CNOOC to boost output by 18% over 3 years

China’s top offshore oil producer CNOOC Ltd said it aims to boost output by 18 percent over the next three years, after reporting stronger-than-expected 2014 profit on cost cuts and higher production.

CNOOC, China’s third largest oil company, plans to boost output to 513 million barrels of oil equivalent (BOE) in 2017, up more than 18 percent from 2014, chief financial officer Zhong Hua told reporters at its results briefing.

But cost cuts will also be a top priority as it braces for long-term oil price weakness. Last month, CNOOC said it planned to slash 2015 capital spending by 26-35 percent to 70 billion-80 billion yuan, while still trying to raise output by up to 15 percent to 495 million BOE.

CNOOC reported net profit of $9.69 billion for last year, up 6.5 percent year on year, as cost cuts, lower tax payment and higher output helped offset the slide in global oil prices.

The clampdown on CNOOC’s costs echoes moves by Chinese oil majors PetroChina and Sinopec Corp. Oil prices have skidded about 50 percent since June, and a government-led probe into graft in the state sector has added to pressure to rein in spending.

CNOOC sold some ageing conventional natural gas assets in Canada last year, and took an asset impairment of 4.1 billion yuan in 2014 on some of its projects in Canada, Gulf of Mexico and Britain.

The Chinese company is also looking for overseas acquisition opportunities as part of its long-term expansion strategy, Wang told reporters. But it will be more flexible in making acquisitions, such as using shares instead of cash only. CNOOC attributed its 2014 profit rise in part to a 6 percent decrease in production costs to $42.3 per BOE last year.