Chinese Oil Giant CNOOC Cuts US Shale, Canada Oil

China National Offshore Oil Corporation (CNOOC), a serious oil operator. With assets around the world, it is reducing its 2020 production and spending guidance. In light of the unprecedented market downturn, with U.S. shale and Canada’s oil sands the most targets of its cuts.

CNOOC announced on Wednesday that it might lower. Its planned CAPEX and production guidance for 2020, as “proactive measures to face the challenges” of the turbulent oil market.

CEO Xu Keqiang said during a statement

“The global oil and gas market was facing an unprecedented situation. Within the half-moon of 2020 as impacted by the COVID-19 pandemic and sharp drop of international oil prices. In response to an increasingly complex external environment, CNOOC Limited took proactive measures. To face the challenges and strived to mitigate the impact. For the remainder of the year, we’ll still implement more stringent cost controls, and further strengthen our income management,” CEO Xu Keqiang said during a statement.

The Chinese company will mostly reduce spending within the U.S. shale patch and oil sands assets in Canada, where production is about to be kept at minimum levels. CNOOC’s chief treasurer Xie Weizhi said on a teleconference, as quoted by South China Morning Post.

CNOOC is that the latest giant oil firm opting to scale back spending in U.S. shale. The oil patch has already seen spending and production cuts. From most companies, including supermajors Exxon and Chevron because the industry has been rushing to chop budgets and exposure to the Permian.

In key operational statistics for Q1 2020, CNOOC said that its average realized. Oil price slumped by 19.3 percent on the year to US$49.03 per barrel. In line with the trend of international oil prices. Overall oil and gas sales fell by 5.5 percent annually. Because the lower realized oil prices couldn’t offset higher production volumes.

CNOOC cut its annual net production target for 2020 from 520-530 million barrels of oil equivalent (boe) to 505-515 million boe. Total cost (capex) for 2020 was reduced from US$12 billion-US$13.4 billion (85-95 billion Chinese yuan) to US$10.6 billion-US$12 billion (75-85 billion yuan).

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