14 1513 17 21 2624 34 36 38 1 3 4 6 7 9 11 12 16 18 2019 22 23 25 27 28 29 30 31 32 33 3735 39

Africa Oceania Europe Asia North America South America

1. Algeria 9. Egypt 28. Australia 6. UK 12. Saudi Arabia 18. India 24. Malaysia 32. Canada 35. Ecuador 2. Nigeria 10. Uganda 29. Papua New Guinea 7. Iceland 14. Iraq 20. Myanmar 25. Brunei 33. United States 36. Colombia 3. Equatorial Guinea 13. Madagascar 30. New Caledonia 8. Netherlands 15. Qatar 21. Singapore 26. Hong Kong 34. Gulf of Mexico 37. Argentina 4. Gabon 31. New Zealand 11. Norway 16. The United Arab Emirates 22. Thailand 27. Indonesia 38. Trinidad and Tobago 5. Congo (Brazzaville) 19. Russia 17. Iran 23. Vietnam 39. Brazil

CNOOC Ltd. COSL COOEC CNOOC EnerTech

A1. Indonesia A7. Algeria A13. Argentina A19. Brazil B1. Singapore B7. Gulf of Mexico B13. New Zealand C1. Netherlands C7. Saudi Arabia C13. Qatar C19. Myanmar D1. Myanmar D7. United States D13. Russia A2. Gabon A8. Australia A14. Iraq A20. New Zealand B2. Australia B8. Thailand B14. UK C2. Iran C8. New Caledonia C14. Thailand C20. Russia D2. Nigeria D8. Canada D14. Singapore A3. Iceland A9. Canada A15. Uganda B3. Canada B9. Norway C3. Madagascar C9. Egypt C15. Vietnam C21. Canada D3. Uganda D9. Indonesia D15. Ecuador A4. Nigeria A10. Trinidad and Tobago A16. Gulf of Mexico B4. Iraq B10. Myanmar C4. Indonesia C10. India C16. Iraq C22. Uganda D4. Iran D10. Brazil A5. Equatorial Guinea A11. Papua New Guinea A17. Colombia B5. The United Arab Emirates B11. Russia C5. Australia C11. Nigeria C17. Brunei C23. Malaysia D5. Australia D11. Iraq A6. Congo (Brazzaville) A12. United States A18. UK B6. Indonesia B12. India C6. Hong Kong C12. Brazil C18. Norway North Sea D6. Qatar D12. The United Arab Emirates WorldReginfo - 545146f5-59f8-4f70-aa55-356176db2160 UK Norway

Russia “The Belt and Road Initiative”

CNOOC’s overseas operation layout is highly consistent with the line of “the Belt and Road Initiative”. We constantly carry out businesses like oil & gas exploration and professional technological service along the line of “the Belt and Road Initiative”, creating “Marine Energy Silk Roads”. Iraq

China

Myanmar

Brunei

Equatorial Guinea Congo (Brazzaville) Indonesia

Australia WorldReginfo - 545146f5-59f8-4f70-aa55-356176db2160 44 CHINA NATIONAL OFFSHORE OIL CORP. BUSINESS / 2015 ANNUAL REPORT 45

International Trade

In 2015, CNOOC Petrochemical Import & Export Co., Ltd. expanded Trade volume of CNOOC Petrochemical international market of oil products, strengthened integrated operation in Import & Export Co., Ltd. (Unit: 10,000 tons) domestic and foreign markets. The total trade volume reached 58.08 million tons, sales revenue RMB 140.5 billion Yuan, and total profit RMB 3.01 billion 5,808 Yuan. 2015

CNOOC Petrochemical Import & Export Co., Ltd. innovated the trade 5,361 2014 business; attempted the diversified purchasing strategies, provided the oil products of various qualities for downstream costumers, and expanded the 4,379 2013 channels of providing resource; created a record of import business volume of procuratorial domestic refinery plant; increased procuratorial importing oil of local refinery plant, and created the potential of expanding business. The overseas share oil was sold to CNOOC’s refinery plant. The Singapore Revenue of CNOOC Petrochemical Import & Export Co., Ltd. branch actively participated in Oman crude oil transaction in Dubai (Unit: RMB billion Yuan) Mercantile Exchange, enhanced involvement in the Middle East benchmark oil market, and promoted CNOOC’s reputation and influence in market. 140.5 2015 CNOOC Petrochemical Import & Export Co., Ltd. achieved progress in 239.1 construction of integrated project. A significant breakthrough was made 2014 in approval procedures of the project of 300,000 tons of crude oil wharf 216.4 in Yantai, and most of engineering quantity was completed. CNOOC 2013 Petrochemical Import & Export Co., Ltd. signed the service agreement and framework agreement on cooperation of crude oil transfer with several refinery plants, which were the source of stable revenue of integrated project. Total profit of CNOOC Petrochemical CNOOC Petrochemical Import & Export Co., Ltd. achieved good results in Import & Export Co., Ltd. (Unit: RMB billion Yuan) shipping business. The affiliated shipping companies, in order to realize “maintaining growth”, gave full play to the opportunity of declining fuel oil 3.01 price, rapidly improved quality and benefit through various measures of 2015 reducing cost, and made the highest profit in 2015. 2.52 2014 CNOOC Petrochemical Import & Export Co., Ltd. created the new model of conducting financial transaction. Facing the adverse situation of rapidly 1.81 2013 decreasing scale of financial transactions, RMB devaluation, and constantly decreasing income from investment resulted from rapidly declining oil price; CNOOC Petrochemical Import & Export Co., Ltd. created the new model of business cooperation, and achieved several breakthroughs by continuous innovation in financial services.

CNOOC Petrochemical Import & Export Co., Ltd. enhanced risk control, adjusted the level of risk from “risk identified, controlled, and tolerant” to “risk wholly identified, strictly controlled, and semi-tolerant”, strictly reviewed various business contracts and controlled various risks to trade with informatization according to trade risk control system and Dun & Bradstreet Credit Evaluation System. The internal control management system including 18 regimes, 151 methods, and 194 detailed rules and regulations was constructed, ensuring that the work is completed according to the rule. WorldReginfo - 545146f5-59f8-4f70-aa55-356176db2160 46 CHINA NATIONAL OFFSHORE OIL CORP. MANAGEMENT / 2015 ANNUAL REPORT 47

MANAGEMENT

Technology Innovation Management Innovation QHSE Informatization Progress Human Resource Management Corporate Culture Corporate Citizenship WorldReginfo - 545146f5-59f8-4f70-aa55-356176db2160 48 CHINA NATIONAL OFFSHORE OIL CORP. MANAGEMENT / 2015 ANNUAL REPORT 49

Establishment of Scientific Research Platform Technological standards issued (Unit: set) TECHNOLOGY INNOVATION Focusing on key technological research projects in major areas of heavy oilfields, deepwater oilfields and unconventional oilfields, CNOOC has 135 launched and carried out the constructions of 17 scientific research 2015 Technology innovation is a strategic engine for an enterprise’s sustainable development. Serving as a global platforms, including “Xinjiang Experiment Platform of Well Drilling” and 166 energy company, CNOOC is championing efforts to supply high-quality energy and exploring new-type marine 2014 “Engineering R&D Platform for Marine Seismic Survey System for Towed- energies continuously based on the oil & gas businesses and driven by the technology innovation, with a view to streamer”, and has made remarkable achievements. It has obtained the 127 2013 providing an inexhaustible driving force for sustainable development of the Company. experimental technology capabilities of practical drilling experiments at a depth of 7,000 meters, digibird assembly and testing, high-temperature & high-pressure sample testing and testing of hazardous substances in marine coatings, providing a basic guarantee for independent innovations. Science and technology awards (at the CNOOC has vigorously implemented its strategy of “development driven Investment in science and technology provincial and ministerial or above level) by science and technology”. Based on its science and technology (Unit: RMB billion Yuan) (Unit: item) thoughts of “overall arrangements, emphasis, standardization and Technology Innovation Achievements improvement”, CNOOC has been making full use of the leading and driving 6.37 59 2015 2015 roles of scientific and technological innovation, enhancing efforts in key CNOOC won a total of 59 scientific and technical achievement awards at the technological breakthroughs, continuously deepening reform of scientific 7.70 industry or above level, of which 3 were national scientific and technological 91 2014 2014 and technological system and mechanism and comprehensively upgrading awards, 13 were awards at provincial or ministerial level and 43 were awards scientific and technological management level. Therefore, its independent 7.28 at industry level. Its “Application of Key Technologies of Improving Recovery 85 2013 2013 innovation capability has been substantially improved. Ratio for Offshore Heavy Exploitation by Polymer Flooding” received the Second Prize of State Scientific and Technological Progress Award (SSTPA). The projects of “Development and Application of Packaged Technologies of Management of Scientific Research Projects Investment in research and development High-Efficiency and Environment-Friendly Aromatic Hydrocarbon” and “Key Science and technology papers (published in core journals) (Unit: RMB billion Yuan) Technology and Engineering Application of Using Scrap Tires to Construct (Unit: piece) CNOOC has made sustainable and stable fund investment in scientific High-Performance Asphalt Pavement” won the Grand Prize of SSTPA and the and technological research and development. The Company’s total 3.07 Second Prize of Science and Technological Progress Award respectively. The 2015 533 scientific and technological investment reached RMB 6.37 billion Yuan, of “Anti- Processing Approach of Highly Acid Crude Oil” received the 2015 which RMB 3.07 billion Yuan was invested in research and development, 3.30 17th “National Patent Excellence Award”. CNOOC was granted 999 patents 2014 484 accounting for 1.49% and 0.72% of its main business revenue respectively. (including 364 invention patents), and released 135 technical standards 2014 Focusing on the national major projects of the “12th Five-Year Plan”, 2.82 (including 32 national standards, 15 industrial standards and 88 corporate 2013 450 the scientific and technological projects at ministerial level and major standards) all year around. 2013 projects at corporate level, CNOOC made an overall management of scientific research projects as a whole. CNOOC carried out 947 national scientific research projects, of which 78 were national scientific research Licensed patents Transformation of Technology Achievements projects and the scientific and technological projects at provincial level (Unit: piece) and 349 were projects at corporate level. CNOOC also innovated its CNOOC has actively promoted the transformation of scientific and pre-examination approach for the initiation of innovation projects and 999 technological achievements. It released and implemented Administrative 2015 strictly inspected new planned projects to guarantee “cost reduction and Rules on Pilot Projects of Major Technology Achievements in CNOOC (Trial), efficiency improvement” in the beginning. Meanwhile, it summed up the 833 Administrative Rules on Industrial (Mine) Pilot Projects of Major Technology 2014 landmark achievements in major scientific research projects during the Achievements in CNOOC (Trial) and Administrative Rules on the Promotion 765 of Major Technology Achievements in CNOOC (Trial). Based on these “12th Five-Year Plan” period, including 12 core and key breakthrough 2013 technology products, such as the “Design, Construction and Application rules, it initiated pilot projects of major technology achievements and of of Ultra-deepwater Semi-submersible Drilling Platform”, 15 core products, industrialization (mine) of major technology achievements and promotion such as “Rotary Steering Drilling System (COTAS)”, and eight categories of projects of major technology achievements. By initiating these pilot projects, technological capabilities, such as the “Overall Infilling and Comprehensive the supporting and promoting role of the scientific and technological Adjustment of Offshore Heavy Oilfields”. achievement transformation on the production and operation has been further strengthened. WorldReginfo - 545146f5-59f8-4f70-aa55-356176db2160 50 CHINA NATIONAL OFFSHORE OIL CORP. MANAGEMENT / 2015 ANNUAL REPORT 51

Major Achievements of Scientific Research Projects

Technological Major Achievements of Scientific Research Projects Fields MANAGEMENT INNOVATION

CNOOC has researched and developed domestically leading and internationally advanced marine “plough- type” inclined-cable seismic data acquisition system to collect 2D seismic data within a range of 4,210.85km and Management innovation is an essential guarantee for companies to strengthen their competitiveness and in a seismic bandwidth between 3-120Hz; it has mastered high-precision seismic data processing technologies achieve sustainable growth. Under the current complex environment of scientific and technological evolution equipped with “plough-type” cables, conventional towing cables, and upper and lower towing streamer broadband processing technologies as the core, which increased the signal-noise ratio of seismic data by 35%. and profound changes in the operating environment, CNOOC must grasp new trends and requirements of

Exploration CNOOC has successfully tested China’s first ultra-deepwater well — “Lingshui 18-1-1” Well, and has been equipped management innovation, make continuous management innovation, and incorporate the innovation in the whole with the complete set of drilling and testing capabilities of the ultra-deepwater offshore wells. management processes. CNOOC has successfully researched and developed the first comprehensive evaluation system of well logging interpretation with internationally advanced level, and has made the well logging data processing and interpretation and evaluated the effective reservoirs for 75 wells. The coincidence rate exceeded 90%. This saved substantial expenditure and greatly shortened the duration.

