SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 6-K
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REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 OF
THE SECURITIES EXCHANGE ACT OF 1934
For August 30, 2006
CNOOC Limited
(Translation of registrant's name into English)
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65th Floor
Bank of China Tower
One Garden Road
Central, Hong Kong
(Address of principal executive offices)
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(Indicate by check mark whether the registrant files or will file annual
reports under cover Form 20-F or Form 40-F)
Form 20-F X Form 40-F
--------- ----------
(Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of
1934.)
Yes No X
--------- ----------
(If "Yes" is marked, indicate below the file number assigned to the registrant
in connection with Rule 12g3-2(b): N/A.)
Company Announcement
--------------------
[LOGO OMITTED]
CNOOC Limited
[COMPANY NAME IN CHINESE CHARACTERS]
(Incorporated in Hong Kong with limited liability under the Companies Ordinance)
(Stock Code: 883)
ANNOUNCEMENT OF 2006 INTERIM RESULTS (UNAUDITED)
----------------------------------------------------------------------------------------------------------
FINANCIAL AND BUSINESS SUMMARY
% change over
First half of 2006 First half of 2005
Total net production of oil and gas 451,392 BOE per day 7.4%
Consolidated turnover RMB 48.34 billion 47.2%
Consolidated net profit RMB 16.28 billion 37.6%
Basic earnings per share RMB 0.39 34.5%
Diluted earnings per share RMB 0.39 39.3%
Interim dividend HK$0.12 per share 20%
----------------------------------------------------------------------------------------------------------
Chairman's Statement
Dear Shareholders,
I am glad to have the opportunity to share the operating results of the
Company for the first half of 2006 with you. In the past half year, with the
commencement of operations of a number of new projects as scheduled, the
Company's production continued to grow steadily, while the successive
discoveries in our explorations offshore China provided us with great
expectations for the future.
In the first half of 2006, the Company's crude oil and natural gas production
reached 68.3 million barrels and 77.6 billion cubic feet respectively. The
total net oil and gas production reached 81.7 million
barrels-of-oil-equivalent (BOE), representing an increase of 7.4% over the
same period last year. The net oil and gas production from offshore China
reached 74.4 million BOE, representing an increase of 7.2% over the same
period last year.
Benefiting from strong commodity prices, our average realised oil price in the
first half year reached US$62.39 per barrel, and our realised gas price was
US$3.17 per thousand cubic feet, representing an increase of 42.1% and 7.6%
respectively over the same period last year.
Our total revenue reached a record high of RMB48.3 billion, representing an
increase of 47.2% as compared with the same period last year. The sales
included sales income from oil and gas and trading income from crude oil of
RMB35.5 billion and RMB12.8 billion respectively, representing an increase of
43.4% and 59.6% respectively over the first half of last year. Our profit
before tax was RMB23.9 billion, representing an increase of 40.6% over the
same period last year, and our net profit was RMB16.3 billion, representing an
increase of 37.6% as compared with the same period of last year.
Our earnings per share in the first half year was RMB0.39. The Board of
Directors approved the payment of an interim dividend of HK$0.12 per share for
2006.
In the first half of the year, our overall production operations proceeded
smoothly. Despite temporary suspension of production at Liuhua 1-1 oilfield
due to Typhoon "Chanchu", the majority of the oil and gas fields were not
affected, and measures for production enhancement have achieved satisfactory
results, and a number of new projects have been put into operation as
scheduled. In respect of health, safety and environmental protection, our OSHA
statistical benchmarks have remained at top levels.
Our steady implementation of natural gas strategy has led to remarkable
results. During the second half of May, the
1
first shipment of liquefied natural gas from the Australian North West Shelf
Project in which we have a working interest, arrived at the Dapeng receiving
terminal in Guangdong province. This was the first shipment of liquefied
natural gas imported into the PRC. This is the start of the provision of high
quality and clean energy resources for the economic development of China.
We have enhanced our efforts in exploration research in terms of depth and
scope, and will continue to step up our investments in exploration to add new
achievements. It is encouraging that we have achieved 6 new oil and gas
discoveries in the first half of the year, and successfully assessed two oil
and gas structures.
What is more encouraging is that Husky Energy Inc., one of our PSC partners,
has made a significant discovery in the deep waters of South China Sea - Liwan
3-1, which is the first deep water discovery in PRC waters. It has proved the
tremendous potential of deep water oil and gas resources in PRC waters.
