CNOOC Sustainability Report 2018 Our Quality Energy for Your Blue Sea and Sky 2018 SUSTAINABILITY REPORT NATIONAL OIL CORP.

CNOOC Office for Policy Research Address: CNOOC Building, No. 25 Chaoyangmenbei Dajie, Dongcheng District, Beijing 100010, P.R. China E-mail: [email protected] Website: www.cnooc.com.cn REPORT Report Introduction GUIDANCE

Following its launch in 2005, this is the Moreover, information about CNOOC’s Corporate Social Responsibilities and Promoting Economic Growth Summary fourteenth consecutive issue of annual management framework, management the Guidelines to the State-owned [P13-34] sustainability report of China National process for sustainable development Enterprises on Better Fulfillment of Offshore Oil Corporation. It is an accurate and our subsidiaries is available on the Corporate Social Responsibilities issued Ensuring Energy Supply 14 Chairman’s Letter P02 reflection of our fulfilment of economic, Company’s website at www.cnooc.com. by State-owned Assets Supervision and Emphasizing Sci-Tech Innovation 23 President’s Letter P04 environmental and social responsibilities cn as sustainability and annual reports over Administration Commission of the State undertaken in 2018. Some pertinent the years. Council of People’s Republic of China Intensifying Safe Operation 30 About Us P06 information about the report is as follows: with reference to the Sustainability Improvements: In order to reflect the Improving Quality Management 34 Corporate Governance and Operation P07 Reporting Entity: China National Offshore fulfillment of CNOOC’s responsibilities Reporting Guidelines of the Global Oil Corporation in a more objective, comprehensive and Reporting Initiative (GRI), the Sustainability Stakeholders P08 Reporting Guidelines of Oil and Natural Alternative Reference: China National intensive manner, the compilation of this Key Performance Indicators P12 Gas Industry (2nd Edition, 2015) jointly Offshore Oil Corporation is herein also report is based on site investigation on the issued by the International referred to as “CNOOC”, “the Company”, responsibility fulfillment of CNOOC’s affiliates Industry Environmental Conservation “we”, “our” or “us”. and the selection of real cases. Opinions and suggestions from the stakeholders are Association (IPIECA) and the American Reporting Period: January 1 to December Enhancing Environmental Protection also incorporated to give an active response Petroleum Institute (API), the Guidelines on 31, 2018. In order to ensure the continuity [P35-44] to their concerns. The report is presented China’s Corporate Social Responsibility and comparability of the information with the themes of “Our Green Energy for Reporting (CASS-CSR 3.0) by the Green Operation 36 disclosed, the applicable period for certain Your Blue Sea and Sky” and three issues of Corporate Social Responsibility Research information may be extended forward or Tackling Climate Change 37 “Promoting Economic Growth, Enhancing Center of the Economics Department of Annex backward accordingly. Environmental Protection, and Driving Chinese Academy of Sciences and the Energy Conservation and Emission Reporting Cycle: The timescale of this Social Progress” to demonstrate CNOOC’s ISO 26000 Social Responsibility Guide Reduction 40 Outlook on 2019 P70 report is a calendar year. sustainable development. In addition to (2010) by the International Standards Organization. Water Resource Management 42 Reporting Principles: To meet the needs the independent release of “CSR Report Third-party Assessment P72 of the stakeholders and general public Overseas”, eight special issues about This report is published in both Biodiversity Conservation 44 Language: Index of Reporting Indicators P74 by disclosing key information of the social responsibility are highlighted in the Chinese and English. In case of discrepancies, Company in a true, objective, timely and report: “CNOOC and SDGs”, “Implementing the Chinese version shall prevail. Glossary of Terms P76 comprehensive manner. Regional Development Strategy”, Accessibility: This report is available in print Feedback Form Third cover “Developing Advanced Equipment”, Data: All 2018 data disclosed herein is and electronic formats. The digital version annual statistics. In case of discrepancies “Building Smart Oilfield”, “Digitalized LNG can be downloaded from the Company’s with the data in the annual report, the latter Receiving Terminals”, “Three-year Action website at www.cnooc.com.cn. To obtain Driving Social Progress shall prevail. Unless otherwise specified, all Plan for Bohai Oilfield Environmental a print version of the report, please email [P45-56] amounts are expressed in Renminbi (RMB). Protection Upgrading”, “Poverty Alleviation [email protected]. See also CNOOC through Consumption”, and “Forty Years Caring for Employees 46 Unless otherwise WeChat Public Account for the H5 version Reporting Scope: of Reform and Opening-up of the Offshore specified, all information disclosed in of this report. Devoting to Public Interests 52 Special Zone”. the report is from official documents, Providing Voluntary Services 53 statistical reports and reports of fulfilment References: This report is prepared on the Special Topics of responsibilities by CNOOC and our basis of the SDGs and Ten Principles of Integrating into the Community 55 subsidiaries. The information has been the United Nations Global Compact, the CNOOC and SDGs P10 reviewed by our management, supervision Guidelines to the Central Government- department and various subsidiaries. owned Enterprises on Fulfillment of WeChat Account of CNOOC Implementing National Development Strategy P20 Developing Advanced Equipment P25 THE LOGO OF CNOOC Building Smart Oilfield P26 CSR Report Overseas The corporate logo of China National Offshore Oil Corporation (CNOOC) encompasses the basic [P57-69] Digitalized LNG Receiving Terminal P28 design elements comprising the letters that make up the Company’s initials CNOOC, enclosed Creating Socioeconomic Value 60 Three-year Action Plan for Bohai Oilfield Environmental Protection by the blue curves and ripples that represent China’s seawaters. The design in red, formed by Strengthening Safety and Upgrading P38 the capital letters CNOOC, depicts an offshore drilling rig silhouetted against the rising sun, Compliance Management 62 symbolizing prosperity in the offshore oil industry of China. Poverty Alleviation through Consumption P50 Protecting a Balanced Ecosystem 64 Forty Years of Reform and Opening-up Building Platform for Employee of the Offshore Special Zone P58 Development 66 ABOUT THE COVER Promoting Enterprise-community Common Development 68 Live broadcast at LNG receiving terminal by a female anchor of CNOOC Visionary Lane Live CHAIRMAN’S LETTER > 03

Chairman’s Letter

Dear all， focused on exploring a green low-carbon Awards of Excellent CSR Report 2018”, etc. development path, kept the concept The year 2018 marks the 40th anniversary Extending international cooperation, of China’s reform and opening-up, of green environmental protection joint development for bright future along with that CNOOC was born and throughout the entire life cycle of oilfield Upholding the internationalization strategy, prospers. We will actively fulfill our production, strived to build a green supply we created a balanced and generalized corporate responsibilities, strive to enhance chain and actively implemented the development model with the new concept comprehensive value of economics, and vision of “Openness and Win-win”. environment and society, and write a new “Three-Year Action Plan for Bohai Oilfield chapter with reform and innovation on the Environmental Protection Upgrading”. In accordance with common values and development of offshore oil industry in the cultural concepts in different countries, we We took various measures to tackle new era. promoted mutually beneficial cooperation in climate change and control greenhouse the oil and gas industry to more advanced Innovation-driven, persevering in gas emissions. We actively advocated level, bearing together the risks and sharing serving the country with energy environmental protection, and attached the achievements. Actively responding to great importance to biodiversity We implement innovation-driven and the “Belt and Road” Initiative and following conservation, resource restoration and market-leading strategies, vigorously the guiding ideology of “Collaboration, environmental improvement around the develop clean energy and strive to increase Value-increasing and Sharing”, we improved operation area, striving to create a better reserves and production. In order to meet the overseas business management ecological environment. the growing demand for high-quality energy system and promoted the coordinated and ensure national energy security, we Rejuvenating enterprise by talents, development of overseas businesses. will intensify efforts in the exploration and sharing development fruits We optimized the overseas employment development of oil and gas, accelerate We promoted the strategy of “Rejuvenating system and promoted the localization the construction of system for Enterprise by Talents”, and created a of employees. By establishing career production, supply, reserve and sales, and clean, healthy and inclusive corporate development channels, we promoted the promote the coordinated development culture and an institutional mechanism development of both enterprise and local among upstream, and of equal opportunities and fair rules. employees; making regulation construction downstream of the oil and gas industry. We created a strong atmosphere of as our top priority, we continued to build Technological innovation being used as a respecting and attached great importance the supervision system for compliance driving force, we implemented the reform to professional talents and a positive, operation. In overseas operation areas, of science and technology system, and energetic environment for talents so as to we were committed to progress together constantly overcome key technologies for effectively improve employees’ sense of with local communities and created more oil and gas exploration and development. gain, happiness and security. opportunities for sustainable development. We strengthened prospective fundamental We increasingly applied new technologies On the platform of CNOOC Welfare researches, and continuously explored for energy conservation and emission Foundation, CNOOC generously provided new marine energy sources. In addition, reduction, and took various means to nearly RMB 110 million for targeted poverty we accelerated the Company’s digital protect local biodiversity and maintain alleviation, marine protection, and social transition and promoted the application of ecosystem balance. cooperation projects over the year. We achievements of “Three New and Three take proper policies for precisely alleviating In 2019, opportunities and challenges are Modernizations” (new technologies, new poverty in accordance with local conditions, intertwined. CNOOC adheres to its eternal materials, new processes; simplification, to guide new consumption poverty belief of developing the blue territory and standardization and localization), in order alleviation mode, and Hezuo, a targeted safeguarding the national energy security. to continuously ensure the supply of clean, city in Gansu Province, therefore casted off At the starting point of new journey, we will safe, efficient and adequate energy. poverty ahead of planning. remain committed to constantly innovating CNOOC adheres to the HSE core values and striving hard, with the courage of Being committed to sharing the of “Safety First, Environment Foremost, “Eradicate the Old and Foster the New”, development benefits with entire society, People-oriented and Equipment Intact”, with the determination of hard work and we continuously promoted warm-hearted and vigorously carries out quality with the eagerness to pursue dreams, to projects and cultural construction for improvement actions, in order to further write the brilliance of the new era! communities, and created harmonious and standardize HSE management and reinforcing community environments, to constantly progress to the international improve people’s lives and build beautiful first-class management level. home together. Green low-carbon, assisting in CNOOC Sustainability Report 2017 was maintaining ecological harmony awarded the highest five-star rating by the We optimized the global layout of natural Chinese Academy of Social Sciences, the gas industrial units and constructed title of “Responsibility for Ten Years, Top Ten State-owned Enterprises” in the “China a main natural gas “artery” along the Corporate Social Responsibility Research Chairman Yang Hua southeastern coast of China. We Report” and the “Leadership Enterprise March 18, 2019 PRESIDENT’S LETTER > 05

President’s Letter

Dear all, To achieve a harmonious symbiosis between employees to carry out “Blue Force” oilfield and nature, we implemented a voluntary activities. Bohai oilfield organized In 2018, in the face of profound changes Three-Year Action Plan for Bohai Oilfield employees to carry out the “Coastal in the macroeconomic and industrial Environmental Protection Upgrading; Environmental Protection Public Welfare environment both at home and abroad, we accelerated the construction of the Action” voluntary services. CNOOC CNOOC reformed initiatively, tackled system of natural gas production, supply, EnerTech created the Little R Alliance as its difficulties, remained pragmatic and storage and marketing with natural public welfare brand to carry out various enterprising, and continued to promote gas sales exceeding 50 billion m3; we forms of popularization of marine science. effective balance and coordinated promoted the upgrading of global supply CNOOC Sustainability Report 2017 was development in-between economic chain management to create a green awarded the highest five-star rating. development, environmental protection and supply chain; we constructed low-carbon social progress. Fulfilling overseas responsibility, management system and information deeply integrating into the world Reforming and innovating, ensuring platform and actively participated in the energy supply researches on carbon emission standard CNOOC has gradually improved its overseas in relevant industries; all 10 carbon trading business management system, actively CNOOC achieved stable and positive pilot enterprises performed their contracts. implemented the Company’s overseas safety development while making further progress In this year we invested RMB 370 million in and environmental protection management in 2018. In details, the annual output of crude energy conservation and emission reduction detailed rules, and achieved centralized and oil and natural gas reached 74.06 million and implemented 114 technological unified management for overseas upstream tons and 27.7 billion m3 respectively. transformation projects, savings energy of assets and a full coverage of overseas Imported LNG reached 26.42 million tons. 253,000 tons of standard coal and water audit supervision, effectively promoting the Natural gas-fired power output was 21.6 resources of 1.66 million tons. coordinated development of other overseas billion kWh. 41.32 million tons of crude oil businesses and the local economy. In was processed and trading volume of oil We carried forward environmental risk pre- 2018, 32.05 million tons of crude oil and products amounted to 100 million tons. evaluation and identification of nearby 11.7 billion m3 of natural gas were produced environmentally sensitive targets, so as A number of key technologies got overseas. to protect the ecological diversity around breakthroughs, more than 10 major the operation area and achieve harmony As a member of the UN Global Compact, scientific and technological achievements, between economic projects and ecological CNOOC strictly abides by the laws such as the series of metamorphic rock environment. China BlueChemical was and regulations of the UN and the host reservoir evaluation techniques, have been granted the National “Green Factory” Title. countries where its business is located. made. The “Construction and Application We faithfully respect human rights, pursue of Hydrodynamic Testing Capability in 4,000 Upholding people-oriented philosophy, equality and actively build harmonious and meters Depth Underwater Engineering fulfilling social responsibility stable labor relations. By adopting effective Equipment” won the Second Prize of With a commitment to the philosophy of measures such as creating employment “National Science and Technology Progress “People-oriented, Caring for Employees”, opportunities and donations to education, Award”, and the “Application Technology CNOOC established “Four-in-One” talent we jointly build communities with local and in-situ Detection Device of Ice-resistant training system, created a fair and open residents. and Skid-resistant Functional Asphalt environment for career development, actively Pavement in Cold Regions” won the Dear friends, I sincerely thank you for your promoted the construction of “Three Major Second Prize of the “National Technological support and trust in CNOOC. In 2019, we Projects” concerning high-quality managers, Invention Award”. A total of 779 patents will not forget our original intentions and professional talents and outstanding young were granted in China and 15 scientific continue to move forward and strive for “Our talents, and strived to help employees and technological achievements have been Green Energy for Your Blue Sea and Sky”. achieve balance between work and life. In transformed into 10 technical standards. 2018, CNOOC ranked No. 6 on the Forbes’ 2018 was CNOOC’s Year of Responsibility List of World’s Best Employers, the only for Safety Production. CNOOC strictly Chinese company on the top 10 list. enforced the safety production responsibility CNOOC invested RMB 60.89 million in system, optimized the QHSE audit mode, poverty alleviation and aids to Tibetan and fully implemented the operation permit areas. In combination with our professional management system. No major safety advantages, we actively explored new production accidents have occurred modes of poverty alleviation through throughout the year. developing competitive industries, and built Protecting green environment, the online and offline consumption platforms safeguarding clear water and blue sky to promote sales of products from targeted poverty alleviation counties and cities. CNOOC strengthened green environmental Hezuo city of Gansu Province took the lead protection management and promoted in poverty alleviation. green low-carbon development to protect President Wang Dongjin the clear water and blue sky. CNOOC actively advocated and organized March 18, 2019 About Us Corporate Governance and Operation

Company Overview Compliance Operation

China National Offshore Oil Corporation, the largest offshore oil and gas producer in China, CNOOC pays great attention to the construction of risk prevention and control system. In 2018, CNOOC further improved its organizational is a state-owned mega company operating under the control of the State-owned Assets Sustainable Development Ability system by setting up an Internal Control, Compliance and Risk Management Committee at the corporate level, which is responsible for Supervision and Administration Commission of the State Council of the People’s Republic Enhances Significantly the construction and implementation of the corporate risk control system and the overall deployment of compliance management, so of China (SASAC). Headquartered in Beijing, CNOOC was founded in 1982. After 36 years as to integrate risk management into corporate governance and help implement the corporate strategy. CNOOC explores a two-level of reform and development, it became an international energy company with prominent risk management reporting mechanism, including the group level and its subordinate unit level, improves the procedures of major risk core business, a complete industrial chain and business spreading across 40 countries and Fortune Global 500 investigation and information tracking and reporting, strengthens the risk management and control of major decision-making process regions. The five main business segments of the Company are oil & gas exploration and according to the principle of hierarchy and classification, and continuously improves the operating mechanism of decision-making, development, professional technical services, refining sales and fertilizers, natural gas and implementation, supervision and coordination. The Company strives for high-quality development by risk-orientation and compliance, by 87th power generation and financial services. In 2018, it was ranked the 87th in Fortune Global strengthening supervision on key areas, key links and major projects to reveal risks and hidden dangers, intensifying audit rectification and 500 and the 32nd in Petroleum Intelligence Weekly (PIW)’s World’s Top 50 Oil Companies. continuously optimizing the internal control system. At the end of 2018, Moody’s and Standard & Poor’s rated the Company with credit ratings PIW Top 50 of A1 and A+ respectively. Both outlooks are stable. Internal Audit 32nd CNOOC adheres to the principle of “Checking problems, Controlling risks, Improving Efficiency and Promoting Development”, focuses on Strategy of Sustainable Development the implementation of the Party’s and national major guidelines and policies, attaches importance to the prominent problems and risks in the As one of the specific implementers of the national energy strategy and marine strategy, Company’s development, and constantly reinforces the concept of effective supervision, in order to contribute value to build an international CNOOC shoulders the crucial mission of ensuring national energy security, developing first-class energy company with Chinese characteristics. In 2018, the Company completed 558 internal audit projects. Based on promoting marine resources and protecting marine ecology. The Company regards economy, compliance operation and improving management ability, the Company created a total of RMB 389 million of direct economic benefit by all environment and society as the most solid cornerstone for energy development and kinds of internal audit projects. value contribution. CNOOC adheres to its corporate vision “Energy for All”, upholding the philosophy of “People-oriented, Responsibilities, Win-win Benefits, Credibility and Innovation” and the ethos of “Safe and Efficient Operations, Green and Low-carbon Growth, Anti-corruption People-oriented, Courage to Innovate, Charitable Giving, Openness and Transparency”. CNOOC keeps tough stance on corruption, maintains high-pressure situation of punishing corruption and resolutely corrects all kinds The Company has systematically built a CSR model on the lines of “Economic Growth, of violations of laws and the Company’s regulations with an iron hand. The Company attaches importance to minor cases and promptly Environmental Protection and Social Progress” and applied the concept of sustainable reminded employees of the tendency problems, besides enhancing anti-corruption awareness on a daily basis and carrying out training development to daily operation in dimensions of organization, institution and management for preventing crises before they emerge. Focusing on key areas and key works, CNOOC conducts special projects and builds corporate process, with the support of the three level CSR management structure including the constitutions to make continuous efforts to address both symptoms and the root cause. The Company gives full play to patrol inspection leading group, departments and subordinates. Moreover, the Company promptly evaluates, and accredited agencies, thereby building a full coverage supervision network to ensure that power is effectively supervised and restricted. adjusts and improves the effectiveness and results of its sustainability strategy through benchmarking and making comparisons with global business leaders and historical data.