CNOOC has made breakthroughs in “Quantitative Interpretation Approach for Reservoir in Marine Sandstone with Adhering to its concept of management innovation, In order to encourage and guide itself and its employees to Time-Lapse Seismic Technology” and applied it to the residual oil prediction and the corresponding adjustment CNOOC constantly advocates innovation spirit, inspires participate in the management innovation, and standardize of project design of mature oilfields in Xijiang River area. It successfully optimized the first 8 adjustment wells and innovation consciousness, guides innovation direction, and institutionalize its management innovation, CNOOC assisted the mature oilfields to increase reserves and production. encourages innovation behaviors and closely connects released Measures on Excellent Achievements of Enterprise CNOOC has developed a set of digital platform for optimizing and adjusting production fluid structure in water- controlled oilfields, and formulated relevant corporate standards. The platform was successfully applied in oilfield the management innovation with its reform, development, Modernization Management in CNOOC Headquarters Development groups at Wenchang, Caofeidian and Lufeng for 149 times and increased oil production of 258,000 cubic meters in production and operation. It successfully organizes the in 2005, and systematically conducted evaluation, total. summary, transformation and promotion of management recommendation and application of outstanding CNOOC has researched and developed a new type of tubular downhole oil-water separators and hanging type innovation achievements, effectively promotes to achievement awards in management modernization. downhole oil-water separation pipe string technologies, which were successfully applied in Bohai Oilfield. The technologies broke the international technology monopoly and provided strong support for oilfields to stabilize oil upgrade its management level, and makes contribution Over 10 years, innovation achievements of enterprise production, control water cut and improve recovery ratio. to developing a world-class energy company with core modernization have emerged one after another, and fruitful The independently researched and developed homemade sand control technologies and tools made substantial competitiveness and Chinese characteristics. results have been obtained. By 2015, CNOOC has won breakthroughs, which covered the whole series of cased wells and open-hole wells. These technologies were in a leading role in China and were applied in wells at Bohai Oilfield for 214 times.

CNOOC has independently researched and developed the drilling speed-up technologies in the complex stratum of East China Sea and achieved large-scale application, which greatly increased the drilling speed, reduced costs and Well Drilling increased benefits.

CNOOC has researched and developed a kind of fast airtight casing threads which are easy to process. The threads increased the make-up speed by 20% compared to that of API casing threads.

CNOOC has developed gas-channeling prevention slurry system which solved the technological challenges of shallow natural gas exploitation in Bohai Sea.

CNOOC has successfully researched and developed inner inspection tools for magnetic flux leakage of offshore oil pipelines which broke the long-term foreign monopoly on China’s testing market of oil and gas pipelines and substantially reduced the testing costs.

CNOOC has made breakthroughs in the application of high-efficient T-type sacrificial anode which was successfully Oceaneering applied in “Peng Lai 19-9” WHPJ Platform.

CNOOC has independently researched and developed the prefabricated thermal insulation pipeline technology of rigid polyurethane foam spraying+polyethylene extrusion and winding, whose applicable depth of water increased to 100 meters from 40 meters. The technology has filled up the technological blank in China, broken the technological monopoly of foreign firms and enhanced the pipeline coating technologies.

CNOOC has successfully researched and developed a new type of low temperature resistant hydraulic asphalt products with excellent performance of deformation resistance under high temperature and cracking resistance under low temperature, which was successfully applied to the constructions of skiing yards of 2022 Winter Olympics.

High aromatic rubber extender oil processing technology successfully passed the industrialization experiments, Refinery and which can produce over 1,000 tons of high aromatic environment-friendly rubber oil with the CA value being higher Petrochemical than 20%. The products met the EU environmental requirements. CNOOC participated in the formulation of national standards — Aromatic Base Mineral Oil of Rubber Plasticizer as the major drafting party.

CNOOC has successfully researched and developed packaged technology of phosphorus-free water quality stabilizer, and realized industrialized application in companies of China BlueChemical, Shandong Luhua Chemical, and ENN Energy in Qinshui, Shanxi Province. It has realized greening treatment of the processing technologies of Chairman Yang Hua awarded the medal of “Advanced Group of China Offshore Oil Industry” to “Hai Yang Shi You 981” to honor its circulating water. substantial contribution in the area of quality management. WorldReginfo - 545146f5-59f8-4f70-aa55-356176db2160 52 CHINA NATIONAL OFFSHORE OIL CORP. MANAGEMENT / 2015 ANNUAL REPORT 53

awarded 193 excellent management achievements at the efficiency, playing an important role in overall planning, corporate level, of which 81 won ministerial level industry guidance, coordination and support. In the past two awards, 27 won nation level awards (11 won the first years, the funding gained through the “Quality and Benefit prizes and 16 won the second prizes). The achievements Year” activity by reducing costs and increasing benefits QHSE covered various links of CNOOC, including reform and has reached RMB 10 billion Yuan each year, making a CNOOC attaches great importance to employees’ physical and mental health, commits itself to creating safety development, production and operation and project great contribution to production and operation. It has also management, reflecting the achievements CNOOC made formulated Collections of Outstanding Case Studies of the production environment for its employees through scientific management and efficient methods, and devotes in the management innovation and the constantly improved “Quality and Benefit Year” Activity and held 8 seminars to to providing the society with higher quality products and marketing services in safe, efficient and environment- management level. promote and publish the good experiences in the activity friendly manners, so as to contribute its values to realize sustainable development of the society and and to explore a long-term mechanism of reducing cost environment. In 2015, CNOOC awarded 21 excellent management and increasing benefits. achievements at the corporate level, of which 10 won ministerial level awards in the national petroleum & petrochemical industry (4 won the first prize, and 6 won the Quality Management and testing, measurement management and equipment second prize). Three management achievements declared maintenance. Through the examination, it promoted the by the Company won the second prizes (national level) In the control of quality, CNOOC adheres to the directives Marketing Company to enhance quality management of 22nd National Enterprise Management Modernization of “people oriented, safety first, honest and law-abiding, of oil products at all links, including oil procurement, Innovation Achievement Awards, namely Engineering reinforcing foundation, innovation-driven and winning with transport, storage, sales, testing, and to improve the quality Technological Management with Objective of Improving quality”. It pursues the quality objectives of “excellence management and control and oil product quality. Development Capability of Deepwater Oil and Gas and leading to satisfy clients”, and implements the general Resources, Management of Legal Risks for Large-Scale requirements of “emphasizing basis, ensuring safety, CNOOC has carried out quality management activities Overseas Oil and Gas Development Projects and New stressing quality and increasing benefits”, so as to fully and won various national awards. In 2015, the innovation Business Development with Objective of Realizing Leapfrog establish a quality management system and culture and achievements of the Company emerged one after another Development of Ocean Engineering. continuously upgrade quality management level. CNOOC in various activities, and two important national awards obtains complete certifications for its products and were gained. The Phase I of Zhuhai LNG Project of services, conducts strict quality supervision and control and CNOOC Gas & Power Group was awarded the honorary “Quality and Benefit Year” Activity constantly improves the quality of its products and services, title of “Excellence Project Award in 15th China Quality establishing a good reputation in the international market. Management Award”; the “Hai Yang Shi You 981” Drilling Since 2014, CNOOC has launched “Quality and Benefit Platform was awarded the “2nd China Quality Award” Year” activity. In 2015, CNOOC deepened and extended CNOOC identifies quality risks and clearly recognizes which was the only important quality prize awarded to the activity to further enhance its management level which quality priorities. In 2015 at the second Quality Manager frontline grassroots team. helped itself achieve the objective of “reducing costs and Meeting, CNOOC clearly put forward the specific increasing benefits”. This successfully completed the major requirements of “Adhering to Problem Orientation, CNOOC promotes the activities of quality management production and operation tasks. Focusing on Implementing and Solving Practical Problems groups to strengthen the quality culture constructions. and Prioritizing Thinking and Working on Solving Practical In 2015, CNOOC continued to promote quality theme The upstream units focused on the research on key areas Problems”. CNOOC emphasized to objectively understand activities of “QC Group” to highlight its achievements of exploration development and well drilling, effectively the relations between quality and safety, seriously identify of quality culture constructions. CNOOC received 107 reducing the costs of each barrel of oil; professional quality risks, set clear objectives and develop quality outstanding achievement awards for its activities of service units strengthened overall planning with upstream planning. ”QC Group” by China Petroleum and Chemical Industry units to collaborate to reduce costs and improve anti-risk Association (CPCIA) all year around, including 6 national capabilities together; downstream units made hard efforts CNOOC implements special quality examination and awards, 2 “National Quality Trustworthy Teams” awards, 11 in the long-term operation of production equipment and improves product quality. In 2015, CNOOC implemented first prizes, 29 second prizes and 68 third prizes awarded optimization of product structure, making new progress in “Full-Coverage, Whole-Process and Consistent-Standard” by CPCIA, 17 “Quality Trustworthy Teams”. The number special quality examination on the 52 gas stations of increasing income and decreasing expenditure; financial was twice more than those in 2014, and accounted for Shandong Branch of CNOOC Marketing Company. From and trade units have actively promoted combination of 35% of the total number of CPCIA. The quality culture the perspective of quality management, the Company production and finance, innovated commercial modes and constructions have made remarkable achievements. provided high quality services to the major businesses; conducted in-depth analysis on the whole processes of oil the departments at headquarters transformed working product sales and put forward improvement requirements CNOOC launches “Quality Month” Champion to strengthen style, enhanced qualification and increased working in areas of institution building, personnel training, sampling the quality consciousness among all the employees. The WorldReginfo - 545146f5-59f8-4f70-aa55-356176db2160 54 CHINA NATIONAL OFFSHORE OIL CORP. MANAGEMENT / 2015 ANNUAL REPORT 55

