(Hong Kong, July 20, 2004) - CNOOC Limited (together with its subsidiaries, the "Company", NYSE: CEO, SEHK: 883) announced today that Caofeidian ("CFD") 11-1/11-2 have come on stream successfully ahead of schedule. It is expected that gross production will reach 15,000 - 20,000 barrels of oil per day within the next several months.

CFD 11-1/11-2 is located on block 04/36 in the western part of Bohai Bay in 20 meters of water. Operated by Kerr-McGee, the Hai Yang Shi You 112, a floating production, storage and offloading facility (FPSO), is the main production platform. The FPSO can process up to 80,000 barrels of oil and 350,000 barrels of gross liquids a day. It can store up to one million barrels of oil for offloading to shuttle tankers. The first phase of the development includes one 48-slot wellhead gathering platform and one 24-slot wellhead platform.

Peak production of CFD 11-1/11-2 is expected to reach 40,000 to 45,000 barrels of oil per day by mid-2005.

Mr. Zhou Shouwei, President of the Company commented, "Time and again, our partners and CNOOC prove that we can continue to deliver results, however demanding they may be. Let me congratulate our partner for a job well done."

The Company owns 51% interest of the field. Kerr-McGee is the operator with 40% interest. Sino-American Energy Corp., a subsidiary of Ultra Petroleum, owns the remaining 9% interest.