CNOOC H1 2026: Record 398.7 MMboe Output at $29.7/BOE Cost Tightens the Bull Case for Offshore China Crude
Net production of 398.7 million BOE for the first half — equivalent to roughly 2.20 million BOE/d — came in as a record for CNOOC and marks a 3.7% year-on-year increase, with both domestic and overseas segments printing new highs simultaneously. The headline read is unambiguously bullish for the upstream China crude complex: volume growth is accelerating into an environment where average Brent was $87.6/barrel, and the company's all-in cost sat at $29.7/BOE, leaving a cash margin north of $57/BOE before tax. That spread explains the operating cash flow number — RMB 141.6 billion for the period, up 29.7% year-on-year — and it's the figure desk traders should anchor on when sizing exposure to 00883.HK or the Shanghai A-share 600938.
Approximately 69% of production originated from China, which means roughly 1.52 million BOE/d is tied to domestic offshore acreage — Bohai, the Western and Eastern South China Sea, and the East China Sea. That geographic concentration matters for the DCE crude futures complex; sustained Bohai Bay volume growth keeps the domestic supply side of SC contracts from tightening on weather-driven outage assumptions. For Brent-linked longs, the overseas 31% (~681,000 BOE/d) spread across Guyana, Iraq, Nigeria, Canada, and Brazil limits single-basin disruption risk, but also means CNOOC is a meaningful swing contributor to non-OPEC Atlantic Basin supply — directionally neutral to mildly bearish for Brent through H2 if overseas growth rates match domestic.
The profit line is the sharpest signal in the document. Net profit attributable to equity shareholders hit RMB 85.8 billion, up 23.4% versus the same period last year, on revenue of RMB 242.7 billion (+16.9%). Oil and gas sales revenue alone was RMB 206.1 billion (+20.0%). The gap between revenue growth (16.9%) and profit growth (23.4%) tells you cost discipline is outpacing the commodity price lift — management's stated all-in cost of $29.7/BOE is essentially unchanged at a structural level while Brent averaged $87.6. Basic EPS reached RMB 1.81 (+23.4%), and the Board declared an interim dividend of HK$0.94 per share, a listing record. Yield-chasing flows into the HK-listed shares are a credible secondary driver of the stock near-term.
On the exploration side, four new offshore China discoveries — Luda 16-1 and Qinhuangdao 30-3 in Bohai Bay, Bozhong 34-2 North, and Enping 11-1 in the Pearl River Mouth Basin — were logged in H1, alongside successful appraisal of 16 oil and gas bearing structures. Enping 11-1 is the one to flag: the company explicitly states it "is expected to commence production rapidly by utilizing existing facilities," which means incremental Bohai/South China Sea barrels could hit the balance sheet within 12 months with minimal incremental capex. Five new projects came on stream in the period. Three new exploration blocks were acquired in Brazil and Indonesia, expanding the overseas optionality without an announced price tag in the extracted disclosures. Onshore unconventional natural gas reserves are also described as growing — watch for this to feature more prominently in the H2 update as China's domestic gas demand curve steepens into winter.
The August commissioning of "Haiyou Anlan," China's first tension-leg floating wind demonstration project, and the full commissioning of the country's first offshore CCUS project in the South China Sea are largely non-commercial at this scale, but they reduce regulatory and ESG-related discount risk in the stock — relevant for international fund positioning that has historically penalized the name on carbon exposure.
The one structural hedge to the bullish read: macro language in the report flags "sharp fluctuations in international oil prices and rising expectations of global liquidity tightening" as the operating backdrop for H1. If Brent corrects materially below the $87.6 H1 average, the cost buffer remains wide at $29.7/BOE but earnings leverage cuts both ways — at $70 Brent the cash margin compresses by roughly 23% against the H1 realized environment.
What to Watch
- Enping 11-1 first production date — a rapid tie-in accelerates Q4 domestic volume upside
- Full-year production guidance reaffirmation at Q3 update (current record trajectory implies management will push the top of any prior range)
- Brent SC spread — widening signals domestic supply pressure is building; tightening flags offshore outage risk
- RMB/HKD fixing around the dividend payment date, given A-share holders receive RMB-converted HKD at central parity
- Any capex guidance revision accompanying Q3 results — five projects on stream with no disclosed budget overrun is clean, but three new overseas blocks add forward spend