Eric Watkins
Oil Diplomacy Editor
LOS ANGELES, Nov. 24 -- China National Offshore Oil Corp. (CNOOC) has outlined a plan to invest, along with its overseas partners, 200 billion yuan over the next 12 years for the exploration and development of oil and gas fields in deepwater regions of the South China Sea.
Luo Donghong, chief development manager of CNOOC's Shenzhen unit, told the South China Morning Post newspaper that CNOOC hoped the 200 billion yuan budget would result in proving geological reserves of 22 billion boe and 350 million bbl/year of output by 2020.
CNOOC's total current output in the eastern South China Sea is about 200,000 b/d.
The expenditure will be spread among the company and its listed vehicles, including CNOOC, China Oilfield Services, and Offshore Oil Engineering, and includes amounts to be spent by its overseas partners.
About 15 billion yuan of infrastructure spending by CNOOC and its units has so far been fixed.
CNOOC head of investor relations Xiao Zongwei said the firm had budgeted its capital spending at an oil price of $70/bbl for this year but would complete the projects even though prices have since fallen.
"Oil is a high-risk, high-return business with a long investment cycle and is highly capital and technology-intensive," he said, adding, "While some small operators may not survive, large firms such as CNOOC can and will complete their budgeted investments."
Contact Eric Watkins at [email protected].