China National Offshore Oil Corporation (CNOOC), the country's largest offshore oil and gas producer, said yesterday its sales rose 69 percent in the third quarter as higher oil and gas production took advantage of oil price hikes.

The company produced 15.2 percent more oil and gas in the third quarter, while total revenue rose 69 percent to 30.9 billion yuan. For the first three quarters, the company's total oil and gas revenue hit 84.95 billion yuan, an increase of 65.3 percent, the company said in a telephone conference yesterday.

"The company has strived to optimize its operating fundamentals as well as leverage external operating environments to serve its corporate value. The remarkable third quarter results show our effective achievements in both hands," Chief Executive Officer Fu Chengyu said in a statement to the Hong Kong stock exchange.

Oil prices in the global market soared 57 percent in the third quarter from a year earlier, peaking at a record $147.27 a barrel on July 11. The price fell to $100 in September, but it was still higher than the $70 to $80 level a year earlier.

CNOOC's average oil selling price was 58.7 percent higher at $106.94 per barrel in the quarter, while the price of its natural gas climbed 12 percent to $3.83 per thousand cubic feet.

The group's Hong Kong-traded shares gained 6.6 percent to close at HK$4.52 in Hong Kong before the result was announced. Shares of CNOOC fell 34 percent in the third quarter, versus an 18 percent drop in the benchmark Hang Seng Index.

The company expressed confidence in reaching its target of producing about 15 percent more oil and gas this year - to 195 to 199 million barrels of oil and gas equivalent.

CNOOC, the country's third-largest oil producer, aims to more than double turnover at the Bohai Bay oil field to more than 542,000 barrels a day in five to six years as new fields come on stream, said Chen Bi, vice president of the company.

In that time, the Bohai Bay oil field is expected to overtake China Petroleum & Chemical Corp's Shengli oil field to become China's second largest.

In the third quarter, the company announced two new oil-producing projects and said it had made four new discoveries.

Its capital expenditure increased by 44.9 percent, year-on-year, to approximately 10.19 billion yuan, lifted by growing material costs.

(HK Edition 10/29/2008 page2)