Company actively responds to the requirements of General its employees, the Company calls on all employees to awareness and practical behaviors, so as to effectively annual examination plans. In 2015, the Company examined Administration of Quality Supervision, Inspection and participate in walking and body building activities. It also guarantee the implementation of and the QHSE systems of 7 units. Quarantine, and extensively promotes the “Quality Month” launches basic mental health information services, and personal safety of employees. Depending on IT tools, CNOOC promotes constant activity by fully utilizing media of newspapers, panels, continues to expand the stress management and mental CNOOC actively responds to the risks brought by younger elimination of hazards. In 2015, the “Major Source new media and posters. A total of 21 secondary units health services to the employees working on sea, at work teams and multiple contractors in a wide range of and Hazards Elimination System” reports a total of 94,904 of CNOOC have participated in the activity with 45,000 departments of headquarters and institutes. In Chinese areas, innovates its safety training means and improves hazards, of which 94,737 (99.82%) have been solved. participants, over 4,000 posters have been produced waters, CNOOC continuously launches stress management safety training system, so as to enhance the quality and In accordance with relevant national requirements, the and posted, over 11,000 publicity materials have been services for employees working on its 52 offshore platforms efficiency of safety training. The Company fully explores Company carries out “Six Crackdowns and Six Solutions” disseminated and over 800 panels have been made, so the to positively ease the pressure of employees and effectively internal resources to construct a safety training course activity; the Company intensifies the elimination of oil spill quality consciousness among all its employees has been contribute to driving health promotion. system for all its employees and continuously optimize risks and prevents oil spill hazards; the Company conducts obviously enhanced. CNOOC enhances professional training on HSE the training platform. The Company also develops an special safety investigation and examination upon the CNOOC solidifies constructions of brand management management personnel and enhances occupational on-line education platform, vigorously trains a team of special operations on ships under repair or construction, system and devotes to building an internationally renowned health management level. The Center for Disease Control internal part-time trainers and enhances the safety training self-owned railways and helicopters and improves safety in brand. By refining the core values of “CNOOC” brand and Prevention of CNOOC General Hospital adopts an management. the production process of the whole industrial chains. and revising the Company image brochure, the Company integrated professional training of combining “inviting” CNOOC conducts special inspections on pipeline hazards, comprehensively unifies both brand cultural connotation and “dispatching” to conduct professional training on HSE Work Safety crude oil storage tank hazards, hazardous chemicals and image, and improves the world’s recognition on management personnel, of which 65 people have been CNOOC always puts work safety as the lifeline to the products and inflammable and explosive products. “CNOOC” brand. “CNOOC 36-1” asphalt, “Haijiang” dispatched and 49 experts have been invited for training. corporate development and constantly enhances a safety Meanwhile, the Company enhances communications lubricant, “Awode” painting, “Yuandu” salty products CNOOC has actively carried out occupational health management system, so as to provide a safer working with local governments and local communities to actively and “Lishen” batteries, as well as “Fudao”, “Tianye” monitoring and evaluation and improved service environment to employees and contractor employees as promote hazard control for oil and gas transmission and “Sakefu” fertilizers have been recognized by the quality. In 2015, two occupational health technological much as possible and create first-class safety management pipelines. society. China Oilfield Services Limited (COSL) is also an service institutes of CNOOC have actively conducted for the field work. international renowned brand. With the improvement of the safety production system two occupational health monitoring and evaluation. In CNOOC strengthens the QHSE system, adheres to constructions as the core, CNOOC timely grasps the CNOOC endeavors to launch quality management training 2015, CNOOC carried out 26 pre-evaluation projects on systemic management mode and coordinates to draw up key links of overseas major and new projects and pays to strengthen quality management consciousness. occupational disease hazards, 22 evaluation projects Through quality management training with various forms, on occupational disease hazard control, 14 assessment rich content and clear classification, the Company not only projects on the status quo of occupational disease hazards enhances employees’ awareness of quality management, and 91 monitoring projects on occupational health hazards. but also improves suppliers’ and contractors’ awareness of quality management, so as to increase their quality management level. Operational Safety

CNOOC puts operational safety as the base and lifeline of Occupational Health its sustainable development. Adhering to the core value ideas of “safety first, environment utmost, people oriented Adhering to the philosophy of “people oriented”, CNOOC and equipment intact” in environment protection and safety, always puts the safety and wellbeing of its employees at the Company constantly improves its safe production the forefront. We unremittingly strengthen the occupational guarantee system, enhances safety control in areas of health management, actively improve the operation personnel, production process and emergency response, environment, focus on the identification, analysis and and builds a company with inherent safety. control of occupational disease hazard factors in workplaces and popularize occupational health promotion Safety Culture activities, so as to ensure the safety and health of the Based on the concept of “people oriented and safety first”, employees in an all-around way. CNOOC advocates code of conduct for field operation, CNOOC focuses on the physical and mental health including “Conduct on Safety Signs” and “Five To-do’s and and promotes health of its employees. Through “Health Five No-nos”. Through various forms of safety trainings, Embraces CNOOC” health management system for all employees transform the safety culture into their self- German engineers are directing the employees of Mechanical Team to operate SPMT system. WorldReginfo - 545146f5-59f8-4f70-aa55-356176db2160 56 CHINA NATIONAL OFFSHORE OIL CORP. MANAGEMENT / 2015 ANNUAL REPORT 57

CNOOC continuously improves its capabilities of emergency response company in Indonesia; the Company unconventional natural gas, including CBM and shale gas, disposing the offshore oil spill. In 2015, based on its six cooperates with international well-known oil spill response so as to constantly increase the proportion of clean energy oil spill emergency bases, CNOOC constructed Huizhou organizations including OSRL (Oil Spill Response Limited), supplies. Comprehensive Base and Base and launched the SINTEF (The Foundation for Scientific and Industrial expansion of Dongying Base, Daishan Base and Weizhou Research at the Norwegian Institute of Technology), and Energy Conservation and Emission Reduction island Base; the Company launched four new environment ITOPF (International Tanker Owner Pollution Federation) CNOOC always deems energy conservation and protection ships in the Bohai Sea, the East China Sea to form a global emergency response system, which emission reduction as an important way to transform and eastern part of the South China Sea, and began to increases its oil spill risk prevention capabilities in development mode and improve core competitiveness. build the 10th environment protection ship. Its emergency international operating areas. With the concept of “green, low carbon, and sustainable response capabilities have been further enhanced through development” in mind, on basis of the mission of building “Emergency Base+Professional Environment Protection a “resource-conserving and environment-friendly” Ships” in China seas. Environmental Protection company, the Company seriously implements national Cleverly using WeChat to promote QHSE management CNOOC constantly improves early warning of typhoons and With the principle of developing a green, low carbon, energy conservation laws and regulations. Depending on emergency responses. In 2015, the typhoons influenced clean and renewable economy in mind, CNOOC makes its energy-saving and emission-reducing management attention to the important changes and potential risks in the production in China seas for 50 days. The Company great efforts to become a “resource-conserving and information system, the Company conducts energy- the production processes of different overseas projects, so timely launched its emergency plans for typhoons, used environment-friendly” company. Based on the control saving and emission-reducing work in all links, including as to provide risk anticipation and technological support helicopters for 1,105 times and ships for 33 times, safely principles that afterwards control is worse than mid-control, production, distribution and consumption; the Company to overseas units in a timely and effective way and ensure mobilizing and demobilizing 23,708 employees without any mid-control is worse than control beforehand and control constantly invests energy-saving and emission-reducing intrinsic safety of overseas projects. casualties. beforehand is worse than whole-process control, the special funds and promotes energy-saving and emission- Company has continuously improved its environmental reducing work through technological progress; the In 2015, CNOOC enhanced the construction of overseas CNOOC improves its joint emergency response management system, constantly enhanced the whole- Company always advocates green and low-carbon emergency safety system and focused on improving the mechanism. In 2015, CNOOC constructed a trilateral process environment management for its projects and production, life and consumption. emergency safety system for its projects in Iraq and Myanmar; management platform for joint emergency response incorporated environment protection into its routine for the operational areas of overseas oilfield services, the resources with China National Petroleum Corporation production and operations. As a result, the Company Based on its information system platform for the Company formulated HSE management plans; the Company (CNPC) and China Petrochemical Corporation (Sinopec effectively reduces the environmental risk hazards, environmental management, CNOOC implements an has also strengthened exchanges and dialogues to promote Group). They divided their operating areas into 15 zones, of becomes a “resource-conserving and environment-friendly” all-around management on “Three Wastes” discharged the good practice of overseas HSE management. which 11 are land linkage zones and 4 are offshore linkage company and realizes sustainable development of itself by the affiliated units at different levels and takes the zones. This realized uniform registration, overall planning and the environment. filling, counting, supervising and alarming of the pollutant Emergency Management and coordination and joint management of emergency emission data into the information management. In this rescue teams and available emergency relief supplies and Responding to Climate Change way, CNOOC realizes a flattening and fine management for Based on hazard identification and risk analysis, CNOOC equipment in each zone. the environmental protection. constantly improves the management system constructions In line with the green and low-carbon development trend, and intensifies emergency training and drills to increase its CNOOC actively conducts foreign offshore emergency CNOOC actively promotes green industrial transformation CNOOC adopts the method of “reducing scale, replacing systemic risk prevention capability and minimize the impact rescues. CNOOC, as a member of the Maritime Search and and upgrading of clean production technologies, speeds up fuels and taking measures” to promote the implementation of emergencies. Rescue Centre, actively participates in regional cooperation the exploration on the development of industries related to of emission reduction projects and promote treatment of on search and rescue and reasonably allocates search and carbon emission trading and completes study on systemic environmental hazards through special transformations CNOOC officially launches the maritime mobile emergency rescue resources, therefore, the Company realizes resource framework of greenhouse gas emission standards. Through of smoke desulphurization and odor removal in refineries. command system. In 2015, the Company constructed the sharing and complementary advantages, and effectively its continuous research on the capturing, storage and In 2015, its emissions of SO2, NOx, COD and Ammonia maritime mobile emergency command and communication responds to all categories of hazards. In 2015, the Company utilization technologies of carbon dioxide, the Company Nitrogen were 8,844 tons, 15,187 tons, 1,723 tons and 149 system which covered the “Four Maritime Spaces” of the participated in foreign rescues for 36 times and successfully enhances carbon inventory and conducts carbon trading, tons, a year-on-year decrease by 29%, 16%, 2% and 67% Bohai Sea, the East China Sea, eastern part of the South rescued 59 people, and won the honorary titles of “Advanced so as to reduce the greenhouse gas emissions. respectively. China Sea and western part of the South China Sea, and Unit” awarded by various provinces and municipalities. realized the combined deployment and unified management Meanwhile, the Company actively participates in the With great importance attached to the policy of “focusing at multiple spots between the headquarters, branches in CNOOC constantly improves its global oil spill risk Energy Revolution. By grasping the strategic opportunities on resource development and energy conservation various areas and comprehensive emergency management prevention capability. The Regional Industry Technical that China has been developing clean energy, the and prioritizing conservation”, and based on the core platforms. The system has provided communication Advisory Group (RITAG) which the Company initiated has Company highlights the strategic position of developing of improving the utilization rate of water resource, support for handling offshore emergencies and enhanced had 6 emergency response members, including South the natural gas industry, accelerates the development of CNOOC places emphasis on technological progress and the overall emergency response capabilities between all Korea, Japan, Malaysia, Thailand and Singapore; it signed offshore gas fields and constructions of LNG receiving innovations, increases efforts on technology reforms, branches of CNOOC. a cooperation agreement with OS-CT, the largest oil spill terminals, and promotes exploration and development of intensifies supervision management, strengthens WorldReginfo - 545146f5-59f8-4f70-aa55-356176db2160 58 CHINA NATIONAL OFFSHORE OIL CORP. MANAGEMENT / 2015 ANNUAL REPORT 59

