China BlueChem’s 2006 Net Profit Attributable to

Equity Holders of the Parent Surged 74.38% to RMB 1,646 million Approximately 12.70% Higher than the Profit Forecast during Listing

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Further Expands Scale through Organic Expansion and Acquisition
Strives to Become a Leading Chemical Fertilizer and
Chemical Producer in China and Overseas

Financial Highlights:

 (Hong Kong, 3 April 2007) China BlueChemical Ltd. (“China BlueChem” or the “Company”; stock code: 3983), the leading chemical fertilizer producer in China, today announced its annual results for the year ended 31 December 2006.

With the expansion of annual production capacity and product mix through the acquisition of Tianye Chemical and the operation of its CNOOC Jiantao methanol plant, the Company recorded a year-on-year increase in revenue of RMB1,094.79 million, or 46.17%, from RMB2,370.99 million in 2005 to RMB3,465.78 million in 2006. Gross profit rose 20.75% from RMB1,077.90 million in 2005 to RMB1,301.62 million in 2006. Net profit attributable to equity holders of the parent surged 74.38% to RMB1,645.82 million, which was approximately 12.70% higher than the forecasted amount of not less than RMB1,461.00 million as disclosed in the Company’s prospectus.

Since the Company’s acquisition of Tianye Chemical, Tianye Chemical has contributed approximately RMB720 million (including a one-off excess over the cost of a business combination of RMB578 million) to the Company’s profit before tax for the year ended 31 December 2006. The Company’s net profit attributable to equity holders of the parent margin increased from 39.81% in 2005 to 47.49% in 2006.  Basic earnings per share was RMB48.40 fen. The board of directors proposed a final dividend of RMB1.50 fen per share for the year ended 31 December 2006.

Mr. Yang Ye Xin, CEO and President of the Company, said, ‘The year of 2006 marked a major milestone of the Company. Apart from its successful listing on the Main Board of the Hong Kong Stock Exchange, the Company achieved satisfactory performance in both chemical fertilizer and methanol business. Among which our “Fudao” brand granular urea product was awarded as “The China Famous Brand”, further solidifying our leading position in the chemical fertilizer industry. At the same time, the Company has successfully entered into the methanol market with CNOOC Jiantao methanol plant commenced mass production one month ahead of schedule.’

The Company’s revenue in 2006 was principally generated from the sales of urea. After the Company’s acquisition of Tianye Chemical, the Company’s annual urea production capacity surged from 1,320,000 tonnes to 1,840,000 tonnes. With the Company’s high efficiency operation, annual sales volume of urea rose 42.70% to 1,947,000 tonnes, with its sales revenue of urea increased by 33.76% to RMB2,976 million as compared with 2005 and accounting for 85.86% of the total revenue.

The acquisition of Tianye Chemical has also equipped China BlueChem with 200,000 tonnes methanol production capacity per annum, thus allowing the Company to expand the product mix to cover methanol products. Besides, the Company has set up joint venture with Kingboard Chemical Holdings Limited and constructed the 600,000-tonne CNOOC Jiantao methanol plant with its mass production commencing ahead of schedule on 1 December 2006. The sales revenue of methanol for the year 2006 has reached an amount of RMB309.00 million, which accounted for 8.90% of the Company’s total revenue.

During the year, China continued to be the major market for the Company and the sales accounted for approximately 98% of its total revenue. The Company’s exports of urea and methanol were mainly to overseas regions including Southeast Asia and North America.

As an important replacement energy, methanol’s application is expected to be further extended with increasing demand growth. Leverage on its superior location with abundant resources, the Company is capable to capture market opportunity and plans to construct a further methanol production facility in Hainan, adding a designed annual production capacity of 1,130,000 tonnes of methanol upon completion.

Furthermore, the Company continues to expand its product mix to develop more competitive synthetic chemical products. Being named as “plastic steel”, polyoxymethylene is widely applied to the manufacture of vehicles, electric appliances and daily necessities, with big market shortage in China. The Company plans to construct a polyoxymethylene production facility in Inner Mongolia with a designed annual production capacity of 60,000 tonnes. Upon completion, this facility will be the largest independent polyoxymethylene production facility in China.

To speed up the Company’s development pace, in 2006 the Company has formed strategic partnerships with the world’s leading chemical fertilizer producer, Yara, where both parties will closely cooperate in constructing high-end compound fertilizer production facility and developing chemical fertilizer products within the next three years.

Looking forward, the Company will continue to implement its two-pronged growth strategy of organic expansion and acquisition to solidify its leading position in China’s chemical fertilizer and chemical industries. ‘Continuous expansion has allowed us to achieve better economies of scale. In the future, by applying our effective management system, we seek to expand our business and at the same time effectively control operational costs, as well as to improve the internal efficiency and external competitiveness in order to build the Company into a competitive chemical fertilizer producer in China and worldwide, thus generating lucrative rewards for shareholders,’ Mr. Yang concluded.

About China BlueChemical Ltd.
China BlueChem is one of the largest and most efficient nitrogenous fertilizer producers in China in terms of production volume and energy consumption. It is a listed company of China National Offshore Oil Corp. that engages in the production of downstream mineral fertilizers and synthetic chemical products. China BlueChem’s production facilities are located in Hainan and Inner Mongolia, China, with a total designed annual production capacity of 1,840,000 tonnes of urea and 800,000 tonnes of methanol. Besides, China BlueChem has also secured long-term natural gas supply for its Hainan Plant. 

For more information about China Bluechem, please visit the company’s website at www.chinabluechem.com.cn.

For press enquiries：

China BlueChemical Ltd.
Ms. Lydia Zhong  Tel:    (852) 22132502  zhongyx@cnooc.com.cn

Strategic Financial Relations (China) Limited
Ms. Anita Cheung  Tel:   (852) 2864 4827  anita.cheung@sprg.com.hk
Ms. Karen Hung  Tel:     (852) 2864 4854  karen.hung@sprg.com.hk
Ms. Arlene Wong  Tel:    (852) 2864 4899  arlene.wong@sprg.com.hk
Ms. Karen To   Tel:      (852) 2864 4860  karen.to@sprg.com.hk