We strictly abide by the concept of emphasising economic efficiency, and
continue to make breakthroughs in overseas development. It is worth mentioning
that in April, we completed the acquisition of a 45% interest in Nigeria OML
130 block, which is our largest acquisition to date. It is believed that this
project will bring substantial reserves and production to us in the near
future, and I am very optimistic about its prospects.
At the end of April, we also took advantage of the favourable commodity
markets and stock markets by implementing a top-up placing of shares. The
market responded with great interest for subscription, generating net proceeds
of approximately HK$13.78 billion.
In the first half year, Dr. Edgar W.K. Cheng was appointed as an Independent
Non-executive Director. I hereby extend on behalf of the Board of Directors
our warm welcome to Dr. Cheng, and I believe that his professionalism and
extensive experience will be beneficial to the shareholders.
2006 has been an extraordinary year, but is also a year full of expectations.
We shall capitalize on the favourable market conditions, uphold the aim of
creating value for shareholders, and on the basis of safe production, continue
to focus on improving each segment in the business chain, striving for better
performance in exploration, development, production, engineering construction,
natural gas business, overseas expansions, health, safety and environmental
protection and cost control simultaneously, thereby delivering satisfactory
results to shareholders.
Lastly, on behalf of the Board of Directors, I would like to take this
opportunity to express my sincere gratitude to the management and all staff
for their hard work. I believe that with our concerted efforts, the Company
will bring even greater returns to our shareholders.
Fu Chengyu
Chairman & Chief Executive Officer
Hong Kong, August 29, 2006
INTERIM RESULTS
The Board of Directors of CNOOC Limited (the "Company") is pleased to announce
the unaudited interim results of the Company and its subsidiaries (the
"Group") for the six months ended 30 June 2006 (the "Period") as follows:
INTERIM CONDENSED CONSOLIDATED INCOME STATEMENT
For the six months ended 30 June 2006
(All amounts expressed in thousands of Renminbi, except per share data)
Six months ended 30 June
Notes 2006 2005
(Unaudited) (Unaudited)
REVENUE
Oil and gas sales 3 35,474,835 24,733,991
Marketing revenue 3 12,821,824 8,035,007
Other income 41,324 63,075
------------ ------------
48,337,983 32,832,073
2
------------ ------------
EXPENSES
Operating expenses (3,212,987) (2,679,754)
Production taxes (1,710,621) (1,195,322)
Exploration expenses (708,604) (611,276)
Depreciation, depletion and amortisation (3,366,327) (2,786,582)
Dismantlement (139,285) (106,951)
Special oil gain levy 4 (1,988,459) -
Impairment losses related to property, plant and equipment - (90,189)
Crude oil and product purchases 3 (12,578,730) (7,951,389)
Selling and administrative expenses (661,903) (545,289)
Others (161,250) (41,464)
------------ ------------
(24,528,166) (16,008,216)
------------ ------------
PROFIT FROM OPERATING ACTIVITIES 23,809,817 16,823,857
Interest income 372,836 208,358
Finance costs (1,097,182) (321,354)
Exchange gains, net 305,009 19,209
Investment income 302,344 60,336
Share of profits of associates 164,495 180,480
Non-operating income, net 1,236 1,154
---------- ------------
PROFIT BEFORE TAX 23,858,555 16,972,040
Tax 5 (7,580,823) (5,143,017)
------------ ------------
NET PROFIT 16,277,732 11,829,023
============ ============
EARNINGS PER SHARE
Basic 6 RMB 0.39 RMB 0.29
Diluted 6 RMB 0.39 RMB 0.28
DIVIDENDS
Interim dividend declared 11 5,326,188 2,138,128
Special interim dividend declared 11 - 2,138,128
------------- ------------
5,326,188 4,276,256
============= ============
INTERIM CONDENSED CONSOLIDATED BALANCE SHEET 30 June 2006 (All amounts
expressed in thousands of Renminbi)
30 June 31 December
Notes 2006 2005
(Unaudited) (Audited)
NON-CURRENT ASSETS
Property, plant and equipment, net 92,738,680 66,625,167
Intangible assets 7 1,463,189 1,299,643
Investments in associates 1,437,159 1,401,839
3
Available-for-sale financial assets 1,017,000 1,017,000
------------- ------------
Total non-current assets 96,656,028 70,343,649
------------- ------------
CURRENT ASSETS
Accounts receivable, net 8 6,943,653 5,277,784
Inventories and supplies 1,307,559 1,199,626
Due from related companies 3,612,333 2,099,197
Other current assets 2,762,511 806,115
Available-for-sale financial assets 10,747,154 13,846,935
Time deposits with maturity over three months 6,540,000 12,200,000
Cash and cash equivalents 18,458,128 8,991,758
------------- ------------
