Energy

Rise in crude prices boosts CNOOC revenue

By Wang Ying (China Daily)
Updated: 2011-04-28 14:33

BEIJING - China's offshore oil producer CNOOC Ltd said its revenue rose 59 percent in the first quarter from a year earlier.

The increase came after crude prices surged and production increased to meet domestic demand.

Sales climbed to 48.5 billion yuan ($7.5 billion) from 30.5 billion yuan a year earlier, the Beijing-based company said in a statement to the Hong Kong Stock Exchange on Wednesday. CNOOC didn't issue a quarterly profit figure as the company only reports half- and full-year earnings.

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The energy explorer benefited from a 20 percent increase in the average price of New York crude in the first quarter while one project came on stream off the Chinese coast as scheduled, boosting output. CNOOC aims to raise overall production by as much as 11 percent this year after acquiring more than $8 billion in overseas assets in 2010 to expand reserves.

Output at the Jinzhou 25-1 project commenced in the first quarter, CNOOC said. The company plans to start Jinxian 1-1 in the first half and begin production at Weizhou 11-2 and Lufeng 13-2 in the second half. All the projects are off China's eastern coast.

In 2010, CNOOC commenced nine domestic projects and boosted annual profit by 85 percent. Almost 70 percent of the company's assets are on the Chinese mainland and virtually all of its income comes from oil and gas production.

The energy explorer aims to produce as much as 365 million barrels this year. In the first quarter, output rose 27 percent from a year earlier to the equivalent of 85.2 million barrels of oil, according to the statement.

The company's shares have advanced 43 percent in Hong Kong trading in the past year, surpassing the 12 percent increase in the benchmark Hang Seng Index. CNOOC fell 0.51 percent to HK$19.60 ($2.5) on Wednesday, before the revenue statement was released.

Overseas production accounted for 20.1 percent of total output last year, compared with 17.4 percent in 2009, CNOOC said in March.

In January, the company agreed to pay $570 million in cash for a one-third stake in Chesapeake Energy Corp's Niobrara Shale project. In February, Bridas Corp, in which CNOOC has a 50 percent stake, agreed to purchase Exxon Mobil Corp's refinery assets in Argentina.

CNOOC holds assets in Australia, Indonesia, Trinidad and Tobago, and Nigeria.

Last month, the company signed agreements with Total SA to buy stakes in Tullow Oil Plc's exploration interests in Uganda. CNOOC will pay $1.5 billion for a one-third share in Exploration Areas 1, 2 and 3A in the Lake Albert Rift Basin.

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