CNOOC, the nation's dominant offshore energy producer, warned of rising pressure on its bottom line as increased production costs and taxes ate into earnings from higher oil prices last year.
The company said yesterday net earnings last year rose 1.07 per cent to 31.26 billion yuan (HK$34.65 billion) from 30.93 billion yuan in 2006. That was in line with the 31.16 billion yuan average estimate of 25 analysts polled by Thomson Financial.
Turnover grew 2 per cent to 90.72 billion yuan.
Operating margin fell to 45.4 per cent from 48.4 per cent as the cost to lift a barrel of oil rose 12.2 per cent to US$16.37.
CNOOC is still better placed than many of its global peers, which face product cost increases of between 10 and 40 per cent because of rising labour and raw material prices.
Gordon Kwan, CLSA's head of China energy research, said CNOOC was helped by its relatively young oil and gas fields and its sharing of development costs with overseas partners in some projects.
Still, rising costs have offset the benefit of a 2.6 per cent jump in oil and gas output to 171 million barrels of oil equivalent, a 12.5 per cent increase in average oil selling prices to US$66.26 a barrel, and an 8.7 per cent gain in gas selling prices to US$3.30 per 1,000 cubic feet.