CNOOC adds to offshore China crude output

China's state-controlled offshore producer CNOOC started three new projects in September that will add around 91,000 b/d of crude output when the fields hit peak production in 2021-23.

The projects at the Jinzhou, Liuhua and Nanbao fields are in the Bohai sea and South China Sea. The biggest is the Liuhua 16-2 field in the eastern South China Sea, which is targeted to produce just 73,000 b/d at its peak in 2022.

CNOOC has now brought on line six new projects this year, five of which are in shallow waters of the Bohai sea. Total production capacity at the fields is around 145,000 b/d. All the new domestic crude projects that the company planned to finish in 2020 are now on stream.

CNOOC is increasing its domestic oil and gas output in line with a call by the Chinese government for upstream firms to raise production.

The company scaled back its output and capital expenditure (capex) targets for this year after oil prices collapsed in late March. It is now targeting production of 1.38mn-1.41mn b/d of oil equivalent (boe/d), down slightly from 1.42mn-1.45mn boe/d previously. Its 2020 capex target took a bigger cut, to 75-85bn yuan ($11bn-12.5bn) from Yn85-95bn previously.

The fall in capex mainly affects CNOOC's overseas projects. The company has postponed development of a second phase at the Buzzard field in the UK North Sea. Its overseas output fell by 5.6pc to 363,000 b/d in January-June.

CNOOC's total output in the first half of the year rose by 6.1pc to 1.42mn boe/d, with both crude and gas production increasing. Domestic liquids production increased by 8pc to 766,000 b/d, as output rose in the Bohai bay and the South and East China Seas.