CNOOC has now joined ExxonMobil in initiating arbitration proceedings against Chevron Corporation to preserve its right to acquire the 30 percent stake in the Stabroek Block, currently held by Hess Corporation. It was previously reported that Chevron is trying to acquire Hess, along with its holdings in Guyana’s prolific oil block to the tune of US$53B.
This development comes as CNOOC grapples with a downturn in its annual profits for the year 2023, despite achieving record production levels. In fact, the Chinese state owned company in its recent stock filing, revealed a net income of 124 billion yuan (US$17 billion) for 2023, compared to 142 billion yuan in the previous year. The decline in profits was attributed to weaker oil prices, which impacted the company’s revenue, falling from 422 billion yuan to 417 billion yuan. The offshore driller, more exposed to oil price fluctuations due to its limited downstream ventures, faced significant challenges in maintaining profitability amidst volatile market conditions.
However, amidst the profit dip, CNOOC celebrated a milestone in its production figures, with crude and gas production reaching 678 million barrels of oil equivalent (MMboe) in 2023, marking the sixth consecutive year of growth. Looking ahead, the company outlined ambitious production targets, aiming for 700-720 MMbbl in 2024 and 780-800 MMbbl in 2025, with capital expenditure expected to range between 125-135 billion yuan for the current year.
In a briefing held in Hong Kong, CNOOC’s Board Secretary Xu Yugao addressed the arbitration proceedings, confirming the company’s filing on March 15 and reaffirming its determination to safeguard its interests and those of its shareholders through legal means. The dispute with Chevron underscores the strategic importance of the Stabroek Block, expected to yield up to 1.2 million barrels per day by 2027, according to Chief Financial Officer Wang Xin.
