Edgar Filing: CNOOC LTD

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

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FORM 6-K

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REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 OF
THE SECURITIES EXCHANGE ACT OF 1934

For August 30, 2006

CNOOC Limited

(Translation of registrant's name into English)
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65th Floor
Bank of China Tower
One Garden Road
Central, Hong Kong
(Address of principal executive offices)

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(Indicate by check mark whether the registrant files or will file annual reports
under cover Form 20-F or Form 40-F)

Form 20-F X Form 40-F
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(Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of
1934.)

Yes No X
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(If "Yes" is marked, indicate below the file number assigned to the registrant
in connection with Rule 12g3-2(b): N/A.)

Company Announcement
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The Stock Exchange of Hong Kong Limited takes no responsibility for the contents
of this announcement, 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
announcement.

[LOGO OMITTED]
[CHINESE CHARACTERS OMITTED]
(Incorporated in Hong Kong with limited liability under the Companies Ordinance)
(Stock Code: 883)

REVISED CAPS FOR A CATEGORY OF CONTINUING CONNECTED TRANSACTIONS
AND
RE-DESIGNATION OF DIRECTORS

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REVISED CAPS FOR A CATEGORY OF CONTINUING CONNECTED TRANSACTIONS

Reference is made to the 2005 Circular in relation to continuing connected
transactions between the Group and CNOOC and/or its Associates. These continuing
connected transactions include the Relevant Category as described below.

CNOOC indirectly owns approximately 66.41% of the issued share capital of the
Company. Accordingly, CNOOC is a connected person of the Company and
transactions between CNOOC and/or its Associates and the Group constitute
connected transactions of the Company for the purpose of the Listing Rules. The
Independent Shareholders approved continuing connected transactions with CNOOC
and/or its Associates and the relevant annual caps at an extraordinary general
meeting of the Company held on 31 December 2005.

The value of continuing connected transactions under the Relevant Category is
subject to annual caps for the year ending 2006 and 2007. Independent
Shareholders' approval will be required if any of the relevant annual caps needs
to be revised pursuant to Chapter 14A of the Listing Rules.

The Directors have been monitoring the value of the Company's continuing
connected transactions. With the increases in international oil and gas prices
in the first half of 2006 and potential increases of international oil and gas
prices for the rest of 2006 and in 2007, the Directors consider that the
existing annual caps for 2006 and 2007 for one category of continuing connected
transactions, namely the Relevant Category, will not be sufficient for the
Group's requirements. The Directors therefore propose that the existing annual
caps for the Relevant Category be revised.

An Independent Board Committee has been formed to advise the Independent
Shareholders in connection with the Revised Caps for the Relevant Category, and
ICEA has been appointed as the Independent Financial Adviser to advise the
Independent Board Committee and the Independent Shareholders.

A circular containing, amongst other things, further information on the Revised
Caps for the Relevant Category, a letter from the Independent Board Committee,
an opinion of ICEA, the Independent Financial Advisor, together with a notice to
convene an extraordinary general meeting to approve the Revised Caps for the
Relevant Category, is expected to be issued to Shareholders as soon as
practicable.
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RE-DESIGNATION OF DIRECTORS

The Board also announces that Mr. Luo Han, Mr. Cao Xinghe and Mr. Wu Zhenfang
will be re-designated from Executive Director to Non-executive Director with
effect from 1 September 2006.
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REVISED CAPS FOR A CATEGORY OF CONTINUING CONNECTED TRANSACTIONS

Background

CNOOC indirectly owns approximately 66.41% of the issued share capital of the
Company. Accordingly, CNOOC is a connected person of the Company and
transactions between CNOOC and/or its Associates and the Group constitute
connected transactions of the Company for the purposes of the Listing Rules. The
Independent Shareholders approved continuing connected transactions with CNOOC
and/or its Associates and the relevant annual caps at an extraordinary general
meeting of the Company held on 31 December 2005.

The value of continuing connected transactions under the Relevant Category is
subject to annual caps for the year ending 2006 and 2007. Independent
Shareholders' approval will be required if any of the relevant annual caps need
to be revised pursuant to Chapter 14A of the Listing Rules.

