Dominant position in China's offshore oil and gas market. Increasingly diversified reserve base. Satisfactory reserve life with a strong record of exploration discoveries. Exposure to volatility in oil and gas prices. Strong and improving cash flows. Positive free cash flows despite an increase in capital expenditure. Adequate liquidity. The negative outlook on CNOOC Ltd. reflects the outlook on the sovereign credit rating on China. We could lower the rating on CNOOC Ltd. if we downgrade China. Other triggers include the central government reducing its support to the company because of a change in the government's strategies or priorities, or CNOOC Ltd.'s stand-alone credit profile falling to 'b+' or below, from 'a-'. We believe both scenarios are unlikely. We may revise
