Tumbling oil prices could present opportunities for cash-rich firms like China National Offshore Oil Corporation, which benefits from low per-barrel production costs, to snap up cheap assets, The Paper reported today, citing the president of the country’s largest offshore producer of crude oil and natural gas.
US President Donald Trump’s recent policies have impacted oil prices significantly in the short term, Yan Hongtao said at the earnings call following the release of CNOOC’s first-quarter financial report yesterday. Brent crude is currently trading at around USD65 per barrel, which is below CNOOC’s realized sales price in the first quarter.
“If prices fall to a level where some firms struggle to maintain their operations, it could create ideal acquisition opportunities for us. We are always prepared,” Yan said. “It doesn’t have to be an entire company, it could just be specific assets.”
“We believe Trump’s policy direction is still uncertain, and short-term price volatility is likely,” Yan said. “But in the long run, looking at global supply and demand trends, we remain optimistic. CNOOC will not be changing its investment plans or production targets for 2025 despite the recent price declines.”
CNOOC’s net profit slumped 7.9 percent in the first quarter year on year to CNY36.6 billion (USD5 billion), affected by a 8.3 percent drop in the average price of Brent crude futures over the period, according to the earnings report.
The Beijing-based firm’s revenue from oil and gas sales dipped 1.9 percent in the three months ended March 31 from a year earlier to CNY88.3 billion (USD12.1 billion). The average realized oil price tumbled 7.7 percent to USD72.65 per barrel, while the average realized gas price climbed 1.2 percent to USD7.78 per thousand cubic feet. Higher sales volumes helped to partially offset the impact from slumping prices.
CNOOC’s capital expenditures dipped 4.5 percent in the first quarter from a year earlier to CNY27.7 billion (USD3.8 billion), primarily due to reduced exploration and well adjustment work.
