CNOOC suffers big loss on low oil price

View of a logo of CNOOC on the rooftop of the headquarters building in Beijing, February 23, 2016. [Photo/IC]

Oil major loses 7.74b yuan, and PetroChina earnings drop 98% in the first six months

CNOOC Ltd posted its first-ever half-year loss as crude's plunge and writedowns on assets, including Canadian oil sands, destroyed profit at China's biggest offshore oil and gas producer.

The company swung to a 7.74 billion yuan ($1.16 billion) loss in the January to June period, compared with a net income of 14.7 billion yuan a year earlier, the Beijing-based oil exploration firm said in a statement to the Hong Kong stock exchange on Wednesday. Oil and gas revenue fell 28.5 percent to 55.08 billion yuan.

During the first half of the year, Brent crude, the global benchmark, had an average price roughly 30 percent lower than in the same period in 2015, roiling global oil firms. Prices have whipsawed this year, flipping five times between bear and bull markets, as production from nations outside the Organization of Petroleum Exporting Countries, including China and the US, declines in the wake of a price crash that began in 2014.

CNOOC's output in the first six months of the year rose 0.6 percent to 241.5 million barrels of oil equivalent, CNOOC said in the statement. CNOOC said in January that full-year production will fall for the first time since 1999 and that capital spending would be capped at 60 billion yuan. Full-year production is forecast at 470 million to 485 million barrels this year, down from 496 million barrels of oil equivalent in 2015.

"Benefiting from the effective measures of cost control and efficiency enhancement, the company achieved remarkable results in cost saving in the first half of the year," CNOOC said in the statement.

Also on Wednesday, PetroChina Co, the country's biggest oil and gas producer, posted its smallest half-year profit since it was publicly listed in 2000, as the crash in oil prices continues to drag on earnings.

Net income dropped 98 percent to 531 million yuan. Revenue fell 15.8 percent to 739 billion yuan. The company was able to eke out a profit after recovering from its first-ever quarterly loss earlier this year.

PetroChina's total global crude oil and gas output rose 1.7 percent to 748.2 million barrels of oil equivalent during the first half of the year, it said on Wednesday. Capital expenditures fell 17.5 percent to 50.9 billion yuan.

Exxon Mobil Corp and Royal Dutch Shell Plc in July reported their lowest quarterly profits since 1999 and 2005, respectively. Chevron Corp. is suffering the longest earnings slump in more than a quarter century and BP Plc posted its lowest refining margin in six years.

Bloomberg