Exhibit 15.2

























Independent Letter



The Missan Oil Fields In Eastern Iraq
Estimated Proved Reserves and Financial Data,
Based on SEC Rules











Prepared
for



CNOOC Limited



As of 31 December 2016













March 2017



This summary letter is based on Gaffney,
Cline & Associates’ official report and has been provided at the request of CNOOC Limited.





www.gaffney-cline.com

















| |                                                                                                                                                                   
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                                                   
| | Gaffney, Cline & Associates

(Consultants) Pte. Ltd.

80 Anson Road

#31-01C Fuji Xerox Towers

Singapore 079907

Telephone: +65 6225 6951


www.gaffney-cline.com
| |                                                                                                                                                                   
| | 3 March 2017                                                                                                                                                      









CNOOC
Limited

No. 25, Chaoyangmenbei
Dajie

Dongcheng
District

Beijing 100010,
P.R. China



Gentlemen,



Independent
Letter



The
Missan Oil Fields in Eastern Iraq
Estimated proved Reserves and Financial Data, Based on SEC Rules
As of 31 December 2016



At the request
of CNOOC Limited (CNOOC), Gaffney, Cline & Associates (GCA) has prepared an independent estimate of the proved reserves and
financial data attributable to certain participating interests owned by CNOOC as of 31 December, 2016. The reserves and income
data were estimated based on Rules of the United States Securities and Exchange Commission (SEC) contained in Title 17, Code of
Federal Regulations, Modernization of Oil and Gas Reporting, Final Rule released 14 January 2009 in the Federal Register, including
all references to Regulation S-X and Regulation S-K (SEC Rules). GCA’s independent study, completed on 3 March 2017 and
summarized herein, was prepared for public disclosure by CNOOC in filings made with the SEC in accordance with the disclosure
requirements set forth in the SEC Rules. In GCA’s opinion, the assumptions, data, methods, and procedures used in the preparation
of this report are appropriate for such purpose and have been carried out in line with the SEC Oil and Gas Reserves Definitions
attached hereto as an Appendix.



The subject
properties of the Missan Oil Fields (Missan) are located in eastern Iraq, 350 km southeast of Baghdad. Based on information provided
by CNOOC, the Proved reserves estimates for properties evaluated by GCA for this report represent approximately 1.53 percent of
CNOOC’s total net proved reserves as of 31 December 2016. GCA is not in a position to verify this statement as it was not
requested to review all CNOOC’s other oil and gas assets.



CNOOC have
signed a 20-year Technical Service Contract (TSC) with the Missan Oil Company of The Iraqi Ministry of Oil (MOC) for the rehabilitation
of improved production and enhanced recovery of petroleum from Missan. CNOOC is the lead contractor of, and holds a 63.75% participating
interest in, the project.



1





The oil reserves
and financial data reported herein were estimated on the basis of SEC Rules. GCA has classified as Reserves those hydrocarbon
volumes that would be economically recoverable as a result of implementing the Rehabilitation Plan only.



In line with
the foregoing, the statement of reserves, presented herein, is economically recoverable as a result of implementing Rehabilitation
Plan and including its extension to the end of 2017. Any volumes produced as a result of further development are currently classified
as Contingent Resources. CNOOC envisages an Enhanced Redevelopment Plan (ERP) to follow immediately after the completion of the
Rehabilitation Plan. Details of the ERP have not been provided to GCA at this stage. Therefore, GCA’s estimates included
in this report are limited to volumes classified as Reserves. As such, the volumes actually recovered under the enlarged plan
are expected to be significantly greater than those presented. However, should the ERP not be approved, it is possible that CNOOC
would be seen as in default of the contract and there could be an early termination and a consequential reduction in reserves.



Under the
terms of the TSC, the Contractor is entitled to use any quantity of Associated Gas from the oil reservoirs necessary for Petroleum
Operations and for power generation. However, all Associated Gas that is not used in Petroleum Operations or for power generation
“shall be delivered unprocessed to MOC”. Thus, the contractor has no entitlement to any gas reserves.



Economic
models were constructed based on terms of the TSC as provided by CNOOC and the current performance of the TSC, in order to calculate
CNOOC’s Net Entitlement volumes, which are made up of CNOOC’s share of Service Fees (Petroleum Cost Recovery and Remuneration
Fees) plus Supplementary Fees, converted to volumetric equivalents. The price used was determined by calculating the quality differential
between the SEC Brent Price (the average 1st of the month price of Brent Crude during 2016) and the Iraq average oil
price as published by SOMO for each month in 2016 and applying the average differential to the SEC price for the 31 December 2016.
Based on the data made available to GCA for January to November 2016 the 2016 average differential to SEC Brent was a US$8.89/Bbl
discount. Based on an SEC Brent price of US$42.90 this results in an average sales price of US$34.01/Bbl, which has been assumed
to remain constant for the duration of the project life.



Future capital
costs were derived from the 2017 development plan prepared by CNOOC for the field. Recent historical operating expense data were
utilized as the basis for operating cost projections. GCA found that CNOOC has projected sufficient capital investments and operating
expenses to produce economically the projected volumes recoverable from the 2017 development activities.



Actual future
prices may vary significantly from the prices required by SEC Rules; therefore, volumes of reserves actually recovered and the
amounts of income actually received may differ significantly from the estimated quantities presented in this report. The results
of this study are summarized in the following table. Reserves net to CNOOC are quoted as Net Entitlement Reserves reflecting the
terms of the TSC.



2





Estimated
Net Reserves and Financial Data



As of 31
December 2016



|                            | Proved         
|--------------------------- | ---------------
|Developed                   | Undeveloped    
|Producing                   | Non-Producing  
|Net
    Reserves            |                
|Oil/Condensate
    – Mstb   | 34,313         
|Income
    Data (M$)        |                
|Future
    Gross Revenue    | $
    1,166,987
|Deductions                  | $
    579,276  
|Future
    Net Income (FNI) | $
    587,711  
|Discounted
    FNI @ 10%    | $
    529,145  



Liquid hydrocarbons
are expressed in thousands of standard (42 gallon) barrels (MBbl). In this report, the revenues, deductions and income data are
expressed in thousands of US dollars (M$).



The future
gross revenue represents CNOOC’s net entitlement share of Service Fees (Petroleum Cost Recovery plus Remuneration Fees)
due under the Technical Service Contract (TSC). Deductions represent CNOOC’s 85% (i.e. 63.75%/75% of total project) share
of project Capital Expenditure, Operating Expenditure, contractual Supplementary Costs, State partner ‘carry’ and
Training Fees. Future Net Income represents CNOOC’s Future Gross Revenue less costs incurred, and on a post-tax basis, under
the terms of the TSC.



The results
included herein were prepared in accordance with the disclosure requirements set forth in the SEC Rules and intended for public
disclosure as an exhibit in filings made with the SEC by CNOOC.



Basis of
Opinion



This document
reflects GCA’s informed professional judgment based on accepted standards of professional investigation and, as applicable,
the data and information provided by CNOOC, the limited scope of engagement, and the time permitted to conduct the evaluation.



In line with
those accepted standards, this document does not in any way constitute or make a guarantee or prediction of results, and no warranty
is implied or expressed that actual outcome will conform to the outcomes presented herein. GCA has not independently verified
any information provided by, or at the direction of, CNOOC, and has accepted the accuracy and completeness of this data. GCA has
no reason to believe that any material facts have been withheld, but does not warrant that its inquiries have revealed all of
the matters that a more extensive examination might otherwise disclose.



The opinions
expressed herein are subject to and fully qualified by the generally accepted uncertainties associated with the interpretation
of geoscience and engineering data and do not reflect the totality of circumstances, scenarios and information that could potentially
affect decisions made by the report’s recipients and/or actual results. The opinions and statements contained in this report
are made in good faith and in the belief that such opinions and statements are representative of prevailing physical and economic
circumstances.



3





In the preparation
of this report, GCA has used definitions contained within Part 210 Rule 4-10(a) of Regulation S-X of the US Securities and Exchange
Commission (see Appendix I).



There are
numerous uncertainties inherent in estimating reserves and resources, and in projecting future production, development expenditures,
operating expenses and cash flows. Oil and gas resources assessments must be recognized as a subjective process of estimating
subsurface accumulations of oil and gas that cannot be measured in an exact way. Estimates of oil and gas resources prepared by
other parties may differ, perhaps materially, from those contained within this report.



The accuracy
of any resource estimate is a function of the quality of the available data and of engineering and geological interpretation.
Results of drilling, testing and production that post-date the preparation of the estimates may justify revisions, some or all
of which may be material. Accordingly, resource estimates are often different from the quantities of oil and gas that are ultimately
recovered, and the timing and cost of those volumes that are recovered may vary from that assumed.



Oil and condensate
volumes are reported in thousands of standard barrels at stock tank conditions (MMstb). Standard conditions are defined as 14.7
psia and 60° Fahrenheit.



GCA prepared
an independent assessment of the reserves based on data and interpretations provided by CNOOC.



