China National Offshore Oil Corporation (CNOOC) (NYSE:CEO) revealed its 2011 business strategy and development plan.
The total net production of CNOOC in 2011 is targeted at 355-365 million barrels of oil equivalent (BOE) (assuming with WTI at US$82.0/barrel). The Company’s net production for 2010 is estimated to be 327-329 million BOE (with WTI at US$79.5/barrel).
During 2011, there are four new projects offshore China expected to come on stream, including major projects such as Jinxian1-1 and Jinzhou 25-1. In overseas, the Eagle Ford project in the United States and the project with Bridas Corporation in Argentina are expected to deliver production. The new oil and gas fields brought on stream in 2010 and 2011, together with new projects overseas, are expected to facilitate the production growth in 2011. Meanwhile, 15 projects are under construction, driving the mid- to long-term production growth of the Company.
On the exploration side, CNOOC will focus on oil and gas exploration in core areas, while strengthening exploration in new areas and frontiers, especially in deepwater South China Sea. During the year, CNOOC plans to drill 96 exploration wells and acquire 19,967 kilometers 2-Dimensional (2D) seismic data and 17,129 square kilometers 3-Dimensional (3D) seismic data. The Company aims to achieve a reserve replacement ratio (RRR) of over 100% in 2011.
During the year, CNOOC’s capital expenditure will continue to provide strong support to a sustainable growth as well as deepwater exploration and development. In 2011, the company’s total capital expenditure is expected to reach US $8.77 billion. Breaking it down, CNOOC plans to spend $1.56 billion on exploration, $5.05 billion on development and $2.02 billion on production expenditures during the year.
“In the new year, we will maintain a robust capital expenditure plan and implement exploration and development activities as scheduled. Meanwhile, we will continue to execute stringent cost control and prudent financial policy to further improve the overall performance of the Company.” Mr. Zhong Hua, CFO of the Company commented.
Mr.Yang Hua, the Vice Chairman and CEO of the Company said, “In the past five years, we have greatly enhanced our corporate value through sticking to our established strategies and delivering the production growth rate of 7-11% from 2006 to 2010. The Company will see a year of steady growth in 2011, laying a more solid base for our future development in the next five years.”