11

2007 Annual ResultsMarch 2008

22

Disclaimer

The information contained in our 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.

33

3.3. Company OutlookCompany Outlook

2.2. Review of the Review of the Four Core Four Core SegmentsSegments

1.1. Company OverviewCompany Overview

44

COSL’s Investment HighlightsUnparalleled competitive edge in

the offshore oilfield service industry

Integrated supply chain

2

5

High quality clientele

3 Ongoing upgrading production facilities and capabilities

4

1

7 Hugh potential from new markets and new businesses

Sound financial performance

Stringent control on QHSE standards6

Excellent management team and productive corporate culture

55

Profit Breakdown

75 working vessels+4 oil tankers+5 chemical carriers

12 jack-ups + 3 semi-submersibles+1 onshore drilling rig+4 module rigs

16%15%

44% 25%

8 seismic vessels + 4 survey vessels

A A UUnique nique IIntegrated ntegrated OOilfield ilfield SService ervice PProviderroviderRevenue Breakdown

Integrated well services

DrillingDrilling Well servicesWell services

Marine SupportMarine Support GeophysicalGeophysical

19%14%

53%

14%

66

2007 Highlights: Continuous Improvements on Quality

1) Operating results hit record high

7) Fulfill social responsibility

2) Steady growth in overseas businesses

3) Financing activities hit new benchmarks

4) Positive recognition in capital market

5) Optimized and streamlined corporate management system

6) Continuous emphasis on QHSE

77

Operating Results Hit Record High

Revenue 6,365 9,008 41.5%

Operating profit 1,392 2,827 103.1%

9.5pp

Net profit 1,128 2,238 98.4%

Total assets 13,130 23,089 75.8%

92.1%

59.0%

210.0%

Interest-bearing debts 2,000 2,644 32.2%

Shareholders’ equity 8,619 17,225 99.8%

Operating profit margin 21.9% 31.4%

EPS (RMB fen) 28.23 54.24

Net operating cashflow 1,870 2,973.9

Cash & cash equivalents 2,309 8,766

Interest-bearing debts / Shareholders’ equity 23.2% 15.3%

（RMB mn, except per share data） 2006 2007 Change ％

88

Operating Results Hit Record High (cont’d)

(RMB Mm)

Competitive cost advantageAlthough revenue and operating profit increased significantly, operating cost grew by a moderate 24.3%

Increases in operating cost were mainly due to business expansion, full capacity utilization and increasedexpenses on equipment and staff headcount

We have the confidence tomaintain growth in both top line and bottom line

Employee compensation costs Repair and maintenance costsConsumption of supplies, materials, fuels, services and othersSubcontracting expensesOperating lease expensesSelling, general and administrative expensesDepreciationOther expenses

YoY growth = 24.3%

387274

1,042900

10281

366313

357206

2,525

1,935

318

357

1,123

937

2006 2007

99

Steady Growth in Overseas Business

0

300

600

900

1200

1500

1800

2003 2004 2005 2006 20070%2%4%6%8%10%12%14%16%18%20%

1,645

(18.3%)

Breakdown of overseas revenue in 2007Breakdown of overseas revenue in 2007 Overseas markets adding momentumOverseas markets adding momentum

Breakthroughs achieved in drilling, well services and geophysical operations at overseas markets4 Mexico module rigs performed wellSuccessfully secured 4 Libya onshore drilling rig service contracts2-year cementing contract of geothermal wellservices with Philippines National Oil CompanyELIS operation successfully penetrated into Middle East and Indonesia

RMB mn RMB Mn

Overseas revenue Overseas/total

Globalization strategy

marked initial success

1010

Financing Activities Hit New Benchmarks

Successfully launched in May 2007 a RMB1.5 billion 15-year corporate bond, issued at a coupon rate of 4.48% or an annualized rate of 4.58%.

COCOSSLL was rated the highest AAA

Raised a net of RMB6.599 billion through issue of 500 million A Shares.

Trading in the A Shares debuted on 28 September 2007

COSL successfully raised funds to develop and strengthen its equipment capability and competitiveness

COCOSSL L successfully raised funds to develop and strengthen its successfully raised funds to develop and strengthen its equipment capability and competitivenessequipment capability and competitiveness

1111

Positive Recognition from the Capital Market

Corporate bond credit rating: AAALong-term credit rating: AAA

The highest investment value listed company in China 2007

COSL was named a Top-30 stock with highest investment potential by Standard & Poor‘s for three consecutive years between 2005 and 2007

China Enterprise Confederation and China Enterprise Directors AssociationNamed Mr. Yuan Guangyu, CEO and President, the “Most Watched Entrepreneur for 2006”