Definition of Reserves and
Resources



Reserves
are estimated remaining quantities of oil and gas and related substances anticipated to be economically producible, as of a given
date, by application of development projects to known accumulations. In addition, there must exist, or there must be a reasonable
expectation that there will exist, the legal right to produce, or a revenue interest in, the production, installed means of delivering
oil and gas or related substances to market, and all permits and financing required to implement the project.



GCA is not
aware of any potential changes in regulations applicable to these fields that could affect the ability of CNOOC to produce the
estimated reserves.



Reserves
are further categorized in accordance with the level of certainty associated with the estimates and may be sub-classified based
on project maturity and/or characterized by development and production status. All categories of reserves volumes quoted herein
have been derived within the context of an economic limit test (ELT) assessment (pre-tax and exclusive of accumulated depreciation
amounts) prior to any Net Present Value (NPV) analysis.



Reserves
net to CNOOC are quoted as Net Entitlement Reserves, reflecting the terms of the applicable Technical Service Contract (TSC).
Lease fuel has been excluded from the reserve volumes.



GCA has not
undertaken a site visit and inspection because it was not required within the scope of work. As such, GCA is not in a position
to comment on the operations or facilities in place, their appropriateness and condition, or whether they are in compliance with
the regulations pertaining to such operations. Further, GCA is not in a position to comment on any aspect of health, safety, or
environment of such operation.



This report
has been prepared based on GCA’s understanding of the effects of petroleum legislation and other regulations that currently
apply to these properties. However, GCA is not in a position to attest to property title or rights, conditions of these rights
(including environmental and abandonment obligations), or any necessary licenses and consents



4





(including
planning permission, financial interest relationships, or encumbrances thereon for any part of the appraised properties).



Use of
Net Present Values



It should
be clearly noted that the Net Present Values (NPV) contained herein do not represent a GCA opinion as to the market value of the
subject property, nor any interest in it. In assessing a likely market value, it would be necessary to take into account a number
of additional factors (e.g., capability, technology, project approvals, capacity, infrastructure, commercial negotiations, market,
and changes to regulatory landscape).



Qualifications



In performing
this study, GCA is not aware that any conflict of interest has existed. As an independent consultancy, GCA is providing impartial
technical, commercial, and strategic advice within the energy sector. GCA’s remuneration was not in any way contingent on
the contents of this report.



In the preparation
of this document, GCA has maintained, and continues to maintain, a strict independent consultant-client relationship with CNOOC.
Furthermore, the management and employees of GCA have no interest in any of the assets evaluated or are related with the analysis
performed, as part of this report.



Staff members
who prepared this report hold appropriate professional and educational qualifications and have the necessary levels of experience
and expertise to perform the work.



The qualifications
of the technical person primarily responsible for overseeing this estimate are included in Appendix II.



This letter
should not be used for purposes other than those for which it is intended. This letter should not be reproduced, either in whole
or part, without the written permission of GCA. CNOOC will obtain GCA’s prior written or email approval for the use with
third parties and context of the use with third parties of any results, statements or opinions expressed by GCA to CNOOC, which
are attributed to GCA. Such requirement of approval shall include, but not be confined to, statements or references in documents
of a public or semi-public nature such as loan agreements, prospectuses, reserve statements, websites, press releases, etc.



5





As independent
reserve engineers/advisors for CNOOC, GCA hereby confirms that it has granted and not withdrawn its consent to the references
to GCA and to the inclusion of information contained in our report entitled “Executive Report for Reserves Estimation of
the Missan Oil Fields in Eastern Iraq as of 31 December 2016” as of 3rd March, 2017 prepared for CNOOC, and to the annexation
of our report as an exhibit in CNOOC’s annual report on Form 20-F for the fiscal year ended 31 December 2016.



Yours faithfully,



GAFFNEY,
CLINE & ASSOCIATES (CONSULTANTS) PTE LTD



|/s/
Hu Yundong                  
|--------------------------------
|Project Manager                 
|Dr
Hu Yundong, Senior Advisor   
|                                
|                                
|/s/
Stephen Lane                
|Reviewed by                     
|Stephen
Lane, Technical Director



Appendices



Appendix
ISEC Reserves Definitions



Appendix
IITechnical Qualifications



6





















Appendix
I	
SEC Reserves Definitions











































U.S. SECURITIES
AND EXCHANGE COMMISSION (SEC)

MODERNIZATION
OF OIL AND GAS REPORTING1



Oil and
Gas Reserves Definitions and Reporting



(a)       Definitions



(1)       Acquisition
of properties. Costs incurred to purchase, lease or otherwise acquire a property, including costs of lease bonuses and options
to purchase or lease properties, the portion of costs applicable to minerals when land including mineral rights is purchased in
fee, brokers' fees, recording fees, legal costs, and other costs incurred in acquiring properties.



(2)       Analogous
reservoir. Analogous reservoirs, as used in resources assessments, have similar rock and fluid properties, reservoir conditions
(depth, temperature, and pressure) and drive mechanisms, but are typically at a more advanced stage of development than the reservoir
of interest and thus may provide concepts to assist in the interpretation of more limited data and estimation of recovery. When
used to support proved reserves, an “analogous reservoir” refers to a reservoir that shares the following characteristics
with the reservoir of interest:



| | (i) | Same
                                         geological formation (but not necessarily in pressure communication with the reservoir
                                         of interest);
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (ii) | Same
                                         environment of deposition;
| | ---- | ------------------------------------------------------------------------



| | (iii) | Similar
                                         geological structure; and
| | ----- | --------------------------------------------------------------------------



| | (iv) | Same
                                         drive mechanism.
| | ---- | --------------------------------------------------------------



Instruction
to paragraph (a)(2): Reservoir properties must, in the aggregate, be no more favorable in the analog than in the reservoir
of interest.



(3)       Bitumen.Bitumen, sometimes referred to as natural bitumen, is petroleum in a solid or semi-solid state in natural deposits with a
viscosity greater than 10,000 centipoise measured at original temperature in the deposit and atmospheric pressure, on a gas free
basis. In its natural state it usually contains sulfur, metals, and other non-hydrocarbons.



(4)       Condensate.Condensate is a mixture of hydrocarbons that exists in the gaseous phase at original reservoir temperature and pressure, but
that, when produced, is in the liquid phase at surface pressure and temperature.



(5)       Deterministic
estimate. The method of estimating reserves or resources is called deterministic when a single value for each parameter (from
the geoscience, engineering, or economic data) in the reserves calculation is used in the reserves estimation procedure.



(6)       Developed
oil and gas reserves. Developed oil and gas reserves are reserves of any category that can be expected to be recovered:



| | (i) | Through
                                         existing wells with existing equipment and operating methods or in which the cost of
                                         the required equipment is relatively minor compared to the cost of a new well; and
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (ii) | Through
                                         installed extraction equipment and infrastructure operational at the time
| | ---- | --------------------------------------------------------------------------------------------------------------------------







_______________



| | 1 | Extracted from 17 CFR
                                         Parts 210, 211, 229, and 249 [Release Nos. 33-8995; 34-59192; FR-78; File No. S7-15-08]
                                         RIN 3235-AK00].
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

AI-1





of
the reserves estimate if the extraction is by means not involving a well.



(7)       Development
costs.Costs incurred to obtain access to proved reserves and to provide facilities for extracting, treating, gathering and
storing the oil and gas. More specifically, development costs, including depreciation and applicable operating costs of support
equipment and facilities and other costs of development activities, are costs incurred to:



| | (i) | Gain
                                         access to and prepare well locations for drilling, including surveying well locations
                                         for the purpose of determining specific development drilling sites, clearing ground,
                                         draining, road building, and relocating public roads, gas lines, and power lines, to
                                         the extent necessary in developing the proved reserves.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (ii) | Drill
                                         and equip development wells, development-type stratigraphic test wells, and service wells,
                                         including the costs of platforms and of well equipment such as casing, tubing, pumping
                                         equipment, and the wellhead assembly.
| | ---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (iii) | Acquire,
                                         construct, and install production facilities such as lease flow lines, separators, treaters,
                                         heaters, manifolds, measuring devices, and production storage tanks, natural gas cycling
                                         and processing plants, and central utility and waste disposal systems.
| | ----- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (iv) | Provide
                                         improved recovery systems.
| | ---- | ---------------------------------------------------------------------------



(8)       Development
project. A development project is the means by which petroleum resources are brought to the status of economically producible.
As examples, the development of a single reservoir or field, an incremental development in a producing field, or the integrated
development of a group of several fields and associated facilities with a common ownership may constitute a development project.



(9)       Development
well. A well drilled within the proved area of an oil or gas reservoir to the depth of a stratigraphic horizon known to be
productive.



(10)       Economically
producible. The term economically producible, as it relates to a resource, means a resource which generates revenue that exceeds,
or is reasonably expected to exceed, the costs of the operation. The value of the products that generate revenue shall be determined
at the terminal point of oil and gas producing activities as defined in paragraph (a)(16) of this section.



(11)       Estimated
ultimate recovery (EUR). Estimated ultimate recovery is the sum of reserves remaining as of a given date and cumulative production
as of that date.



