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 March 2012
Commission File Number 1-14966
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CNOOC Limited
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(Translation of registrant’s name into English)
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65th Floor
Bank of China Tower
One Garden Road
Central, Hong Kong
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(Address of principal executive offices)
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Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
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Form 20-F X Form 40-F ___
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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.
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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): 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.
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CNOOC Limited
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By:
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/s/ Zhong Hua
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Name:
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Zhong Hua
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Title:
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Joint Company Secretary
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Dated: March 29, 2012
EXHIBIT INDEX
| Exhibit No. | Description |
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99.1
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Announcement dated March 28, 2012, entitled “2011 Annual Results Announcement”.
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| 99.2 |
Press Release dated March 28, 2012, entitled “2011 Net Profit Hit Another Record High”.
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Exhibit 99.1
Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.
(Incorporated in Hong Kong with limited liability under the Companies Ordinance)
(Stock Code: 00883)
2011 Annual Results Announcement
CHAIRMAN’S STATEMENT
Dear shareholders,
CNOOC Limited had already gone through a decade of rapid growth and elevated to a new platform when I assumed the position of chairman for the Company in April 2011. The Company’s daily production had surpassed 900 thousand barrels-of-oil-equivalent (BOE); net proved reserve had reached almost 3 billion BOE, with over 80 oil and gas fields in offshore China and overseas businesses spreading over 10 countries. The Company’s market value had exceeded US$100 billion. The Company’s corporate governance became widely recognized and was crowned with “Energy Company of the Year” by Platts Global Energy Awards.
During 2011, not only did we strive to accomplish all our targets established for the year under the new platform, we also drew from our experience in the last decade to devise more detailed plans for the Company’s future, mapping out a blueprint to realize a “New Era of Excellence”.
I would like to share with you here the key paths of how we could arrive at this “New Era of Excellence”.
First, we will continue to establish a foothold for exploration and development in offshore China where is the home for the Company. In 2011, we have further identified the exploration potential in this area and elevated the level of importance and our support for exploration work. Focusing on breakthroughs for resource replacement, the Company has strengthened its regional research activities and breakthoughs in the new regions and new exploration targets and achieved major progress in the area of the lithological traps in Bohai and high-temperature and high-pressure natural gas in Yinggehai.
With respect to development and production, during the year 2011, we overcame various difficulties and reached a net oil and gas production of 331.8 million BOE, thus sustaining the steady growing trend of our Company’s production over years. At the same time, the strategies on regional development and comprehensive adjustments have been further clarified. This would effectively lower the development threshold for oil and gas field in offshore China and fully tap the potential for underground reservoir.
In the future, we will continue to increase our momentum in exploration and development; primarily focus on exploration in mature areas while expanding exploration in new areas and new targets; insist on integrating exploration and development and maintain the Company’s oil and gas reserve and production growth.
1
Second, we will promote deepwater exploration and development. Oil and gas resouces are rich in the deepwater South China Sea and will be an important source for our Company’s medium and long term development. In recent years, our partners have already made a number of important discoveries in the area, including Liwan 3-1. We have also accumulated rich seismic data, deepened our understanding of the geological structure of the area, and identified a number of exploration targets.
At present, the Company is already well prepared in technical expertise as well as operational and managerial capability and will begin deepwater exploration in 2012. The Company has also taken part in a number of deepwater explorations overseas. In the years to come, deepwater will become the important battlefield of the Company’s exploration activities, as well as one of the important sources for reserve and production growth.
Third, we will continue to develop our overseas business. In order to maintain our sustainable growth, we will seek development opportunities globally apart from establishing a foothold at home, offshore China. In 2011, we achieved major breakthroughs in our overseas business development. On one hand, we have successfully established a presence in the resource rich Lake Albert Basin in East Africa. On the other hand, we have further expanded unconventional oil and gas resources such as shale oil and gas and oil sands.
The Company will continue to pursue value-driven acquisition strategies in order to create more room for reserve and production development. While rapidly developing our business overseas, we will enhance asset management and perfect business management system overseas, especially to control the risk on overseas business.
Fourth, we will lead our future development through technology innovation. World leading technology such as offshore heavy oil extraction invented by the Company has made significant contribution to the rapid growth of the Company. In the future, while pursuing the goal of “expanding reserves and increasing production”, we will focus on the development of heavy oil and low permeability oil and gas fields. The Company will develop different types of key technologies that are crucial in leading our future growth through independent research and absorbing innovative ideas.
Fifth, we will advocate on building our corporate culture. Health, safety and environmental protection are important components of our corporate culture. The Company is dedicated to pursuing the harmonious evolution between corporation and society and between humans and nature. In 2011, the oil spill accidents of Penglai 19-3 oilfield, a PSC oilfield in Bohai (“Penglai 19-3 oilfield”), drew wide attention from the media and the public. As a non-operating partner, we have actively assisted the operator on the follow-up work relating to the accidents in an effort to minimize the impact on the oceanic environment. We have also taken the opportunity to once again carry on a thorough inspection on offshore operation safety so as to protect against future incidents.
As a responsible company, we will continue to maintain our transparency and standard corporate governance with the intention to make a timely disclosure and to accept public scrutiny in a humble manner.
In 2011, the Company achieved a net profit of approximately RMB70.26 billion, basic earnings per share reached RMB1.57, a significant increase of 29.1% year over year. In view of the Company’s stable and healthy financial position, the Board of Directors (the Board) has recommended a year-end dividend of HK$0.28 (tax inclusive) per share for the year 2011.
In 2011, Mr. Fu Chengyu resigned as Chairman for the Company. Mr. Yang Hua resigned as Chief Executive Officer and was taken over by Mr. Li Fanrong. I wish to take this opportunity to thank Mr. Fu Chengyu as well as the Board led by Mr. Fu for the contributions made to the development of the Company. I believe that Mr. Yang Hua, as a non-executive director, will continue to contribute his wisdom and experience to the major issues such as strategic development of the Company. I also wish to congratulate Mr. Li Fanrong.
2
Currently, the fragile and imbalanced phenomenon of the world economic recovery has further surfaced while the economy of China has been able to maintain stable and relatively rapid growh. On the other hand, international oil prices are expected to maintain at a high level in view of increasing demand for energy resources. Under such circumstances, there is still plenty of room for growth for the oil and gas exploration and production industry. The blueprint for the Company’s “New Era of Excellence” has already been laid out. We will take the opportunity to continue to excel and will spare no effort to complete all our development targets, and pave the way to a more prosperous future for the Company.
WANG Yilin
Chairman
Hong Kong, 28 March 2012
3
CEO’S STATEMENT
Dear shareholders,
In November 2011, I took over the position of Chief Executive Officer for the Company following the resignation of Mr. Yang Hua. Under his leadership, Mr. Yang has built up a solid foundation for the future development of the Company through the hard work of the management and staff which he has successfully mobilized during his tenure. I wish to take this opportunity here to express my heartfelt respect and gratitude to Mr. Yang.
