CNOOC THE MAINLAND'S DOMINANT offshore oil producer, CNOOC, plans to produce 19 per cent more oil and gas this year, but has projected output growth for the next five years will decline slightly. Chairman Fu Chengyu said the firm expected offshore oil and gas output to be 141 million to 146 million barrels of oil equivalent (boe) this year, up from a target of 118 million to 123 million boe for last year. The forecast 2005 to 2010 compound annual output growth rate has been pared from between 8 per cent and 12 per cent to between 7 per cent and 11 per cent because of unforeseen production and geological difficulties. Mr Fu said the adjustment was primarily the result of a delay in the first phase of development in a joint-venture oil project in Bohai Bay, in northeast China, with United States-based ConocoPhillips. Trial drilling found the field's conditions to be more 'complex' than originally thought. CNOOC plans to raise expenditure on oil and gasfield development by 33 per cent to US$2.2 billion this year, while its budget for exploration will remain at US$260 million. The development spending will facilitate the opening of nine fields this year and seven next year. Mr Fu said CNOOC expected to complete negotiations on the purchase of a 12.5 per cent stake in Western Australia's offshore Gorgon gasfield this year, a deal the company had said was a possibility last year. The Gorgon project is seen as a front-runner among international gasfields to supply liquefied natural gas to CNOOC's parent, China National Offshore Oil Corp in Zhejiang province. Mr Fu, also president of China National, said the development of the mainland's natural gas market was happening faster than expected because of sharp rises in the price of crude oil and coal alternatives.