Bloomberg News

Cnooc Parent’s Sales Growth Slows After Spills, Failed Bid

February 02, 2012

(Updates with shares in sixth paragraph.)

Feb. 2 (Bloomberg) -- China National Offshore Oil Corp., the country’s biggest offshore energy explorer, posted slower revenue growth last year following oil leaks and a failed overseas acquisition.

Sales at the state-owned parent of Cnooc Ltd. reached 480 billion yuan ($76.1 billion), Deputy General Manager Lv Bo told reporters in Beijing yesterday. That’s a 35 percent increase from 2010, Bloomberg calculations show. Revenue grew 78 percent to $56.6 billion in 2010, according to the company last year.

Cnooc cut its output goal after spills shut the country’s biggest offshore oilfield and a venture co-owned by the company scrapped a $7.1 billion bid for BP Plc’s Argentine unit. Cnooc, whose profit accounted for more than half of its parent’s in 2010, plans to boost capital spending by as much as 63 percent this year to start new deepwater fields and acquire more assets.

The group’s output may double by the end of the decade compared with 2010, and triple by 2030, China National Offshore Chairman Wang Yilin said at a company event in Beijing yesterday, without giving specific estimates.

China National Offshore produced 46.61 million metric tons of oil last year, while natural gas output reached 16.7 billion cubic meters, Wang said without providing comparative figures. The group had a record profit in 2011, he said, without being more specific.

Hong Kong-listed unit Cnooc has fallen 6.9 percent in the past year, compared with a 14 percent decline in the benchmark Hang Seng Index. The stock rose 3.6 percent to HK$16.56 as of 2:22 p.m. local time.

Deepwater Drilling

“The financial figures are largely in line,” Gordon Kwan, head of energy research at Mirae Asset Securities Ltd. in Hong Kong, said by e-mail. “What got the market excited is the potential for positive oil and gas discovery news flow next month when they start drilling in China’s virgin deep waters.”

Cnooc, which relies on areas off China’s coast for 80 percent of its output, seeks to boost production this year by as much as 2.7 percent to the equivalent of 330 million to 340 million barrels of oil.

China National Offshore is also the parent of Hong Kong- listed China Oilfield Services Ltd.

--Chua Baizhen and Guo Aibing, with assistance from Chua Kong Ho in Shanghai. Editors: Ryan Woo, Joshua Fellman.

To contact Bloomberg News staff for this story: Chua Baizhen in Beijing at bchua14@bloomberg.net; Aibing Guo in Hong Kong at aguo10@bloomberg.net

To contact the editor responsible for this story: Mike Anderson at manderson34@bloomberg.net.


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