Standard & Poor's said today that China-based CNOOC Ltd.'s (foreign currency; BBB/Stable/--) announcement of a 23% decline in net profit for fiscal 2001 does not affect its ratings on the company. Despite the earnings decline, the company's internally generated cash flow and debt coverage ratio remain strong. The ratings on CNOOC Ltd. take into consideration an expected decline in earnings due to an overall drop in the price of oil and the end of a tax break. CNOOC Ltd. has aggressive capital expenditure plans totaling US$3.2 billion over 2002 and 2003, the majority of which will be used to bring on stream large undeveloped reserves. CNOOC Ltd.'s internally generated cash, together with cash reserves, should be sufficient to cover the
