Energy
Chinese Company Expects Oil Production to Grow in 2009 (CEO, CVX)
Published:
When China’s CNOOC Ltd. (NYSE:CEO) lost out to Chevron Corporation (NYSE:CVX) in a bid for Unocal, it found other places to invest. Like Nigeria and Indonesia. Those investments are expected to start paying off this year, as CNOOC targets net production at 225-231 million barrels of oil equivalent. Estimated net production for 2008 is 194-196 million barrels.
CNOOC noted that its budgeted price for oil in 2009 is $60/barrel,compared with $100/barrel in 2008. Assuming the company is correct onits pricing and production estimates, CNOOC stands to make lowerrevenue and lower profits in 2009. However, CNOOC plans to increase itscapital spending by 19% in 2009, to $6.76 billion. Much of that will goto exploration offshore China itself. The company expects to replacemore than 100% of its reserves in 2009.
At Friday’s close, CNOOC’s market cap was $3.91 trillion, even thoughshares are about 60% below 52-week highs. Talk about too big to fail.
Paul Ausick
January 20, 2009
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