UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 6-K

 

Report of Foreign Private Issuer

 

Pursuant to Rule 13a-16 or 15d-16

of the Securities Exchange Act of 1934

 

For the month of September 2018

 

Commission File Number 1-14966

 

CNOOC Limited

(Translation of registrant’s name into English)

 

65th Floor

Bank of China Tower

One Garden Road

Central, Hong Kong

(Address of principal executive offices)

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

 

Form 20-F x    Form 40-F ¨  

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ¨  

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ¨  

 

Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

 

Yes ¨    No x

 

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): Not applicable  

 

 

 

 

Signature  

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. 

     
    CNOOC Limited
   
By:  

/s/ Jiewen Li

Name:   Jiewen Li
Title:   Joint Company Secretary
   

Date: September 4, 2018

 

 

 

 

EXHIBIT INDEX

 

     

Exhibit No.

 

Description

   
99.1  

Interim Report 2018

99.2  

Notification Letter and Request Form for Non-Registered Holders

 

 

 

 

Exhibit 99.1

 

 

Contents

 

2 CHAIRMAN’S STATEMENT

 

4 KEY FIGURES

 

5 BUSINESS OVERVIEW

 

9 INTERIM CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

 

11 INTERIM CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

 

13 INTERIM CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

 

14 INTERIM CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

 

15 NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

45 REPORT ON REVIEW OF INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

46 OTHER INFORMATION

 

 

1  

 

Chairman’s Statement

 

Dear Shareholders,

 

The global economic upswing continued to strengthen in the first half of 2018. However, uncertainties still exit under the global economy and international oil prices remain volatile. Against this complicated environment, the Company continued to capitalize on its strengths to explore comparative advantage and develop innovative ideas in an effort to reach its potential. During the period, the Company put quality first and gave priority to performance and achieved outstanding results.

 

The Company continued to follow a value-driven exploration strategy in offshore China. In the first half of the year, the Company made six commercial discoveries and drilled 33 successful appraisal wells. Bozhong 19-6 was appraised and confirmed to be the largest gas field in Bohai area. It is expected to become a hundred-million-ton class gas field and to provide high-quality low-carbon energy to North China. In addition, Bozhong 29-6 was successfully appraised and is expected to become a 100-million-ton class oilfield.

 

Regarding our overseas operations, the Company continued to focus on strategic core areas. Three new discoveries, including Ranger, Pacora and Longtail, were made in Guyana year to date. In addition, the Liza field was successfully appraised, further enhancing the asset value and providing a solid resource base for future project development. The Company also successfully completed the integration of its overseas management structure in the first half of this year, which further enhanced the level of operation management of its overseas assets. Going forward, the Company will continue to acquire high-quality exploration blocks overseas, optimize its overseas asset portfolio and further promote global development.

 

At the beginning of this year, the Company set an annual production target of 470-480 million barrels of oil equivalent (BOE). Through careful cultivation, the Company maintained efficient oil and gas operations and successfully achieved its target for the first half of the year and net production amounted to 238.1 million BOE. During the period, the Company made considerable efforts to kick off the “Bohai oilfield stable production of 30 million tons for another 10 years” project, which further enhanced its oil and gas supply capability. To date, two out of the five new projects planned for 2018 have already commenced production and the remaining projects are also progressing smoothly.

 

During the low oil price cycle, the Company worked hard to improve its ability in cost control and sustainable development through management optimization and technological innovation. Despite international oil prices rebound and industry costs inflation, the Company maintained a competitive all-in cost of US$31.83 per BOE during the first half of the year.

 

In the first half of 2018, the Company continued to strengthen its refined management and maintained good profitability and sound financial position. Oil and gas sales revenue reached RMB90.31 billion, representing a year-on-year increase of 20.5%. Net profit reached RMB25.48 billion and earnings per share amounted to RMB0.57, representing a significant year-on-year increase of 56.8%. The Board of Directors has declared an interim dividend of HK$0.30 per share (tax inclusive) for the first half of 2018 by taking into account the Company’s financial status.

 

2  

 

The Company is committed to a green and low-carbon development model and has strived to enhance the supply of clean energy. After years of hard work, the Company’s natural gas reserves have increased gradually with a promising development potential. In the first half of this year, natural gas production increased by 11.0% year-on-year. The successful appraisal of Bozhong 19-6, the largest gas field in Bohai, as well as the development and construction of Lingshui 17-2, the first independent deepwater gas field in offshore China, opened up a new era for the Company’s natural gas business.

