The 2026 National Energy Work Conference was held in Beijing, announcing the successful conclusion of the domestic oil and gas "Seven-Year Action Plan" for increasing reserves and production. Over these seven years, CNOOC Limited has kept its mission in mind, shouldered its responsibilities, united in purpose, and overcome difficulties. It has achieved high-level growth in oil and gas output, promoted synergistic development that has accumulated into a formidable force, forged robust cost control capabilities, and continuously enhanced its ability to safeguard national energy security and contribute to building China into a strong maritime nation. On the occasion of the successful conclusion of the "Seven-Year Action Plan," the China Offshore Oil News and CNOOC's official social media channels are launching a series of reports to comprehensively summarize the outstanding achievements and beneficial practices of CNOOC during the implementation of the plan, fully demonstrating its role as the main force in domestic oil and gas reserve and production increases, building consensus for the new journey, and accumulating strength for the next phase. Calculating the "Three Ledgers" – CNOOC's "Seven-Year Action Plan" forges robust cost control capabilities. On October 30, 2025, CNOOC Limited announced its third-quarter operating results, delivering another excellent report card. The company's net production for the first three quarters increased by 6.7% year-on-year. Equally impressive was the 2.8% year-on-year decrease in its main cost per barrel of oil equivalent. Without high-quality cost control, there can be no solid risk resistance capability. Over the past seven years, facing a complex global oil and gas industry landscape, while successively setting new records for reserves and production, CNOOC has consistently regarded "low cost" as a core competitive advantage for sustainable enterprise development. By skillfully managing the "Three Ledgers," it has forged formidable cost control strength.
Technological Empowerment: Calculating the "Innovation Ledger" for Cost Control. For an oil and gas company, cost is the lifeline for survival and development. In 2019, the National Energy Administration proposed the "Seven-Year Action Plan" for domestic oil and gas reserve and production increases, setting higher demands for reserves and output. "How to balance the relationship between accelerating pace, ensuring quality, and controlling costs" became a mandatory question for CNOOC personnel. Within this seemingly "impossible trinity" of speed, quality, and cost, technological innovation gradually emerged as the solution. "Rather than passively saving money, it's better to proactively create value and lock in costs for the mission objectives," stated a representative from the Engineering Research & Design Institute of the Research Institute. The key to truly making costs "controllable" and "manageable" lies in technological innovation. He gave an example: the widespread application of ultra-high-strength steel across all offshore areas, achieving significant weight reduction and efficiency gains for large-scale platforms through material innovation, leads to annual cost reductions, thus controlling investment at its root. This is one of the foundations of low cost. Facing the reality of high investment, high risk, and high technical thresholds in offshore oil and gas exploration and development, CNOOC has always regarded technological innovation as the core driver for reducing costs and increasing efficiency, and technological breakthroughs as the key variable for cost optimization. Since the inception of the "Seven-Year Action Plan," a series of technological innovations have continuously emerged, generating benefits – innovating exploration theories and technologies, venturing into exploration "no-go zones," while maintaining a competitive level of finding cost per barrel compared to major global oil companies;深入推进 the construction of unmanned platform and typhoon production modes, reducing operation and maintenance costs and improving production efficiency; independently developing subsea production systems, promoting low-cost, large-scale subsea applications... "It can be said that behind every cent of cost reduction, there is strong support from technological progress," said the principal responsible comrade from the Engineering and Technology Department. In cost control, CNOOC chose the "technology" solution. But technological innovation itself is not "cost-free"; how then to calculate the "investment ledger" for technological innovation? "This is also a core issue we have been contemplating and practicing," said cadres and employees across the oil and gas exploration and development industry chain. This particular ledger cannot be judged based on a single project or short-term costs alone. CNOOC consistently focuses on the strategic value of national energy security. "Many core technologies cannot be 'bought or begged for.' Investments in technological innovation must be considered from the perspective of safeguarding national energy security and the long-term development of the enterprise." The company achieves cross-disciplinary collaboration through integrated engineering and production, deeply integrating technological innovation with management advantages, replacing "optimal development investment" with "optimal whole-life-cycle cost," and paying more attention to the enormous benefits brought by technological applications over their 20-30 year or even longer operational cycles. "This ledger for technological innovation, we calculate it clearly, and even more, we calculate it as worthwhile." Over the years, every investment in technological innovation has been accumulating strength for CNOOC's high-quality development and for the national energy cause.
