Fitch Ratings has confirmed that the long-term foreign currency and local currency issuer default ratings of CNOOC (00883.HK) are rated "A+" with a negative outlook. Fitch also confirmed the senior unsecured rating of CNOOC and the bond rating of the securities issued and secured by the company at "A+".

The rating of CNOOC is related to Fitch's evaluation of the credit status of China National Offshore Oil Corporation (CNOOC) - CNOOC holds a 60.49% stake in CNOOC, reflecting the close relationship between the two under Fitch's "Parent-Subsidiary Rating Linkage Criteria".

CNOOC estimates that its capital expenditure in 2024 will be between 125 billion Chinese yuan (same below) and 135 billion yuan, and Fitch expects its capital expenditure from 2024 to 2027 to still be around 30% of its revenue. Compared to its peers, CNOOC has a shorter period of proven reserves for exploration and development and requires higher capital expenditure to ensure production stability in the medium term. Thanks to favorable oil and gas prices and lower costs, CNOOC is currently in a net cash position, and despite its higher capital expenditures, Fitch expects its cash flow to remain strong.

Fitch expects CNOOC's revenue to grow slightly in 2024 due to an increase in production. CNOOC plans to produce 0.7 billion to 0.72 billion barrels of oil equivalent in 2024 and 0.81 billion to 0.83 billion barrels of oil equivalent in 2026, which means a compound annual growth rate of 6% to 7% from 2024 to 2026. This growth is due to continued large-scale capital expenditures and huge reserves. In addition, Fitch expects oil prices to fall to a mid-cycle level of $65 per barrel by 2026, and the drop in oil prices will exceed the growth in production. Therefore, Fitch expects CNOOC's revenue to decline slightly in 2025 and 2026.