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China’s CNOOC will seek to boost its crude oil reserve base and increase the number of new exploration projects it is involved in twofold over the next seven years, Reuters reports, citing a statement by the company on Chinese network Wechat.
CNOOC focuses on offshore oil and gas, and is the largest operator in this area in China and has recently been very active in its international expansion to offset production declines at mature Chinese fields. The announcement of the reserve and production boost plan comes in response to an urging from President Xi Jinping to enhance China’s national security.
“We faced adverse geological conditions as offshore oil and gas fields age. More exploration projects are being moved to deep water area, but these are both risky and costly,” CNOOC’s head of geology, Xie Yuhong, said.
According to the chairman of the company, the reserve boost plan will require record-high investments in the next seven years. CNOOC is announcing its budget and production target for 2019 later this month.
Earlier this month, CNOOC announced, along with its partner Total, the start of production at the Egina deepwater field off the Nigerian coast, which is seen to reach its peak production as early as this year, at 200,000 bpd. The field went into production ahead of schedule, which suggests CNOOC is successfully pursuing its reserve boost plans already.
At end-2017, the company had a net reserve base of 2.613 billion barrels of oil equivalent. According to Reuters, this was the highest reserve base level for CNOOC since 2008. Last year, CNOOC said it will boost its capital spending to US$10.3-US$11.8 billion (70-80 billion yuan), of which 51 percent would be spent domestically and the rest on international projects.
Also in 2018, CNOOC said it planned to expand oil production from a planned 470-480 million barrels of oil equivalent in 2018 to 485 million barrels of oil equivalent this year, and 500 million barrels of oil equivalent in 2020.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.