SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 6-K
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REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 OF
THE SECURITIES EXCHANGE ACT OF 1934
For December 5, 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)
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(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.)
[LOGO]
CNOOC LIMITED
[CHINESE CHARACTERS]
(Incorporated in Hong Kong with limited liability under the Companies Ordinance)
NOTICE OF EXTRAORDINARY GENERAL MEETING
NOTICE IS HEREBY GIVEN that an extraordinary general meeting of the
shareholders of CNOOC Limited (the "Company") will be held at Island
Shangri-la Hong Kong, Two Pacific Place, Supreme Court Road, Hong Kong on 23
December 2002 at 11 am for the purpose of considering and, if thought fit,
passing, with or without modification, the following resolutions as Ordinary
Resolutions:
ORDINARY RESOLUTION
1. "THAT the ongoing connected transactions as described in the Announcement
made by the Company on 5 December 2002, which the Company expects to
occur on a regular and continuous basis in the ordinary and usual course
of business of the Company and its subsidiaries, as the case may be, be
and are hereby generally and unconditionally approved and the directors
of the Company are hereby authorised to do all such further acts and
things and execute such further documents and take all such steps which
in their opinion may be necessary, desirable or expedient to implement
and/or give effect to the terms such transactions."
By Order of the Board
Cao Yunshi
Company Secretary
Hong Kong, 5 December 2002
Notes:
1. Shareholders whose names are registered in the register of members of the
Company on or before 18 December 2002 are entitled to attend and vote at
the Extraordinary General Meeting.
2. Any Shareholder entitled to vote at the Extraordinary General Meeting is
entitled to appoint one (1) or more proxies to attend and vote on his
behalf. A proxy need not be a shareholder of the Company. Shareholders
must appoint a proxy in writing. Such instrument should be signed by the
person appointing the proxy or by such person's authorised
representative. If the form of proxy is signed by another person so
authorised by the shareholder, the power of attorney or other authorising
document must be certified by a notary. The notarially certified power of
attorney or other authorising document together with the proxy form must
be returned to the Registered Office of the Company not later than 48
hours prior to the commencement of the Extraordinary General Meeting. The
completion and deposit of a form of proxy will not preclude any
shareholder from attending and voting at the Extraordinary General
Meeting.
3. Each shareholder (or his/her proxy) shall be entitled to one vote for
each share held. If a shareholder has appointed more than one proxy to
attend the meeting, the voting rights can only be exercised by way of
poll.
Address of the Registered Office of the Company:
CNOOC Limited
65/F, 1 Garden Road, Hong Kong
Tel: 852-2213 2500
Fax: 852-2525 9322
The Stock Exchange of Hong Kong Limited takes no responsibility for the
contents of this announcement, 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 announcement.
[LOGO]
(CNOOC LIMITED)
[CHINESE CHARACTERS]
(Incorporated in Hong Kong with limited liability under the Companies Ordinance)
RENEWAL OF EXISTING WAIVER AND APPLICATION FOR A NEW WAIVER
FOR ONGOING CONNECTED TRANSACTIONS
The Existing Waiver granted by the Stock Exchange on 3 April 2001 from strict
compliance with the relevant requirements of the Listing Rules in respect of
the Ongoing Connected Transactions between the CNOOC Group and the Group will
expire on 31 December 2002. The Directors have applied to the Stock Exchange
for a New Waiver in respect of the Ongoing Connected Transactions for a period
of three financial years ending 31 December 2005.
CNOOC indirectly owns an aggregate of approximately 70.61% of the issued share
capital of the Company, and transactions between the CNOOC Group and the Group
constitute connected transactions for the Company under the Listing Rules and
are subject to approval from the Independent Shareholders. Furthermore, as the
Ongoing Connected Transactions will continue on a regular basis, the Company
has applied to the Stock Exchange for a waiver for three financial years
ending 31 December 2005 from strict compliance with the relevant disclosure
and approval requirements in respect of the Ongoing Connected Transactions
under the Listing Rules.
A Circular containing particulars of the Ongoing Connected Transactions, a
letter from the Independent Board Committee, an opinion of Cazenove Asia
Limited, the independent financial advisor, together with a notice to convene
the EGM to approve, among other things, the Ongoing Connected Transactions
will be issued to Shareholders as soon as practicable.
1. BACKGROUND
We refer to the Prospectus setting out details in relation to the
reorganisation of the Company in 1999 and the IPO of the Company in 2001.
Following the Restructuring, the Company became an indirect subsidiary of
CNOOC. As CNOOC indirectly owns an aggregate of approximately 70.61% of the
issued share capital of the Company, transactions between the CNOOC Group and
the Group constitute connected transactions for the Company.
On 14 November 2000, the Company made an application for a waiver to the Stock
Exchange from strict compliance with the relevant requirements of the Listing
Rules in respect of the Ongoing Connected Transactions between the CNOOC Group
and the Group. Subsequently, the Stock Exchange, on 3 April 2001, granted the
Existing Waiver to the Company subject to, inter alia, the conditions set out
in the Prospectus. The Existing Waiver will expire on 31 December 2002 and the
Company has applied to the Stock Exchange for the New Waiver.
