Beijing: CNOOC Ltd, China’s biggest offshore oil and gas explorer, reported a 31 per cent decline in revenue and an increase in output amid a crash in crude prices.
Oil and gas sales dropped to 24.6 billion yuan ($3.8 billion) in the three months ended March 31, the Beijing-based company said in a statement to the Hong Kong stock exchange Thursday. CNOOC, which gets almost all of its income from oil and gas production, doesn’t report quarterly profit. Output rose 5 per cent, while capital spending was cut by 39 per cent.
“CNOOC looks on track to meet its 2016 output target, with domestic production contributing 66 per cent of the total,” said Lu Wang, a Bloomberg Intelligence analyst in Hong Kong. “The company may underspend its full year capex budget if low oil prices persist.”
Output rose to 124.3 million barrels of oil equivalent from a year earlier, according to the statement. Capital spending during the period dropped to 9.7 billion yuan.
CNOOC’s average realised oil price fell 39 per cent to $32.54 a barrel in the first quarter. Its realised gas price fell 15 per cent to $5.69 per thousand cubic feet. Brent oil, the global benchmark, averaged about $35 a barrel in the first quarter, from about $55 a year ago. Prices hit a 12-year low in January.
New Projects
The company started two new projects during the quarter — Kenli 10-4 in Bohai Bay and Panyu 11-5 in the South China Sea — and it made three new discoveries in China. It also drilled four successful appraisal wells in the country and one each in Algeria, Gabon and Brazil.
CNOOC’s annual production overtook China Petroleum & Chemical Corp. in 2015 to become the country’s second-biggest oil and gas producer as the offshore explorer pumped about 496 million barrels of oil equivalent, compared with its state-owned peer’s 472 million barrels. CNOOC’s output may slip to 470 million to 485 million barrels this year as the company takes measures to control operational costs.
