UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 6-K
 
Report of Foreign Private Issuer
 
Pursuant to Rule 13a-16 or 15d-16
of the Securities Exchange Act of 1934

For the month of August 2013

Commission File Number 1-14966
 
 
CNOOC Limited
(Translation of registrant’s name into English)
 
65th Floor
Bank of China Tower
One Garden Road
Central, Hong Kong
(Address of principal executive offices)
 
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F      X              Form 40-F ___

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ____

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ____

Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
 
Yes   ___         No     X    

If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b):  Not applicable
 
 

 
 
Signature

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 
     
CNOOC Limited
 
         
         
 
By:
 
/s/ Hua Zhong
 
 
Name:
 
Hua Zhong
 
 
Title:
 
Joint Company Secretary
 

Dated: August 30, 2013

 
 

 
 
EXHIBIT INDEX

 
Exhibit No.
Description
99.1 Announcement dated August 30, 2013, entitled “2013 Interim Report.”
99.2 Announement dated August 30, 2013, entitled “Notification Letter and Request Form For Non-Registered Holders.”
 
 
 

 
Exhibit 99.1
 
Contents

2
CHAIRMAN’S STATEMENT

4
CEO’S STATEMENT

6
KEY FIGURES

7
BUSINESS OVERVIEW

10
INTERIM CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

12
INTERIM CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

14
INTERIM CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

15
INTERIM CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

16
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

58
REPORT ON REVIEW OF INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

60
OTHER INFORMATION
 
 
1

 
 
Chairman’s Statement

Dear Shareholders,

During the first half of the year, the world’s major economies has shown signs of improvement. The U.S. economy recorded a mild recovery; the European debt crisis situation continued easing. Although the rate of economic growth in China slightly declined, it is still expected that China can meet its annual economic development target this year.

Faced with a complex external environment, the Company focused on reinforcing its development. We actively promoted the development of new oil and gas fields offshore China and strengthened our management of existing producing oil and gas fields, maintaining steady production growth for the Company. For overseas development, we successfully completed the acquisition of Nexen Inc. (“Nexen”) with smooth progress made for post-transaction integration. At the same time, the Company maintained strong profitability and achieved satisfactory results.

Significant achievements in exploration were made in the first half of the year. In our core operating area, offshore China, we obtained two mid-sized oil discoveries, namely Bozhong 8-4 and Kenli 10-4, and successfully appraised the oil and gas structure of Penglai 15-2. Such new discoveries and successful appraisals will provide strong support for the “New Leap Forward” blueprint of CNOOC Limited.

I am pleased to note that oil and gas production of the Company in both China and overseas continued to grow steadily. Apart from contributions from the newly acquired Nexen, new oil and gas fields brought on stream since 2012 have become the major source of our production growth. These are results of our intensive work and careful planning in offshore China, and further demonstrate the enormous potential in the offshore China area. As part of the Company’s major asset portfolio, overseas projects such as Eagle Ford in the U.S. have also become an important source of production growth. While putting great efforts to boost production growth, we have continued to monitor the integrity of our production facilities to ensure safe and environment-friendly operations at our oil and gas fields.

In February 2013, the Company completed the acquisition of Nexen. Following the acquisition, we have concentrated on the integration of Nexen through setting up a special committee, formulating integration strategies, consolidating business lines and enhancing communication with Nexen’s staff. For the first half of the year, the transaction has already contributed to the production of the Company. In the long run, Nexen’s value to the Company as well as to our shareholders, including its ample reserve base, advanced technologies for oil and gas development, and its experienced management and employee teams, will be gradually revealed and realized.

 
 
2

 

Benefiting from strong oil and gas production growth, the Company achieved a net profit of RMB34.38 billion despite a small decline in international oil prices, representing an increase of 7.9% year over year. Based on the Company’s strong financial position and in accordance with the Company’s dividend policy, the board of directors of the Company declared an interim dividend of HK$0.25 (tax inclusive) per share for the first half of 2013.

The Company has entered into a new phase of development and will endeavour to realize its “New Leap Forward” blueprint. To this end, the Company will continue to maintain its high standards in health, safety and environmental protection, strengthen risk management and build a talented team in order to raise the Company’s core competitiveness and capability for sustainable development, which will lead to an even brighter future for the Company.
 
   
WANG Yilin
Chairman
 
 
Hong Kong, 20 August 2013

 
 
3

 
 
CEO’s Statement

Dear Shareholders,

For the first half of 2013, the Company made smooth progress in exploration, development and production as well as overseas development, maintained a sound financial position and achieved satisfactory results. I am pleased to review with you our achievements for the first half of the year and share with you our plans for the second half.

REVIEW FOR THE FIRST HALF OF THE YEAR
 
In the first half of the year, the Company continued to focus on exploration, development and production and achieved encouraging results. In overseas, the Company successfully completed the acquisition of Nexen which has greatly enhanced our international profile. At the same time, the Company continued to maintain sound health, safety and environmental protection records.

For exploration, achievements in offshore China remained strong and progresses were made in overseas. During the first half of the year, the Company made 7 new discoveries and 18 successful appraisal wells in offshore China. The new discovery of Bozhong 8-4 indicated a major breakthrough in oil and gas exploration on Neogene shallow layers which have shifted from uplifts to depressions, which will lead to a new phase for oil and gas exploration in the western slope of Bozhong area and reveal the exploration potential of other faults in similar geological structures. Another discovery, Kenli 10-4 opened up a new horizon in the exploration of oil and gas of south slope of Laizhou Sag. In overseas, we made a new discovery under the HBR permit in Algeria.

For development and production, net oil and gas production in the first half of the year increased significantly to 198.1 million BOE, representing an increase of 23.1% year over year. Excluding the contribution of 24.8 million BOE from Nexen, the Company’s net production reached 173.3 million BOE, representing a 7.7% increase year over year, mainly benefiting from the followings:

Firstly, production from projects that commenced production since 2012, including Panyu 4-2/5-1 adjustment, Lufeng 13-2 adjustment and Liuhua 4-1, increased steadily; secondly, Penglai 19-3 oilfield resumed production, with output volume gradually returning; thirdly, in overseas, oil and gas production from Eagle Ford in the U.S. and the Missan oilfields in Iraq ramped up steadily, bringing new impetus to production growth. In addition, maintaining high production efficiency in the producing fields also contributed to the growth of production.

On 26 February 2013, the Company completed the acquisition of Nexen, creating a new milestone in the Company’s overseas development. The acquisition will provide us with a more economically efficient platform with higher growth potential, and generate synergies for our existing operation, including a lower-risk, more efficient portfolio of core producing assets, access to exploration opportunities worldwide, and expanded capabilities in exploration, development, and project management. Following the completion of the transaction, the Company and Nexen began to pursue orderly integration, in the areas of management, resources development and corporate culture. As part of our commitment at the time of the acquisition, the Company has been actively working on the application for listing on the Toronto Stock Exchange.
 