Systematic Tackling: Calculating the "Overall Ledger" for Holistic Coordination. In 2018, prior to the start of the "Seven-Year Action Plan," CNOOC, through the regular conduct of "Quality and Efficiency Year" activities, continuously improved its cost per barrel control system, possessing industry-leading profitability per barrel. However, in the early stages of the "Seven-Year Action Plan," international oil prices experienced another decline of over 40%. In response, a representative from the Finance Department stated, "Since oil prices are uncontrollable, we must effectively control costs while increasing production scale." But cost control is not simply about "cutting expenses"; it is a systematic project that runs through the entire process and lifecycle, where any omission in any link could negate previous efforts. If departments and units only focus on their own interests and fail to view issues from the perspective of the company's overall interests, it leads to fragmented processes and loss of efficiency. How to make the "towels" from each link "wring together" more effectively? The company focused on a multi-pronged approach, advancing coordination with systematic thinking, calculating the major ledger and the overall ledger throughout the entire lifecycle of oil and gas fields, ensuring every link serves the maximization of overall value. – Adhering to value-based exploration. The exploration discipline is the source of resource investment and the foundation for sustainable development. "We have always been guided by the exploration philosophy of寻找 large and medium-sized oil and gas fields, aiming to acquire economically recoverable reserves, deeply implementing 'fewer wells, higher efficiency' exploration, continuously improving exploration success rates, and reducing finding cost per barrel," explained the principal responsible comrade from the Exploration and Development Department. – Emphasizing source control. CNOOC established the principle of "selecting the optimal design方案." During the feasibility study stage of a new project, the Research Institute, as the design unit, screens at least 2-3 technically feasible schemes for comparison and selection, evaluating not only technical merits but also conducting whole-life-cycle economic assessments, ultimately choosing the方案 with the best "cost-performance ratio," ensuring project competitiveness from the source. – Accelerating project construction. Among all resource investments, engineering construction and drilling & completion investments account for the largest share. The engineering construction discipline, adhering to the principle of "output maximization,"坚持 maximizes onshore pre-fabrication and commissioning before offshore installation, implements dynamic regional allocation of offshore resources, and reduces engineering construction costs and cycles by promoting engineering standardization. – Strengthening production management. The production discipline strives to control costs and打通 profitability. The company坚持 market-based operations, promotes large-scale "big well pad" operational models, improves equipment utilization rates, and amortizes costs per well; implements market competition mechanisms, continuously optimizes procurement strategies, strictly controls contractor准入, and selects high value-for-money service providers, both reducing costs and accelerating task progress. In the Eastern South China Sea oil fields, every platform with helicopter landing facilities displays quantified data showing how delays of even seconds lead to increased costs. As cost-reduction results emerge from every link of the business chain, the concept that "managing business means managing costs" has become a consensus among all CNOOC personnel.
Lean Management: Calculating the "Long-Term Ledger" for Sustained Mechanisms. Looking at CNOOC's main cost per barrel of oil equivalent each year since the "Seven-Year Action Plan" began, it has remained stable with a downward trend. This is得益于 the deep insight into costs and the concerted efforts of CNOOC personnel. But cost control is not a periodic campaign. How to transform periodic achievements into long-term competitive advantages, and properly calculate and manage this "long-term ledger"? "The sustainability of low costs hinges on mechanisms, which require institutionalized and常态化 management capabilities." In recent years, combining problem-oriented and goal-oriented approaches, CNOOC has explored and practiced lean cost management, gradually building a set of long-term mechanisms for lean management. Focusing on the main cost per barrel, the finance department collaborated horizontally with business departments and connected vertically with subordinate units, taking the lead in establishing a cost control indicator system that aligns with CNOOC's characteristics and meets the needs of lean management. Through continuous iterative development, the indicator system now covers various fields including the upstream sector, source cost reduction, marketing & trading, and new energy. The upstream segment encompasses the entire business chain from exploration, development, engineering, drilling & completion, production, sales, finance, to treasury, becoming a powerful tool guiding the company's whole-process, full-element lean cost management. After building the indicator system, how to efficiently leverage its value? To this end, while establishing the indicator system, CNOOC also set up mechanisms for regular research, analysis, and problem-solving, analyzing cost changes quarterly and adjusting control measures each quarter. Various departments use the cost control indicator system as a抓手, track trends in business and financial indicators, identify problematic indicators, analyze business drivers, discuss improvement measures, and form a closed-loop management mechanism for discovering issues, analyzing causes, implementing rectifications, and solidifying measures. How to meet the data foundation required for lean management? CNOOC chose the essential path of digital transformation. In 2021, the company launched the Business-Finance Platform project, integrating business and financial data from 13 systems; in 2025, the deepened application project of the platform was launched and accepted, establishing ten application modules. The construction and application of the Business-Finance Platform, driven by scenario development,贯通 business and financial data, promotes data quality improvement through data application, and empowers management efficiency enhancement through data value mining, providing comprehensive value-added services for grassroots-level quality and efficiency improvement and穿透 precise control. It is necessary to both transmit cost pressure top-down and stimulate cost-reduction motivation bottom-up. Beyond indicators, mechanisms, and platforms, CNOOC focuses on stimulating the innovative spirit of frontline employees, building the "Frontline Value Creation" brand, and fostering a strong atmosphere where "everyone thinks about value, everyone creates value." By 2025, the collection and selection of outstanding "Frontline Value Creation" cases had been conducted for three consecutive years, covering multiple specialties including exploration, reserves, geology & reservoir, drilling & completion, engineering, production, production engineering, market expansion & sales, procurement, and new energy. Over 550 frontline value creation cases have been挖掘 cumulatively, and the推广 value of these innovation and efficiency cases is gradually扩散 and放大, ultimately converging into an inexhaustible force for CNOOC Limited to build cost advantages from the bottom up. Today, supported by this system, CNOOC is guiding cost management with long-term mechanisms, embedding cost awareness into corporate governance and the daily actions of cadres and employees. Standing at a new starting point, the tasks of increasing oil and gas reserves and production, reducing costs, improving quality, and enhancing efficiency remain arduous. Yet, precisely because of a more solid foundation, CNOOC will advance with greater vigor, achieving阶梯 progression on the path of serving the nation through energy and building a strong maritime country.
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