China Oilfield Services Limited — Proxy Solicitation & Information Statement 2006

Dec 18, 2006

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt as to any aspect of this circular or as to the action to be taken, you should consult your licensed securities dealer, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in China Oilfield Services Limited , you should at once hand this circular to the purchaser or to the bank, licensed securities dealer or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee.

The Stock Exchange of Hong Kong Limited takes no responsibility for the contents of this circular, makes no representation as to its accuracy or completeness and expressly disclaims any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this circular.

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(Incorporated in the People’s Republic of China as a joint stock limited liability company) (Stock code: 2883)

MANDATE TO THE BOARD OF DIRECTORS TO ISSUE BONDS

A notice convening the EGM to be held at Room 610B, CNOOC Plaza, No. 25, Chaoyangmen North Avenue, Dongcheng District, Beijing, the People’s Republic of China on 31 January 2007 at 10:00 a.m. was set out on pages 6 to 7 of this circular. Whether or not you intend to attend the said meeting, you are requested to complete the proxy form in accordance with the instructions printed thereon and return the same to the Company at 65/F., Bank of China Tower, 1 Garden Road, Hong Kong as soon as possible and in any event not less than 24 hours before the time appointed for the holding of the relevant meeting. Completion and return of the proxy form will not prevent the H Shares Shareholders from attending and voting in person at the EGM or any adjourned meeting(s) should they so wish. Shareholders who intend to attend the EGM must complete and return the written replies for attending the EGM to the Company’s registered office by facsimile or post no later than 11 January 2007.

15 December 2006

CONTENTS

	Page
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from the Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
Appendix −Notice of EGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6

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DEFINITIONS

In this circular, unless the context otherwise requires, the following expressions have the following meanings:

“Articles”	the articles of association of the Company;
“Board”	the board of Directors;
“Company”	China Oilfield Services Limited, a joint stock limited
	company incorporated in the PRC with limited liability,
	the H Shares of which are listed on the Main Board;
“CSRC”	China Securities Regulatory Commission;
“Director(s)”	the director(s) of the Company;
“Domestic Share(s)”	domestic share(s) of nominal value of RMB1.00 each
	in the capital of the Company;
“EGM”	the extraordinary general meeting of the Company	to
	be held at Room 610B, CNOOC Plaza, No.	25,
	Chaoyangmen North Avenue, Dongcheng District,
	Beijing, the PRC on 31 January 2007 at 10:00 a.m.;
“Group”	the Company and its subsidiaries;
“H Share(s)”	overseas listed foreign share(s) of nominal value	of
	RMB1.00 each in the capital of the Company which	are
	listed on the Stock Exchange and subscribed for in HK
	dollars;
“Hong Kong”	the Hong Kong Special Administrative Region of	the
	PRC;
“Listing Rules”	the Rules Governing the Listing of Securities on	the
	Main Board of the Stock Exchange;
“PRC”	the People’s Republic of China which, for the purposes
	of this circular, excludes Hong Kong, the Macau
	Special Administrative Region of the PRC and Taiwan;
“Shares”	Domestic Shares and H Shares;
“Shareholder(s)”	registered holder(s) of Shares;
“Stock Exchange”	The Stock Exchange of Hong Kong Limited;
“HK$” or “HK dollars”	Hong Kong dollar, the lawful currency of Hong Kong;

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DEFINITIONS

“RMB” Renminbi, the lawful currency of the PRC; and “%” per cent.

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LETTER FROM THE BOARD

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(Incorporated in the People’s Republic of China as a joint stock limited liability company)

(Stock code: 2883)

Board of Directors:

Fu Chengyu (Chairman) * Yuan Guangyu Li Yong Wu Mengfei Andrew Y. Yan Gordon C.K. Kwong Simon X. Jiang*

Registered Office:

65/F, Bank of China Tower 1 Garden Road Hong Kong

• Non-executive Director

• ** Independent non-executive Director

15 December 2006

To the Shareholders

Dear Sir or Madam,

MANDATE TO THE BOARD OF DIRECTORS TO ISSUE BONDS

1. INTRODUCTION

The purpose of this circular is to provide you with information relating to the proposed grant of a general mandate to the Board to issue bonds on the principle terms set out below. A notice of the EGM to be held on 31 January 2007 is set out on pages 6 to 7 of this circular. The EGM has been convened for the purpose of considering and, if thought fit, passing the special resolution to grant to the Board a general mandate to issue bonds on the principle terms set out below.