China Enterprise China Enterprise ConfederationConfederation

China Enterprise Directors China Enterprise Directors AssociationAssociation

A Top-100 Most-respected listed Company in China in 2007

Recommended as Top 8 golden stocks

Chinese Academy of Social Sciences

International Investment Research Center

1212

Continuous Emphasis on QHSE

Health:The foundation for

our corporate success

Environment:Be a responsible

international citizenQuality:

In pursuit of high quality

QHSEQHSE

Safety:Our persistent promise

COSL’s OSHA score further improved to 0.25 (0.32 in 2006)

Unit output energy dissipation was 0.0703, down 14.6% y-o-y; Unit value-add dissipationwas 0.1116, down 18.7% y-o-y

Saved 10,804 tonnes of standard coal, met energy saving targets for the year

0.25

0.45

0.22 0.27 0.29 0.32

0.00

0.20

0.40

0.60

0.80

1.00

2002 2003 2004 2005 2006 2007

International standard:0.75

OSHA

1313

Fulfill Social Responsibility

Cared for employees

Communicated corporate mission through cultural activities, to raise staff morale

Actively participated in charity activities

Donated two offshore oil schoolsDonated to Project HopeDonated to Mother Water Cellarsand Lifeline Express Projects and supported poverty alleviation and disaster relief campaigns

1414

3.3. Company OutlookCompany Outlook

Company OverviewCompany OverviewCompany Overview11..

2.2. Review of the Review of the Four Core Four Core SegmentsSegments

1515

(RM

B m

m)

2006 2007

2,645

1,808

1,043869

0

6,000

12,000

4422% growth in % growth in rrevenueevenue

42%

(RM

B m

m)

2006 2007

257.5%

89.9%

8.3%

123.8%666

391

409

538

1,489361

216150

0

1,500

3,000

103103% Operating % Operating pprofit rofit ggrowthrowth

DrillingWell Services

Marine SupportGeophysical

103%

Drilling: Scientific management of drilling capacity, increasing day rate

Well Services: Growth in service volume, self-developed technology began contribution

Marine Support: Service prices increased, new facilities commenced operation

Geophysical: The efficiency of single vessel increased, market expansion efforts yielded results

65.8%

31.8%

25.6%

48.3%

Businesses Experienced Rapid Growth

2,270

1,374

1,442

3,922

DrillingWell Services

Marine SupportGeophysical

1616

Analyzing Drilling Services

Source: Company data

100% 100%

60%

70%

80%

90%

100%

2006 2007

Jack

-up

100% 100%

60%

70%

80%

90%

100%

2006 2007

Sem

i-sub

mer

sibl

eavailable day utilization ratecalendar day utilization rate

Utilization Utilization rrateate

91.3%96.5%

84.9%

98.6%

5.2%

13.7%

Strong market demand, full capacityutilizationAs work-volume and price increased, drilling services saw revenue increase 48.3% year on year

New markets expansion(1) Expansion in both domestic and overseas markets

and onshore and offshore markets

(2) Revenue from overseas operation amounted to RMB1151.2 million, comprising 29.4% of the sector’s total

New facilities enhanced resultsCommencement of new facilities added growth momentum to the sector, e.g., 186 operating days were added as jack-up rig COSL941 commenced operation

1717

Analyzing Well Services

417

291

2006 2007

Source: Company data

19

Continuous new overseas markets expansion

(1) Signed a cementing service contract in the Philippines

(2) the sole operator of geothermal wellservices in the Philippines

(3) secured a logging service contract in Indonesia

Strong demand, growth in work volume

Gradually tapped into onshore market(1) Tapping onshore markets for cementing

(2) Opened new market opportunities in the Jidong oilfield

R&D, and product innovation started to contributing to revenue, service prices experienced increases

Revenue from wire loggingRevenue from wire logging

RMB mn43%

Proprietary Product

Innovation

Revenue from Revenue from well well workoverworkover serviceservice

Source: Company data

RMB mn26.1% 544

456

2006 2007

1818

Analyzing MS&T

Vessels Types Quantity

AHTS vessels 21

Utility vessels 5

PSV vessels 11

Standby vessels 38

Oil tankers 4

Chemical vessels 5

Total 84

Growth in work volume, upgrading of equipment capabilities

(1) Owned and operated the largest and the most comprehensive offshore support and transportation fleet in China.

(2) Owns 70 various working vessels, and rented 5 working vessels on long term leases, and owned 4 oil tankers and 5 chemical vessels.

(3) These vessels mainly operated in offshore China

Orderly management of safety measures to build resilience in operation

Effective cost control

1919

Analyzing Geophysical Services

Source: Company data

3D Geophysical 3D Geophysical sserviceservices

processing collection

sq.km.

sq.km.35.8%

32.1%

Strong market demandVolume of 3D seismic data collected rose 32.1%year-on-year to 9,694 sq.km..