Total current assets 50,371,338 44,421,415
------------- ------------
CURRENT LIABILITIES
Accounts payable 9 4,624,046 2,867,678
Other payables and accrued liabilities 7,697,901 5,206,943
Current portion of long term bank loans 834,437 825,674
Due to related companies 531,049 759,934
Due to the parent company 51,613 488,482
Tax payable 4,303,419 3,467,505
------------- ------------
Total current liabilities 18,042,465 13,616,216
------------- ------------
NET CURRENT ASSETS 32,328,873 30,805,199
------------- ------------
TOTAL ASSETS LESS CURRENT LIABILITIES 128,984,901 101,148,848
------------- ------------
NON-CURRENT LIABILITIES
Long term bank loans 515,167 24,392
Long term guaranteed notes 17,513,916 16,531,780
Provision for dismantlement 4,357,530 4,161,663
Deferred tax liabilities 7,323,360 6,827,916
------------- ------------
Total non-current liabilities 29,709,973 27,545,751
------------- ------------
NET ASSETS 99,274,928 73,603,097
============= =============
CAPITAL AND RESERVES
Issued capital 10 923,629 876,635
Reserves 98,351,299 72,726,462
------------- ------------
TOTAL EQUITY 99,274,928 73,603,097
============= ============
4
INTERIM CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY For the six
months ended 30 June 2006 (All amounts expressed in thousands of Renminbi)
Share premium Statutory
Issued and capital Asset Cumulative and non-
share redemption revaluation translation distributive Other Retained
capital reserve reserve reserve reserve reserves earnings Total
(Unaudited)
Balances at 1 January 876,586 20,761,597 274,671 (19,654) 9,413,610 - 25,410,651 56,717,461
2005 as previously
reported
Cumulative adjustment for - - - - - 110,144 (110,144) -
the adoption of HKFRS 2
Cumulative adjustment for - - (274,671) - - - - (274,671)
the adoption of HKAS 16
------- ---------- --------- --------- ---------- -------- ---------- ----------
Balances at 1 January 876,586 20,761,597 - (19,654) 9,413,610 110,144 25,300,507 56,442,790
2005 as restated
------- ---------- --------- --------- ---------- -------- ---------- ----------
Changes of fair value of - - - - - 31,645 - 31,645
available-for-sale
marketable securities
Exchange realignment - - - (39,653) - - - (39,653)
------- ---------- --------- --------- ---------- -------- ---------- ----------
Total income and expenses - - - (39,653) - 31,645 - (8,008)
for the period recognised
directly in equity
Net profit for the period - - - - - - 11,829,023 11,829,023
------- ---------- --------- --------- ---------- -------- ---------- ----------
Total income and expenses - - - (39,653) - 31,645 11,829,023 11,821,015
for the period
2004 final and special - - - - - - (3,495,963) (3,495,963)
final dividends
Exercise of share options 49 4,451 - - - - - 4,500
Equity-settled share - - - - - 11,763 - 11,763
option expenses
------- ---------- --------- --------- ---------- -------- ---------- ----------
Balances at 30 June 2005 876,635 20,766,048 - (59,307) 9,413,610 153,552 33,633,567 64,784,105
as restated
======= ========== ========= ========= ========== ======== ========== ==========
(Unaudited)
Balances at 1 January 2006 876,635 20,766,048 - (512,943) 11,681,974 208,336 40,583,047 73,603,097
Changes of fair value of - - - - - (47,603) - (47,603)
available-for-sale
marketable securities
Exchange realignment - - - (358,857) - - - (358,857)
------- ---------- --------- --------- ---------- -------- ---------- ----------
Total income and expenses - - - (358,857) - (47,603) - (406,460)
for the period recognised
directly in equity
Net profit for the period - - - - - - 16,277,732 16,277,732
------- ---------- --------- --------- --------- -------- ---------- ----------
Total income and expenses - - - (358,857) - (47,603) 16,277,732 15,871,272
for
5
the period
2005 final dividends - - - - - - (4,478,495) (4,478,495)
Equity-settled share - - - - - 36,285 - 36,285
option expenses
Issuance of shares 46,994 14,195,775 - - - - - 14,242,769
------- ---------- --------- --------- ---------- -------- ---------- ----------
Balances at 30 June 2006 923,629 34,961,823 - (871,800) 11,681,974 197,018 52,382,284 99,274,928
======= ========== ========= ========= ========== ======== ========== ==========
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the six months ended 30 June 2006
(All amounts expressed in thousands of Renminbi, except number of shares and
unless otherwise stated)
1. BASIS OF PREPARATION AND ACCOUNTING POLICIES
Basis of preparation
The interim condensed consolidated financial statements for the six
months ended 30 June 2006 have been prepared in accordance with Hong
Kong Accounting Standard ("HKAS") 34 Interim Financial Reporting.