I have had approximately 30 years of experience in the development of offshore oil, witnessing the rapid development of the Company and have a strong passion for the offshore oil industry. It is an honor for me to assume this important task as Chief Executive Officer for the Company. Here, I would like to share with you the Company’s performance during the past year as well as our thoughts for the development of the Company in future.
Striving for our annual targets
In 2011, the Company’s development generally went smoothly but was confronted by difficulties that were unprecedented in the past. Under the circumstances, we continued to strive forward with meticulous planning and strengthened management, and achieved a number of breakthroughs in exploration, development and overseas expansion. During this period, I have been deeply impressed by the dedicated performance of the entire staff of the Company, for which I am very proud of.
In concrete terms, the Company has achieved satisfactory results on many fronts through our unreserved efforts in spearheading the Company from a strong foundation.
First, exploration results: the Company continued to broaden its thoughts and increase its investment on exploration activities, and achieved record levels of exploration work including wildcats drilling and seismic data collection. There were 16 new discoveries and the reserve replacement ratio reached 158%. Kenli 9-1 is a mid-sized discovery made in the mature area. The discoveries of lithologic traps in Qinhuangdao 33-2 and Qinghuangdao 33-3 , has led to a change in the direction of exploration in the Bohai area which was predominated by the search of structural traps, and has broadened the scope of our exploration territory. The successful appraisal of Dongfang 13-1 in Western South China Seas is also expected to open a new chapter for natural gas exploration in the area.
Deepwater exploration has also progressed in an orderly manner. We have strengthened our seismic data collection in the deepwater South China Sea, paving the way for deepwater exploration in 2012. We will strive to make the deepwater exploration a smooth operation and lay a foundation for the long term growth of the Company. In overseas, we have taken part in the drilling of several deepwater exploration wells in the Gulf of Mexico of the United States.
4
Second, development and production: In 2011, the Company proactively dealt with various challenges. Through thorough researching on reservoirs, refining water flooding, and enhancing the hourly production rate from oil and gas fields, the Company has been able to maintain a steady growth of oil and gas production from the producing fields. Realizing a net production of 331.8 million BOE, the Company accomplished its post-adjustment annual production target for the year.
In the Company’s 2010 annual report, we shared with our shareholders the two “new development policies,” the comprehensive adjustments and the regional development. For the comprehensive adjustments, we have focused on moving ahead with the Lufeng 13-2 adjustment project. The project commenced production at the end of 2011 with a daily peak production volume of 33 thousand BOE. We are very pleased with the results of this project as it represents a solid proof of the Company’s success on this new mechanism. We are also working with full steam on the regional development model, with Weizhou 6-9/6-10 oil fields expected to begin production in 2012.
Third, overseas development: in 2011, it was a good sign that the Company’s conventional and unconventional resources were moving ahead side by side in the course of its overseas development. On one hand, the Company has successfully extended to the core yet to be developed basin in East Africa, the Lake Albert Basin, through the acquisition of Tullow’s one-third interest in the exploration areas 1, 2 and 3A in Uganda. On the other hand, the Company has further expanded its business in the shale oil and gas sector in the United States, and expanded its investment in the oil sands business in Canada through the acquisition of OPTI Canada Inc. to bolster the development of the Company’s unconventional resource allocation.
In the future, the Company will maintain a foothold in offshore China, and will continue to develop its overseas assets and expand the scope for long term development on the basis of meeting its targets on resources, risk and return on investment. At the same time, the Company will actively manage its overseas business and streamline its overseas asset portfolio in order to create better value for its shareholders.
Fourth, financial performance: Benefiting from higher realized oil and gas prices, the Company achieved a net profit of approximately RMB70.26 billion in 2011, with a basic earnings per share of RMB1.57, representing a significant increase of 29.1% year over year.
Strengthening the foundation for growth
Health, safety and environmental protection have always been the foundation for the Company’s operation, underlying the Company’s management philosophy. Over the years, we have maintained a good track record in the areas of safety and environmental protection. The oil spill accidents of Penglai 19-3 oilfield and malfunction of several other facilities have rung alarms for us. While raising the awareness of safety and environment protection among our staff, we will continue to emphasize the following areas:
1. To further improve the system for production safety management and raise the level of safety management;
2. To strengthen the comprehensive facility management system and raise the level of intrinsic safety;
3. To specify the system to detect and eliminate risk and enhance the risk management ability;
4. To further improve oil spill prevention and response capability.
5
Planning for our medium to long term development
In early 2011, the Company established its production target for the years 2011 to 2015 with a compound annual growth rate of 6-10%. To achieve this, we will continue to establish a foothold in offshore China and develop our overseas business in order to protect the medium and long term sustainable growth of the Company.
First, continue to strengthen our exploration and development work in offshore China, where oil and natural gas resources are relatively rich and the level of exploration is comparably low. We will strengthen our research of the geological structure, and will move on with core areas, new areas and new exploration targets as well as deep water exploration to provide resource base for the Company’s development. We will follow the thoughts along regional development and comprehensive adjustments, carefully organize our operation resources and plan our development of new oil and gas fields. Weizhou 6-9/6-10, which is planned to commence production in 2012, represents one of the successful results of our regional development approach. In 2012 and the years to come, a number of comprehensive adjustments projects, including Panyu 4-2/5-1 adjustment, Suizhong 36-1 adjustment Phase II, Jinzhou 9-3 adjustment and Qinhuangdao 32-6 adjustment will gradually commence production, and will become one of the important sources for the Company’s future production growth.
Apart from this, we will follow the guideline of “integration of exploration and development” to organize our thoughts, and proceed with rolling exploration and rolling development to fully utilize the benefits of the asset allocation along offshore China to fully utilize the resource potential.
Second, to control the risk of overseas operation: over the past few years, the rapid development of the Company’s overseas business has brought along a few challenges. On one hand, we will enhance the control and reliability of our overseas business through the selection of experienced local partners while on the other hand, we will continue to build up our overseas professional team as well as the management system. At the same time, we will move ahead carefully and retreat at appropriate times in an effort to continue to streamline our overseas assets.
Third, to strengthen our cost control: in recent years, the increasingly stringent fiscal policies together with rising inflation have led to a high cost for the industry. In 2011, the Company’s all-in cost reached US$30.58 per BOE, an increase of 25.0% year over year. We will continue to consider economic efficiency as our primary goal in the evaluation of our investment projects, to streamline our management in order to increase productivity, and to encourage savings in order to control cost.
Fourth, to maintain and strengthen corporate governance: both the size and the asset allocation of the Company have experienced substantial changes following a decade of rapid development. We will insist on and strengthen corporate governance, as well as our internal control system and risk management on the basis of safety and environmental protection, in order to maintain control of our operational risk.