The Company is currently proposing to increase the annual limits of certain
categories of Ongoing Connected Transactions in its New Waiver as compared
with the annual limits in the Existing Waiver, further details of which are
set out in paragraphs headed "Application for New Waiver" of this
Announcement.
2. ONGOING CONNECTED TRANSACTIONS
The following connected transaction agreements were entered into between the
Group and the CNOOC Group at the time of the Company's IPO.
The Directors expect that the Company will continuously enter into transactions
with the CNOOC Group as stated in these agreements, which will constitute
Ongoing Connected Transactions:
o Contracts with foreign petroleum companies;
o Trademark licence agreements;
o Lease agreement in respect of Nanshan terminal;
o Provision of materials, utilities and ancillary services;
o Technical services;
o Research and development services;
o Lease and property management services; and
o Sales of crude oil, condensate oil and liquefied petroleum gas.
Contracts with foreign petroleum companies
Immediately prior to the Restructuring, CNOOC had 37 production sharing
contracts and one geophysical survey agreement with various international oil
and gas companies. As part of the Restructuring, and in preparation for the
Company's IPO, CNOOC transferred to the Group all of its rights and
obligations under these contracts and future contracts, except those rights
and obligations relating to CNOOC's administrative functions. However, CNOOC
remains and will remain a party to the production sharing contracts, as
required by existing laws and regulations. Under the PRC law, the negotiation
of a production sharing contract is a function that only a national company,
such as CNOOC, can perform. This function cannot be transferred to the Company
because the Company is a pure commercial entity. Following the Global
Offering, the Group has continued to deal with CNOOC with respect to the
performance of the rights and obligations retained by CNOOC under the
production sharing contracts. The Company expects that it will continue to
enter into such arrangements with the CNOOC in the future.
New production sharing contracts are entered into between CNOOC and foreign
partners primarily through bidding organised by CNOOC and, to a lesser extent,
through direct negotiation.
Trademark licence agreements
CNOOC and CNOOC's associate are the respective registered owners of two
"CNOOC" trademarks. Under two non-exclusive licence agreements entered into on
9 September, 1999 and which are due to expire on 8 September 2008, the Group
has obtained the right to use the trademarks for a nominal consideration of
Rmb1,000 for each of the trademarks. The registration of the trademarks will
expire on 6 December 2008 and 20 April 2009, respectively. Each of CNOOC and
CNOOC's associate has undertaken that so long as CNOOC is the controlling
shareholder (as defined in the Listing Rules) of the Company, it will renew
the registration of the trademarks to enable the Group to continue to use the
trademarks without any additional payment.
Lease agreement in respect of Nanshan Terminal
Under an agreement dated 9 September, 1999 among CNOOC, CNOOC's associate and
the Group, CNOOC and its associate have granted the Group a right to use the
land and buildings comprising the Nanshan Terminal, Yacheng 13-1 without any
consideration payable to CNOOC or its associate for a term of 20 years. The
property is occupied by the Group for natural gas processing purposes.
Provision of materials, utilities and ancillary services
After the establishment of CNOOC, four PRC subsidiaries were formed to
undertake the exploration and production of oil and natural gas businesses. In
addition, their scope of business included the provision of various facilities
and ancillary services, such as the supply of materials for offshore oil and
gas production, medical and employee welfare services, major equipment
maintenance and repair work and the supply of water, electricity and heat.
After the Restructuring, these PRC subsidiaries of CNOOC no longer undertake
the exploration and production of oil and natural gas businesses but continue
to hold interests in various properties, including office buildings and
warehouses, and to provide to CNOOC China facilities and ancillary services,
some of which may not be available from independent third parties or available
on comparable terms. Currently, these PRC subsidiaries of CNOOC only provide
facilities and ancillary services to the Group. Following the expiry of
existing supply agreements in September 2002, CNOOC China renewed such supply
agreements with each of the four PRC subsidiaries of CNOOC for the supply of
materials, utilities and ancillary services under the terms described below.
Under these agreements, each of these four PRC subsidiaries provide to CNOOC
China various materials, utilities and ancillary services, including:
o materials for offshore oil and gas production (including cement, diesel
oil, mud, fuels, barite and paint);
o oil and gas production labour services,
o warehousing and storage;
o road transportation services;
o telecommunication and network services;
o wharf services;
o construction services, including the construction of roads, piers,
buildings, plants and embankment;
o major equipment maintenance and repair works; medical, child care and
social welfare services; water, electricity and heat supply;
o security and fire services; technical training; accommodation;
o repair and maintenance of buildings; and
o catering services.
The materials, utilities and ancillary services will be provided at:
(i) state-prescribed prices; or
(ii) where there is no state-prescribed price, market prices, including the
local or national market prices; or
(iii) when neither (i) nor (ii) is applicable, the cost to CNOOC's associates
of providing the relevant materials, utilities and ancillary services,
including the cost of sourcing or purchasing from third parties, plus a
margin of not more than 5%, before any applicable taxes.
