CNOOC Limited Environmental, Social and Governance Report Report Information Contents

Name of Organization:

China National Offshore Oil Corporation Limited (the “CNOOC Limited”, “Company” or “We”)

Reporting Period: 04 About Us 22 Safety and Environmental From January 1, 2017 to December 31, 2017. The report may include information beyond the Protection reporting period in order to keep the information consistent. 06 Chairman’s Statement 24 HSE Philosophy Scope of the Report: 25 HSE Management System 08 Vision and Commitments 26 Production Safety CNOOC Limited and its subsidiaries 08 Sustainable Development Strategy 29 Equipment and Facility Integrity Management Contents of the Report: 08 CSR Vision 30 Enhance Emergency Response Vision and commitment of the Company’s Corporate Social Responsibility (“CSR”), common 09 Stakeholders Capability practices, and other key achievements in the course of performing CSR. 33 Environmental Protection 10 Data Specification: Energy Supply 38 Response to Climate Change Oil and Gas Exploration, The data in the report is derived from CNOOC Limited’s internal statistical reports, company 10 Development and Production 42 Care of Employees documents and reports, third-party surveys and interviews. 11 Technological Advancements 44 Employment Policies Reporting Language: 12 Product Quality 46 Employee Rights and Interests 13 Purchasing Management English and Chinese (should there be any discrepancies, please refer to the Chinese version.) 47 Employee Development

Reference: 14 Corporate Governance 54 Employee Health Governance Standards 56 Staff Care This report refers to the "Environmental, Social and Governance Reporting Guide" issued by 16 Code of Ethics the Stock Exchange of Hong Kong Limited, the 10 Principles of UN Global Compact and the 18 58 Social Contributions 19 Risk Management and Internal Control "Sustainability Reporting Standards" issued by the Global Reporting Initiative (GRI). 60 Economic Contribution 20 Audit and Supervision Report Verification Method: 60 Marine Rescue 21 Anti-corruption Practice 62 Public Welfare An independent limited assurance engagement was conducted against this report by Deloitte Touche Tohmatsu Certified Public Accountants LLP. 64 Employee Volunteers

An electronic version of this report is available on the Company’s website at www.cnoocltd.com 66 Prospects and a hard copy is available upon request. 68 Key Performance Data

Investor Relations Department of CNOOC Limited 69 Independent Assurance Report Address: 25 Chaoyangmenbei Dajie, Dongcheng District, 70 ESG Reporting Guideline Beijing, People’s Republic of China Index Postcode:10010 Email: [email protected] Scan this QR code to read or download Company website: www.cnoocltd.com CNOOC ESG reports 04 AboutAbout Us Us 05

About Us

CNOOC Limited, incorporated in the Hong Kong Special Administrative Region in August 1999, was listed on the New York Stock Exchange (code: CEO) and The Stock Exchange of Hong Kong limited (code: 00883) on February 27 and 28, 2001, respectively. The Company was included as a constituent stock of the Hang Seng Index in July 2001. The Company’s American Depositary Receipts (“ADRs”) was listed on the Toronto Stock Exchange (code: CNU) on September 18, 2013. New York Stock Exchange

The Company is the largest producer of offshore crude oil and Code: CEO natural gas in China and one of the largest independent oil The Stock Exchange of Hong Kong and gas exploration and production companies in the world. Limited The Company mainly engages in exploration, development, production and sale of crude oil and natural gas. Code: 00883

The Company’s core operation areas are Bohai, Western South Toronto Stock Exchange China Sea, Eastern South China Sea and East China Sea in offshore China. The Company has oil and gas assets in Asia, Code: CNU Africa, North America, South America, Oceania and Europe.

As at December 31, 2017, the Company has net proved reserves of approximately 4.84 billion BOE (barrels of oil equivalent, similarly hereinafter), and its average daily net production was 1,288,128 BOE1. The Company had total assets of approximately RMB617.2 billion.

Average daily net production was 1,288,128 BOE

Total assets of approximately

Billion RMB Scan the QR code for more corporate 617.2 information

1. Unless otherwise stated, all amounts of reserve and production in this report include our interests in equity method investees. 06 Chairman’s Statement 07

The year of 2017 was full of strike a balance between economic development of oil and gas reserves monitored the emission of pollutants marine rescues, and encouraged our Chairman’s challenges and opportunities. growth, environmental protection and in the future. in the sea and maintained marine staff to participate in charity events, The oil market struggled to regain social progress on topics which our ecology. We introduced an energy- thus contributing to society. Statement momentum after wild volatility, with stakeholders focused on. We view operational safety as conservation management system oil prices eventually stabilizing and the foundation and core value of into the Company’s risk control system In 2017, we continued to follow rebounding.The oil and gas industry In 2017, we fulfilled our production sustainable development, and we and ensured that project energy exceptional and transparent corporate also showed signs of recovery. and operation tasks, ensured stable upheld the value concepts of “Safety consumption is minimized at the governance practices, for which we In 2017, CNOOC Limited grasped and reliable energy supply, met the First, Environment Paramount, institutional level. The Company also won a number of awards from the opportunities and recorded stable market’s need for energy, and made Focus on People, and Equipment conducted thorough carbon verifications marketplace. The Company was once growth in operational performance, great efforts in providing clean Integrity”. We improved the safety and steadily promoted research on again awarded the “Asian Excellence with all the Company’s operations and quality energy. Furthermore, management system, strengthened carbon emission reduction technologies Award” by Corporate Governance running smoothly. We stepped up our following an innovation-driven safety production inspections and in response to people’s concerns on Asia, and we won the “Corporate efforts in sustainable development, strategy, we played a key role in the emergency response capabilities, climate change issues. Awards – Platinum” by The Asset adhering to the Ten Principles of the development of the industry through and paid attention to compliance, for the sixth straight year. Winning UN Global Compact in the areas of technological innovation, and identification and elimination We adhered to the philosophy of these awards demonstrates our human rights, labor, environment and achieved numerous key technical of potential risks and special “human-oriented management” and management capability in areas such anti-corruption. We also proactively breakthroughs. We improved our rectification. All of these measures regarded talents as the Company’s as shareholders’ rights protection, responded to the 17 Sustainable management and control systems eliminated potential risks, enhanced most precious resources. We information disclosure, investor Development Goals of 2030 set out through innovation and established safety management at grassroots endeavored to establish an equal relations, corporate governance and by the United Nations. We strive to a long-term mechanism for level, improved safety awareness and just employment mechanism, social responsibility. It also proves enhancing quality and efficiency, across all staff and cultivated a perfected the scientific and fair talent that we are now a leading-industry thus boosting our sustainable characteristic culture of safety. In evaluation system, ensured a smooth model. development. The Company 2017, situation of CNOOC Limited’s employees’ career development path, achieved and exceeded its oil and production safety remained stable. created an atmosphere to respect We will never forget where we have gas production target, with our net talents, valued the guarantee of come from. In 2018, CNOOC Limited oil and gas production reaching Meanwhile, we have always placed employees’ rights, cared for their will stay true to its original aspirations 470.2 million BOE for the year. As great emphasis on energy conservation, physical and mental health, and and keep our mission as an enterprise at the end of 2017, our reserve life emission reduction and environmental contributed to making them have a citizen firmly in mind. We will put rose back over 10 years, laying a protection as ways to transform the sense of happiness and gain. sustainable development into practice, solid foundation for the sustainable mode of development and enhance pursue the harmonious development of social responsibility. Last year, we We proactively embraced social the economy, environment and society, established a clean, low-carbon and responsibility and pursued improve compliance operations, safe energy-efficient system, strictly benefits for society. In pace with continuously optimize industry continuous business expansion and structure, and facilitate green economic development, we were committed development. We will adhere to eco- to providing more local employment friendly principles and endeavor to opportunities. We also took part in maintain a balanced ecosystem. We will adhere to a people-oriented approach “In 2018, and continue to be the driving force for development while collaborating with CNOOC Limited will stay true to its original aspirations our stakeholders for deeper mutual and keep our mission as an enterprise citizen firmly in mind. benefits. We will put sustainable development into practice, Yang Hua pursue the harmonious development of Chairman the economy, environment and society, and collaborate with our stakeholders for deeper mutual benefits. ” 08 Vision and Commitments/Stakeholders 09

Sustainable Development Strategy development. We have been always regulatory authorities, business Vision and Stakeholders communicating with stakeholders partners and service providers, the on multiple social responsibility public and communities, charities Commitments It is our commitment to sustainable of CNOOC Limited actively supports issues through an open, transparent and non-government organizations development that we will exploit existing the Company’s commitment to CSR and multichannel mechanism. (NGOs) and clients. natural resources in a safe, efficient, and gives close attention to CSR To fully communicate with stakeholders The stakeholders are primarily and environment-friendly manner and progress. This includes strategy to understand their expectations and the following: shareholders and provide society with clean, reliable, and and risks, performance,internal demands is the foundation of our social creditors, employees and employee stable energy that will meet people’s operations, occupational health responsibility and sustainable organizations, governments and reasonable energy demands. The and safety,environment,and human economy, environment, and society rights issues related to sustainable are the three cornerstones of our bid development and CSR, as well as the Communications with key stakeholders to develop energy resources and methods and results of compliance in contribute value. As our business operations and sales. Our management Stakeholders Key Communication Methods Main Focuses Major Actions and Measures Scan this QR code for operations achieved continuous growth is responsible for formulating and more information about and our economic contributions grow executing strategies involved in the Scheduled information Interests Protection of Ensure quality and effectiveness our CSR management steadily, we will press ahead on the management systems related to Shareholders and disclosure shareholders and creditors of information disclosure Regular communications Corporate governance and Maintain regular dialogue road of environmental protection and environmental protection, energy- creditors Annual general meeting risk management Equal treatment of shareholders societal progress. We will combine saving projects, emission reduction, and extraordinary general Organize road shows the economic, environmental, and ecological protection, greenhouse gas meeting social aspects to make them mutually (GHG) reduction, and clean energy Meetings with employee Rights and interests Support employees to join supportive. supplies. representatives Career development labor unions or other employee Employees Regular communications Occupational health and organizations and employee Internal information exchange safety Provide employee training and The Company believes that sustainable The Company has incorporated organizations Complaints technical training development should not only depend sustainability into our organizational Provide occupational health check-ups on the knowledge, beliefs and ideas and institutional system, and our of the Company’s management or management process. We continue Follow up and ensure Operating in compliance with laws Comply with all applicable laws compliance with laws and and regulations and regulations employees. Instead, the sustainability to assess our performance in terms of CNOOC Limited is regulations Proper utilization and development Fulfill tax payment obligations requirement needs to be embedded into sustainability and make improvements Governments and Report on specific matters of natural resources Share industry expertise for further committed to: the corporate management systems and adjustments to ensure our regulatory authorities Routine inspections Economic contribution development Response to enquiries Corporate governance Ensure quality of disclosed and made part of corporate culture at operation and management are more Discussion on industry information Ensuring the stable supply all levels. environment-friendly, efficient and safe, issues Enhance corporate governance of energy in the world and and make balance among economy, enhance supply capacity. Business negotiations Stable cooperative Integrate internal and external The Board of Directors (the “Board”) environment and society. Project cooperation relationships resources Business partners Pursuing sustainable Business communications Knowledge and information Encourage experience, resources and service development, improving resource sharing and technology sharing providers world energy structure, and Mutual benefits Discuss on industry development delivering clean energy. CSR Vision Sustainable energy development model

Operating in compliance As an energy company, it is the partners in the industry chain. We with laws and regulations Information disclosure Stable energy supply Improve oil and gas supply and adhering to a high Company’s responsibility to deliver will work together with stakeholders Public relations Environment protection capability standard of business ethics sustainable energy to society. In and make social responsibility an Response to the public Good corporate image Participate in public welfare Public and and corporate governance enquiries Community protection activities future, the Company will promote engine that drives the Company and communities Support for community Building harmonious Publish CSR reports clean, healthy, and green energy society forward together. building activities communities Ensure high standards on public Developing resources in Participation in public welfare a safe and environment- development models with our welfare projects Support community construction friendly way and responding actively to climate change CNOOC Limited strives to be: Charities and Participation in designated Social responsibility Contribute corporate experiences NGOs projects undertakings Participate in relevant activities Proactively participating Response to enquiries in community-building Regular communications A motivating activities and contributing A dominating force A driving force force for the to public welfare for clean, healthy, Business negotiations Service, price and quality Promote win-win philosophy for the supply of joint progress of and green energy Client services Complaint handling Enhance product quality sustainable energy stakeholders and Clients Client visits and survey Client satisfaction survey and Respecting the rights and development society Regular communications feedback interests of stakeholders models and interactions and pursuing win-win situations 10 Energy Supply 11

Ensure stable supply of natural gas in winter

In 2017, China vigorously promoted the “Environmental to ensure consumption for people’s livelihood. Protection” project and it made an explosive growth in Coordinated with other sources of gas, relieved the domestic natural gas consumption. In winter, when heating pressure of market supply and demand by resource gas is in high demand, the mismatch with supply is stark. substitution, increased the sale of natural gas from South The Company set a goal to ensure heating supply in China Sea in the Guangdong region, and met the goal of winter and prioritize the use of gas for people's livelihood. "Transmitting Guangdong's Natural Gas to the Northern To achieve the objective, it facilitated coordination among Areas" to help alleviate tensions over supply to the northern relevant parties: region. Coordinated with the production department the maintenance of offshore oil and gas field facilities in advance and carried out refining management to remove the bottleneck in natural gas transmission Oil and Gas Exploration, and lay a foundation for stable gas supply. Energy Development and Production Formulated an emergency supply plan, communicated with downstream users, took measures on "Prioritizing Supply Ensuring stable supply of crude oil and 12-2 Oil Field Phase II Project, BD Gas the Use of Gas for People's Livelihood" to scientifically natural gas is a major responsibility of Field and Hangingstone Project have determine the order of reduction in supplies, and reduced the Company. Therefore, the Company started productions within the year.The gas supply for chemical fertilizer and industrial enterprises

