Analysis of CNOOC's Profit Moat in Domestic Oil and Gas Exploration and Production and Its Investment Value Under Low Oil Prices

CNOOC, as a leading domestic upstream oil and gas exploration and production company, its profit moat is mainly based on cost control, production growth, and domestic resource advantages. H1 2024 data shows that the company’s main barrel-of-oil equivalent cost is $27.75/boe[1], with cost control at an industry-leading level, providing important support for profitability under low oil prices. In terms of production, the company plans a 2026 net production target of 810-830 million boe, of which domestic production accounts for approximately 69%[2]; stable production growth expectations enhance profit stability. Fitch analysis points out that CNOOC’s focus on upstream business, favorable oil market conditions, and steady production will continue to support its performance[3]. The data mentioned in the post, such as CNOOC’s domestic barrel-of-oil profit of $14.18 when Brent crude was $43 in 2020 and $33 when Brent crude was $80 in 2024, as well as comparative data with Saudi Aramco and ConocoPhillips, has not been verified for specific sources through public channels and needs further verification.

The stability of domestic oil and gas resources and policy support may form CNOOC’s unique moat. Compared with international oil and gas giants, CNOOC’s domestic operations are less affected by geopolitical risks and also benefit from policy support under the domestic energy security strategy. The company’s clear production growth plan and continuous cost control measures enable it to have stronger resilience against oil price volatility.

In terms of risks, attention should be paid to the direct impact of oil price volatility uncertainty on profitability, as well as the accuracy of unverified data in the post. In addition, technical risks in the oil and gas exploration and production process and rising environmental compliance costs also need to be noted. In terms of opportunities, as the proportion of domestic production increases, the stability of the company’s profitability will be further enhanced, and its profit resilience under low oil prices gives it long-term investment value potential.

CNOOC’s domestic oil and gas exploration and production business has strong cost control capabilities and production growth prospects; domestic resource advantages and policy support form a potential moat. Public data such as the H1 2024 barrel-of-oil equivalent cost of $27.75/boe[1] and the 2026 net production target of 810-830 million boe[2] show that it has profit potential under low oil prices. Some comparative data involved in the post has not been verified for public sources yet and should be used with caution.