CNOOC Announces 2016 Business Strategy
China’s national oil company CNOOC Limited has announced its business strategy and development plan for the year 2016 saying four new projects will come on stream during the year.
These projects are the Kenli 10-4, Panyu 11-5, Weizhou 6-9/6-10 oilfield comprehensive adjustment and Enping 18-1. Currently, nearly 20 projects are under construction.
Within the year, the company plans to drill around 115 exploration wells and acquire approximately 10 thousand kilometers of 2-Dimensional seismic data as well as approximately 14 thousand square kilometers of 3-Dimensional seismic data.
The company's net production target for 2016 is in the range of 470-485 million barrels of oil equivalent (BOE), of which approximately 66 percent and 34 percent are produced in China and overseas respectively. The net production targets set for 2017 and 2018 are around 484 and 502 million BOE respectively. The estimated net production for 2015 was approximately 495 million BOE.
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Cost Control
CNOOC’s total capital expenditure for 2016 will be no more than RMB60.0 billion ($9 billion). Of that amount, the capital expenditures for exploration, development and production will account for around 19 percent, 64 percent and 13 percent respectively.
The company expects to achieve the whole-year targets by cost control and efficiency enhancement despite the lower capital expenditure. Zhong Hua, CFO, said: "In response to the continued challenge posed by low oil prices, we will maintain prudent financial policy and further strengthen cost-control measures in order to make steady progress in the overall business, including exploration, development and production."
Li Fanrong, CEO, said: "Faced with an increasingly complicated operating environment in 2016, the company will fully utilize market mechanisms and combine innovations in technology and management in order to reduce costs and enhance efficiency. In addition, the company will ensure an appropriate balance between short-term returns and long-term growth to promote a steady and healthy development."
Slow Growth for China
The CNOOC plan comes as the country’s growth rate drops. China's economy grew by 6.9 percent in 2015, compared with 7.3 percent a year earlier, making it the slowest growth in 25 years. The International Monetary Fund said it expects China's economy to grow by 6.3 percent this year and six percent in 2017.