1

2002 Results Announcement2002 Results Announcement

2 April 20032 April 2003

China Oilfield Services LimitedChina Oilfield Services Limited

2

OverviewOverview

3

2002 - A Landmark Year for COSL2002 - A Landmark Year for COSL

IPO in November 2002

COSL shares were successfully listed on the Main Board of HKSE, raising net proceeds of US$286 million

Strong growth across all business segments in 2002

Revenue: ~ 15% increase

Net Income: ~ 30% increase

EBITDA Margin: 39%

IPO in November 2002

COSL shares were successfully listed on the Main Board of HKSE, raising net proceeds of US$286 million

Strong growth across all business segments in 2002

Revenue: ~ 15% increase

Net Income: ~ 30% increase

EBITDA Margin: 39%

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Summary ResultsSummary Results(RMB mn except per share data)(RMB mn except per share data)

2001 2002 % Change

Revenue 2,366 2,726 15%

Operating Expenses 2,037 2,247 10%

EBITDA 792 1,072 35%

EBITDA Margin 33.5% 39.3%

EBIT 350 483 38%

EBIT Margin 14.8% 17.7%

Net Income 273 354 30%

Net Margin 11.5% 13.0%

EPS (RMB cents) 10.50 12.84 22%

DPS (RMB cents) NA 1.31

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Growth by SegmentsGrowth by Segments

Key drivers of 2002 revenue growth

7 vessels purchased for Marine Support and Transportation

Higher day rates were achieved for both the vessels and jack-up rigs

Strong demand for Well Services

Turn-around of Geophysical Services

Key drivers of 2002 revenue growth

7 vessels purchased for Marine Support and Transportation

Higher day rates were achieved for both the vessels and jack-up rigs

Strong demand for Well Services

Turn-around of Geophysical Services

Revenue by SegmentRevenue by Segment

38.8% 41.6% 41.7% 39.1%

24.8%27.9% 25.1% 24.6%

21.5%19.6% 20.2% 22.1%

14.9% 13.0% 14.2%10.9%

0%

20%

40%

60%

80%

100%

1999 2000 2001 2002

(%)

Overall Revenue CAGR of 18%Overall Revenue CAGR of 18%2001-2002

Growth

26%

26%

13%

8%644

906 985

413

607 595672

358

428 477603

387

1,064

247

237 308

0

500

1,000

1,500

2,000

2,500

3,000

1999 2000 2001 2002

(RM

B m

m)

2,178

1,662

2,366

2,726

Drilling Marine Support & TransportationWell Services Geophysical

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Cost StructureCost Structure

(1) Includes other operating expenses, provision for impairment of long term investments, and provision for impairment of property, plant and equipment

(1) Includes other operating expenses, provision for impairment of long term investments, and provision for impairment of property, plant and equipment

Consumption of supplies, materials, fuel, services and others

Repair and maintenance costs

Depreciation of property, plant and equipmentEmployee compensation costs Other SG&A and others (1)

24% 25%

15% 17% 22%20%

13% 14% 12% 7%

38% 40% 39% 37%

11%

21% 19%

8%10% 8%

0%

20%

40%

60%

80%

100%

1999 2000 2001 2002

(%)

388 378 383553

238 310455

462207246

153

720793

836

243

235611

170

163

145

0

500

1,000

1,500

2,000

2,500

1999 2000 2001 2002

(RM

B m

n)

1,590

1,817

2,037

2,247

% of Revenue 96% 83% 86% 82%

Cost ComponentsCost Components As % of Total Operating ExpensesAs % of Total Operating Expenses

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EBITDA PerformanceEBITDA Performance

EBITDA margin consistently higher than 30%, 2002 had a record high of 39%

In 2002, Marine Support & Transportation and Well Services are the key growth drivers

Turn-around of Geophysical Services also contributed to the EBITDA margin growth

Continuous improvement of EBITDA profitability due to cost control and margin expansion

EBITDA margin consistently higher than 30%, 2002 had a record high of 39%

In 2002, Marine Support & Transportation and Well Services are the key growth drivers

Turn-around of Geophysical Services also contributed to the EBITDA margin growth

Continuous improvement of EBITDA profitability due to cost control and margin expansion

