Business

CNOOC Limited Sets New Records Amidst Economic Slowdown and Achieves Robust Annual Results in 2023

HONG KONG, March 21, 2024 /PRNewswire/ -- The prestigious CNOOC Limited, a titan in the oil and natural gas industry, proudly publicized its impressive accomplishments for the year ended December 31, 2023. By releasing its 2023 annual results, the company demonstrated resilience against a backdrop of global economic downturn and fluctuating oil prices on the international stage.

Unprecedented Growth in Reserves and Production

Despite facing a year filled with economic challenges, CNOOC Limited has orchestrated a symphony of growth and profitability. Their strategy of commitment to high-quality development has led to unparalleled achievements, breaking records in reserves and production while earning substantial profits and maintaining rigorous standards of corporate governance. This strategic success allowed the company to bestow substantial rewards to its shareholders, receiving widespread acclamation in the capital markets.

Net production of oil and gas for the year soared to new heights at 678 million barrels of oil equivalent (BOE), marking an 8.7% growth from the previous year. This accomplishment indicated five consecutive years of record-breaking production. From 2019 to 2023, net production's compound annual growth rate impressively stood at 7.6%, propelling CNOOC Limited to a leading position amongst peers regarding production growth rate. The company also procured a reduction in natural decline rates in existing fields while upholding supreme production efficacy. China's Bohai oilfields remained the largest base for crude oil production, with Guyana and Brazil becoming instrumental contributors for overseas production expansion.

Exploration Yields Rich Rewards

CNOOC Limited pursued a stringent approach focused on value-oriented exploration throughout the year, leading to nine novel discoveries and successful appraisal of 22 oil and gas structures. This proactive exploration strategy culminated in pushing the net proved reserves to an impressive 6.78 billion BOE, and a striking reserve replacement ratio of 180%. Furthermore, for seven consecutive years, the reserve life index stayed above 10. Numerous substantial oil and gas fields were unearthed and appraised, which led to strategic milestones in locating new plays and resource types. Within Chinese territories, the Company appraised copious oilfields, most notably the Bozhong 26-6 and Kaiping South, each contributing over 100 million tons to the confirmed in-place volumes. The initiation of the first onshore deep-play coalbed methane field marked another significant achievement by surpassing the 100 billion cubic meters mark in proved in-place volume. Extending its reach overseas, CNOOC Limited also made a profound discovery in Guyana, with proved in-place volumes exceeding 100 million tons.

Swift Transition from Reserves to Production

With an annual capital expenditure amounting to RMB 129.6 billion, the company demonstrated a robust integration of exploration and development processes, thereby enhancing the conversion rate from reserves to production. Amidst the numerous ongoing projects, several critical ones commenced within the year, contributing to the company's ever-growing portfolio. Through refining the management of drilling and completion operations, the development cycle significantly shortened, ushering new projects into production ahead of schedule. By adopting engineering standardization and embracing bulk procurement strategies, CNOOC Limited witnessed a substantial curtailing of project costs.

Green Development and Cost Competitiveness

Keeping in line with its green development strategy, CNOOC Limited effectively controlled energy consumption and carbon emission intensity at the source. The production mix saw a rise in clean energy products' share. Notable achievements include the complete recovery and utilization of offshore flare gas in China, exceeding 50 thousand cubic meters daily, and the reduction of approximately 750 thousand tons of carbon dioxide emissions via the introduction of energy-saving technologies. A marked strengthening of the natural gas business was also a highlight, with key developments both offshore, such as the Bozhong 19-6 Condensate Gas Field Phase I Development Project, and onshore, where three unconventional gas production bases have seen an almost fourfold increase in output over five years.

In addition to progress in natural gas, CNOOC Limited actively accelerated the construction of three trillion-cubic-meter gas regions across the South China Sea, Bohai Sea, and inland China. The company's ventures into offshore wind power and carbon dioxide sequestration projects are testament to its dedication to green development and environmental responsibility.

