CNOOC's profit plunges 59% in 2020 as coronavirus hits fuel demand

FILE PHOTO: Men wearing face masks walk past a sign of China National Offshore Oil Corp (CNOOC) outside its headquarters in Beijing, China March 8, 2021. REUTERS/Tingshu Wang

BEIJING (Reuters) - China’s national offshore oil and gas producer CNOOC Ltd reported a 59% plunge in 2020 profit, hitting the lowest since 2017, as the coronavirus pandemic whacked energy prices and hammered fuel consumption.

The listed branch of China National Offshore Oil Corp reported a net profit of 24.96 billion yuan ($3.82 billion), down from 61.05 billion yuan in 2019, while revenue was 155.37 billion yuan, according to a company statement filed to the Hong Kong Stock Exchange on Thursday.

The net profit was in line with analysts’ forecast of 24.338 billion yuan, according to IBES data from Refinitive. CNOOC is one of the industry’s lowest-cost explorers and producers, with all-in production cost at $26.34 per barrel in 2020.

Realised oil prices last year at CNOOC were $40.96 per barrel, down 35.3% on year, and gas prices dipped 1.6% to $6.17 per thousand cubic feet.

Output was 528.2 million barrels of oil equivalent in 2020, up 4.3% year-on-year.

The COVID-19 pandemic wrecked worldwide demand for energy in 2020, as economies locked down and travel was curtailed.

CNOOC’s capital expenditure was 79.5 billion yuan last year, meeting the adjusted target of 75-85 billion yuan. But the company has planned to raise its capital spending to 90-100 billion yuan this year, the highest since 2014.

The company’s reserve life, a measure of how long its current oil and gas reserve base can last, maintained at more than 10 years, according to the statement, with proved reserves reaching 5.373 billion barrels of oil equivalent.

($1 = 6.5350 Chinese yuan renminbi)

Reporting by Muyu Xu and Chen Aizhu