CNOOC Limited, the dominant domestic offshore oil producer, has paid US$190 million to its foreign partners, BP included, to increase its holdings in two offshore oil fields, the company announced on Friday.

The deal aims to maintain CNOOC Ltd's production growth, and to take advantage of the current oil price rises, analysts said.

"We see the deal as positive," said one source with a foreign investment bank in Hong Kong who declined to be identified. "The price is reasonable. The timing is good with oil prices high. And it is of low risk as the projects are already in operation."

But the analyst said the acquisition will make a limited contribution to the company's revenues because management would not increase their production target for this year.

Chief Financial Officer Mark Qiu was reported as saying he expected a 2-3 percent earnings per share enhancement for 2003.

On Friday, CNOOC Ltd said it had p aid US$150 million for BP's entire 24.5 percent interests in Qinhuangdao 32-6, an offshore oilfield in East China's Bohai Bay. The deal helps CNOOC Ltd raise its stake in the field to 75.5 percent. The existing partner Texaco controls the rest.

The company also said it now has controlling stakes in Liuhua 11-1 -- a smaller offshore pocket in the South China Sea -- after acquiring 24.5 percent interests each from BP and the US's Kerr-McGee for US$40 million.

The two acquisitions are expected to boost CNOOC's proven reserves by 3.5 percent.

"CNOOC Ltd has taken advantage of opportunities provided by portfolio adjustments by its foreign partners to strengthen its position in producing fields offshore in China," company President Zhou Shouwei said in a statement.

"These transactions will help the company to meet its production targets and increase near-term earnings."

The company's management told analysts on Friday they would keep its production target unchanged, anti cipating production decline from Yacheng 13-1 in the South China Sea, which supplies natural gas to Hong Kong.

Earlier this year, CNOOC Ltd said it plans to produce 134-138 million barrels of oil equivalent this year. It pumped 126.5 million barrels of oil equivalent in 2002.

Shares of CNOOC Ltd were flat at HK$12.15 (US$1.6) on Friday on the Hong Kong stock market.

In another development, CNOOC Ltd's parent -- China National Offshore Oil Corp -- recorded a profit of 7.75 billion yuan (US$937.1 million) in the first half, up 101 per cent year-on-year, and its sales rose 78 percent to 20.85 billion yuan (US$2.5 billion), the China Offshore Oil Press reported.

(China Daily July 20, 2003)