CNOOC First-Half Profit Rises 23.4% to CNY 85.8 Billion on Record Output

CNOOC Ltd reported a 23.4% rise in net profit attributable to shareholders to CNY 85.8 billion (USD 12.9 billion) for the first half, up from CNY 69.5 billion a year earlier, according to a filing with the Hong Kong Stock Exchange.

The result rests on two levers moving in the same direction. Realized oil prices climbed 23.6% to USD 85.49 per barrel over the period, while net oil and gas output rose 3.7% to a record 398.7 million barrels of oil equivalent. Oil and gas sales revenue increased 20% to CNY 206.1 billion.

Volume growth was concentrated in liquids. Crude oil and petroleum liquids production over the first six months rose 4.8% to 310.3 million barrels. Natural gas output moved 0.2% higher to 517.3 billion cubic feet, and the realized gas price gained 1.3% to USD 8 per thousand cubic feet.

Domestic fields carried the bulk of the barrels. Of the group total, 275.2 million boe came from China, a 3.3% increase.

Costs moved the other way. All-in costs reached USD 29.7 per barrel of oil equivalent in the first half, above the USD 28.41 recorded in the first quarter. At a realized crude price of USD 85.49, the gap between the two figures is the margin that produced the earnings step-up.

Management left guidance unchanged. The company reaffirmed full-year production of 780 million to 800 million boe and capital spending of CNY 112 billion to CNY 122 billion. First-half capex came to CNY 62 billion, roughly half the low end of the annual range.

Exploration results underpin the volume trajectory. In China, CNOOC logged four new oil and gas discoveries, including Luda 16-1 and Qinhuangdao 30-3 in the Bohai Bay, and successfully appraised 16 oil and gas structures, among them Wenchang 19-3. Outside China, the company secured three new exploration blocks in Brazil and Indonesia.

For investors tracking the upstream complex, the combination matters more than either input alone. A realized price of USD 85.49 per barrel with unit costs under USD 30 leaves a wide operating spread on 310.3 million barrels of liquids, and the record 398.7 million boe total means that spread applied to more volume than in any prior half. Producers whose realized prices track lighter benchmark exposure, or whose unit costs sit closer to the price, convert the same barrel into less cash.

The unchanged capex range against CNY 62 billion already spent leaves the second-half spending profile broadly in line with the first, rather than signalling an acceleration off the back of the profit jump. The same holds for volumes: reaffirming 780 million to 800 million boe after 398.7 million boe in the first half implies a second half consistent with the first, not a step change.

Gas remains the flat line in the accounts. A 0.2% output gain and a 1.3% price gain contrast with the liquids figures of 4.8% and 23.6%, leaving crude as the engine of the half-year result.