2. PRINCIPLE TERMS OF THE BONDS

Amount of Bonds to be issued

Bonds in the aggregate amount not exceeding RMB2,000 million.

Term of the Bonds

The bonds will be non-secured, for term of between 10 and 20 years.

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LETTER FROM THE BOARD

Conditions to the proposed bonds issue

The proposed bonds issue will be subject to (1) the approval by the Shareholders at the EGM by way of a special resolution, and (2) the obtaining of the approvals or consents of:

• (a) the National Development and Reform Commission of the PRC;

• (b) the People’s Bank of China; and

• (c) CSRC.

Coupon rate

The final rate will be determined by the Board and will be in accordance with the prevailing market conditions at the time of the issue of the bonds and will be further subject to the final approval of the PRC regulatory authorities listed above. It is currently expected that the bonds will be of fixed rate, with interest payable on an annual basis.

Target subscribers

It is currently intended that the bonds will be issued in the PRC to qualified domestic institutional investors and/or PRC Citizens with valid personal identification documents (other than those prohibited from subscribing for the bonds under PRC laws and regulations.)

Proposed use of proceeds

It is expected that the proceeds from the bonds issue will be used by the Company for the building and upgrading of drilling rigs, the purchase and building of chemical tankers and oilfield working vessels, the upgrading of seismic vessels and building of liftboats and as general working capital of the Company.

Reasons for the mandate

Under Article 82 of the articles of association of the Company, an issue of bonds by the Company would need to be approved by a special resolution of the Shareholders. The Board would therefore seek from the Shareholders a general mandate to issue bonds on terms as set out in this circular and the authority to finalise the detailed terms of the proposed bonds issue, including without limitation, the authority to determine the terms of the bonds, interest rate and approve and execute all such documents, instruments, deeds and things as deemed necessary in connection with and incidental to the proposed bonds issue.

The Board believes that it is in the best interests of the Company and the Shareholders to grant to the Board a general authority to enable the Board to issue bonds on the terms as set out in this circular. Whilst it is not possible to anticipate in

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LETTER FROM THE BOARD

advance any specific circumstances in which the Board might think it appropriate to issue bonds on such terms, the ability to do so would give them the flexibility to capture the opportunity if it so arises.

3. EGM

The notice convening the EGM to consider and approve the granting of a general mandate to the Board to issue bonds on terms set out in this circular is set out on pages 6 to 7 of this circular.

4. PROCEDURES FOR DEMANDING A POLL

Pursuant to Article 76 of the Company’s Articles of Association, a resolution put to the vote of a general meeting of the Shareholders shall be decided on a show of hands unless a poll is (before or after any vote by a show of hands) demanded:

• (i) by the chairman of the meeting;

• (ii) at least two Shareholders with voting rights or their proxies; or

• (iii) one or several Shareholders (including proxies) holding totally or separately 10 percent or more of the shares carrying the right to vote at the meeting.

5. RECOMMENDATION

The Board considers that the granting of a general mandate to the Board to issue bonds would offer the Company more flexibility to deal with market changes and is in the interests of the Company and the Shareholders as a whole and accordingly recommend that all Shareholders should vote in favour of the relevant resolution to be proposed at the EGM.

