China National Offshore Oil Corporation (CNOOC) reveals that it is set to miss this year’s capital expenditure target of $11bn for 2018 due to the deferral of some projects, the companies Chief Finance Officer Mr. Xie Weizhi said during a third quarter results briefing in China, according to Chinese media outlets.
There was good news for CNOOC though; in the third quarter of 2018 - the Company's capital expenditure increased by 29.6 percent Year on Year to approximately $2.1bn, mainly due to the increase in development and production workload.
Mr. Weizhi said that with plentiful cash in hand, CNOOC would instead focus more on the development of existing assets in domestic and overseas markets than acquiring new assets. "Projects, such as the Uganda one, are unlikely to be pushed forward this year," Mr. Weizhi said.
In Uganda, CNOOC has interest in each of the EA 1, EA 2 and EA 3A licenses in the Lake Albert Basin. CNOOC in 2017 completed the front end engineering design or FEED for ground construction and drilling as the operator of EA 3A.
CNOOC reportedly spent $5.22bn over January-September, accounting for only around 50% of the target, although that expenditure was up 9.2% Year on Year.
Mr. Neil Beveridge at Bernstein, a global research company, told S&P Global news agency that CNOOC was expected to start a multi-year growth cycle in 2019, with over 30 projects in the pipeline in both domestic and overseas markets.
CNOOC in a statement said they achieved a total net production of 113.8 million barrels of oil equivalent (BOE) for the third quarter of 2018, representing a decrease of 2.1 percent year over year.
Production from offshore China reached 73.7 million BOE, almost flat from the same period last year. Overseas production decreased 5.4% YoY to 40.1 million BOE, mainly due to the lower production efficiency in the UK North Sea as a result of the preparation work for infill drilling program.
During the period, the Company made four new discoveries and drilled fourteen successful appraisal wells. The new discovery of Luda 4-3 made in offshore China was preliminarily evaluated as a mid-sized oil and gas structure. Successful drilling of Longtail Structure and Hammerhead Structure at the Stabroek block in Guyana further enhanced the asset value and laid a high-quality resource foundation for future development.
On development and production, three out of five new projects planned for this year have commenced production. Dongfang 13-2 gas fields and Wenchang 9-2/9-3/10-3 gas fields are under installation and commissioning, and expected to commence production within the year.