Multiple oil & gas, low-carbon and green energy projects on CNOOC’s agenda for 2023

January 12, 2023, by Melisa Cavcic

Chinese oil and gas giant CNOOC Limited has unveiled its 2023 Business Strategy and Development Plan, which entails ramping up oil and gas production this year by bringing new projects on stream while advancing the transition to low-carbon and renewable energy.

CNOOC disclosed a summary of its business strategy and development plan for 2023 on Wednesday. The firm intends to raise its production target and capital expenditure budget for this year. In line with this, the firm’s targeted net production for 2023 is 650 million to 660 million barrels of oil equivalent (BOE), of which, production from China and overseas accounts for approximately 70 per cent and 30 per cent, respectively.

Furthermore, the Chinese giant’s net production is expected to reach 690 million to 700 million BOE in 2024 and 730 million to 740 million BOE in 2025. The total capital expenditure for 2023 is budgeted at RMB 100 billion ($14.8 billion) to RMB 110 billion ($16.3 billion), of which, capital expenditures for exploration, development, production and others will account for approximately 18 per cent, 59 per cent, 21 per cent and 2 per cent of the total capital expenditure, respectively.

Zhou Xinhuai, CEO of CNOOC, remarked: “In the coming year, CNOOC Limited will continue to seek progress while delivering stable performance. The company will vigorously implement the three major programs of reserves & production augmentation, independent technological innovation and green energy transition, and press ahead with the initiative of quality and efficiency dual upgrading, so that we can sharpen our edge of core competitiveness and create greater value for shareholders.”

CNOOC highlights that nine new projects are expected to come on stream during 2023, including projects in China – Bozhong 19-6 condensate gas field Phase I development project, Lufeng 12-3 oilfield development project and Enping 18-6 oilfield development project – and overseas projects such as Payara project in Guyana, Buzios 5 project and Mero 2 project in Brazil.

On the other hand, the Chinese player continues to promote green and low-carbon developments to expand its new energy business. To this end, the firm plans to steadily advance the project of onshore power for offshore platforms to reduce greenhouse gas emissions from oil and gas production activities. In addition, CNOOC will lead the development of the CZ7 centralized offshore wind power demonstration project in Hainan, which, upon completion, can provide clean electricity of about 500 million kWh per year to the grid, reducing CO₂ emission by about 2.64 million tons each year.

Meanwhile, CNOOC underlines that it “always attaches importance to rewarding shareholders and actively shares the benefits of development.” Therefore, the expected annual payout ratio of the company from 2022 to 2024 will be no less than 40 per cent and the annual absolute dividend is expected to be no less than HK$ 0.70/share (tax inclusive). This is subject to the approval by the general meeting of shareholders on the proposed dividends for each year.

Regarding CNOOC’s recent activities, it is worth noting that the Chinese giant kicked off operations in December 2022 at its oilfields’ onshore power project to supply electricity to 39 offshore production platforms.