 

The Company has always regarded operational safety and environmental protection as the cornerstone for its sustainable development and upheld the principles of “Safety and Environmental Protection First, People Oriented and Focus on Equipment Integrity”. The Company also adhered to the reciprocal relationship between development and protection. In practice, we strictly implemented national and industrial safety and environmental protection standards, actively participated in the battle against pollution, and focused on implementing the “Three-Year Action Plan to Enhance Environmental Protection in Bohai Oilfield”. The Company continued to improve the level and capability of risk classification and management, to prevent major accidents and risks, and to ensure safety and environmental protection throughout the production process.

 

Looking forward to the second half of the year, the external environment is still complicated and volatile, with many uncertainties ahead. The Company will continue to maintain its confidence and make solid progress to achieve its major production and operation targets for the year. Meanwhile, we will ensure the spirit of reform and the enthusiasm of innovation, respond to the uncertainties of the environment with high-quality development, turn challenges into opportunities, and achieve an overall improvement on competitiveness and risk resistance ability.

 

Dear shareholders, looking ahead, CNOOC Limited will continue to work hard, bring about and strive forward in order to achieve a high-quality development and create a better future with you.

 

Yang Hua  

Chairman

 

Hong Kong, 23 August 2018

 

3  

 

Key Figures

 

    Six months ended 30 June
    2018   2017
         
Net profit, million RMB     25,477       16,250  
Basic earnings per share, RMB     0.57       0.36  
                 
Total oil and gas sales, million RMB     90,309       74,943  
Total revenue, million RMB     105,649       92,362  
                 
Interim dividend per share, HK$ (tax inclusive)     0.30       0.20  
                 
Net Production*                
 Crude and Liquids, million barrels     194.1       198.2  
 Natural Gas, billion cubic feet     256.9       231.4  
 Total, million BOE     238.1       237.9  

 

* Including our interest in equity-accounted investees, which is approximately 10.6 million BOE for the first half of 2018 and approximately 8.4 million BOE for the first half of 2017.

 

4  

 

Business Overview

 

In the first half of 2018, by adhering to strategic directions, improving quality and enhancing efficiency and strengthening risk control, the Company achieved its production and operation targets for the first half of the year with a stable safety production performance and positive progress in various businesses in accordance with the targets that were set in the beginning of the year.

 

EXPLORATION

 

In the first half of the year, according to the working plan laid down in the beginning of the year, the Company continued to follow a value-driven exploration philosophy and targeted mid-to-large sized oil and gas discoveries in offshore China. The Company focused its efforts on both oil and gas exploration and strengthened its gas exploration activities. Overseas, the Company focused on strategic core areas and expanded its reserve base. In the first half of the year, all exploration works progressed smoothly and the Company made eight new discoveries and 35 successful appraisal wells.

 

The Company made six new discoveries and drilled 33 successful appraisal wells in offshore China, with a success rate of 54-65% for independent exploration wells. It accelerated the appraisal of oil and gas fields and significantly increased the number of appraisal wells, securing the increase of reserves and production. Material progress has been made in the appraisal of Bozhong 19-6 gas field. Up till now, drilling of six wells were completed, proving that Bozhong 19-6 is a large gas field with resources over 100 million tons with high abundance, high productivity and high quality. Bozhong 29-6 was also successfully appraised and is expected to be classified as a hundred-million-ton class oilfield. Six new discoveries are Ledong 10-2, Weizhou 10-3 East and Wushi 23-5 North in Western South China Sea and Enping 10-2, Enping 15-2 and Lufeng 12-3 in Eastern South China Sea. Among which, Enping 10-2 and Enping 15-2 have shown the exploration potential of the northern belt of Enping Sag, and are expected to be jointly developed with Enping 15-1 to create a mid-sized oilfield. Lufeng 12-3 is the largest commercial PSC discovery in the recent years, and has the potential of developing into a mid-sized oilfield.

 

The Company made two new discoveries and drilled two successful appraisal wells overseas. Two new discoveries, Ranger and Pacora, were made in the Stabroek block offshore Guyana in the first half of the year. The eighth discovery within the block, Longtail, has been made recently, which further confirmed the potential of resources within the block. According to the operator, the total recoverable resources of the block are expected to be over 4 billion BOE.

