CNOOC's target net production volume in 2002 is 125 - 130 million BOE (barrels of oil equivalent). The volume growth continue to be achieved primarily through the development of its proved undeveloped reserves offshore China. Three major development projects will be on stream in year 2002. The announced acquisition of Asia producing assets provides additional production growth otherwise inaccessible to the company. The acquired offshore oil and gas assets tap CNOOC's offshore operating expertise, establish a strong foothold in the region's known hydrocarbon province and afford shareholders immediate earning accretion.
Natural gas (including LNG) will continue to be one of CNOOC's core business priorities. CNOOC is in the best position to capitalize on the growing demand for natural gas in China, especially in the coastal regions. CNOOC will continue its strategy in natural gas exploration and production, LNG projects and other selected natural gas investments.
The Company's total capital expenditure in 2002 amounts to US$1500 -- 1650 million. In addition to US$585 million acquisition expenditure, capital expenditures are expected to total US$900 -- 1050 million offshore China in 2002. CNOOC will spend US$650 - 720 million for development projects and US$180 - 220 million for independent exploration offshore China. Foreign PSC partners are expected to invest additional US$300 million in exploration offshore China, a 150% increase over 2001. Expected capital expenditures for the newly acquired Indonesian unit will be approximately US$40 - 50 million, 90% of which will be for development projects. The capital plan excluding the acquisition represents an estimated 30 -- 50% increase over the last year.
CNOOC will continue to maximize profitability by maintaining financial prudence, improving management system and preserving competitive cost structure. "For 2002, our focus will continue to maintain the historical average of below US$10 per BOE for offshore China assets and improve upon historical averages for the Indonesia Unit," said Mark Qiu, Chief Financial Officer and Senior Vice President.
"It is an aggressive expansion plan. We have a full investment pipeline to deploy capital economically even under a conservative oil prices environment," commented Mr. Fu Chengyu, COO and President of the Company. "We will focus on smooth execution and performance."
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