Efficiency of single vessel enhanced significantly6-streamer COSL718 collected 3,878 sq. km of 3D seismic data, hitting a new record in acreage collected by a single vessel

Effectively arranged facilities for domestic and overseas operationsSuccessfully arranged 6 sailings abroad

Rearranged 2D and 3D operations to maximize efficiencySome 2-D vessels switched to collect 3D seismic data

5,686

4,187

2006 2007

9,694

7,337

2006 2007

2020

3.3. Company OutlookCompany Outlook

Company OverviewCompany OverviewCompany Overview11..

2.2. Review of the Review of the Four Core Four Core SegmentsSegments

2121

International oil prices as quoted on the NYMEX hovered between US$55 and US$70 during 1H2007, and started to climb thereafter to break through US$110.International oil prices as quoted on the NYMEX hovered between International oil prices as quoted on the NYMEX hovered between US$55 and US$55 and

US$70 during 1H2007, and started to climb thereafter to break thUS$70 during 1H2007, and started to climb thereafter to break through US$110.rough US$110.

International Oil Prices Hit New Highs

2222

Steady Increase in Crude Oil Demand

China U.S.A. Others

Expected

y-o-y Growth

Total Consumption

million barrels/Day

Source：EIA Short-term Energy Outlook

186 190

163 170

217.51232.5

253.51

292.07 299.86322.52

350360

183.68180.84

164.83 170.29 170.44 174.73

138.84119.02117.34

83.0762.21

52.68

0

100

200

300

400

2001 2002 2003 2004 2005 2006 2007E 2008E

Domestic Production Net I mport

CAGR：6.5%

Source：China Petroleum and Chemical Industry Data Express

World demand for crude oilWorld demand for crude oil China demand for crude oilChina demand for crude oil

2323

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

2002 2003 2004 2005 2006 2007E 2008E 2009E 2010E

CAPEX OPEX

Continuing Increase in World Investments in Marine Oil and Gas

Continuing Increase in World Investments in Marine Oil and Gas

Bright Future for Oil and Gas Exploration

World investments in marine oil&gas exploration and operations are expected to increase to US$144bper annum on average in next 10 years.

Average investments in deep water operations will exceed US$15B per annum. Deep waters and ultra deep waters will continue to be hot exploration spots for world oil and gas.

Investments will grow faster in West Africa, Brazil, Gulf of Mexico and Asia Pacific regions. Investments in Marine oil and gas in Asia Pacific in 2008 will increase 65% from the levels in 2002.

Exploration activities are seen to kick off in emerging marine regions including Southeast Asia.

Source: Energyfiles Ltd. Source: Oil.IN-EN.com

2424

Goals of COSL

20202020

20102010

Near-term goalNearNear--term goalterm goal Long-term goalLongLong--term goalterm goal

Become a top-notch international oilfield service providers

Become a topBecome a top--notch international notch international oilfield service providersoilfield service providers

An oilfield service provider with strong competences in the

international market

An oilfield service provider with An oilfield service provider with strong competences in the strong competences in the

international marketinternational market

Accelerate development of integrated capabilities. Comprehensively enhance professional capabilities

Explore new business opportunities new oilfield production services

PlansPlansExpand facilities, upgrade service capability Strengthen deep water operation capability

Increase investments in R&D to enhance COSL’s technological competitiveness

Expand scope of service, implement global development strategies

Achieve breakthroughs in technology, capacity expansion and capability upgrades through capital market operations including M&A

2525

Four Core Strategies

TechnologyTechnology--drivendriven Cost CompetitivenessCost Competitiveness IntegrationIntegration GGloballobal OperationOperation

A unique publicly-listed integrated oilfield service providerA unique publiclyA unique publicly--listed integrated oilfield service providerlisted integrated oilfield service provider

Strategic positioning: Expert in conventional technologiesKeen follower in advanced applicationsEnabler of highly efficient operationsContributor to cost reduction Pioneer in integrated servicesParticipant in global competitionPartner in win-win developmentServant for shareholder value

2626

Major Performance Drivers in 2008

11 Introduce new equipmentIntroduce new equipmentIntroduce new equipment

22 Increase work throughputIncrease work throughputIncrease work throughput

33 Raise prices of servicesRaise prices of servicesRaise prices of services

44

55 Accelerate technology R&DAccelerate technology R&DAccelerate technology R&D

Explore new markets, new businessesExplore new markets, new businessesExplore new markets, new businesses

Ongoing Improvements in Operations and Production

2727

CAPEX since listingCAPEX since listing: in excess of RMB 10 billion: in excess of RMB 10 billion

RMB Mil’

Business Driver in 2008: Introduce New Equipment

0

1100

2200

3300

4400

5500

2002 2003 2004 2005 2006 2007 2008

2828

2010201020082008COSL942 to operate in 2H; 4 module rigs operate for six more months; 5 onshore rigs will commence operation in China and other countries

R&D, building, procure equipment like cementing pump, ELIS, liftboat etc.