 
4

 
 
In the first half of the year, the Company posted strong performance on key financial indicators: oil and gas sales reached RMB 110.80 billion, representing an increase of 15.8% year over year, primarily due to the increase of oil and gas production. Net profit was RMB 34.38 billion, and earnings per share amounted to RMB 0.77, representing an increase of 7.9% year over year. The cost for operations of the Company has been satisfactorily under control, resulting in an all-in cost per BOE of US$37.81 (excluding Nexen), representing an increase of 9.3% year over year, among which the operating cost increased slightly by 2.4%.

OUTLOOK FOR THE SECOND HALF OF THE YEAR
 
For the second half of the year, we will continue to enhance our businesses in a meticulous and conscientious manner. Specifically, the Company will focus on the development of the following:

Firstly, promote the timely commencements of the new projects and implement recovery enhancement measures such as infill drilling to accomplish the full year production target;

Secondly, continue to carry out exploration activities and conduct the appraisal of new discoveries made during the first half of the year;

Thirdly, continue to push forward integration work following the acquisition of Nexen and maximize the value of the integration while maintaining stable and efficient operation of Nexen;

Fourthly, continue to strengthen the management and system construction for health, safety and environmental protection to ensure safe and environmental-friendly production.

In the second half of the year, we will work hard to achieve goals for the year and deliver satisfactory results to our shareholders.
 
 
LI Fanrong
Chief Executive Officer
 
  
Hong Kong, 20 August 2013
 
 
5

 
 
Key Figures

   
Six months ended 30 June
 
   
2013
   
2012
 
             
Net profit, million RMB
    34,383       31,869  
Basic earnings per share, RMB
    0.77       0.71  
                 
Total oil and gas sales, million RMB
    110,799       95,658  
Total revenue, million RMB
    139,027       118,268  
                 
Interim dividend per share, HK$ (tax inclusive)
    0.25       0.15  
                 
Net Production*
               
 Oil, million barrels
    161.2       127.0  
 Gas, billion cubic feet
    214.4       195.7  
 Total, million BOE
    198.1       160.9  
 
*
Including our interest in equity-accounted investees, which is approximately 8.0 million BOE for the first half of 2013 and approximately 8.7 million BOE for the first half of 2012.
 
 
6

 

Business Overview

 
EXPLORATION
 
In the first half of 2013, approximately 15,000 km 2D seismic data and 9,500 km² 3D seismic data were acquired and 48 exploration wells were drilled in offshore China. 7 new discoveries were made and 18 successful appraisal wells were obtained in offshore China, resulting in a success rate of independent exploration wells of 53%-81%. Meanwhile, one new discovery was made overseas, namely RDA-1 under HBR permit in Algeria.

The Company’s major exploratory activities in the first half of 2013 are shown in the table below*:

   
Wildcat
   
Appraisal Wells
 
         
Success +
         
Success +
 
Exploration Wells
 
Completed
   
Uncertain
   
Completed
   
Uncertain
 
                         
Offshore China (Independent)
    20       7+8       27       18+5  
Offshore China (PSC)
    1       0+1       0       0+0  
Overseas
    5       1+3       4       3+0  
                                 
Seismic Data
       
2D (km)
             
3D (km2)
 
                                 
Independent
            15,025               6,147  
PSC
            0               3,346  
                                 
Total
            15,025               9,493  
 
* Excluding Nexen.

ENGINEERING CONSTRUCTION, DEVELOPMENT AND PRODUCTION
 
In the first half of the year, the Company carefully organized operation resources to enable engineering construction progressed smoothly. Weizhou 6-12 and Wenchang 8-3 east commenced production as scheduled. Suizhong 36-1 Phase II adjustment, Weizhou 12-8 west and Wenchang 19-1 north projects are ready for production with engineering construction completed. In addition, offshore installation work for Qikou 18-1 adjustment project and Liwan 3-1 was completed. In overseas, Rochelle gas field, located in North Sea, is expected to commence production in the second half of the year.

In the first half of the year, the Company’s total net production recorded a strong growth and reached 198.1 million BOE, representing an increase of 23.1% year over year. Net production of the Company without taking into account 24.8 million BOE from Nexen was 173.3 million BOE, representing an increase of 7.7% year over year, of which 132.2 million BOE were from offshore China, representing an increase of 5.9% year over year, and 41.1 million BOE were from overseas, representing an increase of 13.7% year over year. The increase was mainly attributable to, firstly, the contribution from new oil and gas fields, including Panyu 4-2/5-1 adjustment, Lufeng 13-2 adjustment and Liuhua 4-1; secondly, resumption and ramp up of production from Penglai 19-3 oilfield; and thirdly, in overseas, the increased production from Eagle Ford shale oil and gas project in the U.S. and Missan oilfields in Iraq. In addition, producing fields maintained high production efficiency.
 
 
 
7

 

In the second half of the year, the Company will continue to implement measures to stabilize and enhance the performance of producing oil and gas fields, to ensure the timely commencement of new development projects in order to achieve the annual production target for 2013.
 
The Company’s production by regions is shown in the table below:

   
First half of 2013
   
First half of 2012
 
   
Oil
   
Gas
   
Oil
   
Gas
 
   
(million
         
(million
       
   
barrels)
   
(bcf)
   
barrels)
   
(bcf)
 
                         
Offshore China
                       
Bohai
    72.3       23.7       72.0       22.9  
Western South China Sea
    12.7       60.2       12.6       63.9  
Eastern South China Sea
    27.3       26.6       20.1       25.3  
East China Sea
    0.23       5.5       0.26       6.0  
                                 
Subtotal
    112.5       116.0       104.9       118.1  
                                 
Overseas
                               
Asia
    5.0       22.7       2.1       32.1  
Oceania
    0.7       15.5       0.7       14.1  
Africa
    13.0             11.4        
North America
    12.7       32.6       3.5       8.5  
South America
    4.1       23.0       4.3       22.9  
Europe
    13.1       4.6              
                                 
Subtotal
    48.6       98.4       22.0       77.6  
                                 
Total
    161.2       214.4       127.0       195.7  
                                 
Total net production (million BOE)
    198.1       160.9  
 
 
8

 
 
CAPITAL EXPENDITURE AND COST
 
In the first half of 2013, cash outflow from investing activities was mainly used in acquisition, exploration activities and project development. Aquisiton activities included the payments of RMB92,784 million for the acquisition of Nexen, and RMB379 million to fund Chesapeake’s share of drilling and completion costs pursuant to the commitment made at the acquisition of the Niobrara project. Our development expenditures are primarily spent on the development of the Nexen’s projects, Eagle Ford, OML130, and Suizhong 36-1 Phase II adjustment, as well as those incurred for improving recovery rate of the producing fields.

