China National Offshore Oil Company (CNOOC), a leading LNG market participant among Chinese oil and gas majors, has outlined its 2023 strategy with higher spending plans, including the targeting of more natural gas, both offshore and in unconventional onshore developments.
CNOOC said the offshore focus in China was on the South China Sea, including development of the Shenhai-1 gas field to promote efficient exploration and development of adjacent gas discoveries.
“We will also focus on five key projects including multi-stratal exploration around the Baodao 21-1 gas field and the rolling exploration around the Yinggehai gas field,” explained CNOOC.
Around the existing offshore Bohai gas fields, Chinese largest in the northeast, it would concentrate on the Bozhong 19-6 area and the Bozhong Depression.
CNOOC added that it was also pursuing an onshore unconventional natural gas programme to target 100 billion cubic metres of resources.
“We will actively promote the integration of exploration and development to increase resources in the Shenfu area,” explained CNOOC, referring to the onshore oil and gas located in the Shaanxi province of northwest China.
Spending
CNOOC’s net production target is between 650 million and 660M barrels of oil equivalent of which production from China will account for 70 percent and overseas resources would provide 30 percent.
Net production is also forecast to reach 690M to 700M Boe in 2024 and 730M to 740M BOE in 2025.
The company’s total capital expenditure for 2023 is budgeted at between 100 billion Chinese yuan ($14.75Bln) and 110Bln yuan ($16.23Bln), of which, capital expenditures for exploration, development, production will account for 18 percent, 59 percent and 21 percent respectively and 2 percent will go on administration.
Analysts said the robust programme suggested continued expansion of the economy in China through 2023 after the Covid-19 restrictions were lifted.
Nine new projects are planned to be brought on stream in 2023, including the Bozhong 19-6 gas field Phase I development in China and two oil fields at Lufeng 12-3 and Enping 18-6.
Overseas projects coming on stream include three developments in South America, the Payara Project in Guyana and the Buzios 5 and Mero 2 projects in Brazil.
The company said it continued to promote greener, lower-carbon developments and is expanding renewables, including its offshore wind project in Hainan, providing an additional 500 million kilowatt hours per annum to the power grid.
For shareholders, CNOOC said it expected to continue its annual dividend pay-out to investors through 2024 of “no less than” Hong Kong dollars $0.70 (US$0.09).
“In the coming year, CNOOC will continue to seek progress while delivering a stable performance,” said Chief Executive Zhou Xinhuai.
“The company will vigorously implement the three major programs of reserves and production augmentation, technological innovation and the green energy transition,” added Zhou.