The prices, volumes and other terms for the supply of materials, utilities and
ancillary services will be reviewed by the parties annually. If any of the
terms are to be amended, the parties will enter into a supplemental agreement
no later than 60 days prior to the end of the financial year preceding the
financial year in which such amendments are to take effect. If the parties
fail to reach an agreement by then, the existing terms of the supply agreement
will continue to apply until the parties agree on the terms of the
supplemental agreement. The Company undertakes to comply with the provisions
of the Listing Rules for any supplemental agreements to be entered into
subsequently.
For the two years ended 31 December, 2001 and the six months ended 30 June
2002 the historical costs of the materials, utilities and ancillary services
provided to the Group were Rmb793 million, Rmb815 million and Rmb272 million,
respectively, representing 3.27%, 3.91% and 2.56%, respectively, of the
Group's total revenues.
Technical services
Since the establishment of CNOOC, a number of specialised companies have been
formed by CNOOC to provide sub-contracting services for CNOOC's offshore oil
and gas production activities. These specialised companies have provided
services to the operators of oil and gas fields under the production sharing
contracts through an open bidding process. In connection with the
Restructuring, CNOOC's associates transferred to the Group the existing
technical services agreements with the specialised companies. In 2002, the
specialised companies novated these agreements to China Oilfield Services
Limited ("COSL"), a company listed on the main board of the Stock Exchange and
a subsidiary of CNOOC, who has since assumed the rights and obligations of the
specialised companies thereunder, except in relation to the provision of
engineering and construction services. The Group may terminate any of these
agreements by giving 30 days' written notice to COSL or the specialised
companies, as the case may be. The Group will continue to use the technical
and labour services provided by COSL and the specialised companies, including:
o offshore drilling;
o ship tugging, oil tanker transportation and security services;
o well survey, well logging, well cementation and other related technical
services;
o collection of geophysical data, ocean geological prospecting, and data
processing;
o platform fabrication service and maintenance; and
o design, construction, installation and test of offshore and onshore
production facilities.
For the two years ended 31 December 2001 and the six months ended 30 June
2002, the charges for such technical services payable to COSL (or its
predecessors, as the case may be) and the specialised companies, as the case
may be, were approximately Rmb 2,038 million, Rmb 2,367 million and Rmb 918
million, respectively, representing 8.41%, 11.37% and 8.63%, respectively, of
the Group's total revenue. These costs are based on arm's length negotiations
with COSL on normal commercial terms or on terms no less
favourable than those available to independent third parties, under prevailing
local market conditions, including considerations such as volume of sales,
length of contracts, package of services, overall customer relationship and
other market factors and, in the case of the specialised companies, are based on
an open bidding process. The Company expects that the costs relating to any
future contract with COSL or the specialised companies will be on a similar
basis.
Research and development services
General research and development services
Under the terms of an original general research and development services
agreement dated 9 September 1999 with CNOOC's subsidiaries and China Offshore
Oil Research Centre ("the Centre"), the Group pays the Centre for a term of
three years from 9 September 1999, an annual amount of Rmb110 million, for the
provision of the services, including:
o geophysical exploration services;
o seismic data processing;
o comprehensive exploration research services; and
o information technology services.
The Group may terminate the agreement by giving three months' written notice
to the Centre. The Centre undertakes that the number of working hours spent by
its senior, middle rank and junior staff on services provided to the Group
under the agreement will not be less than 187,000, 215,000 and 150,000 hours
per year, respectively, which is in line with the number of working hours
spent by such staff during the two years ended 31 December, 1998. After the
first year, the Group may request downward adjustments in light of the Group's
requirements.
Following the expiry of the original three years' term of the general research
and development services agreement, the Group and the Centre entered into a
supplemental agreement to renew the original general research and development
services agreement on the same terms and conditions for an indefinite period.
Research and development services for particular projects
The Group may also use the research and development services provided by the
Centre for the provision of research and development services for particular
projects through an open bidding process. For the two years ended 31 December
2001 and the six months ended 30 June 2002, the costs for research and
development services for particular projects through an open bidding process,
were approximately Rmb 52 million, Rmb 50 million and Rmb 46 million,
respectively, representing approximately 0.21%, 0.24% and 0.43%, respectively,
of the Group's total revenues. The agreements for provision of research and
development services for particular projects are entered into on a
project-by-project basis.
Lease and property management services
CNOOC's associate and the Group have entered into an agreement and management
agreements in respect of certain premises situated at CNOOC Plaza, No. 6
Dongzhimenwai Xiaojie, Beijing, the PRC as the head office of the Group in
Beijing. The gross floor area of the premises is approximately 6,060 square
metres. The monthly rent is Rmb996,100 and the annual management fees are
Rmb2,004,270. Both the lease agreement and the management agreement are for a
fixed term of four years commencing 1 January 2000.
