CNOOC suffers smallest rise in income in 5 years
Top Chinese offshore energy producer CNOOC Ltd said yesterday net profit rose 1.1 percent last year on higher oil prices, and although it met its own target earnings, growth is the smallest increase in five years.
The Hong Kong-listed firm blamed rising costs, flat production and higher taxes for the result.
It earned 31.26 billion yuan in 2007, versus 30.93 billion yuan (US$4.4 billion) a year earlier, the company reported after the market closed. Turnover rose two percent to 90.72 billion yuan.
“Higher operating costs, special upstream tax levies and the renminbi appreciation had offset much of the gains from robust oil prices last year,” CLSA analyst Gordon Kwan said, adding CNOOC’s 2007 reserve replacement ratio of 142 percent was “impressive.”
Beijing-based CNOOC paid a special oil levy of 6.84 billion yuan in 2007, up from 3.98 billion yuan a year earlier, on higher crude prices. Its average realized crude oil price rose 12.5 percent to US$66.26 per barrel last year while natural gas prices gained 8.7 percent to US$3.3 per thousand cubic feet.
CNOOC, with projects in Nigeria and Indonesia, is looking for more overseas development opportunities and pursuing deep water exploration with crude prices topping US$110 per barrel early this month.
“In order to capitalize on the opportunity offered by the oil price hike and rising production volume, we will further increase capital expenditure on exploration and development in 2008,” Chairman Fu Chengyu said.
CNOOC’s oil and gas output added only 2.6 percent to 171 million barrels of oil equivalent last year, due partly to the shutdown of its Liuhua oil field in the South China Sea which was hit by a typhoon in 2006 and a delay to starting its Panyu field. Liuhua restarted in mid-2007.
But the oil company said in January it aims to produce up to 199 million barrels of oil equivalent this year, with 10 projects on stream, and plans to raise capital spending by nearly 50 percent to US$5.23 billion in 2008.
CNOOC climbed 1.5 percent to close at HK$11.12 (US$1.43) in Hong Kong trading yesterday.
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