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CNOOC net rises on higher prices

By Wan Zhihong (China Daily)
Updated: 2009-04-01 08:07

CNOOC Ltd, China's largest offshore oil and gas producer, yesterday said its 2008 net profit rose 42 percent because of growth in production and higher oil and gas prices last year.

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The company's net profit touched a record high of 44.4 billion yuan, the company said in a statement to the Hong Kong Stock Exchange yesterday. Sales revenue in 2008 was 126 billion yuan, up from 91 billion yuan in 2007.

The Beijing-based company's oil and gas sales rose 38.1 percent in 2008, amounting to 100.83 billion yuan. The average oil and gas prices increased 34.9 percent and 16.3 percent year-on-year, to $89.39 per barrel and $3.83 per thousand cubic feet, respectively.

CNOOC President Yang Hua said the company saw "strong production growth and competitive cost structure" in 2008.

"Higher crude prices was the main reason for the company's good business performance in 2008," said Liu Gu, analyst with Guotai Jun'an Securities in Shenzhen. "We expect that its profit will drop by around 20 percent this year."

International crude prices surged to a record $147 per barrel last July. However, because of the global financial crisis it has dropped to around $50 per barrel now.

CNOOC said on Jan 20 it plans to lift its 2009 crude and gas production by 16 percent to 18 percent, as some significant projects are expected to come online this year.

The company said 10 new projects are expected to come on stream this year, eight in offshore China, one in Nigeria and one in Indonesia.

Its total capital expenditure this year is expected to reach $6.76 billion, an increase of 19 percent year-on-year.

Jiang Yongzhi, an executive with CNOOC had earlier said that the company was actively seeking overseas acquisition opportunities over the last year but "no one would sell" amid the global recession.

The company's parent, China National Offshore Oil Corp earlier said it would invest 200 billion yuan in oil and gas exploration in the South China Sea in the next 10 to 20 years.