By the end of 2017, has been innovating in technology, Company's exploration, development and the Company had net proven management, and equipment for a long production business continued to make reserves of time, and has continuously overcome remarkable progress, with steady growth in exploration obstacles. In recent years, it oil and gas reserves and production. The billion BOE has promoted the integration of exploration Company overcame many difficulties and Technological Advancements 4.84 and development to achieve improvement exceeded its annual output target through in quality and efficiency and continuously maintaining and increasing production In 2017, the Company implemented the laws and its exploration and development, Petroleum and Petrochemical Technology Innovation 2015-2016". The Company In 2017, the Company had a net raise the level of oil and gas development of oil and gas fields in production and "Innovation-driven" strategy, formulated which provided technical support and and revised management methods and reserves for cost reduction and increasing took the lead in drafting the ISO18647: oil and gas production volume of and production. promoting new oil and gas fields going into Oil and Gas Industry Specification for production. regulations for the Company’s scientific efficiency. The offshore gas hydrate using million BOE research projects and scientific research solid-state fluidization method enabled Offshore Fixed Platform Module Drilling In 2017, the Company continued to strengthen platform construction project, launched CNOOC Limited to independently master Rig International Standard, which was the integration of exploration and development, In 2017, through continuous improvement 470.2 the exploration and development the complete set of technologies for officially published. enhanced the ability and shortened the cycle of operational standards and enhancement exceeding output targets set at laboratories for maritime low-permeability the self-sampling of marine hydrates. the beginning of the year of reserve monetization. For offshore China, it of streamlining management, the Company gas reservoirs and for unconventional Continuous breakthroughs were made In order to safeguard and protect further prioritized investment in mature areas continued to analyze cost-reduction oil and gas, and established China in the research and development of intellectual property rights, the Company while continuing to explore frontier areas. possibility of each operation, steadily Ocean Resources Development Strategy engineering technology. The design of has formulated and implemented For overseas exploration, with its foothold on promoted innovation and helped establish a Research Center jointly with the Chinese China’s first 1,500-meter deep-water management methods such as CNOOC Academy of Engineering. Meanwhile, the condensate storage semi-submersible Limited Intellectual Property Management CNOOC Limited is committed existing core projects, the Company sought long-term mechanism for improving quality Company continued to implement the platform was completed for the first Measures and CNOOC Limited Patent to driving sustainable supply of to maintain a “rolling” pattern of development. and efficiency. The ability for sustainable It continued to maintain a reasonable development was enhanced in all ways. coordination mechanism and strengthen time; the design of a large-scale Management Implementation Rules to energy. Through technological carry out intellectual property internal proportion of exploration investment in total By the end of 2017, the Company had net joint research with research institutes to complex single-point mooring system and management innovation, we master core technologies. was launched for the first time; and the control management. In the year, 98 capital expenditure and to ensure mid-to- proven reserves of about 4.84 billion BOE are working on breakthroughs in offshore heavy oil thermal recovery patents were granted, 190 patents long term sustainable development with a and a net oil and gas production volume energy exploration, development, During 2017, the Company continued to technology was significantly improved accepted and 23 software copyrights relatively high level of exploration activity. of 470.2 million BOE, exceeding output production, and technology to develop key technologies for exploration and engineering design strength was registered. ， ensure steady energy supply In offshore China the Company made 17 targets set at the beginning of the year. All and development of deep-water oil enhanced. to meet the energy demands new discoveries, and successfully appraised in cost was reduced to USD32.54/BOE, and gas fields, offshore heavy oil, low- of society and contribute to the 14 oil-gas structures. As for overseas down by 6.2% year-on-year. permeability oil and gas fields, and In 2017, the "Key Technologies for sustainable development of the exploration, we made 2 new discoveries and onshore coal bed methane. Remarkable Industrial Application of Well Completion results were achieved such as the trial under High Temperature and High Company and society. successfully appraised 2 oil-gas structures. The 5 new projects scheduled to commerce production of offshore gas hydrate using Pressure in South China Sea" won the operation within the 2017 are running solid-state fluidization method, and the first prize at the National Science and smoothly. The Penglai 19-9 Comprehensive fracture system in western Bohai Sea Technology Progress Award. The "High- and study of control of the reservoirs, Efficiency Development Technology Adjustment, Enping 23-1 Oilfields, Weizhou Yingqiong Basin high-temperature and for Offshore Heavy Oil Fields" won the high-pressure natural gas enrichment award for "Top Ten Progresses in China 12 Energy Supply 13

Application of highly-efficient development technology for offshore heavy oil fields

The development technology of offshore heavy oil NB35-2, and LD27-2 in Bohai Bay, which increased fields maximized the exploitation of oil resources the recoverable reserves by more than 60 million on the seabed in a safe and economic way and tons, and during the "Twelfth Five-Year Plan", oil formed four major technical systems including production increased 8.46 million tons, and profits offshore seismic development, overall encryption and rose RMB15.43 billion. Meanwhile, the Company comprehensive adjustment of cluster well patterns, established the world's first demonstration base appropriate sand production for multiple branches, for efficient development of marine heavy oil and and chemical flooding of heavy oil. promoted its development to a new level.

Currently, the technology has been applied to many oilfields such as SZ36-1, LD10-1, JZ9-3, QHD32-6,

Application of key technologies and industrial application of HPHT drilling & completion in the South China Sea

In 2017, the Company made major innovations in key South China Sea; technologies for high temperature and high pressure It took the lead in innovating smart emergency (HPHT) in South China Sea. Details are as follows: shutdown, standby emergency release, and other It pioneered the accurate prediction method safety testing systems to achieve safety testing in of multi-source and multi-mechanism abnormal high-temperature, high-pressure, high-production gas pressure and developed a narrow-miniature pressure wells in a narrow space on the offshore platform; window continuous circulation differential pressure Developed an environment-friendly water-based quantitative control drilling technology to achieve double-effect drilling fluid and a series of speed-up 100% success rate in drilling under high temperature tools. and high pressure in the South China Sea; By taking advantage of the technology, the Company It developed the "Five Prevention" and "Self- has formed a complete technical and industrial healing" high-temperature and high-pressure cement application system and built China's first offshore slurry system for the first time, and built a multi-level high temperature and high-pressure gas field groups, well bore integrity and safety assurance technology, which laid a solid foundation for the implementation achieving a world record of "zero" annulus pressure of the Belt and Road Initiative. Purchasing Management in all high-temperature and high-pressure wells in the

With a series of management systems, and optimizing his performance qualification review and on-the-spot such as the Purchasing Management assessment. The Company carries inspection to screen the short list of System, Supplier Management Method out annual performance evaluations suppliers and conducted inspections for Product Quality and Bidding Management Method, the on all the suppliers in the supplier 17 products in four categories. During Company further promotes impartial base, including but not limited to the written review of 307 supplier bid supplier management and purchasing the aspects of product quality, price, documents and on-site inspection of CNOOC Limited manufactures and out jointly with clients, as required through bidding to avoid environmental date of delivery, after-sales service, 32 suppliers, the Company focused supplies energy products adhering by national or industrial standards. and social risks caused by improper and execution of the health, safety on the comprehensive assessment of strictly to domestic and international Upon completion, inspection results supplier selection. Since 2008, CNOOC and environment (HSE) system. factors like qualifications of suppliers, quality management standards, are objectively and factually reported. Limited has continuously worked to Subsequently, these suppliers have social and environmental responsibility and also works to enhancing We strive for open and transparent optimize supply chain management their rankings adjusted according fulfillment, risk management and management quality. For quality management who strictly comply to while actively implementing corporate a to the evaluation results. CNOOC control, process control and quality inspections and tests of crude oil, standards so as to ensure product supplier-base management system. By Limited has also established a management capabilities, personnel natural gas and by-products, the safety and regulations are observed the end of 2017, CNOOC Limited had unified risk management and control quality and technical capabilities, HSE Company employs professional accordingly. In 2017, CNOOC Limited more than 3,200 suppliers. system to handle violations of management status. third-party commodity inspection did not receive any complaint from regulations as a form of deterrence authorities agreed to in contracts clients regarding product quality or The Company realized the whole- and to reinforce the Company’s for sampling tests or tests carried crude oil and natural gas services. process dynamic management overall prevention and control from the supplier's entry to exit by capacity. In 2017, the Company sharing supplier resource information vigorously promoted the open written Governance Standards Code of Ethics The Board of Directors of Risk Management and Internal Control the Company consisted of 9 members, including two Audit and Supervision executive directors, three non-executive directors and four independent non- Anti-corruption Practice executive directors.

CNOOC Limited continued to receive recognitions and awards for its excellent standards of corporate governance. It also won awards in several corporate governance contests organized by Corporate Governance Asia and The Asset.

We stress the importance of anti-corruption and have built a strict internal prevention and management system to address and deal with all corruption and malpractice cases accordingly.

Corporate Governance

Corporate growth requires sound management. Since the establishment, CNOOC Limited has built a fair and open corporate governance system CORPORATE in accordance to laws and regulation, and global level corporate standards. We promise to maintain a high standard code of ethics, governance and accountability, operate in a business ethical manner GOVERNANCE to protect the Company and stakeholder's interests. 16 Corporate Governance 17

The duties of the Board are to provide the Chief Executive Officer with open and transparent manner about guidance, orientation and supervision effect from April 18th, 2017, and important Company events and invite for lawful and effective execution of he remains as the Chairman of the them to participate in such activities the operations of the Company and Board. On the same day, Mr. Yuan as Annual General Meeting. We also to protect shareholders’ interests, Guangyu was appointed as the Chief invite the minority shareholders to while safeguarding the healthy and Executive Officer and resigned as take part in annual panel discussions steady development of the Company. the President of the Company, and and conference calls so that they can Three committees have been set up Mr. Xu Keqiang was appointed as an earn a better understanding of the under the Board, namely the Audit Executive Director and the President Company’s activities. Committee, Nomination Committee of the Company. and Remuneration Committee. The effective management of the Members of all committees are non- The Company attaches great Board and the Committees further executive directors and independent importance to the communication enhanced the governance standards non-executive directors with a high with the minority shareholders. With of the Company. CNOOC Limited degree of independence. When the their support and trust, we have continued to receive recognition and potential conflict of interests of the achieved sustainable development. awards for its excellent standards Board related matters arises, the We have established open and of corporate governance. It also independent non-executive directors transparent communication channels won awards in several corporate The Company has always been upholding Stock Exchange of Hong Kong Limited. will take the lead in reflecting the with our minority shareholders governance contests organized by Governance high standards in business ethics and The Company’s adherence to these codes opinion of the minority shareholders. and will continue to strengthen the Corporate Governance Asia and The its transparency and good corporate ensures that all decisions are made on communication and cooperation with Asset. Standards governance have been recognized by the principles of trust and fairness and in a There were changes to the Board of them. shareholders and the public. We believe transparent manner to protect the interests Directors of CNOOC Limited in 2017. that maintaining the high-standard corporate of all shareholders. Mr. Yang Hua was re-designated A dedicated section on the Investor governance is essential to the steady from an Executive Director to a Non- Relations page on our website allows and efficient operation of the Company As at December 31, 2017, the Board of Executive Director and resigned as us to inform our shareholders in an and serves the long-term interests of the the Company consisted of 9 members, Company and its shareholders. including two executive directors, three non- executive directors and four independent Awards and Honors in 2017 In 2017, the Company executed its non-executive directors. The resumes of corporate governance policies in strict all directors are shown in the annual report Scan the QR code compliance with the relevant codes on of the Company and available on the for more corporate The Company won the honor of corporate governance of Securities on the Company’s website at www.cnoocltd.com. governance information "the most admired company" The Company won and "Best IR" from "Best the honor of “2016 Corporate Management Team in Corporate Awards – Platinum Award" by Tse Hau Yin, Aloysius Asia in 2017", with vote ranking No. 2 by analysts from buyer The Asset in December. Independent Non-executive Director (Chairman, Financial Expert) and seller in July. CNOOC Limited Chiu Sung Hong Organizational structure Independent Non-executive Director July December of Board of Directors Audit Committee Lawrence J. Lau Independent Non-executive Director

Yang Hua Chairman and Non-executive Director (Chairman) Lawrence J. Lau Independent Non-executive Director June December Nomination Kevin G. Lynch Committee Independent Non-executive Director Board of Directors “The 6th Asian Excellence The Company won the Award 2016”, “Best Investor honor of "Best IR (for Chiu Sung Hong Relations Company (China)”, energy industry)" in Independent Non-executive Director(Chairman) and “Asia’s Best CEO 2017 by IR Magazine (Investor Relations [China])” in December. by Corporate Governance Tse Hau Yin,Aloysius Asia in June. Independent Non-executive Director

Remuneration Wu Guangqi Committee Non-executive Director 18 Corporate Governance 19

