China CNOOC says to raise gas' share to half of output by 2035

China's national offshore oil and gas producer CNOOC Ltd said it aims to raise the share of natural gas to make up half of its total output by 2035 to contribute to a national carbon neutral target by 2060.

CNOOC will accelerate natural gas exploration and production both in China and overseas, and also expand its offshore wind power business as two key paths to cut greenhouse gas emissions, Xie Weizhi, chief financial officer told reporters.

Currently gas accounts for 21% of its production portfolio, Xie said.

CNOOC said its third-quarter revenue fell 26.8% on year to 35.55 billion yuan ($5.32 billion)as weak oil prices overrode the benefit of increased production.

Realized oil prices fell 29% to $43.03 per barrel, while gas prices gained 2% to $5.85 per thousand cubic feet, as China’s regulated gas prices are cushioned from the impact of weak global oil prices.

Total net production rose 5.1% on year at 131.2 million barrels of oil equivalent, bolstered by a robust 10.4% growth in production at home as the state major prioritised spending in domestic activities under a state call to boost supply security.

Overseas output, however, fell 4.6% on scalebacks in projects like Nigeria’s deepwater Egina and Longlake oil sands in Canada.

During the period CNOOC began production from four new domestic offshore projects, including three at Bohai Bay -- Nanbao 35-2 oil field S1 area, Jinzhou 25-1 oilfield 6/11 area and Bozhong 19-6 condensate gas field -- and Liuhua 16-2/Liuhua 20-2 in the Pearl River Mouth basin.

Near-term, gas production will be lifted by two sizeable fields - the Lingshui 17-2 deepwater project in the south China Sea slated for start-up in the second half of 2021 and the newly started Bozhong condensate gas field.

Its third-quarter capital spending dropped 5.8% on year to 18.40 billion yuan, it said.

($1 = 6.6786 Chinese yuan renminbi)

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