Sales of petroleum and natural gas products by the Group to CNOOC and/or its
Associates

The Company entered into a Comprehensive Framework Agreement on 8 December 2005
with each of CNOOC, COSL and OOECL for the provision (1) by the Group to CNOOC
and/or its Associates and (2) by CNOOC and/or its Associates to the Group, of a
range of products and services which may be required and requested from time to
time by either party and/or its Associates, details of which are set out in the
2005 Circular.

The term of each of the Comprehensive Framework Agreements was for a period of
two years from 1 January 2006. The Comprehensive Framework Agreements and
respective annual caps for each category of continuing connected transactions
were approved by the Independent Shareholders at the extraordinary general
meeting of the Company on 31 December 2005. The Relevant Category was one of the
categories of continuing connected transactions.

As disclosed in the 2005 Circular, the Group may sell petroleum and natural gas
products, including crude oil, condensate oil, liquefied petroleum gas, natural
gas and liquefied natural gas, to CNOOC and/or its Associates which engage in
downstream petroleum business at state-prescribed prices or local, national or
international market prices and on normal commercial terms. It is envisaged that
individual sales contracts will be entered into from time to time between the
Group and CNOOC and/or its Associates in relation to such sales. Although most
of the natural gas and liquefied natural gas will be sold under long term sales
contracts, which is the subject of a separate category of continuing connected
transactions, the Group also sells natural gas and liquefied natural gas
products to CNOOC and/or its Associates on a short-term basis for the purpose of
peak adjustments and to

achieve higher margins.

For the three years ended 31 December 2005 and the six months ended 30 June
2006, sales of petroleum and natural gas products by the Group to CNOOC and/or
its Associates were approximately RMB8,324 million, RMB13,630 million, RMB25,988
million and RMB18,761 million respectively.

Revised Caps and rationale

The Board has proposed that the following Revised Caps in respect of the
Relevant Category be set as the maximum annual value of such transactions for
the years ending 31 December 2006 and 2007:

The continuing Historical Existing
connected transactions amount Annual Caps Revised Caps Basis of determination of the Revised Caps

Sales of petroleum and For the three For the two For the two The annual Revised Caps for the Relevant Category
natural gas products years ended 31 years ending years ending have been determined with reference to historical
December 2005 and 31 December 31 December transactions and transaction amounts in respect of
the six months 2007, RMB33,469 2007, RMB48,806 sales of petroleum and natural gas products by the
ended 30 June million and million and Group to CNOOC and/or its Associates; the ongoing
2006, RMB8,324 RMB44,199 RMB63,251 development of existing oilfields and the
million, RMB13,630 million, million, development of several new oilfields offshore China
million, RMB25,988 respectively respectively which may come on stream in the next two years; the
million and estimated resultant increase in sales; internal
RMB18,761 million, estimates of and potential increases in the demand
respectively of the Company's oil and gas products from CNOOC
and/or its Associates; and an internal reference
crude oil price taking into account potential
increases in the prices of oil and gas,
particularly crude oil. In determining the amounts
of the Revised Caps, the Company also took into
account the fact that crude oil from new oilfields
of the Company, which is expected to be made up of
a higher proportion of heavy crude oil, needs to
undergo refining processes which are carried out
primarily by CNOOC and/or its Associates.

Reasons for and benefits of the continuing connected transactions under the
Relevant Category

Prior to the restructuring of CNOOC and establishment of the Company, CNOOC
and/or its Associates and the Group operated as an integrated organisation which
undertook numerous intra-group transactions each year. As a consequence of the
restructuring and upon the listing of the Company's shares on the Stock
Exchange, a number of transactions which have been entered into and which are to
be entered into between the Group and CNOOC and/or its Associates will
constitute continuing connected transactions for the Company under the Listing
Rules.

The continuing connected transactions under the Relevant Category are and will
be conducted in the

ordinary and usual course of business of the Company. This category of
transaction will continue to be agreed on an arm's length basis with terms that
are fair and reasonable to the Company. Due to the long-term relationship
between the Group and the CNOOC Group, the Board considers it to be beneficial
to the Company to continue to enter into the continuing connected transactions
as these transactions have facilitated and will continue to facilitate the
operation and growth of the Company's business.

