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 February 8, 2002
CNOOC Limited
(Translation of registrant's name into English)
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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 Form 20-F or Form 40-F)
Form 20-F X Form 40-F
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(Indicate by check mark whether the registrant by furnishing the information
contained in this Form 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
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(If "Yes" is marked, indicate below the file number assigned to the registrant
in connection with Rule 12g3-2(b): N/A.)
Company Press Release
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IMPORTANT
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If you are in any doubt about this circular, you should consult your
stockbroker or other registered dealer in securities, bank manager, solicitor,
professional accountant or other professional adviser.
If you have sold all your shares in CNOOC Limited, you should at once hand
this circular to the purchaser or transferee or to the bank, stockbroker or
other agent through whom the sale or transfer was effected for transmission to
the purchaser or transferee.
The Stock Exchange of Hong Kong Limited takes no responsibility for the
contents of this circular, makes no representation as to its accuracy or
completeness and expressly disclaims any liability whatsoever for any loss
howsoever arising from or in reliance upon the whole or any part of the
contents of this circular.
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(Cnooc Logo)
CNOOC LIMITED
(graphics omitted)
(incorporated in Hong Kong with limited liability)
DISCLOSEABLE TRANSACTION
ACQUISITION OF INTERESTS IN
OIL AND GAS PRODUCTION SHARING AND
TECHNICAL ASSISTANCE CONTRACTS IN CONTRACT AREAS
LOCATED IN INDONESIA
Exclusive Financial Advisor
to CNOOC Limited
(Merrill Lynch Logo)
Merrill Lynch (Asia Pacific) Limited
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8 February 2002
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CONTENTS
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Page
Definitions .................................................................1
Letter from the Board
Introduction .......................................................3
The Agreement ......................................................4
Reasons for Entering into the Agreement ............................8
General ............................................................8
Appendix - General Information ............................................9
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DEFINITIONS
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In this circular, the following expressions have the following meanings unless
the context indicates otherwise:
"Agreement" the agreement dated 18 January 2002 relating to
the acquisition of the Target Companies Shares
and Intercompany Loans
"BOE" barrels-of-oil equivalent
"Company" CNOOC Limited (graphics omitted)
"Completion" completion of the acquisition of the Target
Companies Shares and Intercompany Loans pursuant
to the Agreement
"Directors" the directors of the Company
"Effective Date" 01:00, 1 January 2002, Hong Kong time
"Group" the Company and its subsidiaries from time to
time
"HK$" Hong Kong dollars, the lawful currency of Hong
Kong
"Hong Kong" the Hong Kong Special Administrative Region of
the People's Republic of China
"Intercompany Loans" means the net aggregate amount, including
accrued interest, owed by the Target Companies
to Repsol Netherlands Finance B.V., an affiliate
of the Sellers
"km" kilometres
"Latest Practicable Date" 30 January 2002, being the latest practicable
date prior to the printing of this circular for
ascertaining certain information referred to in
this circular
"Listing Rules" the Rules Governing the Listing of Securities on
The Stock Exchange of Hong Kong Limited
"PSC(s)" production sharing contract(s)
"Purchaser" CNOOC Southeast Asia Limited, a limited
liability company incorporated in Bermuda, an
indirectly wholly-owned subsidiary of the
Company
"SDI Ordinance" the Securities (Disclosure of Interests)
Ordinance (Chapter 396 of the Laws of Hong Kong)
"Share(s)" ordinary share(s) of HK$0.10 each in the share
capital of the Company
"Shareholders" holders of Shares
1.
"TAC" technical assistance contract
"Target Companies" the nine companies whose names and jurisdiction
of incorporation are set out below:
YPF-Maxus Southeast Sumatra B.V. - the Netherlands
Repsol Exploracion Sunda B.V. - the Netherlands
Repsol (Sumatra) Exploration and - the Cayman Islands
Production Limited
YPF Java Baratlaut B.V. - the Netherlands
Repsol (Java) Exploration and - the Cayman Islands
Production Limited
YPF Madura Barat B.V. - the Netherlands
YPF Poleng B.V. - the Netherlands
YPF Blora Ltd. - the Cayman Islands
PT IIAPCO - Indonesia
"Target Companies Shares" in relation to the Target Companies, their
entire existing issued and fully paid up shares
"US$" United States dollars, the lawful currency of
the United States of America
In this circular, the exchange rate of US$1 = HK$7.8 has been used, where
applicable, for purposes of illustration only and does not constitute any
representation that any amounts have been, could have been or may be
exchanged.
