Oil-Price Rise Powers CNOOC

HONG KONG—Cnooc Ltd., China's biggest offshore oil and gas producer by output, said Wednesday its first-quarter revenue more than doubled from a year earlier because of an increase in production and higher international crude oil prices.
Source:wsj.com     Time:29 Apr 2010
HONG KONG—Cnooc Ltd., China's biggest offshore oil and gas producer by output, said Wednesday its first-quarter revenue more than doubled from a year earlier because of an increase in production and higher international crude oil prices.

Cnooc joined other major Chinese oil producers in raising output, as the government's four trillion yuan ($586 billion) stimulus program boosted demand from the energy-intensive infrastructure sector, bolstering China's role as the driving force behind global oil demand growth.

China said it is targeting 8% economic growth in 2010 after last year's 8.7% growth, and the International Energy Agency said China could account for a quarter of the total increase in global oil consumption this year.

Cnooc's revenue for the three months ended March 31 surged to 30.49 billion yuan from 13.95 billion yuan a year earlier, as benchmark WTI crude oil nearly doubled to an average of $78.71 a barrel in the first quarter from $43.08 a barrel a year earlier.

The company didn't disclose its first-quarter net profit.

Cnooc said it produced 32% more crude oil and natural gas in the first quarter. It produced 67.3 million barrels of oil equivalent, up from 51 million barrels of oil equivalent a year earlier, while the average selling price of its crude oil tracked strength in the international market to jump 81% to $75.37 a barrel.

Capital expenditure in the first quarter fell to 5.8 billion yuan from 7.5 billion yuan a year earlier, as its expansion plans are scheduled for the second quarter or later part of the year, it said.

"In the first quarter, the company achieved strong production and revenue growth as well as encouraging exploration discoveries. I believe that such solid results will provide strong support for achieving our 2010 target," Chairman Fu Chengyu said in a statement.

Cnooc plans to raise its crude oil and natural gas output in 2010. It said in March it is targeting a 21%-28% increase this year, supported by China's measures to strengthen its economy, and is also in talks to expand its overseas interests to boost reserves.

Cnooc, a unit of China National Offshore Oil Corp., said earlier it targets compound annual oil and gas output growth of 6%-10% between 2011 and 2015.

Cnooc's 2010 net profit will likely rise to 42.52 billion yuan, up 44% from 29.49 billion yuan in 2009, according to the average forecast of 19 analysts surveyed by ThomsonReuters.

In the first quarter of 2010, Chinese petroleum demand averaged around 8.1 million barrels a day, rising 16% from the corresponding period of 2009, according to Platts estimates.

PetroChina, China's largest listed oil company by capacity, said Tuesday its first-quarter net profit rose 71% to 32.49 billion yuan from 18.97 billion yuan a year earlier on strong energy demand.
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