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In 2020, the outbreak and wide spread of COVID-19 pandemic severely disrupted the global economy. The lockdown measures implemented worldwide have also affected global economic activities and suppressed market demands. During the year, the commodity prices related to the Group's major businesses, such as crude oil, alumina and coal, significantly declined year-on-year. The Group's annual performance has turned from profit to loss compared to last year. By optimizing asset structure and promoting the optimization of management system, the Group managed to maintain stable cash flow, further improve its operating efficiency and risk control capacity, thus laid the foundation for the Group's future development.
Workload Adjustment and Capital Investment Control
Responding to severe challenges, the Group actively reduced the investment and management costs as well as refined and tightened cost control. Through striving for higher efficiency with improved technology and management level, the Group tried its best to overcome the adverse effects brought by the macro environment and realized a consolidated operating profit in the crude oil segment.
During the year, the total production of the three oil fields under the Group is around 16.75 million barrels (100% basis), which exceeds the mid-year estimated production, but down around 5% compared to last year. Besides, due to the execution of development plans in Yuedong oilfield and the Seram Block in
Assets Structure Optimization and Liquidity Improvement
At the beginning of the year, the Group proactively deployed stress tests in respond to the pressure caused by low oil prices and the pandemic, required the subsidiaries to strictly control operating risks and reduce costs. With clear goals and effective measures, the Group managed to control the operating costs and cash expenditure. Together with the cash inflow supplemented by the disposal of the equity shares in CDH, the overall liquidity of the Group has been improved in the adverse market environment.
Pandemic Prevention and Production Safety Control
As for the pandemic prevention and control, we referred to the successful experience of Mainland China and supervised the subsidiaries to formulate and gradually improve their pandemic prevention and control plans and guidelines depending on their own situations, so as to minimize the impact of the pandemic on production and operation. While taking into account of its own production safety, the Group also tried its best to contribute to the pandemic prevention work at project countries by donating a large amount of anti-pandemic supplies to local communities and medical institutions.
Outlook
In 2021, as the supply and demand of crude oil tends to be stable while the international crude oil prices continue to spike upward the Group is cautiously optimistic about the rebound in commodity prices. It is expected that with the global application of vaccination, the crude oil market is expected to gradually shift from 'Oversupply' in 2020 to 'Tight-Balanced'. The oil production target of the Group in 2021 is around 18 million barrels (100% basis, without considering the potential production restriction factors of the Karazhanbas oilfield), and capital expenditure is expected to reach around
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