CNOOC on track to meet 2024 oil and gas output target despite Q3 typhoon impact

China's top offshore producer CNOOC is on track to meet its 2024 oil and gas production target despite a quarter-on-quarter decline in crude output caused by typhoons over July-September, the company said Oct. 28.

CNOOC's global oil and gas production rose 8.1% year on year to 1.98 million b/d of oil equivalent in the first three quarters of the year.

The volume hit a historical high for the period, exceeding the company's 2024 production target of 1.91 million boe/d to 1.97 million boe/d.

“In the fourth quarter, we will continue to focus on the annual target and strive to accomplish the production and operation tasks for the whole year,” CEO Zhou Xinhuai said in the company's quarterly results statement.

CNOOC's crude production in China fell 4.5% from the second quarter to 1 million b/d in the third quarter during the typical typhoon season. This compares with a 5.3% decline in Q3 2023 from Q2 2023.

“The company implemented remote control through the ‘typhoon production’ model to reduce production losses during the typhoons,” CFO Wang Xin said during the results briefing.

Third-quarter domestic crude production increased 6% year on year, while domestic oil and gas production rose 6.5% to 1.35 million boe/d over January-September.

Wang attributed the growth in domestic oil and gas production to offshore fields in Bohai Bay and the South China Sea, including Bozhong 19-6 and Enping 20-4.

Domestic projects

Wang highlighted that the Liuhua 11-1/4-1 oilfield secondary development project commenced operations in September, with a peak production of 17,900 boe/d. The project is the first oilfield in Asia developed using a deepwater jacket platform and a cylindrical floating production, storage and offloading vessel.

The Shenhai-1 Phase II natural gas development project, which commenced operations in September with a peak production of 162 Mcf of natural gas and 3,931 b/d of condensate, is expected to boost the peak production of Shenhai-1 ultra-deepwater gas fields by 50% to 4.5 Bcm/year, while supplying the Greater Bay area and Hainan province.

CNOOC aims to commence more than eight offshore and two onshore projects in China in 2024. Seven of them have been put into production, with a combined peak output of 123,700 boe/d.

Overseas output rises

CNOOC's overseas oil and gas production rose 8.4% year on year to 630,435 boe/d, driven by the Payara project in Guyana, Wang said. Located in the Stabroek block, the Payara project commenced production in November 2023, with a peak production of 220,000 boe/d.

The company plans to commission two overseas projects before the end of the year -- the 180,000 b/d Mero 3 project in Brazil, in which CNOOC holds a 10% interest, and the 8,200 b/d Long Lake Northwest project in Canada that is 100% owned by CNOOC.

CNOOC's capital expenditure rose 6.3% year on year to Yuan 95.34 billion ($13.38 billion) over January-September.

Wang said most of the capital expenditure was allocated toward development efforts to bring the new projects online.

CNOOC's development spending climbed 7.9% year on year to Yuan 61.79 billion, accounting for 65% of the total expenditure in the first three quarters of 2024.

CNOOC's operational results