AGM 2004

Company:	CNOOC Limited (CNOOC)
Stock code:	0883
Meeting type:	Annual
Date of meeting:	28-Apr-04
Time of meeting:	10:30
Advice date:	19-Apr-04
CCASS voting cut-off	23-Apr-04. VOTE NOW
Notice of Meeting:	Click here
Voting method:	Webb-site.com will require a poll, all proxies will be counted
How to vote:	See our voting guide

Note to journalists:
We have up to 4 proxy seats available inside this AGM. Please contact us if you want one.

Item	Description	Vote
1	Adopt the accounts	FOR
2	Declare a final dividend and special dividend	FOR
3.1	Re-elect Shouwei Zhou as Executive Director	FOR
3.2	Re-elect Kenneth S Courtis as INED	AGAINST
3.3	Re-elect Erwin Schurtenberger as INED	AGAINST
3.4	Elect Evert Henkes as INED	FOR
4	Re-appoint Ernst & Young	FOR
5	Mandate the directors to repurchase shares	FOR
6	Mandate the directors to issue additional shares	AGAINST
7	Mandate the directors to issue repurchased shares	AGAINST
9	Amend the articles of association	FOR

Reasons AGAINST

Items 3.2 and 3.3

We are advising you to vote AGAINST the re-election of 2 independent non-executive directors of CNOOC, Dr Kenneth S Courtis and Dr Erwin Schurtenberger, because we think they have done a poor job in advising minority shareholders to approve loans made by CNOOC to CNOOC Finance Corp Ltd, a subsidiary of CNOOC's parent, China National Offshore Oil Corporation. It is a golden rule of good governance that listed companies should not lend money to their parents. CNOOC is seeking approval for this in a separate EGM taking place on the same day as the AGM, and we advise you to vote against. Please see our separate voting advice on that meeting.

Of course, CNOOC's parent is allowed under Hong Kong's whacky Listing Rules to vote on the re-elections of its so-called independent directors, thereby ensuring the outcome, but your protest votes will count.

Mr Evert Henkes, a former Shell executive who was appointed by the board during the year and now stands for election, escapes our criticism only because he did not participate in the independent board committee which recommended the loans, but this begs the question of why he did not participate in that committee.

Items 6 and 7

Webb-site.com urges all investors to vote against the general issue mandate for all listed companies, for the reasons explained in Project Vampire, unless they comply with the recommendations set out in that article. The non-pre-emptive issue mandate allows management to choose the shareowners by allotment of shares. This corrupts the governance mechanism. Shareowners should govern management, not the other way around. If a company wishes to raise cash by issuing shares, then it should do so by rights issue.

If your company offers new shares to other investors at a discount, but not to you, then your company is transferring value from you to the new investors. Their gain is your loss. That's why we believe an issue for cash should be done by rights issue, failing which it should be limited to 5% of existing issued shares and a maximum discount of 5%.

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Voting recommendations

Reasons AGAINST

Items 3.2 and 3.3

Items 6 and 7