On the evening of October 28th, China National Offshore Oil Corporation (CNOOC, 600938.SH) released its financial report for the first three quarters of 2024, announcing that the company achieved a total operating income of 326.024 billion yuan, a year-on-year increase of 6.3%; and a net profit attributable to the parent company of 116.659 billion yuan, a year-on-year increase of 19.5%, setting a new historical record.
Thanks to a significant increase in net production and effective control over the main costs per barrel of oil, compared to the same period in 2023, the company's net profit for the first three quarters of this year increased by 19.5%; compared to the same period in 2022, despite a 20.2% decrease in Brent oil prices, the company's net profit attributable to the parent company still rose by 7.3%.
In the first three quarters of this year, CNOOC continued to advance the increase in reserves and production, with oil and gas net production reaching a historical high for the same period. The company achieved a net production of 542.1 million barrels of oil equivalent, a year-on-year increase of 8.5%. Among them, the net production in China increased by 6.8% year-on-year to 369.2 million barrels of oil equivalent, mainly due to the production contribution of oil and gas fields such as Bozhong 19-6 and Enping 20-4; overseas net production increased by 12.2% year-on-year to 172.9 million barrels of oil equivalent, mainly due to the production growth brought by the start-up of the Payara project in Guyana.
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On the other hand, CNOOC insists on cost reduction and efficiency enhancement, and has achieved good control over the main costs per barrel of oil. In the first three quarters, the company's main cost per barrel of oil was $28.14, which is basically the same as the $28.37 in the same period last year.
In addition, due to the increase in construction projects compared to the same period last year, CNOOC's capital expenditure in the first three quarters increased by 6.6% year-on-year to 95.34 billion yuan. Among the company's key new projects for 2024, seven new projects have been successfully put into operation in Chinese waters, with a combined peak daily production of 123,700 barrels of oil equivalent. In addition, the company's Suizhong 36-2 oilfield development project and the Huizhou 26-6 oilfield development project are respectively in the installation and commissioning stages, with a peak daily production of 30,300 barrels of oil equivalent after production.
However, compared to the impressive performance in the first three quarters, CNOOC's operating income in the third quarter decreased by 13.5% year-on-year to 99.254 billion yuan. Wang Xin explained, "The decline in operating income in the third quarter is mainly due to the decrease in trade income, which has a low profit margin and has little impact on the company's net profit. The revenue from CNOOC's self-produced crude oil and natural gas sales has not decreased much."
The financial report shows that CNOOC's average selling price for oil in the third quarter was $76.41 per barrel, a significant decrease of 8.2% year-on-year; the average price of natural gas was $7.75 per thousand cubic feet, a slight increase of 2.6% year-on-year. However, looking at the overall sales revenue, the company's oil and gas sales revenue in the third quarter only slightly decreased by 0.4% to 86.32 billion yuan, and the net profit attributable to the parent company increased by 9% year-on-year to 36.928 billion yuan.
The decline in CNOOC's oil trade income in the third quarter is closely related to the trend of international oil prices. Since the third quarter, international oil prices have been fluctuating and generally declining, with Brent crude oil prices falling from about $86 per barrel at the beginning of July to the lowest point of $68 per barrel in mid-September, setting a new low in more than two years. International oil supply and demand, performance of international financial markets, and geopolitical trends are important factors affecting the recent significant fluctuations in oil prices.
Regarding how to deal with the impact of oil price fluctuations on the company's performance, the company will always adhere to effective production growth and low-cost strategy, adhere to the stress test of $35 per barrel, and always adhere to technological and management innovation, continuously reducing the cost per barrel of oil, to deal with the uncertain risks of oil prices with certain work.