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Chinese oil major CNOOC flags increased expenditure in 2020

By Hugh Wilson

State-owned oil and gas company increases investment in exploration, development and renewables

Chinese oil and gas major CNOOC will increase production by between 17 and 27 million barrels of oil equivalent (BOE) in 2020, the company said in a strategy update.

At the same time, the state-owned business will increase capital spending to the highest level since 2014 as it plans a busy year of exploration and development.

Production will rise from 503 million BOE in 2019 to between 520 and 530 million BOE this year. Capital expenditure will jump from $11.6bn (£8.9bn, €10.4bn) to between $12.3bn and $13.8bn.

Most of the money will be spent on exploration and development, with CNOOC intending to drill 227 exploration wells and collect approximately 27,000 sq km of 3D seismic data in the next 12 months.

Ten new projects are expected to come on stream during 2020, eight of which will be in China, one in Guyana and one in the UK. The company also plans an increased focus on cleaner fuels and renewables, and especially offshore wind.

CNOOC is one of the industry’s lowest-cost producers and posted record low production costs in 2019. Chief financial officer Xie Weizhi said the company will maintain cost competitiveness in 2020.

Chief executive Xu Keqiang added: “In 2020, the company will steadily increase its oil and gas reserves and production, pursue profitable reserves and production, lay a solid foundation for high-quality development through technology innovations and management enhancement, and create excellent returns for our shareholders.”

FURTHER READING: China opens oil and gas exploration to foreign companies

FURTHER READING: Premier snaps up BP North Sea oilfields

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