Company’s risk management and identified risks to ensure that all key Risk internal control system, as well as risks are dealt with, monitored, and the periodic submission of the risk addressed. Management management report to the Board. The Company introduced an internal and Internal With respect to risk management, control framework developed by Control the Company officially adopted COSO of the United States, to the Enterprise Risk Management establish an internal control system Framework developed by the and mechanism for finance and COSO (Committee of Sponsoring accounting, business operations and Organizations of the Treadway compliance so as to guarantee that Commission) of the United the information on each report is Since the establishment of the States and took ISO31000: 2009 timely, accurate and integrated. Company, we have focused on “Risk Management Principles maintaining and following strict risk and Guidelines” as an important In 2017, the Company shored management and internal control reference for formulating a set of risk- up oversight, instruction and practices. The Company is well management systems that cover improvement for overseas risk aware of the fact that establishing design, execution, monitoring, and management and internal control. and maintaining a risk management review and are subject to continual Take the subsidiary company of and internal control system, which improvement. The Risk Management Nexen Inc. Canada, as an example, coincides with the strategic goals of Committee is responsible for setting in order to minimize the negative the Company and which suits the the overall objectives and strategies impact on the environment and reality of the Company, is the duty and for risk management based on society during the operation, Nexen mission of the management team. the Company’s strategies, and Inc. conducts risk assessment of all identifying, analyzing, and assessing major projects and identifies possible The Company established the Risk the overall risk, especially key risks negative impacts. A corresponding Management Committee, directly in major decisions, important events, response plan is followed. While managed by the Company’s Chief and key business processes, as the development and design of new Executive Officer. The Risk Management well as reviewing and approving projects are underway, assessments Committee is responsible for the the response plans to major risks. of potential negative impact on organization and implementation of In addition, it is responsible for water, air, land, community, etc. are the Company’s risk management and tracking and periodically reviewing conducted. internal control, supervision of the the execution of response plans to

In 2003, the Board of the Company As a part of efforts to enhance its Code of Ethics approved a set of code of ethics standard of corporate governance, (“Code of Ethics”). The Code of Ethics since 2009, the Company has provides guidelines and requirements reviewed the Code of Ethics annually, in the area of law and code of conduct and continues to revise it according to in respect to supervisory rules, the latest governance requirements. insider trading, market malpractice, The current version of Code of Ethics conflict of interests, company has been disclosed on the Company's opportunities, protection and proper website. All the senior management use of the Company’s assets as well members and directors are required as reporting requirements for the to familiarize themselves with and directors and senior management of obey the Code of Ethics to ensure the Company. that the Company’s operations are honest and legal. Any violation of the Code of Ethics will be penalized and serious breaches will result in dismissal. 20 Corporate Governance 21

Vertically Integrated audit resource distribution. We shore Reporting System Audit and up the full covering of audit supervision without business ethics violation, the in circumvention behaviors of any in key areas, important parts and major Anti-corruption Company has formulated a set of rules form including accepting bribes Supervision projects. We give full rein to the function and established an effective system or kickbacks through relatives or of audit immune system in a bid to Practice to punish and prevent fraud, such as third parties. The Code aims to provide a solid safeguard boosting risk “the Code of Commercial Behavior avoid misconduct by employees management, improving efficiency, Audit and Conduct of Employees of CNOOC at work. Meanwhile, employees standardizing operation and sustaining Committee Limited”, “Regulations on Conflicts of are encouraged to abide by laws, sound development. The Company pays Interest”, “The Procedures for Handling provisions and business rules to avoid close attention to rectification, prevention We focus on anti-corruption practice Rule Violations”, “Petition and Visiting conflict of interest. and control of risks, establishes and have built a strict internal Reporting and Appeal Management audit rectification and accountability prevention and management system Measures” and “Financial Control The Procedures for Handling Compliance In order to ensure the effectiveness mechanisms, and effectively implements to address and deal with all corruption Complaint Management Measures”. All Rule Violations detail provisions Officer and appropriateness of business audit rectification. and malpractice cases accordingly. new employees receive training on the for behaviors that violate the operations, internal control, and risk contents of all such documents and sign relevant laws of the state and the management, the Company has set up With the development of its overseas CNOOC pays great attention on the a letter of confirmation about“The Code regulations of the Company. Those a supervision management system that businesses, the Company’s internal moral standards of its employees. of Commercial Behavior and Conduct behaviors include violations of adopts risk control as its focus, internal control and risk management of of Employees of CNOOC Limited.” At rules of production and operation Audit Department control as its supporting mechanism, overseas assets have become The Company is convinced the same time, the general managers management, violations involving and internal audit-based monitoring increasingly extensive. The Company that honesty and integrity are and senior managers of the Company financial discipline, and corruption as its safeguard, forming a vertically will combine the annual and medium- the cornerstone of sustainable departments are responsible for the and bribery. The articles from Article integrated management and reporting to-long-term plans of overseas audit to development. Therefore, the Company construction of uncorrupted governance 53 to 61 clearly outline punishments system of “Auditing Committee - Director expand covering overseas companies has a high ethical standard for the in their areas of management. for corruption (embezzlement) and of Regulatory Department - Auditing bribery, and Article 19 states clearly and projects. Through the use of various Audit Departments of behavior of its employees. It requires Department - Auditing Department of forms of auditing, diversified auditing Branches and Subsidiaries employees to stick to integrity and self- The Code of Commercial Behavior that employees facing criminal Subsidiary Company”. methods, the Company has improved development with self-discipline and and Conduct of Employees describes liability from breaking the law will be audit efficiency and effectiveness. At honesty. In order to strengthen the the code or standard of conduct dismissed. The Company follows the main line of the same time, it has taken a number internal management of the Company, that employees should follow in the “Ascertaining Problems, Controlling of measures to continuously promote workplace and clearly states that reporting mechanism, and regularly improve the self-discipline of the Risks, Improving Efficiency and overseas audit work, establish a normal the Company forbids employees organize communication between Company's employees, and ensure Promoting Development” to improve working mechanism for overseas from accepting or giving bribes various units. that the Company's production and audit management system and optimize auditing, establish an overseas audit business activities proceed smoothly or kickbacks, and from engaging

Financial Control Complaints: Reporting Channel and Handling

CNOOC Limited and its subsidiaries have set up Measures of CNOOC Limited and will be reported to the full-time and part-time organizations and positions Audit Committee of the Company periodically in order to handle complaints and grievances. Anyone can to ensure that all individual reports are given proper make reports, allegations and grievances about attention and major weaknesses in the system brought violations and breaches of regulations to management, to the attention of the Audit Committee directly. compliance monitoring personnel, legal advisers, internal audit department or other relevant departments Nexen Inc. Canada, the subsidiary of the Company, of the subsidiaries by letter, in person, telephone, or conducts internal and external audit of all operational email, etc. processes to ensure that the company does not violate any local law or management regulations within the Financial control complaints and other grievances and company or health and security norms. All identified risks complaints will be handled and directed in accordance are reported to the management and a corresponding with the Complaint and Grievance Administrative solution is developed accordingly. 治理保障 道德守则 HSE Philosophy 风险管理及内控 HSE Management System CNOOC Limited has been 审计与监督 consistently upholding its Production Safety goal of “taking the lead in 廉洁从业 achieving world-class level of safety and environmental Equipment and Facility Integrity Management protection”. Enhance Emergency Response Capability Environmental Protection Response to Climate Change

CNOOC Limited has been making constant efforts to improve emergency response management mechanism, promote processing capacity of emergency rescue system, and strengthen accident prevention and emergency response capability

Adhering to the idea of a “green, low-carbon, clean, and circular economy", CNOOC Limited has stepped up efforts to build an “energy-saving and environment-friendly” enterprise.

Safety and Environmental SAFETY AND Protection CNOOC Limited has always believed that operational safety is integral to its sustainable growth. All along, the Company has upheld HSE core values of “Safety First, Environment Paramount, Focus on People, and Equipment Integrity”. It has cultivated a safety culture featuring ENVIRONMENTAL “People-oriented Implementation and Intervention”, strengthened safety systems and made constant efforts to improve HSE internal control system. It strengthened fixing of responsibility for safety, improved dual control and management mechanism, strengthened management at basic level and continuously elevated safety management level and pushed forward energy conservation and PROTECTION emission reduction. CNOOC Limited has been proactively fulfilling its social responsibility. 24 Safety and Environmental Protection 25

third parties and track problems” with recording Occupational Injuries HSE Philosophy HSE focus on issues including compliance, method at an all-round level, CNOOC potential risk identification and conducted further research on PSM Management elimination, major high-risk (Processing Safety Management) operations, emergency response KPI system; CNOOC Limited stepped System management, equipment and facilities forward to learn from international management. By adopting this HSE best practices, (enhance HSE management model, CNOOC Limited liabilities) and risk control, and has promoted continuous improvement make sure to provide a safe and and practical implementation of HSE environmental workplace for its management system among its employees. Comply with laws, regulations and affiliated units, thus improving safety industrial standards, and strive for management at work. In 2017, CNOOC Limited continued HSE excellence. to strengthen investigation of HSE performance mirrors the In 2017, CNOOC Limited organized construction projects, brought forward comprehensive quality of the an overall scale benchmarking requirements and reminders in areas Company. management with world’s first tier including project compliance, risk mitigation and risk supervision in Manage contractors and share energy companies. CNOOC Limited CNOOC Limited has been consistently key respects. It focused on sources information and experiences to optimized HSE management system upholding its goal of “Taking the Lead in of risks, giving priority to safety achieve Win-Win cooperation. by setting up HSE Management Achieving World-class Level of Safety System Framework that is in line management, continued to improve Endeavor to use clean and and Environmental Protection”. with international industry risk HSE systematic management and harmless materials and energy, and management principles and guaranteed sustainable development protect environment and natural In 2017, CNOOC Limited improved continuous improvement principles of production and operations. Conduct systematic management resources. its safety management system in as well as featuring company and continuous improvement with accordance with national laws and characteristics, and further specified the motto “We can always do it regulations. CNOOC Limited has basic requirements to its affiliated better.” adopted a management model that units on HSE management. On the Promote the “5 DON’Ts until DOs” is “led by departments, consulates basis use of reference from OSHA safety rules, focus on details, and manage risks within acceptable Put people first that regards levels. employees as our most valuable resource and asset.

With set objectives, implementation is important.

Sound HSE performance is one of the foundations for the Company’s growth and development. Ensuring economic return, HSE management is also our commitment to social responsibility. 26 Safety and Environmental Protection 27

In 2017, the overall production safety the lifeblood of enterprise development, In-depth Investigation and Inspection Production situation of CNOOC Limited was continues to improve production safety stable while the safety awareness and security system, fosters safety In 2017, aiming to “Eliminate Severe and organized special inspections Safety and safety leadership had also been culture, strengthens production safety and Extraordinarily Serious Accidents, of maritime safety management. It further strengthened. CNOOC Limited inspection and emergency response Prevent Major Accidents and Decrease carried out comprehensive inspections always believes that production safety capability, and makes efforts to Carried out comprehensive Ordinary Accidents”,CNOOC Limited of equipment and facilities, organized is the basement of its sustainable completely safeguard the Company’s inspections of equipment continued to adopt superior methods of detailed internal investigation of integrity development, let production safety be production and operation. and facilities at investigation and special inspections, management system and enhanced the urging all levels of the organization management of offshore equipment; operation points for well to implement safety requirements completed well control inspection tours control inspections tours In-depth Risk Control 38 put forward by the government and at 38 operation points and special Company. CNOOC Limited undertook inspections of well control safety at In 2017, CNOOC Limited expanded guarantee they are under control, thus operation points for special superior investigation of HSE 11 operation points. It organized “Well safety management and risk control practically preventing operational risks. inspections of well control management system of NEXEN UK, Control Activity Week” as well as well to its frontline operations. It conducted CNOOC Limited carried out rectification 11 safety Shenzhen Branch and other affiliated control emergency response and operational license screening and measures on drilling (workover) rigs. units; reviewed the investigation and rescue drills, carried out downhole investigations from three dimensions It conducted special screening and rectification of NEXEN Long Lake operations safety survey, improved — special operations and ordinary management of dangers from items and and NEXEN Calgary; completed drilling (workover) well control safety operations, responsible zones and non- people falling from drilling (workover) special inspections of high risk management and continued to lay a responsible zones, and relevance to rigs high above the ground, thus contractors for diving and helicopter; solid foundation for production safety. equipment and facility integrity. It carried comprehensively enhancing safety out comprehensive management of its management level of platform drilling diversified operations and established (workover) rigs. license management requirements targeting various types of operations to

Promote and improve platform drilling (workover) rigs safety management

In 2017, CNOOC Limited proactively pushed for It achieved all-round improvement of platform elimination of potential safety risks related to drilling/ drilling/workover rig safety management through workover rigs. It conducted special screening and optimization of management mechanism, specifying management of risks concerning items and people the limits of responsibilities and liabilities, completing falling from drilling (workover) rigs high above the management system and criterion, pushing forward ground. It undertook special research and surveys integrity management of drilling/workover rigs and on safety management of drilling/workover rig. improving management and working of professional teams.