Looking forward to 2012, we will continue to strengthen our exploration work, to enhance our efforts to achieve breakthroughs in oil and gas exploration, to carefully organize the development and production of oil and gas fields, and to maintain a stable oil and gas production growth. At the same time, we will strive to control the cost under the cost rising environment.
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The Company has excelled to a new platform of development. We are facing new challenges and at the same time ample room for development. We will follow the guidelines of the Company’s blueprint for “New Era of Excellence” to strive forward in order to create better values for our shareholders and to make a greater contribution to the community.
LI Fanrong
Chief Executive Officer
Hong Kong, 28 March 2012
7
Consolidated Statement of Comprehensive Income
Year ended 31 December 2011
(All amounts expressed in millions of Renminbi, except per share data)
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Group
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Notes
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2011
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2010
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Note 2.2
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REVENUE
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Oil and gas sales
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6 | 189,279 | 146,134 | |||||||||
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Marketing revenues
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50,469 | 32,446 | ||||||||||
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Other income
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1,196 | 1,456 | ||||||||||
| 240,944 | 180,036 | |||||||||||
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EXPENSES
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Operating expenses
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(18,264 | ) | (15,647 | ) | ||||||||
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Taxes other than income tax
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(10,332 | ) | (7,109 | ) | ||||||||
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Exploration expenses
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(5,220 | ) | (5,483 | ) | ||||||||
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Depreciation, depletion and amortisation
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7 | (30,521 | ) | (26,756 | ) | |||||||
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Special oil gain levy
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(31,982 | ) | (17,706 | ) | ||||||||
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Impairment and provision
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(22 | ) | (27 | ) | ||||||||
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Crude oil and product purchases
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(50,307 | ) | (32,236 | ) | ||||||||
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Selling and administrative expenses
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(2,854 | ) | (3,039 | ) | ||||||||
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Others
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(835 | ) | (888 | ) | ||||||||
| (150,337 | ) | (108,891 | ) | |||||||||
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PROFIT FROM OPERATING ACTIVITIES
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90,607 | 71,145 | ||||||||||
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Interest income
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7 | 1,196 | 618 | |||||||||
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Finance costs
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8 | (1,707 | ) | (1,122 | ) | |||||||
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Exchange gains, net
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7 | 637 | 995 | |||||||||
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Investment income
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7 | 1,828 | 427 | |||||||||
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Share of profits of associates
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320 | 199 | ||||||||||
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Share of profits of a joint venture
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247 | 199 | ||||||||||
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Non-operating (expenses)/income, net
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(563 | ) | 142 | |||||||||
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PROFIT BEFORE TAX
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7 | 92,565 | 72,603 | |||||||||
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Income tax expense
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9 | (22,310 | ) | (18,193 | ) | |||||||
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PROFIT FOR THE YEAR ATTRIBUTABLE TO OWNERS OF THE PARENT
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70,255 | 54,410 | ||||||||||
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OTHER COMPREHENSIVE (LOSS)/INCOME
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Exchange differences on translation of foreign operations
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(3,826 | ) | (2,496 | ) | ||||||||
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Net (loss)/gain on available-for-sale financial assets, net of tax
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(800 | ) | 5,590 | |||||||||
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Share of other comprehensive (loss)/income of associates
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(20 | ) | 3 | |||||||||
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OTHER COMPREHENSIVE (LOSS)/INCOME FOR THE YEAR, NET OF TAX
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(4,646 | ) | 3,097 | |||||||||
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TOTAL COMPREHENSIVE INCOME FOR THE YEAR ATTRIBUTABLE TO OWNERS OF THE PARENT
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65,609 | 57,507 | ||||||||||
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EARNINGS PER SHARE ATTRIBUTABLE TO ORDINARY EQUITY HOLDERS OF THE PARENT
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Basic (RMB Yuan)
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11 | 1.57 | 1.22 | |||||||||
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Diluted (RMB Yuan)
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11 | 1.57 | 1.21 | |||||||||
8
Consolidated Statement of Financial Position
31 December 2011
(All amounts expressed in millions of Renminbi)
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Group
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Notes
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2011
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2010
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Note 2.2
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NON-CURRENT ASSETS
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Property, plant and equipment
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220,567 | 186,678 | ||||||||||
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Intangible assets
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1,033 | 1,148 | ||||||||||
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Investments in associates
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2,822 | 1,781 | ||||||||||
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Investment in a joint venture
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20,175 | 20,823 | ||||||||||
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Available-for-sale financial assets
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7,365 | 8,616 | ||||||||||
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Other non-current assets
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379 | - | ||||||||||
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Total non-current assets
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252,341 | 219,046 | ||||||||||
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CURRENT ASSETS
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Inventories and supplies
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4,380 | 3,975 | ||||||||||
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Trade receivables
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12 | 20,662 | 19,680 | |||||||||
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Held-to-maturity financial assets
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23,467 | 3,040 | ||||||||||
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Available-for-sale financial assets
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27,576 | 18,940 | ||||||||||
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Other current assets
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7,684 | 14,486 | ||||||||||
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Time deposits with maturity over three months
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24,476 | 11,976 | ||||||||||
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Cash and cash equivalents
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23,678 | 27,287 | ||||||||||
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Total current assets
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131,923 | 99,384 | ||||||||||
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CURRENT LIABILITIES
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Loans and borrowings
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14 | 19,919 | 21,194 | |||||||||
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Trade and accrued payables
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13 | 20,424 | 18,056 | |||||||||
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Other payables and accrued liabilities
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22,217 | 18,124 | ||||||||||
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Taxes payable
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7,656 | 11,049 | ||||||||||
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Total current liabilities
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70,216 | 68,423 | ||||||||||
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NET CURRENT ASSETS
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61,707 | 30,961 | ||||||||||
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TOTAL ASSETS LESS CURRENT LIABILITIES
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314,048 | 250,007 | ||||||||||
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NON-CURRENT LIABILITIES
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Loans and borrowings
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14 | 18,076 | 9,859 | |||||||||
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Provision for dismantlement
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24,964 | 15,825 | ||||||||||
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Deferred tax liabilities
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9 | 5,488 | 6,841 | |||||||||
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Other non-current liabilities
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2,664 | 1,716 | ||||||||||
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Total non-current liabilities
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51,192 | 34,241 | ||||||||||
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NET ASSETS
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262,856 | 215,766 | ||||||||||
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EQUITY
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Equity attributable to owners of the parent
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Issued capital
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15 | 949 | 949 | |||||||||
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Reserves
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261,907 | 214,817 | ||||||||||
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TOTAL EQUITY
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262,856 | 215,766 | ||||||||||
| LI Fanrong | WU Guangqi |
| Director | Director |
9
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
31 December 2011
(All amounts expressed in millions of Renminbi unless otherwise stated)
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1.
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CORPORATE INFORMATION
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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 thereby creating a group comprising the Company and its subsidiaries (hereinafter collectively referred to as the “Group”). During the year, the Group was principally engaged in the exploration, development, production and sale 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 the 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.
