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Shanghai: Cnooc Ltd, China's largest offshore oil producer, posted a 1.3 per cent gain in 2007 profit, the smallest increase in five years, because of rising costs and flat production growth.
Net income rose to 31.3 billion yuan ($4.5 billion), or 0.72 yuan a share, from 30.9 billion yuan, or 0.73 yuan a year earlier, the Beijing-based company said in a statement to the Hong Kong stock exchange yesterday. The median profit estimate in a Bloomberg survey of 10 analysts was 31.08 billion yuan. Sales rose two per cent to 90.7 billion yuan.
Cnooc's output steadied from a year earlier partly because of delays to the start of the Panyu field. Costs rose as windfall tax payments to the Chinese government gained after oil surged to records. Cnooc's planned capital spending may climb 44 per cent this year as competition to find reserves caused a global shortage of rigs and drilling crews.
"Flattish production growth, higher taxes and the rapid renminbi appreciation have offset gains from rising crude prices," Gordon Kwan, head of China energy research at CLSA Ltd., said yesterday. Benchmark crude prices in New York have risen almost 70 per cent in the last year.
Cnooc rose 1.5 per cent to close at HK$11.12 in Hong Kong trading before the earnings were announced. The stock has gained 68 per cent in the past year, more than the 15 per cent increase in the benchmark Hang Seng Index.
Dividend
The company proposed a final dividend of 0.16 yuan a share, compared with 0.14 yuan a year earlier.
CNOOC produced the equivalent of between 171 million barrels of oil last year, 2.6 per cent more than a year earlier, the company said yesterday.
The company aims to increase oil and gas output by 18 per cent this year, producing the equivalent of between 195 million and 199 million barrels of oil, Cnooc said in January. The company plans to spend $1.04 billion on oil and gas exploration in 2008, it said then. The explorer aims to replace the oil and gas reserves it depletes at a rate of more than 100 per cent this year.
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