CNOOC slips on higher costs in H1

Production progress: Li Fanrong stresses rise in oil and gas output

China National Offshore Oil Corporation’s net profit slipped by 2.3% in the first half of the year as higher costs ate into higher revenues.

The Beijing-headquartered oil giant netted 33.59 billion yuan between 1 January and 30 June on revenues up 5.7% year-on-year to 117.1 billion yuan.

Chief executive Li Fanrong said that during the period “good progress was made in the production and operation and a healthy financial position was maintained”, while vowing to “continue to work diligently to ensure that we meet our annual production and business targets”.

All-in costs per barrel of oil equivalent rose 2% to $43.20 over the period while operating costs rose 7% to $11.78 per boe in a hike put down to the two months’ longer contribution of Nexen’s assets that it bought for $15.1 billion in February 2013.

The Hong Kong-listed explorer’s total net oil and gas production rose 6.8% in the first half to reach 211.6 million boe, of which 36.3 million boe came from Nexen.

Average realized oil prices rose 2% to $106.30 per barrel while average gas rates rose 13.5% to $6.44 per thousand cubic feet.

CNOOC made nine discoveries and sank 23 successful appraisal wells in the first six months of 2014, led by the Lingshui 17-2 find that the Chinese company predicted would “become the first large-sized deepwater gas field made by our independent exploration activities”.

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