Cnooc Cuts 2020 Capex, Output Target
Chinese state-run Cnooc has reduced its production target and capital expenditure for 2020, it said April 29 in a stock exchange filing.
“Under the current low oil price environment, the company has adjusted its operating strategy promptly and implemented more prudent investment decision-making to ensure its long-term sustainable development,” Cnooc said.
The company has cut its output target from 520-530mn barrels of oil equivalent to 505-515mn boe and total capital expenditure from yuan 85-95bn ($12bn-$13.5bn) to yuan 75-85bn.
“The global oil and gas market was facing an unprecedented situation in the first quarter of 2020 as impacted by the Covid-19 pandemic and sharp drop of international oil prices. In response to an increasingly complex external environment, Cnooc Limited took proactive measures to face the challenges and strived to mitigate the impact. For the rest of the year, we will continue to implement more stringent cost controls, and further strengthen our cash flow management,” CEO Xu Keqiang said.
Meanwhile, Cnooc’s oil and gas sales revenue during the three months to March 31 (Q1 2020) stood at yuan 39.95bn, down 5.5% yr/yr, mainly due to lower realised oil and gas price. Cnooc’s average realised oil price decreased by 19.3% yr/yr to $49.03/barrel while average realised gas price was $6.38/’000 ft3, down 7.3% yr/yr.
First-quarter total net production was 131.5mn boe, up 9.5% yr/yr. Production from China increased 9.7% yr/yr to 87.1mn boe. Overseas production grew 9% yr/yr to 44.5mn boe, Cnooc said.