(EnergyAsia, March 29 2011, Tuesday) — China National Offshore Oil Corp Ltd (CNOOC) said it achieved record oil and gas production as well as net profit for the year ended December 31 2010.

Its net production increased 44.4% year-on-year to reach 328.8 million barrels of oil equivalent (BOE), while its net profit grew 84.5% to RMB54.41 billion. (US$1=RMB6.56). Its oil and gas sales increased 77.7% yoy to reach RMB149.12 billion.

With basic earnings per share (EPS) reaching RMB1.22 in 2010, the Beijing-based company’s board has proposed a year-end dividend of HK$0.25 per share. Together with an interim dividend of HK$0.21 per share, the company will distribute a total dividend of HK$0.46 per share in the year. (US$1=HK$7.79).

CNOOC attributed its robust performance to strong growth in oil and gas production from both new and existing fields as well as from newly acquired projects, combined with high oil prices last year. Its average realised oil price increased 28% yoy to US$77.59 per barrel, and its average realised gas price rose 6.5% yoy to US$4.27 per thousand cubic feet.

Over the year, CNOOC also reported making 12 independent discoveries while successfully appraising 12 oil and gas structures in 18 wells in offshore China.

ignificantly, tThe company said its reserve replacement ratio for the year amounted to 202%, its highest since 2003.

In 2010, nine new projects started production including Bozhong 3-2, Bozhong 29-4, Bozhong 19-4, Caofeidian 18-1, Bozhong 26-3, Luda 32-2, Weizhou 11-1E, Weizhou 6-8, and Huizhou 25-3, with each field’s production meeting or exceeding expectations.

CNOOC said it actively implemented its value-driven mergers and acquisition (M&A) strategy, acquiring interests in Bridas Corp and Eagle Ford shale oil and gas project that allow the company to enter into the resource rich areas in South America and for the first time into the shale play in North America.

The company said its total capital expenditure decreased 18.8% to US$5.071 billion, attributing the drop to efficiency improvements and workload being postponed due to the weather constraints. US$2.429 billion was spent on development expenditure, US$1.111 billion on exploration, and US$1.437 billion on production. Its all-in cost increased 11.4% yoy to US$24.76 per BOE.

Yang Hua, CNOOC chief executive officer, said:

“In 2010, CNOOC Ltd recorded exciting results in production growth, reserve replacement and net profit, demonstrating the company’s outstanding operational and management capabilities. Although in the year, the pressure on cost inflation was still one of the steep challenges faced by the entire industry, we were able to maintain a competitive cost structure among the global peers by implementing stringent cost control measures.”

Fu Chengyu, CNOOC chairman, said:

“In 2010, I’m pleased that the company maintained its excellent profitability while achieving rapid growth. We are willing to share the benefits with our shareholders in dividends according to our established dividend policy.”