CNOOC Limited announced Tuesday in its latest business strategy and development plan that it will cut its capital expenditure (CAPEX) to RMB 60 billion ($9.1 billion) in 2016.
The reduction marks a significant decrease from the CAPEX set out in the company’s previous business strategy plan, which outlined a range of between RMB 70-80 billion ($10.6-$12.1 billion) for 2015. CNOOC’s net production target has also been cut from 475-495 million barrels of oil equivalent to 470-485 MMboe, although the target for 2018 will increase to 502 MMboe.
Within the year, CNOOC plans to drill around 115 exploration wells and acquire approximately 6,000 miles of 2D seismic data and 5,400 square miles of 3D seismic data. Four new projects are expected to come on-stream this year, including the Kenli 10-4, Panyu 11-5, Weizhou 6-9/6-10 and Enping 18-1 assets. Currently, nearly 20 projects are under construction, according to a CNOOC statement.
Zhong Hua, chief financial officer of CNOOC, commented in a company statement:
“In response to the continued challenge posed by low oil prices, we will maintain prudent financial policy and further strengthen cost-control measures in order to make steady progress in the overall business, including exploration, development and production.”
Li Fanrong, CEO of CNOOC, said in a company release:
“Faced with an increasingly complicated operating environment in 2016, the company will fully utilize market mechanisms and combine innovations in technology and management in order to reduce costs and enhance efficiency. In addition, the company will ensure an appropriate balance between short-term returns and long-term growth to promote a steady and healthy development.”
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