CNOOC's associate and the Group entered into an office lease agreement in
respect of certain office premises at 2-37 He Kou Jie, Tanggu District,
Tianjin, the PRC. The gross floor area of the premises is approximately 12,245
square metres. The monthly rent (including management fee but excluding water
and electricity charges) is Rmb1,127,108. The lease agreement is for a fixed
term of four years commencing 1 January 2000.
CNOOC's associate and the Group entered into an office lease agreement in
respect of office premises at Nantiao Road, Potou District, Zhanjiang,
Guangdong Province, the PRC. The gross floor area of the premises is
approximately 9,670 square metres. The monthly rent (including management fee
but excluding water and electricity charges) is Rmb560,650. The lease
agreement is for a fixed term of four years commencing 1 January 2000.
CNOOC's associate and the Group entered into an office lease agreement in
respect of office premises at
20th, 22nd and 23rd Floors, 583 Lingling Road, Shanghai, the PRC. The gross
floor area of the premises is approximately 3,439 square metres. The monthly
rent (including management fee but excluding water and electricity charges) is
Rmb392,046. The lease agreement is for a fixed term of four years commencing 1
January 2000.
CNOOC's associate and the Group entered into two lease agreements in respect
of certain office premises situated at 1 Second Industrial Road, Shekou,
Shenzhen, the PRC. The gross floor area of the premises is approximately 5,440
square metres. The monthly rent (including management fees but excluding water
and electricity charges) is Rmb530,657. The lease agreements are for a fixed
term of four years commencing 1 January 2000.
The Group entered into lease agreements with CNOOC's associates in respect of
the three residential premises at 60 Bayshore Road and 50 Bayshore Road,
Singapore at an aggregate quarterly rental of S$4,000 (excluding an aggregate
quarterly service fee of approximately S$2,311).
The lease agreements expired on 30 September 2002 and the Group expects to
renew the leases prior to the EGM on the same terms as previously agreed.
The aggregate amount of the annual rentals under these lease agreements is
approximately Rmb43.3 million. The aggregate amount of management fees payable
under the management agreements are Rmb2,004,270. Sallmanns (Far East)
Limited, an independent valuer, has confirmed that the payments due under each
of the lease agreements and the management agreement reflect the fair and
reasonable commercial market rent and management fees, respectively.
The Company has entered into further lease agreements with CNOOC Group since
the IPO and will continue to enter into further leases from time to time on
normal commercial terms, subject to the annual limits set out below. For the
two years ended 31 December 2001 and the six months ended 30 June 2002, the
aggregate rentals and management fees payable by the Group were approximately
Rmb 49 million, Rmb 46 million and Rmb 27 million, respectively.
Sales of crude oil, condensate oil and liquefied petroleum gas
The Group may sell crude oil, condensate oil and liquefied petroleum gas to
associates of CNOOC which engage in the downstream petroleum business at
international market prices on normal commercial terms. The prices for such
sales are, and will be, no less favourable to the Group than the prices for
sales to independent third party customers of the Group such as China
Petroleum & Chemical Corporation, PetroChina Company Limited and Castle Peak
Power Company Limited. For the two years ended 31 December 2001 and the six
months ended 30 June 2002, the total amounts the Group received from
associates of CNOOC were Rmb508 million, Rmb1,814 million and Rmb1,950
million, respectively, representing approximately 2.1%, 8.7% and 18.3% of the
Group's total revenues for the respective periods.
3. REASONS FOR AND BENEFITS OF THE ONGOING CONNECTED TRANSACTIONS
Prior to the Restructuring of CNOOC and establishment of the Company, the
members of the CNOOC Group and the Group operated as an integrated
organisation which undertook numerous intra-group transactions each year. As a
consequence of the Restructuring and upon the listing of the Company's shares
on the Stock Exchange, a number of transactions which have been entered into
and which are to be entered into between the Group and the CNOOC Group will
constitute Ongoing Connected Transactions for the Company under the Listing
Rules.
The Ongoing Connected Transactions as referred to in this Announcement are and
will be conducted in the ordinary and usual course of business of the Company.
These transactions will continue to be agreed on an arm's length basis with
terms that are fair and reasonable to the Company. Due to the long-term
relationship between the Group and the CNOOC Group, the Board considers it to
be beneficial to the Company to continue to enter into the Ongoing Connected
Transactions as these transactions have facilitated and will continue to
facilitate the operation and growth of the Company's business.
4. APPROVAL BY INDEPENDENT SHAREHOLDERS
As CNOOC indirectly owns an aggregate of approximately 70.61% of the issued
share capital of the Company, transactions between the CNOOC Group and the
Group constitute connected transactions for the Company under the Listing
Rules and are subject to approval from the Independent Shareholders.