The interim condensed consolidated financial statements do not include
all the information and disclosures required in the annual financial
statements and should be read in conjunction with the Group's annual
financial statements as at 31 December 2005.
Significant accounting policies
The accounting policies adopted in the preparation of the interim
condensed consolidated financial statements are consistent with those
followed in the preparation of the Group's annual financial statements
for the year ended 31 December 2005, except for the adoption of the
following amendments mandatory for annual periods beginning on or after
1 January 2006:
HKAS 21 Amendment The effects of Changes in Foreign Exchange Rate -
Net Investment in a Foreign Operation
HKAS 39 Amendment Cash Flow Hedge Accounting of Forecast Intra-group
Transactions
HKAS 39 Amendment The Fair Value Option
HKAS 39 & HKFRSs 4 Amendments Financial guarantee contracts
HKFRSs 1 & 6 Amendments First-time Adoption of Hong Kong Financial
Reporting Standards and Exploration for and
Evaluation of Mineral Resources
HKFRS 6 Exploration for and Evaluation of Mineral Resources
HK(IFRIC)-Int 4 Determining whether an Arrangement contains a Lease
HKFRS 6 deals with the accounting for exploration for and evaluation of
mineral resources, including oil and gas. The adoption of this standard
has no significant impact on the Group's result of operations and
financial position.
HKAS 39-Financial Instruments: Recognition and Measurement-Amendment for
financial guarantee contracts - which amended the scope of HKAS 39 to
include financial guarantee contracts issued. The amendment addresses
the treatment of financial guarantee contracts by the issuer. Under HKAS
39 as amended, financial guarantee contracts are recognized initially at
fair value and generally remeasured at the higher of the amount
determined in accordance with HKAS 37 - Provisions, Contingent
Liabilities and Contingent Assets and the amount initially recognized
less, when appropriate, cumulative amortization recognized in accordance
with HKAS 18 - Revenue.
HKAS 39- Amendment for cash flow hedge accounting of forecast
intra-group transactions - which amended HKAS 39 to permit the foreign
currency risk of a highly probable intra-group forecast transaction to
qualify as the hedged item in a cash flow hedge, provided that the
transaction is denominated in a currency other than the functional
currency of the entity entering into that transaction and that the
foreign currency risk will affect the financial statements.
HKAS 39 - Amendment for the fair value option - which restricted the use
of the option to designate any financial asset or any financial
liability to be measured at fair value through profit and loss.
The adoption of these amendments did not affect the Group results of
operation or financial position.
Impact of issued but not yet effective Hong Kong Financial Reporting
Standards ("HKFRSs")
The Hong Kong Institute of Certified Public Accountants has issued a
number of new and revised HKFRSs that are not mandatory for these
financial statements. The Group has not early applied these HKFRSs in
these financial statements. Unless otherwise stated, the following
HKFRSs are effective for accounting periods beginning on 1 January 2007:
HKAS 1 Amendment Capital Disclosures
HKFRS 7 Financial Instruments: Disclosures
HK(IFRIC)-Int 8 Scope of HKFRS 2
HK(IFRIC)-Int 9 Reassessment of Embedded Derivatives
The HKAS 1 amendment will affect the disclosures about qualitative
information about the Group's objective, policies and processes for
6
managing capital; quantitative data about what the Company regards as
capital; and compliance with any capital requirements and the
consequences of any non-compliance.
HKFRS 7 will replace HKAS 32 and has modified the disclosure
requirements of HKAS 32 relating to financial instruments.
The Group expects that the adoption of the the pronouncements listed
above will not have any significant impacts on the group's financial
statement in the period of the initial application.
