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Energy

CNOOC to hit high end of annual output target, says finance chief

China’s dominant offshore oil and gas producer reports 15.5 per cent third quarter revenue growth

PUBLISHED : Thursday, 26 October, 2017, 7:30am
UPDATED : Thursday, 26 October, 2017, 7:30am

Energy giant CNOOC is confident of reaching the high end of its annual output target while containing its project spending at the low end of its budget, its finance chief said after reporting a 15.5 per cent third quarter revenue growth.

China’s dominant offshore oil and gas producer recorded total revenue of 37.25 billion yuan (US$5.61 million) for the three months to September 30, up from 32.26 billion yuan in same period last year, it said in a filing to Hong Kong’s stock exchange.

It was driven entirely by a 20.4 per cent year on year jump in the average crude oil selling price to US$50.87 a barrel, while that of natural gas surged 15.9 per cent to US$6.05 per thousand cubic feet.

For the year’s first nine months, revenue grew 29.5 per cent year on year to 116 billion yuan, even as oil and gas output slid 1.4 per cent to 354.1 million barrels of oil equivalent (boe).

The output amounted to 77 to 79 per cent of its full year target.

Chief financial officer Xie Weizhi said while the firm’s output came ahead of its budgeted progress, it has not adjusted its target to produce oil and gas equivalent to between 450 million to 460 million boe for the whole of this year.

Based on current progress, we are confident of being able to reach the high end of our annual output target
Xie Weizhi, CNOOC’s chief financial officer

This was due to uncertainties such as the number of typhoons hitting the South China Sea before the year end, and uncertainty whether some closed fields will resume production later this year or early next year.

“Based on current progress, we are confident of being able to reach the high end of our annual output target,” Xie told reporters via teleconference.

While CNOOC’s expenditure on projects for the nine months amounted to 33.2 billion yuan, roughly half its annual budget, he said it expects the full year total to come in at the lower end of its 60 billion to 70 billion yuan budget.

“With over 20 projects in the pipeline both domestically and internationally, we are convinced 2018 will mark the start of a multiyear growth cycle,” Sanford Bernstein senior analyst Neil Beveridge wrote in a note after the third quarter results.

CNOOC shares closed 2.5 per cent higher on Wednesday at HK$10.16, ahead of the results’ announcement. They have risen 4.7 per cent year to date, compared to the Hang Seng Index’s 28.6 per cent gain.

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