COSL Enjoys Tax Incentives Granted to High and New Technology Enterprises

(June 26, 2003 Beijing) China Oilfield Services Limited ( COSL ; SEHK: 2883) announced today that it was granted a reduced corporate income tax rate of 15% for the fourth quarter of 2002.

Pursuant to the Notice Relating to the Corporate Income Tax Relief Policy issued by the PRC Ministry of Finance and State Administration Taxation ( SAT ) in 1994, hi-new tech enterprises registered in a State Council approved Hi-New Tech Development Zone, as verified by the local tax bureau, are eligible to enjoy a preferred corporate income tax rate of 15%. In April 2003, COSL applied to the Administrative Committee of the Tianjin Hi-New Tech Zone and the Tianjin State Tax Bureau to qualify for this benefit for the year 2002.

COSL s application has been approved recently. For the reason that COSL was registered in September 2002 with the place of registration at Tianjin Tanggu Marine Hi-New Tech Development Area ( TMHT ), COSL will enjoy the 15% corporate income tax rate for the period of October through December 2002.

From January through September 2002, COSL was subject to a standard corporate income tax rate of 33%, and paid taxes in the amount of RMB 204 million. From October through December 2002, COSL was only subject to a corporate income tax rate of 15% and paid taxes in the amount of RMB 26 million. The lower tax rate resulted in a RMB 31 million reduction in COSL s tax liability for the fourth quarter 2002.

Next year, COSL again plans to apply for the corporate income tax incentive program applicable for the year 2003.

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