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CNOOC releases 1Q20 operational results

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Oilfield Technology,

CNOOC has announced its key operational statistics for 1Q20.

The company achieved a total net production of 131.5 million boe for 1Q20, representing an increase of 9.5% y/y. Production from China increased by 9.7% y/y to 87.1 million boe, mainly attributable to commencement of new projects and the acquisition of China United Coalbed Methane Corporation Limited. Overseas production increased by 9% y/y to 44.5 million boe, mainly due to production contribution from new projects including the Egina oilfield in Nigeria and the Appomattox oilfield in the US Gulf of Mexico. For the new projects planned this year, Liza oilfield phase 1 in Guyana came onstream ahead of schedule in December 2019, and other projects progressed as scheduled.

During the period, the company made two new discoveries and drilled 21 successful appraisal wells. Offshore China, the Kenli 6-1 oil and gas bearing structure was successfully appraised and became the first large-sized oilfield in the Laibei lower uplift, which further proved the huge exploration potential of the Neogene lithologic reservoir in Laizhou Bay. In Guyana, the 16th new discovery of Uaru was made in the Stabroek block.

For 1Q20, the company’s average realised oil price decreased by 19.3% y/y to US$49.03/bbl, which was in line with the trend of international oil prices. The company’s average realised gas price was US$6.38/1000 ft3, decreased by 7.3% y/y, primarily due to the declined gas price in North America. The unaudited oil and gas sales revenue of the company reached approximately RMB 39.95 billion during the period, down only 5.5% y/y, mainly due to the combined effect of lower realised oil price and increased oil and gas sales volume.

The company's CAPEX reached approximately RMB 16.90 billion for 1Q20, up 20.1% y/y, as a result of the increased workloads.

Under the current low oil price environment, the company has adjusted its operating strategy and reduced its annual net production target for 2020 from 520-530 million boe to 505-515 million boe and total CAPEX for 2020 from RMB 85-95 billion to RMB 75-85 billion.

Xu Keqiang, CEO of the company, said: “The global oil and gas market was facing an unprecedented situation in the first quarter of 2020 as impacted by the COVID-19 pandemic and sharp drop of international oil prices. In response to an increasingly complex external environment, CNOOC Limited took proactive measures to face the challenges and strived to mitigate the impact. For the rest of the year, we will continue to implement more stringent cost controls, and further strengthen our cash flow management. ”

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