China’s CNOOC Saw Profits Plunge in 2023 Due to Lower Oil Prices

China’s state-held oil and gas giant CNOOC said on Thursday that its net profit for 2023 slipped by 12.6% from a record-high level in 2022, due to the decline in international oil prices.  

CNOOC, which specializes in offshore oil and gas developments in China and internationally, reported a net profit attributable to shareholders of the company of $17.2 billion (123.8 billion Chinese yuan) for 2023, down from the all-time high of $19.7 billion (141.7 billion yuan) booked for 2022, when oil prices exceeded $100 per barrel after the Russian invasion of Ukraine. 

The drop in profits in 2023 was partially contained by reduced costs, the Chinese state oil giant said.  

CNOOC boosted its 2023 oil and gas production to a record-high of 678 million barrels of oil equivalent (boe), above the 650 million boe guidance. Net proved reserves were also at their all-time high for the company at the end of 2023, at around 6.78 billion boe. In 2023, the reserve replacement ratio reached 180% and the reserve life remained above 10 years for seven consecutive years, CNOOC said.

All-in costs fell to $28.83 per boe, down by 5.1% from 2022.

Since the beginning of this year, CNOOC has announced two major oil discoveries offshore China as it looks to further increase reserves and production.

CNOOC hiked in January its oil and gas production targets and capital expenditures to record-high levels as it looks to boost reserves and production.

CNOOC now aims at an output of between 700 million and 720 million barrels of oil equivalent this year as it significantly raised its production targets in the 2024 business strategy and development plan.

The net production target for 2025 was set at 780 million to 800 million boe, and output in 2026 is planned to further rise to between 810 million and 830 million boe.

By Tsvetana Paraskova for Oilprice.com

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