Aiming to control production costs to deal with lower oil prices, China's CNOOC has cut its oil and gas output target and capital expenditure (capex) for this year.
The company has set a new output target of 1.38 million-1.41 million b/d of oil equivalent (boe/d) for this year, down from a previously targeted 1.42 million-1.45 million boe/d. It also cut its capex by 10 billion yuan ($1.41 billion) to Yn75 billion-85 billion.
The cut in targeted output will almost all stem from CNOOC's overseas oil and gas assets, of which costs were higher than those for domestic production. The newly-targeted overseas output will account for 34 percent of the total output, down from a previous 36 percent.
From a previously planned 38 percent, CNOOC plans to cut its overseas percentage in the total capex this year to 30 percent. This indicates that investment in its overseas assets will fall to Yn22.5 billion-25.5 billion from Yn32.3 billion-36.1 billion.
The firm will minimize production from its oil sands operations in Canada and shale oil fields in the US, of which operating costs are at high levels.
Production from domestic fields in the latest quarter increased by 8.6 percent from a year earlier to 957,000 boe/d, mainly attributed to increments from newly-operated projects and the acquisition of China United Coalbed Methane.
