CNOOC sees increasing costs
By Sui-Lee Wee |
April 1, 2010, Thursday
|
Print Edition
Print Edition
CHINA'S top offshore oil producer CNOOC Ltd warned of rising costs after posting second-half earnings that were in line with estimates, as higher crude oil prices at the end of 2009 offset higher expenses.
Analysts forecast stronger earnings this year for CNOOC, with oil prices expected to hold in the US$70-US$80 per barrel range, higher than the average 2009 price of US$62 per barrel.
"In 2010, the Chinese economy is expected to be an important force in leading the recovery of the global economy. However, such recovery may be slow and uneven," CNOOC said in a statement to the Hong Kong stock exchange.
"Moreover, budding inflation will add uncertainties to the environment of the company's operations. The oil and gas industry's costs may stay high."
Unlike its peers, PetroChina and Sinopec Corp, CNOOC makes all of its profit from exploration and production, exposing it to the extreme volatility in crude oil prices over the last two years.
Total oil and gas output rose 17.2 percent to 227.7 million barrels of oil equivalent in 2009. Its average realized oil price was US$60.61 per barrel, down 32.2 percent from 2008.
CNOOC said nine new projects were expected to start production in 2010, with 98 exploration wells to be drilled.
Analysts say CNOOC, which is bidding for a stake in the Brazilian offshore oilfield of Norway's Statoil and recently bought a US$3.1 billion stake in Argentina's Bridas Holdings, could be the most acquisitive Chinese oil company this year as it races to meet its aggressive production growth targets.
CNOOC has adopted a 21-28 percent annual growth target this year, higher than the annual growth targets for international oil majors BP Plc and Royal Dutch Shell Plc, which have scaled back targets amid falling oil prices.
CNOOC, the last of China's triumvirate of energy companies to report earnings, posted a net profit of 17.1 billion yuan (US$2.5 billion) for the second half of 2009 versus 16.83 billion yuan a year earlier. That was in line with a consensus forecast of 17.6 billion yuan from 22 analysts compiled by Thomson Reuters.
Analysts forecast stronger earnings this year for CNOOC, with oil prices expected to hold in the US$70-US$80 per barrel range, higher than the average 2009 price of US$62 per barrel.
"In 2010, the Chinese economy is expected to be an important force in leading the recovery of the global economy. However, such recovery may be slow and uneven," CNOOC said in a statement to the Hong Kong stock exchange.
"Moreover, budding inflation will add uncertainties to the environment of the company's operations. The oil and gas industry's costs may stay high."
Unlike its peers, PetroChina and Sinopec Corp, CNOOC makes all of its profit from exploration and production, exposing it to the extreme volatility in crude oil prices over the last two years.
Total oil and gas output rose 17.2 percent to 227.7 million barrels of oil equivalent in 2009. Its average realized oil price was US$60.61 per barrel, down 32.2 percent from 2008.
CNOOC said nine new projects were expected to start production in 2010, with 98 exploration wells to be drilled.
Analysts say CNOOC, which is bidding for a stake in the Brazilian offshore oilfield of Norway's Statoil and recently bought a US$3.1 billion stake in Argentina's Bridas Holdings, could be the most acquisitive Chinese oil company this year as it races to meet its aggressive production growth targets.
CNOOC has adopted a 21-28 percent annual growth target this year, higher than the annual growth targets for international oil majors BP Plc and Royal Dutch Shell Plc, which have scaled back targets amid falling oil prices.
CNOOC, the last of China's triumvirate of energy companies to report earnings, posted a net profit of 17.1 billion yuan (US$2.5 billion) for the second half of 2009 versus 16.83 billion yuan a year earlier. That was in line with a consensus forecast of 17.6 billion yuan from 22 analysts compiled by Thomson Reuters.
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