China National Offshore Oil Co., Ltd. (hereinafter referred to as CNOOC) announced its 2023 business strategy and development plan on January 11.The company raised its production target and capital expenditure budget for this year, with a net production target of 650 million barrels to 660 million barrels of oil equivalent, and a total capital expenditure budget of 100 billion to 110 billion yuan.

Regarding the outlook for global oil demand in 2023, especially the intensity of demand growth, the forecasts of major investment banks and major energy institutions are divided.At a media call held on the same day, CNOOC CEO Zhou Xinhuai told Surging News that global and Chinese oil demand has basically returned to its pre-epidemic level.Most institutions believe that demand will continue to grow, but the extent of the increase is still controversial.From the supply side, global upstream investment in the past five years has been seriously insufficient, making it difficult to release new production capacity in a short period of time.Therefore, oil supply and demand in 2023 will show a tight balance.

Geopolitical conflicts have reshaped the global oil and gas supply pattern, and OPEC's ability to regulate global production and supply has been significantly enhanced than before.Zhou Xinhuai believes that only OPEC is currently the only major oil-producing country with a certain capacity to increase production, but judging from the 2022 production strategy, OPEC cannot accept what it considers low oil prices.Affected by the above factors, there is a high probability that oil prices will remain high and volatile.

Xie Weizhi, chief financial officer of CNOOC, mentioned at the meeting that international oil prices are expected to remain above US880 per barrel in the future.According to Xie Weizhi, the company expects to complete capital expenditure of about 100 billion yuan in 2022. In 2023, due to the increase in development investment, the annual budget has been increased, and it is expected to reach the level of 100 billion to 110 billion.Among them, exploration, development, production capitalization and other capital expenditures are expected to account for about 18%, 59%, 21% and 2% of the total capital expenditure budget, respectively.Domestic and overseas capital expenditures accounted for 76% and 24%, respectively.

In terms of exploration, CNOOC's exploration strategy this year is to “strive for major breakthroughs in new areas, new fields, new types, and new formations”, including both oil and gas, stabilizing oil and increasing gas; deepening the Bohai Sea and speeding up the South China Sea; continuously strengthening risk exploration and finding reserve replacement areas.In 2022, CNOOC exceeded its plan, and its net production is expected to reach about 620 million barrels of oil equivalent.This year, the company's net production target is 650 million barrels to 660 million barrels of oil equivalent, of which China accounts for about 70% and overseas accounts for about 30%.This growth trend will continue-in 2024 and 2025, CNOOC's net production is expected to reach 690-700 million barrels of oil equivalent and 730 million barrels to 740 million barrels of oil equivalent, respectively.

Surging News also learned that during the year, CNOOC is expected to put into operation 9 new projects, including China's Bozhong 19-6 condensate gas field Phase I development project, Lufeng 12-3 oilfield development project and Enping 18-6 oilfield development project, as well as overseas Ong Payara project, Brazil Buzios5 project and Brazil Mero2 project.

In terms of new energy business, CNOOC will independently develop the Hainan CZ7 centralized offshore wind power demonstration project, with a total installed capacity of 1.5 million kilowatts, which can provide about 5 billion kilowatt-hours of clean electricity to the power grid every year after completion.Zhou Xinhuai said that the wind power project will be developed in two phases, with an estimated investment of 1.7 billion to 2 billion yuan in 2023.