CNOOC suffering profits slide on lower prices

China National Offshore Oil Corp (CNOOC) expects its net profit to tumble at least 30 per cent this year due to the fall in international oil prices, vice-president Wei Liucheng said.

Mr Wei also said the company, with a monopoly of off-shore oil exploration and development, was in no hurry to go public amid the slump in oil prices and stock markets.

'The stock market is so bad and the international oil price so low. Why should we hurry to get listed now?' he said.

Vice-president Chen Bingqian said last year the company would want to float in Hong Kong this year and sources close to the company had said the company was seeking a red-chip listing.

Mr Wei said: 'We haven't started preparing for the listing. Nor have we started restructuring [for listing purpose].' The company had not appointed financial advisers or sponsors for the listing.

Contrary to suggestions the company would lose as much as two billion yuan (about HK$1.86 billion) this year, Mr Wei said the company would be profitable and would be able to meet its production target of 16 million tonnes of crude.

'I don't think we will slip into the red this year. We still earned 200 million yuan in the first quarter, when world prices were at their lowest level,' he said.

'We will definitely make less profit this year. We predict we may earn at least one billion yuan less this year.' The company, which accounted for about 10 per cent of domestic crude output, made net profit of 3.2 billion yuan last year.

CNOOC sells its oil based on international prices, which tumbled from US$20 a barrel last year to about $13 this year.

The company posted a 5.5 per cent year-on-year decline in production to 5.57 million tonnes of crude in the first four months.

Mr Wei said production had been normal but foreign partners preferred to sell less when prices were low, he said.

If the company kept producing the same amount in the following months, it could achieve production of 16 million tonnes, Mr Wei said.