Cnooc Ltd.
, China’s biggest offshore oil
explorer, aims to increase oil and gas production by as much as 28 percent this
year as demand for fuel rises in the world’s fastest-growing major economy.
The Hong
Kong-listed company plans to produce between 275 million and 290 million
barrels of oil equivalent, Cnooc said in its strategy report today. China
continues to be the company’s main production base, President
Yang Hua
told reporters.
China
processed a record 374.6 million metric tons of crude oil last year, or 7.5
million barrels a day, as manufacturing rebounded with a recovering global
economy. Cnooc’s output of crude oil and natural gas reached between 226
million and 228 million barrels last year, the company estimated.
“That’s a
staggering production forecast after a stand-out 2009,”
David Hewitt
, an energy analyst at CLSA Asia
Pacific Markets, said in an e-mail. “Cnooc management is delivering on a global
scale.”
Cnooc’s
2010 production targets are based on a crude-oil price forecast of $75 a
barrel. Capital expenditure may rise 29.5 percent to $7.93 billion this year,
the company said.
The oil and
gas producer may spend $1.47 billion on exploration, $4.81 billion on
development and $1.5 billion on production, according to Cnooc.
“While the
operating cost for the energy sector keeps climbing up, we will continue to
implement our low-cost strategy to make a balance between achieving higher
production growth and maintaining competitive cost advantage,” Yang said.
Cnooc
has gained 70 percent in Hong Kong
trading in the past year, outpacing the 58 percent increase in the benchmark
Hang Seng Index. The stock rose 1.1 percent to end at HK$11.26 today, before
the release of the strategic report.
New
Projects
The year
2010 will be “a splendid year for the company, especially for our production
growth,” Yang said in a statement. Cnooc put up a good performance last year,
which was difficult because of inclement weather and a slower economy, he said.
The company
plans to start operating nine new projects off the Chinese coast this year to
support production growth in 2010, the oil and gas producer said. Cnooc said it
is targeting a reserve replacement ratio of more than 100 percent this year.
Most of
Cnooc’s oil and gas is produced off the country’s coast and this will remain
the focus of the company’s efforts to increase production, Chairman
Fu Chengyu
said on Aug. 27.
“The growth
in China’s oil demand this year will outpace last year, benefiting producers,”
Yin Xiaodong
, an oil analyst with Beijing-based
Citic Securities Co., said by telephone.
Overseas
Forays
Cnooc is
keen to develop overseas resources even as the company faces many difficulties
in its investments outside China, President Yang said at a media briefing in
Hong Kong today, declining to give details.
The company, which agreed to buy exploration licenses in the
U.S. Gulf of Mexico from Statoil ASA last year, is driven more by value than by
location in its drive to acquire overseas assets, he said.
“Mexico could be good value, that is why we are pursuing
it,” he said. “The area we are pursuing in the Gulf of Mexico is very
promising.”
The Chinese
energy explorer also has oil and gas interests in Indonesia, Nigeria,
Australia, Kenya and Equatorial Guinea, according to the company’s 2008
annual report
.
Cnooc’s
parent, China National Offshore Oil Corp., is keen to team up with
Tullow Oil Plc
to develop Uganda’s energy resources, the
nation’s president’s office said on Jan. 26.
China
National is also among companies in talks to acquire 16 production licenses in
Nigeria, the country’s presidential office said on Sept. 29.