China Oilfield Services Ltd (COSL), the largest offshore oilfield services provider in China, Wednesday said its 2008 net profit rose 38.6 percent on strong demand in domestic and overseas markets.

The company said net profit for the full year rose to 3.1 billion yuan from 2.2 billion yuan in 2007. Sales revenue rose to 12.1 billion yuan in 2008, compared with 9 billion yuan in 2007, it said in a statement to the Hong Kong bourse yesterday.

"Though the financial crisis affected industries across the world, its impact on the oilfield industry has been minimal due to the lagging effect of the industry," said the statement.

Last year, the company purchased Awilco Offshore ASA, a Norwegian drilling company, to speed up its internationalization process. The company's overseas business experienced strong growth, with operations extending to 20 countries and regions, said the statement.

"We are optimistic about its business performance this year," said Li Qiang, analyst, Bohai Securities. "The company will still see many oilfield services orders this year."

"Due to the economic recession many oil companies will see a slowdown in demand for engineering equipment. COSL, however, is operating on long-term contracts, and they cannot be canceled or revised when oil price fluctuates," said Li.

Yuan Guangyu, vice-chairman of COSL earlier told China Daily that "no matter how the financial crisis affects the global economy, the demand for offshore services - drilling and all related value-added services - will continue".

COSL's one major client, CNOOC Ltd, is expected to spend US$6.8 billion in 2009, an increase of 19 percent compared with 2008.

COSL's Yuan said the company would continue to pursue worthy M&A targets in the global market in future, especially in "technology-intensive, high value-added areas".

Last year, COSL spent 12.7 billion kroner (US$2.3 billion) to buy Awilco Offshore ASA (AWO). Company officials said with the deal COSL could expect a relatively high growth in 2009 and 2010.

AWO's modern high-specification rigs and cutting-edge technology for offshore drilling is a good strategic fit for COSL pursuant to its globalization and growth strategies, it said.

Yuan said in 2009, the company's revenue contributions from outside China, or the degree of the company's globalization, will exceed 30 percent of its total revenue. That would make it possible for 50 percent overseas revenue in 2015.

(China Daily April 2, 2009)