As a participant of the United Nations Global Compact, CNOOC has always been adhering to the Ten Principles. By focusing on safer, more environmental-friendly and more Three fronts of defense for risk management in CNOOC efficient operation and management, CNOOC always strives for a balance among economic growth, environmental protection and social progress, and devotes to “Our Green Energy Board of Directors for Your Blue Sea and Sky”. Discipline Other Professional Audit Committee Committees Inspection Group ……

Top Management

Comprehensive Major Economic Internal Control, Budget Management Activities Risk Control Compliance and Risk Vision Philosophy Safe and efficient Open and transparent Committee, etc. Committee Management Committee Social Business Departments and Energy for All People-oriented, Green and low carbon Responsibility Dedication of love Business Units Engineering Procurement Legal Discipline Inspection Responsibilities, Risk Management Office Audit Values Department Department Department Supervision , Win-win Benefits, People-oriented Brave in innovation Credibility and Innovation Consulting Center ……

The first front The second front The third front SUSTAINABILITY MANAGEMENT > 09

Stakeholders

Communication with Stakeholders

In 2018, CNOOC kept on the theme of “Our Green Energy for Your Blue Sea and Sky” and undertook sustainable development CNOOC has built a service and and non-governmental organizations, echo their concerns. A series of key through three dimensions of “Promoting Economic Growth, Enhancing Environmental Protection and Driving Social Progress”. The communication system for stakeholders, etc. We pay close attention to their performance indicators are used to Company organized various forms of exchange activities for stakeholders, widely collected opinions and suggestions of stakeholders including governments, labor union, concerns in the formulation and ensure our actions and communication and responded to their concerns through various channels. Some concerns were presented as main topics in this report. shareholders, customers, industry implementation of our strategies, with stakeholders effective. We believe partners, suppliers and contractors, policies and plans. We also take various that trust and support of stakeholders financial institutions, media, communities measures of information disclosure to are impetus for our further development.

CNOOC Limited and NNPC Signed Cooperation MOU The Petrobras FPSO built by COOEC started the dry hauling operation Information Disclosure

Paper media Microblog WeChat Mobile APP Website: www.cnooc.com.cn

Stakeholders’ Voice Social responsibility management symposium China BlueChemical paid a return visit in the field of North China

“CNOOC has donated to Baoting “Over the past 16 years, CNOOC has “I am very happy and honored to work Middle School to build four teaching performed outstandingly in safety in CNOOC. Chinese technicians are buildings and dormitory buildings, management, production operation, very conscientious and responsible. which greatly improved the conditions budget control and economic value Their modest and friendly attitude of teaching facilities. In recent years, creation. The Company also did well towards us makes me feel warm the overall performance of our school in the recent project handover. Even and at ease. In our Missan Oilfield, I in the college entrance examination in the final phase of the project, it has have learned a lot of knowledge, and has been rising. In 2018, our entrance maintained a good safety record and improved my professional capability rate of the first-batch university high production. We hope CNOOC greatly. reached 33%. Many students were will continue to invest and expand its —Mohammed, Drilling admitted to the famous universities business in Indonesia.” Superintendent of Missan such as Tsinghua University and — Amin, Government Oilfield Topic identification Beihang University.” official of Indonesia —Zhou Xiaohua, Principal of Baoting Middle School, height height Overseas Stakeholder Concern Domestic Stakeholder Concern 90 90 quality waste 80 management 80 management energy saving and safe emission reduction creating operation 70 safe 70 jobs charity localized improving tackling operation purchasing products and water resource climate supply chain sci-tech services 60 management innovation 60 co-construction management change between technology ensuring company and transfer energy supply abiding by 50 compliance 50 community local laws and promoting social anti- operation technological regulations employment welfare corruption cooperation protecting green energy biodiversity 40 voluntary protecting operation supply 40 equal service biodiversity employment 30 30 community water resource employees’ development employee management promotion 20 rights and 20 interests cost reduction professional and efficiency 10 10 training improvement

10 20 30 40 50 60 70 80 90 height 10 20 30 40 50 60 70 80 90 height CNOOC Social Responsibility Topic Significance to CNOOC CNOOC Social Responsibility Topic Significance to CNOOC Selection Model Selection Model SUSTAINABILITY MANAGEMENT > 11

CNOOC and SDGs

As a member of the UN Global Compact, CNOOC adheres to the Ten Principles in human rights, labor standards, environment and anti-corruption and takes effective Clean water and Climate action Life below water Life on land measures referring to the 17 sustainable development goals (SDGs) in Transforming sanitation Our World: The 2030 Agenda for Sustainable Development, proposed by the UN.

In 2018, CNOOC made every effort to fulfil social responsibilities according to the Four domains of the UN Global Compact characteristics of its business in order to achieve the 2030 SDGs.

10,103.5 25.3 6 pay taxes according to laws, fresh water consumption for the whole energy saving biodiversity conservation research projects (items) year (10,000 tons) (10,000 tons of standard coal) compliance operation, care for employee development energy consumption, repay shareholders increase public welfare contribution, emission reduction reform and innovation, promote community harmony ecological balance, biodiversity 882 increase value 166.1 11 investment in marine environmental and ecological Environmental water saving (10,000 tons) ratio of sulfur dioxide emission protection (RMB10,000) Economic reduction (%) Growth Protection Sustainable 11 Development CNOOC Sustainable Development Model ratio of nitrogen oxides Management emission reduction (%) maintain regional ecology, improve working environment, enhance resource efficiency Social tackle climate change improve environmental quality, control environmental pollution, Progress develop circular economy adhere to the sharing of resources

labor rights, multi-culturism community harmony, employee satisfaction No poverty Zero hunger Good health and Quality education Gender equality well-being

Affordable and Decent work and Industry, Responsible Partnerships for clean energy economic growth innovation and consumption and the goals infrastructure production 6,089 99.45 5.5 19.19 Investment of poverty alleviation in Tibet ratio of physical examination for annual training courses ratio of female employees (RMB10,000) occupational health (%) (10,000 courses) 0 217 131 88.9 employment of child labor assistances to employees in difficulty (households) volunteer teams annual trainees (10,000 people) 369 12,183 34.48 7,406 36.1 sales of LNG (100 million m3) total assets R&D investment crude oil output ratio of overseas assets (%) (RMB 100 million) (RMB 100 million) (10,000 tons) 4 27 640.9 fixed-point poverty alleviation pre-evaluation of occupational annual training hours 848 3,205 (provinces) hazards (cases) (10,000 hours) sales of gasoline (10,000 tons) 8,337 277.3 crude oil overseas output 7,162 science and technology natural gas output turnover (RMB 100 million) (10,000 tons) employees (people) (100 million m3) 1,176 sales of diesel (10,000 tons) 93,601 117 staff (people) 779 4,132 natural gas overseas output Granted patents (awards) processed crude oil (100 million m3) 323 (10,000 tons) sales of aviation kerosene 100 (10,000 tons) rate of conclusion of 289 78.57 invention patents (awards) localization rate of overseas Reduced Sustainable cities employment contract (%) 531 1,183 employees (%) disabled employees (people) inequalities petrol stations and communities

rate of social insurance100 Peace, justice and 2.86 158 coverage (%) strong institutions ratio of ethnic minority employees (%) gas stations

1,147 100 tax and fees (RMB100 million) quality and QHSE management system certification rate of supplier and contractor (%) Key Performance Indicators Promoting Economic Growth

2018 Source of Item 2016 2017 2018 National National Data Data Crude Oil Output / Domestic Output (10,000 tons) 7,697/4,555 7,551/4,278 7,406/4,201 18,911 NBS Natural Gas Output / Domestic Output 245/129 259/143 277/160 1,610 NBS (100 million m3) LNG Imports (10,000 tons) 1,652 2,046 2,642 Processed Crude Oil (10,000 tons) 3,229 3,592 4,132 Crude Oil Trading Volume (10,000 tons) 7,941 8,637 9,764 Fuel Oil Output (10,000 tons) 435 372 460 Ethylene Output (10,000 tons) 107 108 158 1,841 NBS Economic Methanol Output (10,000 tons) 151 153 152 Growth Fertilizer Output (10,000 tons) 370 384 402 5,460 NBS Natural Gas-Fired Power Output 215 213 216 (100 million kWh) Direct Contractor Casualties (people) 2 5 3 Employee Casualties (people) 5 0 1 Recordable Injury Events (cases) 65 47 56 R&D Investments (RMB100 million) 21 27 34 Science and Technology Employees (people) 9,097 8,529 8,337 Granted Patents (awards) 834 840 779 Energy Conservation and Emission 4.1 3.5 3.7 Reduction Investments (RMB100 million) Comprehensive Energy Consumption per RMB10,000 Turnover 0.3519 0.3805 0.3548 (tons of standard coal equivalent) Energy Savings Environmental 23.0 33.5 25.3 Protection (10,000 tons of standard coal equivalent) Sulfur Dioxide Gas Emission (tons) 5,796 4,710 4,174 Chemical Oxygen Demand (tons) 1,075 1,074 919 Nitrogen Oxides Emission (tons) 10,654 10,268 9,117 Ammonia Nitrogen Emission (tons) 109 66 61 1 Headcount (10,000 people) 10.6 9.8 9.4 Rate of Conclusion of Employment 100% 100% 100% Contracts Rate of Social Insurance Coverage 100% 100% 100% Percentage of Employees Joined the Labor 100% 100% 100% Union Percentage of Female Employees 21 20 19 Degree of Employee Satisfaction 7.62 8.15 8.72 (10-point system) Incidence of Occupational Disease (cases) 3 4 3 Social Progress Rate of Physical Examination for 99.9% 99.7% 99.5% Occupational Health Average Training Duration per Employee 86.0 74.0 74.34 (hours) Employee Turnover Rate 2.6% 2.0% 2% Charitable Donation (RMB10,000) 13,608 9,304 10,983 Tax and Fees (RMB100 million) 741 959 1,147 Number of Foreign Employees (people) 4,864 4,767 4,671 Localization Rate of Overseas Employees 71% 80% 79%

Note: 1Headcount includes the number of foreign employees. CHINA NATIONAL OFFSHORE OIL CORP. PROMOTING ECONOMIC GROWTH 14 < > 15

Ensuring Energy Supply Oil and Gas Production Bohai oilfield maintained production over 30 million 3m for 9 years consecutively CNOOC adheres to the innovation-driven In 2018, driven by demand, Bohai oilfield a result better than pre-drilling production CNOOC continues to provide more The largest condensate gasfield in Eastern China approved by the Ministry of strategy and sets low cost as lifeline. In adjusted the production plan in time. The allocation, with the output volume of 29 diversified, greener and more Natural Resources of China order to ensure national energy security, Company put 54 development wells into units exceeding the allocation plan. The environmental-friendly quality energy, the Company takes effective measures production and produced 514,000 m3 water cut was controlled to rise less than The reserve of large-scale condensate gasfield “Bozhong 19-6” structure is evaluated to be strengthen the conventional oil and gas to increase production according to local of crude oil in the year, exceeding the 3% and the average natural decline rate was “Bozhong 19-6” structure was proven by the largest condensate gasfield in Eastern production plan; put 142 adjustment wells controlled within 15%. A new record of exploration and development, promote conditions and maintain high production the Oil and Gas Reserves Audit Office of the China. Its development will provide clean into production, with the number reaching a production over 30 million m3 for 9 years the development of unconventional gas, time efficiency and high utilization Ministry of Natural Resources of China on energy for Beijing-Tianjin-Hebei region. new historical high in Bohai oilfield, and got consecutively has been made. increase the supply of LNG and make December 27, 2018. efficiency of oil wells. a great contribution to ensuring energy In 2018, the domestic output of crude oil supply and control of air pollution. and natural gas was 42.01 million tons China’s first self-operated 100-billion-m3 deepwater gasfield started development In 2018, CNOOC produced 74.06 million and 16 billion m3 respectively.

3 tons of crude oil and 27.7 billion m of The project kick-off meeting for the of semi-submersible production platform, natural gas, imported 26.42 million tons development of “Lingshui 17-2” gasfield which are well adapted to the deep and of LNG and generated 21.6 billion kWh in the Western South China Sea was held complex waters of the South China Sea and of natural gas-fired power. on June 19, 2018, which marks China’s will strongly promote the development of oil first self-operated 100-billion-m3-scale and gas resources in the South China Sea. deepwater gasfield has formally entered The achievement is of great significance to Oil and Gas Exploration the stage of development. This event also the construction of the gasfield cluster in the Being guided by its exploration planning shows that China has mastered the design, South China Sea and the protection of China’s and the philosophy of looking for large construction and installation technologies energy security. and medium-scale oil- and gasfields, CNOOC keeps value-driven exploration A major breakthrough in HTHP exploration in “Ledong 10-1” gasfield and has optimized its exploration Bohai oilfield construction site investment portfolio. Major breakthroughs On June 1, 2018, the drilling operation of in “Ledong 10-1” block, as the drill for the have been made in oil and gas exploration Nanhai East oilfield maintained production over 15 million m3 for 4 years “Ledong 10-1” UHTHP well in the western first time encountered a high resistivity gas consecutively both at home and abroad. South China Sea was completed safely reservoir over 100 meters thick and the proved In 2018, CNOOC continued to keep with high quality. A major breakthrough reserves of single well set a new record. In 2018, facing the disadvantageous factors smart oilfields, and the production of the year the domestic exploration and newly has been achieved in UHTUP exploration such as frequent and strong typhoons, exceeded 7.34% of the plan. This is the 23rd discovered reserve at a high level, with dock repair of two tankers and shutdown consecutive year since 1996 that Nanhai East 12 commercial discoveries and 11 of multiple oilfields for overhaul, Nanhai oilfield has achieved oil and gas production 3 potential commercial discoveries, and East oilfield achieved comprehensive of more than 10 million m and the 4th safe production and operation by further consecutive year since 2015 that its oil and made successful evaluation of 5 large intensifying exploration and development, gas production has exceeded 15 million m3. and medium-scale oil and gas bearing promoting lean management and building structures including “Bozhong 19-6” “Bozhong 29-6” “Bozhong 13-1S” “Lufeng The largest self-operated offshore gasfield in China gained vitality again 12-3” and “Ledong 10-1”. The Company also achieved 5 overseas commercial In 2018, the adjustment well A10H in than 33 billion m3 of natural gas. However, discoveries and successfully evaluated 1 “Dongfang 1-1” gasfield, China’s largest with the prolongation of development life, oil and gas bearing structure. self-operated offshore gasfield, kept the production of the gasfield decreases production at high level. Since being put and it is urgent to increase production by into operation, the well has accumulatively exploiting potentials. Through a new round produced 44 million m3 of natural gas, of basic research on geological reservoirs and ensuring steady gas supply for Hainan. fine management, Nanhai West oilfield has vitalized the old gasfield and activated nearly Since its first operation in 2006, “Dongfang 1-1” 5 billion m3 of gas reserves in the block. Drilling in the western South China Sea gasfield has accumulatively produced more CHINA NATIONAL OFFSHORE OIL CORP. PROMOTING ECONOMIC GROWTH 16 < > 17

Refining and Chemical The ethylene plant for CNOOC Huizhou Phase 2 Project started up Service Network CNOOC Oil & Petrochemicals supplied diesel directly to Fujian railway system for the first time Production At 5:20 on April 24, 2018, the ethylene CNOOC Huizhou Refinery Phase 2 Project CNOOC always takes customer CNOOC adheres to the development cracking unit, the core unit of 1.2 Mt/a ethylene were independently developed, designed satisfaction as an important indicator to On November 14, 2018, CNOOC Oil & role in ensuring the core area status of Fujian path of “Low Cost, Differentiation, plant for CNOOC Huizhou Refinery Phase 2 and manufactured by Chinese enterprise. It measure service quality. The Company Petrochemicals began to directly supply diesel Province as the core area of the 21st Century Science and technology leading” Project produced for the first time qualified is the first application of domestic similar continuously innovates business modes for locomotive depot in Fujian railway system Maritime Silk Road. The annual consumption by means of small-scale distribution. Railway of diesel for locomotives exceeds 20,000 tons. and is committed to building an oil ethylene and propylene, which marks the equipment in world-class ethylene plant and and marketing channels by changing successful start-up of the ethylene plant. has set a new milestone for “made by China” transportation has an extremely important refining industry with international the marketing concept from “passive of major technical equipment. leading level by keeping close to the Three key units of 1.2 Mt/a ethylene plant for marketing, market-driven” to “planning goals and requirements of high quality ahead, infrastructure-driven” and from The first independently constructed long-distance petroleum product pipeline development. In order to enhance “small market business” to “big market has transported more than 4 million tons of products per year core competitiveness, the Company The MoU on Cooperation of Phase 3 Project of Huizhou Refinery signed business”. In order to enable customers actively adapts to market changes to enjoy more convenient products and At 11:20 on December 3, 2018, Dongguan product pipeline independently constructed by and strengthen the linkage between On the morning of October 16, 2018, the agreement on behalf of their respective services, the Company fully integrates Sales Logistics of CNOOC Sales has CNOOC. It starts at the Daya Bay in Huizhou production and marketing to achieve witnessed by Premier Li Keqiang of the State groups. The two parties will cooperate in internal and external resources, actively transported accumulatively 4 million tons of and ends at Lisha station in Dongguan. The low inventory operation by resource Council and Dutch Prime Minister Lute, the construction of production facilities and expands service network and improves petroleum products since the beginning of the pipeline is 162.3 kilometers long with design optimization, structural adjustment, cost CNOOC and Shell signed a Memorandum integrate their assets in the Daya Bay, aiming its quality. CNOOC attaches great year by Huizhou-Dongguan long-distance transportation capacity of 4 million tons per pipeline, exceeding the annual design capacity year. The pipeline is operated by advanced control and market development. of Understanding (MoU) on Cooperation for at fully exerting the advantages and benefits importance to customer information Huizhou Petrochemical Phase 3 Project in of industrial clusters and creating a large-scale for the first time and reaching a record high. SCADA automation system and provides protection and continuously enhances In 2018, CNOOC processed 41.32 million The Hague. Yang Hua, chairman of CNOOC, integrated refining base with global first-class Huizhou-Dongguan long-distance pipeline is strong guarantee for the sales of CNOOC’s service capabilities for better customer tons of crude oil, produced 14.55 million and Ben van Beurden, CEO of Shell, signed competitiveness in the Daya Bay. the first above-ground long-distance petroleum refined oil products in South China. satisfaction. CNOOC strives for 100% tons of refined oil products, 1.58 million resolution rate of customer complaints tons of ethylene, 2.89 million tons of and common development with sodium carbonate, 6.27 million tons Daxie Petrochemical Light Hydrocarbon Aromatization Project started up CNOOC Oil & Petrochemicals entered the International Market customers on the basis of mutual benefit. of bitumen and 1.77 million tons of In June 2018, CNOOC Oil & Petrochemicals In October 2018, CNOOC Oil & lubricants, with the total profit reaching On March 6, 2018, the pile foundation for procedures and the leveling and road works Daxie Petrochemical Light Hydrocarbon was completed in 2017. In this project, liquefied exported 360 tons of methyl ethyl ketone Petrochemicals exported Rubber Plasticizer RMB 10.1 billion and the operating Petroleum Products Supply Aromatization Unit officially started up. gas, C5, C6, raffinate oil and light naphtha products to Singapore. The company thereby N4010 to Japan. Relying on the stable supply profit exceeding RMB 10 billion for three The project, with a total investment of RMB will be used as main raw materials, with a CNOOC continues to develop marketing entered the high-end coatings market in of raw materials and good performance of consecutive years. 500 million, is planned to build a set of light series of reactions such as selective cracking, network for petroleum products Southeast Asia and obtained access to the products, the company’s rubber plasticizer high-end coatings markets in Europe and the products received unanimous praise from hydrocarbon aromatization unit with a capacity isomerization, cyclization and dehydrogenation and optimize the network structure. United States. downstream customers. of 500,000 t/a. The unit is scheduled to be of light hydrocarbon molecules C4~C7 through Focusing on improving the quality of completed and put into operation by the end molecular sieve catalysts in order to work out network construction, the Company of September 2019, as all the pre-approval high value-added products. has developed a large number of high- CNOOC Zhongjie Petrochemical builds “Green Energy Supply Base in Xiongan quality service station projects. In 2018, New Area” the Company newly opened 217 petrol stations. On June 6, 2018, CNOOC Zhongjie coordinated development of Beijing-Tianjin- Petrochemical sent its high-quality Hebei region. polypropylene products to Xiongan New Area, with the cumulative product supply reaching 1,577 tons, by which the company took a firm step in building a green energy supply base in Xiongan New Area. CNOOC Zhongjie Petrochemical takes building a new Zhongjie in the new era as a new starting point and makes itself a bridgehead for building a green energy supply base in Xiongan New Area and contributing to the CNOOC’s petrol station in service

