Feb 2018

Disclaimer

The information contained in this presentation is intended solely for your personal

reference. In addition, such information contains projections and forward-looking

statements that reflect the Company’s current views with respect to future events

and financial performance. These views are based on assumptions subject to

various risks. No assurance can be given that future events will occur, that

projections will be achieved, or that the Company’s assumptions are correct.

Actual results may differ materially from those projected. Past track record

cannot be used as guidance for future performances.

2

Company Outlook

Industry Outlook

Source：IEA, BofA Merrill Lynch Global Research estimates

全球钻井平台使用率

Differentiated S & D for crude oil worldwide

Source：IHS Report

Expectation on the Trend of Oil Price

Moderate increase in oil prices from 2018 onwards

Relative oil supply and demand balance will experience further tightening

International agencies predict moderate increase in oil prices from 2018 onwards

4

Source：Rystad Energy UCube and Rystad Energy research and analysis

全球钻井平台使用率

Reserve discoveries in 2017 were the Lowest

Source：BP 2017 energy Statics review

RRR hit historical low

Oil and gas reserve discoveries in 2017 were the lowest since 2012

RRR hit historical low after consecutive years of decline

Global Oil and Gas Reserves Forecast

5

Reserves include gas condensate and natural gas liquids (NGLs) as well as crude oil.

-50%

0%

50%

100%

150%

200%

250%

300%

350%

400%

1983

19

84

1985

19

86

1987

19

88

1989

19

90

1991

19

92

1993

19

94

1995

19

96

1997

19

98

1999

20

00

2001

20

02

2003

20

04

2005

20

06

2007

20

08

2009

20

10

2011

20

12

2013

20

14

2015

20

16

Oil RRR ratio

3Yr

Ave

rage

RR

R

Operational Environment

CAPEX growth of oil and gas companies, especially on the onshore and deep-water

CNOOC's Capex in 2018 has climbed 40% ~ 60% than 2017E

COSL's Domestic and overseas workload will grow at different rates expectedly

250

CNOOC CAPEX Plan

Source：IHS Report Source：CNOOC Limited

6

CAPEX forecast for global upstream oil and gas companies

Unit：USD billion

2014 2015 2016 2017 2018 0

100

200

300

400

500

600

700

800 Onshore Business Deep-water

0

20

40

60

80

2016A 2017E 2018B

Exploration Development Production Others

49.0 50.0

70-80 Unit : RMB billion

Industry Outlook

Company Outlook

Industry Consolidation

8

Oilfield service industry is restructuring while few companies filed for bankruptcy

Period：2015-2017; Source：Haynes And Boone and related news report

Medium Development Plan

COSL will leverage on the synergies and cost advantages;

Adhere to prudent financial policies; Realize the goal of 50/50 mix.

2017

50/50 Loss to Profit

Medium-term targets

Domestic market: Focus on new workload and requirements

International Market: further strengthen the overseas regional management and scale

Maintaining cost competitiveness: through reducing management cost, strengthening technology and optimizing assets

Implement service upgrade: Provide with comprehensive solution plan

2018

9

International D

omestic

Equip

ment

Technology

Expand the overseas markets with the opportunities arising from BRICS.

By 2020, the company will endeavor for a breakthrough in Africa markets and continually expand the Far East.

Expand 'Belt and Road' market opportunities

Hold high the development strategy of 'Belt and Road' Initiative and increase the revenue share in the region.

Revenue from the 'Belt and Road' region has grown by 10% in 2016 and will keep increasing as the Company goes internationalized.

10

Target at new project assignments

Reconstruct aging oilfields, improve oil recovery • Utilized 'Reservoir Revitalization' technology • Adopted Thermal Recovery Technology to Nanbao 35-2 Oilfield • Enlisted Xijiang 23 segment on 'Integrated project for water shut-off treatment'

Enrich oilfield related services in China’s offshore market • Offshore wind power exploration • New energy deep-water exploration business

Undertake CNOOC’s Projects

11

Step-up Expansion on CNOOC’s Domestic and Overseas Projects

Actively follows CNOOC’s overseas projects

The Middle East

Southeast Asia The

Americas

Africa

The Far East

• Drilling, Casting and Cementing

integrated contract

• Drilling Contract

Europe

Note：Closely followed

overseas projects from

CNOOC

12

• Canadian Nexen Logging

Integrated Contract

• COSL Confidence Acquired

Drilling Contract

• COSL Pioneer acquired

Nexen Drilling Contract

• COSL Innovator acquired

Lundin Drilling Contract

• COSL Promoter executed

Statoil drilling contract

• COSL Superior acquired drilling contract

• Onshore drilling integrated service

• Integration and Stimulation projects

• Logging contract

• Acquired drilling, technology

segment framework agreement

• NH9 acquired Drilling Contract • HYSY937 acquired Drilling Contract • TCP, DST and Logging Integrated Contract • Logging, cementing and directional wells contracts

