China energy giant CNOOC raises output targets and planned exploration spending as oil price recovers
The company sees production of 470 million boe to 480 million boe this year, a rise over earlier projections and the first increase in three years
CNOOC, China’s dominant offshore oil and gas producer, has raised its output targets for this year and next as oil prices steadily recover, and will budget more money for exploration activities in a sign of optimism over the outlook for the commodity.
For this year, the state-backed firm has set a target of producing between 470 million barrels of oil equivalent (boe) and 480 million boe, above its earlier projections of 455 million boe to 465 million boe and the first increase in three years.
The target for 2019 has been raised to 485 million boe from an earlier estimate of between 460 million boe and 470 million boe.
It also unveiled a target of 500 million boe for 2020 for the first time.
The output target for this year was based on an average estimate for the benchmark Brent crude oil price of US$53 a barrel, compared to the actual average of US$54.8 in 2017. Last year Brent’s average price was around US$55 per barrel, up 21 per cent from the previous year.
“Our output target is based on a relatively conservative oil price assumption,” CNOOC CEO Yuan Guangyu told reporters on Thursday. “We believe the current price level is quite favourable already, further upsides could trigger output increases from Opec and shale oil producers in the US.”
Opec is the oil producing countries’ cartel.
