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Rise in CNOOC H2 net flat

The rise in CNOOC Ltd's second-half earnings was almost flat as a plunge in crude oil prices weighed on the top Chinese offshore energy producer's margins, it said yesterday.

The harsh economic climate continues this year and the company said it would feel the pinch of a "severe winter" in 2009. The company said it will boost capital spending on exploration and development while controlling costs stringently.

Its second-half net profit totaled 16.9 billion yuan (US$2.47 billion), against 16.7 billion yuan a year earlier, but below a consensus forecast of 17.42 billion yuan by 18 analysts polled by Thomson Reuters.

Full-year earnings rose 42 percent to 44.4 billion yuan after crude prices rallied in the first seven months and the company increased output. Sales rose 39 percent to 126 billion yuan.

"The global oil economy is still in the dark. Oil prices continue to wane. For the oil industry, the cold winter still prevails," Chairman Fu Chengyu said in a statement, adding that low oil prices will have a "material effect" on profitability in 2009.

Oil prices are now about two-thirds below July's record of US$147 a barrel, but Fu said the current prices have not made a sharp impact on its fields under development and CNOOC is taking a long-term view of China's robust energy demand.

With 10 new projects to come on stream, CNOOC aims to raise production by up to 18 percent to 225 million to 231 million barrels of oil equivalent this year.


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