(12)       Exploration
costs. Costs incurred in identifying areas that may warrant examination and in examining specific areas that are considered
to have prospects of containing oil and gas reserves, including costs of drilling exploratory wells and exploratory-type stratigraphic
test wells. Exploration costs may be incurred both before acquiring the related property (sometimes referred to in pail as prospecting
costs) and after acquiring the property. Principal types of exploration costs, which include depreciation and applicable operating
costs of support equipment and facilities and other costs of exploration activities, are:



| | (i) | Costs
                                         of topographical, geographical and geophysical studies, rights of access to properties
                                         to conduct those studies, and salaries and other expenses of geologists, geophysical
                                         crews, and others conducting those studies. Collectively, these are sometimes referred
                                         to as geological and geophysical or "G&G" costs.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (ii) | Costs
                                         of carrying and retaining undeveloped properties, such as delay rentals,
| | ---- | -----------------------------------------------------------------------------------------------------------------------



AI-2





ad
valorem taxes on properties, legal costs for title defense, and the maintenance of land and lease records.



| | (iii) | Dry
                                         hole contributions and bottom hole contributions.
| | ----- | ----------------------------------------------------------------------------------------------



| | (iv) | Costs
                                         of drilling and equipping exploratory wells.
| | ---- | -------------------------------------------------------------------------------------------



| | (v) | Costs
                                         of drilling exploratory-type stratigraphic test wells.
| | --- | -----------------------------------------------------------------------------------------------------



(13)       Exploratory
well. An exploratory well is a well drilled to find a new field or to find a new reservoir in a field previously found to
be productive of oil or gas in another reservoir. Generally, an exploratory well is any well that is not a development well, an
extension well, a service well, or a stratigraphic test well as those items are defined in this section.



(14)       Extension
well. An extension well is a well drilled to extend the limits of a known reservoir.



(15)       Field.An area consisting of a single reservoir or multiple reservoirs all grouped on or related to the same individual geological
structural feature and/or stratigraphic condition. There may be two or more reservoirs in a field which are separated vertically
by intervening impervious strata, or laterally by local geologic barriers, or by both. Reservoirs that are associated by being
in overlapping or adjacent fields may be treated as a single or common operational field. The geological terms "structural
feature" and "stratigraphic condition" are intended to identify localized geological features as opposed to the
broader terms of basins, trends, provinces, plays, areas-of-interest, etc.



(16)       Oil
and gas producing activities.



| | (i) | Oil
                                         and gas producing activities include:
| | --- | ----------------------------------------------------------------------------------



| | (A) | The
                                         search for crude oil, including condensate and natural gas liquids, or natural gas (“oil
                                         and gas”) in their natural states and original locations;
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (B) | The
                                         acquisition of property rights or properties for the purpose of further exploration or
                                         for the purpose of removing the oil or gas from such properties;
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (C) | The
                                         construction, drilling, and production activities necessary to retrieve oil and gas from
                                         their natural reservoirs, including the acquisition, construction, installation, and
                                         maintenance of field gathering and storage systems, such as:
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (1) | Lifting
                                         the oil and gas to the surface; and
| | --- | ------------------------------------------------------------------------------------



| | (2) | Gathering,
                                         treating, and field processing (as in the case of processing gas to extract liquid hydrocarbons);
                                         and
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (D) | Extraction
                                         of saleable hydrocarbons, in the solid, liquid, or gaseous state, from oil sands, shale,
                                         coalbeds, or other nonrenewable natural resources which are intended to be upgraded into
                                         synthetic oil or gas, and activities undertaken with a view to such extraction.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Instruction
1 to paragraph (a)(16)(i): The oil and gas production function shall be regarded as ending at a “terminal point”,
which is the outlet valve on the lease or field storage tank. If unusual physical or operational circumstances exist, it may be
appropriate to regard the terminal point for the production function as:



| | a. | The
                                         first point at which oil, gas, or gas liquids, natural or synthetic, are delivered
| | -- | -------------------------------------------------------------------------------------------------------------------------------



AI-3





to
a main pipeline, a common carrier, a refinery, or a marine terminal; and



| | b. | In the
                                         case of natural resources that are intended to be upgraded into synthetic oil or gas,
                                         if those natural resources are delivered to a purchaser prior to upgrading, the first
                                         point at which the natural resources are delivered to a main pipeline, a common carrier,
                                         a refinery, a marine terminal, or a facility which upgrades such natural resources into
                                         synthetic oil or gas.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Instruction
2 to paragraph (a)(16)(i): For purposes of this paragraph (a)(16), the term saleable hydrocarbons means hydrocarbons
that are saleable in the state in which the hydrocarbons are delivered.



| | (ii) | Oil
                                         and gas producing activities do not include:
| | ---- | -----------------------------------------------------------------------------------------



| | (A) | Transporting,
                                         refining, or marketing oil and gas;
| | --- | ------------------------------------------------------------------------------------------



| | (B) | Processing
                                         of produced oil, gas or natural resources that can be upgraded into synthetic oil or
                                         gas by a registrant that does not have the legal right to produce or a revenue interest
                                         in such production;
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (C) | Activities
                                         relating to the production of natural resources other than oil, gas, or natural resources
                                         from which synthetic oil and gas can be extracted; or
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



(D)
Production of geothermal steam.



(17)       Possible
reserves. Possible reserves are those additional reserves that are less certain to be recovered than probable reserves.



| | (i) | When
                                         deterministic methods are used, the total quantities ultimately recovered from a project
                                         have a low probability of exceeding proved plus probable plus possible reserves. When
                                         probabilistic methods are used, there should be at least a 10% probability that the total
                                         quantities ultimately recovered will equal or exceed the proved plus probable plus possible
                                         reserves estimates.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (ii) | Possible
                                         reserves may be assigned to areas of a reservoir adjacent to probable reserves where
                                         data control and interpretations of available data are progressively less certain. Frequently,
                                         this will be in areas where geoscience and engineering data are unable to define clearly
                                         the area and vertical limits of commercial production from the reservoir by a defined
                                         project.
| | ---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (iii) | Possible
                                         reserves also include incremental quantities associated with a greater percentage recovery
                                         of the hydrocarbons in place than the recovery quantities assumed for probable reserves.
| | ----- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (iv) | The
                                         proved plus probable and proved plus probable plus possible reserves estimates must be
                                         based on reasonable alternative technical and commercial interpretations within the reservoir
                                         or subject project that are clearly documented, including comparisons to results in successful
                                         similar projects.
| | ---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (v) | Possible
                                         reserves may be assigned where geoscience and engineering data identify directly adjacent
                                         portions of a reservoir within the same accumulation that may be separated from proved
                                         areas by faults with displacement less than formation thickness or other geological discontinuities
                                         and that have not been penetrated by a wellbore, and the registrant believes that such
                                         adjacent portions are in communication with the known (proved) reservoir. Possible reserves
                                         may be assigned to areas that are structurally higher or lower than the proved area if
                                         these areas are in communication with the proved reservoir.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



AI-4





| | (vi) | Pursuant to paragraph (a)(22)(iii)
of this section, where direct observation has defined a highest known oil (HKO) elevation and the potential exists for an associated
gas cap, proved oil reserves should be assigned in the structurally higher portions of the reservoir above the HKO only if the
higher contact can be established with reasonable certainty through reliable technology. Portions of the reservoir that do not
meet this reasonable certainty criterion may be assigned as probable and possible oil or gas based on reservoir fluid properties
and pressure gradient interpretations.
| | ---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



(18)       Probable
reserves. Probable reserves are those additional reserves that are less certain to be recovered than proved reserves but which,
together with proved reserves, are as likely as not to be recovered.



| | (i) | When
                                         deterministic methods are used, it is as likely as not that actual remaining quantities
                                         recovered will exceed the sum of estimated proved plus probable reserves. When probabilistic
                                         methods are used, there should be at least a 50% probability that the actual quantities
                                         recovered will equal or exceed the proved plus probable reserves estimates.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (ii) | Probable
                                         reserves may be assigned to areas of a reservoir adjacent to proved reserves where data
                                         control or interpretations of available data are less certain, even if the interpreted
                                         reservoir continuity of structure or productivity does not meet the reasonable certainty
                                         criterion. Probable reserves may be assigned to areas that are structurally higher than
                                         the proved area if these areas are in communication with the proved reservoir.
| | ---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (iii) | Probable
                                         reserves estimates also include potential incremental quantities associated with a greater
                                         percentage recovery of the hydrocarbons in place than assumed for proved reserves.
| | ----- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (iv) | See
                                         also guidelines in paragraphs (a)(17)(iv) and (a)(17)(vi) of this section.
| | ---- | -----------------------------------------------------------------------------------------------------------------------



(19)       Probabilistic
estimate. The method of estimation of reserves or resources is called probabilistic when the full range of values that could
reasonably occur for each unknown parameter (from the geoscience and engineering data) is used to generate a full range of possible
outcomes and their associated probabilities of occurrence.