CNOOC Limited conducted special inspections of well repair and well control safety, emphasizing downhole operation safety management

In 2017, considering the high frequency of rig establishing and improving management system workover accidents recently, CNOOC Limited of downhole operation and well control safety, conducted special inspections on well control. With enhancing education of supervisors for rig workover, comprehensive analysis of various issues, CNOOC strengthening screening and rectification of well Limited pushed forward downhole operational safety repair related to potential risks, and improving management by making suggestions, including management at headquarters. 28 Safety and Environmental Protection 29

Strengthening safety execution capability

In 2017, CNOOC Limited organized mechanism to establish a broad safety responsibilities. During the selection of safety culture activities under the theme structure. At the workforce level, the outstanding employees of production — “Safety to The Last Centimeter” Company organized various activities safety, a large number of personnel — in an effort to identify and rectify such as safety and environmental were noticed. They were committed “not thorough” phenomenon in the protection knowledge competition, to their positions and responsibilities, four aspects of management system safety essay competition and micro- devoted to their careers, excelled improvement — laws and regulations video competition on safety warning, at management and performed enforcement, safety awareness, which improved employees’ safety outstandingly. and quality and profit enhancement, awareness and skills and promoted thus utilizing multilateral cooperation implementation of production safety

Safety leadership

CNOOC Limited’s Chairman Yang Hua’s Letter to Home our Mission, leaders at various levels gave safety In the preliminary stages, the Company In 2017, the Company revised and addressed all employees of the Company highlighting lectures through site visits or inspections. The Equipment took investigation as the starting point, improved its integrity management safety issue – Seeing You Safe Puts Me at Ease – was Company CEO gave safety lectures to overseas organized experts to participate in system related to equipment and published on China Offshore Oil Press and received employees during the visits. Some units encouraged and Facility preliminary research and feedback on facilities. The revision involved 50 positive response. The Company leadership spoke for management personnel in functional departments spotted problems, improved intrinsic documents and 332 articles. With safety by acting in the video Leadership Talks About to give safety lectures to business staff. Leaders at Integrity safety of equipment and facilities. With improved integrity management, both Safety. Following the example set by Chairman Yang various levels hosted safety management seminars respect to production and operation, the accident rate for equipment and Hua’s lecture Safety Responsibility is a Vital Part of and safety symposiums. Management the Company strengthened screening facilities and breakdown impact rate and management efforts targeting on production have been reduced. potential risks and risk assessment As a result, the risk from equipment of key facilities. Meanwhile, the and facilities has been brought Company strengthened its employees’ under control and their growth is Tianjin Branch “Safety Month” programs maintenance capability and timeliness. sustainable.

3.50% 3.27% During the “Safety Month”, the Tianjin branch organized knowledge competition, safety knowledge training, various safety themed activities, including production emergency response drill, potential risks screening 3.00% safety signing event, hand-protection activities, safety and rectification. These activities created a strong safety culture environment. 2.50% 2.41% 2.35%

2.00% 1.81%

1.50%

1.00% 1.00% 0.76% 0.63%

0.50% 0.40% 0.36%

0.00% Year 2009 2010 2011 2012 2013 2014 2015 2016 2017

Impact Rate of Equipment and Facilities Failure on Output (Output impacted by equipment and facilities/total output planned) 30 Safety and Environmental Protection 31

CNOOC Limited has been making constant regions, where most of its affiliated units are Enhance efforts to improve emergency response located. Currently, four bases have already management mechanism, promote processing basically established their emergency Emergency capacity of emergency rescue system, and linkage mechanisms. Outside the system, Shanghai branch increased marine emergency response capability strengthen accident prevention and emergency the Company improved the collaborative Response response capability. In 2017, the Company system between CNOOC Limited, Sinopec Capability continued to encourage its affiliated units and CNPC, participated in the Emergency On July 27, 2017, at the request of sent a Super Puma helicopter to rescue to refine and improve emergency response Response Coordination for Storage Tanks Zhejiang Maritime Safety Bureau, Ningbo crew on ships dragging anchor. The drill plans, further integrated information systems of Fire Emergency Coordination Meeting held Maritime Safety Bureau and Zhoushan tested emergency response efficiency and emergency response management, improved by Sinopec Xuzhou branch, supported the Maritime Safety Bureau, CNOOC Limited capability of CNOOC Limited’s helicopter 1 the ICS system, enhanced emergency drills command arrangements from National Shanghai Branch sent one Super Puma and ships. Through the drill, the Company to strengthen the system’s risk mitigation Emergency Rescue, and continued to helicopter and two ships to join COSCO gained practical experience to fulfill its capability and reduce the impact of promote and plan emergency linkage work. Zhoushan Shipyard Co. Ltd. in joint drill social responsibility in the future. emergencies as much as possible. for tycoon preparation and resistance in The Company attaches great importance Liuheng water area in Putuo district of The Company promoted the improvement to the security of overseas projects. By Zhoushan city. During the drill, CNOOC of regional emergency linkage mechanisms strengthening its business communication with Limited sent a powerful ship to rescue from within and outside the system. Within international security and emergency rescue broken cable ships berthing at Zhoushan the system, the Company proposed the organizations (Control Risk, International dock and rescued ships dragging anchor requirement to establish and improve a SOS, etc.), the Company effectively promoted in Zhoushan anchorage ground and regional emergency coordination and the establishment of work mechanisms for linkage management mechanism in the collecting overseas security information and Bohai, Zhanjiang, Huizhou, and Hainan releasing early warnings.

1. ICS：Incident Command system

Strengthen overseas HSE management

In 2017, the Company continued to strengthen operations. Combining the Company’s overseas supervision management of overseas affiliated safety management and good practices of the units’ HSE performance. The Company industry, it established and refined overseas strengthened safety leadership and execution security management requirements, provided ability of overseas top management, organized highly efficient and reliable security information, HSE audits of CNOOC UK and Indonesia and established efficient channels to share safety companies’ projects, conducted joint emergency status of overseas personnel in a timely manner. drills and training to increase employees’ safety These efforts have provided strong security Safety model applications of MES (real-time database) system promoted safety and efficiency awareness.These efforts remarkably improved support for overseas operations. good performance of overseas HSE. In 2017, the Company attached great importance For a long time, unsatisfactory onsite safety data had online management of safety data pertaining to offshore to changes made in international politics and been a problem for Shenzhen Branch. Repetitive oil and gas fields. social instability that might affect overseas and tedious work consumed a large proportion of management personnel’s time. To address this The system optimized and standardized current safety CNOOC Limited tackled key problems of risk prevention and rescue in high seas problem, the Shenzhen Branch took advantage of real- business models and management procedures, time online function of the database and added several enabling management personnel both on land and As a leading company in China’s offshore oil and has formally started tackling relevant problems of risk new business application models in the current MES sea to search for and understand safety management gas exploration sphere, and with more and more prevention and control and setting up emergency system, including reporting on potential risks, accidents status in real time. According to statistics, the system developments of oil and gas resource in deep response rescue system for high seas operation. and events, license management and others. It utilized has saved a total of 7,770 working hours since it came and faraway seas, CNOOC is in urgent need of information technology to complete online collection and into effect, which is equivalent to one person working strengthening its offshore emergency rescue capability. The project not only established China’s capabilities transmission of onsite safety data. Through automatic 3.5 years. Information technology has helped business On October 26, 2017, the kick-off meeting of “Research of operation risk control and emergency rescue data statistics and application analysis, Shenzhen units boost quality and efficiency. and Engineering Demonstration of Accident Prevention in high seas, but also provided support to other Branch reduced onsite workers’ workload and realized and Control Technique in Offshore Oil and Gas industries’ offshore emergency rescue. It contributed to Exploration”, a key research and development project improvement of the country’s public security prevention of China, was held in Beijing. It signified that CNOOC and control system in high seas. 32 Safety and Environmental Protection 33

Repair Nanhai Shengli FPSO Environmental Environment Management Protection Adhering to the idea of a “Green, Low- and Gas Fields Exploration Projects, carbon, Clean, and Circular Economy", Detailed Rules on Reporting of In May, 2017, Shenzhen Branch found water leakage in the Company started preparations for conducting ship CNOOC Limited has stepped up its Environmental Events and other the cabin of Nanhai Shengli FPSO (Floating production structure assessment and overhaul of Nanhai Shengli efforts to build an “Energy-saving and documents. It worked to reduce risks storage and offloading unit). If the leakage increased, FPSO and planned to replace parts of the hull that Environment-friendly” enterprise, and and dangers of environmental impact water would cause damage to equipment in the cabin suffered serious corrosion in 2018. continuously push forward various work in all phases to continuously improve and affect the safety of the whole unit. in environment management. the Company’s environmental management ability. Shenzhen Branch immediately launched the repair In the context of promoting a desirable process to conduct detailed inspection of the leaking eco-civilization, CNOOC Limited Simultaneously, the Company point. In less than 10 days, it sealed several leaking pushed for green development and conducted annual special supervision points and prevented major accidents. Meanwhile, strengthened marine environmental and inspection of offshore platform protection. In 2017, it continued emission to meet and strengthen to establish and refine its offshore standards. It also strengthened environmental protection system, inspection and management of including Detailed Rules on the production process pollutant emission. Management of Environmental The Company increased environmental Impact Assessments of Offshore protection measures by strengthening Oil and Gas Fields, Detailed Rules and monitoring the key areas with on the Management of Completion information-based efforts, carrying Acceptance of Environmental out targeted environmental protection Safety Management Performance Data Protection Facility for Offshore Oil supervision and resolving problems.

Offshore oil engineering has always been a high-risk industry. In health, safety and environmental protection. Our annual OSHA 2017, CNOOC Limited continued to adhere to high standards of (Occupational Safety and Health Administration) records are as follows.

Total Work Cases Rate Recordable Rate of Hours of Lost of Lost Scope Incidents Recordable Casualties (millions of man- Work Work Incidents hours) Days Days

Employees 41 12 0.06 6 0.03 0 2017 Employees and Direct 109 48 0.09 17 0.03 1 Contractors

40 12 0.06 6 Employees 0.03 3 2016 Employees and Direct 112 68 0.12 25 0.04 5 Contractors

Employees 44 20 0.09 3 0.01 0 2015 Employees and Direct 124 68 0.11 15 0.02 0 Contractors

Note: According to OSHA statistical methods, all indicators (except for total work hours) are calculated on the basis of 200,000 man-hours. 34 Safety and Environmental Protection 35

In 2017 , the Company fulfilled the to environmental protection laws and These efforts strengthened environmental requirements outlined in the Measures for regulations, the Company’s branches protection management personnel’s expertise Environmental Protection Management organized training for management personnel and business acumen, and also encouraged During Production and Measures for the in various units to teach them newly issued onsite management staff to take the initiative in Accountability for Ecological Environment and revised environmental protection protecting the environment. Damage, and strictly maintained the laws and regulations. They also organized ecological “red line”. Meanwhile, in an training program on environmental protection effort to strengthen employee's awareness management procedures for offshore facility and management skills in adhering general supervisors and other supervisors.

CNOOC Limited’s Whole-process Environmental Protection Management Flow Chart

Whole-process Environmental Protection Pre-feasibility Study Feasibility Study / ODP Design Construction Trial Production Production Abandonment Management

Environmental Protection; Basic design has to gain environmental assessment Public Participation permission before being Environmental Instruction submitted to investment Completion Acceptance Pre-assessment of Report for Environmental Environmental Disposal of Requirement for Building a Environmental committee Environmental Environmental Risk Impact Assessment Implementation plan as Protection Program Protection Impact — Post Environmental Project Report required by environmental Environmental Facilities Evaluation Impact Assessment assessment andpermission Standardization Report for the project Reports of environmental assessment changes to the project

Registering emission Submitting documents outlets, recording and Submitting of “Three Simultaneous” reporting pollutant Submitting Feasibility Study Submitting project application, emission data abandonment Submitting Pre- Report, ODP Report, impact assessment draft environmental Filling environmental implementation Environmental Management assessment Report Monthly Impact for approval, approval Submitting protection facilities supervision, clean program, abandonment Information System Assessment Report, documents, as well as Management Program calibration report, production, personnel impact assessment internally Reviewed impact assessment completion acceptance training, due diligence, implementation report Report, Draft and implementation program report and approval work evaluation and and approval, as well Reporting Files of and change report Turning projects with monitoring plan in as environmental impact Assessment completion acceptance the system as per monitoring program approvals into factories requirements

"Three Wastes" Treatment Technology Management; Environmental Wastewater Up-to- Protection Inspection "Three Simultaneities" of Environmental Management standard Emission and Environmental before Trial Production Pollutant Emission Environmental Monitoring Environmental Protection Recycle Guidelines; Supervision in Environmental Monitoring Plan Requirements Design Air Pollutant Treatment Construction Project Protection Acceptance Technology Guidelines; after Completion of Solid Waste Treatment Construction Project Technology Guidelines 36 Safety and Environmental Protection 37

