Analysis of CNOOC's Moat and Cost Advantage Sustainability in Domestic Oil and Gas Exploration and Production

This analysis is based on a social media post [1], which compared the barrel-of-oil profit performance of CNOOC with Saudi Aramco and ConocoPhillips in 2020 (Brent oil at $43) and 2024 (Brent oil at $80). The post claims that CNOOC’s domestic barrel-of-oil profit was $14.18 in 2020, higher than Saudi Aramco’s $10.82; in 2024, it was approximately $33, higher than Saudi Aramco’s $23.5 and ConocoPhillips’ $12.7. However, social media analysis [1] shows that the results calculated from public financial data are inconsistent with the post’s data (CNOOC’s 2024 barrel-of-oil profit was approximately $2.61 per barrel of oil equivalent, Saudi Aramco’s about $31.64 per barrel, and ConocoPhillips’ about $1.22 per barrel of oil equivalent). The discrepancy may stem from differences in data types (operating profit vs. net profit), statistical scope (crude oil vs. oil and gas equivalent), or accuracy of production data.

CNOOC’s moat advantages mainly include: 1) Monopoly position in domestic oil and gas resources; 2) Leading technical level; 3) Strong capital strength; 4) Stable government support [1]. These advantages have certain stability amid oil price fluctuations: domestic market demand is relatively stable, government support reduces policy risks, and capital and technical strength support cost control.

1. Domestic market monopoly is the core moat
   : CNOOC’s monopoly position in domestic oil and gas exploration and production allows it to stably acquire resources without being overly affected by international market competition, which is an important guarantee for coping with oil price fluctuations.
2. Profit data contradictions highlight indicator differences
   : The profit discrepancy between the post and public data indicates that the definition of “barrel-of-oil profit” (operating profit/net profit, crude oil/oil and gas equivalent) needs to be clarified; otherwise, the comparison lacks objectivity.
3. Government support enhances stability
   : As a domestic energy enterprise, the policy and financial support CNOOC receives makes it more resilient when coping with oil price declines, an advantage that international giants find difficult to replicate.

: 1) Uncertainty in profit data may affect decision-making; 2) Market risk from continuous fluctuations in international oil prices; 3) Operational risks from technological updates and changes in environmental regulations.
: 1) Steady growth in domestic energy demand; 2) Potential for cost reduction brought by technological progress; 3) Long-term development space enhanced by the government’s emphasis on energy security.

CNOOC has moat advantages such as domestic resource monopoly, leading technology, strong capital strength, and government support; its cost advantage comes from low-cost extraction of domestic resources and efficient operations. The profit comparison data in the post has not been verified, and the definition of financial indicators needs to be further clarified. Amid oil price fluctuations, CNOOC’s domestic market position and government support help maintain competitiveness, but attention should be paid to data accuracy and market risks.