BEIJING, March 7, 2000 --- CNOOC Limited ("the Company") announces that the Ministry of Foreign Trade and Economic Cooperation ("MOFTEC") of China approves today the contract between CNOOC and Bligh Oil & Minerals to explore for oil in a 608 sq km block of Beibu Gulf in the South China Sea. The effective date of the contract for work program purposes will therefore be April 1, 2000.

The 22/12 block lies south - west of Hong Kong in western South China Sea and next to the currently second largest producing area of the Company, Weizhou Block where daily net production averaged 34,500 barrels of crude oil for the year of 1999.

The initial term of the contract provides for a two-year period, during which Bligh is committed to the drilling of a 2,250-meter exploration well. The contract award follows a 2D and 3D seismic survey in this block.

Under the terms of the contract Bligh will be responsible for all exploration and appraisal costs. The Company will have the option to take up to a 51 per cent of participating interest in this block prior to any commercial development therein.

Mr. Fu Cheng Yu, Chief Operating Officer and Executive Vice President of CNOOC Limited, said: "This agreement demonstrated our continued commitment to cooperating profitably with foreign companies." Meanwhile, the Company and Bligh staffs have been preparing for the drilling in the block and rapid progess has been made in this regard.

CNOOC Limited is the largest producer of oil and gas offshore China and one of the largest oil and gas exploration and production companies in the world with net proved reserves of approximately 1.8 billion barrels-of-oil equivalent as of December 31, 1999.