Water Resources Management Marine Ecological Protection CNOOC Limited has always been Protecting the Environment, and Letting assessment and environmental CNOOC Limited upheld the principle innovation and transformation, and constantly optimizing production proactively promoting and practicing Nature Restore Itself”. The Company protection facility for offshore oil and of “Paying Equal Attention to Increase comprehensive sewage treatment. techniques; realized water-saving protection of marine eco-civilization. fulfilled the requirements outlined in the gas exploitation projects. For newly It pays high attention to protecting Measures for Environmental Protection built and refurbished environmental Sources and Reduce Usage and Giving targets by adopting an array of ecological diversity near the area of Management During Production protection projects, the Company Priority to Conservation”. It focused on In 2017, the Company prioritized water measures; and increased employees’ operation. The Company advocates and Measures for the Accountability rigorously implemented Measures for improving the use of water resources and conservation at all levels by setting crisis awareness and water-saving balance between project construction Management of Damages to the the Management of Newly Built and pushed for comprehensive strengthening specific tasks and indexes for its units concepts. and operations, and ecological Ecological Environment, and strictly Refurbished Environmental Protection of water resources management through over water-saving; reduced fresh water protection. It attained win-win results maintained the ecological “red line”, so Projects. It reduced legal and technical between ecological protection and as to achieve the goal of harmonious risks of environmental protection stronger monitoring, technological consumption per production unit by In 2017, the Company’s total fresh water project construction by restoring the coexistence with ocean and mutual projects through methods including consumption amounted to 1.813 million environment, resource conservation and benefit. unrestrictive technical proposal, open tons, fresh water consumption per oil research, and protection of ecological bidding, advance funding construction Index Unit 2016 2017 and gas production unit was 0.0332 diversity. CNOOC Limited strictly followed the and making payment upon final cubic meters/tons, and the annual water management and control measures acceptance. The Company’s total fresh Following the requirements of the including marine main functional million tons 1.879 1.813 saving amounted to 88,000 tons. water consumption country’s eco-civilization, CNOOC zoning, marine functional zoning and Fresh water consumption per Limited conducted planning, scheduling, marine ecological conservation redline. cubic meters/tons 0.0335 oil and gas production unit 0.0332 scientific research and implementation of Following the principle of environmental offshore oil and gas exploration under the protection during project construction, Annual water-saving thousand tons 113 88 guidance of the national policy of “Giving it implemented “Three Simultaneous High Priority to Conserving Resources, Features” of environmental impact Seawater desalination provided fresh water to production Built “Environmental Friendly Company” and proactively restored fishery resources through the artificial propagation and release of fish The Weizhou Terminal of CNOOC Limited is located was gradually applied, it effectively relieved offshore equipment on the Weizhou island in Guangxi Province, more than from dependence on fresh water supplied from land. The “Protect while Developing and Achieve Development of fishery resources restoration and fish release in 60 kilometers south of North Sea. In recent years, with technology has advantages such as being low cost, low energy by Protecting”. This win-win philosophy of ocean Liuhua 4-1 project, Liuhua 19-5 project and Xijiang 23-1 continuous development of tourism and industry on the consuming, of smaller size and yielding better quality of fresh development shared by enterprises and local readjustment project. island, water consumption has grown rapidly and fresh water water, thus supporting offshore platforms in cost reduction and governments is crucial to the sustainable exploitation resources have apparently declined. The Weizhou Terminal increasing efficiency. of ocean fishery resources. In 2017, Shenzhen Branch The number of fish in the ocean and their length is an important terminal for handling processing, storage and proactively restored fishery resources through the increased after artificial propagation and fish releases. outward transportation of oil and gas explored in the largest Currently, besides seawater desalination equipment being artificial propagation and release of fish. It released Shenzhen Branch achieved significant ecological crude oil production base, Weizhou southwest oildom, in used at Weizhou terminal, Zhanjiang Branch has been using a total of 1.6 million mangrove red snappers and 600 benefits in protecting marine ecological environment thousand Nibea Coibors. It met the requirements and fishery resources. the western South China Sea. To address the shortage of the equipment in several oil and gas fields in Wenchang and fresh water on Weizhou island, Zhanjiang Branch introduced Weizhou. This equipment is expected to produce 500 tons of seawater desalination membranes system, which converted fresh water per day after going into operation. brackish water to fresh water which was used to generate Adoption of electro-magnetic induction pyrolytic technique to solve the problem of harmless electricity. Desalted Seawater for Fire Tank treatment of thousands of tons’ oil drilling cuttings in Enping oilfield

Membrane filtration, also known as reverse osmosis, is 4 ’’ a process of applying pressure to seawater on the one 6 ’’ 4 ’’ Living Water Since April 15th, 2017, this project has completed Seawater Desalination In 2017, Enping 24-2 platform utilized side of the equipment to make fresh water osmose to the electromagnetic induction pyrolytic technique and processes of hoisting installation, fixed position other side. This seawater desalination technology requires 3 ’’ advanced rock debris treatment equipment to solve installation, pipeline connection, onsite adjustment, significantly less energy to operate, half of electro dialysis the environmental problem of realizing offshore operation management and dismounting hoisting. process and a 40th of distillation method. As the technology Desalted Seawater for Clean Water Tank harmless treatment of 1,000 tons of oil drilling Relevant parties of Enping 24-2 platform have been Living Water cuttings produced during drilling operation of two fearlessly working against hostile weather and other extended reach wells in Enping 23-1 oilfield. difficulties to follow each step of the processes of rock debris treatment operations. Electromagnetic induction pyrolytic technique is a mature and environmentally sound technology for The environmentally sound electromagnetic Turbine waste heat is used in seawater desalination oily sludge treatment. The technology principle of induction pyrolytic technique has been successfully rock debris treatment equipment uses spiral transfer adopted in harmless treatment of offshore oil drilling pump or plunger pump to transfer oil base mud and cuttings. It is a good practice, a beneficial experiment The Company installed heat exchangers for flue gas phases. Currently the first phase of seawater desalination drilling cuttings to decompression pyrolysis reactors, as well as an example of win-win cooperation and hot water on the flues of two gas turbines of Penglai has been completed and the second phase is under where, heated by high frequency electromagnetic among several parties. While proactively pushing 19-3 oil field RUP platform. The system used hot water construction. In 2017, the first phase produced 13,000 tons induction electric power and stirred by paddles, oil forward sustainable development of offshore oil, drilling cuttings and drilling sludge gradually pyrolyse CNOOC Limited personnel at Enping oilfield have circulating pump, transmitted the heat of turbine flue gas of fresh water. It not only met its own fresh water demand, and carbonize. Base oil and water in oil-based always borne in mind that "Lucid Waters and Lush to seawater desalination equipment and produced fresh but also provided 3,000 tons to other offshore platforms in drilling fluids are separated in the form of gas and Mountains are Invaluable Assets". They thought water by distilling seawater. The project consists of two the proximity. recovered after liquidation in condensing units. The innovatively and shouldered the responsibility of harmless residue is automatically discharged so as protecting blue oceans and clear skies. to realize. 38 Safety and Environmental Protection 39

Climate change remains one of the the Company has been proactively “New tricks” of cost reduction for offshore Response major challenges facing the world. As a developing clean energy and promoting lighting system responsible energy company, CNOOC energy conservation and emission to Climate Limited aims to establish itself as a reduction projects in an effort to address Lighting for two platform blockings is abundant light, the system will “Resource Conservative, Green and climate change. and two buildings for housing automatically turn off the lamps Change Low Carbon” enterprise. To this end, employees of Bozhong 34-9 and lanterns. Compared with oilfield development project traditional control model, the new Energy Conservation needs about 1,800 lamps and system features longer service lanterns. To reduce operation and time and lower operation and In 2017, CNOOC Limited made in every aspect of its production maintenance costs, for the first maintenance cost. It is expected constant efforts to manage and and operation. It not only focused time, LED was used entirely. More to save about 13,500MWh of control energy consumption in newly on energy conservation and control than that, offshore oil platforms electricity and reduce GHG built projects, deeply explore energy at the beginning of the projects and conservation potential of its facilities, conducted strict assessment and adopted optoelectronic switches to emission by nearly 11,700 tons of coordinate energy allocation within inspection of newly built projects and realize automatic control of some CO2 equivalent. the region, continuously provide refurnished them to ensure they reach lamps and lanterns. When there special fund for energy conservation the advanced standards in China, and emission reduction and promote but also continued to adopt such technology advances. On the basis of measures as improving management, constantly improving its systems and optimizing process and production mechanisms for energy conservation, operations, and undertaking reforms in Natural gas recovery project in south Bohai Sea the Company formed a set of complete energy conservation technologies. The In 2017 management systems for energy Company also launched energy saving conservation, specified requirements initiatives, and encouraged employees the energy conserved of energy management organization to go green commuting, to consume in Bohai oilfield insisted on the Company compressed and structure, assignment of responsibilities, a green way, and constantly boosted tons achieving energy conservation recovered associated gas produced management principles, schedule and their knowledge and awareness of by improving technology in Bozhong 28/34 oilfields and 155,299 plan management, energy conservation environmental protection. and management capability. transferred it into joint supply pipeline of standard coal equivalent assessment and inspection management It explored the energy network in southwest Bohai region. of fixed assets investment, special In 2017, the energy conserved was 155,299 conservation potential and This endeavor enabled relevant funds management, supervision tons of standard coal equivalent, 118.8% focused on utilizing of waste parties in the region to complement management, education and training of annual target. The comprehensive The comprehensive energy heat. To make better use each other’s advantages of energy and other aspects. It standardized the energy consumption per unit of oil and gas of associated natural gas utilization and raised the efficiency of consumption per unit of oil and process of energy conservation and production was 0.0494 tons of standard produced during operation, energy use. gas production incorporated it into the Company’s risk coal. the Company added new According to statistics, the project control and management system. compressors and undertook is capable of recovering 60 million tons construction work with cubic meters of natural gas and 0.0494 CNOOC Limited has attached great the advantage of current reducing GHG emission by 140,000 importance to energy conservation production facilities and tons of CO2 equivalent. of standard coal joint pipeline network in Main Energy Consumption of CNOOC Ltd. southwest Bohai region. Because of these efforts, Index Unit 2015 2016 2017

Crude Oil thousand tons 306.7 313.9 323.2

Natural Gas billion cubic meters 1.732 1.732 1.766

Diesel thousand tons 27.0 25.1 28.3

Electricity million kWH 146 132 150

Meeting Energy Saving Targets

Index Unit 2015 2016 2017 Recovery and reuse of low pressure associated gas of Hai Yang Shi You 113 FPSO Energy Saving tons standard Targets coal equivalent 78,998 86,952 130,767 Bohai oilfield pays high attention to recovery and reuse of flaring through second stage separator and reused it to Energy Saving tons standard Actuals coal equivalent 130,196 159,416 155,299 low pressure and small batch associated gas. In Bozhong provide stable gas source for turbines. The project is 25-1 oilfield, sometimes, the turbine had to use diesel as capable of recovering and reusing 15,000 cubic meters of

Note: The statistics include only those of Tainjin Branch, Shanghai Branch, Zhanjiang Branch fuel due to insufficient natural gas. The Company added a natural gas per day, reducing costs by providing sufficient and Shenzhen Branch. China United Coalbed Methane Co. Ltd. with excluding overseas units. frequency-converting control small displacement compressor gas for the main engine. to Hai Yang Shi You 113 FPSO. The compressor recovered 40 Safety and Environmental Protection 41

Emissions Reduction Improving Carbon Resources Management

are met. It strengthened inspection and NOx) have been included in pollution The Paris Climate Agreement came into In 2017, CNOOC Limited conducted management of polluting emission in management and control. According effect on November 4, 2016. On December research and analysis of low carbon the production process. The Company to the country’s management and 19, 2017, China launched its carbon market. laws and regulations for overseas 1 Premised upon “Green Development further regulated environmental control requirements for VOCs , The low carbon management platform of operation projects, carbon emission and Low-carbon Innovation,” CNOOC protection by strengthening and CNOOC Limited has taken measures CNOOC Limited established a series of new impact on offshore oil and gas fields Limited has always advocated monitoring the key areas of protection for pollution prevention and control of standards for carbon emissions. It set up new newly developed under the 13th a green and low-carbon style of with information-based efforts, carrying VOCs produced by offshore terminal models including carbon emission calculation, Five-Year Plan, and technologies production, life, and consumption. It out targeted supervision and ensuring treatment facilities. By implementing statistics, monitoring, data analysis, carbon including carbon sequestration promoted energy conservation and the resolution of problems. LDAR (leak detection and repair) quota index, carbon quota P&L, internal and oil displacement by carbon. 2 emission reduction in production, procedure, the Company enhanced CCER national and local low carbon policies The Company is constantly transmission and consumption by At present, all of the Company’s control of VOC emission at dynamic/ In 2017 and others. Within the year, the Company pushing forward carbon dioxide taking advantage of energy conser- offshore facilities emissions have static sealing points. It reduced VOC the total GHG emissions of conducted carbon inspection and discovered capture and storage, transmission, vation, environmental protection reached standards. The average leakage by repairing pipe valves. the Company was its total carbon emission amount, emission oil displacement, geological system. concentration of oil content in process In 2016-2017, the Company has million tons intensity and carbon emission reduction sequestration, chemical utilization water is averagely 13.1 mg/L, much completed LDAR in 9 offshore terminal potential. These efforts laid a solid foundation technologies and other efforts. In The Company strictly complies with its lower than the national’s emission treatment plants. 7.829 for the Company’s low carbon development 2017, the total GHG emissions of principle of the discharge of pollutants, standard of 30 mg/L. strategy. the Company was 7.829 million of CO2 equivalent “Standard Compliance Comes tons of CO2 equivalent, of which the First ”. The Company implements In 2017, in domestic the Company More than that, the Company assessed the direct GHG emissions (scope I) was emissions reduction programs and produced 22,325.9 tons of hazardous impact of carbon emission on fixed asset 7.736 million tons of CO2 equivalent, the GHG emission per tons of updates pollutant-treatment facilities to waste and 16,489.9 tons of non- investment and construction projects. It made accounting for 98.81%. The indirect enhance the management of pollutant hazardous waste, 99.8 tons of COD oil and gas production was clear regulations and listed requirements GHG emissions (scope II) was 93 control during operation. To meet (“Chemical Oxygen Demand”), tons about the assessment’s scope, procedure and thousand tons of CO2 equivalent, the requirements of management 2,534.8 tons of oil in water, 8.4 tons report. By the end of 2017, it had completed accounting for 1.19%. The amount of of stationary pollution sources of sulfur dioxide, and 272.2 tons of 0.1409 inspection of carbon emission assessments GHG emission from production of oil

centering around pollutant emission nitrogen oxides. According to national of CO2 equivalent for 9 projects including Wenchang 13-2 and gas per ton was 0.1409 tons. permits, the Company conducted requirements for comprehensive comprehensive adjustment project. research about overseas offshore management and control of offshore pollution emission permitting system oil and gas exploitation pollutants, the and monitored current condition of statistic of COD, oil in water and waste offshore pollution emission. At the emissions have been achieved. As same time, the Company carried out required by onshore environmental special inspection of offshore platform management, onshore terminals

emission to ensure that requirements with gaseous pollutants (SO2 and

1. VOCs: volatile organic compounds 2. CCER: Chinese Certified Emmission Reduction

All of the Company's offshore facilities emissions have reached standards. The concentration of oil content in process water averages 13.1 mg/L

much lower than the national's emission standard 30 mg/L Employment Policies CNOOC Limited respects the basic human rights which all Employee Rights and Interests employees are entitled to in accordance with the laws in Employee Development each jurisdiction. The Company also respects employees' values, personalities, and Employee Health privacy under different cultural backgrounds Staff Care

CNOOC Limited adheres to gender equality, encouraging the hiring of female employees and developing training and education for women in management roles.

