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CNOOC to look for 'appropriate' M&A deals to meet 2025 goal - CEO

Push follows Xi initiative to boost China's energy security

CNOOC aims to double its proven energy reserves by 2025.

HONG KONG (Nikkei Markets) -- Chinese offshore energy producer CNOOC plans to look for "appropriate" merger-and-acquisition opportunities as part of its efforts to answer President Xi Jinping's call to boost the nation's energy security, Chief Executive Yuan Guangyu told reporters at a media briefing on Wednesday.

Yuan's remarks were in response to a question on whether the company aimed to bolster production in coming years to meet its recently stated objectives for 2025. The company said in a statement posted on its WeChat account last week that it aims to double its proven energy reserves by 2025, following a call by President Xi in July 2018 for domestic oil companies to work towards ensuring national energy security.

The company hadn't detailed its reserves in its interim report for 2018, the annual results for 2017 or the interim earnings report for 2018. Company executives didn't disclose specific goals at the media briefing on Wednesday.

Meanwhile, CNOOC aims to increase the share of its gas output from 20% of total, striving to narrow the gap with the industry standard of 30% to 50% of total production, Yuan said in Hong Kong after the company unveiled its business strategy and production target for 2019.

Earlier on Wednesday, the company said its capital expenditure budget for 2019 will be maintained at 70 billion yuan ($10.32 billion) to 80 billion yuan, with a majority of it earmarked for development. It also disclosed a production target of 480 million to 490 million barrels of oil equivalent (BOE) for 2019. The company achieved an estimated output of 475 million BOE for 2018, compared with its target of 470 million to 480 million BOE, which was set at the beginning of last year.

Six new projects are expected to come on stream in 2019, CNOOC said. The company plans to drill 173 exploration wells and acquire approximately 28,000 square kilometers three-dimensional (3D) seismic data during the year.

Looking ahead, net production is aimed at 505 million to 515 million BOE for 2020, and 535 million to 545 million BOE for 2021, it added.

The guidance issued by the company on Wednesday includes projects on which the management has confidence, Yuan said at the briefing. He said CNOOC would aim to meet its targets by expanding exploration efforts both in and outside the country.

CNOOC shares fell 2.5% in Hong Kong on Wednesday before it unveiled its business strategy for 2019.

- By Benny Kung

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