CNOOC’s plans for 2024: Upping hydrocarbon production, natural gas exploration, and green power ante

Within its 2024 Business Strategy and Development Plan, China’s oil and gas giant CNOOC Limited has outlined a set of objectives for the year ahead. With energy demand on the rise, the Chinese giant has unveiled intentions to step up oil and gas production, bolster its hydrocarbon reserves, and scale up natural gas exploration activities while pursuing its energy transition agenda to low-carbon and renewable energy through the integrated development of green sources, such as offshore wind, and oil and gas business.

The summary of CNOOC’s business strategy and development plan for 2024 shows the firm’s determination to continue boosting reserves and production. To this end, the company’s net production target is 700 million to 720 million barrels of oil equivalent (boe) in 2024, with production from China and overseas accounting for approximately 69% and 31%, respectively.

Moreover, CNOOC’s net production target is 780 million to 800 million boe in 2025 and 810 million to 830 million boe in 2026. The net production for 2023 is estimated to be around 675 million boe, setting record highs for five consecutive years. The firm claims that its production growth is attributable to a strong pipeline of new projects and sufficient capital investment.

Zhou Xinhuai, CEO and President of CNOOC, commented: “In the coming year, CNOOC Limited will aim high while keeping its feet on the ground. We will implement the three key programs of increasing reserves and production, technological innovation and green development, and press ahead with the initiative of quality and efficiency enhancement, so as to lay a solid foundation for development, and improve the capability of value creation.”

While the Chinese giant’s total capital expenditure for 2024 is budgeted at RMB 125 billion (almost $17.63 billion) to RMB 135 billion (over $19 billion), capital expenditures for exploration, development, and production will account for approximately 16%, 63%, and 19% of the total, respectively. The firm is expected to record capital expenditures at about RMB 128 billion (more than $18 billion) for 2023.

Since CNOOC will keep on striving to search for large and medium-sized oil and gas fields and strengthen the resource base for increasing reserves and production, the exploration workload is expected to remain at a high level in 2024. In line with this, the Chinese firm will intensify its efforts in natural gas exploration, and push forward the construction of three trillion-cubic-meter-level gas regions in the South China Sea, the Bohai Sea, and onshore China respectively.

Last year, the company made new exploration discoveries with a proven in-place volume of over 100 million tons boe in the Bohai Sea and the deepwater South China Sea, realizing a discovery of 100-million-tons in-place volume for five consecutive years. During 2024, multiple high-quality projects are anticipated to be brought on stream.

Some of CNOOC’s major projects coming online in China include Suizhong 36-1/Luda 5-2 oilfield secondary adjustment and development project, Bozhong 19-2 oilfield development project, Shenhai-1 Phase II natural gas development project, Huizhou 26-6 oilfield development project, and Shenfu deep-play coalbed methane exploration and development demonstration project.

When it comes its overseas projects, the firm highlighted the Mero 3 project in Brazil as a strong supporter of production growth. CNOOC is committed to taking advantage of technological innovation to sustain reserves and production growth and empower high-quality development with key technologies for deepwater exploration, alongside ways to sustain and increase volume from producing oilfields.

While building intelligent oil and gas fields, establishing technology systems, refining digital scenarios, accelerating the construction of unmanned and semi-unmanned offshore platforms, and speeding up the installation of typhoon mode, the Chinese firm is also pursuing green development, and exploring the industrialization of CCS/CCUS technologies.

With CCUS’ role in slashing the carbon footprint from operations at the forefront, a comprehensive assessment of storage potential offshore China has been carried out while an offshore CCUS demonstration center in northern China, relying on the Bozhong 19-6 gas field, is also planned.

CNOOC explains that it endeavors to develop differentiated advantages in deep sea wind power generation, and promotes the integrated development of offshore wind power and oil and gas production. Therefore, the firm’s green power substitution will be expedited and green electricity consumption is expected to exceed 700 million kWh in 2024.

At the start of January 2024, CNOOC began production from an oilfields Phase II development project in the South China Sea. The company also brought several new projects online in 2023. In November 2023, the firm began production from a condensate gas field Phase I development project in the Bohai Sea.

A few weeks before this, the Chinese giant started production from an oilfield development in the Bohai Sea. Prior to this, CNOOC began production from another oilfield development albeit in the South China Sea.