CNOOC Limited always sticks to the concept of "people- oriented" development, constantly perfecting the training system, improving employees' growth and development system, and creating opportunities for them to continue to develop.

Care of Employees

CNOOC Limited regards its employees as the most precious resource and asset. Consistently upholding the people-oriented concept of development, the Company focuses on employees’ rights and interests, constantly perfecting the labor system so as to create an environment of growth for staff and help them develop healthily. At the same time, The Company cares for employees’ physical and mental health and CARE FOR strives to realize the growth of both enterprise and its staff.

By end of 2017, we had 19,030 employees, including 15,011 in Beijing, Tianjin, Shenzhen, Shanghai, Zhanjiang and other cities in China (The data coverage is only within China (namely 15,011 employees) in this chapter, except female employee ratio and employee distribution.), and EMPLOYEES 4,019 were in other countries and regions. Domestic staff accounted for 79% of employee strength while overseas staff accounted for 21%. The employee turnover rate in 2017 was 1.6%. 44 Care of Employees 45

CNOOC Limited respects the basic development , build enterprise CNOOC Limited respects cultural diversity and exchange of domestic and overseas Employment human rights which all employees culture with respect, openness, and and local customs of countries, promoting employees, so as to create a dynamic are entitled to in accordance with inclusiveness, and cherish staff’s mutual understanding among staff with working environment. Policies the laws in each jurisdiction. The diversified talent. All employees enter different nationalities, regional and cultural Company also respects employees’ into employment contracts with the backgrounds. The Company works hard values, personalities, and privacy Company on an equal and voluntary to promote the integrated development under different cultural backgrounds. basis. The Company strictly conforms In China, CNOOC Limited acts in to labor laws, opposing any form of strict compliance with the Labor Law inhumane treatment, and abides by In 2017, 23% of employees had Master’s degree or below. 87% of employees were of the People’s Republic of China stipulations on salary, overtime, and degrees or above, 58% had bachelor’s in Asia, 8% in America, 5% in Europe and and Law of the People’s Republic of statutory benefits. The Company degrees and 19% had a junior college other regions. China on Employment Contracts and prohibits child labor (anybody under safeguards all employee rights and 16) and the youngest employees are interests. Overseas, the Company currently 18. There is no forced labor As of 2017, there were total employees abides strictly by relevant laws and in the Company. regulations, as well as conscientiously adhering to international conventions CNOOC Limited adheres to gender 19,030 accepted by the Chinese government equality, encouraging the hiring of and respects the legitimate rights and female employees and developing female employees interests of all employees. training and education for women in management roles. In addition, The Company complies with the Company has organized various 87% diversification and none-discrimination activities to enrich female employees’ 2,605 policies. It is prohibited to set up lives in spare time, encouraging their 8% clauses of , gender, nationality, marital participation. As of 2017, there were 5% female middle and senior level managers status, religion, or being hepatitis 2,605 female employees, accounting B virus carriers while recruitment. for 14% of staff strength, of which We insist on giving fair and equal 121 were middle and senior level 121 treatment in our recruitment, training, managers. promotion, and compensation regardless of race, nationality, religion, gender, age, marital status and other legal privileges of an employee. The Company strives to offer employees equal opportunities in recruitment, promotion, training, and career 46 Care of Employees 47

CNOOC Limited endeavors to create unemployment, and maternity – CNOOC CNOOC Limited always sticks to system, and creating opportunities Employee an open, transparent, and equitable Limited also provides employees with Employee the concept of "people-oriented" for them to continue to develop. By diversified environment. It adheres to personal accident insurance, commercial development, constantly perfecting unrestrained talent growth channels, Rights and people-oriented, caring principles and supplementary medical insurance, and Development the training system, improving the Company motivates employees to values, and protects the legitimate rights non-adult children supplementary medical employees’ growth and development realize their self-worth. Interests and interests of its employees. insurance. It also provides employees with company annuity and housing subsidies. The Company strives to offer employees The Company respects and supports the Career Growth competitive compensation packages freedom of its employees to socialize, by gradually implementing the normal gather, and join Labor Unions in accordance Based on different professional Company has refined its professional salary increase and allocation system with the law. Guided by the Trade Union groups and job characteristics, the title management system and talent that is consistent with the market. Law of the People’s Republic of China, the Company has identified three streams assessment practices. With five-year The Company’s allocation system, Company has established Labor Unions, for talent cultivation systems — talent development planning, it sets which continues to emphasize the field which have the responsibility and obligation management (M rank), technology up the idea of talent development and employees, is closely associated with to protect employees’ legitimate rights (T rank) and work (W rank) — which promote the implementation of talent employees’ quality of work, values and and interests as well as to monitor the provide career development paths projects. contributions. A pay mechanism that Company’s fulfillment of its responsibilities. suitable for each employee. The employee incomes matches to Company Labor Unions also oversee all operational profit growth has also been adopted, activities related to employee benefits and ensuring employees benefit from the communicate with the Company on behalf Company’s ongoing development. of its members. The Company follows the Labor Contract Management Rules The Company has also built a comprehensive and other management systems based and effective social security system, which on practical situations and oversees their brings employees under various social implementation within the Company. It also insurance programs as well as a variety of maintains close communication with legal supplementary insurance schemes. Aside departments and labor union organizations from the five basic social insurance programs to jointly guarantee employees’ legal – pension, healthcare, employment injury, interests. The training of talent is more professional

In order to further lift core competitiveness, establishes hierarchical teacher pool and promote the coordinated development course pool to promote the checking of of talent in different fields and levels, and course resources and the establishment comprehensively improve the overall of multi-level knowledge management In 2017, CNOOC Limited selected qualities and abilities of staff, the Company system. At the same time, the Company has made the “13th Five-Year” talent innovates the select methods of technical development plan: with the cultivation of experts, rearranges management functions 71 high-level personnel, young and middle- at all levels, delegates the power of aged ‘backbone’ employees, international evaluation to lower levels, and regulates young scientific and technological talent, and urgently-needed professionals evaluation procedures. talents of the second batch in the lead, the Company makes solid progress in promoting leading personnel In 2017, CNOOC Limited selected 71 2 initiative, high-level core talent initiative, persons for the second batch of young young talent cultivation initiative, CNOOC scientific and technological talent, leading international personnels of the craftsman initiative, international core 2 leading international personnel of first batch talent cultivation initiative, and secondary the first batch, 57 core international unit ‘backbone’ talent initiative, so as to talents, and fourth batch of local 57 build a talent aggregation. The Company experts numbering 56. carries out knowledge management leading international experts engineering, which starts with the training of employees to strengthen core skills and management abilities; by carrying out course development competitions 56 at different levels and internal training local experts of the fourth batch teacher selection activities. The Company 48 Care of Employees 49

The talent evaluation is more scientific and fair Change the requirement of foreign language into an Increase substitutes for thesis extra option Technical standard officially issued In 2017, the Company adjusted ability, and achievements in talent TEM 8, TOEFL, IELTS, and implemented and optimized the professional title evaluation, the Company strives to TOEIC Authorized national invention evaluation system based on the enrich the dimension of the evaluation, CET4, CET6 patent actual situation. The main features of do away with the trend of “emphasizing National professional and Face-to-face courses for 2 hours the reform included doing away with education background, working technical personnel of and above English examination for the promotion experience, and thesis”, and appraise foreign language grade title Adjust and Five or more micro lectures, or of technical titles, weakening the ‘form and value employees who have strong optimize it examination in keeping micro lectures that add up to 25 of thesis’, focusing on frontline staff professional skills and excellent with the actual minutes or more in grassroots units, and opening the achievements. situation green channel. Focusing on ethics, End the limits of educational qualification for frontline Open green channels staff in grass-roots unit Outstanding high-level personnel For staff who have worked from demobilized army cadres on frontline for over 20 The ground- can directly apply for senior breaking points years, the requirement of professional titles after obtaining of national education background can medium-grade professional title professional be lowered to junior college Overseas high-level talent can titles system degree when they apply for reform directly apply for professional level senior professional titles senior titles

Methods of selecting and evaluating innovative talent

Insist on The Title Highlight In 2017, in terms of the methods of selecting talents, culture and knew more about rules of talent both political Layout the Propensity achievements examinations research integrity and testing to focus on and Play the role the Company innovated in and explored three development. The participation of internal assessors professional direction of frontline contributions- of “baton” to knowledge thesis and competence of foreign staff in For high-level guide others aspects. in different stages of talent selection such as the with emphasis achievements grass-roots overseas talent language and reasonably on the former computers units and urgently formulation of plan, short listing, and the interview, not First, with the aid of data tools and platforms from only saved costs, but also made selection methods For professional level overseas Provide a wider Carry out Do not need a explore other and technical talent and world for talent external assessment organizations, we made more scientific and efficient, continuously internalized “one vote unified form forms of staff who urgently- to play their online evaluation of participants’ abilities such as the organizing abilities, and promoted employees’ veto” for achievements work on the needed roles and display academic to replace frontline for a professionals, long time, the their skills, offer commercial reasoning abilities, management skills, competence. Third, changing to online application cheating thesis the those who make requirements limitations on and personality, which are regarded important for and selection including features such as handling of of educational qualifications contributions background and length of a sense of evaluation. Second, we did away with external materials, competency assessment, interview and and length of employment accomplishment assessment organizations and used internal scoring, professional oral examination and results. employment can be lowered can be lower assessors, who were more familiar with our enterprise 50 Care of Employees 51 Employee Training Excellent Employee In 2017, guided by the Annual Plan cultivated 22 talent assessors, 30 case In September, 2017, Han Changwei He says, “My achievements today for Key Training Programs, the developing personnel and internal Company continued to put the focus of training coaches, and over 80 course won the first place in the CNOOC are because of the strict teaching by training on key specialties and critical developing personnel and teachers. 7th Professional Skills Competition onsite teachers. I will also pass on roles, establishing and perfecting Electrician Contest. “The competition the professional skills and spirit that I the knowledge management system At the same time, the Company is similar to the actual situation, so it inherited from my teachers to younger and training resource management promoted the certification of professional tests your daily training and practice,” colleagues.” In 2017, the times of certifying system. The Company insisted on skills and increased the proportion of diversified development, continuous experienced professionals. In 2017, Han Changwei always says. Where reached empowerment, and internal sharing, a total of 2,346 employees received there is a task, he is the one to The competition is similar to the continuous education of talented and certifications. Currently, the Company do it in no time, and never avoids willing employees in special technical has 4,377 employees with titles of senior actual situation, so it tests your responsibility. 2,346 skills. worker or higher, and 848 technicians daily training and practice If work is his duty, studying is his and senior technicians, accounting for Record of maintenance electrician In 2017 , 44 key training programs respectively 72.51% and 14.05% of the hobby. After work, whether it be Currently, the Company has Han Changwei from Lufeng Oil and systematic construction projects total technical workforce. on site, in the workshop, or the Field involving 2,100 attendees were dormitory, you could see Han studying completed , which successively to improve his skills. Whenever he 4,377 employees with titles of senior sees an electrical equipment for the Number of training Total Training Hours Year Total Training Sessions Total Training Hours first time, he will not rest till he has worker or higher programs attended per Person understood how the machine works, 2017 22,468 213,167 1,084,229 72 either by consulting colleagues or 848 2016 18,077 204,653 920,576 reading about it. Therefore, everyone 64 calls him the “electrical encyclopedia” technicians and senior technicians 2015 18,423 225,521 1,151,930 97 of the place. Han is more than willing to share his hard-learned experience.

CNOOC online learning platform - “Haixue” launched

On July 3, 2017, CNOOC online learning platform 30 sub-categories. With modules on the platform such Excellent Employee “Haixue” was officially launched. The platform is as courses, knowledge, activities, examinations and available in both computer and mobile phones, which research, employees can independently participate can currently support about 15,000 existing CNOOC in online learning and evaluation exercises. With the staff accounts to log in and undergo online or offline comprehensive coverage of the platform, the learning As a worker with over 20 years’ and performed the best work. Solving learning, with over 14,000 learners. methods of CNOOC employees have gradually experience, Gao Peng has not only technical problems together with changed. Sharing and acquiring knowledge within the ingenuity but also piercing eyes that crane manufacturers, machinists, and There are 401 courses on the platform, covering three organization has become a habit. won’t miss anything amiss; from mechanics, he became an experienced categories - technology, skills, and general fields, and a small touch switch to the whole crane driver. hydraulic system. An entire crane is operating in his mind. Over the years, He is also an experienced worker. He Gao constantly strived for perfection has taught numerous students during Training young employees in Uganda his more than 20 years career, some of whom became boatswain, some In order to make young employees understand FEED CNOOC Uganda Limited Company were awarded Experienced worker with a sharp vision became experts in the crane industry, design and become familiar with works in oilfields, at the CNOOC International Award for Outstanding Record of crane driver Gao Peng from and others are crane drivers like CNOOC Uganda Limited specializes in selecting Youth Recognition. The youth is the hope for the Bonan Operation Corporation him. He says, “Ingenuity comes from outstanding employees from various related business development of the oil industry in Uganda and is also passion, and gold medal comes from departments to participate in FEED design in batches. a hope for CNOOC to develop and grow in Uganda. In 2017, CNOOC Uganda Limited arranged 14 young CNOOC Uganda Limited takes positive steps to persistence. I will continue to work people in two batches, who are “future oilman”, to support young students, cultivate young ‘backbone’ earnestly and conscientiously, so as to communicate and exchange knowledge with different employees, and offer young people a better platform develop my offshore oil career. departments to strengthen their understanding of this to create a better industry. In recent years, CNOOC Uganda Limited future for the has also chosen young employees to train in China Company. on several occasions and has systematically learned about CNOOC’s drilling and completion management system with its Chinese colleagues. CNOOC Uganda Limited’s focus on young talent has achieved good results. In 2017, two employees from 52 Care of Employees 53

