CNOOC: Offshore to drive growth of oil and gas

Growth in the oil and gas sector will come mostly from offshore in China, which is expected to become an important energy growth driver for the years to come, said a report released on Friday by China National Offshore Oil Corp.

The company said its offshore crude increment last year accounted for more than 80 percent of the country's total growth volume, a record high, while the exploitation of offshore natural gas resources is steadily advancing toward ultra-deep waters.

China's estimated offshore crude production in 2021 is expected to reach 54.64 million tons, up 5.8 percent year-on-year, while natural gas output is estimated to reach 19.6 billion cubic meters, up 5.4 percent compared with the same period of the preceding year, the China Offshore Energy Report drafted by the CNOOC Energy Economics Institute said.

The institute forecast the country's offshore oil and gas output will continue increasing this year. Crude output will rise 5.4 percent to 57.6 million tons, accounting for around 80 percent of the county's total crude increment. Natural gas production will exceed 20 billion cubic meters, up 6.7 percent year-on-year and making up around 12 percent of the country's gas increment.

Li Ziyue, an analyst with BloombergNEF, said China's offshore oil and gas output has great upside potential.

"CNOOC accounted for more than half of China's total oil and gas output addition last year and the driller is also trying to carve out a role in the country's growing clean energy sector, seeking to use its engineering prowess to become a major player in offshore wind power projects," she said.

"The company's oil and gas production is expected to rise more than 6 percent each year during the 2022 to 2024 period, while its continuous upstream investment and production commitment will also play a critical role in China's energy supply security."

Wang Dongjin, chairman of CNOOC, said the company will further take advantage of the company's offshore advantages while laying out the new energy industry to enhance its position as the country's top offshore oil and gas driller.

The company will conduct oil exploration, focusing on increasing capacity and storage of oil and gas, and adopting advanced technologies to bolster China's energy security and reduce its reliance on foreign energy sources, he said.

The report said that while Asia has led the world's offshore exploration activities, China is one of the most active areas for offshore exploration and ranks fourth in newly launched offshore oil and gas production projects. CNOOC's offshore oil and gas production projects are ranked top in the world, it said.

Despite a surplus of global offshore engineering oil and gas equipment, the Chinese market remains resilient. The country's carbon peak and neutrality ambitions and its energy transition will accelerate the development of its offshore energy production, the report said.