EBITDA MarginEBITDA Margin

513

827 792

1,072

31%

38%33%

39%

0

200

400

600

800

1,000

1,200

1999 2000 2001 2002

0%

10%

20%

30%

40%

50%

(RM

B m

m)

EB

ITD

A M

argin

(%)

EBITDA YoY Growth 35%61%

4%

Overall EBITDA CAGR of 28%Overall EBITDA CAGR of 28%

DrillingWell Services

Marine Support & TransportationGeophysical

156310

397 471144

266178

241

133

168 174

272

88

81

83 44

0

300

600

900

1,200

1999 2000 2001 2002

(RM

B m

m)

827

513

792

1,0722001-2002

Growth

101%

57%

36%

19%

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Operating Profit PerformanceOperating Profit Performance

Improved operating profits and margins in 2002 as a result of stronger contribution of Marine Support & Transportation and Geophysical segments

Improved operating profits and margins in 2002 as a result of stronger contribution of Marine Support & Transportation and Geophysical segments

Operating Profit MarginOperating Profit Margin

74

365 350

483

5%

17% 15%

18%

0

100

200

300

400

500

1999 2000 2001 2002

0%

10%

20%

30%

Operating Profit Operating Margin

(RM

B m

m)

Op

erating

Pro

fit Marg

in

Operating Profit YoY

Growth38%393%

4%

Operating Profit by SegmentOperating Profit by Segment

37.3%69.8% 55.3%

53.4%

41.6% 26.7%19.1%60.3%

25.2%

5.5%

15.9% 23.1%

2.5%

-19.2%

5.2%

-21.7%-20%

0%

20%

40%

60%

80%

100%

1999 2000 2001 2002

(%)

DrillingWell Services

Marine Support & TransportationGeophysical

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Improving Net IncomeImproving Net Income

Overall Net Income CAGR of 59% from 1999 to 2002Overall Net Income CAGR of 59% from 1999 to 2002

354

273287

88

5%

13%12%

13%

0

50

100

150

200

250

300

350

1999 2000 2001 2002

(RM

B m

m)

0%

5%

10%

15%

20%

Ma

rgin

(%)

Net Income Net Margin

YoY growth =

30%

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Balance SheetBalance Sheet

In RMB MillionIn RMB Million

2001 % 2002 %

Cash and Cash Equivalents 871 17% 2,632 33%Accounts Receivable 351 7% 525 7%Other Current Assets 565 11% 343 4%PP&E 3,049 61% 4,317 54%JV’s & Others 194 4% 141 2%Total Assets 5,030 100% 7,958 100%

Short-term Loan 165 3% 0 0%Trade Payables and Other Payables 369 7% 275 3%Other Current Liabilities 1,187 24% 335 4%

Long-term Loan 30 1% 0 0%Deferred Tax Liability 344 7% 567 7%Long-term Payable to CNOOC 0 0% 600 8%Total Liabilities 2,095 42% 1,777 22%

Shareholders' Equity 2,935 58% 6,181 78%Total Liabilities and Shareholders' Equity 5,030 100% 7,958 100%

As at December 31,

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Segment AnalysisSegment Analysis

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A. DrillingA. Drilling

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Drilling Revenues Drilling Revenues

Total drilling revenue increased 8% from 2001 Total drilling revenue increased 8% from 2001

Drilling TurnoverDrilling Turnover

526629

773

49

188

174 57

69

89

39 167

840

0

100

200

300

400

500

600

700

800

900

1,000

1999 2000 2001 2002

(RM

B m

n)

Day Rate Contract Turnkey Others

YoY growth = 8%

Note: 2003 drilling revenue includes all well workover revenues

644

906

985 1,064

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Well Workover Trends

Summary Drilling Activity Summary Drilling Activity

Number of wells drilled correlates to the development cycle. Well Number of wells drilled correlates to the development cycle. Well workover volume continues to increase as production activity increasesworkover volume continues to increase as production activity increases

