OREANDA-NEWS. November 01, 2011. Cnooc Ltd, the largest offshore oil and gas producer in China, said it produced a total of 80.9 million barrels of oil equivalent in the third quarter in 2011, down 9.1 percent from the same period last year as it shut the country's largest field after an oil spill.

However, the company posted a 23.7 percent gain in third-quarter revenue from a year earlier as it benefited from rising oil and gas prices, Cnooc told the Hong Kong Stock Exchange on Wednesday.

Sales revenues for the quarter ended September 30 reached 46.26 billion yuan. The average oil price rose 50.3 percent year-on-year to USD 112.04 per barrel while its gas price increased 20.0 percent to USD 5.18 per thousand cubic feet from the same period last year, the company said in the statement.

The company only provides full profit statements for its interim and full-year results.

Cnooc cut its annual production target by as much as 9.3 percent on August 25 as it was ordered the close the Penglai 19-3 field - 51 percent owned by the company - after a serious oil leak occurred in June.

The full suspension of drilling operations at the oilfield in Bohai Bay will lead to a loss of 62,000 barrels a day of oil production, the company said in a separate statement in September.

The leaks have been contained and it was waiting for the order from the State Oceanic Administration to decide when to resume production at the oilfield, Cnooc Chief Financial Officer Zhong Hua told reporters during a teleconference.

"Cnooc will have a hard time meeting its 2011 production target, which has already been revised lower," said Neil Beveridge, a Hong Kong-based energy analyst at Sanford C Bernstein & Co. "The shutdown of the Penglai field is likely to continue until year end and it will take time to ramp up production to previous levels."

Linus Yip, an analyst from First Shanghai Securities, told China Daily that Cnooc may also have strategically cut back production as crude oil prices have seen some turbulence lately.

Energy firms including Cnooc will also be subject to the new resource tax instead of royalties on November 1. The Finance Ministry on Monday announced that the tax will be "temporarily" set at 5 percent of sales.

Zhong said the new resources tax will have a "fairly small" impact on Cnooc as preliminary estimates show the new levy on the group will be limited to a profit loss of below 5 percent during the next few quarters, since production sharing contract (PSC) fields will continue to pay royalties until the contract expires.

About 80 percent of the production is currently generated from its Chinese business, among which nearly half are PSC fields. Zhong added that the company also gets tax breaks from exploring aging oilfields and drilling in geologically difficult terrain.