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China's CNOOC on Track to Hit Oil, Gas Output Target

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China's CNOOC on Track to Hit Oil, Gas Output Target

Reuters

HONG KONG, Aug 20 (Reuters) - China's top offshore oil explorer CNOOC Ltd, which acquired Canadian energy firm Nexen for $15.1 billion in February, said it is on track to meet its 2013 output target after posting a first-half profit that beat analyst estimates.

CNOOC, once an investor darling for its high-growth profile, has been struggling to boost its output in the past few years as domestic fields age. The firm has spent heavily on more advanced technology to drill in deep-sea areas off the Chinese coast, expanded into unconventional energy such as oil sands and shale in North America, and acquired assets including Nexen - the biggest ever overseas corporate takeover by a Chinese company.

State-controlled CNOOC said previously it aimed to produce 338 million-348 million barrels of oil equivalent (boe) this year, excluding Nexen's contribution, or growth of just up to 2 percent from 2012. First-half output rose 7.7 percent on year to 173.3 million boe, not including Nexen's production, according to a filing with the Hong Kong stock exchange on Tuesday.

"We maintain our original production forecast," CNOOC's Chief Executive Li Fanrong told reporters at the firm's earnings briefing, adding that the company is keeping its original output target of 6 to 10 percent compound annual growth in 2011-2015, excluding contributions from Nexen.

In the filing released after the market close, CNOOC said first-half net profit gained 7.9 percent to 34.38 billion yuan ($5.61 billion) as increased output offset lower crude prices and higher operating costs. That topped the average forecast of 30.87 billion yuan in a Reuters poll of four analysts.

Nexen contributed 197 million yuan to CNOOC's net profit and 24.8 million boe to the firm's output.

For the whole of this year, Nexen is expected to contribute 59 million boe to CNOOC's output, Chief Financial Officer Zhong Hua said at the briefing.


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