CNOOC Limited (SHA: 600938) shares closed down by 2.29% at CNY 25.64 on September 4, 2025, shedding CNY 0.60 from the previous close of CNY 26.24. The intraday chart reflected a sharp early-morning drop from the opening price of CNY 26.00, a trend that remained largely flat until minor recovery post-lunch break. Despite this dip, trading volumes remained moderate, and institutional watchers interpreted the movement more as short-term profit booking than a reaction to fundamental changes.
The market’s reaction comes on the heels of two positive corporate developments from the Chinese offshore oil giant: the official production start at the Wenchang 16-2 Oilfield Development Project and robust interim earnings showing strong profitability, gas growth, and a reaffirmed dividend. Yet, the disconnect between operational momentum and stock movement signals a cautious undertone among investors.
Why did CNOOC shares slide on September 4, despite the Wenchang 16-2 project coming online?
At first glance, the timing of the decline appears counterintuitive. On September 3, 2025, CNOOC Limited formally announced that production had commenced at its Wenchang 16-2 Oilfield Development Project in the western Pearl River Mouth Basin. This project marks a key addition to CNOOC’s domestic upstream portfolio, leveraging nearby infrastructure while introducing a new multifunctional jacket platform.
The Wenchang 16-2 project is expected to deliver plateau production of approximately 11,200 barrels of oil equivalent per day by 2027, with 15 development wells planned. The oil type is classified as light crude, aligning with global demand for cleaner-burning petroleum products. As the sole operator with 100% interest, CNOOC Limited retains full economic upside from the field.
Despite the strategic value of this development, analysts suggested that the project’s contribution had already been priced in following earlier disclosures in Q2 and that current sentiment is more reactive to macro signals than project-level milestones.
What do the interim financial results reveal about CNOOC’s operational and financial performance in 2025?
Released on August 27, CNOOC Limited’s 2025 interim results painted a picture of steady operational growth and resilient profitability. Net oil and gas production reached 384.6 million barrels of oil equivalent (BOE), marking a 6.1% year-on-year increase, while natural gas output jumped 12.0%—an encouraging trend given China’s push to diversify away from coal.
Total oil and gas sales revenue stood at RMB 171.7 billion, and net profit attributable to shareholders came in at RMB 69.5 billion, reflecting the firm’s success in managing costs even as oil price volatility persists. The all-in cost was kept flat at USD 26.94 per BOE, underscoring CNOOC’s lean operational strategy. The Board declared an interim dividend of HKD 0.73 per share (tax inclusive)—a clear signal of capital discipline and shareholder alignment.
Institutional sentiment around the results remained broadly positive, with buy-side desks highlighting the company’s robust free cash flow, strong balance sheet, and execution track record on major upstream projects.
How is CNOOC balancing exploration growth with capital discipline and technology upgrades?
A key highlight from the first-half report was CNOOC’s dual focus on reserves expansion and digital innovation. Five new oil and gas discoveries were reported, including Jinzhou 27-6 and Caofeidian 22-3 in offshore China. Eighteen additional oil-bearing structures were appraised successfully, while international ventures in Guyana and a newly awarded block in Kazakhstan added depth to the exploration pipeline.
On the technology front, CNOOC accelerated deployment of AI-driven field management, remote sensing, and intelligent drilling capabilities. For instance, intelligent injection-production systems are now helping reduce the natural decline rate in legacy fields, while geophysical tools are improving deep-play seismic imaging.
The Shenhai-1 Intelligent Gas Field stood out, having been recognized as one of China’s top smart energy infrastructures. The field is projected to produce over 4.5 billion cubic meters of gas annually, bolstering China’s LNG and domestic energy resilience.
What role does CNOOC’s green energy pivot and CCUS play in future-proofing its business model?
Beyond hydrocarbons, CNOOC Limited is visibly pivoting toward greener operations, positioning itself in line with China’s energy transition ambitions. The firm deployed over 900 million kWh of green power in H1 2025 and consumed an additional 500 million kWh of purchased renewable electricity.
More significantly, it brought China’s first offshore carbon capture, utilization, and storage (CCUS) project online at the Enping 15-1 platform. The Bohai Oilfields are now being prepared to host the country’s largest offshore CCUS hub, capable of full-cycle carbon management. This reinforces CNOOC’s ability to generate hydrocarbons in a carbon-constrained future while positioning for regulatory tailwinds.
These efforts may not generate immediate earnings accretion but are increasingly viewed by investors as necessary ESG-driven de-risking mechanisms.
What is the strategic importance of CNOOC’s new Indonesian exploration contracts signed in August?
On August 25, 2025, CNOOC Limited disclosed that its subsidiaries had signed Production Sharing Contracts (PSCs) for the Gaea and Gaea II blocks in Indonesia’s Papua Barat Province. These blocks are adjacent to the Tangguh LNG infrastructure and span approximately 12,000 square kilometers.
Although CNOOC’s stake is relatively modest at 5.56% non-operating interest, the move signals deeper strategic alignment with BP, ENEOS, and other regional partners. It also enhances CNOOC’s exposure to Southeast Asian gas plays, especially relevant as Asian LNG demand remains strong amid European energy uncertainty and Indian decarbonization push.
This geographic diversification complements CNOOC’s existing Guyana and Brazilian upstream assets, broadening reserve exposure across geologically and politically diverse basins.
How are institutional investors interpreting the recent stock decline and forward-looking signals?
The stock’s decline on September 4 appears to be more technical than structural. Institutional investors attributed the move to near-term profit booking, possibly following the interim dividend record date, or to cautious rebalancing amid currency volatility and macro risk.
Despite the drop, the stock remains well above its 52-week low of CNY 23.11, though still trading significantly below its high of CNY 33.06. At the current level, CNOOC shares are trading at a P/E ratio of 9.56, with a market capitalization of approximately CNY 887.7 billion. From a valuation standpoint, the energy giant remains attractive for yield-focused investors and those seeking exposure to China’s offshore oil and gas sector.
Watchers are particularly focused on CNOOC’s ability to sustain high-margin gas growth, maintain reserve replacement above 100%, and continue its disciplined dividend payout. The next set of catalysts could include progress updates on the Shenhai-1 Phase II project, CCUS execution milestones, and any new international M&A or licensing wins.
What is the outlook for CNOOC’s full-year guidance and investor sentiment going forward?
Chairman Zhang Chuanjiang reiterated in the interim report that CNOOC is “on track to complete annual tasks and promote high-quality development” in the second half of 2025. The reaffirmation of upstream execution, cash flow visibility, and exploration success gives institutional investors reason to stay long, even amid global headwinds.
However, with Brent crude prices showing softness and China’s domestic demand signals mixed, investors will continue to monitor broader macro indicators alongside company-specific execution. FII and DII flows remain largely stable, with no significant ETF-led redemptions reported.
Overall, sentiment remains neutral to positive, with short-term volatility not detracting from the long-term conviction in CNOOC’s integrated offshore energy strategy.
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