CNOOC Production Rises, Revenue Falls

CNOOC Limited revealed a year on year production increase, and revenue loss, in its financial results for the third quarter of 2015.

The company achieved a total net production of 127.5 million barrels of oil equivalent during 3Q 2015, representing an increase of 23.8 percent compared to 3Q 2014. Net production from offshore China reached 83.3 million barrels of oil equivalent, a 28.2 percent year on year increase, primarily due to the production contribution from newly commenced projects in Bohai and the Eastern South China Sea. Net production from overseas rose 16.5 percent year on year to 44.3 million barrels of oil equivalent, partly due to new production from the Golden Eagle project in the UK North Sea.

During 3Q 2015, CNOOC made a total of three new discoveries and drilled fourteen appraisal wells offshore China. The Caofeidian 6-4 structure was successfully appraised and proved to be a mid-sized oilfield, which represents a significant breakthrough after several years of oil and gas exploration in western Bohai, and the new Liuhua 21-2 discovery demonstrated the exploration potential of Baiyun Sag in the Pearl River Mouth basin, according to the company.

The unaudited oil and gas sales revenue of CNOOC in 3Q 2015 reached approximately RMB 36.25 billion ($5.70 billion), representing a decline of 32.3 percent year on year. The decrease was largely due to the company’s average realized oil price decline of 50.7 percent year on year to $48.84 per barrel and the average realized natural gas price decline of 3.0 percent year on year to $6.41 per thousand cubic feet.

Facing a low oil price environment, CNOOC has continued to lower costs and enhance efficiency, in addition to reducing its full-year capital expenditure. During the period, the company reduced its capex by 44.0 percent year on year to approximately RMB 14.75 billion ($2.31 billion).

Li Fanrong, CEO of CNOOC, commented in a company statement:

“In the third quarter, the company made smooth progress in overall business, including exploration, development and production. Our cost controls and enhanced efficiency measures were executed effectively and achieved remarkable results as we aimed to proactively respond to the impact of low oil prices. Meanwhile, we are confident that we will achieve our production and operation targets for the year.”

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