Page 5 - AsianOil Week 14 2022

AsianOil COMMENTARY AsianOil

The company’s net earnings for 2021 reached and efficiency enhancement, while its Enping
CNY71.2bn ($11.2bn), bolstered by rising oil oilfields achieved remote-controlled production
prices and recovering demand. in typhoons. Both these developments represent
Currently, it is planning to produce 281.2mn “significant progress in digital transformation
barrels of oil and 12.57 tcf (355.90 bcm) of gas and intelligent development”, the company said.
in 2022, up from 279.76mn barrels and 1.20 tcf This year, CNOOC intends to spend CNY90-
(33.96 bcm) in 2021. It is worth noting, though, 100bn ($14-16bn), with 20% of this earmarked
that Sinopec’s planned gas production growth of for exploration. The company anticipates pro-
4.8% y/y represents a slowdown compared with ducing 600-610mn boe this year, with 69% of
11.9% in 2021. Nonetheless, like PetroChina, this due to come from domestic operations in
Sinopec continues efforts to raise the share of China, according to its 2022 business strategy
gas in its production mix in a bid to help with and development plan. It is aiming to bring
decarbonisation. 13 new projects online this year, including the
“The natural gas business will not only sup- Shenfu South gas field at home and the 3M gas
port the company’s transformation, but also project in Indonesia. In total, CNOOC antic-
generate good profit, because of which we will ipates drilling 227 exploration wells, of which
continuously increase the proportion of clean 132 will be targeting onshore unconventional
energy, particularly natural gas, in our overall plays.
energy mix,” Sinopec’s chairman, Ma Yong- CNOOC Ltd is also planning to raise about
sheng, said in the company’s earnings call. CNY35bn ($5.5bn) in April in what could be
Sinopec warned that oil price volatility and China’s 10th largest listing, with the proceeds
geopolitical challenges could have an impact used to fund new oil and gas projects and to
on overseas investments and operations. It did replenish capital.
not mention specific projects that could be
affected, but this came days after Reuters had What next?
reported that Sinopec had suspended talks on All three companies remain vulnerable to the
two major potential investments in Russia – impacts of the pandemic in China, which con-
a petrochemical project and a gas marketing tinues to pursue a zero-COVID strategy that Sinopec’s
venture – that are estimated to be worth up to looks increasingly futile against the highly trans-
$500mn combined. missible Omicron variant. With the lockdown planned gas
of Shanghai extended in early April, there are production
CNOOC’s record growing concerns over the impact on domestic
CNOOC Ltd, the listed arm of CNOOC, also oil and gas demand if Beijing decides to roll out growth of 4.8%
reported its net profit reaching a record high in broader lockdowns.
2021 at CNY70.3bn ($11.1bn). This represented The three oil and gas companies will also have y/y represents
a y/y increase of 181.7%. to make decisions on how to proceed with exist-
The company’s production also reached a ing and new investments in Russia, as illustrated a slowdown
record high, at 573mn barrels of oil equivalent by the reports on Sinopec’s Russian plans. Bei- compared with
(boe), bolstered by 14 new projects that were jing wants to maintain its economic relations
brought online over the course of 2021. The with Russia, but Chinese companies are none- 11.9% in 2021.
output growth recorded by CNOOC in 2021 theless likely to proceed cautiously in order not
was the largest among the three state-owned to fall foul of international sanctions.
companies. Thus far, the companies have sought to avoid
CNOOC highlighted the construction of commenting on specific Russian investments,
the Dongfang “intelligent” gas fields, which are though CNOOC’s chairman, Wang Dongjin,
operated from a control centre that uses tech- said in late March that it was too early to discuss
nologies including the internet of things (IoT), new investment in the country.
big data and artificial intelligence. It said Dong- All three companies own stakes in Russian
fang’s development supported cost reduction projects.™

Week 14 08•April•2022 www. NEWSBASE .com P5