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August 27, 2009

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CNOOC's profit in H1 plunges 55% on slump in crude prices

FIRST-HALF net profit at CNOOC Ltd, China's top offshore oil producer, plunged 55 percent as a slump in crude oil prices squeezed margins.

However, Chairman and CEO Fu Chengyu believed signs of economic recovery and a rebound in oil prices would make this year its "next milestone in its history of stable growth," as he expects net production to rise more than 15 percent and 10 new projects to come on stream this year.

In the first half of the year, CNOOC earned 12.4 billion yuan (US$1.8 billion), versus 27.5 billion yuan a year earlier, the company said after Hong Kong's stock market closed yesterday. It joined other global giants, including Exxon Mobil Corp and Royal Dutch Shell Plc, to report weaker results amid depressed oil prices, which averaged 53 percent lower in the first six months as a global recession hurt demand.

This was the lowest interim profit since 2005 for CNOOC, the listed unit of China National Offshore Oil Corp, but it still beat the average forecast of 11.4 billion yuan by analysts polled by Reuters.

Amid hopes of a global economic recovery, benchmark New York crude futures have rebounded to more than US$72 a barrel yesterday, more than doubling from a low of US$33.55 on February 12.

Its revenue tumbled 42 percent to 40.6 billion yuan, CNOOC said. Crude oil and gas output in the first half rose 15.2 percent to 105.8 million barrels of oil equivalent.

Meanwhile, Fu said CNOOC has no intention to buy a stake in Spanish energy company Respol YPF SA's Argentine unit, denying earlier reports that it is partnering China National Petroleum Corp, parent of PetroChina Co, to make a joint bid.

CNOOC is not seeking large acquisitions and would instead pursue cooperation with companies, Fu told reporters in a briefing in Hong Kong.

The firm failed in a US$18.5 billion bid for Unocal Corp in 2005 due to opposition by United States politicians.


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