34 25 27

31

161

117 134 66

57

240

20

40

60

80

100

120

140

160

180

200

1998 1999 2000 2001 2002

Wel

ls D

rille

d

Exploration wells Development wells

Summary Drilling ActivitySummary Drilling Activity

105147 134

192

319

815

0

100

200

300

400

500

600

700

800

900

1997 1998 1999 2000 2001 20020

100

200

300

400

500

600

700

800

Well workovers Production wells

Well Workovers

Total Production

Wells

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Utilization and Day RatesUtilization and Day Rates

Strong domestic demand and international deployment continue to drive up Strong domestic demand and international deployment continue to drive up our average day rates, utilization continue to surpass international peersour average day rates, utilization continue to surpass international peers

Source: COSL, ODC (utilization based on days available)

60%

70%

80%

90%

100%

1999 2000 2001 2002

15

20

25

30

35

Ja

ck

up

WT

I (US

$/bb

l)Uti

lizat

ion

60%

70%

80%

90%

100%

1999 2000 2001 2002

15

20

25

30

35

Se

mi

WT

I (US

$/bb

l)Uti

lizat

ion

COSL Global WTI

Utilization RatesUtilization Rates

Source: COSL, ODC (Jackup day rates for 300’ rigs)

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

1999 2000 2001 2002

Jack

up

0

20,000

40,000

60,000

80,000

100,000

120,000

1999 2000 2001 2002

Sem

i

(US$/day)

Comparative Day RatesComparative Day Rates

GOMCOSL West Africa SE Asia

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Rig Fleet LocationRig Fleet Location

China

TianjinKorea

Qingdao

Fuzhou

Xiamen

Guangzhou

Hong Kong

Philippines

BeijingOffshore China0 100 200 300 km

Shanghai

BH VIII

BH XBH V

NH I

BH XII BH VII

NH VINH IV

NH V NH II

BH IX BH IV

As of Dec 31, 2002

Primary focus in South China Sea and Bohai Bay

International deployment began in 2002

Offshore Nigeria (Feb 2002)

Offshore Indonesia (Oct 2002)

Primary focus in South China Sea and Bohai Bay

International deployment began in 2002

Offshore Nigeria (Feb 2002)

Offshore Indonesia (Oct 2002)

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B. Well ServicesB. Well Services

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Well Services Revenues Well Services Revenues

Total well services revenue expanded 13% in 2002Total well services revenue expanded 13% in 2002

413

607 595

672

0

100

200

300

400

500

600

700

800

1999 2000 2001 2002

(RM

B m

n)

Well Services RevenuesWell Services Revenues

YoY growth =

13%

19

Well Services Revenue BreakdownWell Services Revenue Breakdown

2001 vs. 2002 Well Services Revenue Components2001 vs. 2002 Well Services Revenue Components

Well services experienced robust growth across most of the segments Well services experienced robust growth across most of the segments due to increased exploration, development, and production activitydue to increased exploration, development, and production activity

13%

14%

21%

11%

4%

13%

595

210148

11875

44

672

239179

13372 49

0

100

200

300

400

500

600

700

800

Total Logging Fluid Cementing DirectionalDrilling

Others

(RM

B m

n)

2001 2002

YoY Growth

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C. Marine Support and TransportationC. Marine Support and Transportation

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Marine Support & Transportation RevenuesMarine Support & Transportation Revenues

Consistent revenue growth driven by strong demand offshore China

Higher day rates for vessels

Higher working days supported by enlarged fleet capacity

Consistent revenue growth driven by strong demand offshore China

Higher day rates for vessels

Higher working days supported by enlarged fleet capacity

Marine Support & Transportation RevenuesMarine Support & Transportation Revenues

603

477428

358

0

100

200

300

400

500

600

1999 2000 2001 2002

(RM

B m

m)

YoY growth =

26%

22

Growth of Our FleetGrowth of Our Fleet

15 15 15 16 16 16

23 23 23 2325 26

32 3 3 7 7

3 6 6 66 5

66 6 6

6 6

0

10

20

30

40

50

60

70

1997 1998 1999 2000 2001 2002

AHTS Vessels PSV Vessels Standby Vessels

Utility Vessels Oil Tankers

53 5460 60

5349

22.4% growth since 1997

Our fleet has been growing to meet increased demandOur fleet has been growing to meet increased demandin offshore Chinain offshore China

