(Hong Kong, March 7, 2003) - CNOOC Limited (together with its subsidiaries, the "Company", SEHK: 883, NYSE: CEO) is pleased to announce that it has entered into an agreement with BG International Limited (BG), a wholly owned subsidiary of BG Group, to acquire from BG a 1/12th (8.33%) interest in the North Caspian Sea Project (the "Project") in Kazakhstan for US$615 million.
The Project covers approximately 5,600 square kilometers of the Caspian Sea and includes the highly attractive Kashagan field, the Kalamkas discovery and three other significant exploration prospects: Kairan, Aktote and Kashagan SW. The Kashagan field is one of the largest oil and gas discoveries in the world and the largest in the past 30 years. Located in one of the world′s most prolific oil and gas basins, the field contains estimated recoverable reserves of up to 13 billion barrels of oil equivalent. The Project is owned by a world class consortium of partners including ENI-Agip (operator), BG Group, ConocoPhillips, ExxonMobil, INPEX, Shell and TotalFinaElf.
"This acquisition allows the company to gain a firm foothold in one of the world′s most prolific oil and gas basins and provides the potential for significant reserve growth and visibility in long-dated production growth," said Mr. Wei Liucheng, Chairman and CEO of CNOOC Limited. "We look forward to partnering with many of the world′s top oil and gas companies in what will be the largest oil and gas project in Kazakhstan."
"This transaction further demonstrates CNOOC′s opportunistic approach to capture value enhancing transactions and strengthens the Company′s long-term growth prospects. Estimated low opex and long production life are expected to result in strong cash flow to CNOOC and its shareholders for many years to come" commented Dr. Mark Qiu, CFO and SVP of CNOOC Limited.
Completion of the acquisition is subject to the satisfaction of a number of conditions including the waiver of certain preemption rights and receipt of governmental approvals.
Credit Suisse First Boston and Merrill Lynch are acting as financial advisors to the Company in connection with the transaction.
