COSL Constructs the Second 400 Feet Jack-up Rig

(14 July 2005 Beijing) China Oilfield Services Limited ( COSL or the Company ; Stock code: 2883) announced today its collaboration with Dalian New Shipbuilding Heavy Industry Company Limited ( DNS ), a subsidiary of China Shipbuilding Industry Corporation ( CSIC ), to construct the second 400 feet jack-up rig.

On 30 June 2005, COSL signed a Cooperation Framework Agreement with DNS for the construction of a second JU2000 Enhanced Style drilling unit. According to the Cooperation Framework Agreement, on the condition that the construction schedule will not be affected, both COSL and DNS have rights to come up with an optimized design based upon as-built drawings of the first jack-up rig which has been under construction since March 2004. The proposal will be implemented upon mutual consent of both parties.

DNS will be the prime contractor for the second jack-up rig construction project, responsible for EPCI (engineering, procurement, construction, installation and commissioning) with a total lump sum (excluding VAT) of approximately USD147 million. As per the construction schedule, the jack-up rig will be delivered by the end of December 2007.

Mr. Yuan Guangyu, CEO of COSL, stated, In view of the increasing demand for energy in global markets and to cater to the demand for offshore oil and gas exploration and production as well as to capture the immense opportunities from overseas development, we endeavor to seize this golden opportunity to increase injection in enhancing our drilling equipment. We are confident that the launch of the construction project will further fortify our integrated equipment capacity, improve our drilling fleet structure and ultimately, strengthen our competitiveness in the international markets.

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Background Information about the Company

China Oilfield Services Limited ( COSL , stock code: 2883) is the leading integrated oilfield services provider in the offshore China market. Its services cover each phase of offshore oil and gas exploration, development and production, including drilling, well services, marine support and transportation and geophysical services. COSL has been listed on the Main Board of the Hong Kong Stock Exchange since November 20, 2002. Since March 26, 2004, COSL's stocks can be traded by means of American Depositary Receipts in the United States. The ticker symbol is CHOLY.

As at 31 December 2004, COSL owns 13 drilling rigs, including 10 jack-ups and 3 semi-submersibles while operating one leased jack-up rig. In addition, COSL owns and operates the largest and most diverse fleets offshore China, including 68 vessels and 5 oil tankers, 6 seismic vessels, and 3 geo-tech survey vessels. It also has large arrays of modern facilities and equipment for logging, drilling fluids, directional drilling, cementing, well completion and other well work-over services.

Majority of COSL s business is conducted in offshore China, in North and South America, the Middle East, offshore Africa and offshore Europe. COSL and its employees worldwide are dedicated to providing premier quality services, while adhering to the highest health, safety and environmental standards. COSL has obtained the ISO 9000 and ISM (International Safety Management) certifications. COSL also plans to obtain certifications under the ISO 14000 environmental management standard as well as the OSHA 18000 occupational health and safety standards.

For further enquires, please contact:
Mr. Chen Weidong
Tel: 86-10-84521686
Email: chenwd@cnooc.com.cn

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