2. ACQUISITIONS
(i) On 8 January 2006, CNOOC Limited signed a definitive agreement with
South Atlantic Petroleum Limited ("SAPETRO") to acquire a 45 % working
interest in the offshore Oil Mining License 130 ("OML 130") in Nigeria
for US$2.268 billion in cash. On 20 April 2006, the Company completed
its acquisition for a total consideration of US$2.268 billion plus an
adjustment of US$424 million for financial, operating and capital
expenditures in the period prior to closing. OML 130 has not started
commercial production.
Details of the assets acquired are as follows:
Purchase consideration:
RMB'000
- Consideration paid 21,526,010
- Direct costs relating to the acquisition 96,439
----------
Total purchase consideration 21,622,449
==========
The assets arising from the acquisition are as follows:
RMB'000
Oil and gas properties 20,623,251
Cash-call prepayment 999,198
----------
21,622,449
==========
(ii) On 27 January 2006, the Company signed an agreement to acquire a
35% working interest in the Nigeria OPL229 for a consideration of US$60
million. The transaction is not completed as at 30 June 2006.
3. OIL AND GAS SALES AND MARKETING REVENUE
Oil and gas sales represent the invoiced value of sales of oil and gas
attributable to the interests of the Group, net of royalties and the
government share of allocable oil that is lifted and sold on behalf of
the government. Sales are recognized when the significant risks and
rewards of ownership of oil and gas have been transferred to customers.
Marketing revenues represent the sales of oil purchased from foreign
partners under production sharing contracts and the revenues from the
trading of oil through the Company's subsidiary in Singapore. The costs
of the oil sold are included in "Crude oil and product purchases" in the
condensed consolidated income statement.
4. SPECIAL OIL GAIN LEVY
During the period, a special oil gain levy ("SOG Levy") was imposed by
the Ministry of Finance of China at the progressive rates ranging from
20% to 40% on the portion of the monthly weighted average sales price of
the crude oil lifted in PRC exceeding US$40 per barrel. The SOG Levy
paid can be claimed as a deductible expense for corporate income tax
purpose and calculated based on the actual volume of the crude oil
entitled.
5. TAX
(i) Income tax
The Company and its subsidiaries are subject to income taxes on an
entity basis on the profits arising in or derived from the tax
jurisdictions in which they are domiciled and operate. The Company
is not liable for profit tax in Hong Kong as it does not have any
assessable income currently sourced from Hong Kong.
The Company's subsidiary in the PRC, CNOOC China Limited, is a
wholly -owned foreign enterprise. It is exempt from the 3% local
surcharge and is subject to the enterprise income tax of 30% under
the prevailing tax rules and regulations.
The Company's subsidiary in Singapore, China Offshore Oil
(Singapore) International Pte. Ltd., is subject to income tax at
rates of 10% and 20%, for its oil trading activities and other
income generating activities, respectively. The Company's
subsidiaries owning interests in oil and gas properties in
Indonesia along the Malacca Strait are subject to corporate and
dividend tax combined at the
7
rate of 44%. According to current tax treaty between Indonesia and
Malaysia, the Company's subsidiaries owning interests in oil and
gas properties in Indonesia are subject to corporate and dividend
tax combined at rates ranging from 43.125% to 51.875%. The
Company's subsidiary owning interests in oil and gas properties in
North West Shelf Project in Australia is subject to income tax at
rate of 30%. All of the Company's other subsidiaries are not
subject to any income taxes in their respective jurisdictions for
the period presented.
Certain of the Group's oil and gas interests in Indonesia are held
through Labuan incorporated companies. In May 2006, certain
amendments to the tax treaty between Indonesia and Malaysia were
agreed by the respective Ministers of the two countries whereby
certain current reduced tax rates enjoyed by Labuan companies
would no longer be available. The proposed amendments will need to
be ratified by the two countries and will take effect two months
after the ratification. It is uncertain when the ratification will
be completed. If the ratification comes into effect in 2006 and
the Group is not able to reorganise the holding structure of the
oil and gas interests to an equivalent tax structure, the combined
corporate and dividend income tax rates of certain of its
Indonesian operations will increase from 43.125% to 48% and from
51.875% to 56% respectively. This change in income tax rate, had
it been applicable as of 30 June 2006, would have the effect of
increasing the deferred tax expense and the current tax expense of
the Group by approximately RMB272 million and RMB48 million
respectively, with a corresponding increase in the deferred tax
and current tax liabilities as of 30 June 2006 by the same
respective amount.