LNG Receiving Terminal in Fujian Province A large number of dolphins are playing around the offshore Birds are resting on platforms platforms

wastewater comprehensive treatment and recycling, and risks timely and realize the harmonious relations between the Daya Bay with diving volunteers from the Pearl River The intelligent identification system of environmentally enhances water resource management in the round. In economic projects and ecological environment. Delta region. They fixed 200 coral seedlings at five iron coral sensitive resources in the Bohai Sea is officially put into 2015, CNOOC saved 1.27 million tons of water resources. shelves one by one and professional divers laid the shelves operation. The system can realize intelligent identification, Through the CNOOC’s marine environment and ecological on the soft sandy land of the seabed, providing a diverse quantitative analysis and scientific assessments of the In 2015, CNOOC consumed 1.947 million tons of standard protection public welfare foundation, the Company ecological space for maritime animals to live and breed. planning of offshore oil and gas field and the influence of coal, 4.638475 billion kWh of electricity, 306,698.7 tons commits to the research and conservation projects of developing environmentally sensitive areas. of crude oil, 327,686.1 tons of diesel oil, 6.824505 billion biodiversity, and promotes to recover resources and CNOOC conducts survey on the population quantity and cubic meters of natural gas, 19,896 tons of fuel oil, improve the environment in its locations of projects. migratory distribution of neomeris phocaenoides and CNOOC digs “Biopori” to capture water and prevent floods. 3,979.5 tons of gasoline and 34.6985199 trillion KJ of Meanwhile, CNOOC actively involves in environmental its protection in the Yellow Sea and the Bohai Sea. The In the “World Environment Day”, Husky—CNOOC Madura heating power. Its energy consumption per RMB 10,000 initiatives and makes efforts to create better ecological neomeris phocaenoides are under state second class LLC (HCML), a company co-established by CNOOC Yuan turnover is 0.2731 tons of standard coal equivalent, conditions to promote the “Beautiful China” constructions. protection and listed into the Convention on International Southeast Asia Limited and Husky Energy, responded to decreasing by 3.9% year on year and being better than Trade in Endangered Species of Wild Fauna and Flora. the call of United Nations Environment Programme and CNOOC continues to carry on the enhancement and the planned annual target; 308,000 tons of standard coal Under the pressure of deteriorated maritime ecological organized 120 Chinese and Indonesian employees to dig release activity in China seas, releasing 980 million rare and equivalent was saved, completing 179.5% of the target in environment and overfishing, their living conditions “Biopori”, so as to enhance the capabilities of the ground protected maritime species, including penaeus penicillatus, the annual plan. In terms of its major products, including have become increasingly severe. CNOOC develops a pseudosciaena crocea, sparus latus and anguilla japonica. to absorb and retain rainwater and minimize the influence oil and gas production, crude oil processing, soda ash, constructive neomeris phocaenoides-protection strategy Among them, 110,000 were tachypleus tridentatus which are of floods on downstream low-lying land. synthetic ammonia and power generation, the unit energy and conducts five-year “Population Quantity and Migratory one of the most ancient species on the Earth and are known consumption continued to show a declining trend, which Distribution of Neomeris Phocaenoides and its Protection” The Long Lake Oil Sands Project constructs corridors as living fossils. This has effectively promoted the sustainable led the Chinese industry and some products were even at Project. for the animal migration. Nexen selects four places in development of fishery and increased fisherman’s revenue, an internationally leading level. the Project area and buries the early ground oil pipelines leading the development of local economy. CNOOC establishes a resource directory of mudflat to create migration corridors for animals. In 2015, the shellfish species. By surveying, collecting and preserving Ecological Protection CNOOC actively conducts transplantation of mangrove corridors were in a good condition, deer, wolves, bears, the mudflat shellfish species in coastal areas of the Bohai forest and coral . In 2015, the Company grew 520,000 lynx and other animals were often observed to pass CNOOC adheres to the principle of ecological protection Sea, the Company implements qualitative and quantitative mangrove plants in the coastal belt of Kaozhou Bay of through the corridors. during all phases of a project’s life cycle. The Company analysis and evaluation of resource distribution of mudflat Huidong County in an area of 310 mu. Mangrove forest always attaches importance to protecting the ecological shellfishes in that area, and establishes a resource In addition, Nexen funds Nature Conservancy Canada plays an important role in purifying maritime water quality, diversity of the operating sites and their surroundings and directory of mudflat shellfish species in coastal areas of (NCC) all year round to conduct biodiversity conservation protecting animal habitats and bio-diversity, and improving made assessment of environmental risks in advance, so the Bohai Sea at Shandong Province, which provides data and science activities, actively participates in the volunteer local natural environment. as to identify in advance the environmentally sensitive reference for reasonable exploitation and utilization of activities of NCC and advocates wildlife protection to the targets in the vicinity of the project, avoid environmental In addition, the Company’s young volunteers gathered in mudflat shellfish species in the Yellow River Delta zone. public and even practices by itself. WorldReginfo - 545146f5-59f8-4f70-aa55-356176db2160 60 CHINA NATIONAL OFFSHORE OIL CORP. MANAGEMENT / 2015 ANNUAL REPORT 61

development of sales terminal businesses; the Company constructions overseas. The Company develops foreign INFORMATIZATION PROGRESS improves its application capabilities of new technologies, informatization planning which, with a user focus and a uniformly deploys, constructs and manages the mobile service orientation, classifies the development strategy of Facing the new normal in economic development, CNOOC continues to adhere to the policy of “application application development platforms and promotes to reduce overseas informatization constructions and identifies the driven by business, innovation led by information technology”. The Company enhances top-level design costs and increase benefits and to develop in an innovative coordinative management and control way that “IT system of IT system, supports the coordinative development and improves the resource integration and allocation way; according to overall planning of information security, of CNOOC is responsible for overall coordination and IT capabilities, so as to promote to “reduce costs and increase benefits” and develop in an innovative way. The the Company comprehensively carries out comprehensive systems of the secondary companies are responsible Company has made remarkable progress in in-depth application, management upgrading and production treatment of information security, implements protective for their own businesses”; CNOOC strengthens the mode transformation. and corrective measures in three aspects of Internet management and control system of an overseas outlets, dynamic password and terminal security, so as to informatization, carries out the special work of integrating improve intrusion prevention capabilities of network and IT the IT systems of Nexen, including the integration of system. supporting resources in SAP systems and communications Enhancing Fundamental Capabilities developing towards the vision of a smart CNOOC on basis between information technicians; the Company promotes of consistently promoting a digital CNOOC”, creating IT the constructions of overseas regional support center and Starting with top-level design, CNOOC strengthens capabilities for the transformation and upgrading of its Promoting In-depth Integration of overseas call center, initially constructing an overseas management and control of the structure of its fundamental businesses; based on the requirements of “shutting down, Informatization and Industrialization three-level IT support and support system comprising platform, continuously improves the application value suspending, integrating and transforming IT systems”, headquarters, regions, and local companies, which covers Centering on the main line of “integrating data resource of IT, providing IT support for healthy and sustainable the Company upgrades the Domino Platform, deeply the whole CNOOC. and deepening system application”, CNOOC prioritizes development of its businesses. According to the integrated OA System, forms 30 application modules informatization of production and operation, closely serves principle of “priority dominating, top-bottom combination, globally and accumulates efficient and fast cloud service production, promotes in-depth integration of informatization joint participation and overall arrangement”, CNOOC experiences; based on the demands of “One System and industrialization, and constantly constructs a digital develops the informationization plan for the “13th Five- and One Brand”, the Company conducts the pilot project CNOOC, making remarkable achievements. The Company Year Plan” period which puts forward the strategic of “One Refueling Card”, enhances the overall image of supports accurate operation policies and analysis, releases objective of “constructing an interconnected CNOOC and CNOOC and promotes and supports the coordinative new supply standards, cleans data and transfers the IT systems, which greatly improves the quality of master data of supplies and lay a data foundation for the innovative Other systems application of big data in production and operation Project control Archiving Project planning management; according to the overall planning of “Smart Oilfields”, CNOOC steadily improves the intactness of Design system oilfield equipment and infrastructure and the pilot projects Integrated system of engineering design of smart production, making initial achievements; through Receiving Database Electrical design Database the integrated collaboration platform of engineering design, PFD design Data and document management Publishing the CNOOC refinery gradually establishes a metabase and Business management: work processes, Receiving information specifications for the middle and downstream 3D factory design Database project progress, data transmission... Publishing Receiving engineering maps, providing technological support and Database P&ID design Publishing Receiving “integrated delivery” services for the constructions of Material/procurement Database Publishing middle- and downstream engineering projects, promoting

Receiving Factory data warehouse the constructions of “digital factory”. Database Instrument design Other applications Database Publishing Publishing Digital delivery

Owner systems Supporting Overseas Development

CNOOC coordinates the overseas informatization work,

Supportive IT systems of companies (ERP, MES, CRM and factory maintenance) strengthens integration of IT systems, and enhances the construction, management and control of informatization WorldReginfo - 545146f5-59f8-4f70-aa55-356176db2160 62 CHINA NATIONAL OFFSHORE OIL CORP. MANAGEMENT / 2015 ANNUAL REPORT 63

