China’s push to squeeze more oil and gas from home is paying off just as imported energy becomes more geopolitically complicated.
CNOOC posted record first-half profit and production on Wednesday, helped by higher oil prices following the Iran war and continued growth from its offshore fields.
Net profit attributable to shareholders jumped 23.4% from a year earlier to 85.8 billion yuan, or about $12.9 billion. Oil and gas sales revenue climbed 20% to 206.1 billion yuan.
The biggest boost came from crude prices. CNOOC’s average realized oil price rose 23.6% to $85.49 per barrel during the first six months of the year, while its realized natural gas price increased just 1.3%. But it was selling more of it too.
Net oil and gas production rose 3.7% to a record 398.7 million barrels of oil equivalent, including 275.2 million boe produced in China. Crude oil and liquids output climbed 4.8% to 310.3 million barrels.
Beijing has spent years pushing its state oil companies to increase domestic production and reduce China’s exposure to imported energy. That strategy has taken on new urgency since the Iran war disrupted traffic through the Strait of Hormuz, one of China’s most important oil-supply routes.
Full production began in May at CNOOC’s first phase of the Kenli 10-2 development in the Bohai Sea, and it’s now producing more than 20,500 barrels per day.
The company made another four discoveries during the first half and appraised 16 oil- and gas-bearing structures. It also added three exploration blocks in Brazil and Indonesia, including its first operated position in Brazil’s Santos Basin pre-salt.
Costs did rise, with CNOOC’s all-in cost reaching $29.70 per boe. But with realized oil prices above $85, there was plenty of room left.
CNOOC maintained its 2026 production target of 780 million to 800 million boe and its capital spending guidance of 112 billion to 122 billion yuan.
So while China reaps the benefits of increased energy security, CNOOC shareholders are raking in the cash.
By Julianne Geiger for Oilprice.com
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