CNOOC Charts Ambitious Production Growth Amidst Global Uncertainty
China National Offshore Oil Corporation (CNOOC), the nation’s dominant force in offshore crude oil and natural gas extraction, is setting its sights on an increased output for the current year. This strategic push comes at a time of heightened geopolitical tensions and a concurrent rise in global oil prices, signaling a deliberate move to capitalize on prevailing market conditions.
The company’s forward-looking strategy follows a period of mixed financial results. In 2025, CNOOC reported an 11.5 per cent decrease in net profit, settling at 122.08 billion yuan (approximately US$17.7 billion). This decline was attributed to lower oil prices experienced throughout the year, despite the company achieving record volumes of both crude oil and natural gas production. Revenue for the same period saw a dip of about 5.3 per cent, amounting to 398.22 billion yuan.
Despite the profit dip, CNOOC has announced its intention to produce between 780 million and 800 million barrels of oil equivalent (BOE) this year. This target represents a potential increase of up to 3 per cent over the record 777.3 million BOE achieved in 2025, which itself marked a significant 7 per cent growth from the previous year.
Strategic Imperative: Navigating Geopolitical Headwinds
The decision to elevate production targets is directly linked to the volatile global landscape. CNOOC chairman Zhang Chuanjiang articulated this rationale, highlighting “heightened geopolitical risks and successive waves of regional conflicts and uncertainty.” He emphasized that these factors are poised to drive oil prices upward, creating an opportune moment to expand production capacity.
The current global climate, characterized by ongoing conflicts and strained international relations, has demonstrably impacted energy markets. The ongoing conflict involving the US and Israel’s stance on Iran, for instance, has contributed to a climb in oil prices. As of Thursday, Brent crude oil was trading at nearly US$106 per barrel. This stands in stark contrast to the average Brent crude price of US$68.20 per barrel recorded in 2025, a year-on-year decrease of approximately 14.6 per cent from 2024.
Expanding Reserves and Investments for Future Growth
Looking beyond the immediate year, CNOOC remains committed to a long-term vision of growth and sustainability. “In 2026, we will solidify our development foundation by increasing oil and gas reserves and production,” stated Zhang. This commitment is underpinned by tangible actions taken in the past year.
- Exploration and Discovery: CNOOC successfully identified six new oil and gas reserves and confirmed the viability of 28 oil and gas-bearing geological structures.
- Strategic Acquisitions: The company expanded its exploration footprint by securing four new projects in key international markets, including Iraq, Kazakhstan, and Indonesia.
These initiatives are backed by substantial financial commitments. Capital expenditure dedicated to oil and gas exploration and development is projected to range between 112 billion yuan and 122 billion yuan for the current year.
Offshore Dominance and the Rise of New Energy
CNOOC views its offshore operations as a cornerstone of China’s future energy security and production capabilities. “Offshore oil and gas represent a key strategic area for China’s future production growth, offering vast prospects and development opportunities for the company,” Zhang explained. This focus is complemented by an increasing recognition of the role of new energy sources. The company anticipates that “the role of new energy in the energy mix will become increasingly prominent, with technological breakthroughs and scale-up both accelerating.”
Furthermore, CNOOC has outlined ambitious plans for its domestic operations. Senior vice-president Yan Hongtao revealed that the company is tentatively planning to increase its domestic oil output to as much as 70 million tonnes annually over the next five years, a substantial rise from the current 61 million tonnes. This expansion will be accompanied by significant growth in natural gas production, with the addition of two large natural gas fields expected to boost output to 40 billion cubic metres, up from the current 30 billion cubic metres.
Cost Management and Shareholder Returns
While aggressively pursuing production growth, CNOOC is also keenly focused on maintaining cost competitiveness. CEO, President, and Vice-Chairman Huang Yongzhang emphasized this dual strategy, stating, “We can’t control the oil prices; but we can control our costs.” This disciplined approach to expenditure is crucial for navigating market volatility and ensuring long-term profitability.
Reflecting its financial performance and strategic outlook, CNOOC’s board has recommended a dividend payout ratio of 45 per cent for 2025. This translates to a distribution of HK$1.28 per share, which includes a final dividend of HK$0.55 per share. The company’s shares, listed in Hong Kong, saw a positive market response, gaining 2.5 per cent to close at HK$29.22 on Thursday.
