CNOOC posts 66% drop in 2015 net profit

China’s oil company CNOOC reported a 66.4% drop in net profit, saying it expects to see a challenging and complex operating environment looking ahead in 2016. According to Bloomberg, the result is at its lowest since 2004, but it still exceeded analysts’ forecasts.

The company on Thursday said its oil and gas sales revenue in 2015 was RMB146.6 billion, representing a decline of 32.8% compared to 2014. Due to the efforts of the lowering costs and enhancing efficiency program, CNOOC said its all-in cost decreased by 5.9% yoy to US$39.82 per BOE, representing a cost decline for the second consecutive year. The net profit declined by 66.4% yoy to RMB20.25 billion. Capex was RMB66.5 billion, representing a decrease of 37.9%.

In 2015, CNOOC made 16 new discoveries. Due to the low oil price, CNOOC said its reserve replacement ratio was 67% for the year. As at the end of 2015, the company’s net proved reserves were approximately 4.32 billion barrels of oil equivalent (BOE).

According to CNOOC, the company managed to meet its annual oil and gas production target, with net oil and gas production reaching 495.7 million BOE, an increase of 14.6% year-over-year (yoy).

Yang Hua, Chairman of CNOOC Limited, said: “In 2015, the Company achieved satisfactory results in different areas of business notwithstanding the significantly lower capital expenditure. Looking ahead, the Company may face more complex and challenging production and operating environment. We will continue to adjust our business strategy and intensify the activities for the ‘Year of Quality and Efficiency’ program. We will endeavor to allow more space for growth through reform and innovation, and to consolidate our achievements through improved systems and policies, so as to ensure the sustainable growth of the company.”