Chairman‘s Statement

Dear shareholders, 
In the past year, the world economy struggled to recover amid COVID-19 pandemic outbreaks. Global oil demand gradually revived, while energy transition continued to accelerate. For CNOOC Limited, the capital market environment had undergone tremendous changes.

To survive the extremely challenging external environment, we adhered to the business strategy of seeking progress while maintaining stability. We strived to increase reserves and production, steadily implemented major projects, firmly promoted technological innovation, actively expedited green and low-carbon development, and insisted on enhancing quality and efficiency to reduce costs. By fighting through hardship and challenges, we reached new heights and delivered excellent results.

We continued to step up our efforts in exploration and development, thereby bringing our reserves and production to new records. 22 commercial discoveries were made throughout the year. In offshore China, 4 middle-to-large sized oil and gas fields including Kenli 10-2 were confirmed. Overseas, continuous new discoveries were made in the Stabroek block in Guyana, which now contained a total recoverable resource of over 10 billion BOE. The reserve life of the Company remained above 10 years, which effectively guaranteed the resource base for our sustainable development. During the year, new projects came on stream in succession, firmly underpinning the production growth. The measures to increase production in Bohai oilfields have achieved remarkable results, making it the largest crude oil production base in China. The successful commissioning of “Shenhai-1”, the ultra-deep water large gas field, will fuel the construction of a major trillion-cubic-meter-level gas production area in the South China Sea. In 2021, our net production reached 573 million BOE, exceeding the target set at the beginning of the year and hitting a record high.

We actively promoted the innovation-driven strategy and made new breakthroughs in key core technologies. “Shenhai-1” energy station, the world’s first 100,000-ton deepwater semi-submersible oil production and storage platform, achieved three world-class innovations, which signified a historic leap into ultra-deep water for the Company’s exploration and development activities in offshore China. New progresses were made in digitalization and intelligentization. The proportion of unmanned offshore production platforms was further increased. Enping oilfields realized unmanned production in typhoon condition for the first time.

We accelerated our transition into green and low-carbon development. Natural gas would take a larger share in our production mix, as the ultra-deep water large gas field “Shenhai-1” was commissioned and the large-sized condensate gas field Bozhong 19-6 made steady progress. Meanwhile, the Company facilitated the establishment of a new energy business development system by setting up a new energy branch. Qinhuangdao/Caofeidian onshore power project, a power-from-shore project, commenced operation as scheduled, marking a major breakthrough for the Company’s efforts to optimize its development model to save energy and reduce consumption, to control cost and enhance efficiency. The carbon capture and storage (CCS) demonstration project at Enping oilfields made remarkable progress. The first 300 MW offshore wind farm had been connected to the grid at full capacity.

We dedicated unswerving efforts to reduce costs, to enhance quality and efficiency, and witnessed significant improvement in our profitability. All-in cost was US$29.49 per BOE, and operating cost was US$7.83 per BOE, which further sharpened our cost competitive edge. We seized favorable opportunity of the rebound of international oil prices and achieved oil and gas sales revenue of RMB222.1 billion. The net profit hit a new high of RMB70.3 billion.

In addition to delivering outstanding operational results, we continued to implement occupational safety campaigns. We improved the risk prevention and control system, and enhanced our emergency response capabilities to ensure a stable performance in health, safety and environmental protection.

In 2021, Mr. Xia Qinglong was appointed as an Executive Director of the Company, and Mr. Hu Guangjie resigned as an Executive Director. On behalf of the Board of Directors, I would like to extend my congratulations to Mr. Xia Qinglong and thank Mr. Hu Guangjie for his contributions to the development of the Company.

A new chapter has begun. We will continue to pursue the strategic goal of building a world-class energy company, by solidly advancing the three major projects of Reserves & Production Augmentation, Independent Technology Innovation, Green Energy Transition, and by further enhancing quality and efficiency. On the basis of ensuring safe and compliant operations, we will continue to consolidate our cost competiveness, improve profitability, and deliver impressive results.

CNOOC Limited has smoothly delisted from the New York Stock Exchange (NYSE) and the Toronto Stock Exchange (TSX), and has promoted RMB share Issue in an orderly manner. As disclosed in the announcement of the Company dated 30 March 2022, the China Securities Regulatory Commission (the “CSRC”) has approved the RMB Share Issue of the Company. In order to avoid the impact on the progress of RMB Share Issue of the Company, the Board decides not to recommend the declaration of the 2021 year-end dividend and will announce a special dividend plan as soon as possible after the completion of the RMB Share Issue, and the 2021 year-end dividend as originally planned and the special dividend for the 20th anniversary of the listing in Hong Kong shall be combined and declared as a special dividend.

In the new capital market environment, we will remain committed to generating returns to our shareholders. The Company has promised at the beginning of the year that, subject to the approval by the general meeting of shareholders on the dividend proposed for each year,  the expected annual payout ratio will be no less than 40% in the next three years, and the annual absolute dividend will not be less than HK$0.70 per share (tax inclusive). In 2022, the Company will appropriately implement share buybacks subject to the authorization granted at the general meeting of shareholders.

Pines do not shed their needles in cold weather, and the emerald sea gets clearer in its vastness. Dear shareholders, riding the waves of 20 years hard working, CNOOC Limited is now in its prime time. We will embark on a new journey with persistence and perseverance, along with all our shareholders to pursue a brighter future.

Wang Dongjin    
Hong Kong, 30 March 2022