• 4 minutes "Natural Gas Trading Picks Up Considerably Amid High Volatility" by Charles Kennedy - ...And is U.S. NatGas Futures dramatically overbought at the $6.35 range?
  • 8 minutes How Far Have We Really Gotten With Alternative Energy
  • 12 minutes  What Russia has reached over three months diplomatic and military pressure on West ?
  • 7 hours GREEN NEW DEAL = BLIZZARD OF LIES
  • 5 days "The Calm Before The Storm In Oil Markets" by Tom Kool of OILPRICE and seen at YahooFinance
  • 16 hours Revisiting: "The U.S. Grid Isn’t Ready For A Major Shift To Renewables" from March 2021 by Irina Slav at OILPRICE
  • 1 day How cheap Chinese tires might explain Russia's 'stalled' 40-mile-long military convoy in Ukraine
  • 5 days "Russia will stop 'in a moment' if Ukraine meets terms - Kremlin" by Reuters via Yahoo News...but Reuters suddenly cut out the balanced part of the story.
  • 5 days Will Variants and Ill-Health Continue to Plague Economic Outlooks?
  • 5 days Oil Stocks, Market Direction, Bitcoin, Minerals, Gold, Silver - Technical Trading <--- Chris Vermeulen & Gareth Soloway weigh in

Chinese Oil Giant CNOOC Cuts US Shale, Canada Oil Sands Output

China National Offshore Oil Corporation (CNOOC), a major oil operator with assets around the world, is reducing its 2020 production and spending guidance in light of the unprecedented market downturn, with U.S. shale and Canada’s oil sands the main targets of its cuts.

CNOOC announced on Wednesday that it would lower its planned capex and production guidance for 2020, as “proactive measures to face the challenges” of the turbulent oil market.

“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,” CEO Xu Keqiang said in a statement.

The Chinese company will mostly reduce spending in the U.S. shale patch and oil sands assets in Canada, where production is set to be kept at minimum levels, CNOOC’s chief financial officer Xie Weizhi said on a teleconference, as quoted by South China Morning Post. Staff layoffs cannot be avoided, the manager said.

Related: Trump Could Use ‘Nuclear Option’ To Make Saudi Arabia Pay For Oil War

CNOOC is the latest giant oil firm opting to reduce spending in U.S. shale. The oil patch has already seen spending and production cuts from almost all companies, including supermajors Exxon and Chevron, as the industry has been rushing to cut budgets and exposure to the Permian. 

According to CNOOC’s Xie, oil will trade in the $30-$40 per barrel range for most of this year.

In key operational statistics for Q1 2020, CNOOC said that its average realized oil price slumped by 19.3 percent on the year to US$49.03 per barrel, in line with the trend of international oil prices. Overall oil and gas sales fell by 5.5 percent annually, as the lower realized oil prices couldn’t offset higher production volumes. 

CNOOC cut its annual net production target for 2020 from 520-530 million barrels of oil equivalent (boe) to 505-515 million boe. Total capital expenditure (capex) for 2020 was reduced from US$12 billion-US$13.4 billion (85-95 billion Chinese yuan) to US$10.6 billion-US$12 billion (75-85 billion yuan).   

By Tsvetana Paraskova for Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage



Leave a comment

Leave a comment

EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News