The Board considers that the continuing connected transactions under the
Relevant Category have been conducted on normal commercial terms or on terms no
less favourable than those available to independent third parties, under
prevailing local market conditions, and were entered into in the ordinary and
usual course of business of the Group, are fair and reasonable and in the
interests of the Company and our Shareholders as a whole, and that the Revised
Caps for the Relevant Category are fair and reasonable.

Disclosure and Independent Shareholders' approval requirements

Under the Listing Rules, the continuing connected transactions under the
Relevant Category are subject to reporting, announcement and Independent
Shareholders' approval requirements. The Company will seek Independent
Shareholders' approval at the Extraordinary General Meeting for the Revised Caps
on the condition that:

1. the annual amounts of the continuing connected transactions under the
Relevant Category shall not exceed the Revised Caps;

2. (i) the above continuing connected transactions will be entered into in
the usual and ordinary course of businesses of the Group and either (A) on
normal commercial terms or (B) if there is no available comparison, on
terms no less favourable to the Group than terms available from
independent third parties; and (ii) the above continuing connected
transactions will be entered into in accordance with the relevant
agreements and on terms that are fair and reasonable and in the interests
of the Shareholders as a whole.

The Company will comply with relevant provisions of the Listing Rules in
relation to the continuing connected transactions under the Relevant Category.

APPROVAL BY INDEPENDENT SHAREHOLDERS

As CNOOC indirectly owns an aggregate of approximately 66.41% of the issued
share capital of the Company, the Revised Caps for the Relevant Category are
subject to approval by the Independent Shareholders under the Listing Rules. In
view of the interests of CNOOC held indirectly through OOGC and CNOOC BVI, OOGC,
CNOOC BVI and their respective Associates will abstain from voting in relation
to the resolutions approving the Revised Caps for the Relevant Category.

GENERAL

The principal business activity of the Company is investment holding. The Group
principally engages in the exploration, development, production and sales of
crude oil and natural gas and other petroleum products.

The CNOOC Group principally engages in the provision of technical services,
logistic services,

chemicals and fertilizer production, natural gas and power generation, and
financial services.

RE-DESIGNATION OF DIRECTORS

The Board also announces that Mr. Luo Han, Mr. Cao Xinghe and Mr. Wu Zhenfang
will be re-designated from Executive Director to Non-executive Director with
effect from 1 September 2006.

Luo Han

Born in 1953, Mr. Luo received a doctorate degree from the Petroleum University
in China. He has over 30 years of experience in the oil industry in the PRC. He
joined CNOOC in 1982. From 1993 to 1999, Mr. Luo served as the Vice President of
China Offshore Oil Eastern South China Sea Corporation and concurrently as the
Chairman of the CACT (CNOOC-AGIP-Chevron-Texaco) operators group, and the
Executive Vice President of China Offshore Oil East China Sea Corporation, a
subsidiary of CNOOC. In 1999, he served as the General Manager of CNOOC China
Limited's Shanghai Branch. Mr. Luo is a Vice President of CNOOC, a position he
has held since 2000. He also serves as the Chairman of the Board of Directors of
Zhonghai Trust & Investment Co., Ltd., a subsidiary of CNOOC, and the Director
of CNOOC China Limited, a subsidiary of the Company. Mr. Luo was appointed as an
Executive Director of the Company with effect from 20 December 2000.

Save as aforesaid, Mr. Luo does not have any relationship with any other
Director, senior management, substantial shareholder or controlling shareholder
of the Company.

Apart from holding 8,230,000 share options in the Company, Mr. Luo has no other
interest in the Company's securities within the meaning of Part XV of the
Securities and Futures Ordinance.

There is no service contract between the Company and Mr. Luo upon his
re-designation as Non-executive Director. Mr. Luo's emoluments are expected to
comprise an annual remuneration of HK$950,000. The emoluments of Mr. Luo will be
determined with reference to perception of industry standards and prevailing
market conditions. The Remuneration Committee will review the level of
directors' remuneration from time to time and make recommendation to the Board
for adjustments if necessary. Mr. Luo is subject to the retirement provisions in
the articles of association of the Company.

There is no other information required to be disclosed pursuant to any of the
requirements of Rules 13.51(2)(h)-13.51(2)(v) of the Listing Rules, nor are
there any other matters to be brought to the attention of the shareholders of
the Company.

