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THE WALL STREET JOURNAL: China's Cnooc Says 2005 Net Rose 57% on High Oil Prices

Associated Press
HONG KONG — Cnooc Ltd., China's largest offshore oil producer by output, said Friday its 2005 net profit rose 57% on soaring oil prices and strong output growth. The company also said it had ended talks on buying natural gas from the Gorgon project in Australia and will instead seek supplies from Indonesia.
CNOOC's company secretary, Cao Yun Shi, told reporters on the sidelines of an earnings news conference that no price has been agreed for the Indonesian gas. “The Gorgon thing is over,” he said. Chevron Corp., the project operator, holds a 50% stake in the venture, while Royal Dutch Shell PLC and Exxon Mobil Corp. own 25% each.
China remains concerned over an increasing shortage of natural gas in the next five years, caused by sharply rising demand and limited production capacity, especially after the country's first liquefied natural gas terminal starts operating in mid-2006, analysts said.
Cnooc's net profit for 2005 was 25.32 billion yuan ($3.15 billion), compared with 16.14 billion yuan the year before. Revenue rose 29% to 69.46 billion yuan, largely lifted by higher oil prices. The company's average oil selling price rose 34% to US$47.31 per barrel.
Cnooc, which last summer gave up its $18.5 billion bid to acquire U.S. oil firm Unocal Corp. amid intense opposition in Washington, said it will keep hunting for overseas oil assets.
Last year, Cnooc said it had seven projects come on stream, and it made 14 new discoveries and eight appraisal successes in offshore China. It also expects several big domestic oil fields to start producing oil in the near future, the company added.
Cnooc, which disclosed a US$2.27 billion acquisition of a stake in a Nigerian oil field mid-January, said it proposes a special dividend of five Hong Kong cents on top of a final dividend of 10 HK cents. In 2004, each shareholder got a final dividend of three HK cents, plus a special dividend of five HK cents.
Offshore oil and gas production rose 14% to 141 million barrels of oil equivalent. Cnooc said late January it is targeting a 9% increase in oil and gas output this year.
Reserve replacement ratio, which measures how fast an oil company replaces the oil and gas it pumps with new findings, was 173% in 2004.
Capital spending in 2005 totaled US$2.20 billion, up from US$1.69 billion in 2004.
Copyright © 2006 Associated Press

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