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2.1
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STATEMENT OF COMPLIANCE
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These financial statements have been prepared in accordance with International Financial Reporting Standards “IFRSs” (which also include International Accounting Standards (“IASs”) and Interpretations) issued by the International Accounting Standards Board (the “IASB”), Hong Kong Financial Reporting Standards “HKFRSs” (which also include Hong Kong Accounting Standards (“HKASs”) and Interpretations) issued by the Hong Kong Institute of Certified Public Accountants (the “HKICPA”), accounting principles generally accepted in Hong Kong and the Hong Kong Companies Ordinance. A summary of the significant accounting policies adopted by the Group is set out below.
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2.2
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CHANGES IN ACCOUNTING POLICY AND DISCLOSURES
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Standards, revisions and amendments to IFRSs and HKFRSs which are applicable to the Group, and have been adopted for the first time for the current year’s financial statements:
Mandatorily adopted as of 1 January 2011:
IAS 24 (Revised)/HKAS 24 (Revised) – Related Party Disclosures
IAS 24 (Revised)/HKAS 24 (Revised) clarifies and simplifies the definition of related parties. The new definitions emphasise a symmetrical view of related party relationships and clarify the circumstances in which persons and key management personnel affect related party relationships of an entity. The revised standard also introduces an exemption from the general related party disclosure requirements for transactions with a government and entities that are controlled, jointly controlled or significantly influenced by the same government as the reporting entity. The accounting policy for related parties has been revised to reflect the changes in the definitions of related parties under the revised standard. IAS 24 (Revised)/HKAS 24 (Revised) are effective for annual periods beginning on or after 1 January 2011. The adoption of the revised standard did not have any impact on the financial position or performance of the Group.
Other than the impact of IAS 24 (Revised)/HKAS 24 (Revised) as discussed above, the mandatory adoption of effective IFRS and HKFRS has had no significant financial effect on the consolidated financial statements.
Early adopted before the mandatory effective dates:
IFRS 10/HKFRS 10 – Consolidated Financial Statements
IFRS 10/HKFRS 10 replaces the portion of IAS 27/HKAS 27 that addresses the accounting for consolidated financial statements. It establishes a single control model that applies to all entities. It requires management to exercise significant judgement to determine which entities are controlled, and therefore are required to be consolidated by a parent.
10
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2.2
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CHANGES IN ACCOUNTING POLICY AND DISCLOSURES (continued)
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The standard introduces a new definition of control under which control of investee requires an investor to possess all the following three elements: 1) the power over the investee; 2) the exposure or rights to variable returns from its involvement with the investee; and 3) the ability to use its power over the investee to affect the amount of the investor’s returns. The adoption of IFRS 10/HKFRS 10 does not have significant impact on the Group’s consolidated financial statements.
IFRS 11/HKFRS 11 – Joint Arrangements
IFRS 11/HKFRS 11 replaces IAS 31/HKAS 31 Interests in Joint Ventures and Standing Interpretation Committee-13 Jointly-controlled Entities — Non-monetary Contributions by Venturers. IFRS 11/HKFRS 11 addresses only two forms of joint arrangements (joint operations and joint ventures) where there is joint control. In determining the type of arrangements, IFRS 11/HKFRS 11 requires parties to the arrangement to assess: 1) the legal form of the separate vehicle; 2) the terms of the contractual arrangement; and 3) other facts and circumstances that give them right to the assets and obligations for the liabilities or right to the net assets of the vehicle. A joint arrangement that meets the definition of a joint venture must be accounted for using the equity method. For a joint operation, an entity recognises its assets, liabilities, revenues and expenses relating to its relative shares thereof.
The application of this new standard impacts the financial position and presentation of statement of income of the Group. This is due to the cessation of proportionate consolidating a joint venture Bridas Corporation and the adoption of equity accounting for this investment.
Bridas Corporation is a separate legal entity that controls its own assets, earns its own income and incurs its own expenses and liabilities. The Group’s rights as a shareholder of Bridas Corporation are limited to dividends or distributions of the net assets of Bridas Corporation, rather than having direct rights to any operating assets, production output and obligations for any operating liabilities. Accordingly, the Group has evaluated its interest in Bridas Corporation as an investment in joint venture under IFRS 11/HKFRS 11.
Upon the adoption of IFRS 11/HKFRS 11, the Group changed the accounting for its investment in Bridas Corporation from proportionate consolidation to the equity method. The comparative period has been retrospectively adjusted with the investments in Bridas Corporation being equity accounted since the date of acquisition on 4 May 2010, hence the earlier adoption has no impact on the consolidated statement of financial position as at 1 January 2010. The effect on the consolidated statement of financial position as at 31 December 2010 and the consolidated statement of comprehensive income for the year ended 31 December 2011 and 2010 is summarised below.
IFRS 12/HKFRS 12 – Disclosure of Interests in Other Entities
IFRS 12/HKFRS 12 establishes the disclosure objectives for an entity to disclose information concerning its interest in a subsidiary, a joint arrangement, and associate or an unconsolidated structured entity. It also requires an entity to disclose the significant judgements and assumptions it has made in determining the nature of its interest in another entity or arrangement, also in determining the type of joint arrangement in which it has an interest. Additional disclosures are made in the Group’s consolidated financial statements.
IAS 27 (Revised)/HKAS 27 (Revised) – Separate Financial Statements
Revisions are made resulting from the issuance of IFRS 10/HKFRS 10 and Consolidated Financial Statements are now addressed by IFRS 10/HKFRS 10. Therefore, IAS 27/HKAS 27 are revised to only address separate financial statements, including how to prepare separate financial statements of an investor and what disclosures should be made in the separate financial statements. The adoption of IAS27 (Revised)/HKAS 27 (Revised) does not have significant impact on the Group’s consolidated financial statements.
IAS 28 (Revised)/HKAS 28 (Revised) – Investments in Associates and Joint Ventures
Revisions are made resulting from the issuance of IFRS 11/HKFRS 11. An entity applies IFRS 11/HKFRS 11 to determine the type of a joint arrangement in which it is involved. Once it has determined that it has an interest in a joint venture, the entity recognises an investment and accounts for it using the equity method.
The five new or revised standards are required to be adopted for annual periods beginning on or after 1 January 2013 with early application permitted so long as all of the five new or revised standards are applied early. As discussed above, the Group has adopted these five new or revised standards starting from 1 January 2011.