In view of the interests of CNOOC held indirectly through CNOOC BVI, CNOOC BVI
and its associates will abstain from voting in relation to the resolutions
approving the Ongoing Connected Transactions. An Independent Board Committee
of the Company has been appointed to advise the Independent Shareholders on
whether or not the terms of the Ongoing Connected Transactions are in the
interest of the Company and are fair and reasonable so far as the Independent
Shareholders are concerned. An Independent Financial Advisor, Cazenove Asia
Limited, has been appointed to advise the Independent Board Committee of the
Company regarding the terms of the Ongoing Connected Transactions.
5. APPLICATION FOR NEW WAIVER
Under the Listing Rules, the Ongoing Connected Transactions as stated in Part
2 above would normally require full disclosure and/or prior Independent
Shareholders' approval. However, as such transactions have been, and/or will
continue to be carried out in the ordinary and usual course of business and
occur on a regular basis on normal commercial terms and on terms that are fair
and reasonable so far as the Shareholders are concerned, the Directors
considered that it would not be practical to make disclosure or if necessary,
obtain Shareholders' approval for each transaction as it arises. Accordingly,
the Company has applied to the Stock Exchange to grant a waiver for a period
of three years up to 31 December 2005 from the relevant requirements of the
Listing Rules in respect of the Ongoing Connected Transactions as described
above and matters arising out or in connection with such Ongoing Connected
Transactions on the conditions that:
i. in relation to the Ongoing Connected Transactions referred to in the
paragraphs headed "Contracts with foreign petroleum companies",
"Trademark licence agreements" and "Lease agreement in respect of Nanshan
Terminal" the transactions, and the respective agreements (if any)
governing such transactions, must be on terms that are fair and
reasonable so far as the Company's shareholders are concerned, and in
relation to the Ongoing Connected Transactions referred to in the
paragraphs headed "Provision of materials, utilities and ancillary
services", "Technical services", "Research and development services",
"Lease and property management services" and "Sales of crude oil,
condensate oil and liquefied petroleum gas" the transactions, and the
respective agreements (if any) governing such transactions must be:
a. entered into by the Group in its ordinary and usual course of
business;
b. either on normal commercial terms or, where there is no available
comparison, on terms no less favourable than those available to or
from independent third parties; and
c. on terms that are fair and reasonable so far as the Shareholders are
concerned;
ii. brief details of the Ongoing Connected Transactions in each year as
required by Rule 14.25(1)(A) to (D) of the Listing Rules, i.e., the date
or period of the transaction, the parties thereto and a description of
their connected relationship, a brief description of the transaction and
the purpose of the transaction, the total consideration and the terms,
and the nature and the extent of the interest of the connected person in
the transaction, shall be disclosed in the Company's annual report and
account for the relevant year;
iii. the Company's independent non-executive directors shall review annually
the transactions and confirm, in hthe Company's annual report and
accounts for the year in question, that such transactions have been
conducted in the manner stated in (i) above and, where applicable, within
the limit stated in (v) below;
iv. the Company's auditors shall carry out review procedures annually in
relation to the Ongoing Connected Transactions and shall confirm in
writing whether the transactions:
a. received the approval of the Directors;
b. have been entered into in accordance with the pricing policies as
stated in the Company's financial statements; and
c. have been entered into in accordance with the terms of the agreement
governing the transactions or, where there is no agreement, on terms
that are not less favourable than terms available to or from
independent third parties.
For the purpose of the above review by the Company's auditors, CNOOC has
undertaken to the Company that it will provide the auditors with access to its
relevant accounting records;
v. the aggregate annual volume of transactions shall not exceed the proposed
annual limits set out in the following table:
-------------------- ------------------- --------------------- ------------------------------------------
The transactions Annual limit in Proposed annual Basis of determination of the new cap
the Existing limit in the New amounts
Waiver Waiver
-------------------- ------------------- --------------------- ------------------------------------------
Materials, 10% of the 10% of the audited During the Relevant Period, the maximum
utilities and audited consolidated total amount in this category was 3.91%. Based
ancillary services consolidated revenues of the on this track record and the projection
supply agreements total revenues of Company in the of future needs of such services, prices
the Company in immediate preceding and availability of alternative
the immediate financial year providers of such services, the
preceding Directors believe that the new cap
financial year amount for the three years ending on 31
December 2005 should remain at 10% of
the audited consolidated total revenues
of the Company in the immediate
preceding financial year. The Directors
believe that the existing limit provides
sufficient flexibility to the
Group.
-------------------- ------------------- --------------------- ------------------------------------------
Technical Services In respect of the In respect of the During the Relevant Period, the maximum
three f inancial three financial amount in this category was Rmb 2,367
years ending 31 years ending 31 million. Based on the continued
December 2002, December 2005, Rmb expansion of existing oilfields and the
Rmb 2,200 5,853 million, Rmb development of two new discovered
million, Rmb 7,338 million and oilfields in Bohai Bay which the
3,800 million and Rmb 4,880 million, Directors expect to be completed by the
Rmb 5,300 respectively end of year 2004, the Directors believe
million, that the new cap amount for such
respectively services should be set at Rmb 5,853
million, Rmb 7,338 million and Rmb
4,880 million for the three financial
years ending on 31 December 2005. The
increase in the cap amounts for such
services also reflect the fact that the
Company is increasingly involved in the
operation of oilfields, which in turn
involves the provision of a higher
amount of technical services. The
Directors are of the view that the new
cap amounts provide sufficient increment
for the Group to capture the Group's
future anticipated expansion plan.
