CNOOC, mainland's largest offshore oil producer, yesterday said the organic growth of its existing businesses is the company's key driver this year and the ongoing overseas expansion would not affect the set production forecast.

The company's chairman Fu Chengyu refused to make any comment when he was asked about the speculation of the acquisitions of Canadian energy companies Talisman and Husky Energy on the sideline of the annual general meeting yesterday.

Making no comments over the overseas expansion, he said the company's total production will reach between 195 million and 199 million barrels this year and the projection is calculated on the basis of the existing businesses.

"The forecast will not be altered even we carry out overseas acquisition this year," he said.

He also attributed the 61 percent and 5 percent increases in oil sales and production in the first half to the company's organic growth.

In response to the comment by the PetroChina that the rise of global oil price will hinder overseas acquisition, Fu did not find a common ground on the perspective, saying different companies have different tactic to foray overseas, which is regardless of the oil fluctuation.

He, however, did not pinpoint any specific regions or countries on the company's list, saying any place that is rich in resources will be the priority.

Fu then said that a joint venture of the company had won a bid for one of the five conjoined oil fields in Indonesia.

He added that the bidding price was about $200 million and CNOOC held 66 to 67 percent of the JV. But he declined to reveal the investment costs of the project.

Commenting on the oil price trend, Fu said that it has little room for the fuel to surge when the price has spiked above $130 per barrel.

Looking ahead, he said the company would make more deep-sea exploration in the second half.

Fu stressed the company would be prudent in the front because of its high costs.

"A vessel for deep-sea exploitation costs about $1 million a day," he said, adding the company would be cautious in controlling the operation costs.

Asked whether the central government would raise windfall tax with the rising oil prices, Fu believed the adjustment accordingly and the effect on the company would be released in August.

(HK Edition 05/30/2008 page2)