 

In addition, the Company acquired 4,460 km 2 of 3D seismic data.

 

5  

 

The Company’s major exploration activities as of 30 June 2018 are shown in the table below:

 

             
    Exploration Wells   Seismic Data
    Wildcat   Appraisal Wells   3D (km 2 )
             
Offshore China (Independent)     26       41       4,059  
Offshore China (PSC)     4       2       401  
Overseas     3       2        
                         
Total     33       45       4,460  
                         

ENGINEERING CONSTRUCTION, DEVELOPMENT AND PRODUCTION

 

In the first half of the year, the Company carefully organized its operating resources and progressed well for the five new projects that are expected to commence production within this year. Among them, Stampede oilfield and Weizhou 6-13 oilfield commenced production in the first half of the year. Wenchang 9-2/9-3/10-3 gas fields, which are expected to commence production in the second half of the year, are undergoing installation and commissioning. Penglai 19-3 oilfield 1/3/8/9 comprehensive adjustment project and Dongfang 13-2 gas fields are also progressing as scheduled.

 

In the first half of the year, net production of the Company reached 238.1 million BOE, in line with expectation. Net production from offshore China was 152.9 million BOE, representing a decrease of 1.9% year-on-year, mainly due to the natural decline of producing fields. Net production from overseas was 85.2 million BOE, representing an increase of 3.7% year-on-year, mainly attributable to the rise in production brought by enhancement measures and new wells commencement of the Missan project in Iraq. In the first half of the year, crude and liquids and natural gas production accounted for 82% and 18% of the total net production, respectively. Natural gas production increased 11% year-on-year, which was mainly benefited from the growth of natural gas demand in China.

 

In the second half of the year, on the basis of safety and environmental protection, the Company will continue to promote the commencement of production of new oil and gas fields, properly maintain and increase the production of producing oil and gas fields and ensure the achievement of all production and operation targets of this year.

 

6  

 

    First half of 2018* First half of 2017*
    Crude and   Natural   Crude and   Natural
    liquids   gas   liquids   gas
    (million       (million    
    barrels)   (bcf)   barrels)   (bcf)
                 
China                
Bohai     78.5       30.2       80.4       26.7  
Western South China Sea     19.9       46.7       18.4       50.2  
Eastern South China Sea     29.3       58.8       34.4       41.7  
East China Sea     0.8       10.2       0.8       11.4  
Others           0.3              
                                 
Subtotal     128.5       146.2       134.0       130.0  
                                 
Overseas                                
Asia (excluding China)     12.1       29.0       9.5       25.1  
Oceania     0.7       17.3       0.4       14.1  
Africa     11.9             14.2        
North America (excluding Canada)     9.2       23.3       8.4       22.9  
Canada     11.3       6.5       9.0       7.9  
South America     5.1       30.8       4.0       25.3  
Europe     15.3       3.9       18.8       6.1  
                                 
Subtotal     65.6       110.7       64.3       101.3  
                                 
Total     194.1       256.9       198.2       231.4  
                                 
Total net production (million BOE)           238.1               237.9  
                                 
* Including our interest in equity-accounted investees, which is approximately 10.6 million BOE for the first half of 2018 and approximately 8.4 million BOE for the first half of 2017.

 

7  

 

CAPITAL EXPENDITURE

 

In the first half of the year, the Company’s capital expenditure was RMB21.0 billion. Capital expenditure for exploration and development were RMB4.1 billion and RMB12.4 billion, representing a decrease of 14.6% and 11.4% year-on-year respectively, which was mainly attributable to cost savings due to the improvement of quality and enhancement of efficiency, as well as delay in some construction projects. Capital expenditure for production was RMB4.4 billion, representing an increase of 69.2% year-on-year, which was mainly attributable to increased workload of infill drillings etc.

 

COST AND EXPENSES

 

In the first half of 2018, major changes in cost items as compared with the first half of 2017 are as follows: depreciation, depletion and amortization expenses (“DD&A”) decreased by 14.5% to RMB27,221 million compared to RMB31,824 million in the same period of 2017, mainly due to change in production mix and increased reserve. Our Special Oil Gain Levy (“SOG” Levy) was RMB1,117 million, primarily due to the realized oil price in China offshore oilfields excessing the threshold of SOG Levy. Our losses attributable from a joint venture was RMB6,509 million while the profit attributable from a joint venture was RMB275 million in the first half of 2017, mainly due to depreciation on the value of the assets in Argentina owned by BC ENERGY INVESTMENTS CORP. as a result of the depreciation of the Argentina peso against the U.S. dollar and the sharp increase of interest rate.