Cao Xinghe

Born in 1949, Mr. Cao graduated from Tianjin Politics and Law Management College
majoring in Economic Laws and later studied for MBA in Capital University of
Economics and Business. Mr. Cao has forty years of experience in the petroleum
industry since he started work in 1965. He worked for Shengli oilfield and
Dagang oilfield before he joined CNOOC in 1982. From 1985 to 1996, Mr. Cao
worked as Manager of Bohai Oil Commercial Company and later as the Manager of
Bohai Oil Transportation Company, both being the subsidiaries of CNOOC. From
1996 to 2003, he worked as Deputy General Manager and General Manager of CNOOC
Bohai Corporation successively. From April 2003 to July 2004, Mr. Cao worked as
Assistant President of CNOOC. He became Vice President of CNOOC in August 2004.
Mr. Cao also serves as the Chairman of the Board of Directors

of CNOOC Base Group Limited, a subsidiary of CNOOC. Mr. Cao was appointed as an
Executive Director of the Company with effect from 31 August 2005.

Save as aforesaid, Mr. Cao does not have any relationship with any other
Director, senior management, substantial shareholder or controlling shareholder
of the Company.

Apart from holding 2,570,000 share options in the Company, Mr. Cao has no other
interest in the Company's securities within the meaning of Part XV of the
Securities and Futures Ordinance.

There is no service contract between the Company and Mr. Cao upon his
re-designation as Non-executive Director. Mr. Cao's emoluments are expected to
comprise an annual remuneration of HK$950,000. The emoluments of Mr. Cao will be
determined with reference to perception of industry standards and prevailing
market conditions. The Remuneration Committee will review the level of
directors' remuneration from time to time and make recommendation to the Board
for adjustments if necessary. Mr. Cao is subject to the retirement provisions in
the articles of association of the Company.

Wu Zhenfang

Born in 1952, Mr. Wu is a senior engineer and graduated with a bachelor's degree
from Dalian University of Technology, majoring in Offshore Petroleum Engineering
and Construction. He later studied for EMBA in Shanghai Jiao Tong University.
Mr. Wu joined the petroleum industry in 1971. He joined CNOOC in 1982. From 1993
to 1997, he was Deputy General Manager of CNOOC Nanhai West Corporation. He
became the President of CNOOC Chemical Limited in 2000. He was also the Chairman
of the Board of Directors of Fudao Fertilizer Limited and CNOOC Chemical Limited
from 2001 to 2003 and 2003 to 2005 respectively. From 2003 to 2004, Mr. Wu was
Assistant President of CNOOC. In August 2004, he became Vice President of CNOOC.
Mr. Wu also serves as the Chairman of a number of subsidiaries of CNOOC
(including Guangdong Dapeng LNG Company Limited, CNOOC Fujian Natural Gas
Limited, CNOOC Oil & Petrochemicals Co., Ltd. and CNOOC Zhejiang Ningbo LNG Co.,
Ltd.), the Chairman and President of CNOOC Gas and Power Limited and the Vice
Chairman of Shanghai Petroleum and Natural Gas Company Limited. Mr. Wu was
appointed as an Executive Director of the Company with effect from 31 August
2005.

Save as aforesaid, Mr. Wu does not have any relationship with any other
Director, senior management, substantial shareholder or controlling shareholder
of the Company.

Apart from holding 2,570,000 share options in the Company, Mr. Wu has no other
interest in the Company's securities within the meaning of Part XV of the
Securities and Futures Ordinance.

There is no service contract between the Company and Mr. Wu upon his
re-designation as Non-executive Director. Mr. Wu's emoluments are expected to
comprise an annual remuneration of HK$950,000. The emoluments of Mr. Wu will be
determined with reference to perception of industry standards and prevailing
market conditions. The Remuneration Committee will review the level of
directors' remuneration from time to time and make recommendation to the Board
for adjustments if necessary. Mr. Wu is subject to the retirement provisions in
the articles of association of the Company.

