CNOOC Ltd., a dominant player in China’s energy landscape with a majority stake held by China National Offshore Oil Corp., delivered a landmark performance in the past year, shattering its own production records. The company reported a net production of 777.3 million barrels of oil equivalent (MMboe), translating to an impressive 2.13 MMboe per day. This substantial achievement represents a robust seven percent year-over-year increase, signaling strong operational execution and strategic growth.
For investors focused on the upstream oil and gas sector, CNOOC’s operational breakdown offers further insights. Crude oil output expanded by 5.8 percent, showcasing consistent performance in its core liquid hydrocarbons business. Crucially, natural gas production surged by an even more significant 11.6 percent. This pivot towards gas proved instrumental in fortifying the company’s financial resilience, particularly in a market characterized by fluctuating international oil prices. The strategic emphasis on natural gas not only diversifies CNOOC’s energy portfolio but also positions it favorably in the global energy transition narrative.
Operational excellence remains a cornerstone of CNOOC’s strategy. The company has proactively focused on optimizing crude oil production while meticulously managing water-cut in its fields. Deploying advanced intelligent water injection and production technologies on a broad scale has been key to these efforts. As a direct result, CNOOC successfully curtailed its natural decline rate to a commendable 9.5 percent, demonstrating superior reservoir management and asset stewardship. This focus on efficiency and technological integration directly contributes to sustained production levels and improved cost structures, enhancing shareholder value.
Global Project Momentum Drives Production Uplift
CNOOC’s impressive production growth was not confined to its domestic operations; a significant portion stemmed from the successful ramp-up of multiple strategic projects across its international portfolio in South America and North America. These ventures underscore the company’s expanding global footprint and its capability to execute large-scale, complex offshore developments.
In 2025, CNOOC, alongside its joint venture partners, brought critical projects online, significantly contributing to the year’s production gains. Off the coast of Guyana, the Yellowtail project within the prolific Stabroek block commenced operations. CNOOC holds a substantial 25 percent interest in this high-potential asset, which represents a key growth engine in the deepwater frontier. Simultaneously, offshore Brazil, the company activated Buzios7 in the Buzios field, where it maintains a 7.34 percent stake, and Mero4 in the Mero field, with a 9.65 percent interest. These deepwater Brazilian developments further solidify CNOOC’s presence in prime pre-salt basins, known for their world-class reservoir quality and significant production potential.
Domestically, CNOOC maintained a vigorous development pace, bringing a remarkable thirteen new projects online across China’s offshore basins in 2025. The South China Sea witnessed nine start-ups, showcasing the ongoing vitality of this mature yet productive region. These include the Dongfang 1-1 Gas Field 13-3 Block Development Project, the Dongfang 29-1 field, the Panyu 11-12/10-1/10-2 Oilfield Adjustment Joint Development Project, the Weizhou 5-3 field, the Weizhou 11-4 Oilfield Adjustment and Satellite Fields Development Project, the Wenchang 9-7 field, the Wenchang 16-2 field, phase II of the Wenchang 19-1 field, and the Xijiang Oilfields 24 Block Development Project. This concentrated development effort highlights CNOOC’s commitment to maximizing returns from its established domestic resource base.
Further bolstering its domestic portfolio, CNOOC also announced four key project inaugurations in the Bohai Sea. These included phase I of the Bozhong 26-6 field, the Caofeidian 6-4 field adjustment, phase I of the Kenli 10-2 Oilfields Development Project, and phase II of the Luda 5-2 North field. These projects collectively enhance China’s energy security and demonstrate CNOOC’s continuous investment in maintaining and expanding its core offshore production capabilities.
Navigating Market Headwinds: Financial Performance and Cost Discipline
Despite a record-breaking production year, CNOOC’s net profit in 2025 registered CNY 122.1 billion ($17.69 billion), a decrease from CNY 137.9 billion reported in 2024. This moderation in profitability occurred against a backdrop of volatile international oil prices, which impacted overall revenue. However, the company’s astute management strategies ensured profit resilience. CNOOC successfully sustained profitability through a combination of stable production growth and the implementation of practical, highly effective cost-control measures. This disciplined approach shielded the company from greater financial impact and underscores its operational efficiency.
Total oil and gas sales revenue for 2025 amounted to CNY 335.7 billion, down from CNY 355.6 billion in the previous year, reflecting the softer pricing environment. Nevertheless, CNOOC’s commitment to cost leadership shone through, with its annual all-in cost per barrel of oil equivalent standing at an impressive $27.9. This represents a 2.2 percent year-over-year decrease, illustrating the company’s success in driving down operating expenses and maximizing margins even in a challenging market. For investors, such robust cost management is a key indicator of financial strength and operational efficiency in the highly capital-intensive oil and gas industry.
In line with its financial results, CNOOC declared an annual dividend of HKD 1.28 ($0.16) per share, a slight adjustment from the HKD 1.4 per share distributed in 2024. This reflects a balanced approach to capital allocation, ensuring continued returns to shareholders while maintaining financial flexibility for future investments and growth.
Future Outlook and Strategic Growth Pillars
Looking ahead, CNOOC has set ambitious targets for 2026, signaling continued growth for upstream investors. The company forecasts net production to range between 780 and 800 MMboe, building on the record performance of the past year. This forward guidance suggests sustained operational momentum and confidence in its project pipeline. To support these production targets, CNOOC anticipates capital expenditure for 2026 to be between CNY 112 billion and CNY 122 billion, earmarked for exploration, development, and production enhancement initiatives across its global portfolio.
The foundation for future growth is further strengthened by CNOOC’s significant reserve additions. At the close of 2025, the company’s net proven reserves climbed to an impressive 7.77 billion boe, representing a robust 6.9 percent increase year-over-year. This expansion in reserves provides a solid long-term resource base for continued production and revenue generation, reassuring investors about the sustainability of CNOOC’s operations.
CNOOC’s exploration program delivered tangible results in 2025, with a total of six new oil and gas discoveries and the successful appraisal of 28 oil and gas-bearing structures. Domestically, the company made the significant Longkou 25-1 discovery and successfully appraised Qinhuangdao 29-6, both in the Bohai Sea. These achievements underscore the promising exploration prospects within the shallow lithologic fields of the Bohai region, potentially unlocking new production hubs.
Internationally, CNOOC’s exploration efforts in the Stabroek block in Guyana yielded further success with the successful appraisal of two oilfields, Lukanani and Ranger. These appraisals not only confirm the vast potential of the Stabroek block but also significantly consolidate the resource base for CNOOC’s existing equity interest. Furthermore, in a strategic move to diversify its overseas asset portfolio and expand its global reach, CNOOC acquired four new exploration projects spanning Iraq, Kazakhstan, and Indonesia. These acquisitions open new avenues for future discoveries and underline CNOOC’s long-term growth ambitions in diverse geopolitical and geological settings, making it an compelling prospect for global energy investors.
