Cnooc plans share buybacks after record expensive oil profit

Cnooc Ltd plans to implement share buybacks and guarantee dividends until 2024 after its profits hit a record high last year.

China’s largest offshore driller reported net income of 70.3 billion yuan ($11 billion) in 2021, rebounding from a three-year low in 2020 on higher production and rising prices, he said in his annual report on Wednesday. Oil and gas production rose 8.5% to 573 million barrels of oil equivalent.

Cnooc plans to propose to its general meeting annual dividends of at least 40% of earnings from 2022 to 2024, with an absolute dividend of at least HK$0.70 per share, according to its annual presentation. It also plans to implement share buybacks this year. The allocation of the 2021 dividend will only be announced after a scheduled listing in Shanghai.

It’s too early to tell whether the company will add more investments in Russia, Chairman Wang Dongjin said on a conference call on Tuesday. Its only investment in the country is a stake in Novatek PJSC’s Arctic LNG 2 project, which is in the early stages of development and progressing normally, he said.

Global oil prices averaged $71 a barrel last year, down from $43 in 2020, as the global economy recovered from the pandemic. Gains accelerated this year after Russia’s invasion of Ukraine sparked fears of supply shortages.

The state-owned company is targeting capital expenditure of 90-100 billion yuan this year, up from 88 billion in 2021, as China seeks to boost oil and gas production to reduce its reliance on imported fuel . Last year, Cnooc’s Bohai Bay production center became the largest in the country and still has room to grow.

The company plans to increase production by around 5.6% this year after raising its reserves to 5.7 billion barrels of oil equivalent in 2021, the highest level in the company’s history. .

Cnooc 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.

The company has planned a 35 billion yuan IPO on the Shanghai Stock Exchange that could also bolster upstream drilling and funding for its new renewable energy segment. The China Securities Regulatory Commission gave written approval for the listing on Wednesday, and Cnooc will conduct preliminary price consultations on April 6-7.

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Felix J. Dixon