Cnooc to Launch 10 Upstream Projects in 2020

Chinese state-run Cnooc expects to bring 10 new oil and gas projects on stream this year, it said in its 2019 annual report published on April 8.

These projects include the Penglai 19-3 oilfield block 4 adjustment/ Penglai 19-9 oilfield phase 2, the Qinhuangdao 33-1 South oilfield phase 1, the Bozhong 19-6 gas field pilot development project, the Luda 16-3/21-2 joint development project, the Nanbao 35-2 oilfield S1 area, the Jinzhou 25-1 oilfield 6/11 area, the Liuhua 29-1 gas field development project and the Liuhua 16-2/Liuhua 20-2 oilfield joint development project, all of which are off the coast of China. It will also commission the Liza oilfield phase 1 in Guyana and the Buzzard oilfield phase 2 in the UK.

The Liza oilfield phase 1 came on stream earlier than scheduled, in December 2019, it said.

Cnooc said it will start appraisal and construction work for the new projects. “It is expected that more than 20 projects will be under construction throughout the year, which will lay a solid foundation for mid and long-term growth in production,” it said.

The company, however, warned that changes in oil and gas prices could have a material effect on its business, cash flow and earnings.

“Oil and gas prices are volatile. A downward trend in oil and gas prices which lasts for a long period may adversely affect our business, revenue and profits, and may also result in the write-off of higher-cost reserves and other assets, reduction in the amount of oil and natural gas we can produce economically and termination of existing contracts that have become uneconomic,” it said.

Cnooc’s net profit for 2019 stood at yuan 61.05bn ($8.6bn), an increase of 15.9% yr/yr, it said last month.