China’s CNOOC Limited today announced a summary of the Company’s business strategy and development plan for the year 2014.
The Company’s net production target of 2014 is in the range of 422 to 435 million barrels of oil equivalent (BOE), including approximately 69 million BOE as a result of the acquisition of Nexen Inc. (Nexen). The Company’s net production for 2013 is estimated to be around 412 million BOE, including 61 million BOE of production as a result of the acquisition of Nexen.
During 2014, the Company expects 7 to 10 new projects to come on stream. Independent oilfields Kenli 3-2 and Qinhuangdao 32-6 comprehensive adjustment project under the PSC contract, both located in Bohai, are expected to reach a peak daily production at around 37 thousand BOE and 36 thousand barrels respectively. Enping 24-2 project, located in Pearl River Mouth Basin, is expected to reach a peak daily production at around 40 thousand barrels. First oil from the Golden Eagle development in the UK North Sea, in which the Company holds a 36.5% working interest and acts as the operator, is expected in late 2014. Once fully commissioned, Golden Eagle is expected to reach a peak daily production of up to 70,000 BOE. In 2014, the Company expects a busy pipeline of engineering and construction with about 20 new projects under construction.,
The Company has an extensive exploration program this year and plans to drill roughly 155 exploration wells and acquire approximately 26.7 thousand kilometers of 2-Dimensional (2D) seismic data as well as approximately 19.4 thousand square kilometers of 3-Dimensional (3D) seismic data. Within the year, the Company will continue to strengthen the deepwater exploration. In 2014, the Company is targeted to a reserve replacement ratio (RRR) of over 100%.
In 2014, in order to support a sustainable growth by enhancing exploration and development operation, the Company expects to incur a total capital expenditure of RMB 105 to 120 billion (with Nexen accounting for around 19%), in which the capital expenditures for exploration, development and production represent 19%, 65% and 14% respectively. The Company expects such capital expenditure will strongly support its production and reserve growth in the future.
Zhong Hua, CFO of the Company said, “Experiencing the upward trend on costs in the industry this year, the Company will utilize capital more prudently through the capex plan to support the development of the Company in the future.”
Li Fanrong, CEO of the Company commented, “We maintain our production target of 6-10% CAGR from 2011-2015. To accomplish this during 2014, we will stick with the Company’s strategic goals and strengthen exploration and development activities in order to create excellent returns for our shareholders.”
Press Release, January 20, 2014