Cnooc Ltd. said its first-half profit declined as oil prices slumped over concerns about global growth, even as China’s biggest offshore driller benefited from strong output during the period.
The company reported net income of 63.8 billion yuan ($8.76 billion) for the first six months, down 11% from a year earlier, it said in a filing late Thursday. That follows a 6% decline in first-quarter earnings. Oil and gas output, however, rose 9% to 331.8 million barrels during the half.
Cnooc’s shares advanced as much as 2.4% in early Hong Kong trading Friday. Analysts said the company displayed resilience during the half, citing cost controls and the strong production growth.
Brent crude was on average 24% lower in the first half of the year than same period in 2022, when Russia’s invasion of Ukraine sparked fears of a global energy crisis. Prices have slipped this year as China’s sputtering exit from Covid restrictions has raised concerns about a global economic slowdown.
With a relatively minuscule refining business, Cnooc remains more exposed than its peers to fluctuations in the crude oil market. Every $1 drop in benchmark rates can cut earnings by 3.4%, according to Bloomberg Intelligence.
Capital expenditure rose 36% to 56.5 billion yuan, helped by overseas drilling in Guyana and Brazil and steady growth in domestic gas development, according to the stock filing on the Shanghai Stock Exchange released on Thursday.
Cnooc has pledged higher spending this year to lift volumes and is extending its operations into deeper waters, responding to Beijing’s calls on the sector to do more to curb reliance on fuel imports. Xi reiterated a focus on energy security last month and called for further reforms in China’s oil and gas sectors to ensure reliable supply.
Cnooc’s sister companies, PetroChina Co. and Sinopec, will report earnings later this month.
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