The company reported a net profit of 54.41 billion yuan ($8.2 billion), up from 29.49 billion yuan in 2009 when it was hammered by low oil prices due to the financial crisis, according to a filing to the Hong Kong Stock Exchange.

Revenue jumped 74.0 percent last year to 183.05 billion yuan, up from 105.20 billion yuan in 2009, the listed unit of state-owned China National Offshore Oil Corporation said.

"In 2010, the world economy continued to recover from the financial crisis with the support of the government's loosening monetary policies and economic stimulus plan," the company said.

"Due to rising demand, international oil prices increased considerably over the previous year," it said, adding its net oil and gas production surged substantially by 44.4 percent last year.

The company said it expected "stable growth" on strong economic expansion in China and continued recovery in the global economy, but warned rising inflation could push costs higher and erode its profit margin.

"Looking forward to the year 2011, the world economy is expected to maintain its pace of recovery, and the economy of China is expected to maintain its rapid growth," it said.

New York's main contract, light sweet crude for delivery in May, eased 26 cents to $104.71 per barrel in Asian trade on Wednesday but analysts said the escalating unrest in Libya and the rest of the Middle East and North Africa would push prices higher.

CNOOC said it would invest more in exploration and have more than 10 new projects under construction in 2011, after "successfully expanding its scope of business to South America and the Middle East".

CNOOC paid $3.1 billion in March 2010 for a 50 percent stake in Bridas Corporation, which was previously wholly-owned by Argentina's Bridas Energy Holdings.

earlier related report
OPEC ambiguity a risk to oil market
London (UPI) Mar 23, 2011 - The Organization of Petroleum Exporting Counties' ambiguity in its responses to global oil price and supply movements is a risk to the stability of the crude oil market, a think tank said.

The London Center for Global Energy Studies, writing in its monthly report, also warned OPEC's stance may hurt both the producer group and world economic recovery.

"The oil market needs a clear unambiguous signal from OPEC that the lost Libyan production will be replaced -- and soon," CGES said. However, that clear message has been lacking in actions and words from OPEC, the center added.

Libyan leader Moammar Gadhafi's violent response to dissent and subsequent calls for his overthrow have put the country's 1.5 million barrels a day of crude oil out of the equation, although it isn't clear if the production and export is completely stopped or some is trickling through.

The Libyan crisis and the devastation caused by the earthquake and tsunami in Japan created major uncertainties over crude oil supplies and dented enthusiasm for nuclear power as a "clean" substitute for hydrocarbons. Demand for oil soared also in response to stockpiling.

But if the world expected a speedy OPEC response with increased oil production that is nowhere to be seen, CGES said.

"Failure to act in a transparent and decisive way risks a repeat of the 2008 price surge and the subsequent collapse in oil demand and OPEC's revenues," the think tank warned.

It said, despite tight supplies since last year, OPEC had "done little to try to prevent a repeat of the damaging surge in oil prices that we saw in 2008, which was followed by an abrupt collapse in global oil demand and, with it, OPEC oil production and revenues."

Instead, "OPEC has continued to claim that the world is well supplied with oil, stocks are high and prices are being driven by factors other than market fundamentals," CGES said, citing inadequate supplies as the reason for rising prices.

OPEC countries that are well-equipped to pump more oil, such as Saudi Arabia and Kuwait, aren't doing enough to help ease prices, it said.

The think tank said its analysts estimated the world would need to have access to supplies of at least 1.5 million barrels a day more with the approach of the second quarter of 2011 to rein in prices. Global oil production fell from about 29.85 million barrels a day in February to about 29 million barrels a day, while oil prices remain more than $100 a barrel and have gone higher in recent weeks.

Crude oil prices dropped close to $102 per barrel overnight but mainly in response to Japan's decision to allow oil companies to release oil from the country's reserve stockpiles.

Japan is trying to relieve shortages that resulted from the March 11 earthquake and tsunami and aftershocks.

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