COSL Announces 2005 Interim Results

Net Profit Reached RMB 555.9M
Proposed Special Dividend of RMB 1.39 FEN per share

Highlights

Financial Summary

[29 August, 2005, 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 interim results for the period ended 30 June, 2005.

During the period under review, turnover amounted to RMB 2,372.5 million, representing an increase of 32.1% as compared with the same period last year. All of the Company s four business segments namely, drilling services, well services, marine support and transportation services and geophysical service achieved significant growth with turnover increased by 32.9%, 58.8%%, 17.0% and 8.0% respectively. Net profit amounted to RMB 555.9 million, representing an increase of 22.7% from that of RMB 453.1 million recorded in 2004. The Board of Directors has recommended interim special dividend of RMB 1.39 Fen per share for the period ended 30 June, 2005.

Commenting on the 2005 interim results, Mr. Yuan Guangyu, CEO and President of the Company, said, Benefiting from a strong worldwide economic growth and high oil prices, the E&P activities offshore China remained active. For drilling service, the increase in turnover was mainly attributable to an increase in drilling day rate as well as an increase in well workover services provided to our customers. In order to further expand our drilling capacity, we entered into a contract for the construction of the second 400 feet jack-up rig on 30 June 2005. Regarding the development of overseas market, the Company awarded a five-year well workover service contracts in Indonesia with a total contract amount of approximately US 98.36 million. During the period under review, we utilized our comprehensive chain of service and secured a total of six integrated project management services contracts, with a total contract amount of RMB540 million, representing a 25.6% increase compared to RMB430 million over the same period last year.

During the period under review, turnover from drilling services amounted to RMB1,061.0million, representing an increase of 32.9%. COSL drilled a total of 113 wells, representing a decrease of 13 wells compared to the same period last year. Amongst, 78 wells in the Bohai Bay, 22 wells in the South China Sea and13 wells in Indonesia.

Of these wells, 87 were development wells, representing a decrease of 6 wells compared to 93 wells in the same period last year, while 26 were exploration wells, presenting a decrease of 7 wells compared to 33 wells in the same period last year. The decrease was mainly attributable to the increased drilling activities with longer drilling cycle were arranged in the first half of the year.

The average day rate for drilling rigs was US 42,931/day, representing a 21.7% increase compared to the same period last year. The average utilization rate for drilling rigs during the period under review was 99.1%.

Turnover from well services amounted to RMB626.3 million in the first half of 2005, representing an increase of RMB232.0 million, or 58.8%, compared to RMB394.3 million over the same period last year. The substantial increase in turnover was mainly attributable to higher revenue derived from directional drills, drilling fluids, logging and material sales as compared to the same period last year.

During the period under review, turnover from marine support and transportation services amounted to RMB427.6million, representing an increase of RMB62.2million, or 17.0%, compared to RMB365.4million over the same period last year. The increase was mainly attributable to the operation of six newly-built vessels delivered in the second half of last year, which contributed to the increase of 949 days of the total operating days to 11,444 days. Total number of servicing days increased to 11,656 days, compared to 10,615 servicing days in the same period last year. Average utilization of marine support vessels was 98.2%, compared to 98.9% over the same period last year.

Turnover from geophysical services amounted to RMB257.6 million in the first half of 2005, representing an increase of RMB19.0million, or 8.0%, compared to RMB238.6 million over the same period last year. This increase was mainly attributable to an increase in data collection activities in South China Sea and overseas, upgrading of the seismic data collection system of one seismic vessel which resulted in improved efficiency.

2D data collection increased by 6.5% compared to 19,589km over the same period last year, primarily due to a growth in work volume in the South China Sea and overseas.

In order to expand its market prospect for the oilfield services, COSL added one geotech research vessel into its fleet in February 2005. The vessel will conduct inspection and maintenance activities for sub-sea pipeline, thus led to the expansion of marine geotech survey services into pipeline inspection services.

Mr. Yuan concluded, Global demand for oil continues to rise, we are confident that the E&P activities and oilfield services will be able to ride on their momentum. We will continue to lead in the offshore China market, while looking out for suitable expansion in overseas markets, including Southeast Asia. As we enter a new economic cycle, we strive to stay abreast with market trends while strengthening our market position, to strengthen our management and to expand our market share, in order to continual growth in overall profitability.

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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 30 June 2005, COSL operates 14 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 4 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

iPR ASIA LTD
Natalie Tam/Antonia Au/ Katie Tsui/ Sharis Siu
Tel: 2136 6182/ 2136 6176/ 2136 6955/ 3170 6753
Fax: 2136 6068
Email: natalietam@iprasia.com.hk/antoniaau@iprasia.com.hk/ katietsui@iprasia.com.hk / sharissiu@iprasia.com.hk

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