CNOOC’s profit drops, needs funds for Nexen deal
August 27, 2012 Category Petrochemicals, Weekly
China National Off-shore Oil Corp’s net profit fell to CNY31.87 billion in the first six months from CNY39.34 billion a year earlier, as revenue fell 5% to CNY118.27 billion, while oil and gas output shed 4.6% to 160.9 million barrels of oil equivalent (BOE). CNOOC blamed the lower output to the closure of its key Penglai 19-3 field in China’s Bohai Bay after an oil spill last year. The company hasn’t provided a date for the field’s start-up, which is pending government approval, although it is operationally ready to resume production. CNOOC is confident of meeting its production target of 330-340 million barrels of oil equivalent for 2012 set earlier in the year. CNOOC has announced it will take drastic measures to get the money it needs to buy Nexen in the wake of its disappointing first-half profits, which fell nearly 20%. CNOOC Chairman Wang Yilin said that the company will reduce its dividend almost by half to help raise the USD15.1 billion it needs to buy the Canadian company. The Nexen deal should help China gain both the technology and operating experience it needs to extract potentially huge domestic reserves of bitumen, heavy oil and shale oil, said industry experts.
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