2017 Strategy Preview
January 19, 2017
Disclaimer
This presentation includes “forward-looking statements” within the meaning of the United States
Private Securities Litigation Reform Act of 1995, including statements regarding expected future
events, business prospectus or financial results. The words “expect”, “anticipate”, “continue”,
“estimate”, “objective”, “ongoing”, “may”, “will”, “project”, “should”, “believe”, “plans”, “intends” and
similar expressions are intended to identify such forward-looking statements. These statements are
based on assumptions and analyses made by the Company in light of its experience and its
perception of historical trends, current conditions and expected future developments, as well as
other factors the Company believes are appropriate under the circumstances. However, whether
actual results and developments will meet the expectations and predictions of the Company depends
on a number of risks and uncertainties which could cause the actual results, performance and
financial condition to differ materially from the Company’s expectations, including those associated
with fluctuations in crude oil and natural gas prices, the exploration or development activities, the
capital expenditure requirements, the business strategy, whether the transactions entered into by
the Group can complete on schedule pursuant to the terms and timetable or at all, the highly
competitive nature of the oil and natural gas industries, the foreign operations, environmental
liabilities and compliance requirements, and economic and political conditions in the People’s
Republic of China. For a description of these risks and uncertainties, please see the documents the
Company files from time to time with the United States Securities and Exchange Commission,
including the Annual Report on Form 20-F filed in April of the latest fiscal year.
Consequently, all of the forward-looking statements made in this presentation are qualified by these
cautionary statements. The Company cannot assure that the results or developments anticipated will
be realized or, even if substantially realized, that they will have the expected effect on the Company,
its business or operations.
2
Outline
Operating Strategy
2017 Operating Guidance
Outlook
3
Operating Strategy
Sustainable
development
Capital
efficiency
Asset
return
Balance short-term and mid-to-long term
Maintain prudent financial policy and improve capital efficiency
Optimize asset portfolio and focus more on return
4
2017 Overview
2017 Capex of RMB60-70 billion
Prioritize profitability and improve investment return
Production target of 450-460 mmboe, five new projects to come on stream in 2017
Maintain high standards on HSE performance
5
Capex Plan
80
(RMB bn)
66.5
60
60-70
7.5
50.3
6.3
40
43.7
34.3
20
14.7
0
2015A
Exploration
9.4
2016E
Development
2017B
Production
Others
6
2017 Capex Plan Breakdown
15%
18%
52%
48%
66%
Exploration
Development
Production
Others
China
Overseas
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Exploration
Exploration Capex represents 18% of total Capex
 Enhance integrated exploration and development, and accelerate the
monetization of reserves
 Maintain focus on mature areas offshore China, and continue to explore new
areas; Based on current core oversea areas to strengthen rolling exploration
Maintain exploration Capex at a reasonable level and ensure adequate exploration
workload to support sustainable development in the mid-to-long term
8
Exploration Program
Address value-driven exploration philosophy, attach equal importance to the quantity and
quality of oil and gas resources, prioritize high-return and quick-monetization assets, and
support the Company’s sustainable growth.
Exploration wells
126
118
2016E
2017B
3D Seismic (‘000 km2)
勘探井（口）
16
13
2016E
2017B
Note: Excludes unconventional exploration wells (23 estimated in 2016 and 16 planned for 2017)
9
Development and Production
Development Capex represents 66% of total Capex
 Optimize engineering plans to achieve effective integration of engineering
construction and production operation
 Steadily advance the development of key overseas projects
Production Capex represents 15% of total Capex
 Evaluate the economics of infill drilling programs
 Closely monitor oil prices, and maintain flexibility on infill drilling wells
10
Production Target
600
400
(mmboe)
476
450-460
35%
36%
65%
64%
2016E
2017B
(@Brent USD45.13/bbl)
(@Brent USD51.00/bbl)
200
0
China
Overseas
2017 production target of 450-460 mmboe, with oil and gas representing 83% and 17%, respectively.
