CNOOC earmarks up to $19 billion for oil & gas, offshore wind, solar, and AI-integrated plays

Chinese state-owned oil and gas giant China National Offshore Oil Corporation (CNOOC) has set out its multibillion-dollar business strategy and development plan for 2025, which aims to up the hydrocarbon production ante by finding large and medium-sized oil and gas fields, stepping up the green power development game by harnessing more offshore wind and onshore solar, pursuing other green and low-emission developments, and taking advantage of artificial intelligence (AI) to enhance its oil and gas business.

Within its ‘2025 Business Strategy and Development Plan,’ CNOOC has revealed that its capital expenditure will remain flat, with the total capital expenditure budgeted at RMB 125 to RMB 135 billion (around $17.19 to $18.57 billion), of which the capital expenditures for exploration, development, and production will account for approximately 16%, 61%, and 20% of the total, respectively. The Chinese giant’s 2024 capital expenditure is expected to have reached approximately RMB 132 billion (about $18.15 billion).

The firm claims its production will continue to grow in 2025, with daily net production expected to exceed 2 million barrels of oil equivalent (boe) per day. The company’s net production target for the year is 760 to 780 million boe, of which production from China and overseas accounts for approximately 69% and 31%, respectively. The net production target is 780 to 800 million boe in 2026 and 810 to 830 million boe in 2027. The Chinese player’s 2024 net production is estimated at approximately 720 million boe, said to be setting record highs for six consecutive years.

On a mission to increase the resource base for reserves and strengthen production growth, CNOOC will endeavor to search for large and medium-sized oil and gas fields. The capital expenditure for exploration in China will mainly be directed to sustain crude oil reserves and expand natural gas reserves during 2025, led by the construction of the three trillion cubic-meter-level gas regions. However, the firm will continue to focus on the Atlantic Ocean rim and the ‘Belt and Road’ countries for overseas exploration.

In addition, drilling will continue in Guyana; exploration is planned in Nigeria; and a seismic survey is expected to be conducted in Mozambique and Iraq. Simultaneously, the firm will continue to look for high-quality acreage, especially operating assets, as it intends to promote exploration and development integration, alongside engineering standardization, to accelerate the conversion of reserves into production.

CNOOC plans to bring multiple new projects on stream, including the Bozhong 26-6 oilfield development project (Phase I) and the Kenli 10-2 oilfields development project (Phase I) in China. Two big projects where the firm holds a non-operated interest are also expected to come online: ExxonMobil’s Yellowtail project in Guyana and Petrobras’ Buzios 7 project in Brazil. While increasing hydrocarbon reserves and production, the firm will actively promote technological innovation and green development.

To this end, CNOOC will continue its research on key oil and gas exploration and development technologies to build intelligent oil and gas fields by relying on the ‘Hi-Energy’ artificial intelligence model to facilitate the in-depth integration of digital intelligence technology with the oil and gas business to promote lean management. The firm intends to drive the integrated development of the hydrocarbon and new energy sectors.

In line with this, the company intends to gradually expand the scale of offshore wind power and screen and build onshore photovoltaic projects, using solar panels to convert sunlight into electricity. CNOOC, which plans to expedite green power substitution, expects its green electricity consumption to exceed 1 billion kWh in 2025, with an increase of 30% year-on-year. The firm claims that it has incorporated carbon price into the investment evaluation process, and has been advancing the regional carbon capture (utilization) and storage (CC(U)S) pilot projects.

With environmental protection and energy conservation as priorities, the firm underlines that it has taken measures to address climate change challenges. CNOOC also places great emphasis on shareholder returns and the expected annual dividend payout ratio from 2025 to 2027 is planned to be no less than 45%, subject to the approval of the general meeting of shareholders.

Zhou Xinhuai, CEO of CNOOC, commented: “In 2025, CNOOC Limited will solidly push forward the three key programs of increasing reserves and production, technological innovation and green development, to drive the company’s high-quality and steady development. We will actively share the fruits of development with our shareholders while enhancing our capability of value creation.”