Compared with the first half of 2012, our expenses in the first half of 2013 increased primarily as a result of increased operating expenses and depreciation, depletion and amortization. Our operating expenses increased 49.2% to RMB 13,060 million in the first half of 2013 from RMB 8,753 million in the first half year of 2012. Our depreciation, depletion and amortization increased 74.3% to RMB 26,440 million in the first half of 2013 from RMB 15,172 million in the first half of 2012. These increases were mainly due to newly acquired business of Nexen.

For our commitment related to our exploration, development and production, please refer to note 20 – Commitments and contingencies – (i) Capital commitments to the Interim Condensed Consolidated Financial Statements on page 44 of this interim report.

Save as disclosed in this interim report, there has not been any material change in our performance and the material factors underlying our results and financial position during the first half of the year.
 
 
9

 
 
Interim Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income
For the six months ended 30 June 2013
(All amounts expressed in millions of Renminbi, except per share data)

         
Six months ended 30 June
 
   
Notes
   
2013
   
2012
 
         
(Unaudited)
   
(Unaudited)
 
                   
REVENUE
                 
Oil and gas sales
    4       110,799       95,658  
Marketing revenues
    4       26,586       21,884  
Other income
            1,642       726  
                         
              139,027       118,268  
                         
EXPENSES
                       
Operating expenses
            (13,060 )     (8,753 )
Taxes other than income tax
 
7(ii)
      (7,486 )     (8,034 )
Exploration expenses
            (4,360 )     (4,584 )
Depreciation, depletion and amortisation
            (26,440 )     (15,172 )
Special oil gain levy
    5       (11,871 )     (13,639 )
Crude oil and product purchases
    4       (25,614 )     (21,780 )
Selling and administrative expenses
            (3,276 )     (1,246 )
Others
            (1,284 )     (552 )
                         
              (93,391 )     (73,760 )
                         
PROFIT FROM OPERATING ACTIVITIES
            45,636       44,508  
Interest income
            556       633  
Finance costs
    6       (1,461 )     (850 )
Exchange gain/(loss), net
            787       (356 )
Investment income
            1,224       1,037  
Share of profits of associates
            116       156  
Share of profits of a joint venture
            645       54  
Non-operating income, net
            264       27  
                         
PROFIT BEFORE TAX
            47,767       45,209  
Income tax expense
    7(i)       (13,384 )     (13,340 )
                         
PROFIT FOR THE PERIOD ATTRIBUTABLE
                       
 TO OWNERS OF THE PARENT
            34,383       31,869  
 
 
10

 
 
          Six months ended 30 June  
   
Notes
   
2013
   
2012
 
         
(Unaudited)
   
(Unaudited)
 
                   
OTHER COMPREHENSIVE LOSS
                 
Items that may be subsequently
                 
 reclassified to profit or loss:
                 
Net loss on available-for-sale financial assets,
                 
 net of tax
    9       (681 )     (621 )
Exchange differences on translation
                       
 of foreign operations
            (2,467 )     280  
Share of other comprehensive loss of associates
            (30 )     (1 )
                         
OTHER COMPREHENSIVE LOSS
                       
FOR THE PERIOD, NET OF TAX
            (3,178 )     (342 )
                         
TOTAL COMPREHENSIVE INCOME
                       
FOR THE PERIOD ATTRIBUTABLE
                       
TO OWNERS OF THE PARENT
            31,205       31,527  
                         
EARNINGS PER SHARE FOR THE
                       
PERIOD ATTRIBUTABLE TO ORDINARY
                       
EQUITY HOLDERS OF THE PARENT
                       
Basic (RMB Yuan)
    8       0.77       0.71  
Diluted (RMB Yuan)
    8       0.77       0.71  
 
Details of the interim dividend declared for the period are disclosed in note 17 to the interim condensed consolidated financial statements.
 
 
11

 
 
Interim Condensed Consolidated Statement of Financial Position
30 June 2013
(All amounts expressed in millions of Renminbi)
 
         
30 June
   
31 December
 
   
Notes
   
2013
   
2012
 
         
(Unaudited)
   
(Audited)
 
                   
NON-CURRENT ASSETS
                 
Property, plant and equipment
    10       408,357       252,132  
Intangible assets
    3, 11       17,314       973  
Investments in associates
            4,088       3,857  
Investment in a joint venture
            20,460       20,160  
Derivative financial assets
    22       12        
Available-for-sale financial assets
    22       6,651       7,051  
Deferred tax assets
            547       40  
Other non-current assets
            2,903       963  
                         
Total non-current assets
            460,332       285,176  
                         
CURRENT ASSETS
                       
Inventories and supplies
            8,648       5,247  
Trade receivables
    12       31,895       23,624  
Derivative financial assets
    22       305        
Available-for-sale financial assets
    22       52,820       61,795  
Other current assets
            12,459       8,314  
Time deposits with maturity over three months
            26,617       16,890  
Cash and cash equivalents
    13       21,498       55,024  
                         
Total current assets
            154,242       170,894  
                         
CURRENT LIABILITIES
                       
Loans and borrowings
    15       45,965       28,830  
Trade and accrued payables
    14       40,531       23,989  
Derivative financial liabilities
    22       232        
Other payables and accrued liabilities
            25,126       17,435  
Taxes payable
            14,474       12,183  
                         
Total current liabilities
            126,328       82,437  
                         
NET CURRENT ASSETS
            27,914       88,457  
                         
TOTAL ASSETS LESS CURRENT LIABILITIES
            488,246       373,633  
 
 
12

 

         
30 June
   
31 December
 
   
Notes
   
2013
   
2012
 
         
(Unaudited)
   
(Audited)
 
                   
NON-CURRENT LIABILITIES
                 
Loans and borrowings
    15       84,144       29,056  
Provision for dismantlement
            43,449       29,406  
Deferred tax liabilities
            27,922       3,403  
Derivative financial liabilities
    22       12        
Other non-current liabilities
            3,103       1,988  
                         
Total non-current liabilities
            158,630       63,853  
                         
NET ASSETS
            329,616       309,780  
                         
EQUITY
                       
Equity attributable to owners of the parent
                       
 Issued capital
    16       949       949  
 Reserves
            328,667       308,831  
                         
TOTAL EQUITY
            329,616       309,780  
 
 
13

 

Interim Condensed Consolidated Statement of Changes in Equity
For the six months ended 30 June 2013
(All amounts expressed in millions of Renminbi)


   
Equity attributable to owners of the parent
 
                                                 
         
Share
                                     
         
premium
         
Statutory
                         
         
and capital
   
Cumulative
   
and non-
               
Proposed
       
   
Issued
   
redemption
   
translation
   
distributive
   
Other
   
Retained
   
final
       
   
capital
   
reserve
   
reserve
   
reserves
   
reserves
   
earnings
   
dividend
   
Total
 
                                                 
Balances at 1 January 2012
    949       42,129       (17,187 )     20,000       10,282       196,541       10,142       262,856  
Profit for the period
                                  31,869             31,869  
Other comprehensive
                                                               
 income/(loss), net of tax
                280             (622 )                 (342 )
                                                                 
