China's state-owned offshore oil and gas producer CNOOC Ltd said it is confident of achieving its spending target this year, the highest since 2014, as it responds to a call to build up the nation's petroleum output and reserves.
The company plans to spend $10.3 billion to $11.8 billion on exploration and production, CNOOC said in a press release on Jan. 23, compared with an expected $9 billion in capital spending for 2018.
Beijing has called on the state oil giants to increase domestic exploration to help meet strong crude demand and counter falling output from maturing fields. This came after President Xi Jinping urged oil companies in August to improve national security by boosting domestic production and reserves.
In response to the government's call, CNOOC pledged last week to double its exploration activities and proven oil and gas reserves in China over the next seven years.
The company is allocating more spending this year on domestic exploration and production, which will make up 62% of total expenditures versus last year's 51%.
"Our main focus will be exploring for large- to medium-sized oil and gas fields ... and will speed up exploration of natural gas," the company said in a presentation of its plans published on its website.
Domestic exploratory drilling will take up $2 billion, or 76% of total exploration spending, while overseas work will account for the remaining 24%.
The $2 billion compares with $1.4 billion estimated in 2018 and is nearly double to that of 2016.
In global exploration, CNOOC will speed up spending on the Stabroek block offshore Guyana, where an Exxon Mobil-led consortium that includes the Chinese company has tapped recoverable reserves of 5 billion barrels of oil equivalent.
CNOOC expects to bring six new projects, including the Egina oilfield in Nigeria and the Huizhou 32-5 oilfield in the South China Sea, on stream in 2019, the company said.
It also expects to drill 173 exploration wells this year, it said.
The company said its total oil and gas production will reach 480 million to 490 million barrels of oil equivalent in 2019, up from 475 million barrels in 2018.
It will further reduce its cost of producing a barrel of oil in 2019, said company Chief Executive Officer Yuan Guangyu at a presser, without giving a specific figure.
CNOOC's domestic production will account for 63 percent of its total production in 2019, compared with 65% last year, the company said.
Recommended Reading
Oceaneering Won $200MM in Manufactured Products Contracts in Q4 2023
2024-02-05 - The revenues from Oceaneering International’s manufactured products contracts range in value from less than $10 million to greater than $100 million.
E&P Highlights: Feb. 5, 2024
2024-02-05 - Here’s a roundup of the latest E&P headlines, including an update on Enauta’s Atlanta Phase 1 project.
CNOOC’s Suizhong 36-1/Luda 5-2 Starts Production Offshore China
2024-02-05 - CNOOC plans 118 development wells in the shallow water project in the Bohai Sea — the largest secondary development and adjustment project offshore China.
TotalEnergies Starts Production at Akpo West Offshore Nigeria
2024-02-07 - Subsea tieback expected to add 14,000 bbl/d of condensate by mid-year, and up to 4 MMcm/d of gas by 2028.
US Drillers Add Oil, Gas Rigs for Third Time in Four Weeks
2024-02-09 - Despite this week's rig increase, Baker Hughes said the total count was still down 138 rigs, or 18%, below this time last year.