CNOOC posts record Q1 profit on higher oil prices, output growth

BEIJING, April 25 (Reuters) – Chinese national oil and gas explorer CNOOC Ltd’s first-quarter net profit surged 24% to a record, driven by higher realised oil prices and output growth.

Net income for January-March rose to 39.7 billion yuan ($5.48 billion) from 32.1 billion yuan in the same period last year, according to the company’s filing with the Hong Kong Stock Exchange on Thursday.

The profit jump for upstream-focused CNOOC follows a 6.2% increase in realised oil prices in the first quarter versus the previous year.

The listed arm of the state-backed CNOOC Group reported a 14.1% increase in revenue to 111.5 billion yuan in the first quarter.

CNOOC’s total net production during the period was 180.1 million barrels of oil equivalent (boe), up 9.9% on last year.

Domestic output increased by 6.9% while output from the company’s international operations increased by 16.9%, lifted by higher production in Guyana and Canada.

The company in January lifted its 2024 production target by about 8% to a record 700 million to 720 million boe, while raising the annual capital spending target to new highs.

The company plans capital spending of between 125 billion yuan ($17.44 billion) and 135 billion yuan this year, potentially exceeding the previous record of 128 billion yuan in 2023, to further support reserves and production growth.

CNOOC continues to invest heavily in offshore production in the Bohai Bay off eastern Shandong province, which has been one of the primary drivers of China’s rising oil output in recent years.

As one of the world’s most cost-efficient producers, all-in production costs for the first quarter stood at $27.59 per barrel, down from $28.20 per barrel in the same period last year.

Capex increased 17.3% to 29.01 billion yuan.

The company’s reserve replacement ratio will not be lower than 130% this year, CNOOC’s CFO Wang Yufan said in January. ($1 = 7.2472 Chinese yuan renminbi) (Reporting by Andrew Hayley and Colleen Howe; Editing by Muralikumar Anantharaman)

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