CNOOC posts 2007 profits

BEIJING, March 28 (UPI) -- China National Offshore Oil Corp. Ltd. posted disappointing profits for 2007, up only 1.1 percent.

China's largest offshore oil and gas producer reported its smallest growth in five years. Analysts said production has slowed due to high costs of drilling, and an increased tax on oil has cut into the oil firm's revenue.

CNOOC's net profit in 2007 rose to $4.46 billion in 2007. The company, whose shares are traded in Hong Kong and New York, said its windfall tax on oil sales above $40 a barrel rose because of higher oil prices as crude stayed at nearly $100 per barrel at the end of last year, China Daily reported.

"CNOOC's expenses are growing faster than revenue and it could get worse if the company doesn't take any action to improve its production growth and lower costs," said Anna Yu, an energy analyst from Taifook Securities.

The company hopes to produce between 195 million and 199 million barrels of oil equivalent in 2008, CNOOC Chairman and Chief Executive Officer Fu Chengyu said in a statement. He said CNOOC's output of oil and gas only rose 2.6 percent last year.