CHINA National Offshore Oil Corporation has cut its capital expenditure budget by up to 35 per cent on 2014 levels, the company has announced.

The reduction, of between RMB 70 billion and RMB 80 billion for 2015, will see the exploration capex budget cut by 21%, the development capex budget cut by 67% and the production capex budget cut by 10%.

At the same time, CNOOC has set a net production target of between 475 million and 495 million barrels of oil equivalent for 2015, up 15% on the 432 million barrels of estimated net production in 2014.

The net production targets set for 2016 and 2017 are around 509 and 513 million BOE respectively.

“The company expects to achieve all of its annual targets by cost control and efficiency enhancement despite the lower capital expenditure,” CNOOC said in an announcement.

The year will see seven new projects coming on stream, including the Jinzhou 9-3 comprehensive adjustment project which already commenced production.

Both the Kenli 10-1 project and the Bozhong 28/34 comprehensive adjustment project located in Bohai are expected to reach peak production of around 36 and 30 thousand BOE per day respectively.

In addition, CNOOC plans to drill around 162 exploration wells and to acquire about 36,000 kilometres of 2D seismic data, as well as 1.4 million hectares of 3D seismic data.

CNOOC chief executive Li Fanrong said the company was facing a “complicated and highly volatile macro environment in 2015.”

“The Company will continue to strengthen the management of internal operations and make efforts to meet annual operational targets,” he said.

“Meanwhile, the Company will ensure an appropriate balance between short-term return and long-term development, and implement prudent capital investment plan in order to continuously carry out its ‘New Leap Forward’ strategy.”