The Bohai Bay is located in the northeastern part of China, approximately 200 kilometers east of Beijing. The PL19-3 oil field, discovered by Phillips in 1999 is situated in this area, which is the largest discovery made offshore China to date.

Bohai Bay is the Company's most important and largest oil and gas production base offshore China. In 2007, the Company’s production and reserves in Bohai Bay continued to grow, further strengthening its
leadership position.

As of 31 December 2007, the net proved reserves in this region amounted to 1,078 million BOE, accounting for 41.5% of the Company’s total. The average daily production in this area amounted to 218,447 BOE.