China National Offshore Oil Corporation (CNOOC) is the third-largest national oil company in China, after CNPC (parent of PetroChina), and China Petrochemical Corporation (parent of Sinopec). It focuses on exploration and development of crude oil and natural gas offshore of China. CNOOC Group is owned by the government, and its subsidiary, CNOOC Ltd is listed in Hong Kong. Another subsidiary, China Oilfield Services, is listed in Hong Kong and New York. In July 2012, CNOOC announced an agreement to acquire Nexen, a Canadian oil and gas company, for approximately US$15.1 billion.
CNOOC boosts oil output off southern coast to reach target
Mainland giant remains confident of achieving the 2011-15 average growth targets by raising production in waters off its southern coast
CNOOC, China's biggest offshore energy explorer, is expanding oil production in waters off its southern coast to reach a target missed since 2011.
CNOOC was developing new projects based on findings near the island of Weizhou, 80 nautical miles east of the border with Vietnam, said Liao Hongyue, director of the Weizhou Island Terminal. It was also enhancing current projects, he said.
"I'm positive more production should be possible out of this site once some of the programmes under way begin to produce results," Liao told reporters visiting the terminal on Tuesday.
The Weizhou rigs produce 45,700 barrels of oil equivalent a day, about 4 per cent of the Beijing-based company's global output. CNOOC produced 412 million barrels of oil equivalent in 2013, including 61 million barrels that came from Canadian unit Nexen.
Weizhou is CNOOC's biggest oil producer in the western part of the South China Sea, one of four major oil- and gas-producing areas off the shores of China. The company started a new project in the Weizhou area last year, increasing the number of operational oilfields to four.
Rigs WZ11-4, WZ11-1, WZ12-1 and WZ6-12 produce mostly crude oil. CNOOC, which started WZ6-12 last year, has announced a new finding in an area called Weizhou 12-11.
Last month, CNOOC's state-owned parent China National Offshore Oil Corp placed an oil rig near the disputed Paracel Islands off the coast of Vietnam, leading to confrontations between Vietnamese and Chinese boats. The move set off violent anti-China protests in Vietnam and prompted China to evacuate thousands of its citizens.
The dispute comes amid rising tensions between China and its Asian neighbours, who are pushing back against Chinese efforts to exploit resources in disputed maritime areas.
While the Weizhou projects bordered Vietnam, they were well within China's territory and had never caused any sovereignty disputes in the past, Liao said.
CNOOC's Zhanjiang unit, which runs the Weizhou projects, plans to increase oil and gas output in the western part of the South China Sea to 260,000 barrels of oil equivalent a day by 2015, and 350,000 barrels by 2020, according to presentation materials from Weizhou projects. The company did not provide current production numbers.
CNOOC has failed to achieve the 6 to 10 per cent growth target since 2011 as production at its ageing offshore oilfields in China slowed. Chief executive Li Fanrong said the company could still achieve the 2011-15 average growth targets by delivering higher growth this year and next.
Weizhou produces mostly crude and a limited quantity of gas as a byproduct. Production from the island counts for 4 per cent of CNOOC's global total and 60 per cent of crude produced out of the western South China Sea, based on numbers provided by the company.
CNOOC has four oil- and gas-producing areas in China, including Bohai Bay, East China Sea, eastern South China Sea and western South China Sea. The western South China Sea area shares its maritime border with Vietnam.