CNOOC 2011 Profit Up 29 Percent on Oil Sales

CNOOC, Ltd. CEO released 2011 results that were on par with our expectations. The company increased earnings 29% from 2010, on revenue of CNY 240.9 billion, versus our forecast of CNY 239.5 billion. The strong growth was mostly attributable to higher oil prices.

Production for the year was 860 thousand barrels of oil equivalent per day, roughly flat with 2010 production.

Operating costs were up 17% from 2010, higher than our expectations of 7% growth, though some of the increase is probably attributable to the Penglai 19-3 platform shutdown last summer.

As we have observed in prior releases, the company was fairly tight-lipped on forward-looking details. Still, we believe CNOOC is best positioned in the near term (compared with PetroChina PTR and Sinopec SNP ) thanks to its lack of downstream assets. (Elitedaily, Edited by Topco)