Energy giant committed to long-term growth

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Last updated at: (Beijing Time) Friday, January 16, 2004

Energy giant committed to long-term growth

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Chinese energy giant, China National Offshore Oil Corp. (CNOOC), Thursday announced that its target net production volume offsnethore China in 2004 is expected toreach 118 million to 123 million BOE (barrels of oil equivalent), compared with 108 million BOE in 2003.

In a press release on it business strategy and development planfor year 2004, CNOOC said it is committed to long-term production growth albeit problems at two of the offshore China fields, QHD 32-6 in Bohai Bay and PY5-1/4-2 in Eastern South China Sea.

Improvements in these fields will help the company achieve the upper end of the target. Despite the problems, the company continues to strive for production target set earlier for 2005, said CNOOC.

The company's exploration budget in 2004 is expected to approximately double that of 2003 to reach 270 million to 290 million US dollars. The exploration program is designed to achievea reserve replacement rate of 180 percent in 2004.

The development capital expenditure in 2004 is budgeted at 1.6 billion to 1.7 billion US dollars, according to the company.

Thirteen development projects are expected to come on stream between 2004 and 2005, of which six are expected to be completed in 2004, the most planned for completion in a certain year ever inthe company's history.

CNOOC said that it will continue to maintain its cost competitiveness. Even though offshore China production costs in 2003 and 2004 are experiencing upward pressure, proactive measuresare in place to bring costs further down. Lifting costs are expected to step down materially in 2005.

"CNOOC Limited's winning strategies remain unchanged. We will continue to focus on achieving production growth, adding reserves through exploration and opportunistic acquisitions, developing andexpanding natural gas business to deliver solid returns to our shareholders," said Fu Chengyu, chairman and chief executive officer of the company.

He said the fundamentals of the company remain healthy and the management is confident of the growing future of the company.

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