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CNOOC's First-Half Profit Jumps 23% as Oil, Gas Sales Outpace Output Growth

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CNOOC's First-Half Profit Jumps 23% as Oil, Gas Sales Outpace Output Growth

CNOOC (HKG:0883, SHA:600938) recorded stronger profit and revenue in the first half, even as production volumes rose only modestly, suggesting price rather than output as the main driver of the gain.

Attributable profit jumped 23% year over year to 85.8 billion yuan, or 1.81 yuan per share, the Chinese offshore oil and gas producer said in an after-hours filing on Wednesday.

Revenue climbed 17% to 242.7 billion yuan, with oil and gas sales, its largest revenue driver, up 20% to 206.1 billion yuan.

Net production of oil and gas rose only 3.7% to 398.7 million barrels of oil equivalent, a slower pace than the growth in oil and gas sales revenue.

The gap suggests that CNOOC took advantage of higher selling prices during the first half.

"Faced with multiple challenges such as sharp fluctuations in international oil prices and rising expectations of global liquidity tightening, the company remained focused and proactive," CNOOC said in its earnings report.

CNOOC booked a special oil gain levy of 9.73 billion yuan in the first half, up sixfold from 1.61 billion yuan a year earlier. The levy is a profit tax charged on domestic crude oil production when global oil prices cross a specific threshold.

Exploration expenses rose 50% to 7.86 billion yuan, which CNOOC linked to intensified exploration activity, including new discoveries in China and newly acquired exploration blocks in Brazil and Indonesia.

The rest of CNOOC's expenses were virtually unchanged in the first half versus a year earlier, with operating expenses rising only 7% to 19.6 billion yuan.

By segment, the exploration and production business accounted for nearly all of the profit increase, while the trading segment contributed only modestly.

Looking ahead, CNOOC said it will maintain its focus on its annual production and operation targets and increase is reserves and production.

CNOOC's board declared an interim dividend of HK$0.94 per share, a record high since the company's listing.

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