China Offshore Oil Says Output to Rise

CNOOC's strategic plan for 2008 sets a production target of 195 million to 199 million barrels of oil equivalent, up from the 169 million to 171 million barrels it planned to produce in 2007.

"For CNOOC Ltd., 2008 is a new, exciting year with rapid growth in production," the company's chairman, Fu Chengyu, said in a statement.

Total capital spending is due to rise 44 percent to $5.24 billion, of which about 80 percent will be spent developing oil and gas fields, both at home and overseas.

"The company expects that these capital expenditures will provide strong support to its reserves and production growth in 2008 and in the next few years," the statement said.

CNOOC, whose shares are traded in Hong Kong and New York, is the publicly listed unit of state-owned China National Offshore Oil Corp., China's third-largest oil company by assets.

The company said it expects to bring 10 new projects online, helping to boost its reserve replacement ratio a key measure of oil company performance above 100 percent. The ratio is the measure of new reserves to oil produced.

"We will take advantage of the high oil price environment and speed up our operations," Yang Hua, CNOOC's chief financial officer, said in a conference call.

At the same time, CNOOC would focus on controlling costs, he said.

"Deep-water drilling is very expensive, so operational efficiency is extremely important," he said.