2.
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LETTER FROM THE BOARD
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(Cnooc Logo)
CNOOC LIMITED
(graphics omitted)
(incorporated in Hong Kong with limited liability)
Directors: Registered office:
Wei Liucheng (Chairman and Chief Executive Officer) 65th Floor
Fu Chengyu Bank of China Tower
Jiang Longsheng 1 Garden Road
Zhou Shouwei Hong Kong
Luo Han
Tso Kai Sum*
Will Honeybourne *
So Chak Kwong**
Chiu Sung Hong**
* non-executive director
** independent non-executive director
8 February 2002
To the Shareholders
Dear Sir or Madam,
DISCLOSEABLE TRANSACTION
ACQUISITION OF INTERESTS IN OIL AND GAS
PRODUCTION SHARING AND TECHNICAL ASSISTANCE CONTRACTS
IN CONTRACT AREAS LOCATED IN INDONESIA
INTRODUCTION
The Directors announced on 18 January 2002 that on 18 January 2002 the Company
and CNOOC Southeast Asia Limited entered into a share purchase agreement to
acquire the shares in, and intercompany loans owing by, nine subsidiaries of
Repsol YPF, S.A. which together hold a portfolio of operated and non-operated
interests in oil and gas production sharing and technical assistance contracts
in contract areas located offshore and onshore Indonesia. The purpose of this
circular is to provide you further information on the Agreement.
3.
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LETTER FROM THE BOARD
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4.
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LETTER FROM THE BOARD
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THE AGREEMENT
Date of the Agreement
18 January 2002
Parties to the Agreement
1) Sellers : YPF Energy Holdings N.V., Repsol Exploracion
S.A., Repsol International Finance B.V. and YPF
International Ltd, each of which is a
wholly-owned subsidiary of Repsol YPF, S.A., a
Spanish integrated oil and gas company which is
an independent third party not connected with
the directors, chief executive or substantial
shareholders of the Company or any of its
subsidiaries or any of their respective
associates (as defined in the Listing Rules).
2) Sellers' Guarantor : Repsol Exploracion S.A. (as guarantor of the
Sellers' obligations under the Agreement)
3) Purchaser : CNOOC Southeast Asia Limited
4) Purchaser's Guarantor : the Company (as guarantor of the Purchaser's
obligations under the Agreement)
Assets to be Acquired
The assets to be acquired are the shares in, and the Intercompany Loans owed
by, the Target Companies. The principal businesses of the Target Companies are
the exploration, development and production of oil and gas offshore and
onshore Indonesia. Their principal assets comprise a portfolio of operated and
non-operated interests in an aggregate of five production sharing and
technical assistance contracts in that region. Based on the Company's internal
review, the Company estimates the net working interest proved reserves of the
assets as at the Effective Date at approximately 360 million BOE.
5.
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LETTER FROM THE BOARD
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The interests owned by the Target Companies comprise the following assets (the
remaining interests being owned by independent third parties):-
Contract Interests in the Contract
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South East Sumatra PSC 65.34%
Offshore Northwest Java PSC 36.72%
West Madura PSC 25.00%
Poleng TAC 50.00%
Blora PSC 16.70%
As at the Effective Date, the Target Companies Shares and Intercompany Loans
were valued by the Company at US$585 million (HK$4,563 million), assuming zero
net working captial.
The net profits before and after taxation and extraordinary items of the
Target Companies (on a combined basis) for the two full financial years ended
31 December 1999 and 31 December 2000 and for the 11 months ended 30 November
2001 were as follows:-
For the year ended 31 For the 11 months ended
December 30 November 2001
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1999 2000
---- ----
US$'000 US$'000 US$'000
Net profit before taxation and 129,801 220,27 156,033
extraordinary items
Net profit after taxation and 57,021 71,685 80,164
extraordinary items
For the 12 months ended on each of 31 December 1999 and 31 December 2000, the
above figures are derived from the audited accounts of the Target Companies
(except for YPF Blora Ltd and PT IIAPCO, in respect of which they are derived
from their unaudited management accounts). For the 11 months ended 30 November
2001, these figures are derived from the unaudited management accounts of the
Target Companies. The unaudited aggregate net asset value of the Target
Companies (on a combined basis) as at 30 November 2001 was approximately
US$223 million (HK$1,739 million).
6.