(20)Production
costs.



| | (i) | Costs
                                         incurred to operate and maintain wells and related equipment and facilities, including
                                         depreciation and applicable operating costs of support equipment and facilities and other
                                         costs of operating and maintaining those wells and related equipment and facilities,
                                         they become part of the cost of oil and gas produced. Examples of production costs (sometimes
                                         called lifting costs) are:
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (A) | Costs
                                         of labor to operate the wells and related equipment and facilities.
| | --- | ------------------------------------------------------------------------------------------------------------------



| | (B) | Repairs
                                         and maintenance.
| | --- | -----------------------------------------------------------------



| | (C) | Materials,
                                         supplies, arid fuel consumed and supplies utilized in operating the wells and related
                                         equipment and facilities.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (D) | Property
                                         taxes and insurance applicable to proved properties and wells and related equipment and
                                         facilities.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (E) | Severance
                                         taxes.
| | --- | ---------------------------------------------------------



AI-5





| | (ii) | Some
                                         support equipment or facilities may serve two or more oil and gas producing activities
                                         and may also serve transportation, refining, and marketing activities. To the extent
                                         that the support equipment and facilities are used in oil and gas producing activities,
                                         their depreciation and applicable operating costs become exploration, development or
                                         production costs, as appropriate. Depreciation, depletion, and amortization of capitalized
                                         acquisition, exploration, and development costs are not production costs but also become
                                         part of the cost of oil and gas produced along with production (lifting) costs identified
                                         above.
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



(21)       Proved
area. The part of a property to which proved reserves have been specifically attributed.



(22)       Proved
oil and gas reserves. Proved oil and gas reserves are those quantities of oil and gas, which, by analysis of geoscience and
engineering data, can be estimated with reasonable certainty to be economically producible—from a given date forward, from
known reservoirs, and under existing economic conditions, operating methods, and government regulations—prior to the time
at which contracts providing the right to operate expire, unless evidence indicates that renewal is reasonably certain, regardless
of whether deterministic or probabilistic methods are used for the estimation. The project to extract the hydrocarbons must have
commenced or the operator must be reasonably certain that it will commence the project within a reasonable time.



| | (i) | The
                                         area of the reservoir considered as proved includes:
| | --- | -------------------------------------------------------------------------------------------------



| | (A) | The
                                         area identified by drilling and limited by fluid contacts, if any, and
| | --- | -------------------------------------------------------------------------------------------------------------------



| | (B) | Adjacent
                                         undrilled portions of the reservoir that can, with reasonable certainty, be judged to
                                         be continuous with it and to contain economically producible oil or gas on the basis
                                         of available geoscience and engineering data.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (ii) | In
                                         the absence of data on fluid contacts, proved quantities in a reservoir are limited by
                                         the lowest known hydrocarbons (LKH) as seen in a well penetration unless geoscience,
                                         engineering, or performance data and reliable technology establishes a lower contact
                                         with reasonable certainty.
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (iii) | Where
                                         direct observation from well penetrations has defined a highest known oil (HKO) elevation
                                         and the potential exists for an associated gas cap, proved oil reserves may be assigned
                                         in the structurally higher portions of the reservoir only if geoscience, engineering,
                                         or performance data and reliable technology establish the higher contact with reasonable
                                         certainty.
| | ----- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (iv) | Reserves
                                         which can be produced economically through application of improved recovery techniques
                                         (including, but not limited to, fluid injection) are included in the proved classification
                                         when:
| | ---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (A) | Successful
                                         testing by a pilot project in an area of the reservoir with properties no more favorable
                                         than in the reservoir as a whole, the operation of an installed program in the reservoir
                                         or an analogous reservoir, or other evidence using reliable technology establishes the
                                         reasonable certainty of the engineering analysis on which the project or program was
                                         based; and
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (B) | The
                                         project has been approved for development by all necessary parties and entities, including
                                         governmental entities.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



AI-6





| | (v) | Existing
                                         economic conditions include prices and costs at which economic producibility from a reservoir
                                         is to be determined. The price shall be the average price during the 12-month period
                                         prior to the ending date of the period covered by the report, determined as an unweighted
                                         arithmetic average of the first-day-of-the-month price for each month within such period,
                                         unless prices are defined by contractual arrangements, excluding escalations based upon
                                         future conditions.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



(23)       Proved
properties. Properties with proved reserves.



(24)       Reasonable
certainty. If deterministic methods are used, reasonable certainty means a high degree of confidence that the quantities will
be recovered. If probabilistic methods are used, there should be at least a 90% probability that the quantities actually recovered
will equal or exceed the estimate. A high degree of confidence exists if the quantity is much more likely to be achieved than
not, and, as changes due to increased availability of geoscience (geological, geophysical, and geochemical), engineering, and
economic data are made to estimated ultimate recovery (EUR) with time, reasonably certain EUR is much more likely to increase
or remain constant than to decrease.



(25)       Reliable
technology. Reliable technology is a grouping of one or more technologies (including computational methods) that has been
field tested and has been demonstrated to provide reasonably certain results with consistency and repeatability in the formation
being evaluated or in an analogous formation.



(26)       Reserves.Reserves are estimated remaining quantities of oil and gas and related substances anticipated to be economically producible,
as of a given date, by application of development projects to known accumulations. In addition, there must exist, or there must
be a reasonable expectation that there will exist, the legal right to produce or a revenue interest in the production, installed
means of delivering oil and gas or related substances to market, and all permits and financing required to implement the project.



Note
to paragraph (a)(26): Reserves should not be assigned to adjacent reservoirs isolated by major, potentially sealing, faults
until those reservoirs are penetrated and evaluated as economically producible. Reserves should not be assigned to areas that
are clearly separated from a known accumulation by a non-productive reservoir (i.e., absence of reservoir, structurally
low reservoir, or negative test results). Such areas may contain prospective resources (i.e., potentially recoverable resources
from undiscovered accumulations).



(27)       Reservoir.A porous and permeable underground formation containing a natural accumulation of producible oil and/or gas that is confined
by impermeable rock or water barriers and is individual and separate from other reservoirs.



(28)       Resources.Resources are quantities of oil and gas estimated to exist in naturally occurring accumulations. A portion of the resources
may be estimated to be recoverable, and another portion may be considered to be unrecoverable. Resources include both discovered
and undiscovered accumulations.



(29)       Service
well. A well drilled or completed for the purpose of supporting production in an existing field. Specific purposes of service
wells include gas injection, water injection, steam injection, air injection, salt-water disposal, water supply for injection,
observation, or injection for in-situ combustion.



AI-7





(30)       Stratigraphic
test well. A stratigraphic test well is a drilling effort, geologically directed, to obtain information pertaining to a specific
geologic condition. Such wells customarily are drilled without the intent of being completed for hydrocarbon production. The classification
also includes tests identified as core tests and all types of expendable holes related to hydrocarbon exploration. Stratigraphic
tests are classified as “exploratory type” if not drilled in a known area or “development type” if drilled
in a known area.



(31)       Undeveloped
oil and gas reserves. Undeveloped oil and gas reserves are reserves of any category that are expected to be recovered from
new wells on undrilled acreage, or from existing wells where a relatively major expenditure is required for recompletion.



| | (i) | Reserves
                                         on undrilled acreage shall be limited to those directly offsetting development spacing
                                         areas that are reasonably certain of production when drilled, unless evidence using reliable
                                         technology exists that establishes reasonable certainty of economic producibility at
                                         greater distances.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (ii) | Undrilled
                                         locations can be classified as having undeveloped reserves only if a development plan
                                         has been adopted indicating that they are scheduled to be drilled within five years,
                                         unless the specific circumstances, justify a longer time.
| | ---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (iii) | Under
                                         no circumstances shall estimates for undeveloped reserves be attributable to any acreage
                                         for which an application of fluid injection or other improved recovery technique is contemplated,
                                         unless such techniques have been proved effective by actual projects in the same reservoir
                                         or an analogous reservoir, as defined in paragraph (a)(2) of this section, or by other
                                         evidence using reliable technology establishing reasonable certainty.
| | ----- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



(32)       Unproved
properties. Properties with no proved reserves.



AI-8















Appendix
II

Technical Qualifications

























TECHNICAL
QUALIFICATIONS



GCA is an
independent international energy advisory group of more than 50 years’ standing, whose expertise includes petroleum reservoir
evaluation and economic analysis.



The report
is based on information compiled by professional staff members who are full time employees of GCA.



Staff who
participated in the compilation of this report include Mr. Stephen M. Lane, Mr. Chew Hai Hong, Mr. Andrew B. Duncan, Dr. Hu Yundong
and Ms. Tianjiao Yan. All hold degrees in geoscience, petroleum engineering or related discipline.



Mr. Lane
holds a BSc (Hons) in Geology, is a member of the Society of Petroleum Engineers and is a very experienced Geoscientist and Petrophysicist
with over 30 years’ background in providing geological and petrophysical expertise to clients worldwide. He has particular
involvement as lead petrophysicist/geologist and Project Manager in many oil and gas reserve certifications both for project finance
and for SEC reporting purposes, frequent involvement in the valuation of E&P assets for acquisition and divestment purposes
and production of public documents such as Competent Person’s Reports.



Mr. Chew
holds a BE (Hons) in Civil Engineering and an MBA, is a member of the Society of Petroleum Engineers, a fellow of Institution
of Engineers Malaysia, and a professional engineer registered with the Board of Engineers Malaysia, and has more than 30 years
petroleum industry experience.



