Cnooc's US$13b oil, gas deals show China's supply fears

[BEIJING] China National Offshore Oil Corp (Cnooc) struck US$13 billion worth of deals to boost oil and gas supply, as the country aims to avoid a repeat of last year's energy crunch.

The nation's biggest offshore oil and gas driller has signed agreements with a dozen international firms, according to a statement Wednesday (Feb 16). That includes 4 contracts to jointly develop oil fields off China's coast with foreign companies including TotalEnergies and ConocoPhillips.

China is the world's largest energy user and President Xi Jinping has set long-term goals to curb reliance on pricey imports even as the nation's demand for oil and liquefied natural gas (LNG) continues to rise.

In the short term, the country is lifting fuel purchases from overseas and last year toppled Japan as the world's No 1 LNG importer.

Cnooc's deals include pacts for imports of oil and LNG from suppliers including Kuwait National Petroleum Co (KNPC) and US-based Energy Transfer LP, state media China Petrochem reported, without citing any sources.

KNPC and Cnooc didn't immediately respond to emails seeking further details of the reported agreements. Energy Transfer signed a heads of agreement with Cnooc to work on a deal to supply LNG from its Lake Charles project in Louisiana, the company said in a statement.

Cnooc, the smallest of China's big 3 state-owned oil companies, will lift output by as much as 40 million barrels this year, mainly from its oil fields in Bohai Bay and the South China Sea.

The producer is continuing to prioritise investments in fossil fuels over clean energy. PetroChina Co and China Petroleum & Chemical, or Sinopec, are also boosting output to help avoid a repeat of the 2021 energy crisis that led to blackouts and power rationing in many regions. BLOOMBERG