-------------------- ------------------- --------------------- ------------------------------------------
Research and In respect of the In respect of the During the Relevant Period, the maximum
development three f inancial three f inancial amount in this category was Rmb 52
services for years ending 31 years ending 31 million. Based on this track record and
particular projects December 2002, December 2005, Rmb the Company's projection of future needs
Rmb 140 million, 141 million, Rmb for such services, the Directors believe
Rmb 150 million 148 million and Rmb the new cap amounts for each of the
and Rmb 160 153 million, three financial years ending 31 December
million, respectively 2005 should be marginally revised
respectively downward to Rmb 141 million, Rmb 148
million and Rmb 153 million
respectively, to take into account the
possible inclusion of the research and
development service within the Company.
The Directors believe such new cap
amounts provide sufficient flexibility
to the Group
-------------------- ------------------- --------------------- ------------------------------------------
Sales of crude In respect of the In respect of the During the Relevant Period, the maximum
oil, condensate oil three f inancial three f inancial amount in this category was Rmb 1,950
and liquefied years ending 31 years ending 31 million (representing 18% of the audited
petroleum gas December 2002, December 2005, 42%, consolidated revenues of the Company for
4%, 25% and 38%, 56% and 82%, the six months ended 30 June 2002) and
respectively, respectively, of the amount has been increasing substantially
of the audited audited during the Relevant
consolidated consolidated total Period. Based on the this track record,
total revenues of revenues of the the ongoing development of existing
the Company in Company in the oilfields and the development of two new
the immediate immediate financial oilfields in Bohai Bay which the
financial year year Directors expect to be completed by the
end of year 2004, the Directors believe
the new cap amounts for the three
financial years ending on 31 December
2005 should not exceed 42%, 56% and 82%,
respectively, of the audited
consolidated total revenues of the
Company in the immediate financial year.
The increases in such cap amounts also
reflect the fact that the crude oil from
new oilfields, which is made up of a
higher proportion of heavy crude oil,
needs to undergo refining processes
which are carried out primarily by CNOOC
Group. The increases in such cap amounts
also reflect the fact that the Company
may be able to sell its products at
higher prices to CNOOC Group due to
lower transportation costs. The terms of
such sales to CNOOC Group are, and will
be, no less favourable to the Group than
sales to independent third parties. The
cap amounts are based on the Company's
own projections of revenues and are
intended to provide the Company with a
certain level of flexibility. The
Company will continue to deal with other
customers in the normal course of
business. The Directors believe such new
cap amounts provide sufficient
flexibility to the Group.
------------------- ------------------- --------------------- ------------------------------------------
General research Rmb 110 million Rmb 110 million During the Relevant Period, the maximum
and development amount in this category was Rmb 110
services agreement million. Based on this track record and
the Company's projection of future needs
for such services, the Directors believe
that the new cap amount for the three
financial years ending 31 December 2005
should be maintained at Rmb 110 million.
The Directors believe maintaining the
existing cap amount provides sufficient
flexibility to the Group.
-------------------- ------------------- --------------------- ------------------------------------------
Lease and Rmb 55 million Rmb 78 million During the Relevant Period, the maximum
management services amount in this category was Rmb 49
million. Based on the Company's
projection of future expansion of its
business and availability of alternative
providers, the Directors believe that
the new cap amounts for each of the
three years ending 31 December 2005
should increase to Rmb 78 million. The
Directors believe such a new cap amount
provides sufficient flexibility to the
Group.
-------------------- ------------------- --------------------- ------------------------------------------
The proposed increase in the annual limits for the transactions is a result of
the continued expansion in the scope and operations of the Group, including
the ongoing development of existing oilfields and the development of two new
oilfields in Bohai Bay; and
vi. the Company will undertake that if any of the terms of the agreements or
arrangements referred to above are altered or if the Group enters into any new
agreements with any connected persons (within the meaning of the Listing Rules)
in the future or if the limits stated in (v) above are exceeded, the Company
will comply
with the provisions of Chapter 14 of the Listing Rules dealing with connected
transactions unless it applies for and obtains a separate waiver from the Stock
Exchange.
6. GENERAL
A circular containing particulars of the Ongoing Connected Transactions, a
letter from the Independent Board Committee, an opinion of Cazenove Asia
Limited, the Independent Financial Advisor, together with a notice to convene
the EGM to approve, among other things, the Ongoing Connected Transactions
will be issued to the Shareholders as soon as practicable.