and various other benefits as part of our efforts to help hold those in charge accountable, improves the selection them solve any worries that employees may have. By the and appointment quality of managers and maintains the end of 2015, the workforce reached 110,200. purity and capabilities of leading cadres. The Company HUMAN RESOURCE MANAGEMENT pays attention to the training of reserve talents, selects 40 outstanding young managers to attend the 7th Mid- CNOOC firmly believes that employees are the most valuable resource for its sustainable development Career Development Aged and Young Managers Training Session of CNOOC. and upholds the “people-oriented and employee care” concept. The Company fulfills its responsibilities to The Company also enhances efforts to train and exchange CNOOC complies with a scientific talent strategy, treats its employees, respects their legal rights and interests, improves their professional development space, improves internationalized talents, and reappoints and rotates 24 employees as its wealth, and strives to create a fair and their working environment, cares for their physical and mental health, and promotes diversity and employment of expatriate-employees. locals in the operation areas, so as to realize co-development of itself and its employees. open promotion environment and clear career development paths. The Company designs management, technological and skill positions to construct a personnel development Professional Expertise path which integrates selection, training, assessment, Employee Salary and Benefits are subject to special legal protection. As continuing promotion and certification examination into one. CNOOC implements Young Scientific Talents Training to implement standardized corporate annuity scheme Project and strengthens the training of young scientific CNOOC adheres to the overall idea of “controlling total CNOOC complies strictly with the applicable laws and across the board, the Company constantly increases managers. The Company identifies the first batch of 136 amount, adjusting structure and improving qualification”, policies of the jurisdictions in which it operates, and the reach, multidimensionality and comprehensiveness young scientific talents, lists them into three-year training steadily makes the human resource planning in the on basis of the principles of marketization of labor, of the employee insurance framework and constructs a plan and conducts special training, so that they can rapidly “13th Five-Year Plan” period, constructs a dynamic monetization of allocations and socialization of benefits, comprehensive and effective security system. Additionally, become professional and technical leaders, medium and human resource management system, and forms human initially establishes a distribution system which matches on basis of five basic social securities of pension, medical, high-end technological and management talents, and resources policies and systems of strategic planning, the market mechanism and is closely connected to work work-injury, unemployment and maternity, the Company realizes strategic replacement of talents. leadership management, talent development, employment value, and forms a standardized and competitive salary also provides supplementary insurances of life accident and compensation performance. The Company realizes CNOOC enhances selection, recommendation and and benefits framework, the purpose of which is to reward insurance, commercial supplementary medical insurance full coverage of eHR system which increases the working management of high-caliber talents, actively participates primary business units and key employees and to allow for and supplementary medical insurance for minor children efficiency. The Company standardizes the recruiting and in the national-level talent selection and recommendation, employment and income flexibility. The Company insists as well as corporate annuities and housing allowances. management of employees, strictly controls recruiting including Baiqianwan Talents Program, Young Science & on gender equality and equal pay for equal work, and The Company also provides physical examination, special number and quality, builds a worker transfer platform Technology Award of China and Creative Talent Promotion equally treats its employees who are of different races, physical examination for special types of work, paid leave, for employees, and promotes reposition and settlement Plan. In 2015, 6 individual candidates and 2 advanced nationalities, creeds, sexes, ages, marital statuses and difficulty assistance, emergency relief, critical illness relief and connection of supply and demand for employees in group candidates were recommended for such purpose the reorganized units, effectively utilizing internal human together with 17 expert judges at a state level, among resources. whom, one was elected the member of Chinese Academy of Engineering, two were included into the Baiqianwan CNOOC continuously deepens the reform of the cadre Talents Program, one was selected into Thousand Talents and personnel system, releases six institutions, including Program, and 17 talents were selected into national-level or Management Measures of Leadership Team of Senior industry-level judge expert bases. The Company launches Managers and Management Measures of Senior the selection of the first senior experts at CNOOC, and Managers, and selects and appoints employees legally. conducts expiry audit for the second appointment of 39 The Company increases its efforts for cadre selection and experts at affiliated units. exchanges, pays attention to training of young cadres and promotes exchanges between department at headquarters CNOOC enhances professional qualification system. The and grassroots cadres. The Company makes full use Company improves internal professional qualification of multiple opportunities of rotation and exchange, front certification policies and title management system and line training, local secondment and aiding constructions consistently enhances talent evaluation. In 2015, 47 were in areas under harsh conditions, which selects young qualified for the positions of professor-level technology managers to practice and work under harsh conditions titles, 495 were qualified for senior technical professionals and undertake urgent, hard, dangerous and major tasks and over 2,000 were qualified for intermediate technical and work at the front line. The Company enhances the professionals. Three were qualified for general supervisor The Skill level of competitive selection and strengthens inspecting level in aspects of exploration, borehole and well drilling Competition Site of and examination; the Company also enhances efforts to operations, 97 were qualified for general supervisors, 9 Drillers of COSL train, select, exchange, supervise, control cadres and were qualified for senior project managers or above, 45 WorldReginfo - 545146f5-59f8-4f70-aa55-356176db2160 64 CHINA NATIONAL OFFSHORE OIL CORP. MANAGEMENT / 2015 ANNUAL REPORT 65

were qualified for senior project managers, and 308 were the objective in the “12th Five-Year Plan” period. In 2015, the semi-senior and senior management talents, through subdivision qualified for professional engineers at projects. 240 mid-age and young technicians were trained and 54 of professional talents, the Company carries out targeted training in employees were organized to participate in high-end talent rotation; for mid-age and young management talents, the Company person times CNOOC vigorously promotes skill identification; the exchanges. carries out off-job training for three months, so as to train an young 997,000 proportion of highly skilled employees is further enhanced. management teams who are capable of shouldering important tasks; CNOOC has constructed 61 key training and The Company has released Job Directory at Headquarters for high-level technological experts, the Company comprehensively systemic projects for 997,000 person times (2015 Version), and standardized the management of Employee Training arranges professional and technological training sessions in exploration, skill positions; it has developed three types of work development and production and well drilling; the Company also holds standards, and 14 categories of test libraries for jobs, CNOOC actively promotes the learning organization Young Scientific Talent Training Session to train technological and technical laying a good foundation for training and evaluation of constructions, and encourages employees to set up the management talents in fields of deep-water, unconventional and reservoir frontline skill employees; it has 59 organized appraisals concept of lifelong learning. The Company improves geophysics, seismic data processing, production technologies, high- of junior, semi-senior, senior, technician and senior the talent training system at different levels and stages, hours temperature and high-pressure gas fields and intactness of equipment 7,230,000 technician levels with the number of appraisals totaling broadens training thinking and enlarges training investment and facilities, and improves their core professional technological 9,103 person times. By the end of 2015, CNOOC has in a planned way, creating a platform for capability The total training hours have been 7,230,000 capabilities and scientific research innovation capabilities; for high- hours developed professional standards for 96 types of work, building and potential development of employees. In 2015, level skill talents, the Company holds Comprehensive Capabilities the evaluation libraries for 93 types of work and the according to the requirements of “Second Leap-forward Improvement Session of Mid-aged and Young Technicians to improve on- training textbooks for 21 types of work, and trained over Development” outline on talent development and training, site management skills, innovation capabilities and capabilities of “master 5,000 evaluators and quality supervisors; it has made the Company developed and released CNOOC Training to apprentice transferring”. evaluations for 51,600 person times, and 4,860 employees Development Plan 2015-2020, laying a good foundation for have gained the junior professional qualifications, hours talent development. The training both focuses on the long- In 2015, 61 key training programs and systematic construction projects 81.3 6,457 gained medium professional qualifications, 9,860 term training and the short-term progress. Adhering to the were implemented. The Company trained 997,000 person times for a gained senior professional qualifications, 1,250 gained principle of “integrating training strategy and employee total of 7,230,000 hours, 81.3 hours per person, 4,221 person times and 81.3 hours of training per person technician professional qualifications and 284 gained performance”, the Company consistently trains key talents 707 days, of which 6 sessions were overseas training programs with 123 senior technician professional qualifications, of which the in a long term way. person times. proportion of technicians and senior technicians accounted for 5.4% of main types of skill employees, over-fulfilling CNOOC continues to implement Key Training Plan. For Supported by a training course system with various classifications, grades and systems, for its employees, CNOOC formulates Individual Development Plan (IDP), analyzes comprehensive and professional training needs of employees and specifically implements it in the individual performance appraisal system and training system, so as to ensure that professional level and overall capabilities are increased steadily. The Company focuses on the domestic transformation of overseas training achievements and launches eight domestic transformation sessions of special overseas training, of which the Overseas Training Session of Professional Management of Operation Costs and its achievement transformation sessions play a sound role in saving operational costs.

CNOOC broadens the channels of informatization training for employees and introduces various modes, including “Internet+”. The Company actively encourages employees to make online studies through online platforms of Employee E-book Library, Corporate Network Video Platform, XuetangX and Study China. Meanwhile, relying on the technological support and platform support of workercn.cn of All-China Federation of Trade Unions, employees and their families can browse and read 1,000 electronic journals, 500 industry newspapers, 100,000 e-books anywhere at any time via the Internet. The Company develops online courses, promotes online learning and reduces training costs. The person times participating in 10 safety training courses at the Online University exceeds 50,000. On-site Training of COSL WorldReginfo - 545146f5-59f8-4f70-aa55-356176db2160 66 CHINA NATIONAL OFFSHORE OIL CORP. MANAGEMENT / 2015 ANNUAL REPORT 67

CORPORATE CULTURE

Corporate culture is the soul for a company and the power source for the corporate development. In 2015, facing the severe challenges brought by international oil price slide, CNOOC fully played the leading role of corporate culture, enhanced confidence and gathered strength, with the vision of “Energy for All” in mind, on basis of the carrier of “Quality and Benefit Year”, CNOOC effectively advanced corporate culture building and fully guaranteed its survival and development.

Culture Promotion distributing 1,500 sets of thematic posters; China Offshore Oil Press organized a series of multi key publicities themed CNOOC makes remarkable achievements by deepening on Recognizing Severe Situation and Respond to Major the “Quality and Benefit Year” activity. The Company goes Challenges; the website and WeChat account reported all out to launch and promotes the activity and creates the progress of this activity from multiple perspectives and Version 2.0 of the activity. The Headquarters develops created rich atmosphere. The Company has enhanced the planning of the activity and its objectives and tasks, the efforts to sum up experiences and further promote while its units at all levels have enhanced organization the activity. The Company has organized a public lecture and coordination, forming a sound situation of top-bottom tour of typical cases of the activity, held 8 lectures in 7 combination and progress at one level after another; the large areas and explained 14 typical cases of reducing Rich and Colorful Leisure Activities on Offshore Platforms Company has conducted special treatment of companies costs and increasing benefits with nearly 5,000 employees with losses and made initial progress. Meanwhile, the attending. The lectures were down-to-earth with innovative Company has made all efforts to promote the activity. forms, and were highly recognized by State-owned Assets Company continues to carry forward the CNOOC spirit, the International Company of CNOOC Ltd. established a Through multiple channels, the Company has made an Supervision and Administration Commission and the promote corporate brand building and select and set up “CNOOC International” public account, and invited China’s all-round promotion campaign with high frequency and at Party group of CNOOC Corporate. The activity has saved advanced models, which stimulates the enthusiasm of the Ambassador to Uganda to deliver speeches for employees multiple levels, forming a strong direction of public opinion. over RMB 10 billion Yuan each year for two years, making employees’ dedication, innovation, creating a good image. working overseas; CNOOC Gas & Power Group organized The office of the activity timely edited and released work important contributions to better production and operation The Company fosters and practices the socialist core large-scale discussion themed on “job passion and briefing and news feed, made an exhibition panel for half- performance. values. In the whole CNOOC Corporate, it has conducted dedication, commitment and responsibility”. year achievements, editing and releasing 103 volumes socialist core value education activities with various forms of thematic promotional materials and producing and CNOOC fosters and practices socialist core values. The and CNOOC characteristics, transformed the “patriotism CNOOC makes fruitful achievements in corporate culture and dedication” into the “Firm Faith of Building a Maritime building. The Company establishes typical examples to Power”, transformed the “Honesty and Friendship” into high promote corporate spirits. The Company focuses on the consciousness of adhering to the safety and environmental advanced examples of “Hai Yang Shi You 981” operation protection and fulfilling social responsibilities, which team and “CNOOC ” Chu Jinyong. The Company made initial achievements. It carefully prepared the 2015 has recommended “Hai Yang Shi You 981” operation Annual Report of Party Building of CNOOC which, as the team to participate in “CNOOC Character of the Year first annual report of the Party building of companies or 2014” award which was elected the first; the Company even of central enterprises, attracted high attention and has coordinated the media to carry out “Hai Yang Shi You good evaluation. The Company has actively explored and 981” outreach activities; the Company created a stage enriched learning carriers, displaying many highlights. In play “a letter from Hai Yang Shi You 981 Platform” which 2015, the Donghai Petroleum Administration conducted was put on play in the “worker are the most beautiful-story- 110 “micro Party classes”, established 27 “book clubs of telling session of frontline workers” organized by State- Party branches”; the Offshore Oil Engineering established owned Assets Supervision and Administration Commission the system of “Lecture of the Party Branch Secretary” and and gained “Ten Most Beautiful Story” award. Through

