CNOOC BESS Inaction, $18 B CAPEX into Oil, 25% Exxon Mobil JV, and 1 Cancelled Wind Project (2025)

CNOOC Strategic Inaction, A Key Risk to Energy Transition Goals

In 2025, China National Offshore Oil Corporation (CNOOC) made a clear strategic decision to prioritize its core hydrocarbon business, consciously choosing a follower role in the energy transition and foregoing participation in the high-growth battery energy storage systems (BESS) market. Despite clear market signals and China’s domestic dominance of the battery supply chain, CNOOC’s actions demonstrate a strategic focus on maximizing fossil fuel returns and using adjacent technologies like carbon capture, rather than diversifying into new energy verticals like BESS. This approach contrasts with the diversification strategies of competitors like Shell and Petrobras.

Prioritizing Hydrocarbons Over Renewables

CNOOC’s 2025 business plan is defined by its allocation of capital, which overwhelmingly favors traditional oil and gas. This financial commitment solidifies its position as a hydrocarbon producer rather than a diversified energy company.

• The company allocated a capital expenditure budget of RMB 125 billion to RMB 135 billion (approximately $17.3 billion to $18.6 billion), with 97% directed toward exploration, development, and production of oil and gas.
• While the company stated a goal of “harnessing more offshore wind and onshore solar, ” no specific capital was earmarked for these initiatives or the enabling BESS infrastructure required to support them.
• This strategy resulted in record oil and gas output for 2025 but left the company with no tangible assets or projects in the rapidly expanding energy storage sector.

A Follower, Not a Leader

The company’s operational decisions in 2025 further validated its cautious, observational stance on renewables and energy storage. Rather than investing, CNOOC took steps that actively distanced it from renewable energy integration.

• In a significant move, CNOOC withdrew from the electrification of its North Sea Buzzard field in August 2025, a decision that dealt a major blow to the £2.5 billion Green Volt floating wind project intended to supply the power.
• This inaction is stark when contrasted with market dynamics; global demand for stationary storage surged by 51% in 2025, and the Chinese domestic market was projected to exceed 3 trillion yuan.
• CNOOC’s stated clean-tech efforts focused on increasing green electricity procurement to over 1 billion k Wh and advancing Carbon Capture, Utilization, and Storage (CCUS) pilots, both of which support its existing O&G operations rather than creating new energy revenues.

$18 B in CAPEX, CNOOC’s 2025 Fossil Fuel Focus

CNOOC’s 2025 investment strategy demonstrates an overwhelming commitment to its upstream oil and gas business, while its most significant move related to renewable energy integration was a divestment. This allocation of capital provides a clear view of the company’s priorities, which favor guaranteed returns from hydrocarbons over investment in the energy transition.

CNOOC’s Capital Allocation

The company’s budget for 2025 leaves no ambiguity about its primary objective: increasing oil and gas reserves and production. The financial blueprint details a massive investment into its core business, with non-hydrocarbon activities receiving a negligible share.

• The total capital expenditure budget of up to RMB 135 billion was broken down into 61% for development, 20% for production, and 16% for exploration.
• This investment fueled the successful launch of 16 new oil and gas projects during the year, directly contributing to its record production levels.
• No specific line item or disclosed investment was made into battery energy storage projects or related technologies, indicating it is not a current financial priority.

The Green Volt Cancellation

The most telling financial decision from CNOOC in the clean energy space was not an investment but a cancellation. The company’s withdrawal from a key North Sea decarbonization project underscores its risk aversion toward capital-intensive renewable ventures.

• In August 2025, CNOOC announced it was “unable to find an investible solution” to power its Buzzard platform with renewable energy from the planned Green Volt floating wind farm.
• This decision negated a potential long-term offtake agreement and was a major setback for the £2.5 billion project, highlighting the challenges of electrifying legacy oil and gas assets.
• The move signals that even for decarbonizing its own operations, direct electrification via renewables is not a guaranteed investment path for the company if it does not meet strict financial criteria.

Table: CNOOC Key Investment and Cancellation Decisions (2025)

CNOOC Partnerships, 2 Major Oil JVs Reinforce Core Business (2025)

In 2025, CNOOC’s strategic partnerships were exclusively concentrated on expanding its fossil fuel portfolio through high-value joint ventures and new exploration contracts. These collaborations reinforce the company’s commitment to its core business and highlight the absence of any alliances in the battery or energy storage domain.

Exxon Mobil Guyana Partnership

CNOOC’s role in one of the world’s most significant new oil discoveries continues to be a cornerstone of its international strategy. The partnership in Guyana represents a massive, long-term commitment to hydrocarbon production.

