CNOOC LNG Strategy, 1.0 MTPA Petronas Deal, 780 Million BOE Target, and 2 New Agreements (2025)

LNG Supply Security, CNOOC’s Dual Strategy with Petronas and ADNOC

In 2025, China National Offshore Oil Corporation (CNOOC) executed a robust strategy to fortify China’s energy security by simultaneously expanding domestic production and securing diversified international Liquefied Natural Gas (LNG) supplies. This dual approach is designed to meet rising national demand while hedging against global market volatility and geopolitical risk. The company’s actions reflect a calculated effort to balance self-sufficiency with a resilient, globally sourced energy portfolio.

CNOOC Domestic Production Expansion

The domestic pillar of the strategy is defined by aggressive production targets and capital allocation. CNOOC set an ambitious net production goal of 760 million to 780 million barrels of oil equivalent (boe) for 2025, with plans to increase this to 780-800 million boe in 2026. This growth is backed by a significant capital expenditure of RMB 125-135 billion for the year. Key operational achievements included bringing the Deep Sea No. 1 gas field to its full designed annual production capacity of 4.5 billion cubic meters, demonstrating advanced offshore E&P capabilities.

CNOOC International Supply Diversification

Internationally, the focus was on establishing long-term Sale and Purchase Agreements (SPAs) with key producers outside of traditional supply routes. This move mitigates single-source dependency and potential trade friction. The most significant of these was a deal signed in December 2025 with Malaysia’s Petronas for 1.0 million tonnes per annum (MTPA) of LNG. Earlier, in April 2025, the company secured 500, 000 metric tons annually from the UAE’s ADNOC, with deliveries commencing in 2026. These agreements are crucial given forecasts that global LNG demand will rise by approximately 60% by 2040.

CNOOC 2 Key LNG Deals, Petronas and ADNOC Agreements (2025)

In 2025, CNOOC executed pivotal long-term partnerships with state-owned producers in Malaysia and the United Arab Emirates to diversify its LNG portfolio. These agreements secure significant future volumes for China and represent a strategic shift towards building resilient supply chains with key energy partners in the Middle East and Southeast Asia.

Petronas 1.0 MTPA Supply Agreement

The agreement with Petronas, finalized in December 2025, is a significant long-term commitment. It secures 1.0 MTPA of LNG, bolstering the relationship between two of Asia’s largest energy players. This deal provides CNOOC with a stable, geographically proximate source of LNG, reducing shipping times and costs compared to Atlantic basin suppliers.

ADNOC 0.5 MTPA Forward Agreement

The five-year agreement with ADNOC, signed in April 2025, secures 500, 000 metric tons of LNG annually starting in 2026. This volume is set to double to one million tonnes per year from 2028. This deal was notable as it provided an alternative to other supply sources and strengthened energy ties with a major Middle Eastern producer.

Table: CNOOC 2025 Key LNG Partnership Agreements

Asia vs. Middle East, CNOOC’s Global Sourcing Strategy for LNG

CNOOC‘s 2025 strategy advanced its geographic footprint by securing resources from key production hubs in Southeast Asia and the Middle East, while also maintaining high-risk, high-reward positions in other regions. This geographic diversification is central to its objective of building a resilient supply chain capable of withstanding regional disruptions.

Deepening Southeast Asian and Domestic Ties

The company reinforced its focus on Asia through both domestic and international activity.

• The long-term deal with Malaysia’s Petronas solidifies CNOOC’s position within the intra-Asian energy trade, leveraging proximity to reduce logistical risks.
• Domestically, the company continued to prioritize development in the South China Sea, with projects like the Deep Sea No. 1 and Dongfang 29-1 gas fields reaching key production milestones in 2025.
• Prior to 2025, major discoveries like the Huizhou 19-6 oilfield with over 100 million tonnes of oil equivalent had already established the South China Sea as a critical resource base for the company’s long-term production plans.

Expanding Middle East and Arctic Exposure

Concurrently, CNOOC expanded its reach into other strategic energy regions.

• The five-year supply agreement with UAE’s ADNOC marks a significant step in securing volumes from the Middle East, a region critical to global energy flows.
• The company’s participation in the €11 billion project financing of the Arctic 2 LNG project highlights a long-term strategy focused on resource acquisition, even in geopolitically complex regions like the Russian Arctic.
• This contrasts with the period before 2025, where international projects like the Lake Albert development in Uganda were also a focus, demonstrating a consistent global approach to resource acquisition beyond Asia.

Strengths and Risks, CNOOC LNG Supply Strategy SWOT Analysis

CNOOC’s aggressive expansion and diversification strategy in 2025 establishes significant market strength but also exposes the company to geopolitical risks and long-term price volatility. The company’s actions validated its ability to execute large-scale domestic projects while simultaneously closing major international supply deals.

Table: SWOT Analysis for CNOOC LNG Initiatives

Global LNG FIDs Surge Over 50 bcm/y by 2025, Led by US and Qatar
Total global LNG Final Investment Decisions (FIDs) are projected to exceed 50 bcm/y by 2025, driven significantly by new projects in the US (Louisiana LNG, CP2 phase 1) and sustained investments in Qatar (Qatar NFE, Qatar NFS). The peak in FIDs occurred in 2023 at over 70 bcm/y, followed by a ‘non-FTA pause” in 2024, before another surge into 2025.

(Source: Small-Scale LNG Market Size to Attain USD 250.63 Bn By 2035)

CNOOC 2026 Outlook, Arctic 2 and Long-Term Contract Execution

Looking ahead to 2026, CNOOC’s primary challenge will be integrating its newly secured LNG volumes and managing the execution risks of its high-stakes international investments. The company’s performance will depend on its ability to navigate the complex geopolitical environment while ensuring its long-term contracts deliver value against fluctuating spot market prices.

Monitoring International Deal Execution

The successful start of deliveries from ADNOC in 2026 will be a critical signal.

• If these volumes are delivered on schedule, it will validate CNOOC’s strategy of diversifying its supply portfolio toward the Middle East and confirm the reliability of its new partners.
• Conversely, any delays or contractual disputes could signal underlying challenges in its international procurement strategy, prompting a potential re-evaluation of its partner selection criteria.

Gauging Arctic 2 Project Viability

The trajectory of the Arctic 2 LNG project remains a key variable to watch.

• If the project advances toward production despite geopolitical headwinds, it will affirm CNOOC’s high tolerance for political risk in its pursuit of long-term resource security.
• If sanctions or logistical hurdles stall the project, it could force CNOOC to write down its investment and seek alternative long-term supply sources, potentially increasing its reliance on more conventional, but competitive, markets.

The questions your competitors are already asking

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

• Other long term gas supply deals signed this year
• Current status of Arctic 2 gas project
• New China offshore gas projects
• European companies new gas supply contracts

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