 

Save as disclosed in this Interim Report, there were not any material factors affecting our results and financial position during the first half of the year.

 

8  

 

Interim Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income

 

For the six months ended 30 June 2018

(All amounts expressed in millions of Renminbi, except per share data)

 

             
      Six months ended 30 June
        2018   2017
    Notes   (Unaudited)   (Unaudited)
             
REVENUE            
 Revenue recognised from contracts with customers            
  Oil and gas sales     3       90,309       74,943  
  Marketing revenues     3       12,538       14,237  
  Other revenue             2,802       3,182  
                         
              105,649       92,362  
                         
EXPENSES                        
 Operating expenses             (11,610 )     (11,299 )
 Taxes other than income tax     7(ii)       (4,245 )     (3,752 )
 Exploration expenses             (2,260 )     (2,673 )
 Depreciation, depletion and amortisation             (27,221 )     (31,824 )
 Special oil gain levy     7(iii)       (1,117 )      
 Impairment and provision             (159 )     (305 )
 Crude oil and product purchases     3       (11,700 )     (13,538 )
 Selling and administrative expenses             (3,135 )     (3,188 )
 Others             (2,964 )     (3,698 )
                         
              (64,411 )     (70,277 )
                         
PROFIT FROM OPERATING ACTIVITIES             41,238       22,085  
 Interest income             327       309  
 Finance costs     5       (2,471 )     (2,704 )
 Exchange gains, net             254       294  
 Investment income             1,675       1,063  
 Share of profits of associates             237       166  
 (Loss)/profit attributable to a joint venture     6       (6,509 )     275  
 Other income, net             766       28  
                         
PROFIT BEFORE TAX             35,517       21,516  
 Income tax expense     7(ii)       (10,040 )     (5,266 )
                         
PROFIT FOR THE PERIOD ATTRIBUTABLE TO                        
 OWNERS OF THE PARENT             25,477       16,250  
 

9  

 

             
      Six months ended 30 June
        2018   2017
    Notes   (Unaudited)   (Unaudited)
             
OTHER COMPREHENSIVE INCOME/(EXPENSE)            
 Items that may be subsequently reclassified            
  to profit or loss            
   Exchange differences on translation            
    of foreign operations             2,241       (4,127 )
   Share of other comprehensive (expense)/income                        
    of associates             (12 )     22  
 Other items that will not be reclassified                        
  to profit or loss                        
   Fair value change on equity investments                        
    designated as at fair value through other                        
    comprehensive income             794       (755 )
   Others             29        
                         
OTHER COMPREHENSIVE INCOME/(EXPENSE)                        
 FOR THE PERIOD, NET OF TAX             3,052       (4,860 )
                         
TOTAL COMPREHENSIVE INCOME FOR THE                        
 PERIOD ATTRIBUTABLE TO OWNERS                        
 OF THE PARENT             28,529       11,390  
                         
EARNINGS PER SHARE FOR THE PERIOD                        
 ATTRIBUTABLE TO OWNERS                        
 OF THE PARENT                        
 Basic (RMB Yuan)     8       0.57       0.36  
 Diluted (RMB Yuan)     8       0.57       0.36  
                         

Details of the interim dividends declared for the period are disclosed in note 9 to the interim condensed consolidated financial statements.

 

10  

 

Interim Condensed Consolidated Statement of Financial Position

 

30 June 2018

(All amounts expressed in millions of Renminbi)

 

             
        30 June   31 December
        2018   2017
    Notes   (Unaudited)   (Audited)
             
NON-CURRENT ASSETS            
 Property, plant and equipment     10       391,905       395,868  
 Intangible assets     11       15,091       15,070  
 Investments in associates             4,204       4,067  
 Investment in a joint venture             18,658       25,079  
 Equity investments     19       4,397       3,540  
 Deferred tax assets             27,540       25,509  
 Other non-current assets             9,791       9,248  
                         
