CNOOC, China’s offshore oil and gas company, has announced its results for the third quarter of 2023, revealing a record level of capital spending and a decrease in profit due to lower oil prices.

Despite this, the company achieved better-than-expected operating results and set new records in oil and gas reserves and production.

“In the first three quarters, the company achieved better-than-expected operating results. Oil and gas reserves and production reached a new high. Going forward, the company will push forward the tasks resolutely and strive to meet the full-year targets,” said Zhou Xinhuai the CEO and President of the company.

In the first nine months of 2023, CNOOC achieved a net production of 499.7 million boe, marking an 8.3% increase compared to the previous year. This is the highest production level recorded for the same period in previous years.

The net production from China grew by 6.7% year over year to 345.5 million boe, driven by the production growth of Kenli 6-1 and Lufeng 15-1. Additionally, the net production from overseas increased by 11.8% year over year to 154.1 million boe, mainly due to the production ramp-up from Liza Phase II in Guyana and Buzios in Brazil.

In the third quarter alone, net production reached 167.8 million BOE, representing 7.0% year-over-year growth.

The company discovered Huizhou 26-6 North, a medium-sized commercial discovery that expanded the resource scale of medium-to-deep plays.

In total, CNOOC made eight new discoveries and successfully appraised 21 oil and gas-bearing traps.

Furthermore, three new projects were brought on-stream, including the Bozhong 28-2 South Oilfield Second Adjustment Project and the Lufeng 12-3 Oilfield Development Project. Several other new projects are also progressing smoothly.

CNOOC has maintained effective control over costs, resulting in a 6.3% year-over-year reduction in all-in costs to $28.37 per boe. The strong growth in production partially offsets the impact of fluctuating international oil prices.

The company achieved unaudited oil and gas sales of RMB 238.4 billion and net profit attributable to equity shareholders of RMB 97.6 billion. The company’s average realized oil price dropped by 24.2% YoY to $76.84 per barrel, which was in line with the trend of international oil prices. The average realized gas price was $7.92 per thousand cubic feet, representing a decrease of 2.7% YoY, which was mainly due to lower prices realized for overseas gas offtakes.

CNOOC’s capital expenditure for the first nine months of 2023 amounted to approximately RMB89.5 billion, a 30.2% year-over-year increase. This increase was primarily driven by the increased workloads on projects under construction. To support the growth of reserves and production, the company adjusted its capital expenditure budget for 2023 to RMB 120–130 billion, reaching a record level.

During this period, the company made remarkable progress in green development. Haiyou Guanlan, China’s first deep-sea floating wind power platform, was successfully connected to the grid for power generation. China’s first offshore CCS demonstration project officially commenced operation. Besides, the company’s first onshore centralized photovoltaic project was also connected to the grid for power generation.