CNOOC reports worst result since at least 2011

China’s offshore oil and gas producer CNOOC reported its worst annual result since at least 2011, with revenue from its core oil and gas business falling 17 per cent last year, but it expects to raise output this year as oil prices rebound.

CNOOC reported a net profit of 637 million yuan (US$92.5 million) in 2016, down nearly 97 per cent from a year earlier. Revenue from oil and gas dropped to 121 billion yuan from 147 billion yuan.

“CNOOC managed to eke out a tiny profit, thanks to cost efficiencies and the oil price rebound during the fourth quarter,” Nomura Research analyst Gordon Kwan said.

The poor showing for last year came as CNOOC slashed upstream investment, reduced production and saw a drop in both crude oil and natural gas prices.

The state-owned firm reported a realised oil price of US$41.40 a barrel last year, 19 per cent lower than 2015. Natural gas prices fell 14.6 per cent.

Total production of oil and gas fell 3.8 per cent year on year to 476.9 million barrels of oil equivalent, the first drop since 2012.