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CNOOC 'confident' on output goals

By Emma Dai in Hong Kong and Du Juan in Beijing ( China Daily )

Updated: 2014-01-21

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CNOOC 'confident' on output goals

Workers at a CNOOC subsidiary install equipment in Qingdao, Shandong province. CNOOC's net 2013 output is estimated at 412 million barrels of oil equivalent, including 61 million BOE from Nexen Inc. Jiang Zuofeng / For China Daily

CNOOC Ltd, China's biggest offshore oil and gas developer, on Monday announced its 2014 business strategy, which includes producing 422 to 435 million barrels of oil equivalent.

"We are confident of meeting our production target of 6 to 10 percent annual growth from 2011 to 2015," said Li Fanrong, chief executive officer, at a news conference in Hong Kong.

According to the company, about 69 million BOE of the output target in 2014 will come from Nexen Inc. The acquisition of Nexen raised CNOOC's output after the smooth integration of operations in the past year.

CNOOC's net 2013 production is estimated at 412 million BOE, including 61 million BOE from Nexen.

"Nexen's operations have been within our expectations in the past 10 months. It might look a little bit costly at present, but we invested in the company for strategic longer-term returns," Li said.

"Its regular projects in the North Sea in the United Kingdom are very competitive and generate good cash flow. Its major resources in Canada, namely shale gas and oil sands, will be one of our pillars for long-term development. But we need to lower production costs through better management and innovation," Li added.

"As the biggest overseas acquisition in history, CNOOC did a good job after the transaction," said Li Li, research director at ICIS C1 Energy, a Shanghai-based energy information consultancy. "CNOOC hasn't just gotten more production from the acquisition, it has learned advanced management techniques and gained technological experience through productive and effective internal communication."

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