Chief to go as CNOOC posts results
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China's top offshore oil and gas producer CNOOC Ltd said its long-time chief executive is to be replaced by its president, as it posted its second-best interim profit, fueled by higher crude oil prices and a rise in production.
Fu Chengyu would relinquish his chief executive position but remain non-executive chairman of the company from September 16, CNOOC said yesterday.
He will be replaced by President and CFO Yang Hua, an MIT-educated executive who joined the company in 1982.
"I'm glad we were able to locate an ideal successor, Yang Hua, who has devoted himself to CNOOC Ltd for more than 20 years and has proven himself a robust operator in the toughest circumstances," Fu said.
CNOOC, the first of China's trio of energy companies, which includes PetroChina and Sinopec, to report earnings, posted a net profit of 25.99 billion yuan (US$6.8 billion) for the first half of 2010 versus 12.4 billion yuan a year earlier. Total oil and gas output rose 40.8 percent to a record 149 million barrels of oil equivalent in the first half. Its average realized oil price was US$76.59 per barrel, up 55.2 percent from the same period a year earlier.
But CNOOC warned of rising costs.
Some analysts say CNOOC may not be able to sustain its strong profit growth in the second half if costs continue to escalate and if oil prices continue to trade sideways around the US$70-US$80 per barrel range, relatively flat from the average price of US$72 per barrel in the same period a year ago.
Unlike PetroChina and Sinopec Corp, CNOOC makes almost all its profit from exploration and production and does not have to sell fuel at state-capped prices below production costs.
"Even though we have led the industry in terms of profitability in recent years, our cost is undoubtedly under upward pressure," CNOOC said in a statement to the Hong Kong stock exchange.
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