CNOOC 2016 profit down 97%

China

BEIJING, March 23, 2017 – China’s CNOOC posted its worst annual report in years on Thursday, with revenue for 2016 down 17% and profit, at USD 92.3 million, just a small fraction of the USD 2.93-billion profit in 2015.

Company officials said they had made the best out of a challenging environment.

“In 2016, the company has maintained a strong cost competitiveness despite low oil prices and sluggish global economic growth,” said in a statement CEO Yang Hua. “The company unrelentingly pursued a management concept centered around cost control and improved efficiency, maintained prudent financial policies, and realized sound and steady growth in every business.”

CNOOC made an average of USD 41.40 per barrel of oil last year, almost 20% less than in 2015, though it also managed to reduce its production costs by some 13% to USD 34.67 per barrel. Capex, at CNY 49 billion (USD 7.1 billion) was down 26% year-on-year, contributing to a drop in output of about 3.8% to 477 million boe last year, or roughly 1.3 million boepd.

Though five new projects are expected to come on stream this year, with the company planning to drill 126 new exploration wells, production targets for 2017 project a further decline to between 450 million boe and 460 million boe, followed by small incremental increases of about 5 million boe per year through 2019.

“In 2017, we will balance both short-term and mid to long-term development, pursue quality growth, increase profitability-oriented production volume in order to bring better return for our investors,” Hua added in a separate statement.