11
|
2.2
|
CHANGES IN ACCOUNTING POLICY AND DISCLOSURES (continued)
|
The following presents the effect of adopting IFRS 11/HKFRS 11 on the consolidated statement of financial position comparing the retrospectively adjusted 2010 balances to the balances previously reported, and the 2011 recorded balances to what would have been reported had the Group continued to proportionately consolidate Bridas Corporation:
|
Increase/(decrease)
|
2011
|
2010
|
||||||
|
Assets:
|
||||||||
|
Property, plant and equipment
|
(24,440 | ) | (25,653 | ) | ||||
|
Intangible assets and goodwill
|
(1,783 | ) | (1,874 | ) | ||||
|
Investment in a joint venture
|
20,175 | 20,823 | ||||||
|
Other non-current assets
|
(1,487 | ) | (1,523 | ) | ||||
|
Trade receivables
|
(676 | ) | (555 | ) | ||||
|
Cash and cash equivalents
|
(1,205 | ) | (12,284 | ) | ||||
|
Other current assets
|
(73 | ) | 11,570 | |||||
| (9,489 | ) | (9,496 | ) | |||||
|
Liabilities:
|
||||||||
|
Loans and borrowings
|
(2,206 | ) | (2,294 | ) | ||||
|
Other non-current liabilities
|
(477 | ) | (371 | ) | ||||
|
Deferred tax liabilities
|
(5,679 | ) | (6,281 | ) | ||||
|
Trade payables
|
(674 | ) | (494 | ) | ||||
|
Other current liabilities
|
(453 | ) | (56 | ) | ||||
| (9,489 | ) | (9,496 | ) | |||||
The following presents the effect of adopting IFRS 11/HKFRS 11 on the consolidated statement of comprehensive income comparing the retrospectively adjusted 2010 amounts to the amounts previously reported, and the 2011 recorded amounts to what would have been reported had the Group continued to proportionately consolidate Bridas Corporation:
|
2011
|
2010
|
|||||||
|
(Decrease) in revenue
|
(4,941 | ) | (3,017 | ) | ||||
|
Decrease in operating expenses
|
1,031 | 557 | ||||||
|
Decrease in taxes other than income tax
|
1,330 | 1,095 | ||||||
|
Decrease in depreciation, depletion and amortisation
|
1,470 | 931 | ||||||
|
Decrease in other expenses
|
579 | 188 | ||||||
|
Decrease in income tax expense
|
284 | 47 | ||||||
|
Increase in share of profits of a joint venture
|
247 | 199 | ||||||
|
Total increase in net profit
|
- | - | ||||||
The adoption of IFRS 11/HKFRS 11 has no material impact on basic and diluted earnings per share for the year ended 31 December 2011 and 2010.
12
|
2.2
|
CHANGES IN ACCOUNTING POLICY AND DISCLOSURES (continued)
|
Recognition of the Group’s investment in Bridas Corporation as at 31 December 2010:
|
2010
|
||||
|
Assets:
|
||||
|
Property, plant and equipment
|
25,653 | |||
|
Intangible assets and goodwill
|
1,874 | |||
|
Other non-current assets
|
1,523 | |||
|
Trade receivables
|
555 | |||
|
Cash and cash equivalents
|
12,284 | |||
|
Other current assets
|
118 | |||
|
Liabilities:
|
||||
|
Loans and borrowings
|
(2,294 | ) | ||
|
Other non-current liabilities
|
(371 | ) | ||
|
Deferred tax liabilities
|
(6,281 | ) | ||
|
Trade payables
|
(494 | ) | ||
|
Other current liabilities
|
(11,744 | ) | ||
|
Investment in a joint venture
|
20,823 | |||
|
3.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|
Basis of preparation
These financial statements have been prepared under the historical cost convention, except for available-for-sale financial assets and derivative financial instruments, which have been measured at fair value. These financial statements are presented in Renminbi (“RMB”) and all values are rounded to the nearest million except when otherwise indicated.
Basis of consolidation
The consolidated financial statements include the financial statements of the Company and its subsidiaries for the year ended 31 December 2011.
The results of subsidiaries are consolidated from the date of acquisition, being the date on which the Group obtains control, and continue to be consolidated until the date that such control ceases. The financial statements of the subsidiaries are prepared for the same reporting period as the parent company, using consistent accounting policies.
The results of subsidiaries are included in the Company’s statement of comprehensive income to the extent of dividends received and receivable. The Company’s interests in subsidiaries are stated at cost less any impairment losses.
All intra-group balances, income and expenses and unrealised gains and losses and dividends resulting from intra-group transactions are eliminated in full.
13
|
4.
|
ACQUISITIONS AND OTHER VENTURES
|
2011
|
(i)
|
The Company and Bridas Energy Holdings Ltd. (“BEH”), through Bridas Corporation, a 50% owned joint venture, entered into a share purchase agreement with BP PLC (“BP”) on 28 November 2010, pursuant to which Bridas Corporation would acquire a 60% equity interest in Pan America Energy LLC (“PAE”) from BP for a consideration of approximately US$7.06 billion. On 5 November 2011, Bridas Corporation sent to BP a letter to terminate the above mentioned transaction to acquire 60% equity interest in PAE from BP.
|
|
(ii)
|
On 29 January 2011, CNOOC International Limited (“CNOOC International”) through its wholly-owned subsidiary, OOGC America, Inc., signed a purchase agreement with Chesapeake Exploration, LLC, a subsidiary of Chesapeake Energy Corporation to purchase a 33.3% undivided interest in the Denver-Julesburg and Powder River Basins in northeast Colorado and southeast Wyoming with a cash consideration of US$570 million. In addition, CNOOC International has agreed to fund 66.7% of Chesapeake’s share of drilling and completion costs in the project until an additional US$697 million has been paid. US$180 million was paid in 2011. The deal was closed on 11 February 2011.
|
|
(iii)
|
On 29 March 2011, CNOOC Uganda Ltd, a wholly-owned subsidiary of CNOOC International, entered into a sales and purchase agreement with Tullow Uganda Limited and Tullow Uganda Operation Pty. Limited, wholly-owned subsidiaries of Tullow Oil Plc., to acquire a one-third working interest in Uganda Exploration Areas 1, 2 and 3A (the “Uganda Assets”) for an initial cash consideration of US$1.467 billion, out of which US$251 million was paid in 2011. The acquisition of the Uganda Assets was subsequently completed on 21 February 2012, and the remaining US$1.216 billion was paid accordingly.
|
|
(iv)
|
On 20 July 2011, the Company entered into an Arrangement Agreement, through its indirect wholly-owned subsidiary, CNOOC Luxembourg S.à r.l, to acquire OPTI Canada Inc. (“OPTI”), a public company listed on the Toronto Stock Exchange (“TSX”), with a total consideration of approximately US$2.1 billion, which included an aggregate cash consideration of US$1.25 billion paid to the OPTI shareholders (US$34 million or approximately RMB214 million) and the Second Lien Noteholders (US$1.216 billion or approximately RMB7.69 billion). In addition, due to a change in control of OPTI as a result of the transaction, OPTI must redeem all of its outstanding First Lien Notes in December 2011 at a price equal to 102% of the principal amount of the First Lien Notes plus accrued interest (totaling US$878 million) pursuant to the indentures thereof. The acquisition was completed on 28 November 2011. In connection with the acquisition, the OPTI shares have been delisted from the TSX. OPTI Canada Inc. subsequently changed its name to CNOOC Canada Inc. on 15 December 2011.
|
The fair values of the identifiable assets and liabilities of OPTI as at the date of acquisition are as follows:
|
|
Fair value recognised
on acquisition
|
|||
|
Property, plant and equipment
|
14,600 | |||
|
Cash and cash equivalents
|
1,008 | |||
|
Trade receivables
|
326 | |||
|
Other current assets
|
105 | |||
|
Trade payables
|
(560 | ) | ||
|
Other current liabilities
|
(659 | ) | ||
|
Loans and borrowings
|
(14,262 | ) | ||
|
Other non-current liabilities
|
(344 | ) | ||
|
Goodwill on acquisition
|
- | |||
|
Satisfied by cash
|
214 | |||
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.
