MOSCOW (MRC) -- China National Offshore Oil Corp (CNOOC) will trim annual investment by 10% to 15% in 2020, while maintaining its goal of increasing domestic crude oil and natural gas production for the year, reported Reuters with reference to the company's statement.
CNOOC Ltd, a listed arm of the national offshore energy producer, said during a media briefing the firm will "significantly" cut capital expenditure.
Oil and gas companies worldwide are reducing spending this year following a collapse in oil prices and plummeting fuel demand amid the coronavirus outbreak.
CNOOC did not give any further details on its capital expenditure plan or on its oil and gas production targets for its domestic and overseas blocks.
It will cut total costs by a least 10% and reduce losses at its money-losing firms by 5 billion yuan (USD710 million) in 2020, the statement said.
The company did not give details on the unprofitable businesses. One of its big loss-makers, however, is its gas and power unit, and the company said in March it is set to have its Hong Kong-listed flagship take over that sector.
Capital expenditures at the Hong Kong-listed firm were 79.6 billion yuan in 2019.
The company said in January it would raise 2020 production to 525 million barrels of oil equivalent at both domestic and overseas projects from 506.5 million barrels in 2019. The focus would be on raising domestic output while cutting overseas operations, it said.
CNOOC’s businesses besides oil and gas production include oil refining, petrochemicals manufacturing, liquefied natural gas (LNG) terminals and renewable energy generation.
As MRC wrote before, in early May, 2018, China National Offshore Oil Corporation (CNOOC) and Shell Nanhai B.V. (Shell) announced the official start-up of the second ethylene cracker at their Nanhai petrochemicals complex in Huizhou, Guangdong Province, China.
Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).
According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 557,060 tonnes in the first three month of 2020, up by 7% year on year. High density polyethylene (HDPE) and linear low density polyethylene (LLDPE) shipments rose because of the increased capacity utilisation at ZapSibNeftekhim. Demand for LDPE subsided. At the same time, PP shipments to the Russian market was 267,630 tonnes in January-March 2020, down 20% year on year. Homopolymer PP and PP block copolymers accounted for the main decrease in imports.
China National Offshore Oil Corporation (CNOOC), the largest offshore oil & gas producer in China. CNOOC businesses cover the main segments of oil & gas exploration and development, engineering & technical services, refining and marketing, natural gas and power generation, and financial services.
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