CNOOC Ltd, China’s leading offshore crude oil and natural gas producer, announced a 13% decline in earnings for the first half of 2025. This drop occurred despite achieving record-high production levels both domestically and internationally. The company’s net profit fell to $9.7 billion (approximately 69.5 billion Chinese yuan), primarily due to a significant decrease in oil prices.
According to CNOOC’s report released on Wednesday, the value of oil and gas sales decreased by 7%. The international benchmark Brent crude oil prices averaged around $71 per barrel between January and June, down from more than $83 per barrel during the same period in 2024. Although the decline in prices was somewhat mitigated by record production, it was insufficient to prevent the overall earnings drop.
Record Production Amid Price Declines
CNOOC’s net production reached 384.6 million barrels of oil equivalent (boe), reflecting a 6.1% increase compared to the previous year. This growth was driven by both domestic and international projects, which saw production levels surpass previous records. Noteworthy developments included new offshore initiatives within China and collaborative projects that commenced operations offshore Brazil.
During the first half of the year, CNOOC initiated production on 10 oil and gas field development projects, either as operator or partner. Furthermore, natural gas production surged by 12% year-over-year, contributing significantly to the overall increase in output.
Impact on China’s Energy Sector
CNOOC’s earnings drop aligns with a broader trend among Chinese state-owned energy companies. Earlier this week, PetroChina, the nation’s largest oil and gas producer, reported a 5.4% decline in profit for the January-June period, attributing its struggles to falling oil prices and weakened domestic fuel demand amid the rise of new-energy vehicle sales.
Additionally, Sinopec, the largest refiner in China and Asia, disclosed a staggering 36% slump in first-half profits, also linked to declining oil prices and refining margins, further highlighting the sector’s challenges in the current volatile market.
CNOOC’s results underscore the ongoing difficulties faced by the energy sector amidst fluctuating oil prices. The company’s ability to achieve record production levels indicates a commitment to growth, yet the impact of pricing pressures remains a critical concern for stakeholders.