Total comprehensive
                                                               
  income/(loss)
                280             (622 )     31,869             31,527  
2011 final dividend
                                  (49 )     (10,142 )     (10,191 )
Equity-settled share
                                                               
 option expenses
                            33                   33  
                                                                 
Balances at 30 June
                                                               
 2012 (Unaudited)
    949       42,129       (16,907 )     20,000       9,693       228,361             284,225  
                                                                 
Balances at 1 January 2013
    949       42,129       (17,229 )     20,000       9,225       243,143       11,563       309,780  
Profit for the period
                                  34,383             34,383  
Other comprehensive
                                                               
 loss, net of tax
                (2,467 )           (711 )                 (3,178 )
                                                                 
Total comprehensive
                                                               
 income/(loss)
                (2,467 )           (711 )     34,383             31,205  
2012 final dividend
                                  183       (11,563 )     (11,380 )
Equity-settled share
                                                               
 option expenses
                            11                   11  
                                                                 
Balances at 30 June
                                                               
 2013 (Unaudited)
    949       42,129       (19,696 )     20,000       8,525       277,709             329,616  

 
14

 

 

 
Interim Condensed Consolidated Statement of Cash Flows
For the six months ended 30 June 2013
(All amounts expressed in millions of Renminbi)
 
   
Six months ended 30 June
 
   
2013
   
2012
 
   
(Unaudited)
   
(Unaudited)
 
             
Net cash generated from operating activities
    52,602       36,240  
Net cash used in investing activities
    (124,114 )     (51,845 )
Net cash generated from financing activities
    38,093       5,707  
                 
Net decrease in cash and cash equivalents
    (33,419 )     (9,898 )
Cash and cash equivalents at beginning of period
    55,024       23,678  
Effect of foreign exchange rate changes, net
    (107 )     21  
                 
Cash and cash equivalents at end of period
    21,498       13,801  
 
 
15

 
 
Notes to Interim Condensed Consolidated Financial Statements
30 June 2013
(All amounts expressed in millions of Renminbi, except number of shares and unless otherwise stated)

1.
ORGANISATION AND PRINCIPAL ACTIVITIES
 
 
CNOOC Limited (the “Company”) was incorporated in the Hong Kong Special Administrative Region (“Hong Kong”) of the People’s Republic of China (the “PRC”) on 20 August 1999 to hold the interests in certain entities whereby creating a group comprising the Company and its subsidiaries (hereinafter collectively referred to as the “Group”). The Group is principally engaged in the exploration, development, production and sales of crude oil, natural gas and other petroleum products.

The registered office address of the Company is 65/F, Bank of China Tower, 1 Garden Road, Hong Kong.

In the opinion of directors of the Company (the “Directors”), the parent and the ultimate holding company of the Company is China National Offshore Oil Corporation (“CNOOC”), a company established in the PRC.

As at 30 June 2013, the Company had direct or indirect interests in the following principal subsidiaries, joint venture and associates:

Name of entity
 
Place and date of
establishment
Nominal value of
issued and paid-up
share/registered
capital
Percentage of
equity
attributable
to the Group
Principal activities
 
Directly held subsidiaries:
CNOOC China Limited
Tianjin, PRC
15 September
1999
RMB20 billion
 
100%
 
Offshore petroleum exploration, development, production and
sales in the PRC
China Offshore Oil
(Singapore)
International Pte
Ltd
Singapore
14 May 1993
SG$3 million
 
100%
 
Sales and marketing of petroleum products outside the PRC
CNOOC
International
Limited
British Virgin Islands
23 August 1999
US$20,000,000,002
100%
 
Investment holding
 
OOGC America, Inc.
 
State of Delaware, United States of  America
28 August 1997
US$1,000
 
100%
 
Investment holding
 
CNOOC Finance
(2003) Limited
 
British Virgin Islands
2 April 2003
US$1,000
 
100%
 
Bond issuance
 
 
 
 
16

 


Name of entity
 
Place and date of
establishment
Nominal value of
issued and paid-up
share/registered
capital
Percentage of
equity
attributable
to the Group
Principal activities
Directly held subsidiaries (continued):
CNOOC Finance (2011) Limited
 
British Virgin Islands
31 December 2010
US$1,000
 
100%
 
Bond issuance
 
CNOOC Finance (2012) Limited
 
British Virgin Islands
10 April 2012
US$1,000
 
100%
 
Bond issuance
 
CNOOC Finance (2013) Limited**
 
British Virgin Islands
23 April 2013
US$1,000
 
100%
 
Bond issuance
 
Indirectly held subsidiaries*:
CNOOC Deepwater Development Limited
 
Zhuhai, PRC
1 March 2010
RMB 8.5 billion
 
100%
 
Deepwater and low-grade oil and gas fields exploitation in the PRC and exploration, development, production and sales of oil and gas in the oil and gas fields of South China Sea
 
CNOOC Southeast Asia Limited
 
Bermuda
16 May 1997
US$12,000
 
100%
 
Investment holding
 
CNOOC SES Ltd.
 
Labuan, F.T., Malaysia
27 March 2002
US$1
 
100%
 
Petroleum exploration, development and production in Indonesia
 
CNOOC Muturi Limited
 
Isle of Man
8 February 1996
US$7,780,770
 
100%
 
Petroleum exploration, development and production in Indonesia
 
CNOOC NWS Private Limited
 
Singapore
8 October 2002
SG$2
 
100%
 
Offshore petroleum exploration, development and production in Australia
 
CNOOC
Exploration &
Production
Nigeria Limited
 
Nigeria
6 January 2006
NGN10 million
 
100%
 
Petroleum exploration, development and production in Africa
 
 
 
17

 
 
Name of entity
 
Place and date of
establishment
Nominal value of
issued and paid-up
share/registered
capital
Percentage of
equity
attributable
to the Group
Principal activities
Indirectly held subsidiaries* (continued):
 
CNOOC Iraq
Limited
 
British Virgin Islands
15 October 2010
US$1
 
100%
 
Providing services of petroleum exploration and development in the Republic of Iraq
 
CNOOC Canada
Inc.
 
Canada
15 January 1999
281,749,526 common shares without a par value
 
100%
 
Oil sands exploration, development and production in Canada
 
CNOOC Uganda
Ltd
 
Uganda
11 May 2010
1 million Uganda
Shilling
 
100%
 
Petroleum exploration, development and production in Africa
 
Nexen Energy
ULC***
 
Province of British Columbia, Canada
18 July 2012
CAD13, 671,421,700
 
100%
 
Oil and gas exploration, development and production in Canada
 
Nexen Petroleum UK Limited
 
England and Wales
24 April 1972
GBP98,009,131
 
100%
 
Oil and gas exploration, development and production in UK
 
Nexen Petroleum Nigeria Limited
 
Nigeria
11 March 1998
NGN30 million
 
100%
 
Oil and gas exploration, development and production in Nigeria
 
Nexen Petroleum Offshore USA Inc.
 