Cultivating International Talent Exchange for cultivation of overseas talent

In 2017, CNOOC Limited kept focusing on the Company also dispatched 19 foreign professional exchange of work among employees in different technicians from Nexen to international companies, In 2017, the Company closely such as overseas work shift process and frame a targeted regions. CNOOC selects 17 professionals including research institutes, and headquarters to conduct a integrated with the international cultivation, short-term technical “international leading talent and oil reservoirs, development and production, four- week technical exchanges. Through the two- talents plan – “13th Five-year Plan” exchanges, overseas training, core talent” cultivation plan. At the engineering, and auditing from agencies, international way communication with Nexen, it helped to establish to formulate training and exchange and on-the-job training at our same time, it sought cooperation companies, research institutes, and branches to overseas talent exchange cultivation system and programs for expatriates, and to international energy company, we with overseas institutions on talent visit Canada for internal work exchange, which promote cultural integration. set up training indicators based aimed to comprehensively promote cultivation. In 2017, two talented lasted for at least three months to three years. The on the objectives of international the competence of our dispatched international employees were talent planning, and to ensure the employees. We also tracked and selected to study at prestigious implementation of training tasks. evaluated the implementation of overseas institutions for a year and our newly revised overseas human prepared for going abroad to work The Company focuses on the resources management methods, in key positions. Within the year, Nexen Focuses on Talent Development management of overseas outbound analyzing problems and methods to the Company chose 57 international employees and domestic support promptly satisfy the varied human persons with core talent to study In 2017, Nexen Company continued to implement and management capabilities. In addition, Nexen teams for overseas operations, and resources management demands at the domestic training class the “Developing Internal Talent” program to also promoted the talent exchange plan and sent 35 effectively manages international of overseas businesses. jointly organized by the Company provide employees with diversified development employees to China for short term exchanges and employees and local employees and overseas institutions, through opportunities. The company focuses on the education in 2017. based on their subsidiaries and The Company worked to form an which the Company chooses and development of employee leadership capabilities It discovered and developed employees’ skills and overseas institutions. Through inventory of international reserve cultivates core ‘backbone’ talent for and develops training programs for managers to reserved new forces for the industry by focusing on multiple training methods specific talent and training needs, so as to international businesses and high- enhance their professional and technical capabilities their personal development. to dispatched employees and spot deficiency and weaknesses potential talent for the Company's domestic business ‘backbones’ in the training and development future development. 54 Care of Employees 55

Mental Health and Health Promotion

CNOOC Limited adheres to the application of the Occupational Health CNOOC Limited always prioritizes such as onsite expert lectures, core value of “People-Oriented” Electronic Management System, Employee employees’ physical and mental health group interviews, behavior training, which always prioritize employees' the consistent implementation of at top. The Company has constantly and workshop experience. It aims Health occupational health in an important occupation health promotion, and the engaged in professional organizations to establish a Safety Production – position. Various measures have full coverage of occupational health to carry out stress management and Mental Health Model, which is suitable been taken by the Company to surveillance, has guaranteed the mental health work for the working for the production operation unit. improve the working environment and physical and mental health of CNOOC population for many years, in order Currently, this model has been used to continuously improve the occupational employees. to guide employees to work and qualitatively identify and lock people health management system. The full live with self-esteem, confidence, with hidden psychological troubles rational peace, and positive attitude and actively intervene to eliminate Occupational Health by various psychological services, hidden troubles. In 2017, the periodic test rate of occupational-disease-inductive CNOOC Limited actively carried out populations, and positions in each factors pre-assessment of occupational- unit, and then implement specific Year % disease-inductive factors for and effective prevention and control construction projects and acceptance measures. 98.96 2017 30.53% Common mental troubles of occupational-disease prevention 2.32% Rate of occupational health Severe mental troubles facilities and continued to improve In 2017, the periodic test rate of 32.81% 2016 examination workplace occupational health occupational-disease-inductive factors 2.37% % management. Each unit uses was 98.96 % (2 offshore platforms were 38.95% the CNOOC occupational health not fulfilled due to suspension of work 2015 100 management software to prioritize activities), and the rate of occupational 2.61% the occupational-disease-inductive health examination was 100%. （ ） factors for control, so as to guide and Identification rate % determine those key workplaces, 10.00% 20.00% 30.00% 40.00%

The identification of employees with hidden mental troubles 97.54% 99.98% 100.00% 100.00% 100.00% 100.00% in offshore oil field during recent three years. 100.00%

80.00% 74.12%

Year 60.00%

87.50% 2017 Common mental troubles 40.00% 75.30% Severe mental troubles 95.80% 20.00% 2016 75.90%

0.00% Year 83.00% 2011 2012 2013 2014 2015 2016 2017 2015 78.69% The rate of occupational health examination

Recovery rate（%） 100.00% 100.00% 100.00% 100.00% 20.00% 40.00% 60.00% 80.00% 100.00% 100.00% 98.41% 98.96%

98.00% The recovery rate of employees with hidden mental 96.00% troubles in offshore oil field.

94.00%

92.00% 90.59% 90.00%

88.00%

86.00%

84.00% Year 2011 2012 2013 2014 2015 2016 2017

The periodic test rate of occupational-disease-inductive factors 56 Care of Employees 57

In order to help employees, maintain House” for pregnant or breast-feeding Staff Care work-life balance, the Company offers female employees to keep them safe, paid annual vacation or home leave to healthy and happy. employees, and also encourages staff to take therapeutic leave. Besides, The Company also fulfills its responsibilities the Company also grants a one-time to employees in overseas operations, settlement subsidy or comprehensive giving them a safe and comfortable work allowance and provides temporary environment and appropriate benefits. dorms in order to help migrant employees with relocation. It has dedicated special “Mommy’s Caring

Showing love and care through Mommy’s Caring House

The 10th Bohai youth group wedding On November 2, 2017, the second can end the difficulties female employees face “Mommy’s Caring House” in Zhanjiang ahead of pregnancy, during pregnancy, and Branch were completed and put to lactation period, helping them stay healthy, CNOOC always pays close attention youth group wedding ceremony. use after the first “Mommy’s Caring safe and happy before and after pregnancy. It to employees’ marriage. Employees’ House” in Zhanjiang Branch were shows CNOOC takes special care of female group wedding has already become For ten years, the Youth League opened. The rooms are equipped with employees. a leading brand activity of the Committee of the Company has facilities and items such as sofas, Communist Youth League in Bohai recorded the best moments of over refrigerators, microwaves, lockers, Oilfield. In 2017, a total of 42 pairs of 200 newlyweds, which has become a and newspaper racks. In this house, newlyweds holding hands and went cultural highlight of Bohai Oilfield. female employees can feed their into the marriage in the 10th Bohai babies, while pregnant women and moms can take rest and exchange their parenting and health tips.

The setup of “Mommy's caring rooms”

Destructive hurricane, Company with love and caring

In September, 2017, Hurricane Harvey crowdfunding platform You Caring. wrecked Houston and about 23 employees in Nexen needed help. In the In addition, the Company also invited beginning of October, employees from some professional counselors to undertake Nexen had already donated USD31,695 counseling of flood-affected employees. to Nexen/CNOOC Hurricane Harvey Employee Rescue Foundation via public 58

Economic Contribution Marine Rescue In 2017, the Company Public Welfare donated RMB26.51 Employee Volunteers million

In 2017, the Company's tax payments (including income tax, value-added tax, mineral fee, resource tax and etc.) reached RMB37.249 billion

In 2017, the Company participated in maritime search and rescue operations for 38 times. It rescued 39 people and 31 ships. It used ships for 46 times and helicopters for 7 times for the purpose

Social Contributions Society contributes resources, opportunities and profits of enterprises, as well as the ultimate destination for the development of companies. Only when the enterprise integrates into society, can it progress. CNOOC Limited's policy-makers have always emphasized that harmony with society is the basis for the survival of the Company, the source of development and the pulse of growth. CNOOC Limited has always closely linked its development with social progress and emphasized corporate citizenship, so as to make unremitting efforts to promote social harmony and SOCIAL progress. The Company follows the principle of helping vulnerable groups, acts to give back to the society, participates in community building activities, strives to share its resources with society and contributes to the society with its own development. In 2017, the Company donated RMB26.51 CONTRIBUTIONS million. In recent years, CNOOC Limited and its affiliates have continued to give full play to their advantages in education, health care, maritime rescues, marine environmental protection and community development, striving to implement the Company’s commitment to serve society, create harmony and benefit the people. 60 Social Contributions 61

Oil and gas exploration and production with a net profit of RMB24.7 billion. Facing Economic is one of the major sources of modern the uncertainty of international oil price energy supply and is an important basic trends, the Company has always regarded 2017 Contribution industry of the national economy. With improving quality and efficiency as the the continuous development of science key to responding to the industry cycle. In February 24 In 2017, the Company recorded oil On May 29, 2017, the Tianjin branch received and technology, as well as its unique 2017, the all-in cost was USD32.54 per and gas sales revenue an alert and participated in the rescue of a advantages, the oil and gas industry has BOE, which decreased by 6.2% year-on- merchant ship in distress, and then dispatched promoted the country's development. year. two guard ships and one helicopter for rescue. billion RMB Through its globalization strategy, After two hours, all 5 persons on board were On February 24, 2017, a fishing ship “Yihuangyu CNOOC Limited has expanded its In 2017, the Company's tax payments 151.9 rescued. Subsequently, the Caofeidian Oilfield also 02698” sank in the East China Sea, about footprints to the global markets and has (including income tax, value-added tax, net profit dispatched safety supervisors and doctors to go to 130 nautical miles east of Sheng Mountain in made contributions to promoting global mineral fee, resource tax and etc.) reached the ship to carry out psychological counseling of the Zhoushan. With a total 20 persons in the ship, billion RMB economic and cultural communication and RMB37.249 billion; creating more than persons in distress, and after a preliminary medical there were 7 persons rescued and 13 still missing. cooperation. 19,000 jobs worldwide, supporting local examination, they were sent to land by the guardian Under the coordination of the Zhejiang Maritime 24.7 economy and social development. ship. Search and Rescue Center, the Shanghai branch In 2017, the Company recorded oil and dispatched a guard ship and a helicopter, together gas sales revenue of RMB151.9 billion with the East China Sea Rescue Bureau, Ocean May 29 and Fisheries Bureau, the Navy East Sea Fleet, and China Coast Guard, to search and rescue 13 missing persons.

On July 15, 2017, the Zhanjiang branch received CNOOC Limited’s relevant offshore In 2017, the Company participated in a rescue order from the Hainan Maritime Search July 3 operation units have taken active maritime search and rescue operations and Rescue Center. A fishing boat with four Marine initiatives to take on social responsibility for 38 times. It rescued 39 personnel fishermen on board, 40 nautical miles to the west of Rescue while performing production tasks, have and 31 ships. It used ships for 46 Exploration Drilling Platform No. 3 had lost contact participated in maritime salvage, marine times and helicopters for 7 times for with the shore. The branch immediately dispatched search and rescue, etc., undertaken the purpose. It was commended by the rescue ship “HYSY 685”. It found the missing On July 3, 2017, the Zhanjiang branch received external rescue responsibilities and government departments for 7 times fishing boat on the morning of July 16 and escorted a search and rescue request from the Beihai humanitarian obligations and provided and received 5 letters of appreciation the boat to port. Maritime Search and Rescue Center, which strong support for emergency action from external organizations. immediately dispatched a ship and rescued the by government agencies and been personnel in distress. recognized by many parties. July 15

Tianjin Company Zhanjiang Shenzhen Shanghai July 21 Branch Branch Branch Branch Total

Total number of people rescued 23 9 2 4 38 On October 2, 2017, Panyu Oilfield Panyu 10-2 platform rescued a drowning fisherman from On July 21, 2017, the Bohai Sea saw stormy Quanzhou, Fujian, who had left Dongdian Port in Ships used conditions with offshore winds reaching 8 levels, 30 9 2 5 46 the same province at about 3am on September 24 gusts reaching 10 levels, and waves rising to and planned to sail to the Philippines, but his boat 3-4 meters. Tianjin branch received the rescue capsized in choppy waters. Helicopters 0 2 7 requests from Tianjin Maritime Search and used 5 0 Rescue Center, Hebei Maritime Command Center, and Dongying Maritime Affairs Bureau. Then it Number of 25 13 1 0 39 October 2 coordinated resources as soon as possible and people rescued dispatched 3 ships and a helicopter and rescued 9 persons. Number of 21 4 2 4 31 ships rescued

Number of accolades 4 2 0 1 7 accepted 62 Social Contributions 63

CNOOC Limited insists on maximizing and undertaking localized construction Public social benefits while pursuing the in keeping with the development and Care for vulnerable groups economic goals of the enterprise, culture of different countries. It also CNOOC Limited cares about the development of the local community, Welfare carrying out charitable projects such promotes global social harmony and organizes and develops activities to help vulnerable groups and provides as education and community building, development through its activities. them practical and effective help.

Education assistance Pairing to help poor villages

CNOOC Limited attaches great find more opportunities, while paying Tianjin branch selected staff in August 2017 to form a pairing importance to educate the next attention to students' psychological support group and stationed in Renfengzhuang Village, Qilihai generation and strives to use its education and promoting their physical Town, Ninghe District, and Tianjin City to carry out a three-year strength to help children in areas and mental development. pairing poverty alleviation program. The Tianjin branch handled with poor educational resources to the funds, projects and technology by strengthening community- level organizations, developing and expanding the villages’ collective economy, increasing peasants' incomes, improving infrastructure, perfecting community governance mechanisms CNOOC Best Performers Scholarship and fostering rural culture, aiming to tap their potential and focusing on fighting poverty. Meanwhile, it explored long-term development opportunities for the village.