Mr. Duncan
holds a B.Sc in Civil Engineering, is a chartered member of the Institute of Mechanical Engineers, member of the Society of Petroleum
Engineers and the Association of International Petroleum Negotiators, and has more than 30 years industry experience.



Dr. Hu holds
a PhD in Petroleum Geology, is a member of the Society of Petroleum Engineers and a Registered Mineral Reserve Evaluator of the
P.R. China, and has more than 35 years industry experience.



Ms. Yan holds
a B.Sc in Economics and Mathematics and a M.Sc in Economics, is a member of the Society of Petroleum Engineers and the Association
of International Petroleum Negotiators.







AII-2









| | 
| | 









Independent Letter



The Greater Angostura Fields
Block 2C, Trinidad & Tobago
Estimated Proved Reserves and Financial Data,
Based on SEC Rules



Prepared
for



CNOOC Limited



As of 31 December 2016









March 2017









This summary
letter is based on Gaffney, Cline & Associates’ official report and has been provided at the request of CNOOC Limited.



www.gaffney-cline.com












| |                                                                                                                                                                                                          
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                                                                                          
| | Gaffney,
                           Cline & Associates



(Consultants)
Pte. Ltd.



80
Anson Road



#31-01C
Fuji Xerox Towers



Singapore
079907



Telephone:
+65 6225 6951




www.gaffney-cline.com
| |                                                                                                                                                                                                          
| |                                                                                                                                                                                                          
| | 3 March, 2017                                                                                                                                                                                            







3
March 2017



CNOOC
Limited



No. 25, Chaoyangmenbei
Dajie



Dongcheng
District



Beijing 100010,
P.R. China



Gentlemen,



Independent Letter



The Greater Angostura
Fields
Block 2C, Trinidad & Tobago
Estimated proved Reserves and Financial Data, Based on SEC Rules
As of 31st December, 2016



At the request
of CNOOC Limited (CNOOC), Gaffney, Cline & Associates (GCA) has prepared an independent estimate of the proved reserves and
financial data attributable to certain participating interests owned by CNOOC as of 31 December 2016. The reserves and income
data were estimated based on Rules of the United States Securities and Exchange Commission (SEC) contained in Title 17, Code of
Federal Regulations, Modernization of Oil and Gas Reporting, Final Rule released 14 January 2009 in the Federal Register, including
all references to Regulation S-X and Regulation S-K (SEC Rules). GCA’s independent study, completed on 3 March 2017 and
summarized herein, was prepared for public disclosure by CNOOC in filings made with the SEC in accordance with the disclosure
requirements set forth in the SEC Rules. In GCA’s opinion, the assumptions, data, methods, and procedures used in the preparation
of this report are appropriate for such purpose and have been carried out in line with the SEC Oil and Gas Reserves Definitions
attached hereto an Appendix.



The subject
properties in Block 2C are located 24 miles offshore east coast of Trinidad & Tobago. Based on information provided by CNOOC,
the Proved reserves estimates for properties evaluated by GCA for this report represent approximately 0.23 percent of CNOOC’s
total net proved reserves as at 31 December 2016. GCA is not in a position to verify this statement as it was not requested to
review all CNOOC’s other oil and gas assets.



1









| | 
| | 







GCA prepared
an independent assessment of the reserves based on data and interpretations provided by CNOOC. GCA checked and verified the in
place volume estimation. GCA reviewed the well and reservoir performances employing Decline Curve Analysis (DCA) and material
balance techniques. Economic models were constructed based on terms of the PSC as provided by CNOOC, in order to calculate CNOOC’s
Net Entitlement volumes, which are made up of CNOOC’s share of contractors revenue (Petroleum Cost Recovery and Profit Oil)
converted to volumetric equivalents.



The oil price
used for these computations was calculated with reference to the un-weighted 12-month arithmetic average of the first-day-of-the
month Brent Crude Oil price for each month within the 12-month period (January to December 2016). The average actual sales price
of Calypso Crude Oil from January to December 2016 as provided by CNOOC was US$40.49/Bbl. Based on the data collated by GCA, the
average Brent Crude Oil price for the same months was US$40.57/Bbl. The actual sales price for Block 2C crude equates to an average
discount to Brent of US$0.08/Bbl. This price differential was applied to the reference price for the calculation of reserves and
revenues. The oil price forecast was estimated at US$42.82/Bbl. No price escalation, or cost inflation, has been included in the
evaluation.



The gas prices
used were based on the gas sales information for 2016 provided by CNOOC. The gas price forecast was estimated at US$2.11/MMBtu,
and this price was maintained for the life of the fields considered in this report.



Actual future
prices may vary significantly from the prices required by SEC Rules; therefore, volumes of reserves actually recovered and the
amounts of income actually received may differ significantly from the estimated quantities presented in this report. The results
of this study are summarized in the following table. Reserves net to CNOOC are quoted as Net Entitlement Reserves reflecting the
terms of the PSC.



Estimated
Net Reserves and Financial Data



As of 31
December 2016



|                            | Proved       
|--------------------------- | -------------
|Developed                   | Undeveloped  
|Producing                   | Non-Producing
|Net
    Reserves            |              
|Oil/Condensate
    – Mstb   | 689          
|Gas
    – MMscf             | 48,452       
|                            |              
|Income
    Data (M$)        |              
|Future
    Gross Revenue    | $  102,561   
|Deductions                  | $   60,791   
|Future
    Net Income (FNI) | $  41,770    
|                            |              
|Discounted
    FNI @ 10%    | $  34,676    



Liquid hydrocarbons
are expressed in thousands of standard (42 gallon) barrels (Mstb). All gas volumes are reported on an “as sold basis”
expressed in millions of cubic feet (MMscf) at standard temperature (60 °F) and pressure (14.7 psia). In this report, the
revenues, deductions and income data are expressed in thousands of US dollars (M$).



The future
gross revenue represents CNOOC’s net entitlement under the PSC (Cost Recovery plus Profit Share). Deductions represent CNOOC’s
12.5% share of project Capital Expenditure, Operating Expenditure and Abandonment Costs (ABEX). Future Net Income represents CNOOC’s
Profit Share, net of ABEX, under the terms of the PSC.





2







The results
included herein were prepared in accordance with the disclosure requirements set forth in the SEC Rules and intended for public
disclosure as an exhibit in filings made with the SEC by CNOOC.



Basis of
Opinion



This document
reflects GCA’s informed professional judgment based on accepted standards of professional investigation and, as applicable,
the data and information provided by CNOOC, the limited scope of engagement, and the time permitted to conduct the evaluation.



In line with
those accepted standards, this document does not in any way constitute or make a guarantee or prediction of results, and no warranty
is implied or expressed that actual outcome will conform to the outcomes presented herein. GCA has not independently verified
any information provided by, or at the direction of, CNOOC, and has accepted the accuracy and completeness of this data. GCA has
no reason to believe that any material facts have been withheld, but does not warrant that its inquiries have revealed all of
the matters that a more extensive examination might otherwise disclose.



The opinions
expressed herein are subject to and fully qualified by the generally accepted uncertainties associated with the interpretation
of geoscience and engineering data and do not reflect the totality of circumstances, scenarios and information that could potentially
affect decisions made by the report’s recipients and/or actual results. The opinions and statements contained in this report
are made in good faith and in the belief that such opinions and statements are representative of prevailing physical and economic
circumstances.



In the preparation
of this report, GCA has used definitions contained within Part 210 Rule 4-10(a) of Regulation S-X of the US Securities and Exchange
Commission (see Appendix I).



There are
numerous uncertainties inherent in estimating reserves and resources, and in projecting future production, development expenditures,
operating expenses and cash flows. Oil and gas resources assessments must be recognized as a subjective process of estimating
subsurface accumulations of oil and gas that cannot be measured in an exact way. Estimates of oil and gas resources prepared by
other parties may differ, perhaps materially, from those contained within this report.



The accuracy
of any resource estimate is a function of the quality of the available data and of engineering and geological interpretation.
Results of drilling, testing and production that post-date the preparation of the estimates may justify revisions, some or all
of which may be material. Accordingly, resource estimates are often different from the quantities of oil and gas that are ultimately
recovered, and the timing and cost of those volumes that are recovered may vary from that assumed.



Oil and condensate
volumes are reported in thousands of standard barrels at stock tank conditions (Mstb). Gas volumes are reported in millions of
cubic feet (MMscf) at standard conditions. Standard conditions are defined as 14.7 psia and 60° Fahrenheit.



GCA prepared
an independent assessment of the reserves based on data and interpretations provided by CNOOC.





3







Definition of Reserves and
Resources



Reserves
are estimated remaining quantities of oil and gas and related substances anticipated to be economically producible, as of a given
date, by application of development projects to known accumulations. In addition, there must exist, or there must be a reasonable
expectation that there will exist, the legal right to produce, or a revenue interest in, the production, installed means of delivering
oil and gas or related substances to market, and all permits and financing required to implement the project.



GCA is not
aware of any potential changes in regulations applicable to these fields that could affect the ability of CNOOC to produce the
estimated reserves.