State of Delaware, United States of America
20 July 1990
US$14,790
 
100%
 
Oil and gas exploration, development and production in USA
 
Nexen Marketing
 
Province of Alberta, Canada
1 January 1995
N/A
 
100%
 
Sales and marketing of oil and gas products in North America
 
Nexen Oil Sands Partnership
 
Province of Alberta, Canada
22 March 2005
N/A
 
100%
 
Oil and gas exploration, development and production in Canada
 

 
18

 
 
Name of entity
 
Place and date of
establishment
Nominal value of
issued and paid-up
share/registered
capital
Percentage of
equity
attributable
to the Group
Principal activities
Joint venture:
 
       
Bridas Corporation
 
British Virgin Islands
15 September 1993
US$102,325,582
 
50%
 
Investment holding
 
Associates:
 
       
Shanghai Petroleum Corporation Limited
 
Shanghai, PRC
7 September 1992
RMB900 million
 
30%
 
Production, processing and technology consultation of oil, gas and relevant products in the PRC
 
CNOOC Finance
Corporation Limited
 
Beijing, PRC
14 June 2002
RMB4 billion
 
31.8%
 
Provision of deposit, transfer, settlement, loan, discounting and other financing services to CNOOC and its member entities
 
Northern Cross (Yukon) Limited
 
Yukon, Canada
19 September 1994
22,691,705 common shares without a par value
 
60%
 
Petroleum exploration,
development and production in Canada
 
 
*
All subsidiaries are indirectly held through CNOOC International Limited, except CNOOC Deepwater Development Limited which is indirectly held through CNOOC China Limited.

 
**
CNOOC Finance (2013) Limited was incorporated on 23 April 2013, for issuing guaranteed notes (note 15).

 
***
CNOOC Canada Holding Ltd. was incorporated on 18 July 2012, for oil and gas investment in Canada. On 25 February 2013, the registered capital was increased to CAD9,505,391,000. CNOOC Canada Holding Ltd. was relocated to British Columbia of Canada and alternated the nature of the company to unlimited liability company (“ULC”) on 18 March 2013. CNOOC Canada Holding Ltd. changed its name to CNOOC Canada Holding ULC on the same day. An additional contribution of CAD4,166,030,700 was made on 28 May 2013, and the registered capital was increased to CAD13, 671,421,700. CNOOC Canada Holding ULC and Nexen Energy ULC (formerly known as Nexen Inc.) were amalgamated as one company under the name CNOOC Canada Holding ULC on 20 June 2013. After the amalgamation, CNOOC Canada Holding ULC changed its name to Nexen Energy ULC on the same day.

 
 
19

 

1.
ORGANISATION AND PRINCIPAL ACTIVITIES (CONTINUED)
 
 
The above table lists the subsidiaries, joint venture and associates of the Company which, in the opinion of the Directors, principally affected the results for the period or formed a substantial portion of the total assets of the Group. To give details of other subsidiaries would, in the opinion of the Directors, result in particulars of excessive length.
 
2.
BASIS OF PREPARATION AND ACCOUNTING POLICIES
 
 
Basis of preparation
 
 
The interim condensed consolidated financial statements for the six months ended 30 June 2013 have been prepared in accordance with International Accounting Standard 34 (“IAS 34”) and Hong Kong Accounting Standard 34 (“HKAS 34”) Interim Financial Reporting.

The interim condensed consolidated financial statements do not include all the information and disclosures required in the annual financial statements, and should be read in conjunction with the Group’s annual financial statements for the year ended 31 December 2012.
 
 
Significant accounting policies
 
 
The accounting policies adopted in the preparation of the interim condensed consolidated financial statements are consistent with those followed in the preparation of the Group’s annual financial statements for the year ended 31 December 2012, except for the first time adoption of the following new and revised International Financial Reporting Standards (“IFRSs”)/Hong Kong Financial Reporting Standards (“HKFRSs”) effective for the Group’s financial year beginning on 1 January 2013:
 
 
IFRS 13/HKFRS 13 – Fair Value Measurement
 
 
IFRS 13/HKFRS 13 improves consistency and reduces complexity by providing, for the first time, a precise definition of fair value and a single source of fair value measurement and disclosure requirements for use across IFRSs/HKFRSs. The requirements do not extend the use of fair value accounting, but provide guidance on how it should be applied where its use is already required or permitted by other standards within IFRSs/HKFRSs. Consequential amendments have been made to IAS 34/HKAS 34 to require certain disclosures to be made in the interim condensed consolidated financial statements. In accordance with the transitional provisions of IFRS 13/HKFRS 13, the Group has applied the new fair value measurement and disclosure requirements prospectively. The application of IFRS 13/HKFRS 13 has no impact to the financial position and performance of the Group but result in more extensive disclosure in the consolidated financial statements for the year ending 31 December 2013. Disclosures of fair value information are set out in note 22.
 
 
20

 
 
2.
BASIS OF PREPARATION AND ACCOUNTING POLICIES (CONTINUED)
 
 
IAS 1/HKAS 1 (Amendments) – Presentation of Items of Other Comprehensive Income
 
 
The IAS 1/HKAS 1 (Amendments) introduce new terminology, whose use is not mandatory, for statement of comprehensive income and income statement. Under the amendments to IAS 1/HKAS 1, the “statement of comprehensive income” is renamed as “statement of profit or loss and other comprehensive income” and the “income statement” is renamed as the “statement of profit or loss”. The amendments to IAS1/HKAS 1 retain the option to present profit or loss and other comprehensive income in either a single statement or in two separate but consecutive statements. IAS 1/HKAS 1 (Amendments) requires companies preparing financial statements in accordance with IFRSs/HKFRSs to group items of other comprehensive income into two categories: (1) items that will not be reclassified subsequently to profit or loss; and (2) items that may be reclassified subsequently to profit or loss when specific conditions are met. Income tax on items of other comprehensive income is required to be allocated on the same basis. The amendments have been applied retrospectively, and hence the presentation of items of other comprehensive income has been modified to reflect the changes.
 
 
IAS 34/HKAS 34 (Amendments) – Interim Financial Reporting
 
 
The amendment clarifies that the total assets and liabilities for a particular reportable segment are required to be disclosed if, and only if: (1) a measure of total assets or of total liabilities (or both) is regularly provided to the chief operating decision maker; and (2) there has been a material change from those measures disclosed in the last annual financial statements for that reportable segment. The adoption of this amendment does not have any impact on the financial position or performance of the Group and the Group has followed the requirement to disclose its segment information.

The adoption of the other new and revised IFRSs/HKFRSs does not have any impact on the accounting policy, financial position or performance of the Group.

 
 
21

 
 
3.
ACQUISITION
 
 
On 23 July 2012, the Company, CNOOC Canada Holding Ltd. and Nexen entered into an arrangement agreement in relation to the Company’s proposed acquisition (through its wholly-owned subsidiary, CNOOC Canada Holding Ltd.) of all the Nexen common shares and preferred shares, pursuant to a plan of arrangement under the Canada Business Corporations Act.

