We own and operate the largest and the most comprehensive fleet of 70 marine support vessels, 5 oil tankers and 5 chemical tankers. Our fleet of vessels mainly transports materials, supplies and personnel to offshore facilities of exploration and production, safeguards facilities, moves and positions drilling structures, as well as tows and handles anchors for barges. It also ships crude oil and oil products.

In view of the bullish environment of the global oilfield service industry, COSL adopted a range of measures to ease the shortage in vessel equipments so as to further enhance the capability of vessel equipments and fully capitalize the business opportunities. Also, we have recently kicked off the construction of 18 multi-purpose marine support vessels. The service capability is expected to be further strengthened. In 2006, turnover of marine support & transportation services was RMB1, 042 million, posting an year-on-year increase of 20.2%.

In 2006, we also established a joint venture with Trico Marine Services, Inc. in the U.S. The joint venture, Eastern Marine Services Limited provides services for offshore oil and gas exploration, production and related construction and pipeline projects mainly in Southeast Asia; the Company’s targeted overseas market. Through provision of diversified and excellent oilfield services in the extensive Southeast Asia offshore markets, the position of COSL was further consolidated.

Marine Support Vessels

As at 31 March 2007, we owned and operated an offshore vessel fleet consisting of 70 marine support vessels, 5 oil tankers and 1 chemical tanker. The vessels mainly operate in offshore China while some also operates in other regions. Our fleet of marine support vessels mainly transports materials, supplies and personnel to offshore facilities of exploration and production, safeguards facilities, moves and positions drilling structures, as well as tows and handles anchors for offshore construction barges. Our oil tankers transport crude oil and refined products. Chemical tanker is responsible for shipping liquid chemical products.