Reserves
are further categorized in accordance with the level of certainty associated with the estimates and may be sub-classified based
on project maturity and/or characterized by development and production status. All categories of reserves volumes quoted herein
have been derived within the context of an economic limit test (ELT) assessment (pre-tax and exclusive of accumulated depreciation
amounts) prior to any Net Present Value (NPV) analysis.



Reserves
net to CNOOC are quoted as Net Entitlement Reserves, reflecting the terms of the applicable Production Sharing Contract (PSC).
Lease fuel has been excluded from the reserve volumes.



GCA has not
undertaken a site visit and inspection because it was not necessary and not required within the scope of work. As such, GCA is
not in a position to comment on the operations or facilities in place, their appropriateness and condition, or whether they are
in compliance with the regulations pertaining to such operations. Further, GCA is not in a position to comment on any aspect of
health, safety, or environment of such operation.



This report
has been prepared based on GCA’s understanding of the effects of petroleum legislation and other regulations that currently
apply to these properties. However, GCA is not in a position to attest to property title or rights, conditions of these rights
(including environmental and abandonment obligations), or any necessary licenses and consents (including planning permission,
financial interest relationships, or encumbrances thereon for any part of the appraised properties).



Use of
Net Present Values



It should
be clearly noted that the Net Present Values (NPV) contained herein do not represent a GCA opinion as to the market value of the
subject property, nor any interest in it. In assessing a likely market value, it would be necessary to take into account a number
of additional factors (e.g., capability, technology, project approvals, capacity, infrastructure, commercial negotiations, market,
and changes to regulatory landscape).



Qualifications



In performing
this study, GCA is not aware that any conflict of interest has existed. As an independent consultancy, GCA is providing impartial
technical, commercial, and strategic advice within the energy sector. GCA’s remuneration was not in any way contingent on
the contents of this report.



In the preparation
of this document, GCA has maintained, and continues to maintain, a strict independent consultant-client relationship with CNOOC.
Furthermore, the management and employees of GCA have no interest in any of the assets evaluated or are related with the analysis
performed, as part of this report.



Staff members
who prepared this report hold appropriate professional and educational qualifications and have the necessary levels of experience
and expertise to perform the work.



The qualifications
of the technical person primarily responsible for overseeing this estimate are included in Appendix II.





4







This letter
should not be used for purposes other than those for which it is intended. This letter should not be reproduced, either in whole
or part, without the written permission of GCA. CNOOC will obtain GCA’s prior written or email approval for the use with
third parties and context of the use with third parties of any results, statements or opinions expressed by GCA to CNOOC, which
are attributed to GCA. Such requirement of approval shall include, but not be confined to, statements or references in documents
of a public or semi-public nature such as loan agreements, prospectuses, reserve statements, websites, press releases, etc.



As independent
reserve engineers/advisors for CNOOC, GCA hereby confirms that it has granted and not withdrawn its consent to the references
to GCA and to the inclusion of information contained in our report entitled “Executive Report for Reserves Estimation of
the Greater Angostura Fields in Block 2C, Trinidad & Tobago as at 31 December 2016” as of 3 March 2017 prepared for
CNOOC, and to the annexation of our report as an exhibit in CNOOC’s annual report on Form 20-F for the fiscal year ended
31 December 2016.



Yours faithfully,



GAFFNEY,
CLINE & ASSOCIATES (CONSULTANTS) PTE LTD







|/s/
        Hu Yundong                  
|----------------------------------------
|Project Manager                         
|Dr
        Hu Yundong, Senior Advisor   
|                                        
|/s/
        Stephen Lane                
|Reviewed by                             
|Stephen
        Lane, Technical Director





Appendices



|Appendix
    I  | SEC Reserves
    Definitions
|--------------- | ----------------------------
|Appendix
    II | Technical Qualifications    



5















Appendix
I
SEC Reserves Definitions



















U.S. SECURITIES
AND EXCHANGE COMMISSION (SEC)

MODERNIZATION
OF OIL AND GAS REPORTING[1]



Oil and
Gas Reserves Definitions and Reporting



(a)       Definitions



(1)       Acquisition
of properties. Costs incurred to purchase, lease or otherwise acquire a property, including costs of lease bonuses and options
to purchase or lease properties, the portion of costs applicable to minerals when land including mineral rights is purchased in
fee, brokers' fees, recording fees, legal costs, and other costs incurred in acquiring properties.



(2)       Analogous
reservoir. Analogous reservoirs, as used in resources assessments, have similar rock and fluid properties, reservoir conditions
(depth, temperature, and pressure) and drive mechanisms, but are typically at a more advanced stage of development than the reservoir
of interest and thus may provide concepts to assist in the interpretation of more limited data and estimation of recovery. When
used to support proved reserves, an “analogous reservoir” refers to a reservoir that shares the following characteristics
with the reservoir of interest:



| | (i) | Same
                                         geological formation (but not necessarily in pressure communication with the reservoir
                                         of interest);
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (ii) | Same
                                         environment of deposition;
| | ---- | ------------------------------------------------------------------------



| | (iii) | Similar
                                         geological structure; and
| | ----- | --------------------------------------------------------------------------



| | (iv) | Same
                                         drive mechanism.
| | ---- | --------------------------------------------------------------



Instruction
to paragraph (a)(2): Reservoir properties must, in the aggregate, be no more favorable in the analog than in the reservoir
of interest.



(3)       Bitumen.Bitumen, sometimes referred to as natural bitumen, is petroleum in a solid or semi-solid state in natural deposits with a
viscosity greater than 10,000 centipoise measured at original temperature in the deposit and atmospheric pressure, on a gas free
basis. In its natural state it usually contains sulfur, metals, and other non-hydrocarbons.



(4)       Condensate.Condensate is a mixture of hydrocarbons that exists in the gaseous phase at original reservoir temperature and pressure, but
that, when produced, is in the liquid phase at surface pressure and temperature.



(5)       Deterministic
estimate. The method of estimating reserves or resources is called deterministic when a single value for each parameter (from
the geoscience, engineering, or economic data) in the reserves calculation is used in the reserves estimation procedure.



(6)       Developed
oil and gas reserves. Developed oil and gas reserves are reserves of any category that can be expected to be recovered:



| | (i) | Through
                                         existing wells with existing equipment and operating methods or in which the cost of
                                         the required equipment is relatively minor compared to the cost of a new well; and
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (ii) | Through
                                         installed extraction equipment and infrastructure operational at the time of the reserves
                                         estimate if the extraction is by means not involving a well.
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------


















| | 1 | Extracted from 17 CFR
                                         Parts 210, 211, 229, and 249 [Release Nos. 33-8995; 34-59192; FR-78; File No. S7-15-08]
                                         RIN 3235-AK00].
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------







AI-1







(7)       Development
costs.Costs incurred to obtain access to proved reserves and to provide facilities for extracting, treating, gathering and
storing the oil and gas. More specifically, development costs, including depreciation and applicable operating costs of support
equipment and facilities and other costs of development activities, are costs incurred to:



| | (i) | Gain
                                         access to and prepare well locations for drilling, including surveying well locations
                                         for the purpose of determining specific development drilling sites, clearing ground,
                                         draining, road building, and relocating public roads, gas lines, and power lines, to
                                         the extent necessary in developing the proved reserves.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (ii) | Drill
                                         and equip development wells, development-type stratigraphic test wells, and service wells,
                                         including the costs of platforms and of well equipment such as casing, tubing, pumping
                                         equipment, and the wellhead assembly.
| | ---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (iii) | Acquire,
                                         construct, and install production facilities such as lease flow lines, separators, treaters,
                                         heaters, manifolds, measuring devices, and production storage tanks, natural gas cycling
                                         and processing plants, and central utility and waste disposal systems.
| | ----- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (iv) | Provide
                                         improved recovery systems.
| | ---- | ---------------------------------------------------------------------------



(8)       Development
project. A development project is the means by which petroleum resources are brought to the status of economically producible.
As examples, the development of a single reservoir or field, an incremental development in a producing field, or the integrated
development of a group of several fields and associated facilities with a common ownership may constitute a development project.



(9)       Development
well. A well drilled within the proved area of an oil or gas reservoir to the depth of a stratigraphic horizon known to be
productive.



(10)       Economically
producible. The term economically producible, as it relates to a resource, means a resource which generates revenue that exceeds,
or is reasonably expected to exceed, the costs of the operation. The value of the products that generate revenue shall be determined
at the terminal point of oil and gas producing activities as defined in paragraph (a)(16) of this section.



(11)       Estimated
ultimate recovery (EUR). Estimated ultimate recovery is the sum of reserves remaining as of a given date and cumulative production
as of that date.



