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China's CNOOC reports $1.16 bn net loss

AFP
Beijing-based CNOOC is China's main offshore oil and gas producer

China's main offshore oil and gas producer CNOOC saw its shares on the Hong Kong stock exchange fall on Thursday, after it reported a $1.16 billion net loss for the first half of 2016.

It was the company's first half-year loss since it started trading on the Hong Kong exchange in 2000, with CNOOC blaming low oil prices and write-downs on assets for its performance.

"Further recovery of international oil prices faces headwinds," the company said in a statement sent to the Hong Kong bourse late Wednesday.

CNOOC posted a net loss for the six months ending June 30 of 7.74 billion yuan ($1.16 billion), alongside a 25.4 percent drop in revenue to 66.83 billion yuan.

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This was in line with a warning the firm issued in July saying it could see an 8.0 billion yuan (1.2 billion) net loss, compared to a net profit of 14.7 billion yuan in the same period last year.

CNOOC said it saw an impairment loss of approximately 10.4 billion yuan for the period on "fields in North America, Europe and Africa".

This was "primarily due to the revision of the estimation for the oil price forecast and the adjustment in operating plan for oil sand assets in Canada."

CNOOC acquired Canada's Nexen Energy in 2013 for $15 billion, which many analysts said was too much.

The company warned of tough conditions for the rest of the year, saying it would be "complex and volatile".

"Uncertainties still remain in both the international and domestic macro environment," it said.

CNOOC's shares fell 1.8 percent in Hong Kong during Wednesday morning trade.

China's economic growth slowed to 6.7 percent in the first quarter, its weakest quarterly expansion in seven years.

Plunging crude prices have hurt other major Chinese energy firms.

PetroChina's net profit plunged 97.9 percent in the first half of this year, at 531 million yuan ($79.9 million), down drastically from the 25.4 billion yuan it made in the same period last year.

PetroChina also warned oil prices will continue to "keep fluctuating at a low level".