On 19 February 2013, the Company (through its wholly-owned subsidiary, CNOOC Canada Holding Ltd.) signed a short-term bank loan agreement with the maturity of one year of approximately US$6 billion, for the payment of the consideration related to the acquisition of Nexen.

The acquisition of Nexen was subsequently completed on 26 February 2013 (Beijing time). The  consideration of the acquisition was approximately US$14.8 billion (approximately RMB92.8 billion), and was paid in cash. The consideration is related to acquisition of common shares and preferred shares. As a result of the acquisition, an additional amount of approximately US$275 million was paid by Nexen to settle its long-term incentive plans. The indebtedness of Nexen at the acquisition date remains outstanding except for the US $460 million of subordinated debt that was subsequently repaid.
 
 
22

 
 
3.
ACQUISITION (CONTINUED)
 
The fair values of the identifiable assets and liabilities of Nexen as at the date of acquisition are as follows:

   
Fair value
 
   
recognised
 
   
on acquisition
 
       
Property, plant and equipment
    151,016  
Intangible assets
    3,586  
Investment in associate
    234  
Deferred tax assets
    119  
Other non-current assets
    892  
Trade receivables
    11,148  
Inventories and supplies
    2,782  
Other current assets
    672  
Cash and cash equivalents
    4,858  
Trade and accrued payables
    (17,678 )
Taxes payable
    (1,399 )
Other payables and accrued liabilities
    (529 )
Loans and borrowings
    (34,893 )
Provisions for dismantlement
    (12,992 )
Deferred tax liabilities
    (26,745 )
Other non-current liabilities
    (1,681 )
         
Net assets acquired
    79,390  
Goodwill on acquisition
    13,394  
         
Satisfied by cash
    92,784  
 
The goal of the Nexen acquisition was to provide for a more economically efficient platform with higher and more consistent growth potential. The new portfolio is expected to be better balanced, with lower-risk resource plays located in OECD countries that help smooth out the volatility inherent in the Group’s other international programs. More importantly, the acquisition results in the Company holding increased positions in Canadian oil sands and proven offshore basins, which tie directly to the Company’s strategy to identify and develop unconventional resources and explore in related proven basins.
 
 
23

 
 
3. 
ACQUISITION (CONTINUED)
 
 
The fair values disclosed above are provisional subject to finalisation of valuation for the identifiable assets and liabilities. The review of the fair value of the assets and liabilities acquired will be completed within 12 months after the acquisition date.

An analysis of the net outflow of cash and cash equivalents in respect of the acquisition is as follows:
 
Cash consideration
    92,784  
Cash and cash equivalents acquired
    (4,858 )
         
Net outflow of cash and cash equivalents in respect of the acquisition
    87,926  
 
 
Since the acquisition, Nexen contributed RMB15,356 million to the Group’s turnover and RMB197 million to the consolidated profit for the period.

Had the acquisition taken place at the beginning of the period, the revenue of the Group and the consolidated profit for the period would have been RMB146,639 million and RMB34,710 million, respectively.

Legal and professional fees related to the acquisition were approximately RMB474 million. The expenses are charged to the statement of profit or loss directly.
 
 
24

 

4.
OIL AND GAS SALES AND MARKETING REVENUES
 
 
Oil and gas sales represent the invoiced value of sales of oil and gas attributable to the interests of the Group, net of royalties, obligations to governments and other mineral interest owners. Revenue from the sale of oil is recognised when the significant risks and rewards of ownership have been transferred, which is when title passes to the customer. Revenue from the production of oil and gas in which the Group has a joint interest with other producers is recognised based on the Group’s working interest and the terms of the relevant production sharing contracts. Differences between production sold and the Group’s share of production are not significant.

Marketing revenues principally represent the sales of oil and gas purchased from the foreign partners under the production sharing contracts and revenues from the trading of oil and gas through the Company’s subsidiaries. The cost of the oil and gas sold is included in “Crude oil and product purchases” in the interim condensed consolidated statement of profit or loss and other comprehensive income. In addition, the Group’s trading activities in North America involves entering into contracts to purchase and sell crude oil, natural gas and other energy commodities, and use derivative contracts, including futures, forwards, swaps and options for hedging and trading purposes (collectively derivative contracts). Any change in the fair value is also included in marketing revenue.
 
5.
SPECIAL OIL GAIN LEVY
 
 
In 2006, a Special Oil Gain Levy (“SOG Levy”) was imposed by the Ministry of Finance of the PRC (“MOF”) at the progressive rates from 20% to 40% on the portion of the monthly weighted average sales price of the crude oil lifted in the PRC exceeding US$40 per barrel. MOF has decided to increase the threshold of the SOG Levy to US$55, with effect from 1 November 2011. Notwithstanding this adjustment, the SOG Levy will continue to have five levels and will be calculated and charged according to the progressive and valorem rates on the excess amounts. The SOG Levy paid can be claimed as a deductible expense for corporate income tax purposes and is calculated based on the actual volume of the crude oil entitled.
 
 
25

 
 
6.
FINANCE COSTS
 
 
Accretion expenses of approximately RMB893 million (six months ended 30 June 2012: approximately RMB647 million) relating to the provision for dismantlement liabilities have been recognised in the interim condensed consolidated statement of profit or loss and other comprehensive income for the six months ended 30 June 2013.

 
7.
TAX
 
 
(i)
Income tax
 
 
 
The Company and its subsidiaries are subject, on an entity basis, to income taxes on profits arising in or derived from the tax jurisdictions in which the entities of the Group are domiciled and operate. The Company is subject to profits tax at a rate of 16.5% (2012: 16.5%) on profits arising in or derived from Hong Kong, which is qualified as a foreign tax credit to offset the PRC corporate income tax starting from 1 January 2008.

The Company is regarded as a Chinese Resident Enterprise (as defined in the “Enterprise Income Tax Law of the People’s Republic of China”) by the State Administration of Taxation of the PRC. As a result, the Company is subject to the PRC corporate income tax at the rate of 25% starting from 1 January 2008.

The Company’s subsidiary in Mainland China, CNOOC China Limited, is a wholly-owned foreign enterprise. It is subject to corporate income tax at the rate of 25% under the prevailing tax rules and regulations.

Operating subsidiaries of the Group domiciled outside the PRC are subject to income tax at rates ranging from 10% to 62%.
 
