Calendar An icon of a desk calendar. Cancel An icon of a circle with a diagonal line across. Caret An icon of a block arrow pointing to the right. Email An icon of a paper envelope. Facebook An icon of the Facebook "f" mark. Google An icon of the Google "G" mark. Linked In An icon of the Linked In "in" mark. Logout An icon representing logout. Profile An icon that resembles human head and shoulders. Telephone An icon of a traditional telephone receiver. Tick An icon of a tick mark. Is Public An icon of a human eye and eyelashes. Is Not Public An icon of a human eye and eyelashes with a diagonal line through it. Pause Icon A two-lined pause icon for stopping interactions. Quote Mark A opening quote mark. Quote Mark A closing quote mark. Arrow An icon of an arrow. Folder An icon of a paper folder. Breaking An icon of an exclamation mark on a circular background. Camera An icon of a digital camera. Caret An icon of a caret arrow. Clock An icon of a clock face. Close An icon of the an X shape. Close Icon An icon used to represent where to interact to collapse or dismiss a component Comment An icon of a speech bubble. Comments An icon of a speech bubble, denoting user comments. Ellipsis An icon of 3 horizontal dots. Envelope An icon of a paper envelope. Facebook An icon of a facebook f logo. Camera An icon of a digital camera. Home An icon of a house. Instagram An icon of the Instagram logo. LinkedIn An icon of the LinkedIn logo. Magnifying Glass An icon of a magnifying glass. Search Icon A magnifying glass icon that is used to represent the function of searching. Menu An icon of 3 horizontal lines. Hamburger Menu Icon An icon used to represent a collapsed menu. Next An icon of an arrow pointing to the right. Notice An explanation mark centred inside a circle. Previous An icon of an arrow pointing to the left. Rating An icon of a star. Tag An icon of a tag. Twitter An icon of the Twitter logo. Video Camera An icon of a video camera shape. Speech Bubble Icon A icon displaying a speech bubble WhatsApp An icon of the WhatsApp logo. Information An icon of an information logo. Plus A mathematical 'plus' symbol. Duration An icon indicating Time. Success Tick An icon of a green tick. Success Tick Timeout An icon of a greyed out success tick. Loading Spinner An icon of a loading spinner.

China’s CNOOC readies first deep-water flows as reserves jump

© Bloombergglengorm discovery
Signage for CNOOC Ltd in Beijing.

CNOOC, China’s third largest oil company, is expected to start production at Lingshui 17-2, a large deep-water natural gas field in the South China Sea, during the first half of 2021.

Lingshui 17-2 will be CNOOC’s first fully-owned deep-water gas project, with yearly production of 3 billion cubic meters, or about 1.6% of China’s total domestic gas production.

“Deepwater exploration remains the key area to us in the future, and we have discovered medium-sized oil and gas deposits in Lingshui and Wenchang areas,” Xu Keqiang, chief executive of CNOOC, told a media yesterday after announcing the latest financials.

The state-backed company reported that oil and gas reserves were up 4% year-on-year to 5.37 billion barrels of oil equivalent with a reserves replacement ratio of 136%. Reserves life was 10.2 years which is unchanged from 2019. CNOOC targets 120 reserve replacement ratio for 2021.

CNOOC continues to target 7% yearly production growth over the next three years. Capital expenditure for 2020 was RMB79.5 billion ($12.15 billion) with 2021 guidance of RMB90 billion to 100 billion unchanged. This will be the highest level since 2014, bucking the industry trend.

The company said that output will expand from 528 million barrels of oil equivalent (MMboe) in 2020 to 645 MMboe by 2023. CNOOC reiterated guidance of 2 MMboe/d by 2025.

CNOOC aims to boost the share of natural gas to make up 35% of its total output by 2025, from about 21% currently, and to 50% by 2035, as a contribution to Beijing’s climate change pledge.

CNOOC is also targeting to increase investment in offshore wind development, to more than 5% of yearly capital spending from previous guidance of 3-5%, in order to seize more offshore wind resources, said Xu.

Analysts at investment house Bernstein said that CNOOC’s balance sheet remains strong allowing the company to boost investments in green energy and support a competitive dividend.

Bernstein said there remains a fundamental mismatch between CNOOC’s exceptional performance and market valuation. “We continue to have a high conviction on company outlook,” they said in a note.

CNOOC reported 2020 net profit of RMB25 billion, down 59% year-on-year, which was in line with consensus estimates due to the global pandemic.

Recommended for you

More from Energy Voice

Latest Posts