(ii) Other taxes
The Company's PRC subsidiary pays the following other taxes:
- Production tax equal to 5% of independent production and
production under production sharing contracts; and
- Business tax ranging from 3% to 5% on other income.
6. EARNINGS PER SHARE
Six months ended 30 June
2006 2005
(unaudited) (unaudited)
Earnings:
Net profit from ordinary activities attributable to shareholders for RMB16,277,732,000 RMB11,829,023,000
the period for the purpose of basic earnings per share
Interest expenses and losses recognised on the derivative component RMB1,131,648,000* RMB94,649,000
of convertible bonds
------------------ -----------------
Net profit from ordinary activities attributable to shareholders for RMB17,409,380,000* RMB11,923,672,000
the period for the purpose of diluted earnings per share
================== =================
Number of shares:
Weighted average number of ordinary shares for the purpose of basic 41,054,675,375 41,052,375,275
earnings per share before effects of new shares issued and share
options exercised
Effect of new shares issued 627,825,214 -
Effect of share options exercised - 1,946,406
------------------ -----------------
Weighted average number of ordinary shares for the purpose of basic 41,682,500,589 41,054,321,681
earnings per share
Effect of dilutive potential ordinary shares under the share option 58,746,128 74,986,148
schemes
Effect of dilutive potential ordinary shares for convertible bonds 1,303,469,732* 1,183,066,002
------------------ -----------------
Weighted average number of ordinary shares for the purpose of diluted 43,044,716,449* 42,312,373,831
earnings per share
================== =================
Earnings per share - Basic RMB0.39 RMB0.29
================== =================
- Diluted RMB0.39* RMB0.28
================== =================
* Since the diluted earnings per share amount is increased when
taking the convertible bonds into account, the convertible bonds
had an anti-dulutive effect on the basic earnings per share for
the period and are ignored in the calculation of diluted earnings
per share. Therefore, diluted earnings per share amounts are based
on the net profit for the period of RMB16,277, 732,000, and the
weighted average of 41,741,246,717 ordinary shares.
7. INTANGIBLE ASSETS
During the period, the North West Shelf Project has started commercial
production. Accordingly, the intangible asset regarding the gas
processing rights has been amortised using the unit of production
method.
8. ACCOUNTS RECEIVABLE, NET
The customers are required to make payment within 30 days after the
delivery of oil and gas. As at 30 June 2006 and 31 December 2005,
substantially all of the accounts receivable were aged within six
months.
9. ACCOUNTS PAYABLE
As at 30 June 2006 and 31 December 2005, substantially all of the
accounts payable were aged within six months.
8
10. SHARE CAPTIAL
Number of shares Share capital Issued share
capital
Equivalent of
Shares HK$'000 RMB'000
Authorised:
Ordinary shares of HK$0.02 each as at 30 June 2006 and 31 75,000,000,000 1,500,000
December 2005
Issued and fully paid:
Ordinary shares of HK$0.02 each as at 1 January 2005 41,052,375,275 821,048 876,586
Exercise of options 2,300,100 46 49
-------------- ----------- --------
As at 31 December 2005 (audited) 41,054,675,375 821,094 876,635
Issue of new shares 2,272,727,273 45,454 46,994
-------------- ----------- --------
As at 30 June 2006 (unaudited) 43,327,402,648 866,548 923,629
============== =========== =======
11. DIVIDENDS
On 29 August 2006, the Board of Directors declared an interim dividend of
HK$0.12 per share (2005: HK$0.05 per share), totaling HK$5,199,426,000
(RMB5,326,188,000) (2005: RMB2,138,128,000). No special interim dividend
was declared (2005: HK$0.05 per share, totaling RMB2,138,128,000).
12. SEGMENT INFORMATION
The Group is organised on a worldwide basis into three major operating
segments and collected its information on this basis. The Group is
involved in the upstream operating activities of the petroleum industry
that comprise independent operations, production sharing contracts with
foreign partners and trading business. These segments are determined
primarily because the senior management makes key operating decisions
and assesses performance of the segments separately. The Group evaluates
the performance of each segment based on profit or loss from operations
before income taxes.
The Group mainly engaged in the exploration, development and production
of crude oil and natural gas offshore China. Any activities outside the
PRC are mainly conducted in Indonesia, Australia, Canada, Singapore,
Myanmar and Nigeria.