(12)       Exploration
costs. Costs incurred in identifying areas that may warrant examination and in examining specific areas that are considered
to have prospects of containing oil and gas reserves, including costs of drilling exploratory wells and exploratory-type stratigraphic
test wells. Exploration costs may be incurred both before acquiring the related property (sometimes referred to in pail as prospecting
costs) and after acquiring the property. Principal types of exploration costs, which include depreciation and applicable operating
costs of support equipment and facilities and other costs of exploration activities, are:



| | (i) | Costs
                                         of topographical, geographical and geophysical studies, rights of access to properties
                                         to conduct those studies, and salaries and other expenses of geologists, geophysical
                                         crews, and others conducting those studies. Collectively, these are sometimes referred
                                         to as geological and geophysical or "G&G" costs.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (ii) | Costs
                                         of carrying and retaining undeveloped properties, such as delay rentals, ad valorem taxes
                                         on properties, legal costs for title defense, and the maintenance of land and lease records.
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





AI-2







| | (iii) | Dry
                                         hole contributions and bottom hole contributions.
| | ----- | ----------------------------------------------------------------------------------------------



| | (iv) | Costs
                                         of drilling and equipping exploratory wells.
| | ---- | -------------------------------------------------------------------------------------------



| | (v) | Costs
                                         of drilling exploratory-type stratigraphic test wells.
| | --- | -----------------------------------------------------------------------------------------------------



(13)       Exploratory
well. An exploratory well is a well drilled to find a new field or to find a new reservoir in a field previously found to
be productive of oil or gas in another reservoir. Generally, an exploratory well is any well that is not a development well, an
extension well, a service well, or a stratigraphic test well as those items are defined in this section.



(14)       Extension
well. An extension well is a well drilled to extend the limits of a known reservoir.



(15)       Field.An area consisting of a single reservoir or multiple reservoirs all grouped on or related to the same individual geological
structural feature and/or stratigraphic condition. There may be two or more reservoirs in a field which are separated vertically
by intervening impervious strata, or laterally by local geologic barriers, or by both. Reservoirs that are associated by being
in overlapping or adjacent fields may be treated as a single or common operational field. The geological terms "structural
feature" and "stratigraphic condition" are intended to identify localized geological features as opposed to the
broader terms of basins, trends, provinces, plays, areas-of-interest, etc.



(16)       Oil
and gas producing activities.



| | (i) | Oil
                                         and gas producing activities include:
| | --- | ----------------------------------------------------------------------------------



| | (A) | The
                                         search for crude oil, including condensate and natural gas liquids, or natural gas (“oil
                                         and gas”) in their natural states and original locations;
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (B) | The
                                         acquisition of property rights or properties for the purpose of further exploration or
                                         for the purpose of removing the oil or gas from such properties;
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (C) | The
                                         construction, drilling, and production activities necessary to retrieve oil and gas from
                                         their natural reservoirs, including the acquisition, construction, installation, and
                                         maintenance of field gathering and storage systems, such as:
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (1) | Lifting
                                         the oil and gas to the surface; and
| | --- | ------------------------------------------------------------------------------------



| | (2) | Gathering,
                                         treating, and field processing (as in the case of processing gas to extract liquid hydrocarbons);
                                         and
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (D) | Extraction
                                         of saleable hydrocarbons, in the solid, liquid, or gaseous state, from oil sands, shale,
                                         coalbeds, or other nonrenewable natural resources which are intended to be upgraded into
                                         synthetic oil or gas, and activities undertaken with a view to such extraction.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Instruction
1 to paragraph (a)(16)(i): The oil and gas production function shall be regarded as ending at a “terminal point”,
which is the outlet valve on the lease or field storage tank. If unusual physical or operational circumstances exist, it may be
appropriate to regard the terminal point for the production function as:



| | a. | The
                                         first point at which oil, gas, or gas liquids, natural or synthetic, are delivered to
                                         a main pipeline, a common carrier, a refinery, or a marine terminal; and
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | b. | In the
                                         case of natural resources that are intended to be upgraded into synthetic oil or gas,
                                         if those natural resources are delivered to a purchaser prior to upgrading, the first
                                         point at which the natural resources are delivered to a main pipeline, a common carrier,
                                         a refinery, a marine terminal, or a facility which upgrades such natural resources into
                                         synthetic oil or gas.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





AI-3







Instruction
2 to paragraph (a)(16)(i): For purposes of this paragraph (a)(16), the term saleable hydrocarbons means hydrocarbons
that are saleable in the state in which the hydrocarbons are delivered.



| | (ii) | Oil
                                         and gas producing activities do not include:
| | ---- | -----------------------------------------------------------------------------------------



| | (A) | Transporting,
                                         refining, or marketing oil and gas;
| | --- | ------------------------------------------------------------------------------------------



| | (B) | Processing
                                         of produced oil, gas or natural resources that can be upgraded into synthetic oil or
                                         gas by a registrant that does not have the legal right to produce or a revenue interest
                                         in such production;
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (C) | Activities
                                         relating to the production of natural resources other than oil, gas, or natural resources
                                         from which synthetic oil and gas can be extracted; or
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



(D)
Production of geothermal steam.



(17)       Possible
reserves. Possible reserves are those additional reserves that are less certain to be recovered than probable reserves.



| | (i) | When
                                         deterministic methods are used, the total quantities ultimately recovered from a project
                                         have a low probability of exceeding proved plus probable plus possible reserves. When
                                         probabilistic methods are used, there should be at least a 10% probability that the total
                                         quantities ultimately recovered will equal or exceed the proved plus probable plus possible
                                         reserves estimates.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (ii) | Possible
                                         reserves may be assigned to areas of a reservoir adjacent to probable reserves where
                                         data control and interpretations of available data are progressively less certain. Frequently,
                                         this will be in areas where geoscience and engineering data are unable to define clearly
                                         the area and vertical limits of commercial production from the reservoir by a defined
                                         project.
| | ---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (iii) | Possible
                                         reserves also include incremental quantities associated with a greater percentage recovery
                                         of the hydrocarbons in place than the recovery quantities assumed for probable reserves.
| | ----- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (iv) | The
                                         proved plus probable and proved plus probable plus possible reserves estimates must be
                                         based on reasonable alternative technical and commercial interpretations within the reservoir
                                         or subject project that are clearly documented, including comparisons to results in successful
                                         similar projects.
| | ---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (v) | Possible
                                         reserves may be assigned where geoscience and engineering data identify directly adjacent
                                         portions of a reservoir within the same accumulation that may be separated from proved
                                         areas by faults with displacement less than formation thickness or other geological discontinuities
                                         and that have not been penetrated by a wellbore, and the registrant believes that such
                                         adjacent portions are in communication with the known (proved) reservoir. Possible reserves
                                         may be assigned to areas that are structurally higher or lower than the proved area if
                                         these areas are in communication with the proved reservoir.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





AI-4







| | (vi) | Pursuant to paragraph (a)(22)(iii)
of this section, where direct observation has defined a highest known oil (HKO) elevation and the potential exists for an associated
gas cap, proved oil reserves should be assigned in the structurally higher portions of the reservoir above the HKO only if the
higher contact can be established with reasonable certainty through reliable technology. Portions of the reservoir that do not
meet this reasonable certainty criterion may be assigned as probable and possible oil or gas based on reservoir fluid properties
and pressure gradient interpretations.
| | ---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



(18)       Probable
reserves. Probable reserves are those additional reserves that are less certain to be recovered than proved reserves but which,
together with proved reserves, are as likely as not to be recovered.



| | (i) | When
                                         deterministic methods are used, it is as likely as not that actual remaining quantities
                                         recovered will exceed the sum of estimated proved plus probable reserves. When probabilistic
                                         methods are used, there should be at least a 50% probability that the actual quantities
                                         recovered will equal or exceed the proved plus probable reserves estimates.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (ii) | Probable
                                         reserves may be assigned to areas of a reservoir adjacent to proved reserves where data
                                         control or interpretations of available data are less certain, even if the interpreted
                                         reservoir continuity of structure or productivity does not meet the reasonable certainty
                                         criterion. Probable reserves may be assigned to areas that are structurally higher than
                                         the proved area if these areas are in communication with the proved reservoir.
| | ---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (iii) | Probable
                                         reserves estimates also include potential incremental quantities associated with a greater
                                         percentage recovery of the hydrocarbons in place than assumed for proved reserves.
| | ----- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (iv) | See
                                         also guidelines in paragraphs (a)(17)(iv) and (a)(17)(vi) of this section.
| | ---- | -----------------------------------------------------------------------------------------------------------------------



(19)       Probabilistic
estimate. The method of estimation of reserves or resources is called probabilistic when the full range of values that could
reasonably occur for each unknown parameter (from the geoscience and engineering data) is used to generate a full range of possible
outcomes and their associated probabilities of occurrence.



(20)Production
costs.



| | (i) | Costs
                                         incurred to operate and maintain wells and related equipment and facilities, including
                                         depreciation and applicable operating costs of support equipment and facilities and other
                                         costs of operating and maintaining those wells and related equipment and facilities,
                                         they become part of the cost of oil and gas produced. Examples of production costs (sometimes
                                         called lifting costs) are:
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (A) | Costs
                                         of labor to operate the wells and related equipment and facilities.
| | --- | ------------------------------------------------------------------------------------------------------------------



| | (B) | Repairs
                                         and maintenance.
| | --- | -----------------------------------------------------------------



| | (C) | Materials,
                                         supplies, arid fuel consumed and supplies utilized in operating the wells and related
                                         equipment and facilities.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (D) | Property
                                         taxes and insurance applicable to proved properties and wells and related equipment and
                                         facilities.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (E) | Severance
                                         taxes.
| | --- | ---------------------------------------------------------



| | (ii) | Some
                                         support equipment or facilities may serve two or more oil and gas producing activities
                                         and may also serve transportation, refining, and marketing activities. To the extent
                                         that the support equipment and facilities are used in oil and gas producing activities,
                                         their depreciation and applicable operating costs become exploration, development or
                                         production costs, as appropriate. Depreciation, depletion, and amortization of capitalized
                                         acquisition, exploration, and development costs are not production costs but also become
                                         part of the cost of oil and gas produced along with production (lifting) costs identified
                                         above.
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





AI-5







(21)       Proved
area. The part of a property to which proved reserves have been specifically attributed.