Total non-current assets             471,586       478,381  
                         
CURRENT ASSETS                        
 Inventories and supplies             7,541       7,354  
 Trade receivables     12       25,097       20,787  
 Equity investments     19       14       14  
 Other financial assets     19       103,544       74,344  
 Other current assets             7,831       8,387  
 Time deposits with maturity over three months             13,880       15,380  
 Cash and cash equivalents             23,480       12,572  
                         
Total current assets             181,387       138,838  
                         
CURRENT LIABILITIES                        
 Loans and borrowings     14       4,804       13,892  
 Trade and accrued payables     13       27,314       26,713  
 Contract liabilities             2,726        
 Other payables and accrued liabilities             11,969       14,106  
 Dividends payable             11,293        
 Taxes payable             10,826       6,701  
                         
Total current liabilities             68,932       61,412  
                         
NET CURRENT ASSETS             112,455       77,426  
                         
TOTAL ASSETS LESS CURRENT LIABILITIES             584,041       555,807  
                         

11  

 

             
        30 June   31 December
        2018   2017
    Notes   (Unaudited)   (Audited)
             
NON-CURRENT LIABILITIES                        
 Loans and borrowings     14       129,469       118,358  
 Provision for dismantlement             54,373       52,893  
 Deferred tax liabilities             2,998       3,303  
 Other non-current liabilities             1,208       1,278  
                         
Total non-current liabilities             188,048       175,832  
                         
NET ASSETS             395,993       379,975  
                         
EQUITY                        
Equity attributable to owners of the parent                        
 Issued capital     15       43,081       43,081  
 Reserves             352,912       336,894  
                         
TOTAL EQUITY             395,993       379,975  
                         

12  

 

 

Interim Condensed Consolidated Statement of Changes in Equity

 

For the six months ended 30 June 2018

(All amounts expressed in millions of Renminbi)

 

                             
                             
                             
    Attributable to owners of the parent
                             
            Statutory                
        Cumulative   and non-           Proposed    
    Issued   translation   distributive   Other   Retained   final    
    capital   reserve   reserves   reserves   earnings   dividend   Total
                                                         
Balances at 1 January 2017     43,081       (2,517 )     20,000       4,556       308,155       9,096       382,371  
Profit for the period                             16,250             16,250  
Other comprehensive expense, net of tax           (4,127 )           (733 )                 (4,860 )
                                                         
Total comprehensive (expense)/income           (4,127 )           (733 )     16,250             11,390  
2016 final dividend                             183       (9,096 )     (8,913 )
Appropriation to reserve*                 50,000             (50,000 )            
                                                         
Balances at 30 June 2017 (Unaudited)     43,081       (6,644 )     70,000       3,823       274,588             384,848  
                                                         
Balances at 31 December 2017     43,081       (12,638 )     70,000       4,104       264,598       10,830       379,975  
Impact of adopting IFRS 15/                                                        
 HKFRS 15                             (1,218 )           (1,218 )
Balances at 1 January 2018     43,081       (12,638 )     70,000       4,104       263,380       10,830       378,757  
Profit for the period                             25,477             25,477  
Other comprehensive income, net of tax           2,241             811                   3,052  
                                                         
Total comprehensive income           2,241             811       25,477             28,529  
2017 final dividend                             (463 )     (10,830 )     (11,293 )
                                                         
Balances at 30 June 2018 (Unaudited)     43,081       (10,397 )     70,000       4,915       288,394             395,993  
                                                         
* During the six months ended 30 June 2017, CNOOC China Limited (“CNOOC China”), the Company’s wholly-owned subsidiary, appropriated RMB50,000 million to the general reserve fund.

 

13  

 

Interim Condensed Consolidated Statement of Cash Flows

 

For the six months ended 30 June 2018

(All amounts expressed in millions of Renminbi)

 

    Six months ended 30 June
    2018   2017
    (Unaudited)   (Unaudited)
         
Net cash generated from operating activities     58,406       48,847  
Net cash used in investing activities     (46,212 )     (45,090 )
Net cash used in financing activities     (1,538 )     (3,319 )
                 
Net increase in cash and cash equivalents     10,656       438  
Cash and cash equivalents at beginning of period     12,572       13,735  
Effect of foreign exchange rate changes, net     252       (114 )
                 
Cash and cash equivalents at end of period     23,480       14,059