On May 19, 2017, CNOOC Uganda Ltd organized a CNOOC Limited distinction scholarship awarding ceremony in Hoima District, and awarded a total of USD8,000 CNOOC Limited distinction scholarships to 90 local primary and middle school students. Assist poor residents with career development

The Company has launched the scholarship BC Energy Investments Corp., an affiliated company program since 2013 for outstanding primary and of CNOOC Limited, focused on tapping the potential of middle school students in Uganda’s Hoima District. local residents' development, training poor residents in 330 students have benefited from the project. basic skills, imparting professional skills and assuring them of a decent living. By taking advantages of a well- developed training system, it trained poor local residents to enhance the soft power of communities, combined their own desire of market-oriented operations to solve unemployment and helped lift them out of poverty. "Pearl Students • Entering the Blue Ocean" Charity Project

In June 2017, the Youth League Committee of Tianjin branch and the Xinhua Love Education Foundation launched the "Pearl Students • Entering the Blue Ocean" event. With great Caring Service with Warm Soup enthusiasm, 40 poor university students in Tianjin came to the Bohai Oilfield to visit 3D Visualization On August 17, 2017, Nexen Inc. Canada, a Center and offshore platform construction site, subsidiary of CNOOC Limited, joined hands with to learn about exploration, development and local charity organization Soup Sisters for the production at offshore oil fields, experience the 150th anniversary of Canadian National Day. corporate culture and development concept More than 900 soups were prepared for local of CNOOC Limited, and to communicate with residents and families in need and sent to charity outstanding youth representatives of Bohai organizations for delivering to poor local residents. Oilfield. A total of 150 employee from Nexen volunteered in the event. 64 Social Contributions 65

Join hands and run for love CNOOC Limited Knowledge Classrooms

On May 28, 2017, the annual HBF Run for a run for love. From November 2 to 4, 2017, Shenzhen Reason (a large charity long-distance running HBF Run is one of the most popular charity branch’s “Blue Force” volunteers event) officially kicked off in Perth, Australia. All events in Perth. While promoting running carried out the “Blue Force Knowledge employees and their families belonging to CNOOC for health, it also raises funds for various Classrooms” activity at No.4 Primary Australia International Holdings Private Limited of charitable organizations. The event this year School of Yucai Education Group in CNOOC Limited participated in this charity event. attracted more than 170 charity organizations, Shenzhen. They interacted with primary They joined hands with 33,774 runners in Perth to including cancer association, Western school students through lectures and Australia Diabetes, Western Australia Heart experiments, aiming to arouse their Foundation and Western Australia Lifeline with interest in understanding the ocean and most extensive and deep influence in Western the protection of marine environment. Australia. The event cumulatively raised more than one million Australian dollars for charities in Western Australia.

The Company encourages employees responsibility throughout the Company. Employee to participate in charitable activities Employees can understand CNOOC voluntarily. This is an important way Limited's philosophy of charity more Volunteers for CNOOC Limited to promote social deeply through personal involvement.

"The Blue Force Enters the Campus" Blue Force - Action on Coastal Environmental Protection In 2017, the Youth League Committee of the Shanghai branch visited the Ninan Compulsory Education School in Dongtou In October 2017, Tianjin branch held the sixth “Blue Force – Action District of Wenzhou City twice to carry out on Coastal Environmental Protection” in Qingdao, a beautiful the “Blue Force Enters the Campus” event. coastal city. After six years of development, CNOOC Limited’s Volunteers from CNOOC Limited built charitable activities are gradually bringing results, contributing a good corporate reputation in Dongtou to popularization of marine science, marine awareness and District by imparting marine knowledge and marine ecological environment protection. “Action on Coastal educating students about CNOOC Limited’s Environmental Protection” is rich in content and has aroused culture. They worked with students on beach colleague and public awareness of marine culture and marine cleaning and gave out school supplies to environment protection. At the main event site in Qingdao, students. The Company has established hundreds of volunteers from all walks of life gathered to carry out cooperation with the local natural gas various forms of marine environmental publicity and activities for processing plants and related departments the popularization of science with the theme “Let the Shells Go of Dongtou, which has led to a cordial Home”. relationship between enterprises and local governments. Prospects

Looking into 2018, the global oil market into the entire process of daily is expected to remain steady with signs production and operation. We will of rebound amid an uncertain economic proactively respond to climate change, outlook, presenting both opportunities promote energy conservation and and challenges to the energy emission reduction, and continuously industry. Responding to the expected build a comprehensive low-carbon dynamic changes in the global energy management system. We will continue marketplace, CNOOC Limited will adapt to make great efforts in terms of water to the new era, undertake new missions resources and marine environment and achieve new goals. protection, proactively assume our social responsibility, and establish Looking to the future, we will continue to ourselves as a “resource-conserving grow and develop at a steady pace, and and environment-friendly” company. by upholding the corporate mission of sustainable development, the Company In terms of social responsibility, we will steadily increase its oil and gas will increase our engagement with the reserves. We will also adopt green, community, share our resources with low-carbon and healthy development the society and invite it to benefit from models, continue to provide safe and our development, contribute to the clean energy for society, and maintain community’s economic growth and the balance between economic maintain a harmonious environment. development, environmental protection CNOOC Limited will adhere to a and social responsibility. people-oriented approach, respect talents and encourage them to release Production safety is a core value of their full potential so that the Company the Company. We always strive to and staff can improve together. We develop world-class production safety will also adhere to transparent and management capabilities, continue to efficient governance, keep improving vigorously promote production safety, management efficiency and achieve constantly improve the HSE system mutual benefits for our stakeholders. management, intensify identification and elimination of potential risks, Standing at a new historic starting point comprehensively improve risk control of sustainable development, CNOOC ability, cultivate a unique safety culture Limited will embark on a new journey of and improve operational safety low-carbon energy, write a new chapter management in all our business chains. on how the Company shoulders social responsibilities, and march toward Regarding to the environmental the strategic goal of establishing protection, we will stick to the concept an industry-leading global energy of green and low-carbon and continue company. to integrate environmental protection Key Performance Data Independent Assurance Report

Index 2015 2016 2017

Total assets (million RMB) 664,362 637,681 617,219

Net assets (million RMB) 386,041 382,371 379,975

Total revenue (million RMB) 171,437 146,490 186,390

Net profit (million RMB) 20,246 637 24,677

Tax payment1(billion RMB) 32.2 23.7 37.2

Earnings per share (RMB) 0.45 0.01 0.55

Net production of the year 2 (million BOE) 495.7 476.9 470.2

Net proven reserves (billion BOE) 4.32 3.88 4.84

Dividend per share (HKD) 0.50 0.35 0.30

Crude oil consumption (thousand tons) 306.7 313.9 323.2

Natural gas consumption (billion cubic meters) 1.732 1.732 1.766

Diesel consumption (thousand tons) 27.0 25.1 28.3

Electricity consumption (million KWh) 146 132 150

Energy saving (tons of standard coal equivalent) 130,196 159,416 155,299

Comprehensive energy consumption per oil 0.0470 0.0494 and gas (tons of standard coal equivalent/ton)

Direct total GHGs (million tons CO2 equivalent) 6.735 7.736

Indirect total GHGs (million tons CO2 equivalent) 0.360 0.093

Total GHGs (million tons CO2 equivalent) 7.096 7.829

GHGs per ton of oil and gas production (tons 0.12 0.14 CO2 equivalent/ton)

Non-hazardous waste(tons) 14,647 16,490

Hazardous waste (tons) 20,101 22,326

Fresh water consumption (million tons) 1.879 1.813

Fresh water consumption per tons of oil and 0.0335 0.0332 gas production (cubic meters/ton)

Water saving (thousand tons) 113 88

Number of employees 20,585 19,436 19,030

Number of female employees 2,395 2,514 2,605

Total training hours (hours) 1,502,339 920,576 1,084,229

The rate of occupational health examination (%) 100 100 100

1. Tax payment includes income tax, value-added tax, mineral fee, resource tax and etc. 2. Unless otherwise stated, all amounts of reserve and production in this report include our interests in equity method investees. ESG Guidelines Subject Areas, Aspects, General Locations in the Report External Verification ESG Reporting Guideline Disclosures and KPIs Index B: Society Employment and Labor Standards

Aspect B1: Employment

General disclosure Care for Employees Yes

Total number of employees by gender, employment Care for Employees – Employment B1.1 type, age group and the regional division. Policies, Employee Rights and Yes ESG Guidelines Subject Areas, Aspects, General Locations in the Report External Verification Interests Disclosures and KPIs B1.2 Employee turnover rate by gender, age group and the Care for Employees – Employment A: Environment regional division. Policies & Employee Rights and Yes Interests Aspect A1: Emissions Aspect B2: Health and safety General disclosure Safety and Environmental Protection Yes General disclosure Safety and Environmental Protection, Yes A1.1 Types of emissions and related emissions data. Safety and Environmental Protection Yes Care for Employees Safety and Environmental Protection -- B2.1 Number and rate of work-related fatalities. Yes Total greenhouse gas emissions (in terms of metric Safety and Environmental Protection A1.2 Safety Performance Data tons) and (if applicable) density (e.g., in terms of per Yes – Response to Climate Change Safety and Environmental Protection -- yield unit, or per facility). B2.2 Lost days due to work injury. Yes Safety Performance Data A1.3 Total hazardous wastes produced (in terms of metric Safety and Environmental Protection B2.3 Description of occupational health and safety Safety and Environmental Protection tons) and (if applicable) density (e.g., in terms of per – Response to Climate Change Yes measures adopted, how they are implemented and – Operational Safety Yes yield unit, or per facility). monitored. Care for Employees – Employee Total non-hazardous wastes produced (in terms of Safety and Environmental Protection Health A1.4 metric tons) and (if applicable) density (e.g., in terms – Response to Climate Change Yes Aspect B3: Development and training of per yield unit, or per facility). Care for Employees – Employee General disclosure Yes Describe the measures to reduce emissions, and the Safety and Environmental Protection Development A1.5 Yes results. – Response to Climate Change B3.1 Percentage of trained employees classified by gender Care for Employees – Employee Yes A1.6 Describe the method of handling hazardous and Safety and Environmental Protection and employee category (such as senior management, Development Yes middle management, etc.). non-hazardous wastes, reducing the output, and the – Response to Climate Change results. Care for Employees – Employee B3.2 Average training hours per employee classified by Yes Aspect A2: Use of resources gender and employee category. Development

Safety and Environmental Protection General disclosure Yes Aspect B4: Labor guidelines – Environmental Protection Care for Employees – Employment Total consumption of direct and (or) indirect energies Safety and Environmental Protection General disclosure A2.1 Policies, Employee Rights and Yes (such as electricity, gas and oil) classified by type (in – Environmental Protection Interests terms of thousand KWH) and density (e.g., in terms of Yes per yield unit, or per facility). B4.1 Description of measures to review employment Care for Employees – Employment Yes practices to avoid child and forced labour. Policies

Total water consumption and density (e.g., in terms of Safety and Environmental Protection B4.2 Description of steps taken to eliminate such practices -- No A2.2 Yes per yield unit, or per facility). – Environmental Protection when discovered. Operational practices Describe the plan of energy use efficiency, and the Safety and Environmental Protection A2.3 Yes results. – Environmental Protection Aspect B5: Supply chain management Safety and Environmental Protection A2.4 Describes if there is any problem in seeking for the General disclosure Energy Supply – Purchasing Yes applicable water source, and the plan of improving – Environmental Protection Yes Management the water use efficiency, and the results. B5.1 Number of suppliers divided by regions. Energy Supply – Purchasing Yes Management A2.5 Total amount of packaging materials used for finished -- goods (in terms of metric tons) and (if applicable) N/A B5.2 Describe the practices of hiring suppliers, number of Energy Supply – Purchasing amount of per production unit. suppliers to whom the practices are performed, and Management Yes the methods of executing and supervising related Aspect A3: Environment and natural resources practices.

Safety and Environmental Protection Aspect B6: Product responsibility General disclosure Yes – Environmental Protection General disclosure Energy Supply – Product Quality Yes A3.1 Description of the significant impacts of activities Safety and Environmental Protection Yes B6.1 Percentage of sold or shipped products to be recalled -- N/A on the environment and natural resources and the – Environmental Protection actions taken to manage them. due to safety and health reasons. Number of received complaints about products Energy Supply – Product Quality Yes B6.2 and services and the methods of dealing with the complaints. ESG Guidelines Subject Areas, Aspects, General Locations in the Report External Verification Disclosures and KPIs B6.3 Describe the practices related to the maintenance Energy Supply – Technological and protection of intellectual property rights. Advancements Yes

Energy Supply – Product Quality B6.4 Describe the quality verification process and product Yes recycling program.

Describe consumer data security and privacy policy, B6.5 -- N/A and related implementation and supervision methods.

Aspect B7: Anti-corruption

General disclosure Corporate Governance – Anti- Yes corruption B7.1 Number of corruption lawsuits and the result of -- litigation during the period of reporting to the issuer or N/A its employees. B7.2 Describe the preventive measures and reporting Corporate Governance – Audit and procedures, and related implementation and Supervision, Anti-corruption Yes supervision methods. Community

Aspect B8: Community investment

General disclosure Social Contributions Yes

B8.1 Focus on contribution category (e.g., education, Social Contributions – Marine Rescue, environmental issues, labor demand, health, culture, Public Welfare, Employee Volunteers Yes and sports)

B8.2 Use of resources (e.g., money or time) in focused Social Contributions – Marine Rescue, Yes categories. Public Welfare, Employee Volunteers