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Higher and More Stable Utilization Compared to Global PeersHigher and More Stable Utilization Compared to Global Peers

Note: Trico Marine and Seacor Smit calculate their respective utilization rates based on calendar day utilization methodology; Tidewater and Gulfmark calculate their respective utilization rates based on availability utilization methodology. Tidewater, Seacor Smit, and Gulfmark 02 utilization rate is the average for the 9 months ended Sep 30, 2002

COSL Operating Days 1999 2000 2001 2002Standby vessels 7,675 7,661 7,469 8,717AHTS vessels 4,961 4,897 5,358 5,251PSVs 1,041 899 1,397 2,358Utility vessels 1,787 1,999 1,894 1,791

Total Operating Days 15,464 15,456 16,118 18,117

Calendar Day Utilization RateCalendar Day Utilization Rate

60%

70%

80%

90%

100%

97 98 99 00 01 02

Trico Marine Seacor Smit COSL

Availability Utilization RateAvailability Utilization Rate

60%

70%

80%

90%

100%

97 98 99 00 01 02

Tidewater Gulfmark COSL

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D. GeophysicalD. Geophysical

25

Geophysical Revenues Geophysical Revenues

Geophysical revenue increased by 26% in 2002Geophysical revenue increased by 26% in 2002

247 237

308

387

0

50

100

150

200

250

300

350

400

450

1999 2000 2001 2002

(RM

B m

n)

Geophysical RevenuesGeophysical Revenues

YoY growth =

26%

26

2003 Outlook2003 Outlook

27

Substantial Higher Drilling Activities ExpectedSubstantial Higher Drilling Activities Expected

Source: Company

Eastern South China Sea PY 4-2/5-1 HZ 19-3/2

Bohai Bay BZ 25-1 CFD 11-1/2 PL 19-3 BN fields

East China Sea Pinghu Xihu

Western South China Sea WZ 12-1N DF 1-1

26 34 25 27 24

56 31

161

117 134

1997 1998 1999 2000 2001 2002 2003E

Exploration Wells Development Wells

66

57

160+

40 - 50

Characteristics of Development WellsCharacteristics of Development Wells

Subject to development schedules rather than exploration uncertainties

Number of wells required varies by region – greater in Bohai Bay

Development well programs typically lead to more stable and predictable demand for various oilfield services

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Planned Capital ExpendituresPlanned Capital Expenditures

Alternatives for drilling capacity expansion:

Seek second-hand rigs in 2003

Build rigs domestically

Upgrade current fleet

2003 work plans could be met by:

Improved operating efficiency

Rescheduling work plans with operators to minimize idle days for rigs

Upgrade jack-up rigs to accommodate broader scope of drilling environment

Alternatives for drilling capacity expansion:

Seek second-hand rigs in 2003

Build rigs domestically

Upgrade current fleet

2003 work plans could be met by:

Improved operating efficiency

Rescheduling work plans with operators to minimize idle days for rigs

Upgrade jack-up rigs to accommodate broader scope of drilling environment

Drilling and Marine Support & Transportation segments will continueDrilling and Marine Support & Transportation segments will continueto account for the majority of our future capital expendituresto account for the majority of our future capital expenditures

2003 Planned Capital Expenditures2003 Planned Capital Expenditures(in RMB mm)

Geophysical 94

Drilling 506

Well services288

Marine Support &

Transportation 745

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COSL – Dominant Oilfield Service Provider Offshore ChinaCOSL – Dominant Oilfield Service Provider Offshore China

Realize growth opportunities and

deliver shareholder value

StrengthsStrengths

High growth domestic market

The dominant oilfield service provider for offshore China

Competitive cost structure

Leading technical capabilities

Winning StrategyWinning Strategy

Selectively Selectively pursue pursue

international international opportunitiesopportunities

Realize Realize increasingincreasing

marginsmargins

Strengthen Strengthen and expand and expand customer customer

relationshiprelationship

Further Further integrate integrate

service linesservice lines

Expand Expand operating operating capacitycapacity

Increase Increase technical technical

capabilitiescapabilities

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THANK YOU

www.cosl.com.cn

THANK YOU

www.cosl.com.cn