Bulletin: Cost Controls Help CNOOC Weather COVID Dip

HONG KONG (S&P Global Ratings) Aug. 20, 2020--S&P Global Ratings today said that stringent cost controls by CNOOC Ltd. (A+/Stable/--) have helped the China-based crude oil and natural gas company post better financial performance in the first half than we expected. We expect CNOOC Ltd.'s credit metrics to remain robust, backed by stabilized oil prices and the effects of strong cost controls. We estimate CNOOC Ltd.'s EBITDA was Chinese renminbi (RMB) 47 billion in the first half, already reaching 65% of our full-year EBITDA forecast of RMB72 billion. We assume a US$30 per barrel (bbl) Brent oil price for the rest of the year, and if Brent stays at the current US$40-US$45 per bbl range, the company's EBITDA will likely

...August 20, 2020 HONG KONG (S&P Global Ratings) Aug. 20, 2020--S&P Global Ratings today said that stringent cost controls by CNOOC Ltd. (A+/Stable/--) have helped the China-based crude oil and natural gas company post better financial performance in the first half than we expected. We expect CNOOC Ltd.'s credit metrics to remain robust, backed by stabilized oil prices and the effects of strong cost controls. We estimate CNOOC Ltd.'s EBITDA was Chinese renminbi (RMB) 47 billion in the first half, already reaching 65% of our full-year EBITDA forecast of RMB72 billion. We assume a US$30 per barrel (bbl) Brent oil price for the rest of the year, and if Brent stays at the current US$40-US$45 per bbl range, the company's EBITDA will likely beat our full-year forecast. The company has fully recovered from COVID-19 and operations have returned to prepandemic levels. The company achieved record-low costs and positive free cash flow in the first half despite challenging conditions. All-in costs reached...

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