CNOOC (00883) 5-Year Investment Return and Valuation Analysis Under Low Oil Price Scenario

This analysis originates from a user query on December 19, 2025, regarding the investment value of CNOOC (00883.HK) in a low oil price environment [0]. Key assumptions include an average Brent crude price of $55 per barrel from 2026 to 2030, an annual oil and gas production growth rate of 4.5%, an annual non-recurring profit growth rate of 10%, and a 50% dividend payout ratio.

1. 2025 Profit and Oil Price
   : The user assumes an average Brent crude price of $68 per barrel and non-recurring profit of approximately RMB 130 billion in 2025. Soochow Securities’ report shows that the average Brent crude price in H1 2025 was $70.8 per barrel [1], and CNOOC’s non-recurring profit in 2024 was RMB 137.936 billion [2]. Soochow Securities predicts a 2025 profit of RMB 141.2 billion [1]. The overall profit range of RMB 130-140 billion is basically consistent with the actual situation.
2. Impact of $55 Oil Price on Profit
   : The user assumes a profit decrease of approximately RMB 40 billion to RMB 90 billion. CNOOC’s main barrel oil cost in H1 2025 was $26.94 per barrel [1], with strong cost competitiveness. However, the specific RMB 40 billion decrease needs further verification, and the profit decline trend is consistent with the low oil price logic.
3. Production Growth
   : The 4.5% annual growth rate is consistent with the company’s official production targets for 2025-2027 (760-780, 780-800, 810-830 million barrels of oil equivalent) [4], which is a reasonable range in the long term.
4. Dividends and Tax Rate
   : The user’s assumed 50% dividend payout ratio is slightly higher than the company’s commitment of no less than 45% [4], but it is within a reasonable range. The dividend tax rate for Hong Kong Stock Connect should be 20% [5], not 28% as mentioned by the user.

Assuming the initial investment is based on the closing price of CNOOC H-shares of approximately HK$20 in December 2025 [6], with a total market capitalization of approximately HK$900 billion [6]. After-tax dividend in 2026 (at a 20% tax rate): RMB 90 billion ×50% ×(1-20%) = RMB 36 billion; After-tax dividend in 2030: RMB 145 billion ×50% ×80% = RMB58 billion; The average annual after-tax dividend is approximately RMB47 billion (about HK$50.5 billion, exchange rate 1:0.93 [6]), with a dividend return of approximately 5.6% [0]. In terms of capital gains, if the PE ratio remains at 6-7 times, the 2030 market capitalization is expected to be HK$870-1015 billion [0], with limited growth space.

1. Cost Control as Core Support
   : CNOOC’s barrel oil cost is only $26.94 per barrel [1], which can maintain profitability even under the low oil price of $55, providing a basis for profit growth and dividends.
2. Dividend Policy Enhances Attractiveness
   : The company commits to a dividend payout ratio of no less than 45% from 2025 to 2027 [4]. The user’s assumed 50% ratio is feasible, with an after-tax dividend yield of approximately5.6%, which is attractive to income-type investors.
3. Market Capitalization Growth Constrained by Low Oil Prices
   : Despite an annual profit growth rate of10%, the PE ratio is unlikely to rise significantly under the low oil price assumption, leading to limited capital gains space.

1. Oil Price Volatility Risk
   : If oil prices remain below $55 per barrel, profits may be lower than expected [0].
2. Production Growth Risk
   : If new projects are not put into production as expected, the production growth rate may not reach 4.5% [0].
3. Exchange Rate Risk
   : Fluctuations in the RMB-HK dollar exchange rate affect the actual returns of Hong Kong Stock Connect investors [0].

1. Cost Advantage Maintains Profitability
   : Low barrel oil cost makes the company competitive even in the industry downturn [1].
2. Stable Dividends Attract Investment
   : High dividend yield is attractive in a low-interest rate environment [0].

Under the assumption of an average Brent crude price of $55 per barrel from 2026 to2030, CNOOC can maintain profitability through its low-cost advantage, with an average annual after-tax dividend return of approximately5.6%. The company’s stable dividend policy is attractive to income-type investors, but attention should be paid to factors such as oil price volatility, production growth, and exchange rate risks. The report does not provide specific investment advice and only presents objective information based on assumptions and analysis.