Chinese national offshore oil and gas major CNOOC Ltd. on Oct. 24 revised up its 2023 capital spending to a record on building new production capacities after reporting an 8.13% fall in third-quarter profit on lower realized oil prices.

Despite higher oil and gas output, net profit during July-September period fell to 33.88 billion yuan ($4.64 billion) due to lower realized oil and gas prices, CNOOC said in a filing to the Hong Kong Stock Exchange.

Its revenue grew 5.5% on the year to 114.8 billion yuan.

Global oil prices have fallen since last year, having spiked in the immediate aftermath of Russia's invasion of Ukraine in February 2022, though prices for key benchmarks Brent and WTI did rise steadily through much of the third quarter.

The company's reported realized oil price for the July-September period was 13% lower at $83.20 versus a year earlier.

CNOOC's total net oil and gas production rose 7% on the year to 167.8 MMboe during the third quarter.

Between January and September, net production from China gained 6.7% on the year to 345.5 MMboe, while overseas production grew by nearly 12% to 154.1 MMboe, thanks to production growth from operations in Guyana and Brazil.

CNOOC said it's on track to reach its annual production target of a record 650 MMboe to 660 MMboe, as part of its medium-term goal of a 6% increase in average annual production by 2025.

Maintaining its status as one of the world's most cost-efficient producers, all-in production costs for the first three quarters were $28.37/bbl, down 6.3% on the same period last year.

Capital spending stood at 32.95 billion yuan, up 21.5% from year-earlier level, and totaled 89.5 billion yuan for the first 9 months of the year, up 30% on the year.

Company revised up capex for this year to 120 billion to 130 billion yuan from previously 100 billion-110 billion to "support reserves and production growth".

This would be a record annual spending, exceeding previous high set in 2014 at 105 billon to 120 billion.

"The higher capex does not reflect higher cost, but rather due to acceleration in building new production capacities," CFO Wang Xin told reporters in an earnings call.

Its Hong Kong-listed share has gained 34.5% year to date versus a fall of 14% of the benchmark Hang Seng Index. 

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