Panorama of CNOOC Huizhou Petrochemicals CHINA NATIONAL OFFSHORE OIL CORP. PROMOTING ECONOMIC GROWTH 18 < > 19

Natural Gas Supply CNOOC earnestly implements the national policy of building a production, supply, storage and marketing system for natural gas Tianjin LNG tried all efforts to ensure natural gas development. The Company has made full efforts to increase production and supply of natural gas by acquiring more resources, supply in the heating season speeding up infrastructure construction, strengthening pipeline interconnection, exploring multimodal transport of LNG tank and Tianjin LNG has improved its natural gas supply capacity other measures, in order to contribute to guaranteeing the supply and protecting the environment. through infrastructure construction. By leasing a floating storage gasifier (FSRU), the gasification capacity of the terminal will During the heating season of 2017-2018, CNOOC took many measures to effectively cope with the explosive demand growth. be increased by 14 million cubic meters per day, and the total Through interconnection of pipelines and natural gas among swap, CNOOC increased the gas supply by about 1.1 billion m3, gasification capacity will reach 24 million cubic meters per day; accounting for 50% of the national increment supply, which effectively alleviated the shortage of gas supply in the whole country. by adding 11 loading pries, the loading capacity of the tank car During the heating season of 2018-2019, CNOOC optimized the overall allocation of resources ahead of schedule. According to Tianjin interconnection section of CNOOC Mengxi Pipeline will be increased to 600 tank cars per day, and the liquid supply plan, 24.6 billion m3 of natural gas would be supplied, an increase of 20% over the same period last year, of which 3 billion m3 would put into operation capacity will reach 18 million cubic meters per day (converted into gaseous state); by building the first LNG tank with fully be supplied through interconnection, an increase of 173% over the same period last year. Tianjin Interconnection Section of CNOOC Mengxi Pipeline Phase independent technology and design, the 160,000 cubic meters 1 Project was put into operation on November 15, 2018. During the large LNG tank designed and constructed has increased the A major breakthrough achieved in natural gas Natural gas output of Nanhai East oilfield heating season of 2018-2019, it could supply over 8 million m3 of natural gas storage capacity by nearly 80%. CNOOC Gas & exploration in the Bohai Sea exceeded 5 billion m3 per year natural gas per day to Beijing-Tianjin-Hebei region. Once the Phase Power Group leased 2 LNG vessels and let them wait at sea for 1 Project finishes, CNOOC can directly supply to Xiongan New further instructions, filling with LNG. A major breakthrough has been achieved in natural gas Area and Beijing to effectively alleviate the shortage of gas supply exploration in the Bohai Sea — “Bozhong 19-6” condensate in North China. gasfield in Bohai oilfield has more than 100 billion3 m of proven geological reserves of natural gas and more than 100 million m3 of proven geological reserves of condensate oil. The discovery LNG tank container ship for land-and-sea, south-to- of “Bozhong 19-6” gasfield has opened up a new prospect for north coordinated transport gas exploration in oil-rich basins and helped the Company On November 4, 2018, an LNG tank container ship of CNOOC discover new oil and gas accumulation areas. Gas & Power Group, carrying 130 LNG tank containers, set sail from Yangpu Port, Hainan Province. It is the first beneficial attempt CNOOC Gas & Power Group completed pre-sale in China to transport the surplus of storage capacity in Hainan for ensuring gas supply in winter LNG Terminal to the northern region on a large scale by LNG production tank container. It is of great significance to meet the needs of clean On April 18, 2018, CNOOC Gas & Power Group, in heating in winter and ensure gas supply in the northern region. conjunction with Shanghai Petroleum and Natural Gas Exchange, launched its first cargo pre-sale for winter gas supply, with a total of 21 transactions and 90,000 tons of supply marketing SYSTEM LNG purchased by 11 customers. In this pre-sale activity, Innovated business mode by LNG terminal’s “window” Key project of pipeline interconnection and “south-to- CNOOC Gas & Power Group made full use of the advantages exchange north” transport finished ahead of schedule of portfolio, actively helped customers find right resources On September 20 and October 17, 2018, CNOOC Gas & Power Group During the heating season of 2018-2019, CNOOC planned to and right prices and lock resources in advance. The success in conjunction with Shanghai Petroleum and Natural Gas Exchange, transport a supplementary 30 million m3 of gas per day from of pre-sale activity contributed to stabilize the market price in storage innovatively completed two LNG terminals’ “window” auction Guangdong to the northern region. With CNOOC’s active the winter season and promoted the sustainable and healthy activities. The new mode of transaction is an important measure for promotion, three key pipeline interconnection projects in development of the gas industry. CNOOC to implement the national policy of opening up infrastructures Guangdong have been put into operation on schedule, which laid a and building a comprehensive system covering production, supply, solid foundation for gas supply. Hainan Bonded LNG Tank of CNOOC Gas & Power CNOOC Gas & Power Group received and unloaded storage and marketing. Group was checked and accepted the first ship of Yamal LNG CNOOC Gas & Power Group launched DES, a new distribution mode of LNG tank cars As a measure to implement the important direction made by Xi Jinping, General Secretary of the Communist Party of China Relying on CNOOC E-commerce platform and CNOOC Central Committee, about jointly developing and utilizing Operation Management Center, CNOOC Gas & Power Group the Arctic channel, the first ship of Yamal LNG, purchased has launched DES, a “one-key” trading mode. While selling by CNOOC Gas & Power Group from Novatek, arrived at LNG, the company also provides distribution services and meet Fujian LNG terminal on November 11, 2018, and completed the diversified needs of customers. unloading. It was the first ship of LNG to supply the Asia- Pacific market through the Arctic channel in the winter of 2018. Implementing National Development Strategy

“build the whole island into a Pilot Free Trade Zone and promote the establishment of a free “ intensify efforts to promote the development of the Yangtze River economic belt more importantly, Hainan trade port with Chinese characteristics, give full play to our own advantages, boldly explore Yangtze River promote cooperation in green industries and promote the flow of talent, capital and technology from downstream Pilot Free Trade Zone and innovate, and develop Hainan into a vivid example of socialism with Chinese characteris- Economic Belt areas to upstream and middle stream areas.” tics for a new era and make the island province an example for the nation.” Excerpt of i inping’s speech at a symposium on promoting the development of the Yangtze Excerpt of i inping’s speech at a gathering celebrating the 30th anniversary River economic belt of the founding of Hainan Province and the Hainan Special Economic Zone

JIANGSU

ANHUI

Hainan LNG Terminal Petrol Station and Gas Station SICHUAN HUBEI 119 Joint venture petrol stations Design annual receiving capacity: 3 million tons CHONGQING ZHEJIANG Petrol station Two LNG tanks with a capacity of 160,000 m3 each 9 gas stations

JIANGXI Gas station HUNAN Hainan Yangpu Power Plant GUIZHOU LNG fueled ship The largest gas-fired power plant in Hainan YUNNAN Total loading capacity: 2220 MW Refinery Design annual power generation: 1.8 billion kWh LNG terminal “Independent innovation is the only way toward scaling world heights in science and LNG pipeline Guangdong technology. Enterprises should have the aspirations and guts to accelerate enhancing the capability of independent innovation, strive to achieve the independent control of Province core technologies and hold firmly the initiative of innovative development in our Coating own hands.” Distributed energy Excerpt of i inping’s speech during an inspection tour in Guangdong

Logistics Trade and Logistics SHAOGUANSHI Import and export Bonded LNG Tank Hainan Yangpu Power Plant HAIZHOUSHI Power plant Storage QINGYUANSHI HEYUANSHI Hainan Pipeline Transport CHAOZHOUSHI Pipeline network ZHAOQINGSHI JIEYANGSHI Long-distance gas pipeline: 569 km GUANGZHOUSHI SHANTOUSHI Lingshui 17-2 Gasfield HUIZHOUSHI (including Hainan LNG pipeline) Development Project of Hainan Branch DONGGUANSHI SHANWEISHI Marine engineering YUNFUSHI FOSHANSHI

Urban gas pipeline network: 252 km SHENZHENSHI Annual output of natural gas in stable production period: ZHONGSHANSHI Information security 3 3.2 billion m JIANGMENSHI ZHUHAISHI

MAOMINGSHI YINJIANGSHI Basuo Port Oilfield service Fudao Fertilizer

Design annual output of chemical fertilizer: 1.32 million tons ZHANJIANGSHI

Design annual output of methanol: 1.4 million tons CHINA NATIONAL OFFSHORE OIL CORP. PROMOTING ECONOMIC GROWTH 22 < > 23

Supply Chain Management CNOOC enhances the digital transition of order to build an ecological management supply chain management by improving information system. Emphasizing Sci-Tech Innovation CNOOC strengthens green supply chain the integrated supply chain management management and promotes institutional The implementation of global supply system with procurement platform as Majoring in oil and gas business, the major and important demand of the tight gas E&P, and constantly explores reform in procurement by establishing chain management will refresh “blood the core and the connection in-between CNOOC actively implements the state and the Company, researchers new types of marine energies, in order sharing procurement centers for all and nerves” of the offshore oil industry various modules such as ERP, contract, innovation-driven strategy, deeps the focus on research on a series of to provide clean energies for economic, business sectors, transiting functional chain and maximize the advantages of finance and production. The system reform of sci-tech institutions and core technologies such as efficient social and environmental sustainable procurement to portfolio procurement scale economy by enhancing connection integrates the streams of business, mechanisms and constantly improves development of offshore heavy oil, oil and development. and improving the portfolio procurement between and sharing of internal and information and capital from supply to the sci-tech innovation system. To meet gas E&P in deepwaters, low-permeability standards system and the integrated external value chains, in order to realize demand and constantly strengthens supply chain management system. The real-time response to procurement core competitiveness by giving full play Gold Awards for three sci-tech A number of achievements awarded First Prize of Ministry Level Science and Company maintains the omnibearing demand, effectively reduce the “bullwhip to data value. CNOOC adopts local achievements of CNOOC Technology Progress and whole flow management on effect” and directly cut operating costs, business management mode and sets suppliers and contractors conforming thereby making procurement the core During July 3 to 4, 2018, CNOOC won Three achievements, including Pre- and Technology Progress Award in 2018. up specific function modules on line by to QHSE requirements and promotes competitiveness of CNOOC for high- three Golden Awards for Commercialization stack seismic inversion and hydrocarbon Development and application of experimental considering national policies and regional the upgrading of global supply chain quality development. of Petrochemical Science and Technology identification driven by petrophysics, Key technology for marine riser vortex-induced characteristics in operation areas, in management. Achievements for Key Technology and technology and industrial application of vibration won Special Prize of Marine Application of spudcan penetration and complex marine strata and deepwater drilling Engineering Science and Technology Award extraction of Jack-up Drilling Platform, Dril- fluid, Integrated technologies and application of China Marine Engineering Consultants’ og logging while drilling (LWD) system and of coking inhibiting in heavy oil FCC settler, Association. Welleader rotary steering drilling system, won First Prize of Ministry Level Science Core business sectors Discovery of 100-million-ton oilfield through innovation of key technologies of ultra-heavy oil exploration in the Liaodong Bay, respectively. Integration of global supply chain management management Demand procurement Portfolio procurement Standardization of management inventory Integrated

CNOOC EnerTech awarded API19V COSL developed HTHP oil based drilling fluids system successfully Technical Certification An oil based HTHP drilling fluids system extremely harsh requirements of drilling On August 28, 2018, CNOOC EnerTech was named HTO-DRILL was developed operations. The system has been successfully awarded seven API (American Petroleum successfully by COSL and core products of used in both domestic and overseas HTHP Institute) certifications and became one of HTO-DRILL have been industrialized. HTO- block with remarkable economic and social the companies with the most awarded in the DRILL can solve the problem of narrow safe benefits. The technology was identified as Domestic procurement Innovative global supply Overseas procurement industry worldwide, which was for the first density window during drilling operations. internationally advanced by Tianjin Science sharing center chain management sharing center time awarded to Chinese company. Also severe fluids loss can be avoided with and Technology Evaluation Center. the system and HTO-DRILL can meet the Supply chain management information system

Creation of China’s First Marine “HQI-Navi” integrated navigation Successful development of UHTHP Engineering Digital Technology Center system launched operation coring tool Optimization of material supply chain Nanhai East oilfield improved supply CNOOC enhanced management and management system in Bohai oilfield chain management audit on diving contractors On December 4, 2018, China’s first Marine On November 20, 2018, the independently On September 4, 2018, the coring Engineering Digital Technology Center was developed “HQI-Navi” integrated navigation operation for 12.5 in hole-section of Relying on ERP platform and RLM, Bohai Nanhai East oilfield procurement sharing In 2018, CNOOC carried out special audits established in Tianjin, which will provide system by COSL completed its first “Ledong 10-1-4” UHTHP well in the oilfield integrated various technical means to center has introduced an e-commerce on nine diving contractors, two of which simulation program rehearsal and simulated formal large-scale production project. The South China Sea was completed. The construct an integrated procurement-logistics platform for material requisition, complete failed to be approved, by gradually increasing training for key personnel in domestic and operational efficiency reaching the level of coring recovery rate reached 100%. This management platform, which facilitated the the initial management of universal material the proportion of simulated field operation foreign marine engineering. imported systems of the same kind. achievement filled in the blank. application of many business management supply chain, and develop intellectualization and promoting the implementation of ADCI innovations in CNOOC, improved the through digital management. As consequence, standards. transparency of material supply information the inventory utilization and the accuracy and performance. In recent three years, the of demand plan were both improved and oilfield has reduced inventory by about RMB lead procurement and excess inventory were 1.1 billion. effectively reduced. CHINA NATIONAL OFFSHORE OIL CORP. 24 <

Technical Innovation

Achievement Result Diagenetic analysis technology of Paleogene glutenite reservoir and evaluation techniques series Providing guidance in discovering “Bozhong 19-6” gasfield with 100 billion m3 of reserve. of metamorphic “rock-crust-fracture” reservoir “Early strike-slip fracture+late overpressure activation+channel sand body enrichment” Helping make breakthrough in the exploration of natural gas in Ledong 10 in the field of high accumulation mode, “no bright spot” reservoir temperature -high pressure exploration, with a total of 84.029 billion m3 of proven reserve. prediction technology Theoretical understanding of oil and gas Being applied to deepwater oil and gas exploration in the northern South China Sea, accumulation in deepwaters segmentally controlled helped achieve 88.4 meters thick gas layer and 20 billion m3 of geological reserves of by in the northern continental margin of the South natural gas reservoir by the first drill in the target of “Yongle 8-1”, opening up a new field China Sea of oil and gas exploration in the eastern deepwater area of southeastern Qiong basin. Being applied to 269 wells in three target oilfields such as “Suizhong 36-1”, the Key technologies for potential exploitation of “Two production capacity increasing by 2,086 m3 per day, and the crude oil output increasing Highs” oilfields in the Bohai Sea by 598,000 tons. Achieving directional drilling for the first time in the Middle East (deviation of 50 Directional drilling technology for extremely thick degrees from the vertical) as a world-class technological breakthrough and innovating and high pressure salt-gypsum stratum meaningfully the development mode of Asmari Formation in Missan oilfield with few wells Developing Advanced Equipment and high production. Providing guidance for pre-drilling optimization of ODP in “Dongfang 13-2” gasfield, with CNOOC has persevered in implementing the conversion, i.e. from importing equipment with The localization of China’s offshore oil technol- Key development technologies for HTHP gas the producing reserves increasing by 9.5 billion m3 and the cumulative gas production reservoirs in Dongfang gasfield cluster innovation-driven strategy and successfully 95% of the Company’s start-up funds to localizing ogy and equipment has greatly promoted the increasing by 12.1 billion m3. explored an efficient technology development path 95% of equipment. CNOOC has worked hard for vigorous development of offshore oil related Being applied in “Kenli 10-1” oilfield, with the producing reserves increasing by 5.76 million m3, Fine reservoir characterization technology 11 new development wells have been drilled and production capacity increased by 322 m3 from technology import to import with integrated nearly 40 years to independently develop manufacturing and led the national offshore constrainted by sedimentary per day. innovation, and further to independent innovation advanced equipment and establish a complete oil industry into a new era. Intelligent with-cable measurement and adjustment Being applied to 22 wells in 8 oilfields such as “Bozhong 28-2”, achieving effective by planning, which helps achieve the “Two 95%” technology system for China’s offshore oil industry. technology allocation to 65 layers with 94% of allocation time saving and zero allocation cost. Being applied to the system optimization of 80 low-efficiency wells in the demonstration Secondary fracturing stimulation technology area, with an increase of 110% of the average single well production and an increase of 30,000 m3 of the daily gas production. FLAT-PRO deepwater constant current to synthetic Being applied to “LW22-1-1” well in ultra-deepwater, with the operation depth reaching based drilling fluid system 2,619 meters, the new record of depth of underwater drilling in China. Being applied to “ 9-2 / 9-3 / 10-3” and other projects, achieving the reduction Examples of technology and equipment Underwater engineering safe operation simulation of offshore operation risk by previewing floating simulation program, and effectively guiding test equipment and key technologies localization in 2018 production and operation with the use of underwater production and operation simulation system. Umbilical and underwater valve applied to Free spanning treatment and inhibition engineering Being proved effective in offshore engineering as a solution to free spanning treatment of Wenchang Gasfield Cluster technologies for submarine pipeline submarine pipeline caused by seabed irregularity and erosion. InspII circuit board for platform of integrated Achieving the complete digitalization of core calculation and system design of the whole navigation system of COSL process, which further improved the accuracy and efficiency of storage tank design; Software for Large LNG Tank Design Underwater mechanical tee of COOEC being applied to 6 projects such as Zhejiang LNG Phase 2, with RMB 4 million of the Deepwater cementing head design cost cutting and more than 10% of design time saving for single storage tank. Having developed a high performance bisphosphite ligand for hydroformylation catalyst Hydroformylation of butene mixture for higher and completed the industrial side-line test in cooperation with Shenhua Baotou Coal alcohols production technology Chemical, which proved the performance of the catalyst to reach the level of imported products and thus reduce cost significantly. Being applied in Zhejiang Petrochemical and Zhejang Hengyi Petrochemicals (Brunei) Second generation reformed deolefinization Project, with a contract value of RMB 92 million, annual sales of more than RMB 150 million refining agent and a cumulative output value of RMB 500 million. HPU Underwater Production System for Reticular anionic water purifying agent was applied in Xijiang oilfield and Missan oilfield Wenchang Gasfield Cluster Reticular anionic water purifying agent (Iraq) etc, for treatment oil extraction wastewater. It’s efficiency is outstanding, and it can CGTank Technology of CNOOC Gas & reduce emissions by 50% and lower the dosage of agent by more than 30%. Power Group Being applied to 2 FPSOs “HAI YANG SHI YOU 111” and “HAI YANG SHI YOU 115”, make Recovery and utilization of waste heat from internal- Mixed carbotetraolefins hydroformylation outstanding contributions in energy saving, emission reduction and marine environment combustion engine exhaust gas on offshore facilities technology of CNOOC Oil & Petrochemi- improvement, which was awarded by Shenzhen government RMB 7.11 million. cals Medicinal/electronic solvent membrane process Having established more than 10 sets of demonstration units for solvent recovery Oilfield self-switching valve technology of enhanced purification technology and complete projects, with a total contract value of RMB 25 million. CNOOC EnerTech sets of technology Submarine pipeline material failure analysis Having made more than 40 failure analyses, created an output value of more than RMB 18 million application technology and reduced the losses caused by failure accidents. This technology having been applied to “Dongfang 13-2” condensate oil pipeline, Infrasound leakage monitoring technology of achieved a breakthrough in systematic pipeline leakage monitoring and enriched the Pipeline series of pipeline leakage monitoring technologies. More than 7,000 m3 of oily sludge was treated and the centrifugal sludge was about 2,600 m3. Engineering technology of oily solid waste disposal The total bulk-reducing rate was over 50%. PROMOTING ECONOMIC GROWTH > 27

