CNOOC expands offshore production with Luda 5-2 North and Buzios7 projects

CNOOC Limited has significantly expanded its offshore oil operations with the commencement of production at the Luda 5-2 North Oilfield Phase II Development Project in China and the Buzios7 Project in Brazil. These projects underscore the company’s strategic focus on offshore oil production, technological advancements, and sustainable energy solutions. The latest developments align with CNOOC Limited’s long-term goal of increasing global crude output while enhancing operational efficiency.

The Luda 5-2 North Oilfield Phase II Development Project, located in the central Bohai Sea, marks a crucial milestone for China’s offshore oil industry. Situated at an average water depth of 30 meters, the project integrates advanced recovery techniques for heavy crude extraction. Meanwhile, the Buzios7 Project, part of the Buzios oilfield in Brazil’s Santos Basin, is set to significantly contribute to global deep-water oilfield production. Both projects are pivotal in CNOOC Limited’s broader 2025 growth strategy, which aims to boost energy supply and integrate green initiatives.

What Makes Luda 5-2 North Oilfield Phase II a Technological Milestone?

Luda 5-2 North Oilfield represents China’s first offshore oilfield to extract super-heavy crude using thermal recovery technology. The Phase II Development Project builds upon the success of Phase I, which commenced production in 2022, by further leveraging Jet Pump Injection-Production Technology. This method enhances oil recovery efficiency, ensuring that heavy crude extraction remains both economically viable and environmentally sustainable.

CNOOC Limited, which holds a 100% interest in the project, has deployed one new auxiliary production platform and one production wellhead platform. A total of 29 development wells, including 28 production wells and one water source well, are planned for commissioning. The project is expected to reach a peak production capacity of 6,700 barrels of oil equivalent per day in 2026, reinforcing China’s energy security and supply chain resilience.

How Is Buzios7 Strengthening Deep-Water Oil Production?

Buzios7 is a significant expansion of the Buzios oilfield, the world’s largest deep-water pre-salt oilfield, located in the Santos Basin off the coast of Brazil. This latest development follows five previous phases, with CNOOC Limited’s wholly owned subsidiary, CNOOC Petroleum Brasil Ltda, holding a 7.34% stake in the Buzios Shared Reservoir. The project’s operator, Petrobras, maintains an 88.99% interest, while CNODC Brasil Petróleo e Gás Ltda holds the remaining 3.67%.

Buzios7 is designed to maximize deep-water oilfield extraction using a Floating Production Storage and Offloading (FPSO) unit—one of the largest of its kind globally. The FPSO has a processing capacity significantly above the industry average and is engineered to handle 225,000 barrels of crude oil per day, process 12 million cubic meters of natural gas, and store up to 1.4 million barrels of oil. It was converted in China in July 2024 and deployed to Brazil in October 2024.

A total of 15 development wells have been integrated into the Buzios7 Project, comprising seven oil production wells, six water and gas injectors, one convertible well, and one additional gas injector. The project is expected to contribute to Buzios oilfield’s total daily production target of 1 million barrels of crude oil by the second half of 2025.

How Does CNOOC Limited’s 2025 Strategy Align with These Developments?

CNOOC Limited’s expansion of offshore oil production aligns with its broader 2025 Business Strategy, which prioritizes increased reserves, sustainable technological advancements, and energy efficiency. The company has set a net production target exceeding 2 million barrels of oil equivalent per day in 2025, aiming to reach 780 million to 800 million barrels by 2026, and 810 million to 830 million barrels by 2027.

To support this growth, capital expenditures will remain stable, ranging between RMB 125 billion and RMB 135 billion in 2025. Investments will be allocated towards exploration, development, and production, with a particular focus on expanding offshore energy reserves in China and overseas markets. Notably, drilling operations in Guyana, Nigeria, Mozambique, and Iraq are planned, while a seismic survey in Mozambique will provide valuable insights for further exploration.

What Are CNOOC Limited’s Green Energy Initiatives?

While increasing offshore oil production, CNOOC Limited is also accelerating green energy initiatives. As part of its renewable energy strategy, the company is expanding offshore wind power projects and screening new onshore photovoltaic opportunities. By 2025, green electricity consumption is projected to exceed 1 billion kWh, reflecting a 30% year-on-year increase.

Additionally, CNOOC Limited has incorporated carbon pricing into its investment evaluations and is actively developing Carbon Capture, Utilization, and Storage (CCUS) projects. In alignment with global sustainability efforts, the Buzios7 FPSO is equipped with a closed flare system and heat recovery technology, significantly reducing greenhouse gas emissions. These measures reinforce CNOOC Limited’s Environmental, Social, and Governance (ESG) commitments, which emphasize sustainable energy practices, corporate governance, and community engagement.

What Is CNOOC Limited’s Approach to Shareholder Returns?

CNOOC Limited has reaffirmed its commitment to shareholder value, with an annual dividend payout ratio set at no less than 45% for 2025 to 2027. The company aims to balance market conditions, shareholder expectations, and strategic planning when adjusting its dividend policies.

CEO Zhou Xinhuai emphasized that CNOOC Limited remains dedicated to enhancing value creation while maintaining long-term financial stability. The company will continue to prioritize high-quality offshore developments, integrating technological innovation with sustainable energy solutions.

What Lies Ahead for CNOOC Limited?

With the Luda 5-2 North Oilfield Phase II and Buzios7 Project now online, CNOOC Limited is reinforcing its position as a global leader in offshore oil production. These projects highlight the company’s commitment to technological innovation, sustainable development, and energy security.

As CNOOC Limited executes its 2025 Business Strategy, its focus on reserves expansion, offshore oil production efficiency, and green energy integration will play a critical role in shaping the future of the global energy landscape.