 
26

 
 
7.
TAX (CONTINUED)
 
 
(ii)
Other taxes
 
 
 
The Company’s PRC subsidiaries pay the following other taxes and dues:
 
 
Production taxes at the rate of 5% on independent production and production under production sharing contracts;

 
Resource taxes at the rate of 5% (reduced tax rates may apply to specific products and fields) on the oil and gas sales revenue (excluding production taxes) derived by oil and gas fields under production sharing contracts signed after 1 November 2011 and independent offshore oil and gas fields starting from 1 November 2011, which replaced the royalties for oil and gas fields, except for those under production sharing contracts signed before 1 November 2011 which will be subject to related resource taxes requirement after the expiration of such production sharing contracts;

 
Mineral resource compensation at the temporary rate of 1% (reduced tax rates may apply) on the oil and gas sales revenue derived by oil and gas fields under production sharing contracts signed after 1 November 2011 and independent offshore oil and gas fields starting from 1 November 2011;

 
Export tariffs at the rate of 5% on the export value of petroleum oil;

 
Business tax at rates of 3% to 5% or value-added tax at the rate of 6% on other income;

 
City construction tax at the rate of 1% or 7% on the actual paid production taxes, business tax and value-added tax;

 
Educational surcharge at the rate of 3% on the actual paid production taxes, business tax and value-added tax; and

 
Local educational surcharge at the rate of 2% on the actual paid production taxes, business tax and value-added tax.
 
 
In addition, other taxes paid and payable by the Company’s non-PRC subsidiaries include royalties as well as taxes levied on petroleum-related income, profit, budgeted operating and capital expenditures.

 
27

 
 
8.
EARNINGS PER SHARE
 
   
Six months ended 30 June
 
   
2013
   
2012
 
   
(Unaudited)
   
(Unaudited)
 
             
Earnings:
           
 Profit for the period attributable to
           
  ordinary equity holders for the basic and
           
  diluted earnings per share calculation
    34,383       31,869  
                 
Number of shares:
               
 Number of ordinary shares issued at
               
  the beginning of the period
    44,646,305,984       44,646,305,984  
                 
 Weighted average number of ordinary shares for
               
  the purpose of basic earnings per share
    44,646,305,984       44,646,305,984  
 Effect of dilutive potential ordinary shares under
               
  the share option schemes
    139,277,790       161,740,031  
                 
Weighted average number of ordinary shares for
               
 the purpose of diluted earnings per share
    44,785,583,774       44,808,046,015  
                 
Earnings per share – Basic
 
RMB0.77
   
RMB0.71
 
                 
  – Diluted
 
RMB0.77
   
RMB0.71
 
 
 
28

 
 
9.
NET LOSS ON AVAILABLE-FOR-SALE FINANCIAL ASSETS, NET OF TAX
 
   
Six months ended 30 June
 
   
2013
   
2012
 
   
(Unaudited)
   
(Unaudited)
 
             
Available-for-sale financial assets:
           
Fair value change arising during the period
    500       9  
Reclassification adjustment for net
               
 gain included in the investment income
    (1,224 )     (509 )
Income tax effect
    43       (121 )
                 
      (681 )     (621 )
 
The other comprehensive income or loss of the Group’s available-for-sale investments was derived from investment of corporate wealth management products, liquidity funds and the investment in the equity securities of MEG Energy Corporation.

10.
PROPERTY, PLANT AND EQUIPMENT
 
 
During the six months ended 30 June 2013, additions to the Group’s property, plant and equipment, including the property, plant and equipment acquired in acquisitions, amounted to approximately RMB190,309 million (six months ended 30 June 2012: approximately RMB32,474 million).

The interest of the Group in the North West Shelf (“NWS”) Project in Australia has been collateralised to the other partners of the project as security for certain of the Group’s liabilities relating to the project.

Included in the current period’s additions was an amount of approximately RMB1,103 million (six months ended 30 June 2012: approximately RMB684 million) in respect of interest capitalised in property, plant and equipment.
 
 
29

 
 
11.
INTANGIBLE ASSETS
 
 
The intangible assets of the Group comprise software, gas processing rights of the NWS Project, marketing transportation and storage contracts, drilling rights contracts and seismic data usage rights. The computer softwares are amortised over their respective useful lives on the straight-line basis. The intangible asset regarding the gas processing rights has been amortised upon the commencement of commercial production of the liquefied natural gas using the unit-of-production method. The intangible assets regarding the marketing transportation and storage contracts and drilling rights contracts are amortised over the life of the contracts. The intangible assets related to the seismic data usage rights are amortized over the estimated useful life of the seismic data.

Included in intangible assets is an amount of USD2,133 million (equivalent to RMB13,394 million and RMB13,183 million as at the date of acquisition and 30 June 2013, respectively) related to goodwill with respect to the acquisition of Nexen (note 3).
 
12.
TRADE RECEIVABLES
 
 
The credit terms of the Group are generally within 30 days after the delivery of oil and gas. Payment in advance or collateral may be required from customers, depending on credit rating. Trade receivables are non-interest-bearing.

As at 30 June 2013 and 31 December 2012, substantially all the trade receivables were aged within 30 days. All customers have a good repayment history and no receivables are past due.
 
13.
CASH AND CASH EQUIVALENTS
 
 
Cash and cash equivalents include restricted cash for margin deposits of approximately RMB247 million relating to the Group’s exchange-traded derivative contracts used in the energy marketing business.
 
14.
TRADE AND ACCRUED PAYABLES
 
 
As at 30 June 2013 and 31 December 2012, substantially all the trade and accrued payables were aged within six months. The trade and accrued payables are non-interest-bearing.
 
 
30

 
 
15.
LOANS AND BORROWINGS
Current
 
Effective interest rate
 
30 June
   
31 December
 
 
and final maturity
 
2013
   
2012
 
     
(Unaudited)
   
(Audited)
 
               
Short-term loans
             
and borrowings
             
- General loan
LIBOR+0.85% to 1.85% per annum
           
 
 with maturity within one year
    45,724       27,343  
                   
        45,724       27,343  
                   
Loans and borrowings
                 
due within one year
                 
For Tangguh LNG
LIBOR+0.23% to 0.38% per annum
               
Project**
 with maturity within one year
    241       231  
Notes*
            1,256  
                   
        241       1,487  
                   
        45,965       28,830  
                   
Non-current
                 
 
Effective interest rate
 
30 June
   
31 December
 
 
and final maturity
    2013       2012  
     
(Unaudited)
   
(Audited)
 
                   
For Tangguh LNG
LIBOR+0.23% to 0.38% per annum
               
Project**
 with maturity through 2021
    2,162       2,326  
Notes*
      81,982       26,730  
                   
        84,144       29,056  
 
As at 30 June 2013, all the bank loans of the Group were unsecured. None of the outstanding borrowings was guaranteed by CNOOC.

 
31

 

15.
LOANS AND BORROWINGS (CONTINUED)
 
 
*
The principal amount of US$200 million of 4.125% guaranteed notes due in 2013 and the principal amount of US$300 million of 5.500% guaranteed notes due in 2033 were issued by CNOOC Finance (2003) Limited, a wholly-owned subsidiary of the Company. The obligations of CNOOC Finance (2003) Limited in respect of the notes are unconditionally and irrevocably guaranteed by the Company. The principal amount of US$200 million of 4.125% guaranteed notes was repaid in May 2013.

