CNOOC to spend up to $12.7B in 2018. Plans 132 exploration wells

February 1, 2018

China National Offshore Oil Corporation (CNOOC) expects to drill 132 exploration wells in 2018, and will bring five projects to production.

The company revealed this while announcing its business strategy and development plan for the year 2018.

In 2018, the Company plans to drill 132 exploration wells and acquire approximately 19 thousand square kilometers 3-Dimensional (3D) seismic data. Furthermore, five new projects are expected to come on stream, namely Hess-operated Stampede oil field in the United States, as well as Weizhou 6-13 oil field, Penglai 19-3 oil field 1/3/8/9 comprehensive adjustment project, Dongfang 13-2 gas fields and Wenchang 9-2/9-3/10-3 gas fields in offshore China.

Total capital expenditure for the Company in 2018 is budgeted at RMB70.0 billion to RMB80.0 billion. Converted to U.S. dollars the planned expenditure is between $11,1 billion and $12,7 billion. This is the company’s highest capex in four years, according to Bloomberg.

The capital expenditures for exploration, development, and production account for approximately 18%, 65% and 16%, respectively.

Xie Weizhi, CFO of the Company, said: “The company will maintain prudent financial policy and investment decision-making. We will continue to reinforce quality and efficiency enhancements to continuously improve the Company’s core competitiveness.”

Yuan Guangyu, CEO of the Company, said: “In 2018, the Company endeavors to strengthen innovation and technology-driven philosophy. Meanwhile, we will continue to pursue a sustainable and environmentally friendly development model while increasing oil and gas production and reserves, in order to deliver improved shareholder returns.”

The Company’s net production target for 2018 is 470 million to 480 million barrels of oil equivalent (BOE), of which, production from China and overseas accounts for approximately 64% and 36%, respectively. The Company’s net production for 2017 is expected to be approximately 469 million BOE. The Company’s net production for 2019 and 2020 are estimated to be approximately 485 million BOE and 500 million BOE, respectively.