State oil giant CNOOC Ltd. (00883.HK) has raised its net production growth target by 15 percent for this year from a year ago while cutting capital expenditure by up to 35 percent.
The net production target is in the range of 475 million to 495 million barrels of oil equivalent (BOE), up about 10 percent to 15 percent from an estimated 2014 net production of about 432 million BOE, the company said.
China will account for two-thirds of production while the rest will come from overseas fields.
Meanwhile, capital spending will be held to about 70 billion yuan (US$11.2 billion) to 80 billion yuan, down 26-35 percent from 2014, in line with a prudent investment strategy.
The spending is about 30 million yuan lower than earlier projections by Bank of America Merrill Lynch in a report Tuesday.
CNOOC chief financial officer Zhong Hua said the cutback is in response to “challenges from falling oil prices”.
He said the company will control cost and strive for a “more effective implementation of our capital expenditure plan in order to improve the overall performance of the company”.
Spending for exploration, development and production will account for about 21 percent, 67 percent and 10 percent of capex, respectively, according to a company statement.
The reserve replacement ratio is targeted above 100 percent.
Zhong said the Jinzhou 9-3 project, with peak daily production of 12,000 BOE, has begun production. Six other new projects will come on stream this year.
Among them are Kenli 10-1 and Bozhong 28/34 in Bohai, which are expected to reach peak daily production of about 36,000 and 30,000 BOE, respectively.
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