Cnooc Profit Rises on Increased Oil and Gas Drilling Output

(Bloomberg) -- Cnooc Ltd. posted higher annual earnings and boosted its dividend, as growth in energy output offset weaker prices.

Net income rose to 137.9 billion yuan ($19 billion) in 2024, from 123.9 billion yuan the previous year, China’s largest offshore oil-and-gas driller said in a filing. While that missed expectations of 144.6 billion yuan, and was shy of the record profit in 2022, the full-year dividend rose 12% to HK$1.40 (18 cents).

Output expanded to 726.8 million barrels of oil equivalent, from 678 million barrels a year earlier, with overseas growth led by supplies from Guyana. The state-owned company has led Beijing’s efforts to enhance energy security and its operations have now delivered a sixth year of record production. 

Cnooc’s focus on extraction leaves its earnings heavily dependent on global oil prices, which averaged about 3% less in 2024 on-year. But it also means the company is relatively unaffected by headwinds to demand faced by downstream peers. Earlier this week, China’s biggest top, Sinopec, reported a tumble in profits as the electric-vehicle boom weighs on fuel consumption.

At this point, the company will stick to its three-year output targets through to 2027, including a push to increase gas production, Vice Chairman Zhou Xinhuai said at a briefing.

Among its overseas interests, Cnooc and Exxon Mobil Corp. have merged their arbitration claims against Chevron Corp.’s proposed takeover of Hess Corp., a deal that would allow the US oil supermajor to enter Guyana’s Stabroek Block. A first tribunal hearing is due in May.

PetroChina Co. — the country’s largest oil and gas company, whose operations straddle drilling, refining and retail — reports earnings on Sunday.

China’s energy giants are increasingly looking to natural gas to drive growth, although domestic prices have stumbled recently due a slowing economy and plethora of supply options, from domestic fields and gas piped overland from Russia and central Asia, to pricier seaborne imports of liquefied natural gas.

Another focus is investing in petrochemicals to offset weakness in transport fuels. In that vein, Cnooc is bolstering downstream operations, with a $2.7 billion expansion of its Daxie refinery that’s expected to start up in June.

(Updates to add dividend details in first, second paragraphs.)

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