Building Smart Oilfield

CNOOC adheres to the principle of “Overall Planning, Point-to-area, Step-by-step Implementation” , contrasts with outside advanced practice on the basis of its actual situation, implements pilot projects, explores the deep Pioneering Innovation integration between informatization and industrialization, and establishes a CNOOC actively promotes the development of clean and low-carbon energy supply structure. It conducts technical investigation real-time, integrated and collaborative operation mode covering production, Smart Smart and research in the fields of offshore wind power, ocean thermal energy, marine nuclear energy and other new types of marine safety, environmental protection and other business processes, in order to build exploration development energy. The Company follows up the research on hydrogen energy technologies and effectively promotes the industrialization of smart offshore oil and gas fields. efficient energy utilization technologies including energy storage and distributed energy. Setting offshore oil and gas development and production process as main lines, Smart on the basis of automated data acquisition & control and upgrading of offshore Smart Smart communication, CNOOC smart oilfield has built up an Internet of Things for research oilfield production CNOOC joined the Fund for Enterprise CNOOC established Natural Gas Hydrate Technological Innovation Alliance energy with comprehensive perception, and achieved the integration and con- Innovation and Development tinuous optimization of oil reservoir management, oil recovery technology, In order to develop the National Key a total of 17 research units, including 3 surface engineering, production and operation. Through real-time optimization On December 16, 2018, CNOOC signed up to Laboratory of Natural Gas Hydrate and subordinate units of CNOOC, 4 institutions of Smart Smart join the Joint Fund for Enterprise Innovation by remote experts, big data forecasting and analysis and dynamic scheduling engineering drilling implement the strategic decision of national Chinese Academy of Sciences, 8 universities for production, a production and operation system of automatic control, intelli- and Development of National Natural scientific and technological innovation, for such as China Petroleum University (Beijing), gent forecasting and decision-making optimization has been built up to achieve Science Foundation of China. This further the first time, CNOOC has achieved cross- 1 unit of State Oceanic Administration and the land-sea inter-professional integration and collaboration, in order to improves the basic and prospective research industry and cross-discipline cooperation 1 enterprise outside CNOOC, to establish promote the transformation of production mode and digital transition of the system of the Company, makes overall use by bringing together domestic preponderant Natural Gas Hydrate Technological Company, and achieve high-quality development. of external research forces, supports original research forces. Through preparation and Innovation Alliance with CNOOC and technological innovation and carries out active promotion, CNOOC has organized execute the agreement. subversive innovation by cross-industry cooperation.

A comprehensive research on Following up the research on Steady advancement of marine offshore wind power technology is in hydrogen energy technologies nuclear energy application technology full swing CNOOC follows up the development status CNOOC completed the emergency study CNOOC carried out the feasibility study on of hydrogen energy technology system, on power supply safety under nuclear supplying power to offshore oil platforms looks for opportunities of differentiated power failure, defined the basic process of with offshore wind farms, completed the industrial development opportunities and emergency power supply for nuclear power technical investigation on offshore wind investigates the construction progress of terminal under fault condition and the basic power, put forward the proposal to develop hydrogen refueling stations, the industrial process of safety emergency power supply offshore wind power for CNOOC. application technology and industrial layout under fault condition in power grid. of hydrogen energy.

Substantive progress in research on temperature-difference energy Power generation system CNOOC has completed the China’s first conceptual scheme for construction of offshore 10 MW ocean thermal energy power station, which provides technological and decision-

making support for the state to promote the Warm seawater inlet Support industrialization of ocean thermal energy. platform

Outlet Submarine cable

Cold sea water inlet

Ocean thermal energy exploitation and utilization Digitalized LNG Receiving Terminal

CNOOC Gas & Power Group advances the construction of LNG Receiving Terminal on the Desktop to implement digitalized management on the overall lifecycle oriented and visualized process for the construction and operation of LNG receiving terminal, which is supported by the CGDSim technology to realize the four- dimensional dynamic simulation of the whole station, with the key technologies of LNG receiving, LNG gasification and LNG storage as the core, and information and digital platforms with regard to digital design, design management platform, integrity management and others as means.

Digitalized design platform – three-dimensional design interface Digitalized design platform Design management platform Integrity management platform

The platform design application With the functions of design The platform has five functions scenarios with collaboration of multi- schedule management, proofreading such as data acquisition, three- professions in order to improve control, document version control dimensional modeling, on-line overall digital design and delivery and design resource allocation, the monitoring, risk management and abilities. lean management of design projects, intelligent operation & maintenance. design quality improvement and It uses digital means to reproduce and The three-dimensional design effect has multi-project synchronization restore the whole life cycle of receiving been achieved through sorting out dozens management for receiving station station construction, providing the of drawing templates, customizing design are achieved. most reliable basis for equipment hundreds of design attributes, and dozens asset management and operation & of legends and symbols. maintenance management. CHINA NATIONAL OFFSHORE OIL CORP. PROMOTING ECONOMIC GROWTH 30 < > 31

Production Safety reduction, and continuously enhanced materials for safety standardization; Intensifying Safe Operation emergency response capacity. The year- newly established a CNOOC Safe In 2018, CNOOC advanced the round production safety situation was Production Examination Center and 4 construction of characteristic safety Adhering to the core values of HSE, In 2018, based on its own business risk eight subordinate units and analyzed generally stable with no major production test sites, arranged 147 examinations culture, constantly consolidated the “Safety First, Environment Foremost, characteristics and actual management the differences between the function safety accident. for 5,136 examinees throughout the foundation of on-site safety management People-oriented and Equipment Intact”, needs, and the good practices of the of framework and management year; for 16 affiliated units; conducted 24 such as operation permit and work safety In 2018, CNOOC implemented the Company implements the overall world oil and gas industry, CNOOC requirements, thereby formulating action special safety enhancement audits in 16 analysis, promoted the construction supervision and inspection on 67 responsibility system for safe production systematically standardized the HSE plans for continuous improvement and subordinate units; carried out spot check of double prevention mechanism C-grade facilities and 70 D-grade and reinforces basic safety management management system framework. The enhancing safety management. on the quality of purchased pipeline and of classified risk control and hidden facilities; completed inspection on all in order for the high-quality development. Company carried out pilot projects in 7 professional tests on 169 pipelines danger investigation and management, the risk-grading facilities, examined 38 which were randomly sampled from 3 continuously increased the efforts of application materials for safe production construction projects. Safety Culture environmental protection and emission licenses and examined 20 application Inspection, audit and Leadership In 2018, CNOOC paid more attention to manage- and ment review responsibility fostering the characteristic safety culture Organization, of “People-oriented, Implementation Accident event personnel Dapeng LNG: 12 Years of safe Fudao Company set a world record for fault-free operation management PLAN and safety commercial operation and Intervention”, and established culture ACT On June 20, 2018, the ammonia converter plant had accumulatively produced 7.18 million a long-term mechanism to enhance On September 28, 2018, Dapeng LNG unit of Fudao Company, subordinate of China tons of ammonia and nearly 12.1 million tons all-personnel safety awareness. The Crisis and Risk assess- celebrated the 12th anniversary of safe emergency HSE ment and BlueChemical, set a world record for 22-year of large granular urea, owing to which the management

Company issued Document No. 1 concept management commercial operation, which renewed the fault-free continuous operation of super large converter unit takes the leading position in large of Opinions on Implementing the DO safety operation record of China’s LNG ammonia converter. By the end of 2018, the chemical fertilizer plants.

Construction of Safety Culture of industry. Up to September 28, 2018, the Information CHECK CNOOC to clarify the objectives and Communica- Contractor company had safely unloaded 62.83 million tion and management COSL won national maritime safety honors principles, emphasize accountability and Sharing tons of LNG from 929 ships, setting a safety guide the development of safety culture. Implementa- Design and record of 24.98 million non-destructive safe On November 13, 2018, China Maritime and Credible Ships can benefit a 24-month tion and Construction operation working hours, achieved 2,145 safe working Safety Administration awarded the honorary exemption of safety inspection. For the Safe days and 5.12 million kilometers of safe certificates of “Safe and Credible Ship” and and Credible Ship which is continuously driving. The excellent safety performance “Safe and Credible Captain” to five ships such employed by the Safe and Credible Captain, has provided clean energies in a stable, safe as Binhai 286 and two captains such as Zhang the exemption period can be extended to 36 and reliable manner for the Pearl River Delta Jiahui, from Tanggu Operating Company months and the ship is granted priority in Held Well Control Week events Activities for the Year of all-personnel Responsibility for Safe Production region in Guangdong and Hong Kong. of COSL Shipping Services Division. Safe handling entry and exit formalities. From October 15 to October 21, 2018, It was the “Year of all Personnel safety responsibility system throughout the CNOOC held a series of events in the Responsibility Implementation for Safe Company, included the implementation of “Blue Whale” of COOEC set a safety record name of Well Control Week, with the main Production” of CNOOC Safety Management safe production responsibility system in the theme of implementing the responsibility in 2018. CNOOC actively promoted the key content of audit and inspection and put it Since May 2009, “Blue Whale” has not of safety development and improving the construction and implementation of the all on the list of themes of the Safe Production suffered any safety accidents for nine ability of preventing and controlling the personnel responsibility system for safe Month, promoted the establishment of a four- consecutive years, with 3,351 days of safe major risk of blowout. Through operation, production based on post risk, organized a in-one safe production responsibility system operation and more than 7.5 million safe emergency drilling, technology exchange, seminar to promote the implementation of based on post characteristics. working hours, which hit a new record culture campaign and equipment show of high for single engineering vessel in China. well control, the Company has enhanced the Since it was put into operation, the vessel ability of well control safety management. Held Safe Production Month events has broken the sea-lift record many times, with a total tonnage of more than 1.2 million During the Safe Production Month in 2018, protection and to enhance their security skills tons, equivalent to the total weight of the the directors of CNOOC conducted on-site through organizing safety culture training and steel structure of 30 Bird’s Nest stadiums. special inspection and gave safety instructions promoting seminars as well as various safety The vessel has also set a record of domestic to nearly 20 frontline units by focusing on publicity and education activities. All the offshore engineering hoisting, such as strengthening the construction of safety events promoted high-quality and sustainable installation of a 10,000-ton jacket in 14 leadership, and guided employees to raise development of the Company. days and installation of a 6,200-ton module their awareness of safety and environmental platform by a single crane. CHINA NATIONAL OFFSHORE OIL CORP. PROMOTING ECONOMIC GROWTH 32 < > 33

Emergency Management CNOOC launched pilot work of Unmanned Aerial Vehicle Defense System COSL participated in the comprehensive drill of marine pollution prevention and control in Zhanjiang Based on hazard identification and According to the national overall strategic zone for UAVs with a radius of 500 meters in risk analysis, CNOOC continuously deployment and CNOOC’s requirement for all-weather and all-time period was constructed Number of emergency drills for three More than 200 people from 18 units including board was difficult to play function, hence consecutive years improved the emergency management safe production, the Company launched pilot to be an effective barrier for UAVs in the Zhanjiang Operating Company of COSL the ship and its personnel were in a very 5 mechanism, gradually advanced the work of Unmanned Aerial Vehicle（UAV） invading area by simulating GPS. Shipbuilding Services Division participated dangerous state. The oil reservoir of the in the comprehensive drill of marine pollution starboard hull was damaged and about 400 major accident scenarios construction, defense system in 2018. A spherical no-fly 4 prevention and control in Zhanjiang City, tons of oil leaked into the sea, endangering integrated the ICS system into the 3 37,080 with a total of 12 ships and 2 helicopters. The the coastline near the port and the nature existing emergency plans, carried out 29,834 drill simulated the fire and explosion of the reserve. An emergency plan was launched to anti-terrorism investigation on risk and 2 23,987 “Nachuan” on the way to port due guide joint forces to exercise rescue drill and hidden dangers in the Company and 1 to the aging of engine room lines. The smoke prevent marine pollution incidents. put into practice the Rules for Terrorism was diffuse and the firefighting system on 0 Prevention in Offshore Oil and Gas 2016 2017 2018 Production Facilities. Anti-terrorism drills in Nanhai West oilfield

Nanhai West oilfield directly manages 1 system and adopted various measures such wharf and 3 land terminals involved in as personnel training, simulated exercises anti-terrorism work. In 2018, in order to and installing more anti-terrorism facilities to Headquarters Security Training in 2018: Number of trainees improve anti-terrorism prevention, ensure comprehensively enhance the anti-terrorism production and personnel safety, the oilfield capabilities of the wharf and land terminals. 1,009 actively built up anti-terrorism prevention

BOSS & HUET Card Pass rate :

100% CNOOC launched the first series of comprehensive drills for emergency rescue of offshore well control

On October 16, 2018, CNOOC successfully conducted comprehensive drill for offshore held a series of activities such as well control well control emergency rescue, simulated the Nanhai West oilfield did comprehensive emergency rescue exercise for fire accidents in large ships and storage tanks emergency comprehensive drill, well control whole process of emergency response and technology exchange and well control disposal of blowout during drilling of well On July 14, 2018, 28 government agencies Power Plant, jointly organized the Hainan the emergency response ability of local technology and equipment exhibition with the A10 on “Huangyan 2-2” platform, and carried and adjacent enterprises, such as Safe comprehensive emergency rescue drill 2018 enterprises jointly with relevant government theme of “Implementing the responsibility of out a field test on the three-level well control Production Supervision and Administration for ships and storage tanks at dangerous agencies in order to create a good security safe development, preventing and controlling emergency disposal technology and offshore Bureau and Transportation Bureau of goods wharf, exercising at CNOOC’s wharf environment for the construction of Hainan the major risks of blowout”. During the emergency response process. , and Huaneng at Macun Village. The purpose was to test Pilot Free Trade Area and Free Trade Port. activities, the Company for the first time

CNOOC fought “Mangosteen” the Strongest Typhoon in the Year

Before the coming of “Mangosteen” the No. on every hour, maintained close contact with 22 Typhoon in 2018, CNOOC had deployed emergency departments of its subordinate the overall emergency response plan in units, regularly issued early warning and accordance with the relevant requirements urged the implementation of typhoon of the Ministry of Emergency Management prevention. After September 7, all subordinate and the Typhoon Prevention Emergency Plan units completed various preparations for of the Company. CNOOC maintained 24- typhoon prevention, with the evacuation of hour contact with the Central Meteorological 5,365 persons and facilities by 230 helicopters Observatory to obtain typhoon information and 39 ships from offshore platforms. CHINA NATIONAL OFFSHORE OIL CORP. 34 <

Enhancing Environmental Protection

Improving Quality Management

CNOOC adheres to the directives system, cultivates the quality culture and 1 transport fleet, implemented of “People-oriented, Safety First, and continuously improves product, special audits on key process such as Honest and Law-abiding, Reinforcing engineering and service quality. the system of laboratory regulation, Foundation, Innovation-driven and equipment management, measuring In 2018, CNOOC conducted a series of Winning with Quality”, implements instruments, sample management and audits on the quality management system the national strategy of “Building quantity traceability. In addition, the in key production units, covering the a powerful country by high quality Company also carried out varies of upper, middle and lower business sectors. development”, carries out the quality quality activities and informationization The Company carried out special quality improvement actions in an all-round way, construction to continuously improve examinations on key vehicle products, identifies quality risks comprehensively, quality management. including 21 petrol stations, 1 oil depot improves the quality management

Quality Activities in CNOOC Information Announcement Management During the Quality Month, about 65,245 employees participated in the activities Module System Module and there were totally 2,376 units involved in the launching ceremony. As consequence, 2,162 special inspections were carried out, 5,292 quality hidden Quality Application dangers were found and 4,242 quality problems were solved. Control

Module of Quality Management Activity Quality

Information Module With 46,452 participants in the Total Quality Management Knowledge

Competition of Central Enterprises held by SASAC, CNOOC was awarded as Module System

“Best Organizer”.

Quality Quality Tool Promotion Promotion Tool Quality New Management Management Product/ Technology The total number of QC teams registered reached 1,949, 2 of which were Promotion National Excellent QC Teams. They contributed to 503 outstanding QC Module achievements of the industry.