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LETTER FROM THE BOARD
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South East Sumatra PSC (an aggregate of 65.34% interest)
This is a contract area covering approximately 8,100 square km located
offshore Sumatra and is the largest of the assets held by the Target
Companies. Following Completion it will be operated and majority owned by the
Group. It is the largest offshore oil development in Indonesia and one of
Indonesia's most successful PSCs, having produced more than 1 billion barrels
of oil in more than 20 years of production. The concession expires in 2018.
Offshore Northwest Java PSC (an aggregate of 36.72% interest)
This is a contract area covering approximately 13,800 square km, located in
the Southern Java Sea, offshore Jakarta, and is also one of Indonesia's most
successful PSCs, having also produced more than 1 billion BOE in more than 20
years of production. It is operated by a member of the BP p.l.c. group and
currently produces crude oil and natural gas, selling natural gas to the
Indonesia State Electric Company and the Indonesia State Gas Utility Company.
The concession expires in 2017.
West Madura PSC (25.00% interest) and Poleng TAC (50.00% interest)
These are smaller contract areas offshore Java, near the island of Madura and
the Java city of Surabaya. The contract areas cover approximately 1,600 square
km combined. Kodeco Energy Company is the operator for the West Madura PSC and
Korea Development Co. Ltd is the operator for the Poleng TAC, in each case
assisted by certain Target Companies. These contract areas currently produce
crude oil and natural gas, selling natural gas to the Indonesia State Electric
Company. The West Madura PSC expires in May 2011. The Poleng TAC expires in
December 2013.
Blora PSC (16.70% interest)
This contract area lies entirely onshore Java and covers an area of
approximately 4,800 square km. There has been no production of crude oil or
natural gas from this concession. The operator is currently Coparex Blora B.V.
The concession expires in 2026.
Consideration
The aggregate consideration for the Target Companies Shares and the
Intercompany Loans, to be paid in cash on Completion, shall be US$585 million
(HK$4,563 million), subject to adjustment by reference to changes in the level
of Intercompany Loans up to Completion, the level of working capital as at the
Effective Date, dividends declared prior to Completion and interest. If there
is a material increase in the aggregate consideration after the foregoing
adjustments, the Company will issue a further announcement and comply with the
relevant requirements of the Listing Rules. The aggregate consideration will
also be adjusted by reference to changes in future oil prices over an agreed
period following the date of the Agreement, subject to a maximum increase or
decrease of US$30 million (HK$234 million).
7.
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LETTER FROM THE BOARD
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As at the Effective Date, the balance of Intercompany Loans outstanding,
including accrued interest, was approximately US$335 million (HK$2,613
million).
The consideration for the Target Companies Shares and the Intercompany Loans
was determined based on an arm's length negotiation between the Sellers and
the Purchaser and the Company's internal valuation.
Conditions Precedent
The acquisition of the Target Companies Shares and the Intercompany Loans is
conditional upon the following conditions precedent being fulfilled or waived
on or before 30 September 2002 (or such other date as is agreed by the Sellers
and the Purchaser):
(a) receipt of the approval by the Government of Indonesia and Pertamina
(as necessary) to the transfer of the Target Companies Shares to the
Purchaser;
(b) no challenge to the transfer of any of the Target Companies Shares to
the Purchaser having been made by any other party to any agreement
relating to the assets of the Target Companies, prior to Completion;
and
(c) in the case of the Target Companies Shares and Intercompany Loans in
respect of YPF Poleng B.V. only, no current party to the joint
operating agreement with Korea Development Co., Ltd., ("Poleng JOA")
having indicated an intention to exercise its right to acquire all or
any part of the participating interest in the Poleng TAC from YPF
Poleng B.V. or the shares of YPF Poleng B.V. within thirty days of the
notice to the other current parties to the Poleng JOA sent pursuant to
the Agreement.
If the condition precedent in (c) above is not satisfied, the Target Companies
Shares and Intercompany Loans of YPF Poleng B.V. will be excluded from the
acquisition and the consideration will be reduced accordingly.
Completion shall take place on a date no later than ten business days after
satisfaction (or waiver by the Purchaser) of the condition in (a) above and
(in the case of YPF Poleng B.V.) the condition in (c) above, but subject to
the condition in (b) above being satisfied up to the date of Completion
(unless waived by the Purchaser subject to the terms of the Agreement).
Upon Completion, subject to the terms of the Agreement, the Target Companies
will become indirectly wholly owned subsidiaries of the Company.
Means of Financing
The consideration is to be funded by internal sources. The Directors believe
that the Company has sufficient internal resources to finance the
consideration.
8.
