Oil producer's income up 16pc year on year, profit growth slower

PUBLISHED : Saturday, 26 October, 2002, 12:00am
UPDATED : Saturday, 26 October, 2002, 12:00am

CNOOC - China's dominant offshore oil producer - reported a 16 per cent year-on-year rise in revenues to 16.77 billion yuan (about HK$15.8 billion) in the first nine months of the year.

However, a 10.3 per cent fall in the realised oil price to US$22.82 per barrel implied a smaller rise in profit.

Chief financial officer Mark Qiu Zilei said the company recorded a net profit of more than US$700 million, but did not reveal the exact figure.

A year-on-year nine-month profit comparison is not available as the company is not required under local listing rules to disclose quarterly results.

Crude oil sales revenues rose 16.5 per cent year on year to 14.73 billion yuan in the nine months, as natural gas revenues increased 34.5 per cent to 1.69 billion yuan.

The volume of oil sold rose 26.5 per cent and that of gas climbed 31.8 per cent, making an overall oil and gas volume growth of 27.4 per cent.

Mr Qiu said the company was confident it would outperform the 125 to 130 million barrels of oil equivalent (boe) of oil and gas to be sold for the whole of this year, partly due to the better than expected performance of its newly acquired Indonesian assets.

The company has made three acquisitions this year, paying US$585 million for 185 million boe of proved oil reserve from various Indonesian oil fields in January, US$320 million for 210 million boe of gas reserve in Australia's North West Shelf in August, and about US$275 million for 1.8 trillion cubic feet of estimated gas reserve in Indonesia's Tangguh gas project last month.

Bloomberg in Jakarta yesterday quoted Rachmat Sudibyo, head of Indonesia's oil and gas regulatory body, as saying the BP-led Tangguh project would sell gas at about US$2.40 per million British thermal units, or 26 per cent lower than what was currently paid by Japan.

Japan is the world's biggest gas buyer and the biggest buyer from Tangguh.

The news raised concerns whether Tangguh's profitability might be affected, amid an increase in the region's gas supply and slowing demand from Japan.

Mr Qiu did not confirm or deny the report, but played down the concerns by saying he believed a lower gas price would help mobilise the vast and untapped gas reserve of Tangguh by stimulating demand.

He also believed BP 'would not get involved in loss-making projects'.

Mr Qiu cited BP's high-profile retreat from participating in the PetroChina-led mega west-to-east gas pipeline project, despite the allure of the fast-growing Chinese energy market, as evidence of the British oil giant's caution.