CNOOC Domestic Oil & Gas Exploration Moat and 2026 Profit Forecast Analysis

CNOOC’s domestic oil and gas exploration core moat lies in its significant cost advantage. According to Zhongtai Securities Research Report [1], CNOOC’s five-barrel oil cost in 2022 was $30.39 per barrel of oil equivalent, with operating cost only $7.74 per barrel, far lower than international peers like ExxonMobil ($13.09 per barrel) and ConocoPhillips ($11.27 per barrel) [0]. In 2024, the cost further dropped to $28.52 per barrel of oil equivalent [3], reflecting continuous cost control capabilities. In addition, as China’s main offshore oil and gas exploration enterprise, CNOOC enjoys priority development rights for domestic offshore oil and gas resources, which provides a stable and low-risk resource base, further consolidating its moat.

In 2020, when Brent crude oil averaged $43, CNOOC’s domestic oil and gas production was 356 million barrels of oil equivalent, with a profit per barrel of $14.18, achieving a profit of RMB 34.828 billion [2]. Combined with CNOOC’s 2025 production target of 760-780 million barrels of oil equivalent and an annual growth rate of 2-3%, the 2026 production is expected to be about 800 million barrels of oil equivalent [0]. If the profit per barrel remains at around $14 as in 2020, the total profit can be calculated as approximately 800 million barrels of oil equivalent × $14 per barrel × RMB to USD exchange rate (calculated at 6.897) ≈ RMB 78 billion, which is close to the post’s forecast of RMB 69.4 billion, indicating a reasonable possibility.

1. Sustainability of Cost Advantage
   : CNOOC has achieved continuous cost reduction through technological innovation and efficient management, enabling it to maintain a competitive advantage amid oil price fluctuations.
2. Support for Production Growth
   : CNOOC has multiple key new projects put into production in 2025, including Bozhong 26-6 Oilfield, Kenli 10-2 Oilfield Group, etc., providing solid guarantees for production growth [3].
3. Robustness of Profit Forecast
   : Historical data in 2020 has verified CNOOC’s profitability at $43 oil price; if production doubles, the logic of profit doubling holds.

1. Oil Price Fluctuation Risk
   : Brent oil price may deviate from the $43 assumption, affecting profit levels [0].
2. Exchange Rate Fluctuation Risk
   : Changes in the RMB to USD exchange rate may impact profits [0].
3. Overseas Business Risk
   : Overseas business in some regions may continue to lose money, dragging down overall profits [0].

1. Domestic Demand Growth
   : China’s economic development continues to drive demand for oil and gas, providing a stable market for CNOOC [0].
2. Deep-sea Development Technology Breakthrough
   : CNOOC’s technological breakthroughs in deep-sea oil and gas development will open up new growth space [0].

CNOOC’s domestic oil and gas exploration has obvious cost moat advantages, and can still maintain profitability at extremely low oil prices. There is a reasonable possibility of achieving RMB 69.4 billion in non-recurring profit deduction under the assumption of Brent crude oil at $43 in 2026, mainly based on production growth and sustained cost advantages. Investors need to pay attention to risks such as oil prices, exchange rates, and overseas business, but CNOOC’s long-term competitiveness is supported by cost and resource advantages.