7. DEFINITIONS
In this announcement, the following expressions have the meanings set out
below unless the context requires otherwise:
"associates" has the meaning ascribed to it in the Listing Rules
"Board" The board of Directors
"Circular" the circular to be issued by the Company to its
shareholders in respect of the New Waiver for the
Ongoing Connected Transactions between the Group and the
CNOOC Group
"CNOOC" [CHINESE CHARACTERS](China National Offshore Oil
Corporation), a state-owned enterprise incorporated
under the laws of PRC on 12 February 1982, and the
indirect controlling shareholder of the Company
"CNOOC BVI" CNOOC (BVI) Limited, a company incorporated on 6 August
1999 in the British Virgin Islands with limited
liability, a wholly-owned indirect subsidiary of CNOOC
and the controlling shareholder of the Company "CNOOC
China" CNOOC China Limited, a wholly foreign-owned
enterprise established on 15 September 1999 under the
laws of the PRC, which is wholly-owned by the Company
"CNOOC Group" CNOOC and, following the Restructuring, its subsidiaries
and affiliates, excluding the Group
"Company" CNOOC Limited, a company incorporated on 20 August 1999
in Hong Kong under the Companies Ordinance with limited
liability
"Director(s)" director(s) of the Company
"EGM" an extraordinary general meeting of the Company to be
held to approve the Ongoing Connected Transactions
"Existing Waiver" the waiver granted by the Stock Exchange on 3 April
2001 to the Company in respect of the Ongoing Connected
Transactions between the Group and the CNOOC Group,
subject to the conditions set out in such waiver
"Group" the Company and its subsidiaries
"HK$" Hong Kong dollars, the lawful currency of Hong Kong
"Independent Shareholders" Shareholders other than CNOOC BVI and its associates
"Independent Board Committee" an independent committee of the Board of directors of
the Company established on 2 December 2002 for the
purpose of reviewing the Ongoing Connected Transactions
"IPO" the Initial Public Offering of the Company's shares in
the year 2001
"Listing Rules" the Rules Governing the Listing of Securities on the
Stock Exchange
"New Waiver" the waiver submitted to the Stock Exchange by the
Company applying for a waiver from strict
compliance with the Listing Rules in respect of the Ongoing
Connected Transactions
"Ongoing Connected Transactions" the ongoing connected transactions which are and will
continue to be entered into between the Group and the
CNOOC Group, comprising the connected transactions which
were the subject of the Existing Waiver "PRC" the
People's Republic of China
"Prospectus" the prospectus dated 16 February 2001 issued by the
Company relating to its IPO and the listing of its
shares on the Stock Exchange
"Restructuring" the restructuring of the CNOOC Group of companies now
comprised within the Group and their respective
businesses, effective 1 October 1999 and as detailed in
the Prospectus
"Rmb" Renminbi, the lawful currency of the PRC
"Shareholder(s)" the holder(s) of shares of the Company
"Stock Exchange" The Stock Exchange of Hong Kong Limited
For the purpose of this announcement, unless otherwise indicated, the exchange
rates at HK$1 = Rmb$1.06 have been used, where applicable, for purpose of
illustration only and not constitute a representation that any amount have
been, could have been or may be exchanged.
By Order of the Board
Cao Yunshi
Company Secretary
-------------------------------------------------------------------------------
(CNOOC LIMITED)
[CHINESE CHARACTERS]
(Incorporated in Hong Kong with limited liability under the Companies Ordinance)
EXTRAORDINARY GENERAL MEETING
NOTICE IS HEREBY GIVEN that an extraordinary general meeting of the
shareholders of CNOOC Limited (the "Company") will be held at Island
Shangri-la Hong Kong, Two Pacific Place, Supreme Court Road, Hong Kong on 23
December 2002 at 11 am for the purpose of considering and, if thought fit,
passing, with or without modification, the following resolutions as Ordinary
Resolutions:
ORDINARY RESOLUTION
1. "THAT the ongoing connected transactions as described in the Announcement
made by the Company on 5 December 2002, which the Company expects to
occur on a regular and continuous basis in the ordinary and usual course
of business of the Company and its subsidiaries, as the case may be, be
and are hereby generally and unconditionally approved and the directors
of the Company are hereby authorised to do all such further acts and
things and execute such further documents and take all such steps which
in their opinion may be necessary, desirable or expedient to implement
and/or give effect to the terms of such transactions."
By Order of the Board
Cao Yunshi
Company Secretary
Hong Kong, 5 December 2002
Notes:
1. Shareholders whose names are registered in the register of members of the
Company on or before 18 December 2002 are entitled to attend and vote at
the Extraordinary General Meeting.
2. Any Shareholder entitled to vote at the Extraordinary General Meeting is
entitled to appoint one (1) or more proxies to attend and vote on his
behalf. A proxy need not be a shareholder of the Company. Shareholders
must appoint a proxy in writing. Such instrument should be signed by the
person appointing
the proxy or by such person's authorised representative. If the form of
proxy is signed by another person so authorised by the shareholder, the
power of attorney or other authorising document must be certified by a
notary. The notarially certified power of attorney or other authorising
document together with the proxy form must be returned to the Registered
Office of the Company not later than 48 hours prior to the commencement
of the Extraordinary General Meeting. The completion and deposit of a
form of proxy will not preclude any shareholder from attending and voting
at the Extraordinary General Meeting.