CNOOC Gas & Power Group took the CNOOC Oil & Petrochemicals won the award of “Best Supplier of China’s lead in drafting national standards Domestic Asphalt 2017”

The national standard SY/T 7434-2018 On March 22, 2018, CNOOC was in the runway of the Capital Airport, Jingxin Method for verifying the capacity of awarded as the “Best Supplier of China’s Expressway in Inner Mongolia Desert, G349 LNG receiving terminal drafted under the Domestic Asphalt 2017” for the outstanding Line Zetang to Gongga Airport Section in direction of CNOOC Gas & Power Group performance of “CNOOC 36-1” asphalt used Tibet Snowy Plateau, and etc. was officially issued through the 12th Announcement of the National Energy Administration. The release of this standard COSL won the first prize of “Standard Innovation Contribution Award” will further standardize the method for verifying the maximum capacity of LNG Both national standard (GB/T 30217.2- Emergency Sealing Device for Petroleum receiving terminal, which filled gaps in the 2016 Petroleum and Natural Gas Industries and Natural Gas Drilling and Production domestic field and made a breakthrough in Drilling and Production Equipment Part 2: Equipment) edited by the guidance of COSL 2 the formulation of LNG industry standard. Analysis Methods, Operation and Integrity won the first prize of “Standard Innovation of Deepwater Drilling Riser) and Industry Contribution Award”. Standard (SY/T 7391-2017 Underwater CHINA NATIONAL OFFSHORE OIL CORP. ENHANCING ENVIRONMENTAL PROTECTION 36 < > 37

Green Operation Tackling Climate Change

As a member of the Global Compact and a whole process. green , green power plants and As a responsible energy company, In 2018, CNOOC actively participated in with emission-control, completed a study major promoter of the “Energy Revolution”, green manufacturing, respectively. CNOOC responds to the Paris Agreement the construction of China’s carbon market, on the management scheme of CNOOC In 2018, CNOOC launched the CNOOC not only actively undertakes the and actively responds to climate change, put forward a low-carbon management carbon assets, and actively participated construction of green factory in an all- Nanshan Terminal of Zhanjiang Branch of mission of serving the country with energy focusing on building a clean, low- regulation, formulated a low-carbon in the study of the national carbon round way, CNOOC Zhanjiang Branch, CNOOC won the title of “Green Factory” in supply, but also takes practical actions carbon, safe and efficient energy system, management system, and built up a low- emission benchmark standards of relevant CNOOC Oil & Petrochemicals Huizhou the petroleum and petrochemical industry, to build a green oil fields, and runs the continuously building a comprehensive carbon management information platform. industries. The ten subordinate enterprises Petrochemical, Putian Power Plant of and China BlueChemical, CNOOC concept of green development throughout low-carbon management system. The Company carried out a carbon included in the pilot carbon trading were all CNOOC Gas & Power Group and Qingdao Kingboard and CNOOC and Shell the entire life cycle of oilfield production. inventory on 35 subordinate enterprises in compliance with the regulations. Base of COOEC were selected to carry Petrochemicals were awarded as “Energy CNOOC extended the green supply chain, out the pilot projects of green oilfields, Efficiency Leader” benchmark enterprises. with green production and recycling in the

CNOOC actively explored new energies

Production Sale CNOOC has made lots of active researches Caring for the ocean No investment “cap” in different regions, such as offshore wind power in the East China Sea; geothermal Not “a drop” of pollution Landing of offshore gas Weaving dense energy replacing oil-fired boilers for heating “protective LNG leading Offshore Emergency refining & Development Conception net” for in the Bohai region; cold energy resources of management petrochemicals Recycling environmental Fujian LNG Company for the construction Offshore wind Submarine protection of “snow town” in cooperation with local power plant cable Ecological priority builds Green factories government; effective recovery and utilization the “optimal” scheme with low carbon Green recycling of hydrogen, dry gas, ammonia and other Assessment process and high efficiency by-product resources through integration projects and combination with the salinization industry, to expand and extend the circular Carbon emission must be assessed Paying equal attention to maintenance and before launching projects protection of the sea economy chain. Onshore power grid

Green Development Concept – Green Industry Chain

Pilot for green factory construction CNOOC Gas & Power Group advanced low-carbon transformation for cost reduction

“Jinzhou 9-3” oilfield of CNOOC Tianjin integration of online monitoring, statistics, In 2018, CNOOC Gas & Power Group and ideas promotion. The comprehensive enterprises with emission-control complied Branch, Dongfang Operating Company of calculation, analysis, optimization and achieved remarkable results in energy energy consumption of the unit output value with contracts and schedule, and reduced Zhanjiang Branch and Enping oilfield of management, hence achieved a linked control, conservation by operation optimization, decreased by 9.6% year-on-year, saving energy operating costs of more than RMB 800,000 Shenzhen Branch were selected to be pilot deep integration and intelligent optimization lean management on technical renovation 48,000 tons of standard coal. The subordinate through carbon trading and carbon swap. units. The units managed to build up a green of process, energy consumption and carbon and low-carbon management system with the emissions.

Green Refinery: green level enterprise Nanhai West oilfield carried out research on carbon sink

In 2018, Huizhou Petrochemical of CNOOC ammonia and other pollutants into precarious Nanhai West oilfield carried out research on effects in sulfur removal, carbon fixation activity, thermoplasticity and complete Oil & Petrochemicals was awarded as the resources, and met in advance the requirements marine carbon sink by establishing marine and production of polyhydroxyalkanoates biodegradability. It has therefore high Environmentally Credible Enterprises of of Emission Standards for Pollutants in carbon sink observatory in the western (PHA). PHA is a bio-green macromolecule industrial value with wide use in industrial Guangdong Province. Petroleum Refining Industry. A high-efficient South China Sea and discovered a marine material with biocompatibility, optical and medical areas. reduction of volatile organic compounds Rosebacterium, which performed great The company has reduced the pollutant content (VOCs) emission has been achieved with the of oil products from the source by adopting LDAR technology firstly applied. hydrogenation process, taking sulfur, liquid Three-year Action Plan for Bohai Oilfield Environmental Protection Upgrading

Implementing the thought of ecological civilization, CNOOC actively practices green development to protect the blue sea and sky.

From 2018 to the end of 2020, we will make every effort to implement the Three-Year Action Plan for environmental protection upgrading in Bohai Oilfield, earnestly fulfill the responsi- bilities and obligations, strengthen the ability of environmental monitoring and emergency disposal, and make great contributions to the comprehensive management of Bohai Sea.

Action lan

Realizing “Zero Emission” of water production in offshore facilities Pursuing “Zero Record” of uncontrollable blowout

Pursuing “Zero Accident” of oil spill pollution

Realizing “Zero Pursuing “Zero Reducing domestic Emission” of water Record” of loss production in of control of sewage discharge offshore facilities drilling

Action goal

Reducing natural gas emissions Pursuing “Zero Accident” of oil spill pollution

Reducing solid Waste

Promoting environmental protection management CHINA NATIONAL OFFSHORE OIL CORP. ENHANCING ENVIRONMENTAL PROTECTION 40 < > 41

Energy Conservation and Emission Reduction Pollution Control and Tianye Company devotes to interregional energy supply Emission Reduction Tianye Company of China BlueChemical pipeline between Dongfang Terminal of In 2018, CNOOC achieved energy Green Factory Assessment Guide. Thousand project have all accomplished In 2018, the subordinate enterprises of strengthens cooperation with adjacent Zhanjiang Branch and Hainan Base of China company PetroChina Hohhot Petrochemical BlueChemical reduces waste of natural conservation of 253,000 tons of Besides the upgrading and optimization the corresponding indicators. Fudao CNOOC in key areas such as Beijing- and shares benefits through mutual supply gas and increases benefits of natural gas to standard coal, with an integrated of energy and low-carbon management Company of China BlueChemical was Tianjin-Hebei region, Yangtze River of steam. The connection of regional steam methanol production. energy consumption of 0.3548 tons systems, the Company organized the awarded by SASAC as the “Best Energy economic belt, Pearl River Delta and of standard coal per RMB 10,000 formulation of 5 corporate standards Efficiency Benchmarking Unit” in the Hainan Free Trade Zone (Port), strictly turnover. The Company invested RMB for energy conservation such as the petroleum and petrochemical industry met pollutant emission limits, and actively 370 million and implemented 114 Guide on Constructing Online Monitoring for its sub-business synthetic ammonia. carried out the upgrading of environmental Bohai oilfield introduced associated gas recovery technology technical renovation projects on energy System for Energy Consumption and Two project of COOEC and CNOOC Oil & protection facilities, the comprehensive In 2018, Bohai oilfield introduced a new platform and FPSO “HAI YANG SHI YOU conservation and emission reduction. participated in drafting two national Petrochemicals each were appraised by improvement of volatile organic technology to recycle associated natural gas 112”. It is expected to recycle 4.9 million m3 compounds (VOCs) and the renovation of Entrusted by the Ministry of Industry mandatory standards. 34 key-energy- the Ministry of Industry and Information and supply to offshore turbine generators and of natural gas and reduce 11,900 tons of and Information Technology, the consuming subordinate units included Technology as Green Manufacturing environmental protection equipment on boilers. The technology has been successfully CO2 each year. offshore platforms. A total of 45 projects Company led the formulation of industrial in the Hundred-Thousand and Ten- Systems Integration Projects. applied to the “Bozhong 34-2/4” CEPA standards in the Synthetic Ammonia were launched and RMB 350 million was accumulatively invested to ensure pollutant emission to meet standards. Whole Process EIA management, pollutant emission oxides (NOx) emissions were 9,117 tons COOEC builds green ships from the origin Environmental Protection standards attainment and total quantity and ammonia nitrogen emissions were 61 Management control management as well as the overall tons, decreased by 11%, 11% and 8%, Hazardous Waste On June 15, 2018, “HAI YANG SHI YOU 295”, process flow, technical scheme, equipment emission reduction management. respectively, over the same period last Management China’s first pipeline trenching engineering and auxiliary production. The Company promotes the whole ship, independently designed and constructed year. The chemical oxygen demand (COD) “HAI YANG SHI YOU 295” is expected to process environmental protection In 2018, the Company’s sulfur dioxide The Company pays great attention to by COOEC, was put into operation. It was 919 tons. save 837 tons of standard coal and 4,240 tons management by focusing on strict (SO2) emissions were 4,174 tons, nitrogen the whole process management of innovatively adopted the energy conservation of fresh water every year. Hazardous Waste Generating Units, and low-carbon conception in overall layout, further strengthens on-site audit Diagram of the Whole Process Management of Environmental Protection in CNOOC in entrusting processing units and continuously enhances the standardized Shenzhen Power Company promoted gas turbine upgrading for emission reduction management of solid waste. project life prefeasibility feasibility design construction trial production abandonment Shenzhen Power Company of CNOOC Gas oxide (NOx) emission after upgrading is cycle production & Power Group invested RMB 63.6 million about 11 mg/m3, 41% lower than before Energy saving (10,000 tons of standard coal) to implement DLN1.0+ ultra-low emission upgrading, meaning 60 tons of emission upgrading for two 9E gas turbines. Nitrogen reduction each year. Environmental Environmental Environmental Environmental Environmental Checking and Post-evaluation 35 protection impact 33.5 risk impact protection accepting of environmental management assessment on 30.8 pre-evaluation assessment (EIA) chapter report impact 28.5 scheme retirement 25.3 Documentation 25 23 of Implementation Getting EIA Environmental Renovation for recycling water energy conservation of Fudao Fertilizer Project environmental scheme of ratification facilities EIA and EIA Phase 1 completed protection before reporting calibration report 15 ratification, to investment and report of committee On November 26, 2018, the renovation for pumps and motors renovated. According to changes 0 2014 2015 2016 2017 2018 energy conservation by overall optimization statistics, the renovation can save power by Document and of recycling water of Fudao Fertilizer Project 55,000 kWh per day or 18 million kWh per environmental Uploading Uploading Uploading Energy saving and emission Phase 1 completed site construction, with 6 year, up to 48.7%, and save RMB 13 million Uploading data management, Environmental documents Uploading EIA Inspecting and retirement reduction investment Uploading report management involving pollutant cooling tower fans and 7 sets of circulating of power cost. including ratifications and accepting report scheme, (RMB 100 million) management on environmental scheme of emission, feasibility report, implementation and ratifications assessment report information risk pre-evaluation environmental environmental ODR report and scheme of EIA of environmental and monitoring system protection monitoring, 5 etc. facilities plan, etc environmental supervision 4 4.3 4.1 3.7 “Suizhong 36-1” platform give rebirth to waste oil by “dialysis” 3.5 3 2.9 The central platform of “Suizhong 36-1” purification, all performance indicators of Monitoring Requirements Technical 2 Application of ‘Three Simultaneity’ Management in and whole- oilfield adopted vibration-type membrane thermal oil met the standards. The process of guidelines in Environmental environmental protection design until the monitoring process control ‘Three Wastes monitoring plan 1 separation process for online purification also provides a new idea for recycling used environmental on examination and acceptance of environmental on pollutant protection Treatment’ protection facilities emission 0 of thermal oil system. After filtration and oil products. 2014 2015 2016 2017 2018 CHINA NATIONAL OFFSHORE OIL CORP. ENHANCING ENVIRONMENTAL PROTECTION 42 < > 43

Water Resource Management Fudao corporate campus sewage recycling project completed On August 30, 2018, Fudao Company pools, more than 8,000 meters of sewage produced in the campus is recycled and With emphasis on utilization efficiency of of water resources. The Company renovation of recycling water system, of China BlueChemical completed the pipelines and 17 sets of sewage pumps transported to the plant construction of a new 30,000 m3 wastewater with accessorial electrical instruments. and sewage diversion and compliance water resources, CNOOC strengthens continues to intensify technological and comprehensively strengthen water storage tank, five sewage collection After technical transformation, all sewage discharge with effective treatment. the protection of water resources, innovation, strengthen water use process resources management. implements water-saving activities and management, take comprehensive In 2018, the Company’s annual fresh water promotes the recycling of water resources measures to reuse wastewater and consumption was 101.035 million tons, in order to save freshwater resources reclaimed water, desalinate seawater saving 1.661 million tons of water resources. and enhance sustainable recycling and promote optimization and technical

“Penglai 19-3” oilfield achieved seawater desalination

In 2018, the RUP platform of “Penglai 19-3” , the platform uses the absorbed Water resources oilfield completed the renovation of two gas turbine flue gas to distill seawater and can turbines. After adopting a flue gas and hot water produce 18,000 tons of freshwater every year. Annual consumption of freshwater

101.035 million tons

Saved amount of water consumption Tianye Company conducted water balance tests Shandong Haihua recovers reverse 1.661million tons osmosis concentrated water In August 2018, Tianye Company of order to strengthen the scientific management China BlueChemical invited professional of production water and maximize water On February 6, 2018, the “Experimental institutions to carry out water balance tests, in conservation and rational use. Research and Industrial Application of Reverse Osmosis Concentrated Water Recovery Technology” project, jointly undertaken by Thermal Power Branch of Shandong Haihua, subordinate of CNOOC CNOOC Zhoushan Petrochemical was awarded as Zhejiang Water Conservation Shenzhen LNG adopted new Oil & Petrochemicals, and Tianjin Chemical Type Enterprise technology to reuse reclaimed water Research and Design Institute of CNOOC, achieved a technological breakthrough On April 28, 2018, CNOOC Zhoushan Office of Zhejiang province. Shenzhen LNG of CNOOC Gas & Power after more than two years’ research, which Petrochemical was awarded as Water Group adopted new technology to reuse In recent years, through implementing water marks that CNOOC has reached the leading Conservation Type Enterprise by the Economic reclaimed water and has effectively saved conservation planning and target responsibility level in the domestic industry in terms of and Information Technology Commission, water resources. At present, the sewage system, the company has actively promoted reverse osmosis concentrated water recovery Provincial Housing and Construction treated by water reuse system is all used for enterprise-scale water balance test and water- pretreatment, membrane pollution control, Department, Provincial Water Resources planting, toilet rush and road flushing. saving technology transformation. long-term stable operation of membranes, Department and Provincial Water Conservation and etc. It is expected to increase the total recovery rate of reverse osmosis water system in Thermal Power Branch from 75% to 88.75%, saving 1.8 million m3 of raw water Weizhou Terminal comprehensively uses rainwater and surface water per year.

According to the characteristics of After the project completes, 8,950 m3 of heavy rainfall in Weizhou Terminal water can be stored as supplementary water area and existing facilities, Nanhai West for the recycling system and fire pond in oilfield formulated and implemented a the area. It is expected to save 55,700 m3 of comprehensive utilization and renovation water throughout the year. project for rainwater and surface water. CHINA NATIONAL OFFSHORE OIL CORP. 44 <

Driving Social Progress

Biodiversity Conservation

As a proactive advocate and practitioner pre-assessment to identify sensitive targets in environmental initiatives, research for marine ecological environment in the vicinity, and mitigates environmental and conservation projects dedicated to protection, CNOOC always attaches great risks as early as possible, so as to ecological diversity, resource restoration importance to the protection of biodiversity achieve the harmonious balance between and environmental improvement. Featured in the area surrounding the operation zone. economic projects and ecological projects such as spotted seal protection, environment. enhancement and releasing, have been The Company adheres to the principle of launched to improve ecological conditions ecological protection in all stages of project Taking CNOOC Welfare Foundation as for building a “Beautiful China”. life cycle, carries out environmental risk a platform, CNOOC actively participates

Shenzhen LNG Spotted seals visited Nanhai East oilfield carried out “makes way” for egrets “Suizhong 36-1” oilfield enhancement and release activities

Through concentration of plant In the cold winter, staffs on the “CEPO” Nanhai East oilfield released more layout to save space of 3 hectares, platform of “Suizhong 36-1” oilfield than 3 million pomfret, black pomfret Shenzhen LNG “makes way” for the in the Liaodong Bay of Bohai Sea and yellowfin pomfret and 31 million surrounding ecological environment encountered spotted seals. spotted prawns in the Dapeng Bay of so that rare species such as egrets can Shenzhen. safely breed and grow.

Meeting Dolphins on the A red turtle cruised in the area of “Panyu 30-1” platform Weizhou oilfield

The lovely dolphin family chased A Red Sea turtle, about 0.5 meters in and played around the “Panyu 30-1” length, cruised between the legs of platform. “Weizhou 11-1A” platform and RP platform. 3 CHINA NATIONAL OFFSHORE OIL CORP. DRIVING SOCIAL PROGRESS 46 < > 47

