China National Offshore Oil Company Limited (CNOOC Ltd.) expects its total budgeted net output in 2006 to hit between 168 million and 170 million barrels of oil equivalent (BOE), CNOOC sources said Tuesday.

The budget volume is approximately a nine percent year-on-year increase over the estimated 153 million to 157 million BOE in 2005.

The net production volume offshore China of CNOOC Ltd. is estimated to be 148 million to 149 million BOE in 2006.

The Company's overseas output is expected to be enhanced by the Northwest Continental Shelf Project in Australia, which is scheduled to supply gas to south China's Guangdong Liquid Natural Gas (LNG) terminal in the first half of this year. With this project, the Company's net entitlement overseas is expected to reach approximately 20 million to 21 million BOE, the source added.

During the year of 2006, ten projects offshore China are expected to come on stream, two of which are ready for production. About 16 projects will be completed between 2006 and 2007, CNOOC said.

The exploration budget of CNOOC Ltd. is estimated to increase 72 percent to reach 455 million U.S. dollars and the reserve replacement ratio is targeted to be more than 100 percent in 2006.

With the rise of exploration budget, CNOOC Ltd. plans to conduct more drilling and seismic acquisition activities offshore China, particularly in Bohai Bay and the South China Sea. And overseas exploration activities will also be further strengthened.

In 2006, the company expects to spend 2.59 billion U.S. dollars in development, a 30 percent year-on-year increase. In total, the company's capital expenditure in 2006 is budgeted at approximately 3.06 billion U.S. dollars, 35 percent up from the figure in 2005.

Furthermore, with the launch of new gas projects and CNOOC's Guangdong LNG terminal, it is believed that the company will further strengthen its leading position in gas business in coastal China.

Incorporated in Hong Kong, CNOOC Limited is a subsidiary of CNOOC which holds 70.64 percent stake.

Source: Xinhua