China Oil Giant CNOOC's Annual Profit Plunges 59%

What’s new: China’s state-owned offshore oil and gas producer CNOOC Ltd. reported its profit plummeted 59% last year to 25 billion yuan ($3.8 billion), the lowest annual figure in four years, according to the company’s latest annual report filed to the Hong Kong Stock Exchange.

The plunge came after international oil prices fell in the wake of the Covid-19 pandemic, resulting in declines in both the realized price it could charge for oil and the company’s sales volume. CNOOC earned 34.5% less from selling crude than in 2019, and its realized price for a barrel of oil fell by one-third from 2019’s level to $40.96, according to the report.

What’s the background: CNOOC plans to increase its capital expenditure by up to 26% in 2021 to 100 billion yuan. The oil giant is also tapping new-energy sources such as offshore wind power as the country seeks to become carbon neutral by 2060, with its second offshore wind farm currently in primary design, CEO Xu Keqiang said at a meeting Thursday.

The company is facing delisting of its American depositary shares on the New York Stock Exchange under an executive order signed in November by the then-U.S. President Donald Trump. Such a move is “shocking and hard to understand,” Xu said at the meeting. On March 10, CNOOC requested the that bourse review its delisting decision.

Quick Takes are condensed versions of China-related stories for fast news you can use.To read the full Caixin article in Chinese, click here.

Contact reporter Lu Yutong (yutonglu@caixin.com) and editor Marcus Ryder (marcusryder@caixin.com)

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