(Adds details, context)
* Earns net profit of 56.5 billion yuan vs 63.7 billion yuan
* Production grew 20.2 percent to 411.7 million boe in 2013
* Plans to raise output 4.3 percent to 353 million-366
HONG KONG, March 28 China's top offshore oil
producer, CNOOC Ltd, posted an 11.4 percent slide in
its 2013 net profit on Friday, lagging analysts' forecasts, as
it struggled to deliver production growth and control costs amid
weakening crude prices.
CNOOC posted a net profit of 56.5 billion yuan
($9.09 billion) for last year, versus 63.7 billion yuan in 2012.
The result compared with a consensus forecast of 63.2 billion
yuan from 31 analysts polled by Thomson Reuters.
The state-run firm completed its $15.1 billion acquisition
of Canadian energy firm Nexen Inc in February last year. It was
China's largest overseas takeover that CNOOC says will boost its
annual output by 20 percent and proven reserves by 30 percent.
Once an investor darling for its high-growth profile, CNOOC
has been struggling to boost its output over the past few years
as domestic fields age.
Its production grew 20.2 percent to 411.7 million barrels of
oil equivalent (boe) in 2013, thanks to contributions from
Nexen. But excluding the contribution, CNOOC produced 350.9
million boe last year, missing for the third year in a row its
compound annual growth target of 6 to 10 percent set for the
CNOOC has vowed it will still meet the five-year growth
target, increasing its capital spending budget by as much as a
third from last year to almost $20 billion and aiming to get 20
projects under construction this year while launching up to 10
"These serve as a strong foundation for our development over
the next few years and beyond," CNOOC Chairman Wang Yilin said
in a statement.
CNOOC has said it is aiming for an up to 4.3 percent output
increase to 353 million-366 million boe this year, excluding
contributions from Nexen, above the company's guideline of 338
million-348 million boe announced at early 2013.
That means CNOOC's production, excluding Nexen, will have to
grow around 20 percent in 2015 to achieve the five-year growth
target, according to Reuters calculations.
The impact of CNOOC's output increase was partly offset by a
5.3 percent drop in realised crude prices and a 40 percent surge
in operating costs to 30 billion yuan as a result of the Nexen
acquisition. Like many oil companies around the world, CNOOC has
been facing rising costs as it widens its exposure to
unconventional energy such as oil sands.
CNOOC's shares were one of the worst performers among major
exploration and production companies in 2013 due to worries
about its output growth outlook and the premium it paid to
Some analysts say CNOOC overpaid for Nexen as it had
underestimated the risks of monetizing the landlocked oil sands
and shale gas assets in Canada that account for the bulk of
Nexen's proven and probable reserves.
Shares of CNOOC ended up 1.15 percent on Friday ahead of the
results announcement. The stock lost about 15 percent in the
last three months, versus a 5 percent drop in the benchmark Hang
($1 = 6.0502 Chinese yuan)
(Reporting by Charlie Zhu; additional reporting by Bangalore
newsroom; Editing by Matt Driskill)