overseas employees reached 78.57%. In Career Development Career Health 2018, CNOOC recruited 888 graduates, CNOOC provides employees with CNOOC constantly improves Caring for Employees with the rate of Employment Contracts equal and open environment and clear innovations and informatization of the CNOOC actively promotes the has established occupational pension Conclusion maintained at 100% and the Compensation and Welfare access for career development. We career health management system; development strategy of “Rejuvenating and housing allowance for employees. rate of social insurances coverage 100%, In order to provide employees with have designed three career development strengthens supervision and verification Enterprise by Talents” and creates too. The employee turnover rate was competitive remuneration in the industry, The Company strictly enforces the accesses: management, technology and of occupational health management an institutional mechanism with 2%. No violations such as child labor CNOOC improves its comprehensive relevant regulations on employees’ operation personnel, besides establishing in workplace, focus on promoting equal opportunities and fair rules, and forced labor have been found in any remuneration management, strengthens holidays and fully guarantees employees’ a “Four in One” training system, so as standardized management in daily through building a dense atmosphere operations, in any regions throughout the the linkage between “bonus pool” and legal leave rights. to improve personal professional ability monitoring of occupational hazards and of respecting and attaching greater year, and no complaints on human rights performance appraisal, and forms a and work performance step by step in a health; fully implements occupational importance to talents, developing a issues have been received. clear, sensitive and effective mechanism planned manner. disease hazard control by priority positive and diligent environment for Employment Policy of incentives. CNOOC implements multi- classification, so as to implement talent development. CNOOC earnestly abides by the level and accurate incentives, especially Democratic Management effective control over key workplaces, international conventions ratified by the Career Access focusing on experts, skilled personnel CNOOC constantly improves the key projects, key contacts and key Chinese Government. It has established CNOOC continuously improves the three Protection of Rights and and front-line staff. Through exploring employee democratic management hazards; continuously carries out health a relatively complete management accesses for technology, management Interests diversified incentive methods, the system and makes full use of employees’ promotion and psychological stress system of employment. Employees of and skills with emphasis on mechanism CNOOC strictly abides by laws and Company actively promotes equity and roles in the democratic decision- management services to improve different nationalities, nations, races, building. The Company always focuses regulations of the UN and the host dividend in sci-tech units, and builds a making, administration and supervision. employees’ physical and mental health. genders, religious beliefs and cultural mechanism linking employees’ income on building talent pools and constantly countries where its business is located. The Company effectively protects In 2018, CNOOC carried out 27 pre- backgrounds are treated equally, and implements programs of the selection We faithfully respect human rights, with the performance of the Company, employees’ rights to be informed, to recruiting or use of child labor is firmly evaluation projects of occupational with personal contribution. and training of excellent young talents, pursue equality and proactively advocate oversee, to participate and to be heard, disease hazards and 33 acceptance prohibited. Female has the same rights enhances systematic management of our partners, suppliers and contractors The Company establishes a safeguarding employees’ democratic projects of occupational disease as male in the Company. The Company professional qualification, promotes to make common efforts to comply with comprehensively effective security and legitimate rights and interests. In protection facilities. A full coverage advocates a kind of respectful, open and innovation of the selection of technical relevant regulations. We strictly carry out system, which provides employees, 2018, the employee satisfaction rate of regular surveillance of workplace tolerant culture. experts in subordinates. The Company various employment policies without any unemployment insurance and scored 8.72 points (out of 10 points). occupation hazards has been achieved In 2018, the total number of Company’s has put forward the Deepening the discriminatory provisions or behaviors maternity insurance, as well as multi- Labor unions at different levels effectively and the rate of occupational health employees was 93,601, with 19.19% Reform of the Professional Title to establish harmonious and stable level supplementary insurance. The protect employees’ legitimate rights and examination for employees exposing of female, 2.86% of ethnic minority Management System (Provisional) to labor relations and maintain employees’ participation rate of social insurance interests, and supervise the Company’s occupational disease hazards reached in China, and the localization rate of improve system building, which does not legitimate rights and interests. reaches 100%. In addition, the Company fulfilment of responsibilities and duties. 99.45%. A total of 67 problems in five highlight one’s academic background, The percentage of employees joined the aspects were found during the special record of service or published papers, labor union was kept at 100%. occupational health inspections on 14 but moral character, ability and units, 120 correction proposals and The Company improves the enterprise performance and allow more excellent suggestions were put forward. democratic management system and young talents to have opportunities to Ÿ Senior manager under the direct management of SASAC the business affair publicity system with stand out. Ÿ Group-level technical expert the basic form of workers’ congress, In 2018, 725 persons obtained Senior Caring for Employees Ÿ Group-level skilled expert strengthens the function of safeguarding Technical Qualifications, 80 persons were Employees are the essential source Ÿ Internationalized leading talent rights of the labor union and enhances awarded as Professional Directors in the for sustainable development of the democratic management such as field of exploration, downhole operations, Company. CNOOC highly emphasizes enlarging channels of transmitting and drilling and completion (including 4 on assisting employees in need and Ÿ Technical experts of Ÿ Skilled expert of subordinate unit decisions to lower levels and reporting Ÿ Middle manager Ÿ Core internationalized subordinate unit Ÿ Excellent technician Senior Professional Directors). timely helps their families in difficulty by Ÿ Managing talent talents employees’ opinions to higher-levels so Ÿ Ÿ settling the troubles of their everyday Sci-Tech talent New technician as to help employees fully express their lives. The Company constantly opinions and participate in democratic Employee Training improves employees’ working and decision-making, administration and In 2018, the Company actively carried out living conditions, carries out various supervision. 55,000 training sessions, with 889,000 caring activities, strives for ensuring that Selection and training of core and backbone talents of subordinate units person-time and 6.409 million training employees balance their work and life hours (i.e. 74.34 hours per capita). and enhance their sense of happiness. CNOOC focuses on key groups of talents and the annual key training program with a talent echelon training mode CHINA NATIONAL OFFSHORE OIL CORP. DRIVING SOCIAL PROGRESS 48 < > 49

Assisting Employees in Need 607 families got help during the activity By making the best of new media Balancing Work and Life of “Warm Support to the Families of and information technology, CNOOC CNOOC attaches great importance to CNOOC advocates the philosophy of “Healthy Work, Happy Life” and cares for the employees’ life in an all-round way. The Employees in Difficulty”, and 2,669 has completed the construction of helping employees in need, specially Company preserves cozy and leisure space and organizes various recreational sports activities for the employees to balance their people got reliefs from other projects. information system for poverty alleviation formulates management measures for work and life. Various forms of assistance like regular in five key subordinate enterprises: Bohai poverty alleviation work. Throughout financial aid and children’s educational oilfield, Nanhai West oilfield, CNOOC Oil the year, the Company has allocated grants, ensure that no one employee & Petrochemicals, COSL and CNOOC special funds of RMB 20 million for in need lives below the poverty line, Gas & Power Group. The system poverty alleviation to grass-roots units. that no one child of employee in need effectively enhances the pertinence and As consequence, 217 employee families cannot afford education and that no one timeliness of assistance and guides the and 1,313 disabled people in need employee with serious illness cannot allocation of resources to the targeted got reliefs, more than 500 people with afford medical treatment. employees in difficulty. serious illness got medical assistance,

Nanhai East oilfield promoted stress management and mental health services for all staff

After the investigation on stress management pressure and revealed the change rule of and mental health in offshore facilities, pressure source and employees stress index. Nanhai East oilfield established onshore Therefore, the oilfield can identify the psychological counselling rooms and employees bearing hidden psychological provided psychological counselling services risks and actively intervene those who have to employees, which realized the tracking serious psychological risks and possibly affect and monitoring on employees’ psychological production safety.

Zhuhai LNG included employees’ physical exercises in its value-contribution management

Zhuhai LNG of CNOOC Gas & Power Group staff. Each donation of RMB 1 is converted to included employees’ physical exercises in 1 point of enterprise value-contribution. Each its Management Regulations of Enterprise’s employee’s annual performance assessment Value Contribution, encouraging employees is referred to the points he/she accumulates to do exercise and public welfare activities. (up to 49 points per person every year). This Via the Wechat Sports module, the company management practice has greatly stimulated records each employee’s walking steps and employees’ enthusiasm of exercising and donates to the Tencent public welfare platform has the company put the concept of ‘healthy according to the number of sports steps of all work, happy life’ into practice.

The third Competition of “Good Course, Good Coach”

In July 2018, CNOOC launched the third Competition of “Good Course, Good Coach”. Excellent face-to-face courses, excellent micro-courses and Top Ten Internal Lecturers stood out. Internal training and experience sharing have become popular in the Company. P A C

Adhering to the poverty alleviation principle of “Relieving Difficulties, Eradicating Developing and promoting agriculture and pasture products Poverty, Promoting Blood-making Function and Establishing a Long-term Mecha- through innovation nism”, and considering the characteristics of targeted poverty alleviation counties and According to the characteristics of agriculture and pasture industries of the 6 targeted areas cities, CNOOC carries out targeted poverty alleviation in the fields of industry, in 4 provinces, CNOOC helped local people promote and sell the local featured products like housing, education, medical treatment and infrastructure. After a special national Zhuozi oatmeal and Anduo torn yak beef, with a series of measures including careful assessment and inspection, Hezuo City in Gansu Province was approved to withdraw selection, customized production and package, besides establishing “intelligent online from the list of poverty-stricken counties for casting off poverty ahead of planning. Lanzhou shopping mall” and 6 experience centers for products of poverty alleviation, and the sales CNOOC continued to actively explore new modes of poverty alleviation through amounted to more than RMB 7.43 million. developing competitive industries in six spots, such as Nima in Tibet, Wuzhishan and G309 Baoting in Hainan, Hezuo and Xiahe in Gansu and Zhuozi in Inner Mongolia, and built online and offline consumption platforms of products from these targeted poverty alleviation counties and cities. Linxia County Guanghe County The Company encourages its employees and staff canteens to purchase products from Hezheng County Labrang poverty-stricken cities and counties. Employees are also encouraged to travel with Monastery relatives at their own expense in the targeted poor areas. Sangke Grassland Xiahe County Hezuo Yeli Pass With many measures taken, CNOOC is near to achieve its goal of poverty alleviation, City Milarepa With deep affections for the people of Lingc- but its devotion to poverty alleviation will never stop. Buddha Meiren Grassland Pavilion G213 heng, CNOOC opened their hearts to Gannan Tibetan Autonomous Region sincerely aid the people in difficulty. The Com- Gahai Lake Building Gannan Luqu County G213 pany has already invested RMB 37 million into cultural tourism Tourist routes in poor areas of Gannan industry according to local medical and health care, construction of local characteristics Zagana agriculture and pasture villages and well-off G213 Diebu County Maqu Langmusi ecological civilization villages. Their significant The First Bridge County of the Yellow River contributions to our city’s poverty-alleviation Hequ racecourse work have won unanimous praise from all the Awancang Wetland cadres and citizens of Hezuo.

Excerpt from the Letter of Thanks of Hezuo, Gansu CHINA NATIONAL OFFSHORE OIL CORP. DRIVING SOCIAL PROGRESS 52 < > 53

Devoting to Public Interests Providing Voluntary Services

CNOOC Welfare Foundation is regarded In 2018, CNOOC continued to make welfare charity affairs, and won the 10th CNOOC constantly advocates and the enthusiasm of employees for public strengthened management on volunteers as the unified management platform for targeted poverty alleviation, caring for “China Charity Award” awarded by the promotes voluntary services. In 2018, welfare, and enhanced the awareness and continuously integrated and optimized public welfare programs of the Company. students and performing special public Ministry of Civil Affairs. the Youth League Committee of CNOOC of social and civic responsibility of the the forces and resources of youth continued to carry out “Blue Force” youth youth, in order to better fulfill corporate volunteers teams. Currently, CNOOC has volunteers activities, strived to extend social responsibility and sincerely 131 “Blue Force” youth volunteers teams Investigation in Baoting and Wuzhishan Hezuo takes the lead in poverty voluntary services, vigorously motivated feedback society. The Company further with 4,530 youth volunteers. alleviation On November 8, 2018, Yang Hua, Chairman site inspection on the Assistance Projects of CNOOC and leader of Poverty Alleviation of CNOOC, brought condolences into the Approved by the Office of the Leading Group “Blue Force” in Action and Counterpart Assistance Working Group, registered poor households, investigated the for Poverty Alleviation and Development CNOOC “Blue Force” youth volunteers weakness. During the World Ocean Day, young employees and enterprises as well as came along with his delegation to Wuzhishan development of local industries and had in- of the State Council and the government Action aims to carry out various types World Environment Day and Learn from Lei between enterprises and society. Through City and Baoting County of Hainan Province depth discussions with local people, in order of Gansu, Hezuo, CNOOC’s counterparts, of public welfare activities, such as Feng Day, hundreds of “Blue Force” youth continuous innovation of means and adopting to investigate on targeted poverty alleviation to well follow up the situation and obtain officially withdrew from the list of poverty- popularization of marine science and volunteers teams and thousands of young project-based management, “Blue Force” work and implementation of requirements more accurate information for effectively stricken counties and became one of the first environmental protection, educational volunteers went to streets and communities, stimulated young people’s enthusiasm in from the “first-hand” project. He made on- supporting local poverty alleviation. cities in Gansu to cast off poverty. assistance, community services and social actively implemented the “blue” commitment serving more public interests. assistance for the elderly, disability and and built communicative bridge between

Learn from Lei Feng Day

Investigation in Zhuozi, Inner Mongolia World Ocean On November 6, 2018, Wang Dongjin, Day President of CNOOC and deputy leader of Poverty Alleviation and Counterpart Assistant Working Group, came along with his delegation to Zhuozi, Inner Mongolia, to conduct investigation on targeted poverty alleviation work. He inspected the progress of local poverty alleviation and CNOOC’s Assistance Projects, brought condolences into the registered poor households, visited aiding enterprises and had in-depth discussions with World local people. Environment Day CHINA NATIONAL OFFSHORE OIL CORP. DRIVING SOCIAL PROGRESS 54 < > 55

CNOOC Coastal Environmental Protection Action Integrating Into the Community The “Coastal Environmental Protection to organize beach cleaning activities with The activities not only established a good Public Welfare Action” has been held by the Beihai Branch of the State Oceanic social image of CNOOC, but also promoted CNOOC is proactively committed to and social impact assessment for new the “Warm Hearts” projects to effectively Bohai Petroleum Administration for seven Administration. They carried out marine the public awareness of marine environmental serving society, establishes the regular projects is kept at 100%. The Company improve the residents’ living standard, consecutive sessions since its launch in 2011. science popularization, publicity of marine protection, which has been widely praised by communication mechanism with helps local residents solve difficulties in drive the community culture construction In 2018, volunteers from Bohai oilfield culture and marine environmental protection. all sectors of society. communities and listens to optimization life, improve local ecological environment, and build their beautiful home with went to Tianjin, the birthplace of the Action, proposals of local governments and create and maintain communal safety and cooperative efforts. residents. The ration of environmental harmony. CNOOC constantly advances

Little R Alliance entered campus to provide marine knowledge education CNOOC Petrochemicals Import & Export cares for the reintegrated teenagers

Little R Alliance is a public welfare The Youth League Committee of CNOOC brand created by CNOOC Environmental Petrochemicals Import & Export organized an Protection Services Company (Tianjin) activity named “Homing” for the reintegrated in 2017, with R standing for the initial of teenagers, in order to provide them spiritual Responder. caring and deliver positive energy.

Little R Alliance is committed to science popularization in campus and public welfare activities.

Signing of Donation Agreement for CNOOC University Student Assistance Fund Phase 5 Project

On October 30, 2018, the 3rd session of agreement for CNOOC University Student from 37 universities across the country. Wang CNOOC University Student Assistance Fund Assistance Fund Phase 5 Project, according Jiarui, Chairman of China Soong Ching Ling of China Soong Ching Ling Foundation to which CNOOC Public Welfare Foundation Foundation, and Yang Hua, Chairman of Public Welfare Activities and the Phase 5 will use its own funds to donate to China CNOOC, attended the event and delivered Project Conation Ceremony was held in Soong Ching Ling Foundation, in order to speeches. Beijing. The two parties signed the donation support poverty-stricken college students CHINA NATIONAL OFFSHORE OIL CORP. 56 <

CNOOC actively participates in maritime rescue 2018 Taking advantage of its resources, CNOOC 30 Maritime Rescue Use of Ships actively participates in social maritime rescue and earnestly fulfills its corporate social 26 CSR REPORT OVERSEAS 25 Deeply Integrating into Global Economy • Joint Development for Bright Future responsibility with the premise of ensuring 23 safe operation. In 2018, the Company 20 participated in 41 maritime rescues in China’s waters, dispatched 48 ships and 7 helicopters. 15

10 9 8 5 7 7 6 3 0 The Bohai Sea The East China Sea The western The eastern South China Sea South China Sea

CNOOC awarded as the “Advanced Shandong Haihua fought flood and provided disaster relief Unit for Blood Donation” On August 20, 2018, Shandong Haihua On July 26, 2018, blood donation volunteers urgently allocated risk resistance materials from CNOOC headquarters and subordinate and organized more than 60 volunteers to rush units in Beijing came to the blood donation to the Port Industrial Park for flood fighting. center for emergency blood donation. Besides the quick response to emergency, the After rigorous medical examination, 26 company and its employees donated more employees donated 5,200 ml of blood for than RMB 1.89 million for disaster relief. free. Since 1994, a total of 592 CNOOC’s employees in Beijing have participated in voluntary blood donation, with a total blood donation of 119,000 ml. CNOOC has been awarded by Beijing Blood Donation Office as “Advanced Unit for Blood Donation” for eight consecutive years.

Beijing Base of China Enterprises Co., CNOOC Oil & Petrochemicals cares for Employee of Completion Center of Ltd. cares for the elderly lonely and elderly veterans COSL performed outstanding acts of bravery The Beijing Base Branch of China Offshore CNOOC Oil & Petrochemicals participated in Enterprise Co.，continued to provide poverty alleviation donation ceremonies held GE Xi’ao, employee of Completion Center of intimate service for retired veterans. by the Aotou Street Office and Xiayong Street COSL, fought a knife-wielding gangster with Office respectively to extend regards to lonely bare hands and rescued the robbed woman and elderly veterans. and infant. Forty Years of Reform and Opening-up of the Offshore Special Zone

In 1978, the major decision to open the offshore oil industry was made by the Chinese government.

In 1982, CNOOC was formally born as Offshore Special Zone of China’s reform and opening up.

Forty years ago, CNOOC was born as a result of reform and opening up.

For forty years, CNOOC has developed as China’s reform and opening up continued. CNOOC has always been faithful to the original aspiration of reform and opening up and stayed true to the road of reform and opening up.

For forty years, CNOOC has kept its mission in mind, made bold efforts to continue reform and opening up, taken the lead in building a world-class energy company with Chinese characteristics, and broken new ground for Chinas offshore oil industry.

255 foreign255 cooperation contracts have been accumulatively signed

Assets45 and business were extended in 45 countries

1982 T CNOOC Breakthrough10 in oil trade volume The first foreign cooperation contract was signed (Yinggehai Basin). LNG imports26.42

The first foreign cooperative oilfield was put into operation (Chengbei oilfield). 100 CNOOC Limited was listed on the New York Trading volume of oil Breakthrough30 in domestic Breakthrough50 in domestic LNG imports10 exceeded LNG Imports20 exceeded Stock Exchange and the Stock Exchange of products exceeded 100 The first purchase of oil assets from foreign Breakthrough10 in domestic oil and gas production oil and gas production 10 million tons 20 million tons Hong Kong limited. million tons partners (Liuhua 11-1 oilfield) oil and gas output

2 22 2 2 2 2 23 2 2 2018

Acquisition of Canadian Nexen COOEC and COSL were listed on The first ship of imported LNG Shanghai Stock Exchange and the Stock China BlueChemical was listed in 100 foreign100 cooperation contracts have Exchange of Hong Kong limited Hong Kong been cumulatively signed. respectively. The first overseas acquisition project The first deepwater foreign cooperation Breakthrough50 in oil trading volume (Malacca Project in Indonesia) contract was signed (Nanhai 40/30 block). CHINA NATIONAL OFFSHORE OIL CORP. CSR REPORT OVERSEAS 60 < > 61

COOEC Delivered a World-Class Floating Production Storage and Offloading CNOOC Limited has made successive Creating Socioeconomic Value Device in Qingdao discoveries in Guyana

On May 16, 2018, the world’s largest FPSO, and the highest technical requirements so far The offshore Stabroek block of Guyana CNOOC is an important force in the and concepts of Opening up and Win- Significant Growth of Overseas Economy P67, contracted by COOEC, was delivered in China. The freight volume and distance in which CNOOC participates lies in implementation of the national “Going win, so as to meet the common values in Qingdao. This FPSO project has been completed by tugboats are both the largest in a world-class oil and gas basin whose Out” strategy and the “Belt and Road” and cultural concepts in line with the remarked by the largest quantities of workload the world. resources are of excellent quality. Entering Initiative. The Company takes the interests of all countries, promote deeper crude oil overseas output the area is CNOOC’s important measure responsibility of the central enterprise mutually beneficial cooperation in the oil 32.05 million tons after the complete adjustment of its global and creates a balanced and inclusive and gas industry by sharing risks and exploration strategy during 2013 to 2014. development model with the new ideas achievements. natural gas overseas output Since 2015, the company has continuously 11.7 billion m3 discovered 10 oilfields in this area, which is an unprecedented success. Liza oilfield, the ratio of overseas assets first discovery among them, is planned to be Its drainage It has seventeen It adopts 120 The localization The tugboat % put into operation in early 2020, only 5 years 36.1 capacity is functional technological rate of raw operation lasted after discovery, comparing to 7-8 years that 350,000 tons, modules with and technical material is as 45 days and such sized project usually takes. Such speed Providing better products Promoting local economic which is five a total weight innovations. high as 75%, sailed 12,000 and services development of development demonstrates the leading times that of the of more than involving nautical miles. project execution capability of CNOOC and Providing high-end products Laying the foundation of energy aircraft carrier 25,000 tons and 191 domestic its partners. At present, CNOOC is committed Providing high quality services Enhancing economic vitality Rankings Liaoning. a torch tower of enterprises. to building a globalized technology team to 82 meters high. share technologies and lay a solid foundation for the development of the oil and gas Value PIW’s World’s Top 50 Oil Companies industry in Guyana. Creation 32nd World’s Top LNG Importer 3 rd