9 new supporting vessels will commence operation in 2H

One 8-streamer seismic vessel start operation in April

20092009Jack-up COSL936 will commence operation by year end. 4 onshore rigs have half year more revenue contribution

R&D and procure tools for MWD, acidizing and crushing

9 new supporting vessels to operate in 1H. 2 high-powered deep water vessels will commence operation by year end

Jack-up COSL937 to operate; Four 200-feet jack-up rigs to operate in 2010 and 2011

One 12-streamer seismic vessel will commence operation

Drilling Services

Well Services

MS&TServices

Geophysical Services

Business Driver in 2008: Introduce New Equipment (cont’d)

16 offshore engineering supporting vessels to bedelivered respectively in 2010 and 2011

20112011

Operate the 3000m deep water drilling rig invested by parent company in 2011

1 high power deep water working vesselwill commence operation

2929

COSL COSL –– An oilfield services company offering integrated services An oilfield services company offering integrated services spanning across drilling, development and productionspanning across drilling, development and production

Exploration Stage

Production Stage

y

Development Stage

GeophysicalMarine Support and TransportationDrilling Well Services

Business Driver in 2008: Increase Work Throughput

3030

Business Driver in 2008: Increase Work Throughput (cont’d)

Numerous market opportunities in different stages of oilfield production

Besides increase in work throughput of logging, directional drilling, cementing and well completion, acidizing, crushing, screen pipe production activities are expected to grow

Uptrend in CAPEX and OPEX of oil companies on oilfield exploration

CNOOC announced discovery of 10 new oil and gas reserves in Nov 2007

Source: CNOOC Group annual report

3131

Jack-up: USD/Day

Semi-submersible：USD/Day

Business Driver in 2008: Raise Services Prices

Utilization to remain high due to strong demand, saturated capacity, good customer relationship and tight schedule management

Utilization to remain high due to strong demand, saturated capacUtilization to remain high due to strong demand, saturated capacity, ity, good customer relationship and tight schedule managementgood customer relationship and tight schedule management

20,000

40,000

60,000

80,000

2002 2003 2004 2005 2006 2007

US$78,337/day

US$142,302/day

0

40,000

80,000

120,000

160,000

2002 2003 2004 2005 2006 2007

3232

Tap the deep water segment

Expand foothold in overseas

markets

Targeted Southeast Asia, Middle East, Gulf of Mexico, Russia and Africa

Expand into onshore services, leveraging our strength in the offshore market.

Expand presence in the deep water segment following footsteps of oil companies

Consolidate existing

market share

Secure first-mover advantages in

new markets and new businesses

Business Driver in 2008: Explore New markets, New businesses

Penetrate into onshore markets

3333

COSL-LR7001 commenced drilling

Business Driver in 2008: Explore New markets, New businesses (cont’d)

3434

MarketMarket--orientedoriented

COCOSSLL’’s technologys technology--driven strategydriven strategy

Integrated Integrated InnovationInnovation

LeapfrogLeapfrogDevelopmentDevelopment

TalentTalentorientedoriented

Business Driver in 2008: Accelerate Technology R&D

Introduced proprietary ELIS logging system into domestic and overseas marketsEstablished the first joint laboratoryIntroduced cementing services to XinjiangProprietary “Bohai low-density-high-strength well cementing technology widely applied

COSL’s application of technologiesCOSL’s application of technologies

ConventionalCement

Low-Density,High-Strength

Cement

3535

Business Driver in 2008: Accelerate Technology R&D (cont’d)

Obtained 23 patents in 2007 Owned 78 valid patents by year endObtained 23 patents in 2007 Owned 78 valid patents by year end

ELIS-I completed operations in Bohai Sea, Indonesia and Middle East regions;

FCT (Formation Characteristics Tools)engineering research made a breakthrough

Application of new positive gel drilling fluids system, non-fluorescence drilling fluids system, acidizing technology, nitrogen foam stimulation technology, cross-linking water plugging workover fluids and water absorbent gelationworkover fluids

3636

ASDD

To start the well testing in 2Q08

Upgrade deep water operation from 500m to 1500m

PSC

Independent

Joint venture with 3rd party

Intensify training for deep water operation skills

To operate deep water drilling rigs invested by CNOOC Group

To invest in deep water facilities construction

Business Driver in 2008: Accelerate Technology R&D (cont’d)

3737

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