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LETTER FROM THE BOARD
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Co-operation Agreement
On Completion, Repsol Exploration Services Limited and the Purchaser will
enter into a co-operation agreement, under which Repsol Exploration Services
Limited (an independent third party not connected with the directors, chief
executive or substantial shareholders of the Company or any of its
subsidiaries or any of their respective associates (as defined in the Listing
Rules)) will provide to the Target Companies consulting assistance on arm's
length terms for a period of up to six months, in order to achieve a smooth
transition of the businesses of the Target Companies to the Purchaser.
REASONS FOR ENTERING INTO THE AGREEMENT
The principal activity of the Group is the exploration, development and
production of crude oil and natural gas offshore China. The acquisition of the
Target Companies is consistent with the Group's plan to expand its production
and reserves. Furthermore, the Directors believe that it represents a unique
opportunity to make an acquisition of producing assets that fit with the
Group's offshore expertise and experience. The Company estimates that its net
working interest proved reserves will increase by approximately 360 million
BOE through the acquisition. The acquisition provides additional immediate
production otherwise inaccessible to the Group and makes the Group the largest
offshore oil producer in Indonesia.
GENERAL
The entering into of the Agreement by the Company and the Purchaser
constitutes a discloseable transaction on the part of the Company under the
Listing Rules.
Your attention is also drawn to the Appendix to this circular.
Yours faithfully
By order of the Board
Wei Liucheng
Chairman and Chief Executive Officer
9.
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APPENDIX GENERAL INFORMATION
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1. RESPONSIBILITY STATEMENT
This circular includes particulars given in compliance with the Listing
Rules for the purpose of giving information with regard to the Company.
The Directors collectively and individually accept full responsibility for
the accuracy of the information contained in this circular and confirm,
having made all reasonable enquiries, that to the best of their knowledge
and belief there are no other facts the omission of which would make any
statement herein misleading.
2. DISCLOSURE OF INTERESTS
As at the Latest Practicable Date, the interests of the Directors and
chief executive of the Company in the Shares and the shares of the
Company's associated corporations (within the meaning of the SDI
Ordinance) which had to be notified to the Company and the Stock Exchange
pursuant to Section 28 of the SDI Ordinance (including interests which
they were deemed or taken to have under Section 31 or Part I of the
Schedule to the SDI Ordinance) or which were required, pursuant to Section
29 of the SDI Ordinance, to be entered in the register referred to therein
or, which were required to be disclosed pursuant to the Model Code for
Securities Transactions by Directors of Listed Companies were as follows:
Interest in the Company
Name of Director Number of Shares in which the Director was interested
Personal Family Corporate Other Total
Interest Interest Interest Interest
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So Chak Kwong 30,000 - - - 30,000
SHARE OPTION SCHEME
The following directors were granted options in respect of shares in the
Company under the Pre-Global Offering Share option Scheme:
Name of Director Date of Grant Exercise Price (HK$) No. of Shares
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Wei Liucheng 12 March 2001 5.95 500,000
Fu Chengyu 12 March 2001 5.95 350,000
Jiang Longsheng 12 March 2001 5.95 280,000
Zhou Shouwei 12 March 2001 5.95 280,000
Luo Han 12 March 2001 5.95 280,000
10.
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APPENDIX GENERAL INFORMATION
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The above options may be exercised, in whole or in part, in accordance with the
following vesting schedule:
- 50% of the shares underlying the option shall vest on 12 September 2002;
and
- 50% of the shares underlying the option shall vest on 12 September 2003.
Save as disclosed herein, as at the Latest Practicable Date, none of the
Directors and chief executive of the Company had any interest in the Company or
any of its associated corporations.
3. SUBSTANTIAL SHAREHOLDER
As at the Latest Practicable Date, as far as was known to any Director or
chief executive of the Company, the following persons (not being a
Director or chief executive of the Company) were directly or indirectly
interested in ten per cent. or more of the nominal value of any class of
share capital carrying rights to vote in all circumstances at general
meetings of any member of the Group:
Name of Substantial Shareholder No. of Shares in which the Substantial
Shareholder was interested
CNOOC (BVI) Limited 5,800,000,000 (Note)
Overseas Oil and Gas Corporation Ltd. 5,800,000,000 (Note)
China National Offshore Oil Corporation 5,800,000,000 (Note)
Note : The shares in which CNOOC (BVI) Limited was interested formed the
shares in which Overseas Oil and Gas Corporation, Ltd. was interested; the
shares in which Overseas Oil and Gas Corporation, Ltd. was interested formed
the shares in which China National Offshore Oil Corporation was interested.