Scale Effect of Overseas Markets

13

2018 Selected Key Overseas Markets

COSL Promoter executed Statoil drilling contract

COSL Pioneer acquired Nexen drilling contract

COSL Innovator acquired Lundin drilling contract

Closely follows:

Market opptunities in Iraq

Customer logging project

Customer well workover and cementing project

Europe

The Middle East

Transformation of Customers' Needs

Collaboratively developed the

"heavy oil, low permeability"

oil field

Provide customers with a

basket of oilfield exploration

programs: Framework for

management of Disposable

Oil Field…

Integrated technical service

model based on geological

reservoir

High temperature/deep water

Environmental requirements

Complex formation

Mature oilfield management

Drilling, completion and

workover

Logging, directional wells

Drilling and completion

fluids, cementing

Oilfield stimulation and

other services

14

Lead the Demand

High-end Needs

General Needs

Technical Guarantee Under New Trend

15

Target: Create High-tech Products, Cultivate High-tech Value

Drilling waste management technology to meet the new environmental regulations

Rotary coring equipment enables in-depth tapping for potential reservoir information

Gas hydrate drilling and sampling technology drills into the field of combustible ice

Engaging steady investment expenditure in R&D

Reinforced incentives for industrialization ushers in technology boom

North America United Laboratory speeds up innovation progress

Technical Breakthroughs

Implementations

Large-scale applications of 'D + W' system

Application of high-end logging technology at international advanced standard

Strengthen serialization of standard completion tools, matching international counterparts on the market competitiveness

Boosted Capacity

Cost Competitiveness

Through reform and innovation on management mode, optimize facility management, speed up the

serialization and industrialization of technology products, improve core competitiveness

Global Supply Chain Refine global integrated model

Geophysical Incentives Target for incremental growth in profit-making

North America United

Laboratory

Interconnection and Cooperation

Implement logging while drilling high-

speed

Step-up Self Maintenance Reduce maintenance costs

Disposal of 701/702 vessels

…

Maintain Competitive Cost

16

Reduce Management Cost

Strengthen Technology

Optimize Assets

Disposal of 4 chemical boats

Transformed BH8 into supporting platform

Reform Procurement

Process

Innovative Management;

Incentive-oriented Policies

Reduce Age Effect of

Serialization

Strengthen Technology Capability

Boost Capabilities of Equipment Operation and Maintenance

Optimize Asset Structure

Prudent Financial Policy

2016-2021 Capital and Interest Repayment

Unit: RMB

2018E 2015

6.7b

2016

3.5-4.5b

2017

~2.5b ~2.5b

17

2021 2016 2017 2018 2019 2020

Capital Expenditure

Remarks: long-term unamortized expenses excluded

Source：Bloomberg and rating reports

Companies Middy's S&P Fitch

4 majo

rs oil co

mp

anies

Schlumberger A1 （Stable） AA-（Stable） -

Halliburton Baa1（Stable） BBB+（Stable） -

Baker Hughes Baa1（Stable） B-（Stable） -

Weatherford B3（Neg.） B（Neg.） CCC

COSL Baa1（Neg.） BBB（Stable） A（Stable）

offsho

re drilling

Diamond Ba3（Neg.） B+（Neg.） -

Ensco B2（Neg.） B+（Neg.） -

Noble B3（N.A.） B（Neg.） BBB-（Stable）

Rowan B2（Neg.） B+（Neg.） -

Transocean B2（Neg.） B（Neg.） B+（Neg.）

Seadrill Caa2（Stable） CCC+（Neg.） -

Rig Operation Status（As of 22 Jan 2018）

Operation Drilling Rig

2018

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec location

Do

mestic

19 Jack-ups

1 Jack-up（HYSY943）

1 Jack-up（HYSY924）

2 Semi-subs（NH2/NH5）

1 Semi-sub（NH6）

1 Semi-sub（NH7） -

1 Semi-sub（HYSY981）

International

2 Jack-ups（Superior/Craft）

1 Jack-up（HYSY937）

1 Jack-up（Strike）

1 Jack-up（Seeker）

1 Jack-up（Confidence）

1 Semi-sub（Promoter）

1 Semi-sub（Innovator）

1 Semi-sub（Pioneer）

1 Semi-sub（NH8）

1 Semi-sub（NH9）

18 Remark：1 Semi-sub（Prospector）and 5 Jack-ups（Force/HYSY936/Boss/Power/Hunter）are in bidding or negotiation processes, respective contracts have yet to be concluded.

Jack-up Semi-sub

Full-year contract coverage

Full-year contract coverage

Full-year contract coverage

19

Core Competitiveness

Enhanced Industrial Market Share

New Competitive Framework

• Massive investment expenditure on oil and gas industry

• Slow recovery at industry level

New Operation Model

• Optimize growth dimensions • Restructure Asset structure • Leading in Prudent cost

management • Implement differentiated

and diversified development

New Emerging Markets

• Domestic + International Focus on domestic market + expand global footprint

• Offshore + Onshore Expansion of the offshore market + seizing for onshore business opportunities

• Traditional Needs + Elevated Service