AS CHINA'S OIL industry has been forced overseas in search of fuel sources for its economic engine, China Oilfield Services has made a tidy living. An integrated oilfield services company that provides drilling, well services, transportation and geophysical services, COSL reported strong results for the six months to June 30 2005, with revenues up 32% and operating profits up 14%. That's not surprising, given the frenzy of oil and gas exploration amid record high oil prices, but the market is now presenting its own challenges. "China's domestic [oil] production is very difficult to move forward," says Chen Weidong, COSL's vice-president and company secretary. "The reserve situation is not easy. Offshore [production] still has the potential to grow."
Much of COSL's progress in offshore China has been made hand in hand with CNOOC, its sister state-owned company. Where CNOOC has gone, COSL has followed, and not only in offshore China. COSL is now working for CNOOC in Indonesia, and other areas of southeast Asia, including Myanmar, as well as new projects in the Caspian Sea region. It is a strategy that has paid off, says Chen. "For the last 30 to 40 years, we've played in offshore China," he says, "so outsiders don't know us so well – it takes time.