New CNOOC Fields in Bohai Bay Start Production

CNOOC Limited announced that its two new oil fields, BoZhong (BZ) 26-3 and LuDa (LD) 32-2 in the Bohai Bay have successfully commenced production recently.

BZ 26-3 is located in the central part of Bohai Bay, neighboring producing field BZ 25-1S. The field has an average water depth of about 25 meters. The development and production operations of BZ 26-3 mainly rely on the facilities of its surrounding oilfields. With 4 wells online currently, BZ 26-3 is expected to hit its peak production of more than 6,600 barrels per day in 2011.

LD 32-2 is located in the Eastern Bohai Bay with water depth of about 25 meters, and adjacent to producing oil field LD 27-2. In order to reduce production cost, a joint development plan was carried out for both LD32-2 and LD27-2 fields. The field has 4 production wells currently. The peak production of LD 32-2 is expected to reach 6,300 barrels of oil per day in 2011.

BZ 26-3 and LD 32-2 are all independent oil fields of CNOOC Limited. The Company holds 100% interest and acts as the Operator of these two fields.

NOL Group Reports $282M Q3 Profit
NOL Group reported net earnings of $282m for the third quarter of 2010, a $421m turnaround from the $139m net loss in the third quarter of 2009.  NOL said revenue in the third quarter improved 55% to $2.4b. 
 
The Group has now reported net earnings of $283m through three quarters of 2010.  It lost $530m during the same period last year. 
 
The Group’s Core EBIT (Earnings Before Interest and Taxes) for the third quarter was $319m compared to a Core EBIT loss of US$115 million in the same quarter a year ago.  For the first three quarters in 2010, Core EBIT was $359m compared to a Core EBIT loss of $468m for the first three quarters of 2009.  
 
Business segments
Third quarter revenue for APL, NOL’s liner shipping business, improved 60% to $2.2b.  For the first three quarters, revenue was up 51% to $5.9b.
 
APL’s Core EBIT in the third quarter was $301m following a Core EBIT loss of $130m in the third quarter of 2009.  Core EBIT through three quarters of 2010 was $314m compared to a Core EBIT loss of $502m in the same period a year ago.
 
Third quarter volume for the shipping business increased 12%.  Through three quarters, volume was up 29%.
 
“Volume and rates improved across most of our major trade lanes, and our ships were full,” said APL President Eng Aik Meng.  “At the same time, we were well-prepared with vessel capacity and container equipment to meet our customer commitments.”
 
APL Logistics, NOL Group’s supply chain management business, reported third quarter revenue of $302m, up 30% from a year ago.  Through three quarters of 2010, revenue improved 31% to $880m. 
 
Core EBIT in the Logistics business was up 6% in the third quarter to $18m.  For the first three quarters of 2010, Core EBIT improved 10% to $45m.
 
“Volumes increased in most of our business lines and freight rates improved in International Logistics,” said APL Logistics President Jim McAdam.   “The result has been a continuation of the revenue growth we’ve realized throughout 2010, indicating a return to pre-economic downturn levels.”     
 
OUTLOOK
Following a strong third quarter performance, NOL Group is expected to remain profitable for the full year in 2010.
 
YTD 2010 operating performance (vs. YTD 2009)
Liner Shipping
• Revenue US$5.9 billion, up 51%
• Core EBIT US$314 million, compared to a loss of US$502 million previously
• Average revenue per FEU US$2,799, up 21%
• Volume 2 million FEUs, up 29%
 
Logistics
• Revenue US$880 million, up 31%
• Core EBIT US$45 million, up 10%
• Core EBIT Margin 5.1% compared to 6.1% previously
 
3Q10 operating performance (vs. 3Q09)
Liner Shipping
• Revenue US$2.2 billion, up 60%
• Core EBIT US$301 million, compared to a loss of US$130 million previously
• Average revenue per FEU US$3,120, up 41%
• Volume 655,000 FEUs, up 12%
 
Logistics
• Revenue US$302 million, up 30%
• Core EBIT US$18 million, up 6%
• Core EBIT Margin 6.0% compared to 7.3% previously