The following table presents revenue and profit information for the
Group's business segments.
Independent operations Production sharing contracts Trading business
Six months ended 30 June Six months ended 30 June Six months ended 30 June
2006 2005 2006 2005 2006 2005
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
RMB'000 RMB'000 RMB'000 RMB'000 RMB'000 RMB'000
Segment revenue
Sales to external
customers:
Oil and gas 17,170,172 10,202,301 18,304,663 14,531,690 - -
sales
Marketing - - - - 12,821,824 8,035,007
revenues
Other income 5,108 5,367 34,449 57,420 - -
---------- ---------- ---------- ---------- ---------- ---------
Total 17,175,280 10,207,668 18,339,112 14,589,110 12,821,824 8,035,007
========== ========== ========== ========== ========== =========
Segment results
Net profit 11,127,781 6,826,573 12,958,826 10,097,885 240,218 83,618
========== ========== ========== ========== ========== =========
Unallocated Consolidated
Six months ended 30 June Six months ended 30 June
2006 2005 2006 2005
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
RMB'000 RMB'000 RMB'000 RMB'000
Segment revenue
Sales to external
customers:
Oil and gas - - 35,474,835 24,733,991
sales
Marketing - - 12,821,824 8,035,007
revenues
Other income 1,767 288 41,324 63,075
----------- ----------- ---------- ----------
Total 1,767 288 48,337,983 32,832,073
=========== =========== ========== ==========
Segment results
Net profit (8,049,093) (5,179,053) 16,277,732 11,829,023
=========== =========== ========== ==========
13. SUBSEQUENT EVENT
(i) Subsequent to 30 June 2006, CNOOC Limited, as Guarantor, has
delivered a Guarantee dated 7 August 2006 in favor of Mizuho
Corporate Bank, Ltd., as facility agent for and on behalf of
various international commercial banks under a US$1,065.5 million
commercial loan agreement dated as of 31 July, 2006 in connection
with the Tangguh Project in Indonesia. CNOOC Limited is the parent
company of CNOOC Wiriagar Ltd. and CNOOC Muturi Ltd. which are
project sponsors to the Tangguh Project. Pursuant to the Guarantee,
CNOOC Limited guarantees the payment obligations of the trustee
borrower under the subject loan agreement and is responsible for
41.62383% of the guaranteed obligation, subject to a maximum cap of
US$487,861,984.76. BP Corporation North America Inc., parent of
certain BP related entities (also project sponsors to the Tangguh
Project), pursuant to a separate guarantee between itself and the
facility agent, also dated 7 August, 2006, is responsible for the
remainder 58.37617% of the guaranteed obligation.
(ii) Dr. Kenneth S. Courtis, who retired as an Independent
Non-executive Director of the Company with effect from 24 May 2006
following conclusion of the Company's annual general meeting,
exercised his right to subscribe for 1,150,000 shares of options
granted under the 2002 Share Option Scheme of the Company
subsequent to 30 June 2006, and the allotment was completed on 2
August 2006. After that, Dr. Kenneth S. Courtis no longer holds
any share options of the Company.
9
AUDIT COMMITTEE
The Audit Committee has reviewed together with the management the accounting
principles and practices adopted by the Group and discussed the internal
control and financial reporting matters. The interim results for the six
months ended 30 June 2006 are unaudited, but have been reviewed by Ernst &
Young in accordance with Statement of Auditing Standards 700 "Engagement to
review interim financial reports", issued by the Hong Kong Institute of
Certified Public Accountants. The interim financial report has been reviewed
by the Audit Committee.
PURCHASE, SALE OR REDEMPTION OF THE COMPANY'S LISTED SECURITIES
There has been no purchase, sale or redemption of the Company's listed
securities by the Company or its subsidiaries during the six months ended 30
June 2006.
CODE ON CORPORATE GOVERNANCE PRACTICES
The Company has complied with the code provisions of the Code on Corporate
Governance Practices (the "Code") as set out in Appendix 14 of the Listing
Rules throughout the six months ended 30 June 2006, except for the deviations
from the code provisions ("Code Provision") A.2.1 and A.4.1 only. The
following summarizes the requirements under the relevant Code Provisions and
the Company's reasons for such deviations.
Code Provision A.2.1
Under Code Provision A.2.1, the roles of the chairman and chief executive
officer are required to be separated and not to be performed by the same
individual.