“HAI YANG SHI YOU 760” of COSL began its First Operation in America CNOOC’s First Overseas Operator Project has been fully completed On January 12, 2018, “HAI YANG SHI tough conditions in the operation area, the Ensuring national energy supply YOU 760” of COSL began its first multi- fleet formulated an effective plan to solve the On September 5, 2018, CNOOC Southeast Promoting international cooperation user deepwater two-dimensional seismic problems related to 6,000-meter-deepwater Asia Limited formally handed over the Supplying stable resources acquisition operation in South America. and 12,000-meter-long cables, taking only 24 Southeast Sumatra (SES) block to the This task is the two-dimensional seismic hours to put the ultra-long cables in place at Indonesian government and the Indonesian acquisition project with the largest single one time, and put the gun array in place at one National Petroleum Corporation(Pertamina), operation area ever obtained by Chinese time. The achievements fully demonstrate marking the full completion of CNOOC’s enterprises. It is also the first transnational the technical strength of China’s offshore oil first overseas operator project. The SES exploration and development cooperation in industry and are highly praised by the owners. block is an old oilfield that has been China under the multi-user mode. Facing the continuously developed for over 45 years. COOEC won the 2018 Outstanding Corporate Innovator Award (OCI) It had entered the late ultra-high water- cut stage when CNOOC began operation. In 2018, COOEC won the 2018 Outstanding Corporate Innovator Award The company has made full use of the (OCI). Over the past five years, the company continuously strengthened “CNOOC 36-1” asphalt has been used in the Belt and Road construction ‘three carriages’ to achieve sustainable open innovation, significantly improved its ability to integrate resources development-safety first, tapping potential and maintained its vitality index at about 30%, making it the first mainland On January 15, 2018, the first batch of largest hydropower station. The brand and to increase production, reducing cost and Chinese enterprise to win this honor. The OCI award was established “CNOOC 36-1” asphalt No 50 (grade A) influence of “CNOOC 36-1” asphalt have improving efficiency-so that the old oilfield by the American Product Development and Management Association was delivered to Mozambique for China’s been effectively promoted, which makes was rejuvenated to provide Java region oil (PDMA) to recognize successful enterprises around the world that project of circular expressway construction. outstanding contributions to CNOOC’s active and gas products for 16 consecutive years introduced new products, new programs and new services for over five On March 29, the first batch of “CNOOC participation in the infrastructure construction and even once ranked among the PSC blocks consecutive years. 36-1” hydraulic asphalt was delivered to for the countries along the Belt and Road. whose operation cost per barrel oil were the Nigeria for the construction of Nigeria’s lowest in Indonesian offshore oilfields. The achievement set an example for oil and gas cooperation between the two countries. CHINA NATIONAL OFFSHORE OIL CORP. CSR REPORT OVERSEAS 62 < > 63

Security Emergency Response Mechanism has achieved remarkable results in Staff Reflections Strengthening Safety and Compliance Management CNOOC Iraq Limited

In 2018, many social unrest incidents occurred warning, took effective measures to protect Safety and compliance management is but also conforms to China’s relevant Security Management Rules and around Misan Oilfield in Iraq. The oilfield the lives and properties of employees, and the very resource of CNOOC operating regulations. A good atmosphere has established a security management managers started emergency predetermined played an important role in ensuring stable business in the world. CNOOC takes been created so that ‘everyone knows mechanism for the whole process of plans in time, issued yellow signal early production. institutional construction as the guide. the system and obeys rules’. The overseas projects; attached a great After many years of field operation, the Company has basically achieved full importance to emergency management Company has built up a set of safety coverage of overseas audit supervision, and normalized emergency drills, and compliance supervision system effectively controlled overseas operation which effectively guaranteed the stable Establishment of Information which not only conforms to local laws risks; actively implemented the Overseas operation of overseas projects. 1 Reporting Mechanism 2

● Strengthening Oilfield ● Khalid Almalky and regulations of resource countries, Daily update of security early Coordinating and increasing the warning information Security Forces security force of checkpoints and Iraqi Department Manager, Production adding observation posts in the ● Daily update of person vehicle Zone (Oil Production Plant) of Misan Compliance Management System of CNOOC International Limited matching information periphery of the oilfield Oilfield of CNOOC Iraq Limited ● Daily update of personnel ● Adding work sites and camps of information SWAT to intensify security patrols ● Daily reporting to headquarter ● Strengthening the control over entry CNOOC is a large multinational group Vision and exit of camps and prohibiting the the Iraqi security situation company with strong international passage of unrelated persons competitiveness. It is widely Corporate Management team recognized by the international capital constitution 3 ● Updating and upgrading the market with transparent and perfect comprehensive emergency response corporate institutions, open and Improving Emergency Predetermined Plans plan Business Business Expert ● Formulating the Emergency advanced management concept and process standard ● Updating the Emergency Response Evacuation Guideline Plan for Natural Disasters steady growth. It is a very good partner. ● Maintaining and renewing ● CNOOC has integrated advanced Responsibilities & Guidelines 166 Business Processes Formulating three Emergency emergency resources Response Plan for demonstrations, safety culture into oilfield management, 73 Business Standards Operating rule Frontline ● Testing emergency medical transshipment and tribal therefore, enhances the level of oilfield communication equipment 77 Operation Rules conflicts respectively safety production management, ● Implementing comprehensive ● Establishing Emergency Disposal improves the safety consciousness of and special exercises Process Card for high risk posts local employees and reduces the risks CNOOC Uganda built up an overseas compliance regulation system ● Assessing contractor’s emergency Implementing Emergency Drills response capability in the production process. After nearly seven years of field operation, meets the company’s overseas operation major compliance risks or problems have 4 CNOOC Uganda has built up an overseas requirements with the characteristics of occurred. compliance regulation system, which Uganda. Since the launch of the system, no

Ÿ Up to the end of 2018, 147 regulations, manuals and process guidelines were in use, which are planned to increase to 351 in 2019 Internal Ÿ The company updates its authorization system guideline in a timely manner Control System Ÿ The key systems are reviewed annually and updated annually Construction Ÿ The company gradually advances systematization, process oriented and form oriented improvement, and electronization CNOOC Nexen actively practices EU General Data Protection Regulation

Ÿ Review by specially-assigned person and double signature system Audit and On May 28, 2018, the EU formally Nexen’s information & data protection and Ÿ Combination of monthly audit by accounting managers and spot check Inspection implemented General Data Protection upgraded the Information & Data Protection by financial managers System Regulation (GDPR) which would have a Action Plan. After the enactment of the Ÿ Combination of regular and irregular spot checks and self-checks Regulation significant impact on CNOOC’s business in regulation, the working group updated Ÿ Establishing joint compliance regulations with partners Europe and North America. the legal basis of the relevant procedures, Legal System Ÿ Updating company systems and processes according to the latest contracts and privacy notices in a timely Docking In order to meet the requirements of GDPR regulations of local government manner; interpreted the regulation to Nexen’s System as quickly as possible and improve the Ÿ Cooperating with local government to carry out external audit employees and informed them in various information data security of the company in forms the key provisions; and conducted accordance with the new standards, Nexen Procurement Ÿ Establishing the procurement process strictly in accordance with the online training for all staff to make them fully Anti-monopoly Law and the Anti-Unfair Competition Law had set up a working group one year before System understand their rights and obligations. Construction Ÿ Over-limit procurement must be tendered publicly the regulation was promulgated. The working group made a thorough investigation on CHINA NATIONAL OFFSHORE OIL CORP. CSR REPORT OVERSEAS 64 < > 65

Protecting a Balanced Ecosystem COSL’s fleet of “HAI YANG SHI YOU 720” has worked out an environmental friendly operation mode In 2018, when it was operating in Brazil, method. The fleet has also adjusted the CNOOC attaches great importance to applies all kinds of technological environmental protection management, COSL’s fleet of “HAI YANG SHI YOU 720” frequency of operations by firing low energy Since August, as more and more protecting the balance of ecosystem means for biodiversity protection, and disseminates the concept of faced tight schedule and high environmental and low frequency early warning guns during whales came in the operation area, in overseas areas where it operates, actively organizes and participates in “Lucid Waters and Lush Mountains are protection requirements. The fleet has turnaround in international waters, complying the fleet has made a positive and carries out research and management environmental protection activities, Invaluable Assets” to every corner of the innovated the marine biological monitoring with the related regulations, so as to save professional response to effectively on greenhouse gas emission reduction, continuously improves the level of world. and protection method and changed the more space and time for operation. protect them. calibration method of marine animal driving During the 23 days after the project started, —Juliana Rodrigues Moron equipment from on-site calibration to mirror the fleet observed marine mammals 45 times Marine mammal observer in calibration. The new method improved the and stopped artillery operations 9 times to Brazil speed of calibration by saving nearly four CNOOC International upgrades its global HSSE system avoid disturbing them. hours a day compared with the traditional

To meet the needs of overseas business According to the requirements of corporate set of global HSSE (health, safety, security, development, CNOOC has restructured its QHSE management system and drawing environment) with CNOOC’s characteristics organization of business segments and carried upon good practices in the global oil industry, which is also fit for various overseas business. CNOOC actively participated in the Oil Spill Emergency Response Conference held by the government of Mexico out the management system integration. CNOOC International is reformulating a

Since the BP GoM Oil Spill in 2011, Mexico its entry into Mexico, CNOOC Mexico government authorities and peer companies, and the United States have jointly organized Company has actively participated in various thus has enhanced management through annual Gulf of Mexico Oil Spill Emergency oil spill emergency response conferences communication and raise reputation in Laws Response Conference on the subject of and forums, introducing its experiences of locality. HSSE and leadship regula- quick response to oil spill emergency. Since oil spill response management to Mexican Social tions Occupa- safety and tional security safety Establishment of Alberta Carbon Conversion Technology Center funded by CNOOC Nexen Continu- PL Occupational ous T A health and improve- C N industrial ment A hygiene

Environ-

Accident HSSE mental

event protec- C system tion H E O Emergency C D Supply prepared- K Chain ness Security

Process HSSE safety HSSE training informa- tion sharing

Opening Ceremony of Carbon Conversion Technology Center Panorama of Carbon Conversion Technology Center

CNOOC Nexen advances the caribou conservation program On May 25, 2018, Nexen-funded Alberta competition held by Canadian Oil Sands proud to bring this building to Calgary, so Carbon Conversion Technology Center was Innovation Alliance. innovators can test their technologies on real- CNOOC Nexen has been actively engaged in officially certified by the government of officially put into use for the research on world emissions from natural gas-fired power At the launch ceremony, Paul Khanna, caribou conservation activities in Canadian Alberta as one of the provincial government’s carbon capture and conversion technologies. plants. Knowing that these innovations could Advisor-Government Relations & Climate oil sands area since 2011. The company has restoration projects. Nexen also participated Five research teams were selected as the be applied to oil sands operations in the future Change, Nexen Americas, said, “We are so creatively used its seismic lines and roads in the formulation of Caribou Recovery Pilot first institutes to utilize the center after a is very encouraging.” to effectively reduce the invasion of caribou Project Summary Report that was officially habitats by predators and expand caribou published on the website of Canadian Oil populations in six township areas. In 2018, Sands Innovation Alliance, and proposed the Nexen’s Algar Caribou Habitat Project was following work to expand the caribou habitat. CHINA NATIONAL OFFSHORE OIL CORP. CSR REPORT OVERSEAS 66 < > 67

Building Platform for Employee Development CNOOC Uganda builds Career Ladders for Overseas Employees Introduction of Based on human resources policies of of technical, management and operation staff Excellent Employees CNOOC complies with laws and of employees from various cultural CNOOC and CNOOC International and will be effectively alleviated. Overseas employees referring to the idea of constructing ‘three regulations of the United Nations and backgrounds and adheres to the In 2018, CNOOC Uganda Limited provided teams’, CNOOC Uganda has developed a the countries where it runs business. principle of gender equality, equal pay local employees 55 training courses, covering 7-level career ladder for its employees in The Company strictly abides by all for equal work and equal treatment for Foreign staff technical, management and professional 25 technical and management occupational employment policies, opposes any employees of different races, nationalities, qualification training and on-site practices. sequences, and designed job requirements , The training hours reached 44,720. The form of discrimination, actively builds beliefs, gender, age, marital status and 4 671 and promotion methods for each level. When company dispatched 8 local employees harmonious and stable labor relations special legal protection. The Company the Uganda project enters the stages of on-site to CNOOC’s domestic oilfields, research and safeguards the legitimate rights currently has 5,945 overseas employees, Localization rate of overseas employees construction and operation, the company’s institutes and manufacturers to participate in and interests of employees. It respects including 4,671 foreign employees, with a occupational sequence will be further 2-4 months of on-site practices and achieved the values, personalities and privacies localization rate of 79%. 79% extended to on-site construction, operation Alex Tumwesigye good results. The effect has been highly and maintenance positions. Through the Nationality: Uganda recognized by the Ministry of Energy and continuous improvement of staff career Mineral Development of Uganda. 7 years in CNOOC CNOOC continues to develop international talent training ladders, the bottleneck of the development Staff Reflections In 2018, CNOOC selected the second batch study in the University of Texas at Austin for Alex Tumwesigye is contract acquisition supervisor of of 16 leading talents of internationalization. one year. The Company also recommended CNOOC Nexen is committed to promoting gender diversity 11 of them participated in the Belt and Road 66 core talents of internationalization to Department of Business and Leading Talent Training Program organized participate in the 17-day training program In April 2018, the United Kingdom enacted median of the market data; in terms of long- Contracts in CNOOC Uganda. by the National Development and Reform held by the National School of Development a law requiring companies with 250 or more term incentive awards, males received 3.9% In 2011, he responded to the Commission and the other 5 were sent to of Peking University. employees to publish the gender pay gap. more than females. company’s job advertisement CNOOC Nexen responded positively to the and offered himself several times After investigation and analysis, the company relevant legal requirements with not only before being hired. During the believed that the lower proportion of female announcing the gender pay gap, but also following seven years, he grew employees, especially in senior management conducting a survey on the gender pay gap in rapidly and achieved outstanding MARTIN ADEBIYI SONARIWO positions and technical positions, was the its British branch. results. In 2018, he was elected CNOOC Limited was named the Forbes Nationality: Nigeria main reason for the gender pay gap. To local employee representative and The result of the survey showed that there alleviate the gap, the company formulated World’s Best Employers for consecutive years 8 years in CNOOC was designated candidate for the was no significant gender pay gap in Nexen’s a special action plan in 2018 to strengthen Localized Replacement Plan for British branch. Based on the data of 2016, women’s leadership and built career ladders the Manager of Department of On October 11, 2018, Forbes released its annual World’s Best I joined CNOOC Nigeria in 2010 females annual bonuses were on average for female employees in order to increase the Business and Contracts. Employers List, with 84 Chinese companies on the list. CNOOC and am now in charge of crude 0.7% higher than males; the pay of males is proportion of female employees in senior and ranked 6th, which made it the only Chinese company ranking in the oil sales. CNOOC is the company 0.8% higher than that of females, while the technical positions. top 10 of the list. which I have been working in for company’s average salary was closed to the the longest time since I graduated from university and is my most satisfied employer. In the past eight COOEC International Exchange Center was put into operation years, I had not only the opportunity to fully apply the knowledge I have On December 4, 2018, COOEC International employed as special professors and lecturers and build a multi-level, three-dimensional learned to practice, but also gained Exchange Center was put into operation. of the Center. and normalized talent training mode to Worlds personal happiness from stable COOEC has signed personnel training provide strong talent support for the high- Best The Center will build three platforms for work and development prospects. I cooperation framework agreements with quality development of COOEC. The Center Employers corporate think tank, training of senior have got married and had two sons. Tianjin University, Harbin Engineering will also actively take advantage of the managers and internationalized talents, and I like the working environment and University, China University of Petroleum sharing mechanism, make full use of the maintenance of international relations of the corporate culture very much. (East China), China University of Petroleum abundant teaching resources of universities the COOEC respectively. The Center will Working in CNOOC is a wonderful (Beijing), Southwest Petroleum University and partners, and carry out high-level continuously strengthen the construction experience for me. I feel very and Shanghai Jiaotong University. Five well- cooperation in research, commercialization of internal training system, make full use happy to be a member of this big known professors from Nankai University of results and training of internationalized of external resources such as colleges and family. and Tianjin University and three high- personnel, so as to integrate external sharing universities, realize the organic combination end talents of offshore engineering were and internal sharing. of self-construction and external sharing, CHINA NATIONAL OFFSHORE OIL CORP. CSR REPORT OVERSEAS 68 < > 69

Promoting Enterprise-community Common Development Donations to Students and Education Job Creation CNOOC Nexen raised money for the Heart Disease and Stroke Foundation CNOOC Uganda Opened a Welder CNOOC lives together with the Training Course local government and residents in a On September 28, 2018, more than 50 Nexen This is the fifth consecutive year that Nexen complementary community with a employees participated in the Big Bike Ride in has participated in the event, raising a total CNOOC Uganda Limited has always attached great importance to the training of local talents shared future. The Company has long support of Calgary Corporate Challenge in order of $130,000 for the Foundation Brian Bench, to raise money for the Heart Disease and Stroke VP & CIO-Information Technology and and technology transfer in Uganda. The been committed to working hand in Foundation. Team Brian and Team Mike formed Big Bike leader , said, “It’s an interesting company has vigorously implemented the hand with local communities, creating by Nexen employees were the final winners. friendship game, but more importantly, we win-win concept and managed to promote the employment opportunities, facilitating Nexen raised $30,000 for the foundation, half of have contributed to a great cause.” development of Uganda’s oil industry. In July two-way exchange and integration. which came from Nexen employees. 2018, the company launched a welder training It has been promoting common course and selected 30 local residents to development by both ‘blood transfusion’ Community Construction Donations to Students Job Creation participate in a three-month practical training. and ‘hematopoiesis’ mechanisms, and Education The course was planned to train internationally Organizing voluntary Providing employment Carrying out public certified welders. Uganda’s First Lady donating to local students and education services, improving opportunities, welfare donation, setting community conditions conducting internships attended the opening ceremony of the training in order to sow the seeds of hope for the up scholarship awards and promoting cultural and organizing and holding tutoring course in person and thanked CNOOC for its future of local communities. integration vocational training lectures contribution to the training of Ugandan talents and localization in recent years.