Promotion Meeting of Themed Practice Activities - “Reducing Costs “Hai Yang Shi You 981” Team was evaluated the Party Branch Secretary delivered 76 lectures in total in continued and in-depth outreach, “Hai Yang Shi You 981” and Increasing Benefits and activity for the Best Among youths” “Maritime Character of the Year 2014” 2015 with more than over 6,900 participating person times; was highly recognized in the whole society. The Corporate WorldReginfo - 545146f5-59f8-4f70-aa55-356176db2160 68 CHINA NATIONAL OFFSHORE OIL CORP. MANAGEMENT / 2015 ANNUAL REPORT 69

Institute and China Offshore Bitumen were elected “National times, displaying its deep-water strategy and capabilities. Civilized Unit”. The CNOOC Energy Technology & Services The internal reporting was lively. Centering on two themes held the third Evaluation of “Character of the Year”; the of strictly administering the party in an all-round way as CNOOC Enterprises Corporation held the lecture tour of the well as reducing cost and increasing benefits, the China CORPORATE CITIZENSHIP achievements of “ten stars” which set up examples around Offshore Oil Press has made key reports and organized a The development of a company requires strong support from the whole society, which, in turn, requires active the employees. Meanwhile, the Company has strengthened series of in-depth reports, including “Scientific Research culture carrier construction. It has better played the role of Team Building” and “Overseas Employee Investigation”. contributions from companies in order to develop. As making full efforts to guarantee energy supplies, enhancing “National Ocean Consciousness Education Base” at the The Company has enhanced the use of new media, and environment protection and creating economic values, CNOOC always focuses on livelihood and complies with offshore oil industry exhibition hall and continued to hold its units have launched more than 70 public accounts its obligations and responsibilities of a corporate citizenship, promoting social progress with its real actions. “Open Day” activities. At the headquarters, Jinhu Training on Microblog and WeChat. The number of fans of the In 2015, the Company continued to commit to humanitarian engagements and voluntary service, making joint Center, and Shandong institute of the Petrochemical Microblog account of China Offshore Oil Press has been efforts to build the community with an investment of RMB 169.64 million Yuan in 2015. Company, the Company launched pilot projects of increasing, ranking top ten in a long term among the new corporate culture building. The Company has promoted media of state-owned enterprises. The public account on the constructions of websites, with the websites of CNOOC Microblog of “CNOOC Conch” was appraised as one of and COSL being officially launched and the websites of “Top Ten Microblog Accounts of Well-Known Companies”. Social Humanitarian Engagement Adhering to the principles of poverty reduction of “relief, Import and Export Company and other units running as a In a series of events, such as the Explosion of Hazardous assistance at the source and making blood to establish trail. The websites group functions smoothly. Chemicals at Tianjin Port, it has given full play to the CNOOC actively advocates and adheres to the a long-term mechanism”, CNOOC has made consistent advantages of the new media which made good effects. simultaneous performance of financial responsibilities, investment in the past 20 years and dedicates to improving CNOOC has made remarkable achievements in enhancing environmental responsibilities and social responsibilities. living conditions and education environment in poverty Brand Promotion the corporate image and its influence. CNOOC Public Welfare Foundation has been its uniform areas. The Company helps targeted poverty alleviation cities administration platform for public welfare projects of and counties in Hainan Province, Gansu Province, the Inner CNOOC creates and promotes a corporate brand image charitable contributions and environmental protection, and Mongolia Autonomous Region and the Tibet Autonomous and standardizes its logos. The Company actively Cultural & Sports Activities CNOOC has constantly been involved in public charity, Region to carry out accurate poverty alleviation, implement promotes to standardize and unify its logos on office such as targeted poverty alleviation, education aid and poverty alleviation projects, promote local people to get buildings in Beijing. After the logos on its buildings at CNOOC enriches employees’ cultural life through various special public welfare. rid of poverty and become better off and enhance blood and Shaoyaoju and on building A of activities. The Company has carried out the “Health Bohai Petroleum Administration, the logos on buildings of Embraces CNOOC” health promotion event, actively Marketing Company, on CNOOC Building at Dongzhimen, promoting the idea of health and exercise and enhancing Kaikang Oil Building and on new office building of Donghai employee physical and psychological health management; Petroleum Administration were all designed and installed the Company has promoted its secondary units to establish in accordance with new logos. The logos and images have Basketball Association and Badminton Association, and become more standardized and unified. conducted small-scale and diverse mass cultural and sports activities loved by the mass; the Company has CNOOC focuses on publicity. Centering on its development operated and maintained an Employee E-book Library priorities, the Company has launched a series of outreach which provided employees with an online reading platform activities in a planned and rhythmic way and the quantity with 1,000 electronic journals, 500 industry newspapers and quality of reports have made new breakthroughs. In and 100,000 e-books, enriching their spiritual and cultural 2015, the Company organized 26 key outreach events, lives and promoting CNOOC culture to go deep into the 7,800 articles in printed and online media and 266 reports grassroots. on TV programs, of which 151 were reported by CCTV and 6 were reported by CCTV-news. The Company joined CCTV Finance Channel to plan in-depth reports of “CNOOC Deep-water Equipment”; the Company joined Guangdong TV to plan the program of “Towards Deep Blue: Offshore Daqing Oilfield”; centering on “Hai Yang Shi You 981” Platform, the Company planned 9 deep-water outreach activities, including “Completion of Deep-Water, High-Temperature and High-Pressure Well-Drilling”, which People’s Daily and Xinhua News Agency reported for many Student Fund Activities on “CNOOC Day”, Weizhou Island Terminal of CNOOC WorldReginfo - 545146f5-59f8-4f70-aa55-356176db2160 70 CHINA NATIONAL OFFSHORE OIL CORP. MANAGEMENT / 2015 ANNUAL REPORT 71

making capabilities. By the end of 2015, the Company Integration into Community provides job opportunities and economic benefits for and provide caring services. In 2015, the Company has invested poverty alleviation funds of exceeding RMB the countries or regions where its projects are located, organized over 2,000 volunteer activities, attracting 20,000 130 million Yuan and dispatched 21 talents for poverty CNOOC actively practices its commitment to serving the profoundly influencing the livelihood of local people. young employees’ participation. alleviation in total; the Company has invested over RMB society, creating harmony and benefiting people, makes CNOOC Uganda hires community liaison officers to deal With “Blue Force” as the unified logo of CNOOC youth 260 million Yuan to aid Tibet Autonomous Region and efforts to share its resources with local communities, with various complaints of local community on CNOOC voluntary activities, with the missions of “Serving dispatched 10 managers in total. actively participates in community building and pays back and its contractors, communicate with the residents on Companies and Contributing to Society”, the Company with its development. CNOOC, by building Hope Primary Schools and subsidizing the recommendation of the charity events and to protect creates a series of youth fashion of “Blue Force Caring poor college students, creates a sound learning CNOOC continues to promote “Warm Heart” Project which the rights of local residents to know, to participate in and Ocean”. environment for students, relieves economic pressure of aims to help communities cope with difficulties in life, to benefit from petroleum activities. In 2015, the Uganda In 2015, CNOOC “Blue Force” youth volunteer service team students from poor families, enhances the education level improve the local ecological environment, lead cultural Company completed constructions of cross-cliff roads with continued to grow across China as well as the coastal in poor areas and helps students from poor areas to grow constructions in local communities and effectively improve an elevation difference of 400 meters in a high efficient way, and inland areas. As long as CNOOC exists in one place, healthily. the communities’ living standards, so as to build a better which connects the region with the outside world for the “Blue Force” exists. On Arbor Day, World Environment home. The Company sets up regular communication first time. Through its public platform of “CNOOC Student Fund” Day and World Day, the “Blue Force” youth mechanisms with local communities and carefully listens between itself and the China Soong Ching Ling Foundation, CNOOC Southeast Asia funds Sebir and Kongsi Island volunteer service team across China carried out volunteer to reasonable suggestions from local governments and in 12 years, CNOOC has contributed RMB 38 million Yuan to repair two mosques; the Company completes diving activities, such as cleaning beaches, planting mangroves, communities. On basis of its resource advantages, on the in total which benefited 37 universities and colleges and training for about 40 person times, helped the laid-offs planting coral and popularizing ocean knowledge for free, premise of job security, the Company actively participates directly funded over 12,000 person times of students. to obtain the diving certificates and actively promoted demonstrating “Blue Force” and beautifying China seas. in maritime salvages. In 2015, COSL was involved in them to be re-employed; the Company continues to train CNOOC continues to support “Land of Love · Water Cellar the salvages for 16 times, of which 16 vessels were Relying on CNOOC Public Welfare Foundation, the local fishermen and housewives with maritime product for Mothers” project of China Women’s Development dispatched, rescuing 14 ships in distress and 58 persons Company continues to seek advice on micro public welfare processing skills; the Company builds public health Foundation. In 2015, the Company contributed RMB in distress. projects under “Blue Force Caring Ocean” and selects facilities for communities around the project, including 2 million Yuan of special funds for three sub-projects, six “Approaching Blue” projects and 11 “Blue Force and CNOOC adheres to the combination of “introducing” and public toilets; the Company provides free medical services including “Beautiful Village”, “Safe Drinking Water on Caring Ocean” projects. In 2015, CNOOC received the “going out”, so as to let communities know more about in rural areas. Campus” and “Rural Water Conservancy”. award of “Top Ten Green Initiative of Chinese Companies” CNOOC and learn relevant knowledge. The Company Nexen continues to provide charitable donations and awarded by Global Compact, the Bronze Medal of 2nd CNOOC continues to support the Urban-rural Drinking respects each other with local residents and helps and voluntary services to Canadian “Anti-Domestic Violence China Youth Volunteers Service Competition granted by the Project in the Central and South Ningxia learns from each other, establishing a profound friendship. Association ”, “YWCA Childcare Center”, Calgary Hedge Central Committee of the Communist Young League and Connected to Pengyang County, so as to help solve the CNOOC and Shell join the Promotion and Education Center, Asylum Association and Food Relief Office. the Ministry of Civil Affairs, and the “Best Responsibility safe drinking water problem for Pengyang County, Honghe Bureau of Daya Bay to establish the supportive Nexen also donated USD 65,000 to the communities for Management Innovation Award” at the press conference Zone and Ruhe Zone. In 2015, the major project of Main education project of “Igniting Future”, donating reference community bus, and USD 250,000 to Canada Western of “Youth Attitude · Evaluation of Social Responsibility of Pipes of Pengyang Connecting Engineering was basically books to newcomers at primary schools and junior Summer Games. Nexen has continued to donate to the Bill Large Companies” held by the China Youth Daily and the completed which installed 31.2 kilometers of pipelines. The high school in the beginning of each semester, which Woodward School near the Long Lake Project to expand Guanghua School of Management, Peking University. civil engineering of Wulishan Water Treatment Plant was facilitates students; the Organizing Group of Datong SNG school buildings and establish scholarship. In a total, completed. Project attaches high importance to heritage protection, it Nexen donated USD 300,000 to the School of Business of optimizes and adjusts the factory location when selecting the University of British Columbia to train local economy & Since 2003, CNOOC has supported the “Lifeline Express” the factory site, avoids 3 immovable cultural heritage management talents; Nexen has donated USD 600,000 to Project with an accumulated total investment of RMB 14.82 sites. In 2015, the Organizing Group spent RMB 4.647 support the project of “Adopt-a-room Program” which has million Yuan. Because of its support and contributions for million Yuan in the exploration, identification and salvage benefitted 450 people up to now. 12 consecutive years, the Company receives the Bright excavations of heritage sites located in the factory with an Recognition Award awarded by Chinese Foundation area of 458 hectares, rescuing 32 ancient tombs in Ming for Lifeline Express. In 2015, the Company continues to and Qing dynasties through salvage excavation. donate RMB 1 million Yuan to the First Hospital of Longxi Voluntary Services County of Dingxi City of Gansu Province to establish a Adhering to the concept of “Respect, Mutual Trust and Win- CNOOC consistently advocates and promotes voluntary treatment center of Cataract equipped with Ophthalmic Win”, CNOOC actively involves into local communities. services. In 2015, CNOOC actively engaged in various equipment, and trains professional physicians. This is Through a series of long-term and systemic community voluntary service activities through Labor Union, Youth the third treatment center of Cataract that it has donated. building activities, such as charitable contributions, League Committee and Women’s Organization. The CNOOC has also donated an Ophthalmic Microsurgery voluntary activities and education funding, the Company Company has utilized various forms to help social Training Center in the Hainan General Hospital to serve benefits local people. The Company dedicates to leading disadvantaged groups, popularize maritime knowledge local people. local economic development by project investment and WorldReginfo - 545146f5-59f8-4f70-aa55-356176db2160 72 CHINA NATIONAL OFFSHORE OIL CORP. LOOKING AHEAD TO 2016 / 2015 ANNUAL REPORT 73