(22)       Proved
oil and gas reserves. Proved oil and gas reserves are those quantities of oil and gas, which, by analysis of geoscience and
engineering data, can be estimated with reasonable certainty to be economically producible—from a given date forward, from
known reservoirs, and under existing economic conditions, operating methods, and government regulations—prior to the time
at which contracts providing the right to operate expire, unless evidence indicates that renewal is reasonably certain, regardless
of whether deterministic or probabilistic methods are used for the estimation. The project to extract the hydrocarbons must have
commenced or the operator must be reasonably certain that it will commence the project within a reasonable time.



| | (i) | The
                                         area of the reservoir considered as proved includes:
| | --- | -------------------------------------------------------------------------------------------------



| | (A) | The
                                         area identified by drilling and limited by fluid contacts, if any, and
| | --- | -------------------------------------------------------------------------------------------------------------------



| | (B) | Adjacent
                                         undrilled portions of the reservoir that can, with reasonable certainty, be judged to
                                         be continuous with it and to contain economically producible oil or gas on the basis
                                         of available geoscience and engineering data.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (ii) | In
                                         the absence of data on fluid contacts, proved quantities in a reservoir are limited by
                                         the lowest known hydrocarbons (LKH) as seen in a well penetration unless geoscience,
                                         engineering, or performance data and reliable technology establishes a lower contact
                                         with reasonable certainty.
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (iii) | Where
                                         direct observation from well penetrations has defined a highest known oil (HKO) elevation
                                         and the potential exists for an associated gas cap, proved oil reserves may be assigned
                                         in the structurally higher portions of the reservoir only if geoscience, engineering,
                                         or performance data and reliable technology establish the higher contact with reasonable
                                         certainty.
| | ----- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (iv) | Reserves
                                         which can be produced economically through application of improved recovery techniques
                                         (including, but not limited to, fluid injection) are included in the proved classification
                                         when:
| | ---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (A) | Successful
                                         testing by a pilot project in an area of the reservoir with properties no more favorable
                                         than in the reservoir as a whole, the operation of an installed program in the reservoir
                                         or an analogous reservoir, or other evidence using reliable technology establishes the
                                         reasonable certainty of the engineering analysis on which the project or program was
                                         based; and
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (B) | The
                                         project has been approved for development by all necessary parties and entities, including
                                         governmental entities.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (v) | Existing
                                         economic conditions include prices and costs at which economic producibility from a reservoir
                                         is to be determined. The price shall be the average price during the 12-month period
                                         prior to the ending date of the period covered by the report, determined as an unweighted
                                         arithmetic average of the first-day-of-the-month price for each month within such period,
                                         unless prices are defined by contractual arrangements, excluding escalations based upon
                                         future conditions.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





AI-6







(23)       Proved
properties. Properties with proved reserves.



(24)       Reasonable
certainty. If deterministic methods are used, reasonable certainty means a high degree of confidence that the quantities will
be recovered. If probabilistic methods are used, there should be at least a 90% probability that the quantities actually recovered
will equal or exceed the estimate. A high degree of confidence exists if the quantity is much more likely to be achieved than
not, and, as changes due to increased availability of geoscience (geological, geophysical, and geochemical), engineering, and
economic data are made to estimated ultimate recovery (EUR) with time, reasonably certain EUR is much more likely to increase
or remain constant than to decrease.



(25)       Reliable
technology. Reliable technology is a grouping of one or more technologies (including computational methods) that has been
field tested and has been demonstrated to provide reasonably certain results with consistency and repeatability in the formation
being evaluated or in an analogous formation.



(26)       Reserves.Reserves are estimated remaining quantities of oil and gas and related substances anticipated to be economically producible,
as of a given date, by application of development projects to known accumulations. In addition, there must exist, or there must
be a reasonable expectation that there will exist, the legal right to produce or a revenue interest in the production, installed
means of delivering oil and gas or related substances to market, and all permits and financing required to implement the project.



Note
to paragraph (a)(26): Reserves should not be assigned to adjacent reservoirs isolated by major, potentially sealing, faults
until those reservoirs are penetrated and evaluated as economically producible. Reserves should not be assigned to areas that
are clearly separated from a known accumulation by a non-productive reservoir (i.e., absence of reservoir, structurally
low reservoir, or negative test results). Such areas may contain prospective resources (i.e., potentially recoverable resources
from undiscovered accumulations).



(27)       Reservoir.A porous and permeable underground formation containing a natural accumulation of producible oil and/or gas that is confined
by impermeable rock or water barriers and is individual and separate from other reservoirs.



(28)       Resources.Resources are quantities of oil and gas estimated to exist in naturally occurring accumulations. A portion of the resources
may be estimated to be recoverable, and another portion may be considered to be unrecoverable. Resources include both discovered
and undiscovered accumulations.



(29)       Service
well. A well drilled or completed for the purpose of supporting production in an existing field. Specific purposes of service
wells include gas injection, water injection, steam injection, air injection, salt-water disposal, water supply for injection,
observation, or injection for in-situ combustion.



(30)       Stratigraphic
test well. A stratigraphic test well is a drilling effort, geologically directed, to obtain information pertaining to a specific
geologic condition. Such wells customarily are drilled without the intent of being completed for hydrocarbon production. The classification
also includes tests identified as core tests and all types of expendable holes related to hydrocarbon exploration. Stratigraphic
tests are classified as “exploratory type” if not drilled in a known area or “development type” if drilled
in a known area.





AI-7







(31)       Undeveloped
oil and gas reserves. Undeveloped oil and gas reserves are reserves of any category that are expected to be recovered from
new wells on undrilled acreage, or from existing wells where a relatively major expenditure is required for recompletion.



| | (i) | Reserves
                                         on undrilled acreage shall be limited to those directly offsetting development spacing
                                         areas that are reasonably certain of production when drilled, unless evidence using reliable
                                         technology exists that establishes reasonable certainty of economic producibility at
                                         greater distances.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (ii) | Undrilled
                                         locations can be classified as having undeveloped reserves only if a development plan
                                         has been adopted indicating that they are scheduled to be drilled within five years,
                                         unless the specific circumstances, justify a longer time.
| | ---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (iii) | Under
                                         no circumstances shall estimates for undeveloped reserves be attributable to any acreage
                                         for which an application of fluid injection or other improved recovery technique is contemplated,
                                         unless such techniques have been proved effective by actual projects in the same reservoir
                                         or an analogous reservoir, as defined in paragraph (a)(2) of this section, or by other
                                         evidence using reliable technology establishing reasonable certainty.
| | ----- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



(32)       Unproved
properties. Properties with no proved reserves.









AI-8











Appendix
II
Technical Qualifications















TECHNICAL
QUALIFICATIONS



GCA is an
independent international energy advisory group of more than 50 years’ standing, whose expertise includes petroleum reservoir
evaluation and economic analysis.



The report
is based on information compiled by professional staff members who are full time employees of GCA.



Staff who
participated in the compilation of this report include Mr. Stephen M. Lane, Mr. Chew Hai Hong, Mr. Andrew B. Duncan, Dr. Hu Yundong
and Ms. Tianjiao Yan. All hold degrees in geoscience, petroleum engineering or related discipline.



Mr. Lane
holds a BSc (Hons) in Geology, is a member of the Society of Petroleum Engineers and is a very experienced Geoscientist and Petrophysicist
with over 30 years’ background in providing geological and petrophysical expertise to clients worldwide. He has particular
involvement as lead petrophysicist/geologist and Project Manager in many oil and gas reserve certifications both for project finance
and for SEC reporting purposes, frequent involvement in the valuation of E&P assets for acquisition and divestment purposes
and production of public documents such as Competent Person’s Reports.



Mr. Chew
holds a BE (Hons) in Civil Engineering and an MBA, is a member of the Society of Petroleum Engineers, a fellow of Institution
of Engineers Malaysia, and a professional engineer registered with the Board of Engineers Malaysia, and has more than 30 years
petroleum industry experience.



Mr. Duncan
holds a B.Sc in Civil Engineering, is a chartered member of the Institute of Mechanical Engineers, member of the Society of Petroleum
Engineers and the Association of International Petroleum Negotiators, and has more than 30 years industry experience.



Dr. Hu holds
a PhD in Petroleum Geology, is a member of the Society of Petroleum Engineers and a Registered Mineral Reserve Evaluator of the
P.R. China, and has more than 35 years industry experience.



Ms. Yan holds
a B.Sc in Economics and Mathematics and a M.Sc in Economics, is a member of the Society of Petroleum Engineers and the Association
of International Petroleum Negotiators.





AII-1