• CNOOC holds a 25% interest in the prolific Stabroek Block in Guyana, a joint venture operated by Exxon Mobil (45%) alongside Hess (30%).
• The partners are collectively committed to a development plan of approximately US$55 billion to exploit the block’s extensive resources.
• In September 2025, the consortium greenlit its seventh project in the block, further cementing its long-term production outlook.

Shell Petrochemicals JV

The company also continues to invest in its downstream and petrochemicals business through its long-standing joint venture with a major international oil company. This partnership reinforces its position in the broader hydrocarbon value chain.

• CNOOC maintains a 50:50 joint venture, CNOOC and Shell Petrochemicals Company Limited (CSPC), a major petrochemicals complex in China.
• The joint venture took a final investment decision on a new expansion project in January 2025, signaling continued growth in this non-BESS segment.

Table: CNOOC Strategic Partnerships and Agreements (2025)

China vs. Global Markets, CNOOC’s Geographic Priorities

CNOOC’s geographic strategy in 2025 prioritized expanding its traditional oil and gas footprint in proven international basins while failing to leverage China’s domestic dominance in the battery supply chain for new energy ventures. The company’s actions show a clear preference for international hydrocarbon assets over domestic clean energy opportunities.

International O&G Expansion

CNOOC’s 2025 activities were heavily focused on securing and developing oil and gas resources outside of China. This included reinforcing its position in major offshore projects and acquiring new exploration acreage.

• The company’s most significant long-term growth driver is its 25% stake in the Stabroek Block in Guyana, a world-class offshore oil discovery.
• In August 2025, it expanded its upstream portfolio by signing new Production Sharing Contracts for exploration blocks in Indonesia.
• Its engineering division also secured a major oil and gas contract in Qatar in September 2025, demonstrating its competitive capabilities within the traditional energy sector.

Domestic Inaction on BESS

The company’s lack of activity in the domestic BESS market represents a significant missed opportunity. It has not capitalized on national advantages in manufacturing, policy support, and market growth.

• China commands over 70% of the global battery supply chain, creating a powerful domestic advantage for any company willing to enter the market.
• Despite the China Energy Storage Alliance projecting the domestic market for new energy storage to surpass 3 trillion yuan by the end of 2025, CNOOC announced no projects to capture a share of this value.
• This strategic choice to ignore the domestic BESS boom in favor of international oil projects defines CNOOC as a laggard among national oil companies exploring energy diversification.

SWOT Analysis, CNOOC’s Oil Focus vs. Energy Transition Opportunity

CNOOC’s core strength in hydrocarbon production provides financial stability but creates a significant strategic weakness by exposing the company to transition risks and causing it to miss opportunities in the rapidly expanding energy storage market. The events of 2025 validated the company’s commitment to its traditional business model, resolving any ambiguity about its near-term transition strategy.

Table: SWOT Analysis for CNOOC Energy Storage and Battery Initiatives for 2025: Key Projects, Strategies and Market Impact

CNOOC 2026 Outlook, Watch for a CAPEX Pivot or Continued O&G Focus

The critical indicator for a shift in CNOOC’s strategy will be its 2026 capital expenditure plan; continued focus on CCUS and green power procurement will signal a sustained follower approach, while a dedicated budget for BESS would mark a genuine strategic pivot. Until such a financial commitment is made, all public signals point to the company maintaining its current course.

If This Happens, Watch This

A true change in strategy would be signaled by financial and partnership activities that deviate from the 2025 pattern. Observers should watch for concrete capital allocation and collaborations in the new energy sector.

• If a strategic pivot is underway, the first signal will be in the 2026 business plan. A specific line item in the CAPEX budget dedicated to BESS or integrated renewable projects would be the most definitive evidence.
• Watch for partnership announcements with battery manufacturers or established renewable energy developers. A joint venture would indicate a serious intent to enter the market, moving beyond the current strategy of simple power procurement.
• Progress on CCUS pilots will remain the key milestone for its current decarbonization strategy. A decision to scale these projects would reinforce its focus on mitigating emissions from its core business rather than diversifying away from it.

These Could Be Happening

While unlikely given the public evidence, it is possible the company is undertaking quiet, preliminary work before a major announcement. However, the more probable scenario is that CNOOC is content to observe the market’s evolution from the sidelines.

• The company could be building internal expertise or conducting small-scale, unannounced studies to evaluate BESS technology and project economics.
• It may be waiting for further de-risking of renewable project models or for domestic policy to provide even stronger incentives or mandates for state-owned enterprises to invest.
• However, given the decision to walk away from a commercially advanced project like Green Volt, the most likely scenario is that CNOOC’s internal investment hurdles for renewables and storage remain too high to clear in the near term.

The questions your competitors are already asking

This report covers one angle of CNOOC’s energy transition strategy. The questions that matter most depend on your work.

• Oil major investments in battery storage projects
• China national oil companies renewable energy strategy
• CNOOC carbon capture projects
• Guyana Stabroek block production forecast

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