CNOOC Limited that also has operations in Uganda, announced its key operational statistics for the third quarter of 2019 among others, showing that it achieved a total net production of 124.8 million barrels of oil equivalent (“BOE”), representing an increase of 9.7 percent year over year (“YoY”).
Production from offshore China increased 8.9 percent YoY to 80.2 million BOE, mainly attributable to production growth from the commencement of new projects. Overseas production increased 11.2 percent YoY to 44.6 million BOE, mainly due to the contribution from the new projects of Egina and Appomattox.
During the period, the Company made three new discoveries and drilled 19 successful appraisal wells. In offshore China, Kenli 6-1 in Bohai was successfully appraised and is expected to be a mid-sized oil and gas structure. In Guyana, the new discovery of Tripletail was made in the Stabroek block, which is the fourteenth oil discovery achieved in the block and will support the future development of the Turbot area.
On development and production, three out of six new projects planned for this year have commenced production. Bozhong 34-9 oil field, Caofeidian 11-1/11-6 comprehensive adjustment project and Wenchang 13-2 comprehensive adjustment project are undergoing offshore commissioning.
The unaudited oil and gas sales revenue of the Company reached approximately RMB48.34 billion for the third quarter of 2019, representing an increase of 0.8 percent YoY, mainly due to the increase in production offset the decrease in realized prices. During this quarter, the Company’s average realized oil price decreased 14.9 percent YoY to US$60.89 per barrel, which is in line with the international oil prices. The Company’s average realized gas price decreased 8.8% YoY to US$5.70 per thousand cubic feet, mainly due to the increased proportion of gas production with lower realized gas price.
For the third quarter of 2019, the Company’s capital expenditure increased 27.9 percent YoY to approximately RMB19.53 billion, mainly due to the significant increase in workload.
Mr. Xu Keqiang, President of CNOOC Limited, commented: “In the third quarter, the Company further strengthened its efforts in exploration and development, seeing a steady increase in net production in offshore China and from overseas. The Company is confident of achieving the full-year production and operation targets, and will strive to create maximum and enduring value for its shareholders.”
CNOOC and its partners Total E&P Uganda Tullow Oil and are developing the Tilenga oil field in Uganda and the EACOP pipeline to transport the oil from the field in Hoima to the port of Tanga in Tanzania. The projects will bring significant economic and social benefits to both countries.
Uganda is said to have an estimated 6.5 billion barrels of oil, 1.4 billion of which are recoverable.
However, the production timeline is facing challenges following the breakdown in Tullow Oil’s farm-down negotiations with and government.
In January 2017, Tullow announced that it had agreed a substantial farm-down of its assets in Uganda to Total. Under the Sale and Purchase Agreement, Tullow agreed to transfer 21.57 percent of its 33.33 percent interest in Exploration Areas 1, 1A, 2 and 3A in Uganda to Total for a total consideration of $900 million. CNOOC Uganda Limited (CNOOC) subsequently exercised its pre-emption rights under the joint operating agreements to acquire 50 percent of the interests being transferred to Total on the same terms and conditions.