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China’s CNOOC Boosts H1 Net Profit Despite Weak Oil Prices

China National Offshore Oil Corporation (CNOOC) reported on Thursday an 18.7-percent rise in its net profit for the first half of 2019 on the back of increased sales of oil and gas that more than offset volatile commodity prices.

CNOOC warned analysts at the briefing to present the results that oil prices could continue to be highly volatile amid the U.S.-China trade war and concerns about economies and global oil demand growth.

“The lingering economic and trade disputes, as well as geopolitical instability, may result in further volatility of international oil prices,” Reuters quoted CNOOC’s chairman Yang Hua as saying in the company’s press release.

CNOOC’s oil and gas sales rose by 4.4 percent to US$13.2 billion (94.28 billion Chinese yuan) in the first half of 2019, while net profit rose 18.7 percent to US$4.2 billion (30.25 billion yuan).

The company’s realized oil price in H1 2019 was US$64.60 a barrel, down by 4.1 percent from US$67.36 realized oil price in the first half of 2018.

Total production rose by 2.1 percent on the year to 243 million barrels of oil equivalent (boe)—a record high net production, CNOOC said in its analyst presentation.

CNOOC’s all-in cost fell to US$28.99 per barrel of oil equivalent, down by 8.9 percent compared to the first half of 2018.

At the beginning of this year, CNOOC said it planned its capital expenditure for 2019 to be the highest since 2014 and to increase drilling and development of resources at home after President Xi Jinping ordered companies to boost domestic production. CNOOC planned to focus on exploring large to medium-sized oil fields and to boost exploration of natural gas.

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The company confirmed today its capex for 2019 at US$9.8 billion-US$11.2 billion (70 billion-80 billion Chinese yuan) and said it plans to have six new projects on stream this year.

By Tsvetana Paraskova for Oilprice.com

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