Nexen deal helps CNOOC deliver solid Q1

CNOOC Ltd, China's biggest offshore oil producer, revealed first quarter results on Friday, that showed strong growth in output and sales, triggered partly by its acquisition of Nexen Inc, the Canadian oil and gas company.

Output jumped 17.3 percent year-on-year to 93.6 million barrels of oil equivalent, which helped deliver a 13.3 percent rise in oil and gas sales.

The company did not break down its profits, but analysts believe that the strong sales will translate into decent profit growth, even though the oil price was on a downward track.

"I am very glad to say that the company made significant progress in exploration and production in the first quarter," said Li Fanrong, CNOOC's chief executive officer, in a statement.

CNOOC completed its acquisition of Nexen in China's biggest overseas acquisition in February this year, and the Q1 figures were the first to include Nexen in its balance sheet.

CNOOC was the last of the country's three largest oil companies to report first-quarter results this week.

China Petroleum & Chemical Corp said on Thursday that profit grew 25 percent as Asia's biggest refiner reversed losses in its refining business and raised oil and gas output.

PetroChina Co Ltd, however, suffered a drop in earnings as refining losses continued. The company, blamed the drop on lowered oil prices.

Zhong Hua, CNOOC's chief financial officer, said in a conference call that Nexen had played a big role in helping CNOOC raise production, but he refused to reveal its exact output contribution.

CNOOC announced in January that it aimed to produce 338 million to 348 million barrels of oil equivalent this year, an increase of up to 2 percent from the previous year. The target did not include Nexen.

In the first quarter, CNOOC also made four new discoveries, completed six successful offshore appraisal wells in China, and resumed production at its Penglai 19-3 oil field in Bohai Bay, which was suspended after a leak.