Expands Business to Phosphate Fertilizer

Enhances Cost Advantage & Economy of Scale

(Hong Kong,12 December 2008) China BlueChemical Ltd. (“China BlueChem” or the “Company”; stock code: 3983), a leading nitrogenous fertilizer producer in the People’s Republic of China (the “PRC”), today announced its proposed acquisition of 83.17% equity interest in Hubei Dayukou Chemical Co., Ltd. (“DYK Chemical”) and 100% equity interest in ZHJ Mining Co., Ltd. (“ZHJ Mining”) from China National Offshore Oil Corporation (“CNOOC”), its parent company. Upon the completion of the acquisition, the Company’s business will be expanded from nitrogenous fertilizer to the field of phosphate fertilizer production.

The main business of DYK Chemical and ZHJ Mining involves phosphate mining and processing as well as the production and sale of phosphoric chemical products (mainly phosphate fertilizers). The total consideration of the acquisition is RMB1,262,847,026, of which RMB1,081,027,026  constitutes the consideration for the acquisition of 83.17% equity interest in DYK Chemical and RMB181,820,000 constitutes the consideration of the acquisition of 100% equity interest in ZHJ Mining. Such consideration will be financed by the Company’s internal resources.

DYK Chemical is principally engaged in phosphate mining and processing, and sale and production of mono-ammonium phosphate (“MAP”) and di-ammonium phosphate (“DAP”) fertilizers. The In Situ Quantity Resources of Hubei Province Dayukou Phosphate Mine (“Dayukou Mine”) which is owned by DYK Chemical have been estimated as 124,016 kilo tonnes at an average grade of 19.6% P2O5 (Phosphorus Oxide). The mining production of Dayukou Mine in 2007 was 882 kilo tonnes. The total designed production capacity of MAP and DAP in DYK Chemical are 500 kilo tonnes per annum, and the actual total production reached the designed production capacity in 2007.

According to the auditing report prepared by Ernest & Young, for the six months ended 30 June 2008, DYK Chemical’s revenue amounted to RMB766.39 million with a net profit of RMB85.16 million. As at 30 June 2008, total assets of DYK Chemical were RMB1,466.59 million while the valuation for the 100% equity interests in DYK Chemical prepared by Beijing Pan-China Assets Appraisal Co., Ltd. (“Tianjian”), an independent PRC asset appraisal firm, is RMB 1,299.78 million.

ZHJ Mining’s main business is phosphate mining and sale. It possesses Hubei Province Wangji Phosphate Mine (“Wangji Mine”) of which the In Situ Quantity Resources have been estimated as 35,697 kilo tonnes at an average grade of 21.57% P2O5. The mining volume of ZHJ Mining in 2007 was 570.4 kilo tonnes.

According to the auditing report prepared by Ernest & Young, for the six months ended 30 June 2008, ZHJ Mining’s revenue amounted to RMB51.83 million with a net profit of RMB13.50 million. As at 30 June 2008, total assets of ZHJ Mining were RMB170.99 million while the valuation for the 100% equity interests in ZHJ Mining prepared by Tianjian is RMB 181.82 million.

Mr. Yang Yexin, CEO and President of China BlueChem, said “This acquisition will mark an important milestone in the Company’s execution of its strategic development objectives. The Company’s fertilizer business will be extended to phosphate fertilizer field from the production and sale of nitrogenous fertilizer and this will be conducive to enhancing the company’s position in the fertilizer industry of the PRC. More importantly, through this acquisition the Company will further enlarge its phosphate resources and acquire the know-how and expertise in the mining and expoiting of low-medium phosphate resources, which will help to lay a solid foundation for the Company to develop its phosphate fertilizer and phosphoric chemical business.”

“Upon the completion of the acquisition, the Company will plan to further improve its competitiveness and create more value for the shareholders by making fullest of the low cost advantage, increasing production capacity and restructuring businesses, leveraging on its phosphate resources and vertically integrated operation.”  Mr. Yang also added.

The acquisition will be subject to the approval of the SASAC of the State Council (State-owned Assets Supervision and Administration Commission of the State Council of the PRC), the independent shareholders of the Company and the Department of Commerce ofHubeiProvince.

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About China BlueChemical Ltd.

China BlueChem is one of the largest and most efficient nitrogenous fertilizer producers in the PRC in terms of production volume and energy consumption. It is a listed company of CNOOC that engages in the production of downstream fertilizers and other chemical products. Currently, China BlueChem’s production facilities are located in Hainan andInner Mongolia, the PRC, with a total designed annual production capacity of 1,840,000 tonnes of urea and 800,000 tonnes of methanol. By entering into long-term agreements, China BlueChem has secured stable natural gas supply for itsHainanproduction facilities.

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.Karen Hung         Tel: (852) 2864 4854 / 9155 4555  karen.hung@sprg.com.hk

Ms.Arlene Wong        Tel: (852) 2864 4899 / 9233 2926  arlene.wong@sprg.com.hk

Ms.Annie Choi           Tel: (852) 2864 4837 / 9627 0563   annie.choi@sprg.com.hk

Ms. Cherry Qiu           Tel: (852) 2114 4960 / 6906 0505   cherry.qiu@sprg.com.hk