Community Construction

CNOOC Southeast Asia was commended by the Ministry of Energy and Mineral Resources of Indonesia for its disaster relief operation

the Ministry of Energy and Mineral Resources of Indonesia for its leading role in the disaster CNOOC Southeast Asia Improves Teaching Conditions in Local Schools CNOOC Nexen Increased Local relief operation during the earthquake and Contractor Participation tsunami disasters in September, as well as There is an island with 117 households near solar facilities, the power supply on the island donation to the disaster area and post-disaster the operation area of HCML, subsidiary will never be interrupted and students can use In 2018, in order to promote the participation reconstruction in Central Sulawesi Province, company of CNOOC Southeast Asia. The computers at any time. HCML also built a of aborigines and small and medium-sized Indonesia. Islanders used to take diesel engine generator lightning rod of 18 meters high in the school. contractors in its business, CNOOC Nexen formed a project team of internationally At the award ceremony, the Minister of system as power source and the power only The company hired professional teachers from renowned professionals to simplify the Energy and Mineral Resources of Indonesia lasted for a limited time every day. HCML Jakarta to tutored senior students in middle bidding process, after listening carefully to said, “Companies such as HCML have helped The ribbon-cutting ceremony of the was determined to help the islanders solve school and help them prepare for college co-construction project in Iraq the aborigines contractors. our brothers and sisters in times of crisis. this long-standing problem by installing solar entrance examination. Here, I thank all the companies that have power equipment on the island. With these The newly developed simplified process On December 17, 2018, HCML, subsidiary of taken part. I express highest appreciation for reduced the use of legal terminologies and CNOOC Southeast Asia, was commended by your hard work and sincerity for this.” adjusted the manner of speaking more cordial and friendly by fully took into account the cultural requirements of the aborigines. In CNOOC Iraq Builds Long-term Mechanism of Community Construction particular, it no longer required that every material in the Request for Opinions be CNOOC Iraq, in accordance with the In 2018, CNOOC Iraq signed nine contracts regarded as a legal document, while adopted resolution of the Iraq’s Central Government, with local contractors through public bidding, User’s Guide to put forward contract allocates a budget of US$ 5 million annually involving 13 construction projects, with a requirements including delivery, collection, to cooperate with the local government in total contract value of $ 8.8 million. The personnel and so on. The new process implementing social contribution projects to implementation of social contribution projects enhances the user experience and fully support infrastructure construction in Missan has ensured and improved the local people’s Extend regards in local villages reflects Nexen’s support for the aborigines Province. livelihood, promoted local employment and and local enterprises, which makes Nexen’s economic development, and improved the unique advantages in business development level of education. and gains social recognition. Outlook On 2019

Optimizing the industrial layout, promoting energy transition and exploring business of new energies in a Promoting the strategy of rejuvenating enterprises by talents and improving employees’ sense of gain, prudent and orderly manner happiness and security

Enhancing innovation awareness, strengthening prospective and fundamental research, promoting high- Developing targeted poverty alleviation in an orderly way, making better the public welfare foundation of the quality development Company, and establishing brands in public welfare

Driving Social Progress Promoting Economic Ensuring steadiness and compliance, building a comprehensive system for risk prevention and control, Promoting voluntary services, innovating service means and continuously enhancing the social influence of strengthening the construction of safety culture Blue Force

Growth Implementing high-quality development, wholeheartedly providing quality products and services, and Integrating into communities, sharing resources with the society and repaying the society with our building world famous brands development outcomes

Adhering to green development and constructing perfect green supply chain Responding to the “Belt and Road” Initiative, ensuring safety and compliance during overseas operations and Strengthening water resource management and improving the utilization efficiency of water resources deeply integrating into the world oil and gas industry Actively tackling climate change and building a comprehensive low-carbon management system Attaching importance to environmental protection management in the host country, and maintaining Acting as protector of marine ecological environment, attaching great importance to the protection of adaptation, coordination and unification of the local ecosystem CSR Report Overseas ecological diversity around the operation area Building development platforms for overseas staff, and actively integrating into the local community to EnvironmentalEnhancing achieve the common development of employees, communities and the Company Protection CHINA NATIONAL OFFSHORE OIL CORP. ANNEX 72 < > 73

Comparability ( ★★★★★ ) Third-Party Assessment This “Report” discloses data on 37 key indicators of more than 3 consecutive years, such as “crude oil trade volume”, “R&D input”, “number of personnel of scientific and technological institutions”, “energy conservation and emission reduction input”, “employment Rating Report of “Sustainability Report 2018 of China scale” and “payment of profits and taxes” etc., and compares horizontally the “Ranking of Fortune Global Top 500 Enterprises”, National Offshore Oil Corporation” “Ranking of the World’s 50 Largest Oil Companies”, “Ranking of Global LNG Importers”, and “Ranking of Forbes 2018 World’s Best Employers List” etc., with excellent comparable performance. Upon the request of China National Offshore Oil Corporation, the Chinese Expert Committee on CSR Report Rating invited experts ★★★★★ to form a rating team to rate the “Sustainability Report 2018 of China National Offshore Oil Corporation (CNOOC)” (hereinafter Readability ( ) referred to as “the report”). The “Report” is based on the theme of “contributing green energy and building a blue sea and blue sky”. It unfolds from the aspects of economy, environment, society and overseas responsibilities, with a clear structural framework, highlighting key topics 1. Rating criteria for discussion. While responding to the expectations of stakeholders, it also demonstrates a deep understanding of the company’s fulfillment of its corporate social responsibility. The cover creativity and chapter design adopt large-format live-action pictures, which “Guidelines on Corporate Social Responsibility Reporting for Chinese Enterprises (CASS-CSR 4.0)” of the Chinese Academy of not only highlights the industry characteristics, but also enhances the recognition of the report; the reports sets the “terminology Social Sciences and “China Corporate Social Responsibility Report Rating Standards (2019)” of “Corporate Social Responsibility explanation” section interpreting industry terminology, which has enhanced the legibility of the report, with therefore excellent Report Rating Expert Committee of Chinese Enterprises”. readability performance.

2. Rating process Innovation ( ★★★★★ ) The “Report” sets “China National Offshore Oil and Sustainable Development Goals (SDGs)” as its special topic at its very (1)The rating team reviews and confirms the “Process Data Confirmation of Corporate Social Responsibility Report” submitted by opening, responding to the UN Sustainable Development Goals (SDGs), systematically demonstrating the company’s responsibility the “Report” writing group and relevant supporting materials; performance practice and effectiveness on key issues, highlighting the company’s global vision. By setting up special features, (2)The rating team conducts evaluation on the preparation process and the content disclosed by the “Report”, and then drafts the such as “Practicing National Strategy” and “Building a Sharp Tool for the Country”, the report actively responds to the national rating report; development strategy, and highlights the responsibility of the central enterprises; “2018 Overseas Social Responsibility Report” is an (3)The Vice Chairman of the Rating Expert Committee, the leader of the rating team, and the experts of the rating team jointly sign independent chapter, which highlights the national “Belt and Road” initiative, with therefore outstanding innovative performance. the rating report. Overall Rating ( ★★★★★ ) According to the rating team’s assessment, “Sustainable Development Report 2018 of China National Offshore Oil Corporation” is of 3. Rating results five-star rating, and it is an excellent corporate social responsibility (CRS) report. Process ( ★★★★★ ) The company sets up a sustainability development report preparation leading team, the general manager serves as the team leader, 4. Improvement suggestions responsible for reviewing the report theme, topics for discussion and framework, the various agencies, government departments and 1.Enhance the disclosure of core indicators of the industry, and improve the integrity of the report; affiliates provide and review the basic materials, the chairman of the board of directors is responsible for the report final review; the 2.Increase the disclosure of analysis of the inadequacy of corporate responsibility performance, and further improve the balance of report is positioned as an important tool to improve the level of social responsibility management, disseminate corporate responsibility the report. brand image, disclose corporate responsibility performance information, and construct a reporting system including special reports and independent reports of subsidiaries; identifies material or substantive issues in conjunction with relevant national policies, major corporate issues, industry bench-marking analysis, and stakeholder survey results; plans to hold special press conference, and will present reports in electronic format, print, Chinese and English version, H5, etc., with excellent process performance.

Materiality ( ★★★★★ ) The report systematically discloses the implementation of macroeconomic policies, product and service quality management, safeguarding energy supply, occupational health management, safety production management and emergency, product transportation China National Offshore Oil Corporation Sustainability Report Won a safety, science and technology and innovation, development of new energy, circular economy, measures to actively respond to climate Five-star Evaluation for the Fifth Consecutive Year change, ecological protection and restoration of production areas, and other key topics for discussion of the oil and gas exploration, mining and processing industries. The description is detailed and sufficient, with excellent substantive performance.

Integrity ( ★★★★ ) The main body of the “Report” discloses 78.0% of the core indicators of the oil and natural gas exploration, mining and processing industries from the perspectives of “accelerating economic growth”, “enhancing environmental protection”, “promoting social 任姣姣 Wei Zichuan Cheng Duosheng Zhang En Ren Jiaojiao Scan QR Code to progress” and “overseas social responsibility report” etc., with excellent integrity performance. Vice President of Chinese Expert Leader of the Rating Team Expert of the Rating Team Process Assessor View Enterprise Rating Files Balance ( ★★★★☆ ) Committee on CSR Report Rating This “Report” discloses negative data information such as “number of death of direct contractors”, “number of death of employees”, “number of recordable injury incidents”, “annual number of incidence of occupational diseases” and “employee turnover rate” etc., with leading balance performance. CHINA NATIONAL OFFSHORE OIL CORP. ANNEX 74 < > 75

Index of Reporting Indicators Continued CONTENTS CASS-CSR GRI IPIECA/API

Biodiversity Conservation P5.1/E5.1/E5.2/E5.3/E5.5 103/304 E5/E8/E18/SE5

CONTENTS CASS-CSR GRI IPIECA/API Special Topic : Three- Bohai P5.1/G1.1/E1.1/E2.1 OVERVIEW Oilfieldyear Action Environmental Plan for Protection Upgrading P1.1/P1.2/P1.3/P1.4/P1.5/P2.2/P2.3/P4.2/G2.4/ Inside Front Cover 101/102 G2.5/G5.4/M1.1/M1.2/M1.3/M2.7 DRIVING SOCIAL PROGRESS

P3.1/P3.2/P4.6/P5.2/P5.3/M2.1/M2.16/G1.1/ Chairman’s Letter 101/102 P4.5/P5.1/G1.1/S1.6/S1.7/S1.8/S2.1/S2.3/S2.4/ HS1/HS2/HS3/ G1.2/G1.4/G3.2 S2.5/S2.6/S2.8/S2.9/S2.11/S2.14/S2.15/S2.16/ 103/201/401/403/404/405/406/ SE5/SE6/SE7/ Caring for Employees President’s Letter P3.1/P3.2/P5.2/M2.2/M2.5/M3.3/S1.1 101/102 S2.18/S2.19/S2.20/S2.22/S2.23/S2.25/S2.26/ 408/409/412 SE8/SE15/SE16/ S2.27/S2.29/S2.31 SE17/SE18 P4.1/P4.2/P4.3/P4.6/G1.1/G1.2/G1.4/G2.1/G2.3/ About Us 102/103 G4.1/G4.2 Devoting to Public Interests P5.1/P5.3/S4.10/S4.11 103/203/413 SE1/SE2/SE3/SE4 Corporate Governance and S1.1/S1.2/S1.3/S1.4 103/205 SE11 Providing Voluntary E9/E10/SE1/SE2/ Operation P5.1/S4.14/S4.15 103/303/306/413 Services SE4 Stakeholders P1.5/P2.3/G2.2/G5.1/G5.5/G5.6/M1.3 102/415 Integrating into the SE1/SE2/SE3/ S2.30/S4.1/S4.2/S4.4/S4.5/S4.10/S4.11/S4.14 103/203/307/413/415/419 P5.1/P5.2/G1.1/G1.3/G1.4/M1.4/M1.5/M1.6/ Community SE4/SE5 United Nations Sustainable M2.2/M2.5/M2.17/M2.18/M2.19/M3.7/S1.5/S2.1/ 302/303/304/308/401/402/403/405/ E2/E8/SE4/SE15/ Special Topic Poverty Development Goals S2.11/S2.16/S2.17/S2.22/S2.29/S4.7/S4.15/ 406/408/409/419 SE16 : E2.23/E2.26/E2.27/E2.35/E5.1 Alleviation through S4.10 Consumption P4.5/P5.2/G4.1/M1.4/M2.2/M2.17/M2.18/M2.19/ Key Performance S1.5/S2.1/S2.4/S2.8/S2.9/S2.11/S2.20/S2.22/ E2/E4/E7/E8/SE4/ CSR REPORT OVERSEAS 201/302/305/401/403/404 Indicators S2.24/S3.6/S4.7/S4.13/E1.5/E2.4/E2.21/E2.22/ SE17 SE1/SE2/SE4/ E2.26/E2.27 Creating Socioeconomic P5.3/M2.2/M2.5/M2.16/M3.3 201/203/204/302/417 SE6/SE11/SE12/ Value PROMOTING ECONOMIC GROWTH SE13

P4.2/P4.3/P4.4/G3.2/M2.1/M2.2/M2.3/M2.4/ Strengthening Safety and E8/SE5/SE7/SE9/ S3.1/S3.2/S3.3/S3.11 103/410/419 SE10 Ensuring Energy Supply M2.9/M2.13/M3.1/M3.2/M3.3/M3.4/M3.6/M3.7/ 102/103/305/308/414 Compliance Management SE12 M3.9/M3.10/M3.11/S3.8/E3.3 Protecting a Balanced E1.1/E1.3/E1.6/E2.7/E2.8/E4.1/E4.2/E5.1/E5.2/ 103/304/305/413/419 E8/E9/E10 Emphasizing Sci-Tech Ecosystem E5.3 M2.3/M2.16/M2.21/E2.5 103 E3 Innovation HS1/HS2/HS3/ P5.1/G1.1/G1.3/G6.4/M2.6/S3.1/S3.2/S3.3/S3.4/ SE1/SE2/SE3/ Intensifying Safe Operation 102/103/201/410/413/414 HS4/HS5/SE17 Building Platform for 103/401/403/404/405/406/411/412/ S3.9/S3.10/S3.11/E2.7/E2.8/E2.11 P5.3/S2.18/S4.6/S4.7 SE4/SE5/SE6/ Employee Development 419 Improving Quality SE7/SE8/SE15/ G1.1/M2.6/M2.7/S3.10/S3.11 103/416 HS4 Management SE16/SE17/SE18 Promoting Enterprise- Special Topic SE1/SE2/SE4/ : Community Common S2.19/S4.12 103/201/203/404/411/413/419 Implementing National P4.4/M2.4/S1.6 SE5/SE6/SE17 Development Strategy Development

Special Topic Developing Special Topic Forty Years : M3.3/M2.16 of Reform and: Opening- Advanced Equipment P5.2/M2.2/M2.5 up of the Offshore Special Special Topic Building Zone M2.2/M2.16/M3.3 Smart Oilfield: OUTLOOK ON 2019 A1 Special Topic Digitalized M2.2 LNG Receiving: Terminal ANNEX ENHANCING ENVIRONMENTAL PROTECTION Third-party Assessment A2

Green Operation P5.1/P5.3/G1.2/E1.1/E1.2/E1.4/E2.1/E2.2/E2.23 102/103/305/413 E8/SE1/SE5 Index of Reporting A3 P5.1/E1.1/E1.3/E2.1/E2.2/E2.23/E2.27/E3.4/ Indicators Tackling Climate Change 103/201/203/305 E1/E8/SE4 E4.1/E4.3 Glossary of Terms Energy Conservation and P5.1/S1.6/E1.1/E1.5/E2.1/E2.2/E2.4/E2.21/ E2/E4/E7/E8/E9/ 102/103/302/305/306 Feedback Form P1.5/A4 Emission Reduction E2.22/E2.24/E2.26/E2.30/E2.38/E2.39 E10

Water Resource P5.1/E2.2/E2.18/E2.34/E2.35/E2.36 103/303/305/306 E6/E8/E10 Management CHINA NATIONAL OFFSHORE OIL CORP. 76 <

Glossary of Terms Feedback Form In order to improve the social responsibility engagement of CNOOC on an on-going basis, we would like to hear your thoughts, Drilling Platform LNG which will form an important basis for us to do better. We thank you very much that you could spare some time to give us your valuable feedback on the report and suggestions to the theme and issues of 2019. Offshore drilling platforms are marine structures used mainly Liquefied natural gas or LNG in short refers to the liquid that for drilling exploratory wells. Such platforms, generally divided forms when natural gas extracted from gasfields cools to a into mobile and fixed platforms, are essential for offshore low temperature under high pressure after undergoing the fluid Your Information: oil and gas exploration and development operations and and acid removal, drying and processes. LNG is Name: Company: house drilling, power, communications, navigation and other predominantly methane and is colourless, odourless, non-toxic equipment, as well as lifesaving and accommodation facilities. and non-corrosive. Tel: E-mail:

Heavy Oil Recordable Production Safety Events Your Feedback: Heavy oil is highly viscous crude oil that contains a relatively According to the OSHA standards of the United States, high level of asphaltenes and resins. This usually refers to those recordable production safety events include medical treatment, 1. What is your overall opinion of the report? with ground densities greater than 0.943 and underground work restrictions, lost time and deaths. □ Very good □ Quite good □ Average □ Quite poor □ Very poor viscosities greater than 50 centipoises. Occupational Disease 2. What do you think of the information disclosed in the report? Oil Reservoir This refers to diseases that develop as a result of exposure to □ Very abundant □ Quite abundant □ Fair □ Quite little □ Very little This is the smallest unit for the storage of oil. Oil reservoir layer or occupational hazards at work. 3. What do you think of the quality of the information disclosed in the report? oil layer in short refers to the porous strata for the storage of oil. Not every part of an oil layer will contain oil. Oil reservoir refers to QHSE □ Very high □ Quite high □ Average □ Quite low □ Very low those independent oil-containing areas within an oil layer. The abbreviation QHSE stands for Quality, Health, Safety and 4. Which form of design would you like to be used more in the 2019 report? Environmental. Established on the basis of the principles of □ □ □ □ □ Adjustment Well compatibility of similarities and complementarity of differences, Expression of management thought Data graph Case introduction Special topic Picture Adjustment wells refer to scattered or clustered wells and on the basis of the ISO 9001 and ISO 14001 standards, 5. Which theme would you like to be presented in the 2019 report? drilled, in addition to existing well clusters, for improving the GB/T 28000 family of standards and SY/T 6276 Petroleum □ Our quality energy for your blue sea and sky development of oil fields. and Natural Gas Industries-Health, Safety and Environmental Management System, the QHSE management framework usually □ Our clean energy for lucid waters and lush mountains Well Logging refers to the framework that directs and controls the quality, □ Our clean energy for clear water and blue sky Well logging usually refers to geophysical well loggings, in health, safety and environmental aspects of an organization. □ which different forms of well loggers made based on electrical, Our clean energy for a beautiful life COD magnetic, acoustic, thermal, nuclear and other physical 6. Which issue would you like to be added to the 2019 report? principles, enter wells through the use of well logging cables, Chemical oxygen demand or COD in short refers to the amount □ Economic growth, specifically to allow the ground electrical measuring instruments to record of oxidant consumed when treating water samples using a continuously along the well bore the various parameters that certain amount of strong oxidants under certain conditions. The □ Environmental protection, specifically change with changes in depth. Underground rock formations, usual use of COD is to determine the extent of contamination of □ Social progress, specifically including oil, gas, water, and coal layers and metal deposits, water bodies by reducing substances. □ can then be identified through curves representing these CSR overseas, specifically parameters. CNOOC The abbreviation CNOOC stands for China National Offshore Oil Oil Spill Response Corporation. Oil spill response is the formulation of plans and adoption of CONTACT US: CNOOC Office for Policy Research measures to control and prevent oil spills and reduce pollution Postal Address: CNOOC Building, No. 25 Chaoyangmenbei Dajie, Dongcheng District, Beijing 100010, P.R. China damage, based on the environment and resources in the Tel: 86 (10) 84521103 potential spill sources and waters within the designated sea Fax: 86 (10) 64602830 areas. This sees common use in offshore oil exploration and E-mail: [email protected] development activities.

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