14
|
4.
|
ACQUISITIONS AND OTHER VENTURES (continued)
|
|
|
(iv)
|
(continued)
|
An analysis of the net outflow of cash and cash equivalents in respect of the acquisition is as follows:
|
Cash consideration
|
214 | |||
|
Purchase of Second Lien Notes
|
7,690 | |||
|
Cash and cash equivalents acquired
|
(1,008 | ) | ||
|
Net outflow of cash and cash equivalents in respect of the acquisition
|
6,896 |
Since the acquisition, CNOOC Canada Inc. contributed approximately RMB255 million to the Group’s turnover and approximately RMB15 million to the consolidated profit for the year.
If the acquisition had taken place at the beginning of the year, CNOOC Canada Inc. would have contributed approximately RMB2,418 million to the Group’s turnover and reduced the consolidated profit for the year by approximately RMB268 million.
15
|
5.
|
SEGMENT INFORMATION
|
|
(a)
|
Operating segments
|
The Group is organised on a worldwide basis into three major operating segments. The Group is involved in the upstream operating activities of the petroleum industry that comprise independent operations, operations under joint arrangement and trading business. These segments are determined primarily because the Group’s chief operating decision maker makes key operating decisions and assesses performance of the segments separately. The Group evaluates the performance of each segment based on profit or loss from operations before income tax.
The following table presents the segment financial information for the Group’s operating segments for the years ended 31 December 2011 and 2010.
|
Independent operations
|
Joint arrangements
|
Trading business
|
Corporate
|
Eliminations
|
Consolidated
|
|||||||||||||||||||||||||||||||||||||||||||
|
2011
|
2010
|
2011
|
2010
|
2011
|
2010
|
2011
|
2010
|
2011
|
2010
|
2011
|
2010
|
|||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||||||||||
|
Sales to external customers:
|
||||||||||||||||||||||||||||||||||||||||||||||||
|
Oil and gas sales
|
114,411 | 85,425 | 74,868 | 60,709 | - | - | - | - | - | - | 189,279 | 146,134 | ||||||||||||||||||||||||||||||||||||
|
Marketing revenues
|
- | - | - | - | 50,469 | 32,446 | - | - | - | - | 50,469 | 32,446 | ||||||||||||||||||||||||||||||||||||
|
Intersegment revenues
|
- | - | 21,293 | 17,638 | - | - | - | - | (21,293 | ) | (17,638 | ) | - | - | ||||||||||||||||||||||||||||||||||
|
Other income
|
219 | 491 | 845 | 836 | - | - | 132 | 129 | - | - | 1,196 | 1,456 | ||||||||||||||||||||||||||||||||||||
|
Total
|
114,630 | 85,916 | 97,006 | 79,183 | 50,469 | 32,446 | 132 | 129 | (21,293 | ) | (17,638 | ) | 240,944 | 180,036 | ||||||||||||||||||||||||||||||||||
|
Segment results
|
||||||||||||||||||||||||||||||||||||||||||||||||
|
Operating expenses
|
(9,254 | ) | (7,775 | ) | (9,010 | ) | (7,872 | ) | - | - | - | - | - | - | (18,264 | ) | (15,647 | ) | ||||||||||||||||||||||||||||||
|
Taxes other than income tax
|
(6,904 | ) | (4,434 | ) | (3,428 | ) | (2,675 | ) | - | - | - | - | - | - | (10,332 | ) | (7,109 | ) | ||||||||||||||||||||||||||||||
|
Exploration expenses
|
(3,982 | ) | (4,120 | ) | (1,238 | ) | (1,363 | ) | - | - | - | - | - | - | (5,220 | ) | (5,483 | ) | ||||||||||||||||||||||||||||||
|
Depreciation, depletion and amortisation
|
(16,080 | ) | (12,833 | ) | (14,441 | ) | (13,923 | ) | - | - | - | - | - | - | (30,521 | ) | (26,756 | ) | ||||||||||||||||||||||||||||||
|
Special oil gain levy
|
(22,120 | ) | (12,048 | ) | (9,862 | ) | (5,658 | ) | - | - | - | - | - | - | (31,982 | ) | (17,706 | ) | ||||||||||||||||||||||||||||||
|
Impairment and provision
|
(22 | ) | (27 | ) | - | - | - | - | - | - | - | - | (22 | ) | (27 | ) | ||||||||||||||||||||||||||||||||
|
Crude oil and product purchases
|
- | - | - | - | (50,307 | ) | (32,236 | ) | - | - | - | - | (50,307 | ) | (32,236 | ) | ||||||||||||||||||||||||||||||||
|
Selling and administrative expenses
|
(79 | ) | (122 | ) | (1,164 | ) | (1,267 | ) | - | - | (1,611 | ) | (1,650 | ) | - | - | (2,854 | ) | (3,039 | ) | ||||||||||||||||||||||||||||
|
Others
|
(350 | ) | (535 | ) | (396 | ) | (225 | ) | - | - | (89 | ) | (128 | ) | - | - | (835 | ) | (888 | ) | ||||||||||||||||||||||||||||
|
Interest income
|
- | - | 22 | 28 | - | - | 1,174 | 590 | - | - | 1,196 | 618 | ||||||||||||||||||||||||||||||||||||
|
Finance costs
|
(831 | ) | (502 | ) | (523 | ) | (418 | ) | - | - | (353 | ) | (202 | ) | - | - | (1,707 | ) | (1,122 | ) | ||||||||||||||||||||||||||||
|
Exchange gains/(losses), net
|
- | - | (29 | ) | 34 | - | - | 666 | 961 | - | - | 637 | 995 | |||||||||||||||||||||||||||||||||||
|
Investment income
|
- | - | - | - | - | - | 1,828 | 427 | - | - | 1,828 | 427 | ||||||||||||||||||||||||||||||||||||
|
Share of profits of associates
|
- | - | - | - | - | - | 320 | 199 | - | - | 320 | 199 | ||||||||||||||||||||||||||||||||||||
|
Share of profits of a joint venture
|
- | - | 247 | 199 | - | - | - | - | - | - | 247 | 199 | ||||||||||||||||||||||||||||||||||||
|
Non-operating (expenses)/income, net
|
- | - | - | - | - | - | (563 | ) | 142 | - | - | (563 | ) | 142 | ||||||||||||||||||||||||||||||||||
|
Income tax expense
|
- | - | - | - | - | - | (22,310 | ) | (18,193 | ) | (22,310 | ) | (18,193 | ) | ||||||||||||||||||||||||||||||||||
|
Segment profit for the year
|
55,008 | 43,520 | 57,184 | 46,043 | 162 | 210 | (20,806 | ) | (17,725 | ) | (21,293 | ) | (17,638 | ) | 70,255 | 54,410 | ||||||||||||||||||||||||||||||||