Yours faithfully By order of the Board China Oilfield Services Limited Chen Weidong Company Secretary

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NOTICE OF EGM

APPENDIX

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(Incorporated in the People’s Republic of China as a joint stock limited liability company) (Stock code: 2883)

NOTICE IS HEREBY GIVEN THAT the Extraordinary General Meeting (“ EGM ”) of China Oilfield Services Limited (the “ Company ”) will be held on 31 January 2007 (Wednesday) at 10:00 a.m. at Room 610B, CNOOC Plaza, No. 25, Chaoyangmen North Avenue, Dongcheng District, Beijing, the PRC for the following purposes:

SPECIAL RESOLUTION

“ THAT

The granting of a general mandate to the board of directors to issue bonds not exceeding the aggregate amount of RMB2,000 million for a term of between 10 and 20 years is hereby approved; and the board of directors of the Company is hereby authorised to finalise the detailed terms of the proposed bonds issue including without limitation, the authority to determine the terms of the bonds, interest rate and approve and execute all such documents, instruments, deeds and things as deemed necessary in connection with and incidental to the proposed bonds issue.”

By order of the Board China Oilfield Services Limited Chen Weidong Company Secretary

Hong Kong, 15 December 2006

Notes:

• (1) Holders of the Company’s overseas listed foreign shares (in the form of H Shares) (“H Shares”) whose names appear on the Company’s register of members maintained by Computershare Hong Kong Investor Services Limited on 1 January 2007 (Monday) and representative holder of China National Offshore Oil Corporation (as holder of COSL’s domestic shares) are entitled to attend and vote at the EGM.

• (2) Shareholders who intend to attend the EGM must complete and return the written replies for attending the EGM to the Company’s registered office by facsimile or post no later than 11 January 2007 (Thursday):

Ms. Ada Huang Address: 65/F., Bank of China Tower, 1 Garden Road, Hong Kong Tel: (852) 22132515 Fax: (852) 2525 9322

• (3) Each holder of Shares who has the right to attend and vote at the EGM is entitled to appoint in writing one or more proxies, whether a shareholder nor not, to attend and vote on his behalf of the EGM. Where a shareholder has appointed more than one proxy to attend the EGM, such proxies may only vote on a poll or a ballot. The instrument appointing a proxy must be in writing under the hand of the appointor or his attorney duly authorised in writing. In case that an appointer is a legal person, the power of attorney must be either under the common seal of the legal person or under the hand of its director or other person, duly

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NOTICE OF EGM

APPENDIX

authorised. If the instrument appointing a proxy is signed by an attorney of the appointor, the power of attorney authorising that attorney to sign, or other documents of authorisation, must be notarially certified. For holders of H Shares, the power of attorney or other documents of authorisation and proxy forms must be delivered to the Company’s registered office at 65/F., Bank of China Tower, 1 Garden Road, Hong Kong, no less than 24 hours before the time appointed for the holding of the EGM in order for such documents to be valid.

• (4) The Company’s register of member will be closed from 1 January 2007 (Monday) to 31 January 2007 (Wednesday) (both days inclusive), during which time no transfer of shares will be registered. Transferees of H Shares who wish to attend the EGM must deliver their duly stamped instruments of transfer, accompanied by the relevant share certificates, to Computershare Hong Kong Investor Services Limited by no later than 4:00 p.m. on 29 December 2006 (Friday) for completion of the registration of the relevant transfer in accordance with the Articles of Association of the Company. Computershare Hong Kong Investor Services Limited’s address is as follows:

Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong

• (5) Shareholders or their proxies must present proof of their identities upon attending the EGM. Should a proxy be appointed, the proxy must also present copies of his/her Proxy Form, copies of appointing instrument and power of attorney, if applicable.

• (6) The EGM is expected to last not more than one day. Shareholders or proxies attending the EGM are responsible for their own transportation and accommodation expenses.

As at the date of this circular the Directors of the Company are Mr. Fu Chengyu (Chairman and Non-executive Director), Mr. Yuan Guangyu (Executive Director), Mr. Li Yong (Executive Director), Mr. Wu Mengfei (Non-executive Director), Mr. Andrew Y. Yan (Independent Non-executive Director), Mr. Gordon C.K. Kwong (Independent Non-executive Director) and Simon X. Jiang (Independent Non-executive Director).

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