January 23, 2019 / 9:29 AM / a month ago

China's CNOOC boosts spending target to highest in five years

BEIJING/SINGAPORE, Jan 23 (Reuters) - China's state-owned offshore oil and gas producer CNOOC Ltd set its highest capital expenditure target since 2014, responding to the government's call for oil companies to build up the nation's petroleum output and reserves.

The company plans to spend 70 billion to 80 billion yuan ($10.3 billion to $11.8 billion) on exploration and production, CNOOC said in a press release on Wednesday, compared with an expected 63 billion yuan in capital spending for 2018.

Beijing has called on the state oil giants to increase domestic exploration to help meet strong crude demand and counter falling output from maturing fields. This came after President Xi Jinping urged oil companies in August to improve national security by boosting domestic production and reserves.

In response to the government's call, CNOOC pledged last week to double its exploration activities and proven oil and gas reserves in China over the next seven years.

Six new projects, including the Egina oilfield in Nigeria and the Huizhou 32-5 oilfield in the South China Sea, are expected to come on stream in 2019, the company said.

CNOOC expects to drill 173 exploration wells this year, it also said.

The company said its total oil and gas production will reach 480 million to 490 million barrels of oil equivalent in 2019, up from 475 million barrels in 2018.

CNOOC's domestic production will account for 63 percent of its total production in 2019, compared with 65 percent last year, the company said.

($1 = 6.7820 yuan)

Reporting by Meng Meng and Aizhu Chen; Editing by Tom Hogue

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