CNOOC Ltd.

Dominant position in China's offshore oil and gas industry. Increasingly diversified reserve base. Satisfactory reserve life and good record of production growth. Exposure to volatility in oil and gas prices. Robust financial performance and stringent cost control. Positive free cash flows despite aggressive capex plans. Adequate liquidity. The stable outlook on CNOOC Ltd. reflects the stable outlook on the sovereign credit rating on China. It also reflects our expectation that the company will maintain its dominant position in China's offshore oil and gas exploration and production (E&P) industry for the next 12-24 months at least. The improving oil prices and CNOOC Ltd.'s stringent cost control have resulted in a large buffer for the rating. We could lower the rating on

...Business Risk: Strong Financial Risk: Modest + Dominant position in China's offshore oil and gas industry. + Increasingly diversified reserve base. + Satisfactory reserve life and good record of production growth. + Exposure to volatility in oil and gas prices. + Robust financial performance and stringent cost control. + Positive free cash flows despite aggressive capex plans. + Adequate liquidity....

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