CNOOC to Boost Output 18% Over 3 Years; Vows Cost Cuts
HONG KONG, March 27 (Reuters) – China's top offshore oil producer CNOOC Ltd said on Friday it aims to boost output by 18 percent over the next three years, after reporting stronger-than-expected 2014 profit on cost cuts and higher production.
CNOOC, China's third largest oil company, plans to boost output to 513 million barrels of oil equivalent (BOE) in 2017, up more than 18 percent from 2014, chief financial officer Zhong Hua told reporters at its results briefing.
But cost cuts will also be a top priority as it braces for long-term oil price weakness. Last month, CNOOC said it planned to slash 2015 capital spending by 26-35 percent to 70 billion-80 billion yuan, while still trying to raise output by up to 15 percent to 495 million BOE.
"The company... has sensed the pinch of the 'cold winter'," CNOOC's chairman Wang Yilin said in the firm's earnings filing. "In 2015, we may face even more severe environment for our exploration and development."
CNOOC on Friday reported net profit of 60.2 billion yuan ($9.69 billion) for last year, up 6.5 percent year on year, as cost cuts, lower tax payment and higher output helped offset the slide in global oil prices. That beat a consensus forecast of 52.3 billion yuan from 23 analysts polled by Thomson Reuters.
The clampdown on CNOOC's costs echoes moves by Chinese oil majors PetroChina and Sinopec Corp. Oil prices have skidded about 50 percent since June, and a government-led probe into graft in the state sector has added to pressure to rein in spending.
Earlier this month, Calgary-based producer Nexen, which CNOOC acquired for $15.1 billion in cash in 2013, said it will cut about 400 jobs in North America and Britain in response to plunging oil prices.
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