LOOKING AHEAD TO 2016

The global economy will recover slowly in 2016 while the supply exceeds the demand and the upward trend of international We must promote coordinated development of various business segments, constantly upgrade the joint development oil price is dim in global oil market. In domestic, the refined oil supply exceeds the demand, the natural gas consumption level, actively explore the international market, make full use of the spared facilities resource to the greatest extent, focus on increases at a lower rate with an intensifying competition in market, the oil refining and chemical fertilizer industries face upgrading the quality of oil products and expanding the market firmly, promote implementation of retail organized projects, the higher pressure of reducing excess production capacity, and the crude oil trade and refining industries face the expand corporation of franchising operation, accelerate the progress of production and operation of service stations, unprecedented competition. vigorously expand natural gas market, increase the intensity of developing users of LNG filling, large-scale industry and distributed energy, enlarge the LNG sales scale, actively promote deep integration with industry and trade, and further Facing the pressure and challenges, CNOOC will strengthen follow-up interpretation on the policies and deepen the research, improve increment of value. prediction and countermeasures in key reform fields such as state-owned enterprises, oil & gas, and finance & taxation. With a full understanding of complex domestic and foreign economic conditions, we firmly establish five development We must strictly adhere to safety and environmental protection, seriously fulfill safe production responsibilities, concepts, and take the initiative, aiming at adapting to “New Normal State” and striving to make a new breakthrough in cost comprehensively complete governance of potential dangers of oil and gas pipeline, deeply eliminate and effectively reduce control, asset operation, and industry transformation and upgrading. The Company strengthens the concern on and various QHSE hazards, strengthen the risk management and compliance operation according to law. Meanwhile, we must to the industrial situations, and timely optimizes the strategies and measures of production and management under low oil actively carry out the 3.0 version activity of “Quality and Benefit Year”, strengthen fine management, improve management prices. We must actively integrate into the major nation development strategies like “Building China into a Maritime Power”, level and return rate of investment, promote the operational management to a new stage, lead the development of the “the Belt and Road Initiative”, and the “Revolution of Energy Production and Consumption”, strengthen connection with Company’s industrial chain through scientific and technological innovation, stimulate the operational vitality through the development planning of regions where the businesses are located, and promote close integration of the Company’s management innovation, promote transformation and upgrading through industry innovation, and enlarge the quality development and local economic and social development. potential business.

We must scientifically promote the high-efficiency exploration, adhere to the mainline of seeking for medium and large- Guided with reform & innovation, regarding structural optimization as emphasis, cost reduction & efficiency improvement scale oil and gas fields, optimize exploration portfolio, economically and efficiently promote the oil & gas development as focus, CNOOC will pay more attention to synergetic development, strict management, self-improvement, technological and production, strengthen the study and application of low-cost development schemes, establish the new mechanism of advance, quality and efficiency, and will endeavor itself to make a good start of the “13th Five-Year Plan”. marine oil & gas exploration and development under new situations, pay attention to the construction of oil and gas fields, and construct and reserve a batch of quality production capacity. WorldReginfo - 545146f5-59f8-4f70-aa55-356176db2160 74 CHINA NATIONAL OFFSHORE OIL CORP. MILESTONES 2015 / 2015 ANNUAL REPORT 75

MILESTONES 2015

Time Milestone Time Milestone

January 9 In the National Science and Technology Reward Congress held by the Central Committee of the May 20 The Curtis project shared by CNOOC, China’s first overseas world-class LNG production base, was put Communist Party of China and the State Council in Beijing, CNOOC received the grand prize of the into production. State Scientific and Technological Progress Awards for the project of Research, Development and Application of Ultra-deepwater Semi-submersible Drilling Platforms. May 29 Mr. Yang Hua, Chairman of CNOOC, met with Joe Clark, former premier of Canada, and exchanged views on CNOOC’s business development in Canada and other overseas areas. January 19 The western main pipeline of the Zhuhai LNG terminal gas pipeline, namely the second stage project of the Guangdong pipeline network was put into production and trial run, which marks the production and June 8 In the launch of 2015 World Ocean Day & National Maritime Awareness Day in Sanya, Hainan, “Hai trial run of 621 km of Pearl River Delta natural gas outer ring pipe network of CNOOC. Yang Shi You 981” operation team was awarded the “Maritime Characters of the Year”.

January 20 The Liwan 3-1 Gas Field project in the South China Sea was selected into “2014 Global Offshore Oil and June 23 The State-owned Assets Supervision and Administration Commission of the State Council published the Gas Projects Top 5” and honored with the “Five Stars Award” by Offshore, the world-famous oil and gas list of Grade A enterprises of business performance evaluation in 2014, on which CNOOC has received journal. Grade A in performance evaluation for 11 consecutive years and won the first place among 41 Grade A state-owned enterprises. February 4 The Oil and Gas Reserves Evaluation Office of the Ministry of Land and Resources of the People’s Republic of China confirmed that the natural gas reserves of “Lingshui 17-2”, the first self-developed June 26 In the conference of “Investigation on Youth’s Recognition on Corporate Social Responsibilities (2014- deepwater gas field in China, is over a hundred billion cubic meters. 2015)” held by the China Youth Daily and Guanghua School of Management, Peking University, CNOOC won “Best Responsibility Management Innovation Prize” in “Youth’s Attitude · Corporate with Best Social February 7 The deepwater drilling platform “Hai Yang Shi You 981” spudded in its first overseas deep water Responsibility”. exploratory well in the Andaman Sea in Burma. July 1 CNOOC Gas & Power Group Ltd., affiliated to CNOOC, realized the first online deal of China’s LNG February 10 CNOOC and SK Creative Co., Ltd. entered into Product Sharing Contract for Block 04/20 and 17/03 in with a trading volume of 2,000 tons, which created the precedent of public trade of domestic LNG in the South China Sea. transaction centers and milestone of LNG trade and development in China.

March 17 In 2015 ranking of the overall competitiveness of Asian listed enterprises announced by the Boao Forum July 7 During evaluation activity of “2015 Asian Executive Team” held by Institutional Investor Journal, COSL, for Asia, CNOOC Limited ranked the 10th, listed among Top 10 for the first time. affiliated to CNOOC, was awarded altogether 6 honorable titles such as “the Most Respectable Company in Asia” and “2014 Best Investor Relations Company”. March 20 CNOOC Public Welfare Foundation was awarded “Most Outstanding Contributions to Chinese Children’s Charity”. July 8 Fortune (Chinese Edition) released a ranking list of Top 500 China’s Enterprises in 2015, on which CNOOC Ltd. ranked the 19th. April 22 30,000 tons of diesel produced by Huizhou Refinery was exported to Singapore, marking that CNOOC entered the market of refined oil product market in Singapore for the first time. July 22 Fortune Magazine in America released a ranking list of Top 500 Global Enterprises, on which CNOOC ranked the 72nd, 7 places higher compared to that in last year. April 23 The Installation Methods of Jacket in Shallow Water applied by COOEC, affiliated by CNOOC, was authorized by the United States Patent Office, and under patent protection for 17 years. July 22 In the third session of “Ecological Civilization · Beautiful Home” China Summit of Caring for Climate held by the Global Compact Network China, the “Blue Force · Youth Activity” organized by CNOOC was May 7 Forbes Magazine released a ranking list of Top 2,000 Global Enterprises in 2015, on which CNOOC selected into “China’s Enterprise Top Ten Green Activity”. Limited ranked the 103rd, 5 places higher compared to that in 2014. WorldReginfo - 545146f5-59f8-4f70-aa55-356176db2160 76 CHINA NATIONAL OFFSHORE OIL CORP. MILESTONES 2015 / 2015 ANNUAL REPORT 77

Time Milestone Time Milestone

July 27 CNOOC Marketing Company initiated cooperation with third-party e-commerce and payment service December 2 The successful test of “Lingshui 18-1-1”, the first ultra-deep water well in China drilled by “Hai Yang Shi provider in the fields of oil product marketing, non-oil product marketing, loyalty index maintenance, and You 981”, marked that China has a complete capability of conducting offshore ultra-deep water drilling system optimization relevant with service station internet, and began constructing “internet+ service and test. station”. December 2 COOEC, affiliated to CNOOC, was awarded the title “Top 100 Listed Companies Most Respected by August 8 CPDP49 Module of the Brunei BSP Project was loaded in COOEC’s Tsingtao field, affiliated to CNOOC, Investors in China” in 2015. and first period construction was completed, which was the first time that China’s independently built offshore oil platform entered the Brunei Sea Area. December 3 CNOOC and Husky Oil China Ltd. entered into Product Sharing Contract for Block 15/33 in the South China Sea. August 19 CNOOC Ltd. and Roc Oil Company (China) Limited entered Product Sharing Contract for Block 16/07 and 03/33 in the South China Sea. December 15 CNOOC signed the Significant Clause and Agreement of Enhancing Cooperation in Daya Bay with Royal Dutch to enlarge the joint venture enterprise, shared by both parties in proportion of 50:50, in September 10 “Hai Yang Shi You 301” owned by CNOOC, the first self-manufacturing 30,000 cubic meters LNG Huizhou, Guangdong. transport ship in China, made its first lease, creating a new era of “Chinese ship made in China, and China-made goods transported by Chinese ship” for LNG short-distance transportation service in China.

September 15 CNOOC Marketing Company successfully sold national V0# diesel in Shenzhen Petrochemical Exchange, marking the first online sale of CNOOC’s refined oil.

September 16 COSL, affiliated to CNOOC, was selected as a constituent stock of “Hang Seng China A Top 100 Index” by Hang Seng Indexes Company Limited.

September 22 CNOOC’s Tianjin Oil Spill Response Base was elected as “National Ocean Consciousness Education Base” by the State Oceanic Administration.

September 23 CNOOC was awarded “Enterprises with Best Global Image” in the third session of the Chinese Enterprise Global Image Summit.

October 16 COOEC, affiliated to CNOOC, completed installation of 220kV offshore booster station of offshore wind farm in Xiangshui County, Jiangsu, the largest scale offshore booster station in Asia.

