CNOOC Ltd, China’s state-held oil and gas giant, has reported a decline of 11.3% year over year in its net profit for the first half of 2023, as lower oil prices weighed on profitability.

CNOOC posted $8.7 billion (63.8 billion Chinese yuan) in net income between January and June, down from the same period last year as lower commodity prices weighed on realized prices at all major companies during the second quarter of 2023 and the first half of 2023.

The lower oil prices more than offset an 8.9% increase in CNOOC’s net oil and gas production which was 331.8 million barrels of oil equivalent (boe) for the first half of 2023.

“In the first half of 2023, macroeconomy stayed complex and volatile, while international oil prices saw fluctuations in a downward trend,” CNOOC’s chairman Wang Dongjin said in a statement to shareholders.

In the first half of the year, the CNOOC achieved significant growth in oil and gas production in both China and overseas, with daily net production hitting a record high, the executive added.

Early this year, CNOOC reported a record-high profit for 2022, thanks to the high oil and gas prices.

As prices slid this year, CNOOC, the other Chinese giants, and international majors reported lower earnings compared to the smashing profits of last year.

CNOOC saw a drop in first-quarter net profit compared to the same period of 2022.

CNOOC’s net profit fell by 6.4% year-over-year and stood at $4.4 billion (32.1 billion yuan) for the first quarter of 2023. The company’s average realized crude oil price plunged by 23.9% to $74.17 per barrel, compared to $97.47 a barrel for the first quarter of 2022.

CNOOC, however, reported net production rising by 8.6% in the first three months of 2023 compared to the same period last year.

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This year, the company is targeting another record in production and has set its goal at 650 million to 660 million boe, up from the current annual record of 623.8 million boe hit in 2022.

By Tsvetana Paraskova for Oilprice.com

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