CNOOC 1H Profit Slumps on Virus-hit Demand, Low Oil Prices

Wednesday, August 19, 2020

China's national offshore oil and gas producer CNOOC Ltd said first-half profit slumped by nearly two-thirds to the lowest since December 2017, as the coronavirus pandemic battered energy demand and sent oil prices to historical lows.

The listed arm of state-owned China National Offshore Oil Corp said on Wednesday net profit totaled 10.38 billion yuan ($1.50 billion), missing analysts' forecasts for 12.6 billion yuan.

"Low oil prices coupled with the COVID-19 pandemic had a great impact on the production and operation of the company", Chairman Wang Dongjin said in the results statement.

Revenue shrank 32% as realized oil prices fell 40% to $38.7 per barrel.

Net production of oil and gas rose 6.1% year-on-year to 257.9 million barrels of oil equivalent (boe) to record high, with domestic production up 11.5% while output overseas fell 3.5%.

One of the world's most cost-efficient producers, CNOOC cut its all-in production cost to $25.72 per barrel, 11% below the year-earlier level.

Despite its vow to cut capital spending, the firm's expenditures rose 5.6% in the first six months to 35.6 billion yuan.

The company expected second-half earnings to improve, with oil recovering to nearly $45 a barrel due to supply cuts by the Organization of the Petroleum Exporting Countries and its allies as well as output declines in the United States.

New production would come from oilfields in the Bohai Bay area off north China. But the company is delaying phase two of the Buzzard projects in the North Sea to 2021 from 2020.

It also expects gas from coalbed methane subsidiary to reach 2.5-3 billion cubic meters (bcm) in 2020 and further expand to 6 bcm in 2025. That would push gas to make up 30% of the total output from the current 19%.

CNOOC Ltd's Hong Kong-listed shares have lost 30% so far this year, compared to a 10% fall in the broader Hang Seng Index.

($1 = 6.9051 Chinese yuan renminbi)

(Reporting by Chen Aizhu in Singapore and Muyu Xu in Beijing; Editing by Kim Coghill and David Evans)

Categories: Energy Activity Production Asia China

Related Stories

CNOOC Puts Into Production New Oil Field in South China Sea

Pakistan’s OGDC to Start Production at ADNOC’s Offshore Block by 2027

CNOOC Starts Production at Two New Oil and Gas Projects

All Gas from Conrad’s Mako Field to be Sold to Indonesia’s PLN

Six New Gas Wells in Line for BP’s Shah Deniz Field in Caspian Sea

CNOOC Starts Production at Offshore Oil Filed Equipped with CCUS Tech

Abu Dhabi's NMDC Group Gets $1.1B Subsea Gas Pipeline Job in Taiwan

ADES’ Fourth Suspended Jack-Up Rig Gets Work Offshore Thailand

Saipem’s Castorone Vessel on Its Way to Türkiye’s Largest Gas Field

Vestas Lands First 15MW Offshore Wind Turbine Order in Asia Pacific

Current News

China's ENN, Zhenhua Oil Ink LNG Supply Deals with ADNOC

MODEC Wins ExxonMobil Guyana’s Hammerhead FPSO Contract

Mitigate SCC & HE to Keep Offshore Metal Structures Ship Shape

India Stretches Bids Deadline for 13 Offshore Deep-Sea Mineral Blocks

Indonesia Awards Oil and Gas Blocks to Boost Reserves

Sapura Energy Nets $22.6M in Offshore Support Vessel Contracts

CNOOC Puts Into Production New Oil Field in South China Sea

Sunda Energy Starts Environmental Consultation for Chuditch-2 Well Drilling Plans

Pakistan’s OGDC to Start Production at ADNOC’s Offshore Block by 2027

Petrovietnam, Petronas Extend PSC for Offshore Block

Subscribe for AOG Digital E‑News

AOG Digital E-News is the subsea industry's largest circulation and most authoritative ENews Service, delivered to your Email three times per week

https://accounts.newwavemedia.com