CNOOC succumbs to crude rout in first output cut since '99

Hong Kong

CHINA'S largest offshore oil company will cut output for the first time in more than a decade, prompting speculation the nation's producers are succumbing to the global price war. Shares in Hong Kong fell to a six-year low on Wednesday.

CNOOC Ltd will produce 470 million to 485 million barrels of oil equivalent this year, slipping from 495 million in 2015, it said in a statement to the Hong Kong stock exchange on Tuesday. That would be the first decline since at least 1999. The company said it will chop spending to a maximum 60 billion yuan (S$13.1 billion) from last year's 67.2 billion yuan.

Opec's strategy of flooding markets to drive out higher-cost suppliers has pressured oil prices to the lowest in 12 years, prompting producers from Chevron Corp to Royal Dutch Shell Plc to delay investments and cut costs as they seek to weather the rout. CNOOC's acknowledgment that spending cuts are hurting production m…