Save as disclosed herein, as far as was known to any Director or chief
executive of the Company, there were no other persons who, as at the Latest
Practicable Date were, directly or indirectly, beneficially interested in ten
per cent. or more of the nominal value of any class of share capital carrying
rights to vote in all circumstances at general meeting of any member of the
Group or in any options in respect of such capital.
11.
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APPENDIX GENERAL INFORMATION
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4. LITIGATION
Paladin Resources plc and Paladin Resources (Sunda) Limited (together the
"Paladin Companies") commenced an action in November 2001 in The District
Court of Dallas County, Texas against YPF Indonesia Ltd. (a subsidiary of
Repsol YPF, S.A.) and YPF Maxus Southeast Sumatra B.V. (one of the Target
Companies). The litigation centres on the interpretation of a 1986
settlement agreement and an "area of mutual interest" provision in an
operating agreement (as amended) for the South East Sumatra Contract Area.
The action relates to an acquisition by the Repsol YPF, S.A. group of an
interest in a separate contract area (not being one of the interests owned
by the Target Companies as referred to on page 5 of this circular).
Pursuant to the Agreement, Repsol Exploracion S.A. (being the Sellers'
Guarantor and one of the Sellers) has agreed to indemnify CNOOC Southeast
Asia Limited against any damages awarded against any Target Company and/or
the market value of any forced divestment by any Target Company pertaining
to this action. The amount of the claim is not yet specified and the
Paladin Companies are also claiming specific performance of the settlement
agreement and other agreements. The Directors do not consider that this
will have a material impact on the Group.
Save as disclosed above, as at the Latest Practicable Date, neither the
Company nor any of its subsidiaries was engaged in any litigation or
arbitration of material importance and there was no litigation or claim of
material importance known to the Directors to be pending or threatened by
or against the Company or any of its subsidiaries.
5. GENERAL
(a) The secretary of the Company is Mr Cao Yunshi, a senior economist
and licensed lawyer in the People's Republic of China.
(b) The share registrar and transfer office of the Company in Hong Kong
is Hong Kong Registrars Limited of 2nd Floor, Vicwood Plaza, 199 Des
Voeux Road Central, Hong Kong.
(c) The English text of this circular shall prevail over the Chinese
text.
12.
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Notes to Editors:
CNOOC LIMITED - BACKGROUND
Incorporated in Hong Kong in August 1999, the Company is the dominant producer
of crude oil and natural gas offshore China. The Company is also one of the
largest independent crude oil and gas exploration and production companies in
the world. As of December 31, 2000, its net proved reserves were 1.8 billion
barrels-of-oil equivalents and its net production totaled 239,337 BOE per day.
The Company has interests in 45 crude oil and gas properties in four major
producing areas: Bohai Bay, Western South China Sea, Eastern South China Sea
and East China Sea. The Company is a major oil and gas company in China with
approximately 1,000 employees.
CNOOC LIMITED - RELATIONSHIP WITH ITS PARENT COMPANY
The Company is a 70.6% held subsidiary of China National Offshore Oil
Corporation ("CNOOC"). The Company is the sole vehicle through which CNOOC
carries out oil and gas exploration, development and production activities
offshore China and internationally.
CNOOC, the parent company, is involved in the administrative, research and
services functions for the PRC offshore petroleum industry as well as other
mid- or down-stream petroleum projects.
*** *** ***
This press release contains statements that are not historical facts,
including statements about beliefs and expectations of the directors of the
Company. These forward-looking statements are based on current plans,
estimates and projections, and therefore you should not place undue reliance
on them. Forward-looking statements speak only as of the date they are made,
and the directors of the Company undertake no obligation to update publicly
any of them in light of new information or future events. Forward-looking
statements involve inherent risks and uncertainties. You are cautioned that a
number of important factors could cause actual results to differ materially
from those contained in any forward-looking statement. Such factors include,
but are not limited to, changes of the PRC's economic, political and social
conditions as well as government policies.
*** *** ***
For further enquiries, please contact:
Mr. Xiao Zongwei
CNOOC Limited
Tel : +86 10 8452 1646
Fax: +86 10 8452 1648
E-mail: xiaozw@cnooc.com.cn
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be issued on its behalf
by the undersigned, thereunto duly authorized.
CNOOC Limited
By: /s/ Cao Yunshi
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Name: Cao Yunshi
Title: Company Secretary
Dated: February 8, 2002