SHANGHAI, China - CNOOC Ltd., China's largest offshore oil producer by output, said Thursday that its net profit jumped 22 percent in 2006, boosted by rising oil prices and production volume.

CNOOC said its revenues in 2006 reached 88.9 billion yuan (US$11.5 billion;euro8.6 billion) as production rose 7.9 percent to 167 million barrels of oil equivalent, falling short of its target of 168 million to 170 million barrels of oil equivalent.

"Our excellent financial performance evidenced the company's effective cost management, higher production volume and the high level of international oil prices," Yang Hua, CNOOC's chief financial officer, said in a statement.

The offshore oil and gas producer's net profit of 30.9 billion yuan (US$4 billion;euro3 billion) compared with a net profit of 25.3 billion yuan (US$3.3 billion; euro2.5 billion) in 2005.

The 22 percent rose in earnings was slightly below the 25 percent increase reported in 2005, due partly to higher production costs.

But the retreat in oil prices from a peak of about US$78 per barrel last summer also took a toll.

Oil prices dipped below US$64 a barrel on Thursday. For all of 2006, crude oil prices averaged US$66 per barrel, according to an analysis by Citigroup.

CNOOC said it reported 10 oil and gas discoveries in 2006, including its first deepwater discovery. Seven of its new projects launched production, although typhoon damage limited gains in output.

"With a number of oil and gas projects up and running, CNOOC Ltd. will enter a new phase of growth in terms of both quantity and quality," Fu Chengyu, CNOOC's chairman and CEO, said in a statement to shareholders.

"While our production growth for the year might be flat, we are actually building a mighty force and creating conditions to accelerate our growth for the next phase," he said.