3. Each shareholder (or his/her proxy) shall be entitled to one vote for
each share held. If a shareholder has appointed more than one proxy to
attend the meeting, the voting rights can only be exercised by way of
poll.
Address of the Registered Office of the Company:
CNOOC Limited
65/F, 1 Garden Road, Hong Kong
Tel: 852-2213 2500
Fax: 852-2525 9322
[LOGO]
CNOOC LIMITED
[CHINESE CHARACTERS]
(Incorporated in Hong Kong with limited liability)
Form of proxy for the Extraordinary General Meeting to be held on
23 December 2002
I/We (Note 1)
_______________________________________________________________________________
of_____________________________________________________________________________
being the registered holder(s) of _______________shares (Note 2) of HK$0.10
each in the share capital of the above-named Company HEREBY APPOINT THE
CHAIRMAN OF THE MEETING (Note 3) or______________________
of_____________________________________________________________________________
as my/our proxy to attend and act for me/us at the Extraordinary General
Meeting (and any adjournment thereof) of the said Company to be held at Island
Shangri-la Hong Kong, Two Pacific Place, Supreme Court Road. Hong Kong on 23
December 2002 at 11 am for the purposes of considering and, if thought fit,
passing the Resolutions as set out in the Notice of Extraordinary General
Meeting and at such Meeting (and at any adjournment thereof) to vote for me/us
and in my/our name(s) in respect of the Resolution as indicated below (Note
4).
------------------------------------------------------------------ ------------------- ------------------
RESOLUTION FOR (Note 4) AGAINST (Note 4)
------------------------------------------------------------------ ------------------- ------------------
THAT the ongoing connected transactions as described in the
Announcement made by the Company on 5 December 2002, which the
Company expects to occur on a regular and continuous basis in
the ordinary and usual course of business of the Company and its
subsidiaries, as the case may be, be and are hereby generally
and unconditionally approved and the directors of the Company
are hereby authorised to do all such further acts and things and
execute such further documents and take all such steps which in
their opinion may be necessary, desirable or expedient to
implement and/or give effect to the terms of the Connected
Transactions.
------------------------------------------------------------------ ------------------- ------------------
Date this________ day of ____________ 2002 Signature (Note 5)__________________
Notes:
1. Full name(s) and address(es) to be inserted in BLOCK CAPITALS.
2. Please insert the number of shares registered in your name(s) to which
this proxy relates. If no number is inserted, this form of proxy will be
deemed to relate to all the shares of the Company registered in your
name(s).
3. If any proxy other than the Chairman is preferred, strike out the words
"THE CHAIRMAN OF THE MEETING" and insert the name and address of the
proxy desired in the space provided. A member may appoint one or more
proxies to attend and vote in his stead. ANY ALTERATION MADE TO THIS FORM
OF PROXY MUST BE INITIALLED BY THE PERSON WHO SIGNS IT.
4. IMPORTANT: IF YOU WISH TO VOTE FOR THE RESOLUTION, TICK THE APPROPRIATE
BOXES MARKED "FOR". IF YOU WISH TO VOTE AGAINST THE RESOLUTIONS, TICK THE
APPROPRIATE BOXES MARKED "AGAINST". Failure to complete any or all the
boxes will entitle your proxy to cast his votes at his discretion. Your
proxy will also be entitled to vote at his discretion on any resolution
properly put to the Meeting other than those referred to in the Notice of
Extraordinary General Meeting.
5. This form of proxy must be signed by you or your attorney duly authorised
in writing or, in the case of a corporation, must be either executed
under its common seal or under the hand of an officer or attorney or
other person duly authorised to sign the same.
6. In the case of joint holders of any share, any one of such joint holders
may vote at the Meeting, either personally or by proxy, in respect of
such shares as if he were solely entitled thereto. However, if more than
one of such joint holders is present at the Meeting, personally or by
proxy, the vote of the joint holder whose name stands first in the
Register of Members and who tenders a vote, whether in person or by
proxy, will be accepted to the exclusion of the votes of the other joint
holder(s).
7. To be valid, this form of proxy together with the power of attorney (if
any) or other authority under which it is signed (if any) or a notarially
certified copy thereof, must be deposited at the registered office of the
Company at 65th Floor, Bank of China Tower, 1 Garden Road, Hong Kong not
less than 48 hours before the time for holding the Meeting or any
adjournment thereof (as the case may be).
8. The proxy need not be a member of the Company but must attend the Meeting
in person to represent you.
9. Completion and delivery of the form of proxy will not preclude you from
attending and voting at the Meeting if you so wish. In such event, the
instrument appointing a proxy shall be deemed to be revoked.
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
Name: Cao Yunshi
Title: Company Secretary
Dated: December 5, 2002