CNOOC to cut oil and gas production in 2016

BEIJING, Jan 19 (Reuters) - CNOOC Ltd aims to cut oil and gas production in 2016, the Chinese state-controlled company said on Tuesday, as global oil prices plumb 12-year lows.

CNOOC Ltd increased production in 2015 as oil prices fell to half their 2014 peak amid weak demand growth and a supply glut. Spot prices for natural gas also fell.

The company has set a 2016 net production target for oil and natural gas of 470 to 485 million barrels of oil equivalent (boe), it said in a filing to the Hong Kong bourse, and expected production to rebound in 2018 when the target is 502 million boe.

Net output in 2015 is estimated at 495 million boe, CNOOC said, the high end of last year’s target.

CNOOC Ltd’s output growth in 2015 helped boost Chinese domestic oil production, which grew 1.7 percent to 4.29 million barrels per day even as low prices put pressure on high-cost production, such as the offshore projects that CNOOC Ltd - whose parent is China National Offshore Oil Corporation - specialises in.

The cost of producing a barrel is more than $40 a barrel for Chinese producers, state planner the National Development and Reform Commission said last week. Benchmark Brent crude is currently trading at just under $30 per barrel.

CNOOC Ltd said it would cut capital expenditures to “no more than” 60 billion yuan ($9.12 billion), from a budgeted 70 to 80 billion yuan in 2015.

$1 = 6.5780 Chinese yuan renminbi Reporting by Adam Rose; editing by Jason Neely