(Hong Kong, 17 September 2006) – China BlueChemical Ltd (“China BlueChem”), a leading nitrogenous fertilizer producer inChina, today announced its plan to list on the Main Board of the Stock Exchange of Hong Kong.

About Offering Details

China BlueChem will offer a total of 1,400,000,000 H shares globally at an offer price between HK$1.38 and HK$1.90 per H share. Of the total offer H shares, 90% or 1,260,000,000 H shares will be placed internationally to institutional investors while 10% or 140,000,000 H shares will be offered to the public inHong Kong, subject to adjustment and the over-allotment option. Pursuant to the over-allotment option, a maximum of 210,000,000 additional H shares can be issued, which will represent 15% of the H shares initially offered.

The net proceeds of the offering will amount to approximately HK$2.2 billion, assuming the over-allotment option is not exercised and the offer price at the mid-point price of HK$1.64 per H share.

The proceeds will mainly be used to construct a production facility of polyoxymethylene and partially repay two short-term financing loans which were granted for the construction of Fudao Phase II and to Tianye Chemical respectively. The remaining balance will be used as working capital.

The public offer will open on Monday, 18 September 2006 and close at noon on Thursday, 21 September 2006. The final price is expected to be determined on Friday, 22 September 2006. The allotment results are expected to be announced on Thursday, 28 September 2006. Dealings in the H shares are expected to commence on Friday, 29 September 2006. The H shares will be traded in board lots of 2,000 H shares each. The stock code of the H shares is 3983.

J.P. Morgan Securities Ltd. and UBS AG are the Joint Global Coordinators and Joint Lead Managers. J.P. Morgan Securities (Asia Pacific) Limited and UBS AG are the Joint Bookrunners and Joint Sponsors.

Summary of Issue Statistics

About China BlueChemical Ltd.

China BlueChem is one of the largest and most efficient nitrogenous fertilizer producers inChina, in terms of production volume and energy consumption. It boasts three production facilities, Fudao Phase I and II in Hainan and the Tianye Plant inInner Mongolia, with a total annual designed production capacity of 1,840,000 tonnes of urea and 200,000 tonnes of methanol.

As the only fertilizer-making subsidiary of China National Offshore Oilfield Corporation (“CNOOC”), China BlueChem is well positioned to benefit from secure and low-cost gas supplies for its engery-saving gas-based production. Natural gas is a crucial and environment-friendly raw material for production of urea and methanol. A major subsidiary of CNOOC, China BlueChem can leverage on the CNOOC Group’s strengths in resources discovery, synergy, business culture, governance and corporate image.

The main production facilities are strategically located in Hainan to ensure abundant and reliable supplies of natural gas from offshore gasfields operated by CNOOC Limited (HKSE code: 0883.HK), China BlueChem’s sister company. The convenient location minimizes transportation costs and risks, and more importantly, allows China BlueChem to market its products to both southern and northern hemispheres.

Through its regional and international distributors, China BlueChem’s products reach 20 provinces inChinaand overseas markets such asSoutheast Asia,Australia,New Zealandand theUnited States. Equipped with advanced facilities and its anti-agglomerate chemical technology, China BlueChem’s “Fudao” branded urea products are widely recognized for their quality and have won numerous awards from the Hainan Provincial Government and the China Agriculture Association.

Mr. Wu Mengfei, Chairman ofChinaBlueChem, said, “Thanks to the guidance and effort of our visionary and seasoned management team, China BlueChem has made a proven track record of rapid growth. The listing of the company on the Hong Kong Stock Exchange is expected to further empower China BlueChem to capture the great opportunities inChina’s fertilizers sector. It will not only help us expedite our business development, but also enhance our reputation in the international market, thus allowing us to explore more international cooperation opportunities. ”
 

Yara International ASA (“Yara”), one of the world’s leading suppliers of mineral fertilizers, has become China BlueChem’s strategic investors by undertaking to subscribe 10% of the H shares available from the global offering, with a lock-up period of 36 months. Yara’s strategic investment in China BlueChem will pave the way for both parties to explore future opportunities to contemplate synergistic cooperation.

China BlueChem will continue to explore growth opportunities through both organic expansion and selective acquisition. It has established a joint venture, CNOOC Kingboard Chemical Limited, with a subsidiary of Hong Kong-listed Kingboard Chemical Holdings Limited (HKSE code: 0148.HK), to construct one ofChina’s largest methanol plants with a designed annual methanol production capacity of 600,000 tonnes. With the construction work completed in September 2006, the new methanol plant is expected to commence mass production in January 2007.

Meanwhile, China BlueChem is also planning to construct two advanced plants with a respective designed annual production capacity of 1,130,000 tonnes of methanol and 60,000 tonnes of polyoxymethylene. Looking ahead, China BlueChem will be dedicated to introducing high value-added synthetic chemical products to meet with the rising demand arising from their growing applications in a diverse range of industries.

Mr. Wu concluded, “Chinahas the largest population of any country in the world. The demand for food is expected to increase significantly along with the rise in both population and living standards.China as the largest mineral fertilizer consuming country in the world, represented around 26.5% of the world’s consumption in 2003. The market is even more promising now with the PRC government’s initiatives to support the development of fertilizer industry such as the exemption of paying VAT. Leveraging our leading position in the nitrogenous fertilizer market, China BlueChem has every confidence to create the best value for our shareholders.”

Company at a glance:
 

China BlueChemical Ltd. (HKSE code: 3983.HK)

China BlueChem is one of the largest and most efficient nitrogenous fertilizer producers inChinain terms of production volume and energy consumption. It is the only company in the CNOOC family that engages in the production of downstream mineral fertilizers and synthetic chemical products using natural gas as principal raw material. Its production facilities are located in Hainan andInner Mongolia,China, with a total designed annual production capacity of 1,840,000 tonnes of urea and 200,000 tonnes of methanol. China BlueChem has constructed a new methanol plant. With the completion of construction work in September 2006, the new menthanol plant is expected to commence mass production in January 2007, thus ultimately raising China BlueChem’s total designed annual methanol production capacity to 800,000 tonnes.

For press enquiries:

China BlueChemical Ltd.

Ms. Lydia Zhong       Tel: (852) 2213 2502      zhongyx@cnooc.com.cn

Strategic Financial Relations (China) Limited

Ms. Anita Cheung     Tel: (852) 2864 4827      anita@strategic.com.hk

Ms. Karen Hung        Tel: (852) 2864 4854      karen.hung@strategic.com.hk

Mr. Winston Yau       Tel: (852) 2864 4838      winston.yau@strategic.com.hk

Ms. Arlene Wong      Tel: (852) 2864 4899      arlene.wong@strategic.com.hk

Disclaimer - Forward looking statements

This announcement contains forward-looking statements and information relating to us and our operations and prospects that are based on current beliefs and assumptions as well as information currently available to us. The words “anticipate”, “believe”, “estimate”, “expect”, “plans”, “prospects”, “going forward” and similar expressions, as they relate to us or our business, are intended to identify forward-looking statements. Such statements reflect our current views with respect to future events and are subject to risks, uncertainties and various assumptions. 

Should one or more of these risks or uncertainties materialize, or should any of the underlying assumptions prove incorrect, actual results may diverge significantly from the forward-looking statement.  We do not intend to update these forward-looking statements other than our on-going disclosure obligations pursuant to the Hong Kong Listing Rules or other requirements of the Hong Kong Stock Exchange.