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New projects in 2017
Project
Location
Penglai 19-9 oil field
comprehensive adjustment
Bohai
Expected
Startup
Commenced
production
Peak Production
(boe/d)
Working
Interests
13,000
51%
Enping 23-1 oil fields
Eastern South China Sea
Commenced
production
24,800
100%
Weizhou 12-2 oil field phase II
Western South China Sea
Second half
11,800
100%
Indonesia
First half
25,500
40%
Canada
Second half
18,100
25%
BD gas field
Hangingstone project
5 new projects are scheduled to come on stream in 2017.
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Major New Project：PL 19-9 Comprehensive Adjustment
Located in Central Bohai
New facility: one wellhead platform
CNOOC’s interest: 51% (CNOOC acts as the operator)
Peak production: 13,000 bbl/day
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Major New Project：EP 23-1 Oil Fields
Located in Pearl River Mouth Basin of South China Sea
Joint developed with EP 18-1, EP 23-1 and EP 23-7 oil fields
CNOOC’s interest: 100%
Peak production：24,800 bbl/day
EP18-1 WHPA
EP23-1DPP
14
Our Footprint Worldwide
We have established our presence in the first-tier global projects
Buzzard
Missan
Penglai 19-3
Long Lake
Eagle Ford
Liwan3-1
Tangguh
Appomattox
Stampede
NWS
Akpo
Liza
Uganda
Egina
Usan
Deepwater
Natural gas/LNG
Conventional
Unconventional
Libra
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Global Asset Base
Strong asset base with high quality
Position in mega projects
Global leading player
Project
Interest
Operator
Akpo
45%
Total
Appomattox
21%
Shell
Buzzard
43.2%
CNOOC
Eagle Ford
33.3%
Chesapeake
Egina
45%
Total
Libra
10%
Petrobras
Liwan 3-1
51%
Husky
Liza
25%
ExxonMobil
Long Lake
100%
CNOOC
Missan
63.75%
CNOOC
NWS
5.3%
Woodside
Penglai 19-3
51%
CNOOC
Stampede
25%
Hess
Tangguh
13.9%
BP
Uganda
33.3%
CNOOC/Total/Tullow
Usan
20%
ExxonMobil
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A Long Pipe of Projects Ahead
Offshore China
 Penglai 19-3 oil field 1/3/8/9 comprehensive adjustment
 Weizhou 6-13 oil field
 Penglai19-9 oil field phase II comprehensive adjustment
 Enping 23-7 oil field
 Bozhong 34-9 oil field
 Luda 16-3 oil field
 Wenchang 9-2/9-3/10-3 gas fields
 Luda 21-2 oil field
 Dongfang 13-2 gas field
 Caofeidian 6-4 oil field
 Huizhou 33-1 oil filed
 Liuhua 16-2/20-2 oil field
……
Overseas
 Stampede oil field
 Egina oil field
 Appomattox oil field
……
17
Cost Control
Reshape cost competitiveness
Both All-in cost and Opex decreased for the third consecutive year
Operation efficiency of each business unit continued to improve
All-in cost
50
(US$/boe)
45.02
15
42.30
35.73
40
Opex
(US$/boe)
12.25 12.22
39.82
12
10.44
30.58
30
9.55
9.01
9
24.46
20
7.28
6
2010
2011
2012
2013
2014
2015
2016E
2010
2011
2012
2013
2014
2015
2016E
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Enhance Capital Efficiency
Investment in offshore China per million tons capacity continued to decline
 Optimize overall development plan
 Control cost from the origin of engineering design
 Leverage the supply chain advantage under the low oil price environment
(RMB bn/mm tons)
China’s Production Capacity Investment (mm tons)
7
6
5
4
3
2
1
0
2012
2013
2014
2015
2016
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Profitability-oriented Production Volume
More focus on return and profitability
Develop production with better economic return
Optimize our production volume in accommodating the profitability and price environment
Economic Breakeven for New Oil Projects by Country
Source: Goldman Sachs
20
Three-year Rolling Target
The Company will pursue quality growth, increase profitability-oriented production
volume and bring better return for our investors.
600
400
(mmboe)
476
450-460
455-465
460-470
35%
36%
36%
36%
65%
64%
64%
64%
2016 Estimate
2017 Budget
2018 Target
2019 Target
200
0
China
Overseas
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www.cnoocltd.com
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