DEFINITIONS

"2005 Circular" the circular issued by the Company to its Shareholders in
respect of, amongst others, the continuing connected
transactions between the Company and CNOOC and/or its
Associates dated 10 December 2005

"Associate" has the meaning ascribed thereto under the Listing Rules

"Board" the Board of Directors of the Company

"Company" CNOOC Limited, a company incorporated in Hong Kong with
limited liability, the shares of which are listed on the
Stock Exchange and the New York Stock Exchange

"CNOOC" China National Offshore Oil Corporation ([CHINESE
CHARACTERS OMITTED]), the controlling shareholder of the
Company indirectly holding approximately 66.41% of all of
the Shares in issue as at the date hereof

"CNOOC BVI" CNOOC (BVI) Limited, a company incorporated in the
British Virgin Islands with limited liability, a
wholly-owned indirect subsidiary of CNOOC and the
controlling shareholder of the Company

"CNOOC Group" CNOOC and its subsidiaries (excluding the Group)

"Comprehensive the Comprehensive Framework Agreements dated 8 December
Framework 2005 entered into between the Company and each of CNOOC,
Agreement(s)" COSL and OOECL in relation to the new categories of
continuing connected transactions

"COSL" China Oilfield Services Limited ([CHINESE CHARACTERS
OMITTED]), a company listed on the main board of the Stock
Exchange and incorporated in the PRC, and a subsidiary of
CNOOC

"Director(s)" director(s) of the Company

"Extraordinary the extraordinary general meeting of the Company to be
General Meeting" held to approve the Revised Caps for the Relevant
Category

"Group" the Company and its subsidiaries from time to time

"Hong Kong" the Hong Kong Special Administrative Region of the PRC

"Independent Board an independent committee of the Board comprising of Dr.
Committee" Edgar W.K. Cheng, Mr. Sung Hong Chiu, Mr. Evert Henkes,
Mr. Lawrence J. Lau and Mr. Tse Hau Yin, Aloysius, the
independent non-executive Directors, formed for the
purpose of advising the Independent Shareholders in
relation to the Revised Caps for the Relevant Category,
with Mr. Sung Hong Chiu acting as the Chairman

"Independent ICEA Capital Limited, a corporation registered under the
Financial Adviser" transitional arrangement of the Securities and Futures
or ICEA Ordinance (Chapter 571 of the Laws of Hong Kong) to carry
out type 1 (dealings in securities) and type 6 (advising
on corporate finance) regulated activities, is the
independent financial adviser to the Independent Board
Committee and the Independent Shareholders

"Independent Shareholders of the Company other than CNOOC and its
Shareholders" Associates

"Listing Rules" The Rules Governing the Listing of Securities on the
Stock Exchange (as amended from time to time)

"OOECL" Offshore Oil Engineering Co., Ltd. ([CHINESE CHARACTERS
OMITTED]), a company listed on the Shanghai Stock Exchange
and incorporated in the PRC, and a subsidiary of CNOOC

"OOGC" Overseas Oil and Gas Corporation, Ltd, a company
incorporated in Bermuda with limited liability and a
wholly-owned subsidiary of CNOOC.

"PRC" The People's Republic of China, excluding for the purpose
of this announcement, Hong Kong, Macau and Taiwan

"Relevant Category" the "sales of petroleum and natural gas products"
category of continuing connected transactions between the
Group and CNOOC and/or its Associates, which involves
sales of petroleum and natural gas products by the Group
to CNOOC and/or its Associates

"Revised Caps" the proposed maximum annual caps for the Relevant
Category, as set out in the paragraph headed "Revised
Caps and Rationale" of this announcement

"Shares" share(s) of HK$0.02 each in the share capital of the
Company

"Shareholders" registered holder(s) of the Shares

"Stock Exchange" The Stock Exchange of Hong Kong Limited

As at the date of this announcement, the Board comprises of:

Executive Directors Independent non-executive Directors
Fu Chengyu (Chairman) Edgar W. K. Cheng
Luo Han Sung Hong Chiu
Zhou Shouwei Evert Henkes
Cao Xinghe Lawrence J. Lau
Wu Zhenfang Tse Hau Yin, Aloysius
Wu Guangqi
Yang Hua

By Order of the Board
CNOOC Limited
Victor Zhikai Gao
Company Secretary

Hong Kong, 29 August 2006

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report on Form 6-K to be signed on
its behalf by the undersigned, thereunto duly authorized.

CNOOC Limited

By: /s/ Victor Zhikai Gao
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Name: Victor Zhikai Gao
Title: Company Secretary

Dated: August 30, 2006