October 27 List of “World Top 250 Energy Enterprises in 2015” was officially released by Platts Energy News, on which the position of CNOOC Ltd. rose to the 4th from the 12th in last year, and top 3 enterprises were Exxon Mobil, Chevron, and Shell.

October 28 CNOOC Ltd. was awarded “Asian Best Bond-Issuing Enterprise (China)” by Finance Asia Journal.

November 4 The first period project of Zhuhai LNG project of CNOOC Gas & Power Group Ltd., affiliated to CNOOC was awarded “Prize for Outstanding Projects of National Quality Award”.

November 17 CNOOC Limited was awarded the Platinum Prize of “Award for Enterprise 2015” by The Asset magazine. WorldReginfo - 545146f5-59f8-4f70-aa55-356176db2160 78 CHINA NATIONAL OFFSHORE OIL CORP. GLOSSARY / 2015 ANNUAL REPORT 79

GLOSSARY

Drilling Platform LNG Offshore drilling platforms are marine structures used mainly for drilling exploratory wells. Such platforms, generally divided Liquefied natural gas or LNG in short refers to the liquid that forms when natural gas extracted from gas fields cools to a into mobile and fixed platforms, are essential for offshore oil & gas exploration and development operations and house low temperature under high pressure after undergoing the fluid and acid removal, drying and distillation processes. LNG is drilling, power, communications, navigation and other equipment, as well as lifesaving and accommodation facilities. predominantly methane and is colourless, odourless, non-toxic and non-corrosive.

Heavy Oil Occupational Disease Heavy oil is highly viscous crude oil that contains a relatively high level of asphaltenes and resins. This usually refers to This refers to diseases that develop as a result of exposure to occupational hazards at work. those with ground densities greater than 0.943 and underground viscosities greater than 50 centipoises. QHSE Oil Reservoir The abbreviation QHSE stands for Quality, Health, Safety and Environmental. Established based on the principles of This is the smallest unit for the storage of oil. Oil reservoir layer or oil layer in short refers to the porous strata for the storage compatibility of similarities and complementarity of differences, and on the basis of the ISO 9001 and ISO 14001 standards, of oil. Not every part of an oil layer will contain oil. Oil reservoir refers to those independent oil-containing areas within an oil GB/T 28000 family of standards and SY/T 6276 Petroleum and Natural Gas Industries – Health, Safety and Environmental layer. Management System, the QHSE management framework usually refers to the framework that directs and controls the quality, health, safety and environmental aspects of an organisation. Exploratory Well Exploratory wells refer to wells drilled within an oil or gas field for acquiring the necessary geological data to determine the COD existence, delineate the boundaries, and perform industrial evaluations of oil or gas reservoirs. Those drilled during the Chemical demand or COD in short refers to the amount of oxidant consumed when treating water samples exploration phase can be further divided into prospecting, preliminary exploration and detailed exploration wells. using a certain amount of strong oxidants under certain conditions. The usual use of COD is to determine the extent of contamination of water bodies by reducing substances. Adjustment Well Adjustment wells refer to scattered or clustered wells drilled, in addition to existing well clusters, for improving the Coalbed Methane (CBM) development of oilfields. Coalbed methane, which is a coal-associated mineral resource and considered an unconventional form of natural gas, refers to a kind of hydrocarbon gas (predominantly methane) found trapped within coal beds, mainly adsorbed to the Well Logging surface of coal matrix particles, and partly dispersed in the porosity of coal or dissolved in the coalbed water. Well logging usually refers to geophysical well loggings, in which different forms of well loggers made based on electrical, magnetic, acoustic, thermal, nuclear and other physical principles, enter wells through the use of well logging cables, to Shale Gas allow the ground electrical measuring instruments to record continuously along the well bore the various parameters that Shale gas specifically refers to an unconventional form of natural gas found trapped within shale formations. change with changes in depth. Underground rock formations, including oil, gas, water, and coal layers and metal deposits, can then be identified through curves representing these parameters. Tight Gas Tight gas is an unconventional form of natural gas found in sandstone formations with permeability less than 0.1 Fracking millidarcy. Fracking, also known as hydraulic fracturing, refers to a technique used to create fractures in the oil layer using hydraulic pressure. The process involves the use of a fracking device, to inject a large volume of viscous fluid under high pressure Deepwater Semi-Submersible Drilling Platform into the oil layer and then fill the resulting fractures with proppants such as quartz sand to increase the permeability of the oil Deepwater semi-submersible drilling platform refers to a semi-submersible drilling platform that can operate in deep waters. layer and in turn, increase the amount of water injected or oil produced. Semi-submersible drilling platform, also known as column-stabilised drilling platform, is a kind of mobile drilling platform with small waterplane area and a large part of the floating structure submerged under water. Oil Spill Response Oil spill response is the formulation of plans and adoption of measures to control and prevent oil spills and reduce pollution FPSO damage, based on the environment and resources in the potential spill sources and waters within the designated sea areas. FPSO (Floating Production Storage & Offloading), namely floating production storage & offloading device, which is an oil & This sees common use in offshore oil exploration and development activities. gas production device combined with production processing, storage output and livelihood & power supply. Its complex in WorldReginfo - 545146f5-59f8-4f70-aa55-356176db2160 80 CHINA NATIONAL OFFSHORE OIL CORP. AGENCY DIRECTORY / 2015 ANNUAL REPORT 81

system and price are far higher than that in oil tanker with same shipping tons. As an important part for marine oil & gas development system, FPSO device constitutes a complete set of production system generally with underwater oil production AGENCY DIRECTORY devices, and becomes a high-tech product among offshore engineering vessels at present.

CNOOC Ltd. CNOOC Limited (Hong Kong: 00883, New York: CEO, Toronto: CNU, www.cnoocltd.com). CNOOC Ltd. Address: No. 25 Chaoyangmenbei Dajie, Dongcheng District, Beijing, P. R. China COSL Post Code: 100010 China Oilfield Services Limited (SSE: 601808, HKEx: 02883, www.cosl.com.cn) Fax: 010-64602600

COOEC CNOOC Research Institute CNOOC Offshore Oil Engineering Co., Ltd. (SSE: 600583, www.cnoocengineering.com) Address: CNOOC Building, No. 6, Taiyanggong South Street, Chaoyang District, Beijing, P. R. China Post Code: 100027 China BlueChemical Fax: 010-84523731 China BlueChemical Ltd. (HKEx: 03983, www.chinabluechem.com.cn) CNOOC Bohai Petroleum Administration Bureau CNOOC Gas & Power Group Address: Tower A, CNOOC Building, No. 688 Bohai Shiyou Road, Binhai New District, Tianjin, P. R. China CNOOC Gas & Power Group Limited (gaspower.cnooc.com.cn) Post Code: 300452 Fax: 022-25807147 CNOOC EnerTech CNOOC Energy Technology & Services Limited CNOOC Nanhai West Petroleum Administration Bureau Address: No. 22 Mailbox, Potou District, Zhanjiang, Guangdong Province, P. R. China Oil & Petrochemicals Company Post Code: 524057 CNOOC Oil & Petrochemicals Co., Ltd. Fax: 0759-3901918

CNOOC Oil & Gas Utilization CNOOC Nanhai East Petroleum Administration Bureau CNOOC Oil & Gas Development & Utilization Corporation Address: Tower B, Offshore Petroleum Building, No. 1, 2nd Industrial Road, Shekou District, Shenzhen, Guangdong Province, P. R. China Shandong Haihua Post Code: 518067 Shandong Haihua Group Co., Ltd. (www.haihua.com.cn) Fax: 0755-26683184

CNOOC and Shell Petrochemicals Company Limited (CSPC) CNOOC Donghai Petroleum Administration Bureau CNOOC and Shell Petrochemicals Company Limited (CSPC) Address: Offshore Oil Tower, No. 388 Tongxie Road, Changning District, Shanghai, P. R. China Post Code: 200335 Marketing Branch Fax: 021-22830040 CNOOC Marketing Branch China United Coalbed Methane Corporation Ltd. Address: No. 88 Andingmen Dajie, Dongcheng District, Beijing, P. R. China Post Code: 100011 Fax: 010-64298388

China Oilfield Services Limited Address: No. 201, Haiyou Avenue, Yanjiao Economic & Development Zone, Sanhe, Hebei Province, P. R. China Post Code: 065201 Fax: 010-84522133 84522294 84522246 WorldReginfo - 545146f5-59f8-4f70-aa55-356176db2160 82 CHINA NATIONAL OFFSHORE OIL CORP. AGENCY DIRECTORY / 2015 ANNUAL REPORT 83

Offshore Oil Engineering Co., Ltd. CNOOC International Lease Finance Company Address: No. 199, 15th Haibin Road, Baoshui District, Tianjin Port, Tianjin, P. R. China Address: No. 6 Dongzhimenwai Xiaojie, Dongcheng District, Beijing, P. R. China Post Code: 300461 Post Code: 100027 Fax: 022-59898000 Fax: 010-84528731

CNOOC Energy Technology & Services Limited CNOOC Investment Co., Ltd. Address: No. 6 Dongzhimenwai Xiaojie, Dongcheng District, Beijing, P. R. China Address: No. 6 Dongzhimenwai Xiaojie, Dongcheng District, Beijing, P. R. China Post Code: 100027 Post Code: 100027 Fax: 010-84525111 Fax: 010-84528731

CNOOC Oil & Petrochemicals Co., Limited China Ocean Oilfields Services (Hong Kong) Limited Address: Kaikang CNOOC Mansion, No. 15 Sanqu, Anzhenxili, Chaoyang District, Beijing, P. R. China Address: Room 2507, 25/F, Harcourt House, 39 Gloucester Road, Wanchai, Hong Kong, P. R. China Post Code: 100029 Fax: 00852-25640309 Fax: 010-84527003 CNOOC Capital Construction Management Co., Ltd. China BlueChemical Limited Address: No. 6 Dongzhimenwai Xiaojie, Dongcheng District, Beijing, P. R. China Address: Kaikang CNOOC Mansion, No. 15 Sanqu, Anzhenxili, Chaoyang District, Beijing, P. R. China Post Code: 100027 Post Code: 100029 Fax: 010-84526365 Fax: 010-84527218 CNOOC Enterprises Co., Ltd. CNOOC Gas & Power Group Co., Ltd. Address: No. 6 Dongzhimenwai Xiaojie, Dongcheng District, Beijing, P. R. China Address: CNOOC Building, No. 6, Taiyanggong South Street, Chaoyang District, Beijing, P. R. China Post Code: 100027 Post Code: 100027 Fax: 010-84525020 Fax: 010-84526583

CNOOC Petrochemical Import & Export Co., Ltd. Address: No. 6 Dongzhimenwai Xiaojie, Dongcheng District, Beijing, P. R. China Post Code: 100027 Fax: 010-84521437

CNOOC Finance Co., Ltd. Address: No. 25 Chaoyangmenbei Dajie, Dongcheng District, Beijing, P. R. China Post Code: 100010 Fax: 010-84523878

Zhonghai Trust Co., Ltd. Address: 36/F, No. 763 Mengzi Road, Huangpu District, Shanghai, P. R. China Post Code: 200023 Fax: 021-63086136

CNOOC Insurance Ltd. Address: Unit 1-3A, 38/F, 148 Electric Road, North Point, Hong Kong, P. R. China Fax: 00852-21644878 WorldReginfo - 545146f5-59f8-4f70-aa55-356176db2160 84 CHINA NATIONAL OFFSHORE OIL CORP.

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