Beijing, China, April 26, 2000 --- CNOOC today signed a Petroleum Contract with the Shell Exploration China Limited (SECL) to explore for oil in a 1,895 sq km block (15/12) of the South China Sea.

The block lies about 80 kilometers south-east of Hong Kong in the Pearl River Mouth Basin next to the Xijiang Oil Fields, where CNOOC Limited (the "Company"), with its partners Shell and Phillips is currently producing more than 90,000 barrels of oil per day.

The new contract commits Shell drilling one exploration well in Block 15/12 during the initial exploration period of two years and three months. There are two subsequent optional exploration periods which contain further commitments of three exploration wells over four years.

The contract was signed at the Kempinski Hotel in Beijing by Cao Yunshi, General Counsel for CNOOC, and Dr. Martin Bradshaw, Managing Director of Shell Exploration Limited. CNOOC President Mr. Wei Liucheng, and the Chairman of the Shell Companies in North East Asia, Brian Anderson were also presented in the signing.

Under the terms of the contract SECL will be responsible for all exploration and appraisal costs. CNOOC will have the option to take up to a 51 per cent equity stake in the block prior to any field development.

Mr. Fu Cheng Yu, Chief Operating Officer, said: " The eastern South China Sea is Company′s most important oil producing area. This agreement demonstrates Company and partner have confidence that the Xijiang resources base continue to have potential development opportunity with improved understanding to the existing oilfields."

CNOOC Limited is the largest producer of oil and gas offshore China and is also one of the largest independent oil and gas exploration and production companies with the net proved reserves of approximately 1.8 billion boe as of December 31, 1999.