CNOOC Profits Nosedives, Eyes South China Sea

 

Net income dropped to 14.73 billion yuan ($2.3 billion), or 0.33 yuan a share, from 33.59 billion yuan, or 0.75 yuan, a year earlier, the Beijing-based explorer said in a statement to the Hong Kong stock exchange Wednesday.

 

That exceeded the 13.9-billion yuan average of three analyst estimates compiled by Bloomberg.

 

Despite profit fall, the company kept its dividend payout the same as the year-earlier level.

 

Planned capital expenditure reduction by about 30 billion yuan this year and first-half savings of 12 billion yuan on an oil production tax helped offset lower cash inflows due to lower oil prices.

 

According to a statement by CNOOC, due to the substantial decline in realized oil prices, the company’s oil and gas sales revenue were RMB77.03 billion in the period, representing a decline of 34.2 percent on year.

 

Production from offshore China rose by 19.1% yoy to 156.3 million BOE and production from overseas was 83.9 million BOE, up 4.4% from the corresponding period in 2014. The Company’s 2015 full year production target of 475-495 million BOE remains unchanged.

 

Meanwhile, Argus reported that the company will extend deployment of an ultra-deepwater drilling rig in the disputed South China Sea, despite it being the cause of a diplomatic row between China and Vietnam last year over their respective maritime boundaries.

 

The company's Hai Yang Shi You 981 rig will extend drilling mainly at the Lingshui 17-2 gas field it discovered last year from 24 August until 20 October. Its current position is some 72 nautical miles (130km) off Sanya city in south China's Hainan province, China's maritime safety administration said.

 

CNOOC has also issued a review of its operations offshore China during the first half of 2015. It has achieved a mid-sized light crude oil discovery, Liuhua 20-2, in the eastern South China Sea, likely to be developed with the nearby Liuhua 16-2 and Liuhua 23-1 oil and gas structures.