COSL Announces 2005 Annual Results(33230)

Profit from Operations Increased 22.8% to RMB850.3 million

Highlights

n Turnover increased by 25.2% to RMB4,788.8 million

n Profit from operations increased by 22.8% to RMB850.3 million

n Net profit surged 17.0% to RMB821.0 million

n Earnings per share were RMB20.55 FEN

n Proposed final dividend per share of RMB4.11 FEN

Financial Summary

	For the year ended December 31
	2005 RMB million	2004 RMB million	Change (%)
Turnover	4,788.8	3,824.0	25.2
Profit from operations	850.3	692.2	22.8
Net Profit attributable to shareholders	821.0	701.7	17.0
Earnings per share	RMB20.55 FEN	RMB17.56 FEN	17.0

[22 March 2006, Hong Kong] China Oilfield Services Limited ( COSL or the Company ; stock code: 2883), the leading integrated oilfield services provider in the offshore China market, announced its annual results for the year ended December 31, 2005.

Turnover in 2005 amounted to RMB4,788.8 million, representing an increase of 25.2% over that of 2004. The Company s four business segments, namely drilling services, well services, marine support and transportation services as well as geophysical services, achieved remarkable growth with turnover increasing by 28.5%, 36.4%, 12.2% and 14.5%, respectively. Net profit amounted to RMB821.0 million, representing an increase of 17.0% from RMB701.7 million recorded in 2004. The Board of Directors has recommended a final dividend of RMB4.11 FEN per share for the year ended December 31, 2005.

Commenting on the encouraging results for the year 2005, Mr. Yuan Guangyu, CEO and President of the Company, said, In 2005, the economy of the PRC continued to expand, triggering enormous energy demands. As the largest integrated offshore oilfield services provider in the offshore China market, we capitalized on the favourable market conditions and achieved significant growth in 2005.

Turnover from drilling services amounted to RMB2,205.7 million in 2005, representing a year-on-year increase of 28.5%. The increase was mainly attributable to the increase in drilling day rate and services provided compared with the same period last year. Meanwhile, there was an increase in well workover services provided to our customers.

During the year under review, the Company won an integrated services contract from CNOOC SES Ltd in Indonesia with a total contract value of approximately US 98.4 million. The Company s success in winning this contract represents a significant step towards opening up the overseas market to the Company and will serve as a cornerstone for our expanding service dimensions into a diversified market portfolio.

Turnover from well services for the year 2005 amounted to RMB1,165.3 million, representing an increase of 36.4% as compared to 2004. The substantial increase in turnover was mainly due to the increase in sales revenue from well chemical materials and revenue derived from directional drilling, drilling fluids and logging.

Turnover from marine support and transportation services for the year 2005 amounted to RMB867.7 million, representing an increase of 12.2% over 2004. The growth was mainly due to the delivery of vessels in 2004, as well as the newly-built vessel delivered during the year, which contributed to the increase in operating days for our vessels for marine support services and the increase in day rate.

Turnover from geophysical services for the year 2005 amounted to RMB550.0 million, representing an increase of 14.5% over 2004. This increase was mainly due to an increase in data collection activities in the South China Sea and overseas, upgrading of the seismic data collection system of one seismic vessel which resulted in improved efficiency, as well as increased 2D and 3D data collection activities compared to 2004.

Based on its Integrated Project Management ( IPM ) strategy, the Company made a number of breakthroughs in the areas of drilling, well completion, well workover, logging and oilfield production. It brought along related technical services to satisfy the different needs of customers, increased the Company s operating revenue and enhanced the effect of the synergy on the Company.

In 2005, COSL undertook integrated service projects of production adjustment wells in Bohai, drilling wells in Yuedong and workover wells in Jidong, Bohai. We signed 15 integrated service contracts in total and the aggregatecontract value amounted to RMB887.0 million, representing 18.5% of the total operating revenue for 2005, an increase of 24.

6% when compared to RMB712.0 million for 2004.

Our overseas business also achieved considerable growth in 2005. The operating revenue of the Company from overseas markets for the full year amounted to RMB436.0 million, accounting for 9.1% of the total operating revenue for 2005, representing an increase of 87.1% as compared to RMB233.0 million for 2004.

In respect of our drilling business, COSL secured drilling contracts for its semi-submersible rigs Nanhai No. 2 and Nanhai No. 6 in Myanmar and Australia, respectively. The Company also succeeded in signing a cooperative agreement with Northern Drilling Company of Iran. In addition, we also secured a two-year service contract with Philippine National Oil Corporate for cementing of 28 geothermal wells, and an oilfield technical service contract in drilling fluids and cementing, etc.

in Myanmar.

Mr. Yuan concluded, In view of the favorable conditions for the growth of oil and gas well exploration and oil field services, we will capitalize on the opportunities in oil and gas business development. We will strive to explore overseas markets such as Southeast Asia and establish our foothold in both domestic and foreign markets.

Looking forward to the coming year, we will continue to enhance our profitability as well as productivity, and speed up our efforts in developing deep offshore services. We will further expand our IPM services and rapidly boost our capability in oilfield services. We will also continue to establish our market position in international services, and ultimately, continue our efforts in maintaining a healthy, safe and environmentally-friendly workplace, to maximize value for our shareholders, customers and employees.

-End-

COSL Announces 2005 Annual Results

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