 
The principal amount of US$1,500 million of 4.25% guaranteed notes due in 2021 and the principal amount of US$500 million of 5.75% guaranteed notes due in 2041 were issued by CNOOC Finance (2011) Limited, a wholly-owned subsidiary of the Company. The obligations of CNOOC Finance (2011) Limited in respect of the notes are unconditionally and irrevocably guaranteed by the Company.

 
The principal amount of US$1,500 million of 3.875% guaranteed notes due in 2022 and the principal amount of US$500 million of 5.000% guaranteed notes due in 2042 were issued by CNOOC Finance (2012) Limited, a wholly-owned subsidiary of the Company. The obligations of CNOOC Finance (2012) Limited in respect of the notes are unconditionally and irrevocably guaranteed by the Company.

 
The principal amount of US$750 million of 1.125% guaranteed notes due in 2016, the principal amount of US$750 million of 1.750% guaranteed notes due in 2018, the principal amount of US$2,000 million of 3.000% guaranteed notes due in 2023 and the principal amount of US$500 million of 4.250% guaranteed notes due in 2043 were issued by CNOOC Finance (2013) Limited, a wholly-owned subsidiary of the Company in May 2013. The obligations of CNOOC Finance (2013) Limited in respect of the notes are unconditionally and irrevocably guaranteed by the Company.

 
During March 2005, Nexen issued US$250 million of notes. Interest is payable semi-annually at a rate of 5.2% and the principal is to be repaid in March 2015. In 2011, Nexen repurchased and cancelled US$124 million of principal of these notes. As at 30 June 2013, US$126 million of notes remain outstanding.

 
During May 2007, Nexen issued US$250 million of notes. Interest is payable semi-annually at a rate of 5.65% and the principal is to be repaid in May 2017. In 2011, Nexen repurchased and cancelled US$188 million of principal of these notes. As at 30 June 2013, US$62 million of notes remain outstanding.

 
During July 2009, Nexen issued US$300 million of notes. Interest is payable semi-annually at a rate of 6.2% and the principal is to be repaid in July 2019.

 
During April 1998, Nexen issued US$200 million of notes. Interest is payable semi-annually at a rate of 7.4% and the principal is to be repaid in May 2028.

 
During March 2002, Nexen issued US$500 million of notes. Interest is payable semi-annually at a rate of 7.875% and the principal is to be repaid in March 2032.
 
 
32

 
 
15.
LOANS AND BORROWINGS (CONTINUED)
 
 
During March 2005, Nexen issued US$790 million of notes. Interest is payable semi-annually at a rate of 5.875% and the principal is to be repaid in March 2035.

 
During May 2007, Nexen issued US$1,250 million of notes. Interest is payable semi-annually at a rate of 6.4% and the principal is to be repaid in May 2037.

 
During July 2009, Nexen issued US$700 million of notes. Interest is payable semi-annually at a rate of 7.5% and the principal is to be repaid in July 2039.

 
All the notes issued by Nexen mentioned above were guaranteed by CNOOC Limited since 22 March 2013.

 
During November 2003, Nexen issued US$460 million of unsecured subordinated debentures. Interest was payable quarterly at a rate of 7.35%, and the principal was to be repaid in November 2043. Nexen had completed the redemption of such debentures on 28 March 2013.
 
**
In connection with the Tangguh LNG Project in Indonesia, the Company delivered a guarantee dated 29 October 2007 in favor of Mizuho Corporate Bank, Ltd., which acts as the facility agent for and on behalf of various international commercial banks under a US$884 million commercial loan agreement dated 29 October 2007. The Company guarantees the payment obligations of the trustee borrower under the subject loan agreement and is subject to a maximum cap of approximately US$164,888,000. Together with the loan agreement dated 31 July 2006 with a maximum cap of approximately US$487,862,000, the total maximum guarantee cap is US$652,750,000.

 
An agreement in respect of the sale of a 3.05691% interest of the Company in the Tangguh LNG Project to Talisman Energy Inc. (“Talisman”) for a consideration of US$212.5 million became effective on 1 January 2008. The transaction was completed through the equity transfer of an indirect subsidiary of the Company. The Company through its subsidiary continues to hold a 13.89997% interest in the Tangguh LNG Project after the sale.

 
In addition, a letter of credit agreement was signed between the Company and Talisman with execution of the aforesaid agreement. Accordingly, Talisman has delivered valid and unexpired standby letters of credit with the amount of US$120 million to the Company (as the beneficiary) as a counter-guarantee to offset the exposure of the Company’s guarantee for the aforesaid interest of 3.05691% in respect of the Tangguh LNG Project financing.

There is no default of principal, interest or redemption terms of the loans and borrowings during the period.
 
 
33

 

16.
ISSUED CAPITAL
 
               
Issued
 
   
Number
   
Share
   
share capital
 
Shares
 
of shares
   
capital
   
equivalent of
 
         
HK$ million
   
RMB million
 
                   
Authorised:
                 
Ordinary shares of HK$0.02 each
                 
 as at 30 June 2013 and
                 
 31 December 2012
    75,000,000,000       1,500        
                       
Issued and fully paid:
                     
Ordinary shares of HK$0.02 each
                     
 as at 1 January 2012
    44,659,180,984       893       949  
Shares repurchased and cancelled in 2012
    (12,875,000 )            
                         
As at 31 December 2012 (audited)
    44,646,305,984       893       949  
                         
As at 30 June 2013 (unaudited)
    44,646,305,984       893       949  
 
17.
DIVIDEND
 
 
On 20 August 2013, the board of Directors (the “Board”) declared an interim dividend of HK$0.25 (tax inclusive) per share (six months ended 30 June 2012: HK$0.15 (tax inclusive) per share), totalling approximately HK$11,162 million (tax inclusive) (equivalent to approximately RMB8,891 million (tax inclusive)) (six months ended 30 June 2012: approximately RMB5,459 million (tax inclusive)), based on the number of issued shares as at 30 June 2013.

Pursuant to the Enterprise Income Tax Law of the People’s Republic of China and related laws and regulations, the Company is regarded as a Chinese resident enterprise, and thus is required to withhold corporate income tax at the rate of 10% when it distributes dividends to its non-resident enterprise (as defined in the “Enterprise Income Tax Law of the People’s Republic of China”) shareholders, with effect from the distribution of the 2008 final dividend. In respect of all shareholders whose names appear on the Company’s register of members and who are not individuals (including HKSCC Nominees Limited, corporate nominees or trustees such as securities companies and banks, and other entities or organizations, which are all considered as non-resident enterprise shareholders), the Company will distribute the dividend after deducting corporate income tax of 10%.
 
 
34

 

18.
SHARE OPTION SCHEMES
 
 
The Company has adopted the following four share option schemes:

 
(i)
Pre-Global Offering Share Option Scheme (as defined in the Other Information section);

 
(ii)
2001 Share Option Scheme (as defined in the Other Information section);