China: CNOOC steps up exploration and global expansion

CNOOC is focusing on domestic exploration and expanding its international business, while moving cautiously ahead with the energy transition.
CNOOC expansion exploration 2024

Partagez:

China National Offshore Oil Corporation (CNOOC) will spend between 13 and 14 billion yuan annually on domestic exploration in the coming years, representing 68.2% of its exploration budget in 2023. This strategy aims to increase domestic reserves and production, underlining the importance of China’s offshore for the company. Recent major discoveries in the Bohai Sea and South China Sea, totalling over 733 million barrels, attest to the significant potential of these areas.

Offshore contributions and production growth

Offshore China, the main source of growth in the country’s crude production since 2020, continues to play a key role for CNOOC and China. In 2023, CNOOC’s domestic crude and liquids production grew by 6.6%, and its gas production by 12.3%, outstripping national growth, thanks in particular to ongoing investment and improved technology.

International expansion and cost strategy

In addition to its focus on domestic assets, CNOOC is exploring energy projects in Angola and maintaining a selective internationalization strategy. The company insists on keeping its total costs below $35/bbl, having succeeded in reducing its costs to $28.83/bbl by 2023. Cost discipline crucial to CNOOC’s competitiveness in the global market.

Committed to the energy transition

CNOOC aims to achieve peak carbon emissions by 2028 and carbon neutrality by 2050, while allocating 5-10% of its annual CAPEX to new energy sectors. As China’s leading developer of offshore wind energy and offshore carbon capture and utilization, CNOOC is also venturing into hydrogen.

With a rising CAPEX forecast for 2024, CNOOC plans to increase production to 1.95 million boe/day, with future projections even higher. This investment strategy aims to ensure sufficient reserves to support production growth until 2030, underlining CNOOC’s long-term expansion and efficiency objectives.

British company Prax Group has filed for insolvency, putting hundreds of jobs at its Lindsey oil site at risk, according to Sky News.
Orlen announces the definitive halt of its Russian oil purchases for the Czech Republic, marking the end of deliveries by Rosneft following the contract expiry, amid evolving logistics and diversification of regional supply sources.
Equinor and Shell launch Adura, a new joint venture consolidating their main offshore assets in the United Kingdom, aiming to secure energy supply with an expected production of over 140,000 barrels of oil equivalent per day.
Equinor announces a new oil discovery estimated at between 9 and 15 mn barrels at the Johan Castberg field in the Barents Sea, strengthening the reserve potential in Norway's northern region.
Sierra Leone relaunches an ambitious offshore exploration campaign, using a 3D seismic survey to evaluate up to 60 potential oil blocks before opening a new licensing round as early as next October.
Faced with recurrent shortages, Zambia is reorganising its fuel supply chain, notably issuing licences for operating new tanker trucks and service stations to enhance national energy security and reduce external dependence.
The closure of the Grangemouth refinery has triggered a record increase in UK oil inventories, highlighting growing dependence on imports and an expanding deficit in domestic refining capacity.
Mexco Energy Corporation reports an annual net profit of $1.71mn, up 27%, driven by increased hydrocarbon production despite persistently weak natural gas prices in the Permian Basin.
S&P Global Ratings lowers Ecopetrol's global rating to BB following Colombia's sovereign downgrade, while Moody’s Investors Service confirms the group's Ba1 rating with a stable outlook.
Shell group publicly clarifies it is neither considering discussions nor approaches for a potential takeover of its British rival BP, putting an end to recent media speculation about a possible merger between the two oil giants.
Petro-Victory Energy Corp. starts drilling of the AND-5 well in the Potiguar Basin, Brazil, as the first phase of an operation financed through its strategic partnership with Azevedo & Travassos Energia.
The Texan Port of Corpus Christi has completed major widening and deepening work designed to accommodate more supertankers, thus strengthening its strategic position in the US market for crude oil and liquefied natural gas exports.
CNOOC Limited’s Hong Kong subsidiary and KazMunayGas have concluded a nine-year exploration and production contract covering nine hundred and fifty-eight square kilometres in Kazakhstan, sharing investment and operations equally.
Donald Trump announced that the United States will no longer oppose Chinese purchases of Iranian oil, immediately triggering a drop in global crude oil prices and profoundly reshaping international energy trade partnerships.
Research firm S&P Global Commodity Insights lifts its outlook for the fourth straight year, betting on three point five mn barrels per day from 2025 despite lower prices.
Enbridge plans to expand its infrastructure to increase oil transportation from the American Midwest to the Gulf Coast, anticipating rising exports and addressing current market logistical constraints.
US commercial crude inventories significantly decline by 3.1 million barrels, widely surpassing initial forecasts and immediately pushing international oil prices higher.
The UK could have hydrocarbon reserves twice as large as current official estimates, according to Offshore Energies UK, highlighting the impact of fiscal policies on forecasts and the economic future of the North Sea.
Following US strikes in Iran, international energy companies partially evacuate their teams from Iraq as a precaution, while Lukoil maintains its entire personnel on southern oilfields.
Chinese independent refineries remain cautious amid rising Iranian crude prices driven by escalating Iran-Israel tensions, potentially threatening access to the strategic Strait of Hormuz.