CNOOC's budget net production volume offshore China in 2005 is approximately 141-146 million BOE (barrels of oil equivalent), approximately a 19% yoy increase over budget of 118-123 million BOE in 2004. Its Indonesian unit is expected to report a net entitlement volume of approximately 19 million BOE (at WTI US$27.4/bbl).
Year 2005 will be a significant year in CNOOC's production growth. Sixteen development projects are expected to come on stream between 2005 and 2006, of which nine are expected to be completed in 2005, the most planned for completion in a certain year ever in the Company's history. The Company's 2005 capital budget supports the growth as the development capital expenditure is budgeted at approximately US$2200 million, a 33% yoy increase. The exploration budget is expected to remain at the level of approximately US$260 million. The exploration program will focus on new exploration plays, including deepwater prospects offshore China, targeting to achieve a reserve replacement ratio of approximately 150%.
CNOOC is committed to maintain its all-in production costs in the top quartile among global peers albeit recent global trend of increasing upstream cost and ''over-heating" of the Chinese economy. ''We will continue to maintain our competitive cost structure and take all necessary measures to ease the upward pressure,'' commented Yang Hua, the CFO and Senior Vice President of the Company.
The Company will further implement its natural gas strategy and be the leading gas supplier in coastal China. Expected completion of acquisition of Gorgon equity interests, together with the Tangguh acquisition and the NWS acquisition, will further secure LNG supply with natural gas production increase. CNOOC's grip on China's pioneer LNG projects could further strengthen the Company's leadership in LNG imports and its dominance in coastal China natural gas market.
"CNOOC Limited's sustainable growth platform remains stable. We will continue to focus on production and reserves growth, maintaining competitive cost structure, and implementing our natural gas strategy. The management continues to be confident of the growing future of the company," commented Mr. Fu Chengyu, Chairman and Chief Executive Officer of the Company.
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