CNOOC’s 2023 profit falls 12.6% after record 2022

Beijing — Chinese energy firm CNOOC Ltd (0883.HK), opens new tab, posted a fall of 12.6% in 2023 net income after a record high a year earlier, as hydrocarbon prices fell, although a focus on cost control and reserve expansion helped the result.

The state-controlled offshore oil and gas specialist reported a net profit of 123.8 billion yuan ($17.20 billion) in a filing to the Hong Kong Stock Exchange on Thursday.

Its oil and gas output rose 8.7% to 678 million barrels of oil equivalent (boe), topping its target of 650 million to 660 million boe.

Historically one of the industry’s lower-cost explorers and producers, the company’s all-in production cost fell to $28.83 per barrel from $30.39.

Capital expenditure rose by 37% to a record 137.35 billion yuan.

Net proven reserves stood at about 6.78 billion boe at the end of 2023, up from 6.24 billion a year earlier, as it maintained a reserve life of more than 10 years for a seventh consecutive year. Its reserve replacement ratio stood at 180%.

CNOOC is a top contributor to China’s domestic oil production growth as state-owned oil companies tackle geologically more complex and more costly resources to counter a steep decline at mature basins.

This month, CNOOC announced two large finds each with 100 million tons of oil equivalent proved in place – the deepwater Kaiping South Oilfield in the Pearl River Delta and Qinhuangdao 27-3 off Bohai Bay.

At an earnings briefing, CNOOC’s president Zhou Xinhuai told reporters that these discoveries resulted from accelerated high-efficiency explorations over the last few years and would help stabilise oil production in the key offshore acreage.

The highlight of the company’s global exploration effort was yet another oilfield discovery with proved in-place volume over 100 million tons in Guyana where the company partners with Exxon Mobil (XOM.N), opens new tab as the operator, it said.

In 2024, the company said it planned to focus on increasing reserves and production, putting greater emphasis on gas exploration, and forecast steady growth in both reserves and production.

CNOOC’s Hong Kong-listed shares closed up 0.77% before the earnings release, having gained 40.15% this year versus a fall of 1.08% in the benchmark Hang Seng Index (.HSI).
($1=7.1994 Chinese yuan renminbi)

*Colleen Kristen Howe & Chen Aizhu; editing: Jason Neely & Clarence Fernandez – Reuters