CNOOC to Drill 227 Exploration Wells in 2020

Chinese oil company CNOOC plans to drill 227 exploration wells in 2020 and has set aside up to around $13,8 billion for capital expenditures, CNOOC's highest annual Capex since 2014, according to Reuters.

CNOOC said Monday that its targeted net production for 2020 is 520 million to 530 million barrels of oil equivalent (BOE). Around 64 percent of production is expected to come from China and the remaining 36 percent from its international assets.

The company’s net production for 2019 is expected to be approximately 503 million BOE. CNOOC's net production for 2021 and 2022 are estimated to be around 555 million BOE and 590 million BOE, respectively.

The company’s total capital expenditure for 2020 is budgeted at RMB85 billion to RMB95 billion ($12.34 billion to $13.79 billion). Last year's CAPEX was set between RMB70.0 billion to RMB80.0 billion

The capital expenditures for exploration, development, production, and others will account for approximately 20%, 58%, 20% and 2% of the total capital expenditure, respectively.

In 2020, the CNOOC plans to drill 227 exploration wells and collect approximately 27 thousand square kilometers 3D seismic data. For reference, the company's 2019 plan was to drill 173 exploration wells.

In 2020, several new projects are expected to come on stream. These are Penglai 19-3 oil field block 4 adjustment/Penglai19-9 oil field phase II, Qinhuangdao 33-1 South oil field phase I, Bozhong 19-6 gas field pilot area development project, Luda 16-3/21-2 joint development project, Nanbao 35-2 oil filed S1 area, Jinzhou 25-1 oil field 6/11 area, Liuhua 29-1 gas field development project and Liuhua 16-2 oil field/20-2 oil field joint development project in offshore China. Worth noting, Liza oil field phase 1 in Guyana, originally scheduled for start-up in early 2020, came on stream ahead of schedule in December 2019.

Xu Keqiang, CEO and the President of CNOOC, said,  “In 2020, the Company will steadily increase its oil and gas reserves and production, pursue profitable reserves and production, lay a solid foundation for high-quality development through technology innovations and management enhancement, and create excellent returns for our shareholders.

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