|
Other segment information
|
||||||||||||||||||||||||||||||||||||||||||||||||
|
Segment assets
|
100,629 | 93,405 | 157,065 | 141,098 | 4,232 | 3,160 | 99,341 | 58,163 | - | - | 361,267 | 295,826 | ||||||||||||||||||||||||||||||||||||
|
Investments in associates
|
- | - | 924 | - | - | - | 1,898 | 1,781 | - | - | 2,822 | 1,781 | ||||||||||||||||||||||||||||||||||||
|
Investment in a joint venture
|
- | - | 20,175 | 20,823 | - | - | - | - | - | - | 20,175 | 20,823 | ||||||||||||||||||||||||||||||||||||
|
Total assets
|
100,629 | 93,405 | 178,164 | 161,921 | 4,232 | 3,160 | 101,239 | 59,944 | - | - | 384,264 | 318,430 | ||||||||||||||||||||||||||||||||||||
|
Segment liabilities
|
(33,706 | ) | (20,740 | ) | (50,337 | ) | (56,420 | ) | (2,261 | ) | (1,358 | ) | (35,104 | ) | (24,146 | ) | - | - | (121,408 | ) | (102,664 | ) | ||||||||||||||||||||||||||
|
Total liabilities
|
(33,706 | ) | (20,740 | ) | (50,337 | ) | (56,420 | ) | (2,261 | ) | (1,358 | ) | (35,104 | ) | (24,146 | ) | - | - | (121,408 | ) | (102,664 | ) | ||||||||||||||||||||||||||
|
Capital expenditures
|
20,598 | 24,707 | 45,290 | 27,107 | - | 1 | 1,140 | 92 | - | - | 67,028 | 51,907 | ||||||||||||||||||||||||||||||||||||
16
|
5.
|
SEGMENT INFORMATION (continued)
|
|
|
(b)
|
Geographical information
|
The Group mainly engages in the exploration, development, production and sale of crude oil, natural gas and other petroleum products in offshore China. Activities outside the PRC are mainly conducted in Indonesia, Australia, Nigeria, Argentina, the United States of America, Canada and Singapore.
In presenting the Group’s geographical information, revenues from external customers are based on the location of the Group’s customers, and non-current assets are attributed to the segments based on the location of the Group’s assets. No further analysis of geographical information is presented for revenues from external customers as over 77% of the Group’s revenues are generated from PRC customers, and revenues generated from customers in other locations are individually less than 10%.
The following table presents certain non-current assets and capital expenditure information for the Group’s geographical information for the years ended 31 December 2011 and 2010.
|
PRC
|
Asia except PRC
|
Oceania
|
Africa
|
North America
|
Consolidation and elimination
|
Total
|
||||||||||||||||||||||||||||||||||||||||||||||||||
|
2011
|
2010
|
2011
|
2010
|
2011
|
2010
|
2011
|
2010
|
2011
|
2010
|
2011
|
2010
|
2011
|
2010
|
|||||||||||||||||||||||||||||||||||||||||||
|
Non-current assets
|
191,262 | 126,562 | 33,086 | 33,754 | 2,423 | 2,782 | 26,441 | 30,818 | 44,599 | 16,527 | (52,835 | ) | (13 | ) | 244,976 | 210,430 | ||||||||||||||||||||||||||||||||||||||||
|
Capital expenditures
|
31,932 | 31,938 | 2,450 | 1,789 | 1 | - | 2,142 | 2,540 | 30,503 | 15,640 | - | - | 67,028 | 51,907 | ||||||||||||||||||||||||||||||||||||||||||
The information on non-current assets above is based on the location of assets and excludes financial instruments.
|
|
(c)
|
Information about major customers
|
The current year’s revenue of approximately RMB52,026 million (2010: RMB34,384 million ) and RMB33,591 million (2010: RMB13,218 million) was derived from sales by the independent operations and joint arrangements segments to China Petroleum & Chemical Corporation and PetroChina Company Limited respectively.
6. OIL AND GAS SALES
|
Group
|
||||||||
|
2011
|
2010
|
|||||||
|
|
||||||||
|
Gross sales
|
195,759 | 152,887 | ||||||
|
Less: Royalties
|
(3,134 | ) | (3,523 | ) | ||||
|
PRC government’s share of oil
|
(3,346 | ) | (3,230 | ) | ||||
|
Oil and gas sales
|
189,279 | 146,134 | ||||||
17
|
7.
|
PROFIT BEFORE TAX
|
The Group’s profit before tax is arrived at after charging/(crediting):
|
Group
|
||||||||
|
2011
|
2010
|
|||||||
|
|
||||||||
|
Crediting:
|
||||||||
|
Interest income from bank deposits
|
(1,196 | ) | (618 | ) | ||||
|
Exchange gains, net
|
(637 | ) | (995 | ) | ||||
|
Investment income:
|
||||||||
|
– Net gain from available-for-sale publicly traded investments
|
(1,695 | ) | (425 | ) | ||||
|
– Net gain from held-to-maturity financial assets
|
(133 | ) | (2 | ) | ||||
| (1,828 | ) | (427 | ) | |||||
|
Charging:
|
||||||||
|
Auditors’ remuneration:
|
||||||||
|
– Audit fee
|
19 | 18 | ||||||
|
– Other fees
|
3 | 2 | ||||||
| 22 | 20 | |||||||
|
Employee wages, salaries, allowances and social security costs
|
1,527 | 1,581 | ||||||
|
Equity-settled share option expenses
|
143 | 218 | ||||||
|
Depreciation, depletion and amortisation:
|
||||||||
|
– Property, plant and equipment
|
30,397 | 26,943 | ||||||
|
– Intangible assets
|
204 | 195 | ||||||
|
– Less: Net amount capitalised
|
(80 | ) | (382 | ) | ||||
| 30,521 | 26,756 | |||||||
|
Operating lease rentals:
|
||||||||
|
– Office properties
|
133 | 128 | ||||||
|
– Equipment
|
1,616 | 1,819 | ||||||
| 1,749 | 1,947 | |||||||
|
Repairs and maintenance
|
3,011 | 2,867 | ||||||
|
Research and development costs
|
850 | 823 | ||||||
|
Provision for inventory obsolescence
|
22 | 27 | ||||||
|
Loss on disposal of property, plant and equipment
|
94 | 65 | ||||||
|
Gain on disposal of a subsidiary
|
(372 | ) | - | |||||
|
Donation to the CNOOC Marine Environmental and Ecological Protection Public Welfare Foundation
|
500 | - | ||||||
18
|
8.
