The rating on CNOOC Ltd. reflects the implicit support the company derives from the Chinese government, the company's good reserve growth prospects, its long-life reserves, and its competitive cost structure. These strengths are partly offset by the volatile nature of the independent oil and gas exploration and production sector, which requires large ongoing investment, and the company's aggressive overseas expansion strategy, particularly into higher-risk sovereign regions. The group is considered to be a commercial-related institution under Standard&Poor's government-related entities rating methodology, and the ratings are based on the CNOOC group members' underlying credit quality and government support. Although the long-term ratings on China National Offshore Oil Corp. (CNOOC; A+/Stable/--), the parent of CNOOC Ltd., and its subsidiaries are
