CNOOC's 2014 output to rise 5.6% as Nexen boosts production


CNOOC's 2014 output to rise 5.6% as Nexen boosts production


BEIJING (Bloomberg) -- CNOOC Ltd., China’s biggest offshore oil and gas producer, plans to increase output by as much as 5.6 percent this year, boosted by its acquisition of Canada’s Nexen Inc. last year.

The Beijing-based explorer will produce 422 million to 435 million barrels of oil equivalent, it said in a statement to the Hong Kong stock exchange today. The company produced 412 million barrels of oil equivalent in 2013, including 61 million barrels from Nexen.

CNOOC which bought Nexen for $15.1 billion in China’s biggest overseas acquisition, maintained its 6 percent to 10 percent annual average production growth target from 2011 to 2015. As many as 10 new projects will start in 2014 and capital spending will climb to as much as 120 billion yuan ($19.8 billion) from 90.5 billion yuan last year.

The capital expenditure figure exceeded a forecast from Barclays Plc’s investment-banking unit, which estimated the company’s spend for 2014 at $16.7 billion. “CNOOC has over-estimated capex in the recent past, but spends have still risen rapidly since 2010,” Hong Kong-based Barclays’s analysts including Somshankar Sinha and Ying Lou said in a report today, before CNOOC’s announcement.

CNOOC shares rose 0.7 percent to HK$13.96 at the close in Hong Kong today. They have declined 15 percent in the past year, compared with a 2.9 percent drop in the benchmark Hang Seng index.

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