Mr. Fu Chengyu ("Mr. Fu") is the Chairman of the Board. In addition to the
role of the Chairman, the role of Chief Executive Officer is also designated
to Mr. Fu. This constitutes a deviation from Code Provision A.2.1. The reason
for such deviation is set out below.
The Company is engaged in the oil and gas exploration and production business
which is different from integrated oil companies engaging in both upstream and
downstream operations. In light of this, the Board considers that the interest
of the Company's oil and gas exploration and production business is best
served when strategic planning decisions are made and implemented by the same
person. The Company's Nomination Committee also agreed that it is in the best
interest of the Company that the roles of the Chairman of the Board and Chief
Executive Officer be performed by the same individual.
In light of the above, the Company does not currently propose to designate
another person as the Chief Executive Officer of the Company.
Code Provision A.4.1
Under Code Provision A.4.1, non-executive directors should be appointed for a
specific term and be subject to re-election.
None of the existing Independent Non-executive Directors of the Company is
appointed for a specific term. This constitutes a deviation from Code
Provision A.4.1. However, all the Directors of the Company (executive and
non-executive) are subject to the retirement provisions under article 97 of
the Articles of Association of the Company ("Article 97"). According to
Article 97, one-third of the Directors for the time being must retire from the
office by rotation at each annual general meeting. The Company has observed
the need for good corporate governance practices and the incumbent Independent
Non-executive Directors of the Company, except Dr. Cheng who was elected as an
Independent Non-executive Director of the Company for the first time by the
shareholders at the annual general meeting of the Company in May 2006, have
all retired and stood for re-election in the past three years. Therefore, the
Company considers that sufficient measures have been taken to ensure that the
Company's corporate governance practices are no less exacting than those in
the Code.
MODEL CODE FOR SECURITIES TRANSACTIONS BY DIRECTORS OF LISTED ISSUERS
The Company has adopted a code of ethics ("Code of Ethics") incorporating the
Model Code for Securities Transactions by Directors of Listed Issuers (the
"Model Code") as set out in Appendix 10 to the Listing Rules. All Directors
have confirmed that they complied, during the six months ended 30 June 2006,
with the Company's Code of Ethics and the required standards set out in the
Model Code.
10
CLOSURE OF REGISTER OF MEMBERS
The Register of Members of the Company will be closed from 15 September 2006
to 22 September 2006 (both days inclusive) during which no transfer of shares
of the Company can be registered. In order to qualify for the interim
dividend, all transfers, accompanied by the relevant share certificates, must
be lodged with the Company's registrar, Hong Kong Registrars Limited, Shops
1712-1716, 17th Floor, Hopewell Centre, 183 Queen's Road East, Wan Chai, Hong
Kong, not later than 4:00 p.m. on 14 September 2006. The interim dividend will
be paid on or around 29 September 2006.
As at the date of this announcement, the Board comprises of:
Executive Directors Independent Non-executive Directors
Fu Chengyu (Chairman) Edgar W. K. Cheng
Luo Han Sung Hong Chiu
Zhou Shouwei Evert Henkes
Cao Xinghe Lawrence J. Lau
Wu Zhenfang Tse Hau Yin, Aloysius
Wu Guangqi
Yang Hua
By Order of the Board
CNOOC Limited
Victor Zhikai Gao
Company Secretary
Hong Kong, 29 August 2006
FORWARD-LOOKING STATEMENTS
Certain statements contained in this announcement may be viewed as
"forward-looking statements". Such forward-looking statements are not
historical facts, including statements about beliefs and expectations of the
directors of the Company on the Company and its development and future plans.
These forward-looking statements reflect the Directors' current views with
respect to future events and are not a guarantee of future performance, and
therefore shareholders and potential investors should not place undue reliance
on them. The Directors of the Company undertake no obligation to update or
revise publicly any of these forward-looking statements, whether in light of
new information, future events or otherwise. Forward-looking statements
involve inherent risks and uncertainties. Shareholders and potential investors
are cautioned that a number of factors could cause actual results to differ
materially from those contained in any forward-looking statement. Such factors
include, but are not limited to, changes in the Chinese economic, political
and social conditions and government policies and in the oil and gas industry.
11
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
as amended, the registrant has duly caused this report on Form 6-K to be
signed on its behalf by the undersigned, thereunto duly authorized.
CNOOC Limited
By: /s/ Victor Zhikai Gao
---------------------
Name: Victor Zhikai Gao
Title: Company Secretary
Dated: August 30, 2006