|
FINANCE COSTS
|
|
Group
|
||||||||
|
2011
|
2010
|
|||||||
|
|
||||||||
|
Interest on bank loans which are repayable within five years
|
637 | 264 | ||||||
|
Interest on other loans
|
921 | 384 | ||||||
|
Other borrowing costs
|
30 | 34 | ||||||
|
Total borrowing costs
|
1,588 | 682 | ||||||
|
Less: Amount capitalised in property, plant and equipment
|
(1,150 | ) | (394 | ) | ||||
| 438 | 288 | |||||||
|
Other finance costs:
|
||||||||
|
Unwinding of discount on provision for dismantlement
|
1,312 | 754 | ||||||
|
Others
|
(43 | ) | 80 | |||||
| 1,707 | 1,122 | |||||||
The interest rates used to determine the amount of related borrowing costs for capitalisation varied from 0.9455% to 6.375% (2010: from 4.1% to 6.375%) per annum during the year.
|
9.
|
INCOME TAX
|
An analysis of the tax expense in the Group’s consolidated statement of comprehensive income is as follows:
|
2011
|
2010
|
|||||||
|
Overseas
|
||||||||
|
Current income tax
|
1,532 | 1,202 | ||||||
|
Deferred tax
|
906 | 976 | ||||||
|
PRC
|
||||||||
|
Current income tax
|
21,309 | 17,434 | ||||||
|
Deferred tax
|
(1,437 | ) | (1,419 | ) | ||||
|
Total tax charge for the year
|
22,310 | 18,193 | ||||||
A reconciliation of the statutory PRC corporate income tax rate to the effective income tax rate of the Group is as follows:
|
2011
|
2010
|
|||||||
|
%
|
%
|
|||||||
|
Statutory PRC enterprise income tax rate
|
25.0 | 25.0 | ||||||
|
Effect of different tax rates for the Company and overseas subsidiaries
|
(0.5 | ) | 0.3 | |||||
|
Tax credit from the government
|
(0.2 | ) | (0.1 | ) | ||||
|
Profit attributable to a joint venture and associates
|
(0.2 | ) | (0.1 | ) | ||||
|
Group’s effective income tax rate
|
24.1 | 25.1 | ||||||
The movements of deferred tax liabilities are as follows:
|
2011
|
2010
|
|||||||
|
At 1 January
|
6,841 | 7,440 | ||||||
|
Credited to the consolidated statements of comprehensive income
|
(531 | ) | (443 | ) | ||||
|
Disposal of a subsidiary
|
(549 | ) | - | |||||
|
Exchange differences
|
(273 | ) | (156 | ) | ||||
|
At 31 December
|
5,488 | 6,841 | ||||||
19
|
10.
|
DIVIDENDS
|
|
Group
|
||||||||
|
2011
|
2010
|
|||||||
|
Declared and paid during the year:
|
||||||||
|
Interim dividend
|
9,106 | 8,100 | ||||||
|
Final dividend
|
9,287 | 7,795 | ||||||
|
Total dividends paid in the year
|
18,393 | 15,895 | ||||||
|
Weighted average number of ordinary shares
|
44,668,570,359 | 44,669,199,984 | ||||||
|
Dividend per ordinary share
|
RMB0.41
|
RMB0.36
|
||||||
|
Final dividend proposed for approval at the annual general meeting at HK$0.28 per ordinary share (2010: HK$0.25 per ordinary share) - not recognised as a liability as at the end of the reporting period
|
10,142 | 9,421 | ||||||
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%.
|
11.
|
EARNINGS PER SHARE
|
|
Group
|
||||||||
|
2011
|
2010
|
|||||||
|
Earnings
|
||||||||
|
Profit for the year attributable to ordinary equity holders for the basic and diluted earnings per share calculations
|
70,255 | 54,410 | ||||||
|
Number of shares
|
||||||||
|
Number of ordinary shares issued at the beginning of the year
|
44,669,199,984 | 44,669,199,984 | ||||||
|
Weighted average number of ordinary shares for the basic earnings per share calculation
|
44,668,570,359 | 44,669,199,984 | ||||||
|
Effect of dilutive potential ordinary shares under the share option schemes
|
185,044,651 | 151,987,482 | ||||||
|
Weighted average number of ordinary shares for the purpose of diluted earnings per share
|
44,853,615,010 | 44,821,187,466 | ||||||
|
Earnings per share:
|
||||||||
|
Basic (RMB Yuan)
|
1.57 | 1.22 | ||||||
|
Diluted (RMB Yuan)
|
1.57 | 1.21 | ||||||
20
|
12.
|
TRADE RECEIVABLES
|
The Group’s trading terms with its customers are mainly on credit, except for new customers, where payment in advance is normally required. The credit terms of the Group are generally within 30 days after the delivery of oil and gas. Trade receivables are non-interest-bearing.
As at 31 December 2011 and 2010, substantially all the trade receivables were aged within 30 days. All customers have a good repayment history and no receivables are past due.
|
13.
|
TRADE AND ACCRUED PAYABLES
|
As at 31 December 2011 and 2010, substantially all the trade and accrued payables were aged within six months. The trade and accrued payables are non-interest-bearing and are normally settled within six months.
|
14.
|
LOANS AND BORROWINGS
|
Included in the current portion of the Group’s loans and borrowings, US$500 million 6.375% guaranteed notes issued by CNOOC Finance (2002) Limited, a wholly-owned subsidiary of the Company, were repaid subsequently in March 2012.
Included in the non-current portion of the Group’s loans and borrowings, US$1,500 million 4.25% guaranteed notes due in 2021 and US$500 million 5.75% guaranteed notes due in 2041 (collectively referred as the “Notes”) were issued on 26 January 2011 by CNOOC Finance (2011) Limited, a wholly-owned subsidiary of the Company. The obligations of CNOOC Finance (2011) Limited in respect of the Notes are unconditionally and irrevocably guaranteed by the Company.
|
15.
|
SHARE CAPITAL
|
|
Share
|
Number of shares
|
Share
capital
|
Issued share
capital equivalent of
|
|||||||||
|
HK$’000,000
|
RMB’000,000
|
|||||||||||
|
Authorised:
|
||||||||||||
|
Ordinary shares of HK$0.02 each
as at 31 December 2011 and 31 December 2010
|
75,000,000,000 | 1,500 | ||||||||||