Simultaneously, the company honed its competitive edge in cost management with an all-in cost that dropped to US $28.83 per BOE, a 5.1% decrease from the previous year. This drop in costs, aligned with a significant boost in net production and deft cost control measures, culminated in the company amassing an impressive total annual revenue of RMB 416.6 billion and a net profit attributable to equity shareholders of RMB 123.8 billion. Boasting a robust cash reserve and substantial free cash flow of RMB 88.87 billion, CNOOC Limited decided to distribute these developmental gains with its shareholders by recommending a final dividend of HK $0.66 per share (tax inclusive). Overall, the annual ordinary dividend reached HK $1.25 per share (tax inclusive), reflecting a generous payout ratio of 43.6%.

Commitment to Innovation and Community

In the pursuit of continuous improvement and market leadership, CNOOC Limited maintained a relentless focus on scientific and technological innovation. Breakthroughs were made in key technological areas, with the company achieving noteworthy advancements in its digital transformation journey. The first indegenously-manufactured subsea production system in China, designed to function at water depths of 500 meters, managed to produce over 100 million cubic meters of commercial gas. "Shenhai-1" stands as the world's first super-sized deepwater platform with remote control operation capabilities. Other achievements include Liuhua oilfield's remote-controlled production during typhoon conditions and the achievement of 90% digital coverage in the core business processes of Qinhuangdao 32-6 oilfield, marking it as an intelligent field.

In tandem with strong business performance, CNOOC Limited emphasized balanced development across economic, environmental, and social domains, ardently fulfilling its social responsibilities. The year 2023 saw the implementation of over 100 charitable and public welfare projects encompassing infrastructure, medical assistance, education, employment promotion, poverty alleviation, and cultural exchange initiatives. An investment totalling RMB 158 million underscored the company's commitment to these causes.

Chairman Wang Dongjin stated with pride, "In 2023, we exerted unwavering commitment and diligence in reaching our goals, successfully achieving new records on the fronts of reserves and production. As we continue our journey, CNOOC Limited commits to augmenting our energy supply capacity, pushing the boundaries of innovation, and creating unparalleled value—all the while striving for a high-quality development trajectory. With firm dedication, we will keep setting new benchmarks in our quest to build a world-class energy company."

Forward-Looking Information

This press release contains forward-looking information regarding future business developments of CNOOC Limited and its subsidiaries and includes projections about business prospects and financial outcomes. It is important to note that these forward-looking statements encompass assessments based on the company's current understanding and predictions. While they are laid out with the anticipation that the future will align with these projections, numerous unknowns remain. External factors, such as political and economic conditions, fluctuations in natural resource prices, competition in the oil and natural gas industry, climate change, policy shifts, and changes in governance laws could result in actual outcomes that significantly diverge from CNOOC Limited's expectations. Therefore, while these statements are made with the utmost confidence, the company cannot guarantee that the anticipated results or developments will be realized or, even if substantially actualized, that they will have the anticipated effects.

Enquiries and Information

For those interested in gathering more details or making further enquiries, please contact Ms. Cui Liu of the CNOOC Limited Media & Public Relations division or Mr. Bunny Lee from the Porda Havas International Finance Communications Group. They can be reached through the following respective emails: [email protected] and [email protected].

To learn more about CNOOC Limited and to explore more about the company's vision, strategies, and operations, please visit the company website at http://www.cnoocltd.com.

Conclusion

CNOOC Limited demonstrated resilience, innovation, and environmentally responsible conduct as key components of their success. The company's unwavering commitment to excellence in every aspect of its operations, from technological advancements to community engagement, reiterates their position as a leader in the energy sector. As CNOOC Limited continues to steer through uncharted waters, it remains poised to embrace future challenges and opportunities with the same diligence and drive that underscored its achievements in 2023.

SOURCE: CNOOC Limited